Thursday, June 25, 2009

Makita G6101R 5,800-Watt 11 HP Portable Power Generator with Electric Start

The Makita 5,800-watt 11 HP portable power generator with electric start is powered by an aluminum alloy OHV engine to reduce oil and fuel consumption and produces up to 7 hours of runtime with its 5.68-gallon fuel tank. A brushless alternator delivers consistent power with less downtime for maintenance, while the water-deflecting louvers make this generator watertight. The idle control conserves fuel, and the condenser voltage regulator keeps voltage output stable. This generator produces 74 decibels of sound, and it's backed by a 1-year limited warranty.


Americans have an insatiable thirst for gasoline to the tune of 10 million barrels a day. Turn off the gas spigot and you turn off the American lifestyle. There are many reasons why we could get ticked off about the state of our gas dependence and the apparent lack of control we have over the price of it. But, if we're going to be serious about transforming our national relationship with gas (and other products that come from oil), we shouldn't waste time getting ticked at the wrong things.

Taking your frustration out on the local gas station may be a misdirected blast. I'll be the first one to admit that it really ticks me off how quickly gas prices shoot up, and how slo-o-o-owly they come down. We hear about some political unrest in Nigeria or Venezuela and BAM! The cost of oil futures goes up by $5 a barrel and the local price of gas goes up by 15 cents a gallon. Then when things calm down and the price of oil drops, the gas price stays right where it was for days, weeks, MONTHS! Hmm. But the truth is, those fluctuations at the pump are actually the least significant piece of the pie.

Even people who specialize in studying the price of oil don't know for sure how to calculate all of the factors that influence its price and, ultimately, the price of gas. The price of gas in the United States is a consequence of everything from global economic growth, to greed and politics, to the normal consequences of 6.5 billion people going about their business on a planet with limited resources.

Keeping all of that in mind, here's a rough breakdown of the factors contributing to the price of a gallon of gas.

I. Crude Oil - 57%

According to J. Stephen Simon, President of Exxon Mobile, the actual cost to get a barrel of oil out of the ground is only $12 - $15. So how is it we're paying $50 - $150 per barrel?

For starters, there's the cost of transporting, which requires oil tankers, pipelines and big rigs. Next, oil companies (and the countries from which the oil is pumped) have to make a profit. Global factors, such as political unrest, the value of the US dollar compared to other currencies, and the amount of oil being pumped out of the ground dramatically affect the price. Top all that off with the influence of hedge fund managers and speculators, and you get a global "price" for crude oil. Every dollar increase in the price of a barrel of oil translates into .05 - .07 per gallon at the pump.

It's worth noting that once the price of oil tops about $65, the other costs associated with the price of gas don't increase much. In other words, almost EVERYTHING above $65 is PURE PROFIT for SOMEBODY! All that dribble about the price of oil rising due to increased demand and rising production costs - uh huh. The price of oil spiked because there were hundreds of billions of dollars at stake.

II. Refinement - 18%

Americans drive nearly 3 trillion miles per year, according to the Motor and Equipment Manufacturer's Association. All that driving requires about 168 Billion gallons of gas a year, which is "pumped" from one of 167,000 retail outlets around the country. Converting crude oil to gas, and then getting it delivered to those gas stations, is all part of the refining process.

Once the crude has been delivered to the refinery, it is processed into various blends, or octane, to meet government standards and clean-air acts. The U.S. Gulf Coast is the source of about 40% of the gasoline produced in the United States, and the starting point for most major gasoline pipelines. Almost 70% of our imported crude oil is delivered to this region.

Across the board, US refineries are rolling along at about 87% of their capacity, and the last refinery built in the US was in 1976, in Garyville, Louisiana. It's no mystery why any disruption in normal operations, such as hurricanes slamming into the gulf coast, results in almost immediate spikes in local gas prices. With such tight capacity, we are constantly at the mercy of the weather, mechanical problems, trucker's strikes and anything else that can interrupt a refinery. Most gasoline is shipped from the refinery by pipeline to regional terminals where it may be blended with other products (such as ethanol) to meet local government and market specifications. It is then delivered by tanker truck to individual stations.

While crude oil is the biggest piece of the pie when it comes to gas prices, refining capacity can trump the crude oil price for short periods of time.

III. Taxes - 14% (sometimes)

Gas taxes are a set rate per gallon as opposed to a fluctuating market cost. Consequently, the percentage they represent changes with the retail price of the gas.

The nationwide average tax on gasoline is 45 cents per gallon, as of January 2009. This includes federal tax of 18.4 cents per gallon, average state gasoline excise tax of 18.4 cents per gallon, and other taxes and fees (sales taxes, oil inspection fees, county and local taxes, underground storage tank fees and miscellaneous environmental fees) average 8.2 cents per gallon.

When retail prices are lower, such as where they are now at the start of 2009 ($1.85/gal), the tax bite is about 25% of the total. When prices spike, like during the summer of 2008 ($3.89/gal), the percent is about 11%. From 2000 to 2007, taxes averaged about 24% of the retail gasoline price.

The average U.S. rate is nothing compared to what people in Europe pay. While the cost of oil and refining are pretty standard worldwide, the price per gallon of gas in Europe is between $5-$7 a gallon. The difference in price is all taxes! Sound crazy?

Maybe, but the result of such high prices is that Europe is WAY ahead of the U.S. in terms of fuel efficiency. There are only five vehicle models sold in the United States that achieve combined gas mileage of at least 40 miles per gallon. Overseas, primarily in Europe, there are 113 vehicles for sale that get a combined 40 mpg, up from 86 in 2005. Makes you wonder who's crazier, doesn't it?

IV. Gas Station - 11%

Distribution, marketing, and retail costs/profits are approximately 11% of the gasoline price, down from the 2000 to 2007 average of 12%. This includes the retailer's cost to purchase the finished gasoline and operate the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner.

For most stations, the profit portion only amounts to a few cents per gallon. In fact, as the "gas station" has morphed with the "convenience store" in the last two decades, some stations in highly competitive neighborhoods even take a small loss on the gas just to get customers into the store.

Why Do Gasoline Prices Fluctuate?

Even when crude oil prices are stable, there are other factors that contribute to regional and even local differences in gasoline prices. Of course, gasoline prices can change rapidly if something disrupts the supply of crude oil or if there are problems at refineries. But in addition to that, you also have to consider:

  • Distance from the refinery - Retail gasoline prices tend to be higher with greater distance from the source of supply whether it be ports, refineries, pipelines or blending terminals.
  • Supply disruptions - Any event that slows or stops refinement of gasoline for even a short time, such as planned or unplanned refinery maintenance or shutdowns that occurred when the hurricanes hit the Gulf Coast in 2005, can prompt bidding for available supplies. This not only results in price spikes, it can also interrupt gas availability.
  • Retail competition and operating costs - Pump prices are always subject to retail locations. Stations have different traffic patterns, rents, and sources of supply that influence their pricing.
  • Environmental programs - Some areas of the country, such as California, are required to use special "reformulated" gasoline with additives to help pollution. Other environmental programs put restrictions on fuel transportation and storage, which tend to add to the cost of producing, storing, and distributing gasoline. About a third of the gasoline sold in the U.S. is reformulated.

http://www.Boostertown.net is a web-based resource committed to generating a new public conversation about hydrogen fuel technology in particular, and renewable energy in general. It includes articles, videos and other links for people who want to research these technologies or locate vendors. We can't afford to wait for politicians, oil execs and automakers to figure it out. We need to act now. Visit http://www.Boostertown.net to learn more about Hydrogen-On-Demand and other fuel saving technologies.

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