oil field math

[mikeb]

Oilfield math -

A 15 mpg clunker that travels 12,000 miles a year uses 800 gallons of gas a year.

A 25 mpg vehicle that travels 12,000 miles a year uses 480 gallons a year.

So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.

They claim 700,000 clunkers were turned-in, so that's 224 million gallons saved per year.

That equates to a bit over 5 million barrels of oil.

5 million barrels is about 5 hours worth of US consumption.

More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars

So, the government paid $3 billion of our tax dollars to save $350 million.

We spent $8.57 for every dollar we saved.

I'm pretty sure they will do a great job with our health care, though.

[TearlessTom]

Sounds about right. 

 

Tom

[old grouch]

mikeb
With your kind permission, I will send a copy of that to my Congressman and both my senators.  Maybe if we all did, at least some of them would get the hint?   Stan

[Psychotic Bovine]

Also sad, at least those of us who feel that cars can be works of art:

http://www.caranddriver.com/features/10q1/a_tally_of_interesting_cars_killed_by_cash_for_clunkers-feature

[Big Rig]

I am not sure why you are compaining, the current Administration knows that our kids and our grand children will be paying for the cash for clunkers program.

I can not wait until they pass the healthcare system...maybe all the illegals will step up and pay for that...what do you think?

[Bobbo]

Your numbers are off a little.  If the 700,000 clunker replacements are using 320 million gallons less of gasoline per year, that would be about 11.5 million barrels of crude, since a barrel yields about 19.5 gallons of gasoline.  Crude sells for over $80 a barrel, so the net savings is almost a billion dollars a year.  In three years, it will pay for itself, and after that, it will save money.  Actually, the newer cars are getting almost 30 MPG, so the savings are even greater.

[alph]

mikeb
With your kind permission, I will send a copy of that to my Congressman and both my senators.  Maybe if we all did, at least some of them would get the hint?   Stan

stan,

they won't get the hint.  the money's too green.

al.

[Misfit]

Your numbers are off a little.  If the 700,000 clunker replacements are using 320 million gallons less of gasoline per year, that would be about 11.5 million barrels of crude, since a barrel yields about 19.5 gallons of gasoline.  Crude sells for over $80 a barrel, so the net savings is almost a billion dollars a year.  In three years, it will pay for itself, and after that, it will save money.  Actually, the newer cars are getting almost 30 MPG, so the savings are even greater.

If crude is $80.00 a barrel and you net 19.5 gal. per barrel that = $4.10 per gal before refining costs, transport and pump profits. Where do you buy your fuel?

[Bobbo]

The other 22.5 gallons are refined into fuel oil, lubricants, and many other base products to make plastic, adhesives, and such.  The gasoline accounts for only a small amount of the money made out of crude oil.

[John Schmidt]

Not sure how accurate this is and I don't recall where I got it, but it's at least food for thought.
++++++++++++++++++++++++++++++++++++++

Written by a car dealer.

SO...you took FEDZILLA up on its offer of $4500 dollars to trade in your old "Clunker" (interesting choice of words)? Well, let's see who got the best of that "deal."

If you traded in a clunker worth $3500, you got $4500 off for an apparent "savings" of $1000. You could have gotten $3,500 if you had just traded the car in. So you really are $1,000 ahead (depending on your clunker's value) at this point. Not too bad.

However, you WILL have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500. So, rather than save $1000, you will actually pay an extra $350 to the feds. In addition, you traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need, trading in a "clunker" that was costing you less to run than the payments that you will now be making. Even if you save $1,000 dollars a year in gas due to better mileage, you're still going be in the red for five years....hello?

But wait, it gets even better: you also got ripped off by the dealer. For example, the month before the "cash for clunkers" program started, every dealer in LA was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 because competition was stiff due to poor sales from the stalled economy. When "cash for clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more than you would have the month before. Honda, Toyota, and Kia played the same list price game that Ford and Chevy did. Now let's do the math.

You traded in a car worth: $3500
You got a discount of:       $4500
Net so far:                     +$1000
But you have to pay:        $1350 in taxes on the $4500
Net so far:                        -$350 (that's minus...in the red)
And you paid:                  $3000 more than the car was selling for the month previous
Net Loss:                        -$3350

We could also add in the additional taxes (sales tax, state tax, dealer prep, etc.) on the extra $3000 that you paid for the car, along with the Five years of interest on the car loan; but let's just stop here while you kick yourself. Suffice it to say that those costs will be much higher than any savings you get from "better mileage". So who actually made out on the deal?  FEDZILLA collected taxes on the car along with taxes on the $4500 they "gave" you.

The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. Manufacturers got to dump lots of cars they could not give away the month before. Lots of good or repairable used cars got taken off the market, crushed and sold as scrap metal to (ready for this?) CHINA ! (Look it up...) And the poor consumer got saddled with even more debt that they cannot afford. FEDZILLA'S merry men (who promised that people making less than $250,000. would pay "not one red cent more in taxes") will make millions in new tax revenues after convincing Joe Consumer that he was getting $4500 in "free" money from the "government." In fact, Joe was giving away his $3500 car and paying an additional $3350 for the privilege. Chicago politics gone global...with an agenda.

If you find errors in this math, please let me know...being a simple guy, I'm always willing to learn new things; and if you took "advantage" of the Clunkers deal, I have some swampland down in Florida that's for sale.

And remember, these are the same Einsteins who want to take control of our health care system. Hold on to your wallet!!

[highcountry]

Also sad, at least those of us who feel that cars can be works of art:

http://www.caranddriver.com/features/10q1/a_tally_of_interesting_cars_killed_by_cash_for_clunkers-feature

I actually saw where there was an '80s Maserati traded in as a clunker.  If I recall, it had less than 30K on the clock.

[Bobbo]

John, your post has so many inaccuracies that I can’t address them all.  First, the program is a credit above the fair scrap value of the car.  The biggest one is that the credit will be taxed as income.  You can learn about it here:  http://www.cars.gov/faq#category-06

[John Schmidt]

John, your post has so many inaccuracies that I can’t address them all.  First, the program is a credit above the fair scrap value of the car.  The biggest one is that the credit will be taxed as income.  You can learn about it here:  http://www.cars.gov/faq#category-06

Bobbo, like I said....only food for thought, nothing more. I'm not even sure why I happened to save it to the computer to begin with, and don't recall where it came from. I agree, it has some holes in it, but....as a retired gov't. auditor, I know there are some surprises in there as well. I wasn't about to go through it and edit all the different areas needing it, most people taking advantage of the program couldn't care less anyway....they all figured they got a great bargain. So be it.

[alph]

the numbers might not be 100% accurate, but i kinda know were you're going with it john.  everyone knows that once uncle sam gets involved, it's just going to get more complicated!!

[Jess Tolbirt]

i was going to buy a new car anyway,,,i didnt use the cash for klunkers rather i kept my cherokee and sold it outright...

[czuch]

I still have my clunker.
My daughter and I were getting gas. She asked what milage the surburban gets. 20 says I.
 How much does the Valk get? 35ish.
A few moments of pondering,,,,,,
So, the suburban gets better milage than the bike, proudly she states.
Howzat, my dear.
The bike only hauls the bike and the suburban hauls the suburban.
Couldnt argue, and why would I. I was very proud.
We went for ice cream.