hyways.com logo

The Gas Boycott 'Chain Letter'
by
Lester S. Garrett

25 August 2005

The following is an excerpt from a "Gas Boycott Chain Letter" which is currently circulating on the Net via email.

"It has been calculated that if everyone in the united states did not purchase a drop of gasoline for one day and all at the same time, the oil companies would choke on their stockpiles.

"At the same time it would hit the entire industry with a net loss of over 4.6 Billion dollars which affects the bottom lines of the oil companies.

"Therefore september 1st has been formally declared "stick it up their XXX [sic] " day and the people of this nation should not buy a single drop of gasoline that day. . . ."

The villain here is NOT the oil companies.

While there's plenty of blame to go around (environmentalists and politicians come to mind), you could, and indeed should, start with the worst offender: the American public itself which has prevented oil companies from building new refineries ("NIMBY").

Despite the dramatic increase in demand for crude oil products, no major new oil refinery has been built in the United States in approximately 29 years. That's right, I said almost 30 years.  That puts our total refining capacity back to about 1976.

Even if we were able to increase the supply of oil (though for decades that too has been blocked or impeded by environmentalists and their allies), we would still lack the refining capacity to meet the current demand.  During peak periods, US refineries are already operating at approximately 95 percent of capacity (demand was at 96.8 percent in July of 2004 according to the American Petroleum Institute).

To repeat, even if significant new American oil supplies were to come on line tomorrow, the American voters (through their legislators) have prevented the petroleum industry from building the refining capacity necessary to process it.  Put simply, more oil by itself would not increase the supply available to the public to any meaningful degree.

Making matters worse for our refineries (and hence ourselves), is the multitude of gasoline mixtures required by law to satisfy a crazy quilt of different state mandates. By way of example:  During the summer, oil companies are required to provide the Phoenix area with a different, and more expensive, gas mixture from that used in the northern part of our state.  Needless to say, though say it I will, complying with those regulations increases refining and distribution costs.)

Adding to the price spiral is the fact that world demand for oil has jumped dramatically over the last 29 years.  The newly emerging economies, especially those of India and China -- representing about 2 billion people -- have substantially increased the demand for crude.

I suspect that most of us still understand the relationship between price, availability, and demand.

Did greedy American oil companies prevent themselves from increasing refining capacity?  Did they all get together and decide NOT to develop new oil supplies in Alaska, or off the American coast?  Did they convince our energy industry NOT to build new nuclear plants which would have reduced the demand for oil?  (You can add our country's effective roadblocks to new nuclear energy generation to the mix.  Parenthetically, China has announced plans to build 30 new nuclear reactors by 2020 -- see Wired Magazine, September 2004.)

If you want someone to blame, don't blame the oil companies.  The blame lies no further away than your neighbors, your environmentalists, and your politicians.  The oil companies are simply the beneficiaries of the "head-in-the-sand" energy policies put into place over the last 30 years and more -- put into place with the consent of the governed.

Instead of scapegoating the oil companies, or even the oil producing countries, look to your government's actions, to its restriction and regulation of our energy market.  Look for the refineries your neighbors wouldn't let those greedy oil companies build.  Look for the oil fields your neighbors wouldn't let those greedy producers develop.  Look for the nuclear plants which your neighbors prevented our greedy energy industry from constructing.

So the next time you get one of those emails urging you to "stick it up their XXX" (with "their" being "the oil companies"), tell the writer of that message that the XXX up which the stick belongs is his own.

And that's just the short version.

Lester S. Garrett
30 August 2005

[email address]

copyright © 2005 hyways.com