Oil is Dirt Cheap… Literally
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
In theory, a barrel of crude oil seems quite valuable.
It’s well-known, for example, that from one barrel of oil, a refinery can make 19 gallons of gasoline, 12 gallons of diesel, and four gallons of jet fuel.
That’s the equivalent of six billion joules of energy, or enough to power the average U.S. household for 1.8 months.
A DIRT CHEAP EXPERIMENT
However, sometimes the laws of supply and demand work in mysterious ways. While it seems like oil has good intrinsic value, the glut of supply available to the market is so great that “black gold” has become very cheap.
Some would even say “dirt cheap”.
As a part of our landmark investigation, we went all the way to the Home Depot’s website to verify if this were actually true. The results were astonishing, and this information will definitely be helpful the next time I need to do some gardening.
|Price||Bags Needed||Cost per barrel|
|Loose bulk top soil||$204.00||0.04||$8.48|
|Scotts Turf Builder||$6.97||3.74||$26.09|
|Crude Oil (WTI)||$31.72|
We started by going for the bulk stuff.
For only $135, it’s possible to buy 5 cubic yards of loose bulk top soil. That’s enough for 24 barrels worth, which seemed like a steal. The only downside was that it cost an extra $69 to schedule a dump truck to come by our house, which made it likely overkill for this experiment.
Next, we checked out a bag of Miracle Gro. It’s got the brand name reputation, and this particular bag had a user rating of four stars. At $7.97 for a two cubic feet, we’d just need just less than three bags to fill up a barrel. That works out to $22.38 a barrel. Not bad.
However, if we’re going to be serious about our dirt, we’re going to need something that promotes a strong root system and creates a prime seed-growing environment. We took a peek at Scotts Turf Builder, which is only $6.97 per bag. However, with only 1.5 cubic feet per bag, it’s going to take up over 3.7 to fill up our barrel, bringing our total cost to $26.09.
We’re now within $1.50 of oil’s 52-week low of $27.56.
As we continued to shop online for dirt, a five-star gem caught our eye. The brand name was Proven Winners. How could we go wrong with that?
We took a look at the user reviews to be sure.
“I have a high-quality soil-test kit and tested this soil. It is very high in nitrogen, potassium, and phosphorus, so though it will be excellent for plants it is NOT a soil for starting seeds or potting up seedlings,” wrote a previous buyer.
Noted. We will not use it for starting seeds or potting up seedlings. We checked out the price, and for $10.99 per bag containing 1.5 cubic feet, we had our winner. It takes 3.7 of these to fill up our barrel, bringing our cost per barrel of this particularly good dirt to $41.13.
Unfortunately that’s about $10 more than a barrel of oil, but I guess we’ll hedge our bets