Here's an unsurprising fact: Big Oil is making huge profits. Here's one that might catch your eye: car owners are spending nearly as much gassing up as they paid to buy their car.
Crunching a few numbers, the Union of Concerned Scientists spells out in a new report how consumers could be saving thousands through buying a fuel-efficient vehicle. Oh, and buying oil company stock is basically futile.
Last year, ExxonMobil and Chevron posted near-record profits of $44.9 billion and $26.2 billion, respectively. Whenever someone pumps their tank at a gas station, if they're spending $50, $33 will go directly to oil companies. If the driver bought the car in 2011 and drives it for 15 years (longer than the roughly 11-year lifetime of typical vehicles on American roads), they would be spending more than $22,000 on gasoline, $14,000 of which goes directly to oil companies.
Gas stations aren't making that much money off drivers filling up their tanks – only about 81 cents of an average $50 fueling go to the local gas station owner. "In the end, gas stations make more money off the bottled water, beef jerky, and other things you buy inside than off the fuel you buy outside," said Joshua Goldman, the report's author and policy analyst for UCS's Clean Vehicles program.
Drivers owning shares in oil company stock are not going to make back their money spent at the gas pump. An average driver with $20,000 in ExxonMobil stock would see less than a penny of growth in their stock investment after you account for spending about $1,700 over the course of a year for filling up at ExxonMobil gas stations, according to the UCS.
Spending more on fuel-efficient vehicles like a hybrid is worth it over the vehicle's lifecycle cost, the Union of Concerned Scientists says. For example, a Ford Fusion SE Hybrid may cost $3,500 more than its base conventional gas model, but consumes $9,000 less in gasoline over its lifetime.
Filling up Does Little to Benefit Drivers' Local Economy, Personal Stock Portfolios
WASHINGTON (Feb. 4, 2013) -Most Americans are likely to spend almost as much on gasoline over the life of their vehicle as its original cost but could save thousands with a fuel-efficient vehicle, according to a new report by the Union of Concerned Scientists (UCS), which also found most drivers see their oil company stock grow less than a penny a year from their own fill-ups.
Rising gas prices and drivers' trips to the pump are translating into big profits for the oil industry. Just last week, ExxonMobil and Chevron posted near-record profits in 2012 of $44.9 billion and $26.2 billion, respectively. These profits, however, come at a big cost to consumers. Americans pay thousands of dollars every year to fill up their vehicles, and this expense is taking an increasing chunk out of their wallets.
Examining where all that money paid at the pump actually goes, the new report found that of the $50 a driver pays at the pump, on average, $33 will go directly to oil companies. That means that if a driver bought a car in 2011 and drove it for 15 years – the lifetime for an average vehicle – they would spend more than $22,000 on gasoline, $14,000 of which would go directly to oil companies.
"Filling up at the pump isn't cheap," said Joshua Goldman, the report's author and policy analyst for UCS's Clean Vehicles program. "You're basically paying for a second car every 15 years. The only thing really benefitting from your oil use is oil companies' bottom line."
Filling up does not do much to feed money into communities either. In fact, just 81 cents of an average $50 fill-up goes to the local gas station owner. "In the end, gas stations make more money off the bottled water, beef jerky, and other things you buy inside than off the fuel you buy outside," Goldman added.
Even if a driver owns shares in the same oil companies they buy gas from, their oil use does virtually nothing to benefit their personal stock portfolio. In fact, an average driver with $20,000 in ExxonMobil stock would see less than a penny of growth in their investment after spending $1,700 to fill up with gas from ExxonMobil over the course of a year.
Even if ExxonMobil CEO Rex Tillerson were to spend an estimated $3,200 filling up a Chevy Suburban – one of the most fuel-inefficient vehicles in the country – over the course of a year, his $150 million in ExxonMobil stock would only grow 34 cents through his fill-ups.
By contrast, efficiency can deliver large returns for drivers. For instance, a Ford Fusion SE Hybrid costs $3,500 more than its base conventional gas model, but consumes $9,000 less in gasoline over its lifetime.
"Saving money by investing in a fuel-efficient vehicle is a win whether you own oil stocks or not," Goldman said. "Even Rex Tillerson would see more personal benefit from owning a fuel-efficient vehicle than continuing to fill up a gas guzzler at ExxonMobil stations."
Exxon itself has realized the potential savings of investing in efficiency as it has reduced energy use at its refineries by 9 percent over the last nine years.
Automakers are starting to offer more gas-saving models thanks in part to historic new standards finalized in 2010 and strengthened last year to nearly double the fuel economy of new vehicles by 2025. Tapping into fuel-efficient technologies can not only help save drivers money, but also help create new jobs and put the nation on a path toward cutting its projected oil use in half within 20 years, according to UCS's Half the Oil Plan.
According to data from the Department of Labor's Bureau of Labor Statistics, extracting oil and gas produces less than one job per $1 million of output, and is among the least job-intensive industries in the United States. When consumers reduce spending on gasoline, they spend more money in areas of the economy such as retail, which employs about 12 people per $1 million of output.
"Since the oil industry profits from our fill-ups, we cannot expect them to lead the charge to cut our oil use," Goldman said. "Thankfully, it's easier than ever for consumers to choose fuel efficiency and keeping the money saved on gas in their pockets and their communities instead of oil company coffers."