Friday, 27 November 2009

How much does a barrel of oil cost to produce ?

I'm trying to figure how much rent is in fossil fuels, who owns them and therefore who has the biggest interest in obfuscating the debate on climate change ?

And then of course what tactics will be used and who will be employed to help them in doing that, regardless of whether or not you believe in climate change theory. This is at the root a question of the distribution of wealth and what happens if you get it wrong as is always the case with "Greenery" and "Brownery".

The plot keeps thickening and before I can proceed I must know how much a fossil commodity costs to produce, in wages, interest and rent *. I'm not interested in what it sells for nor exact numbers yet. Lets start with a barrel of oil. Can anyone help me with How Much:

1) the land owner (say Saudi) charges to let you mine it yourself and keep all that production
2) land owner (say Saudi) charges for oil they have mined themselves
3) are the costs of production on free land ** - 2 minus 1

I have found number between $10 - 20 per barrel for easy to get oil. But this is just the cost of production in labour and capital employed, not what the right to mine it, the rent, costs. I've also had some muddled numbers so far saying 20% but these tell me nothing because they are mixed up with the consumer selling price which includes tariffs and taxation specific to a remote consumer nation. I'm seeking the RENT. That is all.

Anyone ? Thx!

Bloody hell its raining again

* The returns to Labour, Capital and Land employed in production
** On imaginary land where no rent is paid
*** Big Fossil is not a specific group such as a nation or corporation. It might well be a tacit alliance of both who own the monopoly