Gas Prices, Boycotts and Urban Legends
- 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
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.
[These examples of email gas rumors are cited by snopes:]
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
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:
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
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
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)
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
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
Citgo 0 barrels of oil
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
Saudi Arabia: 16.9%
(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
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
Citgo 0 barrels of oil
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
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
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,
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
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