Debunking gas known myths

Chances are, you've recently received an e-mail about the rising prices of gasoline and what can be done to corral the record amount you're shelling out each time you visit the pump. It comes off as a thoughtful, good idea and strikes at an issue you, no doubt, feel helpless against. Its solutions seem simple enough, and you probably feel, like many in your position, that it just might work if enough people follow through.

BOYCOTT BANTER

The e-mail urges you to boycott oil companies that get their gas from the Middle East, and while the message is high on rhetoric, it's low on substance. The e-mail typically features the same villains: ExxonMobil, Shell and Texaco - all of whom import significant amounts of oil from Middle Eastern sources, and heroes: Sunoco, Phillips and Conoco, who get their oil, or so the e-mail would have you believe, primarily from Venezuela.

Aside from its misleading nature, which you'll learn about shortly, perhaps the e-mail's most fundamental flaw is its advocacy of a one-day boycott. Such a boycott would not hurt the oil companies in the least, as their oil has already been purchased by the gas station owner. The owner also would not take much of a hit, because boycotters would likely just arrive en masse the next day to fill up their tanks.

But while the heavily circulated e-mail is largely shortsighted, it has served the purpose of planting a seed in the minds of many who might begin to question just where gas actually comes from.

FACTS ABOUT FOREIGN OIL

Readers should beware of the misinformation floating around about gas companies. Implied throughout the text of this e-mail and other "sources" is that the rise in gas prices has its deepest roots in the Middle East. While Americans have long had a big problem on their hands with respect to dependence on foreign oil, this dependence, in fact, has little to do with the Middle East. According to the American Petroleum Institute's (API) June 2005 report, the largest supplier of crude oil to the United States is Canada - supplying nearly 16 percent of U.S. imported oil. The same report illustrates that Saudi Arabia, while the second biggest U.S. supplier at a shade over 13 percent, is the only Middle Eastern country in the top five U.S. suppliers.

SUPPLYAND DEMAND

Another mountain of misinformation contained in many of these chain letters concerns the "Good Guy/Bad Guy" picture the authors paint with respect to oil companies. In short, there are no good guys when it comes to the current oil situation in the United States. News reports littered with references to Hurricanes Katrina and Rita causing many refineries to shut down only tell a half truth. While these shutdowns have contributed somewhat to the limited gas supply, a September 2005 report from The Foundation for Taxpayer and Consumer Rights (FTCR) exposed a series of internal memos from oil companies and the API in which Mobil, Chevron and Texaco intentionally reduced oil refining capacity in an effort to reduce supply and drive up their profits.

One such memo from Mobil, dubbed "Highly Confidential," reveals the company's strategies to keep a smaller California refiner, Powerine, from re-opening in 1996. Though the reopening of Powerine would have helped solve the country's limited refinery dilemma, in order to help Powerine reopen, the California Air Resources Board (CARB) was willing to grant a waiver to Powerine (allowing the company to meet just four of the eight mandated properties in their fuel's makeup) for one year. Such a waiver would have allowed Powerine to sell its gas at a lower cost than Mobil, who had no intention of either reducing the cost of its fuel to compete with Powerine or allowing another refinery to open. This memo and others are available at www.consumerwatchdog.org/en ergy/fs.

For those who find this hard to believe, looking at ExxonMobil's profits for the most recent quarter, when hurricane season caused a stir and several refineries were forced to shut down, supports the theory that the fewer refineries available, the more profit for major oil companies. Forecasts show ExxonMobil will turn a profit of $110 billion for the quarter in which Hurricane Katrina took its toll, a record high and an astonishing 34 percent increase from the same quarter a year ago.

REFINERY GOOSE CHASE

While on the subject of refineries, the mass e-mails are spreading false information about this subject as well. Though companies such as Sunoco and Phillips do not buy their oil from Middle East suppliers, the gas you buy from your local Sunoco or Phillips stations may actually be from the Middle East. Here's why: oil companies such as ExxonMobil and Shell buy their oil from various sources (i.e. Saudi Arabia, Venezuela, et. al.) before selling it to refineries. The refineries ship it to bulk terminals where gas station owners, representing a variety of companies, purchase their gas. In the refining process, oil bought from Venezuela is handled alongside oil from the Middle East with no distinctions made. There is no way of knowing which refinery your gas came from, let alone which country.

With all of this newfound information, you're now back to where you started with the callto action e-mail still sitting in your inbox. So what to do? Simply put, the best way to spend less on fuel is to use less fuel. For more information on how you can use less fuel or find other alternatives, visit the U.S. Department of Energy Web site at www.energy.gov.

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