Gas Station Boycott

[mimitabby]

just don't drive this month! that will show them

[DrBadger]

OK, I have to pipe in here....(disclaimer, I work for a major oil and gas company).

First off, Mr.Silver is right, going to the smaller "independent" gas stations as opposed to a shell, Exxon, BP etc station will not hurt the major oil and gas companies, all the gas comes from the same refineries. Those are run by either the major integrated oil and gas companies (Shell, Exxon, BP, Chevron, Conoco) or one of the refining companies (Valero). Everyone buys everyone elses oil to refine and then the resulting gasoline.

Second, the oil companies’ profit margins are controlled by a lot of things other than gasoline sales. Actually, at my company last year our profit margins were hurt by our refining and marketing end! A big part of the profit margins are the really high price of oil (~$115 this week). This is not being controlled much by how much gasoline people in the US are buying... it is a combination of OPEC (the Organization of Petroleum Exporting Countries) setting prices by controlling production levels, increasing demand in places like China and India, and the weak dollar is driving a lot of investors to hedge by dumping $$ into oil, which is traded in US dollars worldwide. If a company only does exploration and production they are directly benefiting from $100/barrel oil since all they do is sell the oil they find and produce. For the companies that also refine the oil into gasoline, they have to purchase the produced oil at the $100/barrel, but all of that added expence isn't handed directly onto the customer base (ie. the price of gasoline hasn't risen as much as the price of oil) so the companies actually have a smaller profit margin on the refining end of the company than they did 2 years ago.

In terms of profits, yeah, $11 billion sounds like a TON of money (to me even!), but when you look at the net profit margin (how much money is made vs. the amount spent to create the product) it isn't out of line with any other successful corporation. The average for oil and gas companies is around 9% (ranging from ~5%-14%, the 14 is petro-china). Compare this to the net profit margin for other major companies: GE: 10.32%, 3M: 15.29%, Toyota: 6.84%, Google: 25.20%

Now, I am not saying we shouldn't cut down on our gasoline use, drive less, drive more efficient cars when we do need to drive. That is a good thing to strive towards for helping our planet, protecting the resources we have, and our own personal finances, but ultimately it won't have a huge effect on the profits of oil and gas companies like these kinds of boycotts try to say it will.

OK, getting off my soap box, and looking up the address of the friend that I am carpooling with tomorrow to help another friend move (so we don't all drive).
E.