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Want to Boycott Big Oil? Then Boycott Citgo!
Our Buy American Mention of the Week!
by Roger Simmermaker
May 3, 2006

First of all, let me say I don't think we should be boycotting oil because of oil profits or gas prices these days. But for those of you who think oil companies are to blame for the high cost of filling up your gas tank - and you want to boycott an oil company in response - then I would urge you to boycott Venezuelan-owned Citgo. Don't boycott American oil companies for America's pain at the pump. ExxonMobil is not the problem. We are.

We've known about the challenges of oil supply since the 1970s, and we've done little about it. And yes, the government has done little about the problem either, which still means it's our fault since we choose who serves in the government.

Now that I've so boldly blamed the reader for our current situation, for those who are still reading, let me make a second point: Unless you've actively been pushing for alternate fuels and contacting your representatives about it, you have no right to complain about the situation we are in, and you certainly have no right badgering General Motors and Ford for not shifting their emphasis from more-profitable SUVs that were (and still are) in high demand from the American consumer. I highly value my 1996 Lincoln Town car, and will gladly pay more for the luxury of driving it. I wasn't anywhere near driving age during the oil crisis of the 1970s, but I can read up on history just like anyone else, and just like about anyone else, I did nothing to further the cause of less dependence on foreign (or American) oil. In my opinion, for me to complain about it now and point fingers would be highly hypocritical.

ExxonMobil may be guilty of handing out an extravagant $400 million bonus to their outgoing CEO, but Citgo caused us to change our laws (made by the folks you sent to Washington, remember?) and made us question the sovereign right to defend the enactment of those laws.

Back when President Clinton was in the White House, we lost a World Trade Organization dispute - courtesy of Citgo and courtesy of Venezuela (since Citgo is a state-owned company) - that left our president with two choices: weaken our EPA laws or face binding penalties from Venezuela. Rather than hand over your tax dollars to a country that has now vowed to "bring down the United States" and has called our current president a "madman," he changed our clean air laws.

We should be outraged at such sovereignty stampeding. But yet we continue to indiscriminately patronize foreign oil companies thinking it just doesn't matter. But it does matter. Even before the recent run-up of gas prices, chances are you spent over a hundred dollars a month - over a thousand dollars a year - on gasoline. If you didn't then, you probably are now. And if you live in Florida like me, you're probably sending money to the Japanese too if you've ever filled up with Citgo at America's leading convenience-store chain, 7-Eleven. I haven't conducted bulletproof research on this one, but I'd bet Citgo is offered more at Japanese-owned 7-Eleven than any other convenience store chain.

Aside from sending American dollars to foreign regimes hostile to America, how else is it in our interest to pull into a Chevron instead of a Citgo? Corporate responsibility. An American-owned oil firm is much more likely to bow to the wishes of the American people and the American government than a foreign-owned one.

Every now and then, situations arise that prompt our politicians to stress corporate responsibility, and they're doing it now. American pressure prodded Chevron to stop loading oil at Iraqi ports before the Gulf War. A Wall Street Journal article from March 10, 2003 detailed how other top U.S. oil companies such as Exxon (this was before the merger with Mobil) and Valero sharply curtailed their purchases of Iraqi crude as well. The reason? Because the seemingly imminent attack on Iraq could have disrupted oil imports for U.S. markets (my emphasis). Exxon stopped buying Iraqi crude for American markets in April 2002.

However, Exxon did continue to offload Iraqi crude for European markets, despite the risk of a disruption. Why did Exxon, an American company, not want to risk disrupting oil flow to the U.S. but yet risked it for Europe? Corporate responsibility. American companies are much more interested in reacting to what's in the best interest of America than foreign-owned companies like Venezuelan-owned Citgo, British-owned BP (which bought Amoco), or Netherlands-owned Shell, etc.

Do you think Citgo would have cared about or listened to an America that was about to send their sons and daughters to fight and die in the Middle East? A Venezuelan government-owned company that openly supports Fidel Castro's Cuba? Regardless of how you feel about the necessity of the Iraq War, Venezuela couldn't have cared less about the lives of American men and women. When politicians are stressing corporate responsibility, they are talking to American companies, since foreign-owned companies owe no loyalty to the United States. Now, which company most deserves to be sent a message? It's not ExxonMobil, ChevronTexaco, Hess or ConocoPhillips. It's Citgo. And it's not because of the recent run-up in gas prices. A boycott of Citgo has been long overdue.

Getting back to the concern over huge profits reaped by oil companies these days, they are not a result of price gouging. Companies in oil industries make less profit on their sales as a percentage than companies in the banking industry and several other American industries. The reason oil profits are up is because oil consumption is up, largely because of the industrialization of China and India. If you own a business and you're making a 10% profit on your sales, and sales triple, your profits will triple even if you're still making only a 10% profit on your sales. That's what happening in the oil industry. Profits are up because consumption is up.

Another distortion that's been heard all across the airwaves of talk radio lately is that the government is the culprit, raking in far more revenue than the oil companies do. And since the government is making so much money in taxes, they should grant tax cuts to give some of that money back. From the sound of it, you'd think your congressman was personally taking tax money home with him to stuff in his bank account. But if we cut the gas tax, then we'll only take money out of the highway trust fund and curtail our upkeep on roads and bridges, etc., which will only change what we'll complain about in the future. Our government is already broke. Let's not make it worse. The thing to do is not cut gas taxes, but strategically cut pork barrel projects out of the budget.

We missed a great opportunity, in my opinion, when we failed to elect Ross Perot in 1992. In addition to rightly predicting the giant sucking sound that would result from NAFTA, he unfortunately and undeservedly committed political suicide by proposing a 10-cent-a-year tax for 5 years on gasoline to pay down the national debt, which is now clearly out of control. Too many of us objected, warning against higher inflation and higher prices across the board. As I recall, gas was about $1 a gallon back then. It's now over $3 a gallon and inflation is not a huge factor. The only factor is the sacrifice we are all paying now at the pump. We were told by Ross we would either pay now or pay later, and we chose to pay later. Later is here.

So stop blaming American oil companies. They haven't built a refinery in the U.S. for almost three decades, and it's largely because we wouldn't allow them to. We didn't want them to drill in Alaska. Nuclear power was too risky. We stood idly by while the environmentalists dictated energy policy.

Hopefully Ethanol will hold some promise as a fuel for the future. General Motors currently has 1.5 million vehicles on the road that can use corn-based E85 Ethanol. E85 is clean, renewable and made in the USA. But even though GM has taken the lead here, availability is a problem. Michigan, for instance, only has 5 stations in the entire state that offer the fuel. Over a dozen states don't offer it at all. Toyota doesn't plan to offer E85, which is a mix of 85% ethanol and 15% gasoline, until 2008. Honda has no E85 vehicles. Nissan only has it on their new Titan pickup, which unfortunately for them has to compete with the Chevy Silverado, GMC Yukon and Ford F-150 pickups that do as well. Ford says it has hundreds of thousands of vehicles that can run on Ethanol. And you thought GM and Ford were behind the curve since they didn't supposedly take the lead on hybrid technology. As more gas stations make E85 available, the public will see GM and Ford have been better positioned to deal with future energy issues than most of us have been led to believe.

So if the high cost of gasoline has you worried, here's the best way to channel your anxiety into something positive next time you go shopping for a car or truck: Buy an American-owned (GM or Ford), American-made vehicle that runs on American-made E85 fuel. It doesn't get any better than that, especially if you support American independence instead of interdependence.

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