Loading ...
Sorry, an error occurred while loading the content.

Gas Prices, Boycotts and Urban Legends

Expand Messages
  • Lawrence Rogak
    Various internet chain emails urge people to fight rising gasoline prices -- and terrorism -- through boycotts of certain gasoline brands, boycotting gas
    Message 1 of 1 , Sep 2, 2005
    • 0 Attachment
      Various internet chain emails urge people to fight rising gasoline
      prices -- and terrorism -- through boycotts of certain gasoline
      brands, boycotting gas purchases on certain days, etc. Are any of
      these emails on the money?

      Not according to Snopes.com, a website that examines and debunks
      urban legends.

      This is what Snopes.com has to say about these emails:

      ---------------------------------------------------------------------

      Rumor: Spurning gasoline from Shell, Chevron, Texaco, Exxon, and
      Mobil will cut off the funding of terrorists.

      Status: False

      [These examples of email gas rumors are cited by snopes:]

      [Example 1]

      WHERE TO BUY YOUR GAS, THIS IS VERY IMPORTANT TO KNOW. READ ON

      Why didn't George W. think of this? Gas rationing in the 80's worked
      even though we grumbled about it. It might even be good for us! The
      Saudis are boycotting American goods. We should return the favor. An
      interesting thought is to boycott their GAS.

      Every time you fill up the car, you can avoid putting more money
      into the coffers of Saudi Arabia. Just buy from gas companies that
      don't import their oil from the Saudis.

      Nothing is more frustrating than the feeling that every time I fill-
      up the tank, I am sending my money to people who are trying to kill
      me, my family, and my friends.

      I thought it might be interesting for you to know which oil
      companies are the best to buy gas from and which major companies
      import Middle Eastern oil :

      Shell............................. 205,742,000 barrels
      Chevron/Texaco.................... 144,332,000 barrels
      Exxon /Mobil...................... 130,082,000 barrels
      Marathon/Speedway................. 117,740,000 barrels
      Amoco...............................62,231,000 barrels

      If you do the math at $30/barrel, these imports amount to over $18
      BILLION! We're now at $53+ a barrel.

      Here are some large companies that do not import Middle Eastern oil:

      Citgo.......................0 barrels
      Sunoco.................0 barrels
      Conoco.................0 barrels
      Sinclair.....................0 barrels
      BP/Phillips............0 barrels
      Hess........................0 barrels
      ARCO.......................0 barrels
      All of this information is available from the Department of Energy
      and each is required to state where they get their oil and how much
      they are importing.

      But to have an impact, we need to reach literally millions of gas
      buyers.

      It's really simple to do.

      Now, don't wimp out at this point... keep reading and I'll explain
      how simple it is to reach millions of people!!

      I'm sending this note to about thirty people.

      If each of you send it to at least ten more (30 x 10 == 300)... and
      those 300 send it to at least ten more (300 x 10 == 3,000) ... and so
      on, by the time the message reaches the sixth generation of people,
      we will have reached over THREE MILLION consumers!

      If those three million get excited and pass this on to ten friends
      each, then 30 million people will have been contacted!

      If it goes one level further, you guessed it ..... THREE HUNDRED
      MILLION PEOPLE!!!

      Again, all you have to do is send this to 10 people.

      How long would all that take?

      If each of us sends this e-mail out to ten more people within one
      day, all 300 MILLION people could conceivably be contacted within
      the next eight days!

      (I don't like chain e-mail, but I think this is worth while)

      ---------------------------------------------------------------------

      [Example 2]

      Nothing is more frustrating to me than the feeling that every time I
      fill-up the tank, I am sending my money to people who are trying to
      kill me, my family, and my friends. It turns out that some oil
      companies import a lot of middle eastern oil and others do not
      import any. I thought it might be interesting for Americans to know
      which oil companies are the best to buy their gas from.

      Here is the list:

      Top 4 companies that import middle eastern oil (for the period
      9/1/00 - 8/31/01). By the way, 86% of all middle eastern oil comes
      from Saudi Arabia and Iraq.

      Shell 205,742,000 barrels of oil
      Chevron/Texaco 144,332,000
      Exxon/Mobil 130,082,000
      Marathon 117,740,000

      If you do the math at $30/barrel, these imports amount to about $18
      billion. That's a lot of money.

      Here are some large companies that do not import much Middle Eastern
      oil:

      Citgo 0 barrels of oil
      Sunoco 0
      Conoco 0
      Sinclair 0
      Phillips 0
      BP Amoco 62,231,000

      All this information is available from the Department of Energy and
      can be easily documented. Refineries located in the U.S. are
      required to state where they get their oil and how much they are
      importing. They report on a monthly basis.

      ---------------------------------------------------------------------
      ---------------------------------------------------------------------
      [Here, Snopes comments on the above sample emails]:

      Origins: If it weren't for all the gross statistical errors and
      the naïve grasp of oil industry economics exhibited here, this piece
      might actually have some validity.

      Although the message quoted above doesn't address where (outside of
      the Middle East) we import oil from, many people come away from
      reading it with the mistaken impression that most of the USA's crude
      oil is imported from the Middle East. It isn't. According to some
      recent figures regarding crude oil imports, only 31% of the USA's
      imports came from Arab OPEC countries (Algeria, Iraq, Kuwait, Qatar,
      Saudi Arabia) in January 2002. The top six countries (by percentage
      of total USA imports) supplying crude oil to the USA in January 2002
      were:

      Saudi Arabia: 16.9%
      Mexico: 15.1%
      Canada: 15.0%
      Venezuela: 14.4%
      Iraq: 11.4%
      Nigeria: 5.9.%

      (Henceforth, our definition of "Middle East" will encompass the five
      countries identified by the U.S. Department of Energy as "Arab OPEC"
      nations: Algeria, Iraq, Kuwait, Qatar, and Saudi Arabia. This
      definition does not include other oil-exporting countries identified
      by the DoE as "Persian Gulf" exporters, such as Bahrain, Iran, and
      the United Arab Emirates.)

      Moving along, we find that nearly all of the statistics offered in
      the piece quoted above are erroneous or outdated:

      "By the way, 86% of all middle eastern oil comes from Saudi Arabia
      and Iraq."

      Sorry, but no. According to the... U.S. Department of Energy's (DoE)
      web site, only 56% of the oil exported from the Persian Gulf in 2001
      came from Saudi Arabia and Iraq, and that figure is probably even
      lower now that Iraq has cut its oil exports in protest of Israel's
      recent actions on the West Bank.

      "Here are some large companies that do not import much Middle
      Eastern oil:

      Citgo 0 barrels of oil
      Sunoco 0
      Conoco 0
      Sinclair 0
      Phillips 0
      BP Amoco 62,231,000"

      Wrong again. The DoE tracks oil imports by company each month, and
      although the raw data are a little hard to follow (fortunately, the
      DoE also provides an explanation of their symbols), for February
      2002 the totals were as follows:

      CITGO is a wholly-owned subsidiary of the national oil company of
      Venezuela, so naturally most of its crude oil comes from there.
      However, in February 2002 CITGO also imported from Middle Eastern
      countries in the following quantities:

      Iraq: 1,342,000 barrels
      Kuwait: 437,000 barrels

      Conoco imports primarily from Mexico, Venezuela, and Canada, and not
      from Middle Eastern countries. However, they are planning to merge
      with Phillips, which does import from Middle Eastern countries.

      BP imports from a variety of oil-producing countries, but in
      February 2002 BP North America also imported from Middle Eastern
      countries in the following quantities:

      Iraq: 470,000 barrels
      Kuwait: 415,000 barrels
      Saudi Arabia: 2,123,000 barrels
      Algeria: 3,853,000 barrels

      Phillips also imports from a variety of oil-producing countries, but
      in February 2002 Phillips imported from Middle Eastern countries in
      the following quantities:

      Iraq: 717,000 barrels
      Saudi Arabia: 1,100,000 barrels

      Sinclair imports from Canada, not the Middle East.

      Sunoco imports primarily from Canada, Angola, and Nigeria, not
      Middle Eastern countries.

      So, "doing the math" and multiplying these monthly figures by
      $30/barrel and projecting them over the course of a year, supporting
      only the companies listed above would still be putting $3.76 billion
      dollars per year in the coffers of Middle Eastern
      countries.

      Statistics aside, the glaring fallacy here is the suggestion that we
      could possibly buy our gasoline only from these selected companies.
      This notion is like claiming that we could put the big grocery
      chains out of business if we all bought our food only from small mom
      & pop stores, but ignoring the fact that these small shops couldn't
      possibly come close to supplying all our grocery needs. The oil
      companies named above are relatively small (which is a large part of
      the reason why they don't necessarily import from the Middle East)
      and could not satisfy the demand that would be created if a
      significant portion of the USA's consumer base were to shun all the
      largest oil companies, unless they bought up the output of the
      companies we were supposed to be avoiding in the first place (or,
      alternatively, unless they raised their prices sky-high).

      Moreover, the idea that oil companies sell gasoline only through
      their branded service stations, and therefore if you don't buy
      gasoline from Shell-branded gas stations you're not sending money to
      Shell (or, by extension, the Middle East), is wrong. Oil companies
      sell their output through a variety of outlets other than their
      branded stations; as well, by the time crude oil gets from the
      ground into our gasoline tanks, there's no telling exactly where it
      came from. (A good deal of the crude oil purchased from Russia, for
      example, is oil from Iraqi fields sold through Russian middlemen.)

      As the St. Louis Post-Dispatch noted:

      Economics Prof. Pat Welch of St. Louis University says any boycott
      of "bad guy" gasoline in favor of "good guy" brands would have some
      unintended (and unhappy) results.

      Although foreign relations wax and wane, Welch says, the law of
      supply and demand is set in stone. "To meet the sudden demand," he
      says, "the good guys would have to buy gasoline wholesale from the
      bad guys, who are suddenly stuck with unwanted gasoline."

      So motorists would end up buying Arab oil anyway — and paying more
      for it, because they'd be buying it at fewer stations.

      And yes, oil companies do buy and sell from one another. Mike Right
      of AAA Missouri says, "If a company has a station that can be served
      more economically by a competitor's refinery, they'll do it."

      Right adds, "In some cases, gasoline retailers have no refinery at
      all. Some convenience-store chains sell a lot of gasoline -- and buy
      it all from somebody else's refinery."

      St. Louis University's Welch says, "The e-mail presupposes that you
      know who the supplier is, and that's not always the case."
      Finally, what this scheme proposes is merely a symbolic solution
      rather than a practical one, because even if the USA stopped
      importing oil from the Middle East, other countries will still
      purchase it. (Japan alone, for example, generally buys as much or
      more oil from countries such as Saudi Arabia and Kuwait than the USA
      does.)

      Complex problems rarely lend themselves to simple, painless answers.
      Simply shifting where we buy gasoline isn't nearly as good a
      solution as the much tougher choice of sharply curtailing the amount
      of gasoline we buy.

      ---------------------------------------------------------------------
      And that's the lowdown on the gasoline boycott emails. Ultimately,
      the two most powerful forces to bring down oil prices are the two
      things that bring down prices for every other product: lower demand,
      and competition.

      Demand for gasoline will not go down by much until the majority of
      vehicles on the road get extremely high, which isn't going to happen
      soon. In any event, the sheer number of vehicles on the road
      increases every year, reducing the net effect of higher gas mileage
      per vehicle.

      A better solution is to come up with an alternative fuel. When
      people can choose between gasoline powered vehicles and, say,
      natural gas, electric or hydrogen cell cars, gasoline sales will get
      hurt and prices will drop -- but never much lower than the relative
      cost of the other fuels.

      The free market being what it is, products will sell for the highest
      amount that people are willing to pay. When they stop buying,
      that's when things go on sale. There is never a sale on umbrellas
      when it's raining, and gas prices won't drop until sales do.

      Now I can climb into my Chevy Suburban and drive away for the
      weekend.

      Larry Rogak
    Your message has been successfully submitted and would be delivered to recipients shortly.