Counting gas profits on 11 fingers

Future Tense for May. 08, 2006

As a general rule, people in my profession, journalism, do not have an outstanding reputation for their command of science, technology and mathematics.

We even celebrate that lack of knowledge in some of our professional folklore.

Some years ago, the managing editor of The Chicago Tribune heard that scientists at University of Chicago had created a self-sustaining nuclear chain reaction. In other words, they built the world’s first nuclear reactor. In other other words, as the M.E. explained to a Trib photographer, “They split the atom.”

Arriving at the former racquetball court beneath the old Staggs Field stadium, the photographer called the physicists —genuine geniuses — together.

“OK, I want three photos,” the shooter said. “The first is you guys putting the atom in the machine. Then we see you splitting the atom. Last, I want you all looking at the pieces.”

That was in 1942. Thirty years later, the situation had, if anything, grown worse. Knowledge in physics, chemistry, computers, medicine and other science increased on a logarithmic growth curve starting in World War II. Many journalists could not spell “logarithmic,” let alone explain it then, and that’s true today. I’ve read at least three articles in the past month misusing “arithmetic” and “geometric” to incorrectly describe statistical curves.

Thirty-five years ago, I decided to quit man-handling 55-gallon barrels of solvent for a chemical company while writing part time. I dragged my miserable 2-point-not-much grade point average into a college admissions office in Des Moines and begged to be let in. I wanted to study journalism; my academic adviser had other ideas.

“Demonstrably, journalists don’t know arithmetic,” he said. “If they did, they could calculate their probable lifetime earnings and realize they needed to find a more profitable career.”

He had — and has — a point. Half of the radio, TV and newspaper people in the United States work for $22,000 to $47,000 a year. The median is about $31,000 (broadcasters earn more, newspaper people less). By comparison, public-relations specialists average $42,000 and school teachers average $47,000. Why don’t journalists go into those professions that require many of the same skills? Go figure.

My adviser believed colleges should require journalism majors to take classes in economics, statistics, sciences and almost anything other than writing. He was not the most popular person on the journalism faculty, even among his colleagues. I certainly wasn’t happy when he steered me into a major in environmental policy. In hindsight, though, he was right. How can journalists reliably explain science and economics if they don’t understand the fundamental concepts? The simple answer is that we rely heavily on our colleagues who know what they’re writing about.

Unfortunately, some prefer not to let the facts get in the way of a good story.

Take, for example, Andy Rooney’s column on this page.

I don’t always agree with Rooney, but I like his writing. He’s a curmudgeon in the tradition of Mark Twain and H.L. Mencken and when Rooney has an opinion, he doesn’t pussyfoot around or stumble through a bunch of on-the-other-hands.

But Andy doesn’t know a barrel of oil from a bushel of pecks. If I didn’t know better, I might believe someone who told me a barrel contains 55 gallons — we have several 55-gallon drums in our press room right now — but I’d question any source that said 70 gallons. A barrel of crude contains 42 gallons. Four million hits in Google confirm it.

Andy’s math is screwy, too. He tried to calculate how much profit the oil companies make on gasoline (a number many Americans would like to know). Somehow, he figured the oil companies produce a gallon of gas for $1.40.

Do the math for yourself. At the current crude-oil price of $70 per 42-gallon barrel, the oil alone costs almost $1.67 per gallon.

Anyone can make a factual mistake. Even Rooney’s other editors missed this one. both he and they should have been suspicious of the stats.

As Mark Twain once observed, “There are three kinds of liars: liars, damned liars and statisticians.”

A statistician could almost make you feel sorry for the oil companies. Consider this:

A 42-gallon barrel of crude costs $70. On average, the oil industry cracks 19.5 gallons of gasoline out of each barrel. So, in effect, the refinery pays $3.59 per gallon for its basic product. That’s before it spends money to refine the oil. By that calculation, you might think the poor oil industry loses money on every gallon.

If you believe me on that one, let me show you how a statistician proves you have 11 fingers instead of 10. I’ve tried unsuccessfully to collect on that bar bet for 35 years.

For the record, ConocoPhillips’ third-quarter profit last year, when pump prices averaged $2.60, was about 9 cents per gallon or 5.5 percent of the refiner’s price to wholesalers. California’s Department of Energy collects actual financial reports about refinery operations and says the $3.07-per-gallon pump price of gasoline last month included $1.70 for the crude oil, 78 cents for refining and profit (I’d estimate the latter at 11 to 13.5 cents per gallon), 1 cent for dealer costs and profit, 18 cents for the federal tax and 40 cents for state and local taxes.

So, whose numbers do you believe — the refiner’s, California’s, Rooney’s or mine (notice how I sneakily injected my questionable estimate into the state’s facts)?

I’ve already warned you about journalists and arithmetic. My concern is that lots of Americans also lack the math skills and science knowledge to make an informed judgment about what they see or read in the news.

Science and technology isn’t slowing down. That logarithmic curve in the growth of knowedge is aiming for Mars and beyond, both figuratively and literally.

This is why so many experts in business, industry and government now strongly believe that today’s children will need much more science and math education to make informed decisions as citizens ... in the future.



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