Kurt Fischer
One last oil and gas comment.
Although the price of oil is down so much now that I don't hear from people that gasoline is too expensive and the oil and gas firms are rippping us off, when we climb back to a reasonable level I expect to hear the age old chorus.
Working for Mobil Oil and Exxon always helped me keep in perspective how inexpensive our gasoline is.
As you know, major oil and gas firms are made up of four functions: Exploration, Producing, Refining and Marketing.
The Exploration division is incredibly scientific. Imagine looking for evidence of oil which is contained in porous rock miles below the surface of the earth. It is a mainly scientific endeavor. And it is real tough science.
The Producing division is applied geology and engineering. How can we exploit the oil reserves so deep within the earth? How do we understand the geology involved. How do we make the oil flow to the pipes we run underground. How do we lift it to the surface. All of these are applied engineering problems.
Refining is process manufacturing. Refineries are some of the most complex and well engineered facilities in the world. The process of converting the raw crude into gasoline and other products is an amazing manufacturing process. Multi billion dollar facilities.
Marketing is the process of moving the refined product to gas stations and having it available to consumers, both to your own brand and other brands. Plus now it includes the idea of providing small stores with each location. A huge logistics network.
This is really like having four separate companies working together in the same corporation.
When I think about all of the functions that must work separately and together and then think the resulting product is sold for $2 a gallon, it seems like a bargain. Especially when you compare it to the cost of distilled water. Yet no one complains the distilled water companies are bandits. But the scale of the majors allows them to add up the pennies they make on a gallon of gasoline and make it into a very large number based on volume.
Perhaps I go on too long on the topic. But my 15 years at Mobil and Exxon were eye opening.
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