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THE COLUMBUS DISPATCH: Gusher of goods made with crude

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Saturday,  January 5, 2008 3:08 AM
By Paul Wilson

High petroleum prices won’t just hit you at the gas pump. They could hit you at the cash register when you buy golf balls, lipstick and pantyhose.

Those and dozens of other products contain at least some oil, which passed $100 a barrel during trading for the first time this week.

“You’re talking perfumes, deodorant, food preservatives, lipstick,” said Terry Fleming, executive director of the Ohio Petroleum Council. “I think people do forget this. They get so angry at the prices at the pump.”

It’s hard to guess how much costlier these items will become; that will depend in part on how much petroleum they contain. Fleming guessed that more than 70 percent of products in a supermarket have at least some petroleum.

One example: Lids on plastic coffee cups.

So will Americans have to pay more for their daily caffeine fixes?

“Over a period of months, it may eventually drive up the price of that cup a penny or two,” said James Newton, chief economic adviser for Commerce National Bank. “It won’t be one of those things when we see oil hit $100 a barrel and see Starbucks raise the price of coffee 5 or 10 cents a cup.”

Think of it another way: Each barrel of oil contains 42 gallons of petroleum. In the U.S., about 34 gallons of that goes to gasoline, home heating oil and diesel and jet fuel, according to the American Petroleum Institute. Less than a half-gallon of each barrel goes into such products as DVDs, crayons and house paint. But it’s still a significant amount because Americans consume 21 million barrels of oil a day, up from 17 million in the early 1990s.

“We shouldn’t play it up too much, but we shouldn’t ignore it,” Newton said of petroleum as a product component. “With a lot of those (products), oil is a rather modest contributor.”

More than a gallon of each barrel of crude goes to asphalt. That has been one reason construction costs for the Ohio Department of Transportation have increased 40 percent in the past four years, the department said.

Surging crude-oil prices hit Americans hardest at the pump or if they warm their homes with heating oil. Ohioans are paying about 75 cents per gallon more than they did a year ago for unleaded regular, and some experts say gasoline could reach $4 a gallon as the summer driving season looms.

Central Ohioans paid $3.16 a gallon, on average, for unleaded regular yesterday, up 7 cents from three days earlier, according to GasPriceWatch.com. Meanwhile, home-heating oil prices have soared this winter.

Expensive crude also can affect airfares, as airlines add surcharges when jet fuel gets expensive. And almost all consumer products — even those that don’t contain petroleum — can be affected, Fleming said.

“Something like 70 percent of the goods in this country are delivered by truck,” he said. And trucks burn petroleum-based fuels.

For most of the 20th century, as it transformed the modern world, oil was cheap and abundant. Throughout the 1990s, for example, the price for oil averaged $20 a barrel. Even at today’s highs, oil is cheaper than imported bottled water, which would cost $180 a barrel, or milk, at $150 a barrel.

“The concern today is over how will the energy sector meet the anticipated growth in demand over the longer term,” said Linda Z. Cook, a board member of Royal Dutch Shell. “Energy demand is increasing at a rate we’ve not seen before.”

More than any other country, China represents the scope of that challenge. As it turned into a global economic behemoth over the past decade, China also became a major energy user.

Today, China consumes only a third as much oil as the United States, which accounts for a quarter of the world’s oil consumption each day. By 2030, India and China together will import as much oil as the United States and Japan do today.

While demand is growing fastest abroad, Americans’ appetite for big cars and large houses has steadily pushed up oil demand in this country, too. Europe has managed to rein in oil consumption through a combination of high gasoline taxes, small cars and efficient public transportation, but Americans have not.

“Fifty-dollar-a-barrel oil seems so far away at this point,” said Thomas Bentz, a senior energy analyst at BNP Paribas in New York, citing a figure that seemed an impossibly high price for oil only a few years ago. “Oil will stop rising when we see demand destruction. We haven’t seen that yet.”

Made from oil

Products that contain petroleum that could be affected by oil prices:

Antiseptics

Baby strollers

Balloons

Bandages

Cameras

Candles

Clothing

CDs and DVDs

Computers

Crayons

Dentures

Deodorant

Diapers

Food preservatives

Garbage bags

Glue

Hair dryers

Ink

Insecticides

Medical equipment

Nylon rope

Pacemakers

Photographs

Roofing

Shampoo

Shaving cream

Soft contact lenses

Telephones

Toothpaste

Toys

Vitamin capsules

Source: Ohio Petroleum Council

Information from The New York Times was used in this story.

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