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Commentary: Oil Company Boycott Not the Answer to Fighting High Gas Prices

By Richard Caufman

Buffalo, NY – Recently, there has been a great deal of noise about boycotting various oil companies. All of these people are missing two important things:

First, if worldwide consumption does not decrease, there is no reason for oil prices to be reduced. Boycotting one company and buying the same product, in the same quantities from other companies does not reduce demand. In economic terms oil is nearly a perfectly elastic commodity. Total demand and total Production determine the difference between cost and selling price. Instead of boycotting one company, let's find a way to reduce our INDIVIDUAL consumption by 10% this week, and keep it that way for a year. Next year, find a way to reduce by another 5%.

How can we do this? a few examples for individuals: Double insulate your house; Replace energy wasting appliances with more efficient ones. Grow trees where they will cool in the summer and protect from winter winds. Make vehicle travel a last resort: walk, bicycle, or shop via the internet before making a buying trip. Record actual fuel consumption (gallons, watts, cubic feet of natural gas) so changes in consumption, not dollars spent can be monitored.

As a society, we can subsidize the energy costs of the poorest citizens with all of the same options we do for ourselves. These projects should be done and administered locally, using local companies and workers. They should be focused on things which will give people a sense of ownership. Paying part of someone's heating bill is not the same as helping them insulate, or buy a new furnace. Helping renters buy and own their own energy efficient appliances instead of helping their landlords get away with substandard insulation, heating systems, and appliances changes the perspective on who we are really helping, and why.

Landlords already have ways to recoup repair costs, why not use both positive and negative incentives with respect to the energy consumption of their rental properties? For instance, instead of using a 20 or more year depreciation schedule for furnaces and insulation, why not create deductions based on total energy savings for each improvement? If landlords want to rent units that exceed regional average energy units per square foot of building, why not add a tax burden for excess energy consumption?

The second missing thing is this: The "profits" of Exxon Mobil are less than 10% of their total sales. If they were to sell gasoline at cost, prices would go down only 10%. How many of us ever bought stock in an energy company? How many shareholders would it take to influence a company's policies toward profitability? IF we owned the majority of the stock, how profitable would we want the company to be?

Beyond the actions I presented earlier, what we need to do follows a couple simple lines of reasoning:

1. Reduce non-fuel oil consumption. Fuel consumption MAY be less than 60% of our total oil usage. How much would 100% recycling of Aluminum, Plastic, steel, and other energy-intensive products reduce demand?

2. Develop viable alternatives for worldwide use. Fixing energy consumption here is only part of the problem. If there is no worldwide reduction of demand the price of oil will never be reduced. Finding ways to have other nations become energy independent will help us, too.

Demands for a consumptive, indulgent lifestyle for even the poorest of people requires decisions about how and where to spend available resources. How much oil is used to generate electricity? Are we willing to build nuclear, wind, hydro, and solar electrical generation systems (not to mention converting landfills to biomass cogenerators) to reduce oil consumption? Are we willing, in one of the coal richest nations in the world to develop and use clean coal-powered generation systems? Would we be willing to work on ways to reuse spent nuclear fuel, clean up the emissions of coal-fired power plants, and improve traffic flow without encouraging urban sprawl? Or, will we carp uselessly about corporations doing what they are supposed to do; namely make profits for both their own continuation and to reward those who have invested in the corporation?

Listener-Commentator Richard Caufman works in product development for the second largest manufacturing operation in Akeley, Pennsylvania.