How expensive is it to manufacture liquid oxygen?

- Oct 31, 2019-

That's actually a pretty complicated question. Manufacturing liquid oxygen is a large scale operation. Trying to do it at a small scale would cost a lot of money, so it's only economically feasible to do it in reasonably large plants. Those plants are expensive to build and operate, but when you divide out the cost per unit of liquid oxygen, it's not that much.

How much, exactly? That's not easy to say. Once a plant is built, the primary ongoing cost is for electricity (lots and lots of electricity). The oxygen is pulled out of the atmosphere, and so is free, you just have to pay to separate and liquefy it. When you break down that electrical cost per gallon of liquid oxygen, it's pretty cheap, well under a dollar a gallon. 

BUT, to get there, you have to spend millions of dollars designing and building the plant, and then you continually have to employee operators, maintenance personnel, engineers, and managers, to keep it running and keep it safe. Then, having produced the liquid oxygen, it has to be stored and transported (which is complicated and always involves losses. You also have to maintain marketing departments, logistics operations, and a host of other groups to get the oxygen to the customer.

What that means is that the direct cost (the cost of electricity) only represents a small fraction of what the liquid costs to produce and distribute in reality. Industrially, it can be sold in bulk for a few dollars a gallon. In small lots, it's much more expensive, because there are economies of scale involved. But how much it actually costs to produce depends on how many of the costs you actually want to count.


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