77-24-B3
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Coffee
TranscriptThe other day, an editor of the Oil and Gas Journal delivered a new thought on the matter of petroleum that I thought you might enjoy. I'll be right back. Most of us have calmed down a little about the sudden and drastic hike in gasoline prices that followed the boycott and the OPEC nation's decision to play monopoly. Still, we have a hard time getting used to the new tally every time we say, “Fill ‘er up.” For decades, almost as long as we'd had the automobile, the petroleum industry had kept us supplied with the lowest priced fuel of any nation on Earth. So, when the change came, politicians ranted and raved about contrived shortages and windfall profits. The editor I mentioned, a gentleman named Gary Congrate and his wife, had been out shopping for clothes for their children they paused for a typical American pastime, the coffee break. We still think of the British afternoon tea ritual as somehow unusual, if not a little peculiar. In an amusing way it hasn't dawned on us that the coffee break is every bit as firmly fixed a part of American life. A part of the ceremony, of course, is delivery of the check. In Mr. Congrate’s case, it was 90 cents for two cups of coffee. That price nagged him for the rest of the day, and no wonder. It seems only yesterday the coffee was a nickel a cup and very often free with an order of food and the skyrocketing cost of coffee is much more recent than the hike in gasoline prices. Mr. Congrate sat down later in the day with a sharp pencil and did some figuring. A coffee cup holds about four ounces and since there are 128 ounces in a gallon that works out to 32 cups per gallon. So, at 45 cents a cup that makes coffee price out at $14.40 a gallon. Being associated with the oil business it was natural for him to extend the equation up to barrel capacity, and price a barrel of coffee, not counting tips, taxes and handling would figure out to $600. And 98% of that barrel of coffee is plain water. Oil, of course, is energy to run our factories, generate electricity, heat our homes and run our cars. Our government has about a five dollar and a quarter lid on a barrel of oil from already operating wells, and the Arab monopolists are charging, what, $13 or thereabouts. As Mr. Congrate says, with I'm sure some wonderment, “Where are the loud complainers about $600 a barrel coffee?” There have been no charges of contrived shortages or excessive profits, environmentalists haven't demanded that we remove the caffeine nor have politicians talked of hidden reserves or production deliberately withheld. Where have they all gone? Mr. Congrate says, “Maybe they're on a coffee break, trying to figure out higher taxes or more controls for the oil industry.” This is Ronald Reagan. Thanks for listening.
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