With Exxon Mobil reporting $10.65 billion profits for the quarter, expect (1) news reports on the billions of dollars in profits the company is raking in even as consumers are faced with $4/gallon gasoline, followed by (2) outraged political commentary about how Exxon is profiting from consumer misery.
Mark Perry, blogging at Carpe Diem, offers up a little perspective: Exxon’s profit per gallon of gasoline sold runs a little about 2 cents, while federal, state, and local gasoline taxes per gallon of gasoline range from a low of 26.4 cents (Alaska) to a high of 66 cents (California, New York).
At the Freakonomics blog, guest Charles Fishman explains “Why water will never be the next oil.” A sample:
If you leave aside the somewhat silly world of bottled water, there has been almost no innovation in the industry of water for decades. A water facility today uses the exact same technology it did in 1973. In what other industry is that the case? The typical Wal-Mart long-haul truck has more intelligence in it than the typical water system.
The technological revolution has completely bypassed the world of water, mostly because of the strange nature of the market for it. Water has almost no pricing signals. You can’t trade it. And while in the developed world you don’t typically run out, if serious scarcity develops, you can’t just buy more, no matter how much you’re willing to pay. The most liquid and plentiful natural resource on the planet is almost completely illiquid as an asset.
Actually, I’d be surprised if many water systems are not using microprocessors, for example, or other technologies in their systems. The “exact same technology [as] 1973″ sounds a little over dramatic. But “strange nature of the market for it” is right.
Fishman has a new book out on water supply, The Big Thirst. (More: A WSJ review of The Big Thirst, the book’s website: http://www.thebigthirst.com/.) Fishman’s prior book was The Wal-Mart Effect, so perhaps he really knows something about how smart those long haul trucks are.