Sunday, August 19, 2007

To Think: We Used to Want to Fill Our Gas Tanks With Water!

PepsiCo recently released a statement that, due to increasing pressure from the environmental and political communities, they will begin including the words "Public Water Source" on their bottled water labels. For those of you who don't grasp the significance (don't feel bad: without the explanation, It's sufficiently obscure that, if I didn't know the entire story, I likely wouldn't catch the point either), it means that the water in the bottle is plain old tap water.

That's right-tap water.

Now they do something to it I guess. I don't entirely understand the process, but it's tantamount to putting a charcoal filter on the hose bibb in the front yard, then filling up plastic bottles with the water, and selling it-for $1.29 per bottle!

I did some rough calculating, and, at $1.29/20 oz. bottle, the retail price for that bottled water is $8.25/gallon. I filled up my car this afternoon with premium (high-octane) gasoline, and paid exactly $3.05/gallon-and it pained me.

I find it fascinating that the American public is so fixated on rising fuel prices as a socio-political issue. I'd guess that in the last week, I've heard or read about escalating fuel prices at least six times. And, I challenge you: bring up "big oil" in a conversation with a large group of people, and see if there isn't at least one or two people who don't start ranting about corporate thievery, and government being in the pocket of the oil companies. And you know what? I don't relish the thought of paying $3.05/gallon for gas. I drive quite a bit, and I have to admit: it hits the old pocketbook. But I do think that we, as a society, have lost perspective. Because, think about it: how much must it cost to deliver that single gallon of premuim gasoline to me? I'm definitely no expert, but consider for a moment: the fixed costs associated with drilling wells, installing pumping equipment, and storage tanks. Then the costs of filling barrels with crude oil, loading it on tankers bound for the United States (from some middle-eastern country, I presume), and then shipping it here. Then finally off-loading it, refining it, putting it into a tanker truck, trucking it here to Kerman, and filling the tank here at my local gas station. And, let's not forget the cost of running the equipment to pump the fuel from the tank to my car, the fixed costs associated with running the gas station, and the variable costs (like the ignorant guy with the ring in his nose who acts like I'm bothering him if I run in to ask for a receipt, because the little screen on the pump says "Paper out. See cashier"). Oh, and don't forget the .36 cents per gallon the goes to our county, state and federal government.

And that doesn't even include profit!

Not knowing the exact costs of each of these, I can't say for sure, but my guess is that there's very little left for Mr. Exxon, or Mr. Valero. The long and short of it is, while it's painful, and seems excessive, the price tag doesn't seem so exorbitant that the only conclusion that we can draw is that the oil companies are robbing us blind. My guess is that they're making a reasonable margin, all things considered.

Let's contrast this with Aquafina. Put charcoal filter on hose bibb, buy a bunch of plastic bottles with Aquafina labels, fill up bottles, put cap on, load them up into a truck, and haul to Fastrip in Kerman. Ok, I'm oversimplifying the process, I know. It's more complex than that, I admit. But it's still just water! Which costs virtually nothing!

But, that's not really the point of this post. There's an economic theory that is foundational at the company I work for. It's based on the idea that we are entrusted with certain economic resources, to do with as we see fit. Those economic resources are the product of human effort (that is, the mental and physical energies that we exert as human beings generate those economic resources). Thus, the imprudent (or innefficient) use of economic resources is tantamount to the wasting-or taking-of human life. Which leads me to my point: when I realize that I pay $8.25/gallon for bottled water, which does absolutely nothing (but slate my thirst), yet I pay only $3.05/gallon for fuel-which in turn allows me to travel (thereby, conceptually at least, enabling me to work, and generate further economic resources), it becomes apparent to me that, in purchasing bottled water, I am being exceptionally wasteful, which is tantamount to murder (that is, I'm simply throwing away the "energy" that was used to generate those funds that I've used to purchase the water). Think about it for a moment: water provides no energy, no nutrients, and really, very little enjoyment. There is really no substantive benefit, economic or otherwise associated with drinking water (filtered or non-filtered). And, in fact, I recall a story recently where a woman, participating in some radio station contest (trying to win a gaming console), died after drinking three gallons of water. So, not only does water not provide any benefit, it can kill you!

That's an extreme example, to be sure, but you get my point! Gasoline, comparitively (despite our protestations regarding the price of the stuff), is a bargain! Think about it: for just over a third the price of bottled water (which does nothing), you get the ability to travel (along with as many folks as you can fit in your vehicle), somewhere between 17-34 miles!

Which brings me around to my real point: I'm not going to boycott or rant against the bottled water industry. They're just filling a desire or need in the market. That's the market economy at work. But I WILL chastise you, intelligent readers, for wasting economic resources (and, in turn, human life) by purchasing bottled water!

You're better off buying Diet Pepsi.

5 comments:

Katie Booker said...

You know, that is so weird because AquaFina is my ABSOLUTE favorite bottled water! I guess it just goes to show..you might as well drink tap water!

And yes I agree..you are better off sticking to Diet COKE..tho not Pepsi!!!

PJ said...

I trust, Katie, that you now recognize the error in your ways, and will no longer purchase Aquafina, or any other bottled water?

Shane said...

I use bottled water all of the time because it is conveniant. I do not like the taste of Aquafina (Pepsi Co.) or Dasani (Coca-Cola Co.) or many others. The only one I like is Alhambra or Sparklets which is the same company. It is cheaper when bought at contract prices and in bulk like a delivery service. Only about 25% of bottled water companies use tap water, Pepsi and Coke being two of them.

I will continue to use bottled water because of its convenience and a better choice then drinking sodas.

I looked into this subject a few years ago and your post made me revisit the #'s.

Bottled water on average cost 10,000 times more then tap water. It takes almost 2 million barrels of oil per year to make the the bottles for the water. That is enough oil to fuel about 125,000 autos in the same year. The added minerals in bottled water are not good for babies so it is better to use tap water in baby bottles. It takes between 400 and 1,000 years for a plastic bottle to degrade.

But I will continue to drink bottled water!

PJ said...

Shane:

Great comment! The incredible thing, though, is that you've proven my point here, yet you'll still drink the stuff!!

Amazing!

Katie Booker said...

I can't promise that I won't ever drink another Aquafina...but I will be more conscious about it!!!


I'm in Fresno this week...so my blogging might become slim..but I will stop by and post on yours!!
Come see us!!!!! =)