took me awhile to understand what you are saying. It is somewhat convoluted, but clear after some thought. You are looking at the total cost and subtractring the figure for labor to see what is left. Not a bad approach. Can't really see anything wrong with it. Just could be explained a little better.
We used to use a figure of $100/hour for the cost of a professional person. And these operators would not be $10/hour people either. They would have to have some training and brains to watch the process.
Just considering one day of production... or one hour..
assuming 110 barrels a day is a 24-hour 2 or 3-shift operation.
Total Cost = $1100.
Salaries (assuming a figure of $80 all-in) = 24 X 2 X 80 = over 3K
assuming the 110 figure was for an 8-hour day...
salary cost = 8 X 2 X 80 = 1200.
More reasonable, i would say the cost of a barrel of pyrolysis oil is nmore like 40-50... factoring in the labor plus machine time, raw materials (catalyst), etc.
Some tell me how I am incorrect in saying that $10/hour only covers labor in the most optimistic scenario?
In comparison, the exploration cost of a barrel of crude is $45. THis is a component of the price of crude that is allocated to the ongoign exploration costs. In reality, the uplift cost (the cost of getting the crude from the ground) is like $5. Minimal. Hence, JB's angle.
But, realistically, that uplift cost is from wells that are producing and need no manual intervention...
so someone tell me I am wrong that the 10/barrel would only cover labor, and give some numbers to demonstrate your approach.
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