Six weeks ago, Hubber Jyoti Kothari asked, "How much petrol (gas) and diesel are obtained from a barrel of crude? Is the price of crude ex origin? Why is it costlier in Europe? How many litres in a gallon and in a barrel?"

This information is readily available in the FAQ section of the website of the Energy Information Administration (EIA) of the U.S. Department of Energy. However, some of my own research and calculations may also be of interest, as I just finished writing an article on why the price of crude oil has skyrocketed and what can be done to change the situation, and I found some fascinating facts online that I need to share with someone but which did not fit into the scope of the aforementioned article. So here, simply to air that research, are some of my more interesting findings.

First, to answer the original question, one barrel of crude oil, pulled straight from the ground, contains 42 gallons. Although it will burn just as it is, and there are examples of Texas and Oklahoma families in the 1950s digging their own personal oil well and attaching their heating system directly to it (In Cold Blood by Truman Capote mentions this technique, among other sources), crude oil performs much better for specific applications if purified and separated into certain component parts, a process called refining.

Refining a barrel of oil creates approximately 19.6 gallons of gasoline (petrol), which is 43% of the total. Another 23% becomes diesel fuel or heating oil, 10% jet fuel, 4% propane, 3% asphalt, and 18% other products, which includes petrochemical feedstock for the manufacture of rubber and plastics, as well as consumer products such as ink, bubblegum (put that in your mouth and chew it), crayons (ditto for kids), deodorant, and heart valves. As the EIA states in a footnote, the percentages add up to more than 100% because there's a 5% gain in the refining process, presumably from the volume of additives.

I won't get into the metric calculations; there are too many websites that will convert gallons to liters and back again. Besides, I guarantee they'll do it better than my own personal math skills.

Instead, let's address the issue of origin. One of the factors that determines the cost of a barrel of oil--a specific barrel of oil, not a generic one--is its chemical composition, which in turn determines how much it will cost to refine it and which is caused by the geography of the region where that barrel originated. For example, West Texas Intermediate (WTI) oil is a light crude that contains little sulfur (called "sweet" crude) and which is easy and cheap to refine. So is Brent crude from the North Sea, although it's not quite as light or sweet and therefore costs a little more to separate out the sulfur and turn it into petrol. Both of these are among the more expensive oils of the 161 varieties in the world, with WTI generally slightly higher than Brent.

On the other hand, around 70% of Mexico's crude is a heavy oil with a high sulfur content, called a sour crude. This makes it more difficult and expensive to refine, and therefore it brings a lower price than WTI or Brent. Also, more and more of the crude oil being pumped from the Middle East is heavy sour crude, and Dubai in 2006 initiated a crude oil commodity exchange similar to NYMEX, intended to market this oil to refineries in Asia, which are better equipped to refine it. See, not every refinery can refine every type of oil, and although some refineries can shift their production criteria for various types, it costs money to do so, further raising the cost of the finished products.

So the answer to that question is yes, the cost of a barrel of oil has much to do with its origin, because it has much to do with its composition and subsequent refining costs.

Taxes are the culprit for higher prices in the Eurozone. In the U.S., Federal gasoline tax is 18.4 cents per gallon. Each state also charges a gas tax. The average is 21.4 cents per gallon, with the lowest being Georgia at 7.5 and the highest being--no, not California, but Washington state at 36. On average, around 10% of your pain at the pump, at $4 per gallon, goes to governments at one level or another.

Fuel taxes in Europe are much higher. In Germany, taxes are currently around 75% of petrol prices, or 1.10 Euros of the 1.52 Euros for a liter of petrol. At July 10, 2008's exchange rate of 1.5785 Euros to the dollar, that's a price tag of $2.40 per liter ($1.75 of that in taxes) or around $9 per gallon (with $6.65 in taxes), and we're at the upper limit of my math so I'm stopping right there. Duties are higher in the U.K. and the Netherlands, lower throughout the remainder of the EU, lower still down under in Australia and New Zealand, and lowest of all in Canada and the U.S. (Are we going to stop complaining? I doubt it.)

Of note is that some of Germany's petrol duties go toward environmental issues. Currently, even Green Party members have voiced some willingness to cut these taxes to lower the cost of transportation. As Charles Wheelan points out in his excellent primer Naked Economics: Undressing the Dismal Science (2002, W.W. Norton), industrially developed nations are concerned about the environment because they can afford to be. When they can no longer afford it, it goes by the wayside.

Facts, fictions, and outright lies

The U.S. uses more oil than any other nation in the world. En toto, yes; per capita, no. Not even close.

The CIA World Factbook contains a fascinating melange of data, for our purposes specifically including the population of each nation in the world and total oil consumption on an annual basis, figures roughly circa 2005. It seemed simple enough to divide one into the other, and I compiled the table below.

Crude oil usage per capita, meaning how much of a barrel of oil is used by each person in various countries per day

1. Virgin Islands 1.0648
2. Gibraltar 0.8571
3. Singapore 0.1736
4. Kuwait 0.1290
5. Luxembourg 0.1284
6. Qatar 0.1023
7. Faroes 0.0929
8. Guam 0.0909
9. the Bahamas 0.0879
10. United Arab Emirates 0.0866
11. Cyprus 0.0706
12. Bermuda 0.0695
13. Aruba 0.0693
14. Canada 0.0691
15. Greenland 0.0689
16. Seychelles 0.0683
17. United States of America 0.0682
18. Iceland 0.0676
19. Saudi Arabia 0.0655
20. Belgium 0.0616
21. Puerto Rico 0.0591
22. the Netherlands 0.0569
23. Antigua and Barbuda 0.0543
24. Norway 0.0526
25. Ireland 0.0462
26. Japan 0.0438
27. South Korea 0.0437
28. Australia 0.0426
29. Taiwan 0.0421
30. Greece 0.0406
31. Hong Kong 0.0406
32. Sweden 0.0401
33. Spain 0.0388
34. Libya 0.0384
35. Switzerland 0.0354
36. Israel 0.0351
37. Austria 0.0344
38. Italy 0.0324
39. Germany 0.0322
40. Portugal 0.0311
41. France 0.0308
42. United Kingdom 0.0299
43. Eurozone (average) 0.0296
44. British Virgin Islands 0.0250
45. Iran 0.0229
46. Venezuela 0.0212
47. Mexico 0.0179
48. Russia 0.0178
49. Thailand 0.0137
50. Iraq 0.0134
51. Argentina 0.0116
52. Poland 0.0116
53. Syria 0.0116
54. South Africa 0.0115
55. Brazil 0.0109
56. Turkey 0.0099
57. Belize 0.0099
58. Egypt 0.0072
59. China 0.0049
60. Philippines 0.0037
61. Vietnam 0.0027
62. India 0.0021
63. Nigeria 0.0021
64. Mozambique 0.0006

This is not a complete table. It is also not scientific data by any means and demonstrates very little beyond my fascination with minutiae. For example, the data I used and therefore the table I constructed do not differentiate between the various uses for crude oil, such as industrial production, electricity generation, transportation, heating, etc. Cooling one luxury hotel in the Virgin Islands could, because of their low domestic population, skew the figures outrageously. So could industrial production in Singapore, and obviously heating is an issue in Iceland and Greenland. Therefore, this table won't withstand too much analysis and national attacks or defenses based upon it won't hold water.

One inarguable point is that oil usage is directly tied to a nation's level of industrial development. Nations with economies based upon knowledge and industry crowd into the top of this chart, while those based upon industry and agriculture cluster toward the bottom. Whether that consumption is necessary, providing benefits for us all, or whether it's wasteful, frittered away by poor driving habits or political attacks on oil production facilities--well, again, neither the data nor the table were designed for such differentiation.

Consumption is outpacing production. All too true. Again according to the CIA World Factbook, world production of crude oil in 2005 reached 78.9 million barrels per day, whereas consumption in the same year was 80.29 mbpd. This is one of the major reasons the price of crude oil has skyrocketed, as refineries bid aggressively for decreasing oil supplies and speculators sneak in the middle to take a cut from the profits. (Dubai's new exchange doesn't allow speculators and will sell only to refineries, a popular and possibly wise move in the current world market.)

Consumption has reached a plateau and is decreasing in industrially developed nations while it's rising in the rest of the world. Inside the U.S., this is one of the many statistics tracked by the Federal government, and the following data are supplied by the EIA:

In April 2008, U.S. gasoline sales were 56,137,100 gallons per day (roughly one gallon for every 5.4 people), down from 57,475,300 gallons per day in April 2007 and 61,020,800 gallons per day in April 2006. That's a savings of 4,883,700 gallons per day, or an 8% reduction over a period of two years. Note that the reduction began before the price of a barrel of oil went through the roof. Although prices are contributing to lower consumption, it is obviously not the only factor. But somebody else gets to research that Hub.

The world is about to run out of oil. This seems to depend upon who you're talking to. Some industry experts, including Texas oil wizard T. Boone Pickens, claim the end is near. However, his voice is a trifle suspect these days because he's just sunk a ton of his own money, not into new oil exploration, but into Northern and Western Texas wind farming, which is becoming a competitor to hydrocarbon-fired electricity generation. That possible conflict of interest aside, he's a knowledgeable source with decades of industry experience, and discounting his opinion may not be the best idea I've ever had.

A less biased view might or might not be had from M. King Hubbert, a PhD geoscientist who first proposed that the world's supply of oil is finite and that the halfway point would be reached in approximately 1995. If you want to give yourself nightmares, read about his theory in Wikipedia under the heading "peak oil."

My own calculations, based upon figures available from the CIA World Factbook, says we have just over 45 years of proven oil reserves in the world today, if consumption figures don't rise above levels reached in 2005, which they already have. Not good news.

However, the operative word in the above paragraph is "proven," meaning oil reserves that are known and mapped. This doesn't include, obviously, those reserves that have not yet been discovered, leaving open the question as to whether any such actually exist. If they do, the calculations of Pickens, Hubbert, and myself must undergo revision.

It also doesn't include other potential sources, such as oil shale in the U.S. Rocky Mountain states and oil sands in Alberta, Canada. These resources are massive, more than twice the size of conventional reserves, but they can't be extracted by the usual drilling methods and instead require some technological innovation (read large R&D budgets) which is why they aren't generally included in calculations of proven reserves. However, Alberta's oil sands are already in production, and therefore those revisions are becoming increasingly necessary.

So when someone starts discussing peak oil and the downfall of industrialized mankind, my advice is to listen to what they're saying but keep the salt handy. You might want a pinch of it to flavor those statements. Then again, depending upon whose statistics you believe, you may not.

There you have it--much more than you EVER wanted to know about a barrel of oil. Next time, be careful what you ask, because I just might be working on a similar topic and again expand my investigation accordingly. And then you might find yourself reading that, too.