Thursday, May 27, 2010
The Economy The Problem with a BP Boycott
Posted by Chris Wage on Thu, May 27, 2010 at 10:15 AM
This is an understandable reaction, and the logic makes sense on a first-pass basis: You stop buying BP gas — which comes from BP oil — which makes BP feel the pain and be more responsible. Or something. Unfortunately, the economic reality is very far from that simple scenario. The effects of a BP gas station boycott would be ineffective and/or undesirable for a few reasons:
1) BP gas stations aren't owned by BP — they're owned by independent franchisees. This means that if you boycott these stores in general, you're only screwing some poor guy trying to make a buck.
2) Oil is what they call a "fungible commodity" — this means basically that if you don't buy it, someone else will. Further, since boycotting BP stations means they'll just sell their gas wholesale elsewhere, the result could actually be marginally higher prices due to reduced suppliers.
3) Finally, even if a boycott did affect BP somehow (which it won't), one wonders how you reconcile this with the fact that we're trying to force them to clean up their mess. Hitting them in the pocketbook right now, in the midst of a truly unprecedented (and perhaps futile) clean-up effort, seems a bit ill-advised.
That's not to say that BP should go off scot-free, per se. I honestly haven't even delved into the details of how negligent they were and what safety regulations/rules were broken. I do know, though, that there are thousands of off-shore oil rigs in the gulf alone. BP just has the misfortune of being the guys this time around to fuck up in the process of feeding our oil habit. Last time it was Exxon.
Rather than approaching this whole thing from a vengeful/punitive angle, we should focus on ways to discourage off-shore drilling and reduce oil/gas consumption in general. So if you really want to hit BP where it hurts, skip the drive to work and take a bus. Ride a bike. And maybe stop at a local BP gas station and buy a snack on the way in!
Comments (18)
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Boycotting one oil company may help ... but learning how to use less fossil fuel might be better.
See http://www.greenfuelbooster.com/tipsFrame.…
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Wage is pointing to problems that are true of most if not all boycotts. Indian swadeshi movements in the early 20th Century caused hardships among British factory workers, people who were much worse off economically than BP franchise owners.
On these terms no one would ever boycott. Has there ever been a boycott that worked with such surgical precision that no one was affected or corporates didn't find a means of evading and passing down body blows?
Boycotting BP stations is more of a stand to BP to make them realize that the public does not stand for what is going on. Clearly, anyone that is not bothered by this disaster is not right in the head but saying that you won't buy BP is saying that you disagree with their business practices for sure. The guy who is running the gas station is ultimately affected but that is an occupational hazard he/she should know from the get go. Especially this day in age when moves towards alternate sources of energy are being made, it is ignorant to operate a fuel station and not understand that is a fact of life. Thanks for stating many obvious points but try not to write off that this won't work until it has had a run through. Did you tell everyone before that huge steel box was lowered that it won't work because ice will form causing it to fail? Probably not. Don't knock it until it's tried basically.
I am not great at investigating past events because I am by no means a journalist but please refer to this article, http://www.nytimes.com/1989/05/03/us/six-g… . I would be curious which of the demands of the boycotting parties were met throughout the years by Exxon. I can safely say that safer takers were built and from what I can remember gas prices were lowered to please the public after hiking them after the spill.
Slate wrote a piece last night about the best way to punish BP, and concludes something like a social license system might work. Violations are assigned a point system, and a certain number of points results in restrictions on expansion, acquisitions, drilling, etc. Kind of like the DMV's safe driver points system -- after so many wrecks and/or tickets, you lose your license for a while.
http://www.slate.com/id/2255170/
BP is only on the hook for paying $1, 075,000,000.00 in reaparation for the billions of dollars of damage and destruction of a way of life that have been. Clean-up has been suspended because 7 workers have been hospitalized, likely from the toxic affects of the dispersants that BP has refused to stop using under a government order. Now we are faced with the probability of ground water contamination when hurricane storm surges force the oil and chemicals inland this summer.
The problem with a BP boycott is that BP isn't the real evildoer here: oil is. We all need to do what we can to cut our oil consumption, bottom line. Don't boycott BP, boycott oil. It's just a fluke that this was a BP rig which blew, it could easily have been Royal Dutch Shell or Chevron or anyone else. And we need to pass a serious energy bill that really commits this country to getting off the oil tit. Cuz I'm frankly tired of hearing people say we're going to do that. Been hearing that since the 70s. DO IT already.
Mike, ob1korobi: I think you're both focusing more on the collateral damage issue -- which, though I didn't say so, is relatively minor compared to my primary point, which is that the boycott very likely won't work anyway.
This isn't an issue with boycotts so much as it is an issue with the specific complexity of oil markets and the distribution chain: the fact that oil companies don't own the gas stations, that oil is a fungible commodity, that gas station franchise branding is purely a function of gas brand marketing (increasingly a relic of the past as well), and so on and so forth.
By all means, feel free to attempt the boycott, but all I'm saying is that if a coordinated boycotting campaign actually took off, it a) wouldn't do anything to BP, and b) would hurt the franchise owners trying to make a buck via the incidental/marginal product sales that people buying gas also buy, c) it could actually make gas prices marginally higher
A bit more detail from some econ prof:
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.
. . . 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 . . . 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."
I admit, quite sadly, because it flies against every emotional and instinctual belief, that you are on point with your anti-boycott argument. It's just that one would like to do something that both 'feels good' and sticks it to the man. Walking/biking instead of driving does feel good, and is good for you, but you just don't get the satisfaction of symbolically giving the finger to yet another heartless corporation.
Our basic right to protest is one of the most fundamental and critical rights we have as citizens to exorcize as a Democracy for a true Democracy to work. "Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." Margaret Mead
The fungibility is all too true. I've seen a driver filling station tanks at one dealer drive a half-mile down the road and start unloading more at a competitor's station. But I hate it. I'd like to be able to stick it to BP and know that it wasn't the guy who lives down the street from me trying to make it on ten cents a gallon profit who was getting hurt. I'd like for every $20 I spend filling my tank to somehow be sucked directly from the BP CIO's salary. I don't want to symbolically give him the finger. I want to smack him up side the head.
I boycotted Exxon for years and years because of the Valdez spill. I kept up with the effort in the pre-internet age, and I never saw that it had much more than a short term effect. The social license idea is much better -- more "points" on your drilling record should equate to fewer permits to drill.
BP is a brand name worth billions of dollars. Boycotting the brand would reduce its worth, and make the little station owners switch their franchise contracts to another oil company name. That's how the boycott works. You think the little gas station on the corner gets to but "BP" signs up for free?
I like what JT said it will actually make a deference. JT must be a republican while Chris Wage or whomever wrote this article must be a democrat due to the facts. Fact 1 he says that (The effects of a BP gas station boycott would be ineffective) at the beginning of his article, but at the end of his article he said (So if you really want to hit BP where it hurts, skip the drive to work and take a bus.) Well which is it? In both cases you are simply not buying a tank of BP gasoline. Does BP really know the difference? All they know is kangaroo is not selling as much. And as for hurting the franchise- well why are they selling out America by choosing a completely foreign owned company? If they chose American owned at least the money that was made stays in the USA and not elsewhere. Yes I know that all use foreign oil but it is the prophets that could remain here. With BP every cent goes to foreigners. The franchises all overcharge you on every single item anyway so do you think we should feel sorry for there British supporting ways? Well I don't. Maybe they will switch- at least that's my hope.
Is this an actual paper that you write for? Where is the editor? Garbage....I can't believe this came up while searching for BP research info! I commend your dictionary search of the word "fungible", but if your trying to reach people or at the very minimum inspire one person, lets try a different angle! Of course boycotting works...why? Because people talk about boycotting...including yourself! F*#@ BP and the family member in the business your trying to help out!... Are you alergic to seafood? No....Well you should see this as a serious problem then! Do you like the beach? or any water in general? Well lets just think about things before we speak next time.....(Oh wait...you wrote these thoughts down) Ok, enough busting your chops.....why don't we try to do some old school reporting before we publish stuff like this. By the way it takes a minimum of 3 million in capital to get on the BP franchise wagon!...Do I care if they lose a little bit...not at all! Tell your son or daughter that the reason they are doing something 10 years from now is a direct result of the BP oil spill! I just can't believe these people (BP) are in charge of cleaning up for themselves? R.I.P. to those who died in the accident and I hope this at least changes the way big oil does business.....
PLEASE
BP has billions and billions of dollars - and if it bankrupts them all the better
owners should have know that they were getting into bed with the devil - BP has a long history of fuckups - owners shouldve done the research or instead bought a Subway francise instead
if you want to support the owners but not bp buy a candy bar or something inside the store - but do not buy the gas - owners make very little off the gas anyways - they pay for the priveledge of having the gas which draws in customers (but like i said they shouldve known who they were getting into bed with from the beginning - most probably did)
I'm under no illusions that my personal boycott of BP means a damn thing to the company, but it does have its benefits. Personally, I feel better not standing under their enviro-friendly logo with my credit card in hand. And, the boycotts are effective, but maybe not the way they are intended.
Whether you buy your gas from BP, Shell, Amoco, Marathon – it really doesn’t matter to the motor in you car. It will still mix the fuel with air, ignite it, and then spew the exhaust right out the ol’ tailpipe. But if the company you buy product from willfully violates environmental and occupational safety laws, creates an economic and environmental catastrophe of epic proportions, intentionally lowballs the harm it has caused, and then is more interested in its legal defense than in taking due care of its responsibilities – that’s another matter. So I boycott BP.
I’ve been told I’m wrong, though, and the error of my ways falls into claims that bear examination. First, since most BP stations are “independently owned and operated,” I am only hurting a local small businessman when I take my little Honda across the street. The second claim that boycotts are misguided contradicts the first: that depriving BP stations of my purchase will only reduce their revenues and hamper their sincere cleanup efforts. For now, let’s just say that these two claims cancel each other out – later we can pick each claim apart on its own merits.
The third claim is essentially that BP is too big to fail, a phrase that leaves a certain acrid taste in one’s mouth. BP isn’t hurt by my fillups going somewhere else, the story goes; BP is a huge company and taking my business elsewhere is not even a drop in that bucket. The fact is, though, BP profits from every gallon sold, so I am making an impact, however small. “Can’t hurt us, we’re too big?” The arrogance of that position alone is worth a boycott.
The fourth area of claims is that this was not negligence, it was an accident; or that it wasn’t BP’s fault when environmentalists “forced” BP to drill further offshore than they could handle, or that since we use far more petroleum than we produce domestically we are all guilty. So a boycott is misguided? Wrong, wrong, wrong; it was negligence by a company that chose to operate the way it did; BP’s drilled far offshore because they said they could handle any problems it might cause. And while it’s true we need to use less oil, even the most fuel-inefficient among us know the difference between our demand and their disaster.
When a Boycott BP demonstration was staged here locally, the response was worth noting. The dealer insisted on local TV that his is an independent dealership and that the boycott only hurts a local business. Here’s the first opportunity to call bullshit: if his dealership is independent, he can buy from another distributor, right? If he can’t change brands, how independent is he?
What the dealer did do was chop his price 50 cents for the one-hour duration of the protest. I’m not sure what this was supposed to accomplish; it did virtually assure there will be more protests. At the end of the day it was little more than a crass PR move, an attempt to bolster the dealer’s image at the temporary expense of his own bottom line. Other dealers in other parts of the country have reacted quite differently, in effect joining forces with the boycott, and demanding to be let free of their contracts with BP. This contrast makes the local dealer’s reaction and price cut more difficult to bear.
But it was the reaction to the television news report that was most startling. As is the case with most local news “viewer comments” web pages, the discussion quickly degenerated into off-topic, zero-sum politics. More than one commenter wondered whether protesters were hypocrites for having driven their cars to a protest at a gas station (missing the point that the protest wasn’t about gasoline, per se, but about a company whose willful actions led to this disaster). Others, intent on focusing the blame solely on the federal response – and on Obama - absolved BP for an “accident” that could have happened to any oil company, and praised Louisiana governor Bobby Jindal for his angry posturing. Never mind that Jindal has sealed state records concerning his response to the disaster, and has failed to activate the National Guard troops the Pentagon had approved. Of course, if one is intent on focusing the blame on President Obama, no other fault need be admitted. Still others wish to hang the entire mess on “tree-huggers” who “forced” BP to drill deep; a recrimination so far off-base it smacks of blaming a rape victim because she was female.
Gasoline is a fungible commodity; if I don’t buy t someone else will. BP will continue to produce and sell gas no matter what I do. While I want BP to take responsibility, I do not see it as my responsibility to support their product and practices. They will pay for this but I won’t let them pay for it with my gas dollars.
So what’s the point? The boycott drew attention, and the reporting of the boycott drew even more. Internet trolls ran with it, and even two weeks later were trying to get in the last word. If the real point of a boycott is to gain attention for a cause and spark debate, well, Mission Accomplished (to recycle one of history’s most regrettable slogans).
For the record, I voted for Obama but am growing increasingly frustrated by the federal response; yet while there is plenty of blame to shell out, it is clear that BP caused this crisis and is ultimately responsible (I thought the president should have seized BP’s US assets from the beginning; if there was anything left of it after cleanup and claims, they could keep the change). The federal response has been lame but also has been crippled by intent. When BP claimed their “leak” was in the 900-1400 bbl/day range, that’s what the Coast Guard was preparing to combat. When BP refused to allow independent sources to quantify the catastrophe, they did so with full understanding of the impact a $4300/bbl fine would have. Lowballing by a factor of 50 or 100 would save billions in fines. Burying more beneath toxic dispersants would save even more.
While my personal boycott won’t harm BP as much as I wish it would, I just feel dirty even driving by their stations. So I’ll do two things: I will boycott BP stations. And owing up to my own responsibility, I will do my best to conserve fuel, drive less, and work to elect those who will actively push for new energy technologies and public transit. We all own this disaster, to some degree, but BP owns the most of it. Not supporting this company may not change much, but at least I feel better for having made a choice I can defend. I can not understand how anyone can defend any other choice.
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