The Futility of the BP Boycott

The Futility of the BP Boycott
Jillian Bandes
Monday, June 14, 2010

Liberal activists say that British Petroleum has shirked its responsibilities in dealing with the gulf oil spill, so they’ve started a boycott of the company. Like many boycotts, this one doesn’t seem to be very effective.

“BP had the resources to drill and create this horrible disaster, now they have the responsibility to clean it up,” said Levana Layedecker, Communications Director of Democracy for America, in a release. “But, they won't do it on their own. They need to know we will make them pay one way or another.”

Apparently, the $17.5 million a day ($1.2 billion in total) that BP has already paid isn’t enough. The company “continues to deny the extent of the problem,” and “is still playing games with the numbers,” sentiments also expressed by our commander in Chief. It’s not clear if Democracy for America, or Obama, wants BP to simply stop the spill, or pony up more money in the meantime. Whatever the case, Democracy for America and a host of other liberal groups are trying to impose punitive damages on the oil company with a widespread boycott of the company’s gas stations.

Groups involved include Ralph Nader's consumer advocacy organization “Public Citizen,” a 300,000-member Facebook group, a bizarre alliance between nu-metal band Korn and pop-icons the Backstreet Boys, in addition to activists such as Jesse Jackson and Cindy Sheehan. Their methods vary from simply encouraging followers to buy elsewhere, to donating money for tacky bumper stickers that say “Boycott BP: AnyoneButBP.com.”

If it seems futile, that’s because it is, says one industry insider who spent 25 years in the business.

“When someone says, ‘I want to boycott BP,’ the person you wind up hurting is the guy who lives in the community, buys the pages in the high school year book, and the cookies from the girl scouts. So, not he’s representing the ‘evil’ BP,” he said. “What I think they ought to do instead is…start walking.”

In other words, boycotting certain gas stations only stands to harm individual gas station owners, not the larger company. That’s because individual stations that have the BP logo on them may or may not buy from a BP gas distributor. More importantly, stations that don’t have the BP logo are just as likely to buy from a BP distributor. A host of liberal media outlets, from the New York Times to Time magazine, have pointed out the futility of a boycott.

“You see their market dropping significantly already. Americans are already dissatisfied with BP,” said Nicolas Loris, a research assistant at the Thomas A. Roe Institute for Economic Policy Studies. “I don’t think a boycott is going to enhance that message any more than what the marketplace is already doing.”

One relevant example is the boycott of Citgo, which is owned by Venezuela. In 2002, Venezuelan President Hugo Chavez made controversial remarks about the United States' war in Iraq, which led many activists to call for abandoning Citgo fuel. That boycott accomplished virtually nothing except for a temporary downswing in business for locally-owned gas stations.

It’s easy to think that walking away from a store leads to decreased revenues for that product, but that’s simply not the way it works when it comes to the oil and gas industries, said Loris. Things like consumer protests and government regulation simply don’t have the “oomph” to deal with the problem.

“BP is to blame, and they’re responsible for the spill, but the unfortunate thing is that they don’t have the technology to deal with the leak,” said Loris. “Meddling isn’t going to fix that problem.”