Boycott BP? Feels good, but it hurts the innocent
Our view: Oil giant owns just 2% of its stations and can sell on spot market.
If ever a company deserved to be boycotted, BP is it. The oil giant has caused one of the worst environmental disasters in U.S. history, one that can no longer even be called an "accident." The April 20 rig explosion that killed 11 men was likely the result of corner-cutting and risk-taking ingrained in BP's culture. As if that weren't enough, top BP executives have responded to the crisis with an infuriating combination of cluelessness and condescension.
How could Americans not be eager to teach them and their company a lesson?
The only trouble is, the call to boycott BP gasoline stations that's gaining ground across the USA will barely cause the company a hiccup. What it will do is harm gas distributors and other small entrepreneurs who own service stations, as well as the people working for them €" none of whom had anything to do with the spill.
BP owns fewer than 200 gas stations in the USA, and consumers would be hard-pressed to distinguish them from the nearly 9,800 others that are owned or leased by dealers. All have long-term contracts to sell BP gas €" contracts not easily jettisoned without paying a hefty fee. While BP makes money from these sales, they are a minuscule portion of the company's worldwide revenue.
Even the process for supplying gas stations cushions BP from economic harm. Wholesale gasoline €" whether it's destined for a BP station or some other brand's station €" is a mixture of gasoline from different companies. The only thing that distinguishes one brand from another is the additives blended in before it's picked up by distributors. If BP can't sell its wholesale product to them, it sells the excess on the spot market. No harm done.
Meanwhile, some dealers and distributors are struggling because of scattered boycotts. Though the effects vary widely, on the Gulf Coast business is down at some stations by as much as 40%. Those losing money are often neighbors of the boycotters, who haven't a clue who their victims are.
Public Citizen, a liberal advocacy group that's championing the boycott, says it's seeking to hurt BP's carefully tended brand image. That brand is already in shreds. If being seen as the cause of tarred coastlines, oil-drenched birds and ruined livelihoods isn't enough, BP has CEO Tony Hayward (a walking, or should we say yachting, PR disaster) and Chairman Carl-Henric Svanberg (who proclaimed that BP really cares about the "small people" of the Gulf Coast). Ultimately, BP might well have to overhaul upper management and rebrand itself, the way ValuJet, now AirTran, did after its disastrous 1996 crash in the Everglades.
Boycotts generally work best when they're aimed at pressuring the target into taking a particular action €" as when civil rights groups threatened to boycott Coca-Cola for doing business in South Africa under the apartheid regime. Coke decided to pull out.
If Americans want to rally behind a cause that sends a message to Big Oil and helps the nation, they might drive less, walk or bike more, trade in a gas guzzler for a hybrid, or turn down the heat or air conditioning. Such actions take more effort than a feel-good boycott, but they'd go a lot further toward reducing the nation's energy consumption and its dependence on fossil fuels.