Wednesday, October 22, 2008

Gas Boycotts

Oye. Please, people, STOP email-forwarding gas boycotts! Please spread the word on this one: gas boycotts (and I have seen dozens of different angles on that idea) cannot work. Ever. Period.

The people that suggest a boycott are operating under the traditional supply and demand ideas, and in a supply/demand situation, a boycott is a great tool.

But brace yourself for this one, because it's going to sting. Seriously, I was pissed when I figured this one out:

Those ideas don't apply here. Not to oil.

We are talking about a finite resource here that is controlled by a handful of power groups and EVERYBODY needs it EVERYWHERE. Trying to buy less from one company doesn't change that fact, and the companies that sell this stuff know that. The whole world is one big junkie trying to score hits from our drug dealer. If we all go down the block to another dealer for a few weeks, that first dealer is NOT going to lower his prices. He knows we'll be back, and if we're not there will always be others. Or he can sell it to a different market...

Which brings me to my next point. Even more important than our addiction is the fact that the oil companies have never hesitated to buy and sell oil to and from each other as well. If one company (say Citgo) isn't seeing as much performance at the pump as their competitor (lets say Exxon), then they will happily sell at least some of their current supply directly to Exxon, and Exxon will turn around and sell it to you at the pump. So, in that scenario, even though you avoided Citgo stations, you still bought their gas at their price and they still get your money.

Sadly, as long as we live the way we do and rely on the vehicles that we do, we can't do anything about prices or who gets our pump dollars. The source of the gas you pump at any given station can be different from day to day at the same station.

This is also the same reason why opening up new drilling here won't make a significant dent in our pump prices at home. It is a world commodity, traded on the world market, and it's price is SET by that world market. Anybody who thinks that just because we start to produce a tiny amount ourselves that we're going to see the benefits ourselves directly at the pump is dillusional. And I say "produce a tiny amount" because in the massive scheme of the world's total oil market, we are sitting on a tiny percentage of the whole. As holders of a tiny piece of the pie it jsut isn't possible for us to have any lasting or meaningful impact on the world price per barrel, and THAT price is the price that dictates what you pay at the pump.

What would be a more effective means of stopping the money from going to Chavez and the middle east, and anywhere else is to start circulating emails urging for alternative fuel cars. Plug-in electric cars, hydrogen cars, bio-diesel, etc. THAT is where we can hurt them.

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