1. Why is our gas so high?
2. The First Wave
3. The Final Solution

Why is our gas so high?

Gasoline, one of the main products refined from crude oil, accounts for 17 percent of the energy consumed in the United States each year. The United States consumes over 840, 000, 000 gallons of gasoline each day. While it is produced year round, extra volumes are produced just before the peak Summer driving season when demand is highest. Many find it strange that the price begins rising before the actual demand picks up.

Gasoline is made from crude oil, which was formed from the remains of tiny aquatic plants and animals that lived hundreds of millions of years ago. These remains were covered with layers of sediment, which over millions of years of extreme pressure and high temperatures became the mix of liquid hydrocarbons (an organic chemical compound of hydrogen and carbon) that we know as crude oil. Because crude oil is made up of a mixture of hydrocarbons, refineries break down these hydrocarbons into different products - crude oil is heated and put into a still - a distillation column - and different hydrocarbon components boil off and can be recovered as they condense at different temperatures. These "refined products" include gasoline, diesel fuel, heating oil, jet fuel, liquefied petroleum gases, residual fuel oil, and many other products.

Gas is delivered through massive pipelines from oil refineries to a colossal distribution chain serving 167,000+ gasoline stations throughout the country. The costs you pay for gas are a result of the cost required to produce and deliver the product. These costs include the cost of crude oil to the refineries (44% of the total price you pay), refinery processing costs (15%), marketing and distribution costs (14%), and the final profit margin tacked on by the retail gas stations (<1%). To all of this, taxes are then added at various levels and account for about 27% of the costs. When doing the math, understand that we typically get about 47 barrels from 100 barrels of crude oil processed in the U.S.

In addition, states such as California have stringent requirements that exceed federally mandated requirements for clean gasoline. This results in a higher price for Californians due to the relatively few supply sources for their unique form of gasoline. Variances in regional prices are typically due to inequities in the distribution and delivery process.

Retail gas prices tend to rise right before summer, when the demand is higher, and fall during the winter months. This typically accounts for a .10 to .15 cent rise in the price. When looking at price increases, several other factors can come into play including OPEC cuts in production (OPEC supplies about 39% of the world's oil and hold more than 60% of the world's estimate crude oil reserves), wars and turmoil in oil production countries, and problems with the U.S. petroleum infrastructure. The single cost that has risen the fastest is the refining costs and profits.

So why has the price nearly tripled in the last 3 years, rising from 1.20 a gallon to nearly 3.00 a gallon? Many people blame the oil refineries right here in the United States, quoting their billions of dollars in annual profits as the most incriminating evidence. And many people have decided to fight back.

The First Wave

During the months of April and May of 2005, an email began circulating requesting that all customers boycott the oil refineries by refusing to buy gas on certain dates (e.g. September 1, 2005).  The oil companies were not really worried about this because they knew the customers would have to buy their gasoline sometime.   Still, the email was circulated widely and became a favorite water cooler topic.

The Final Solution

In July of 2005, another email began circulating and this one made much more sense. A ploy was introduced in the form of a consumer resistance campaign that, if executed properly, could indeed put pressure on the big oil companies (Exxon and Mobil in this particular case). The gambit works like this:

It has been calculated that if everyone in the United States and Canada did not purchase a drop of gasoline for one day and all at the same time, the oil companies would choke on their stockpiles.  At the same time, it would hit the entire industry with a net loss of over 4.6 billion dollars.

Join the resistance!  We are going to hit close to $3.00 a gallon by the end of summer and it might go higher!  Want gasoline prices to come down?  We need to take some intelligent, united action.

By now you're probably thinking gasoline priced at about $1.50 would be super cheap.  Me too!  It is currently $2.59 for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at $1.50- $1.75, we need to take aggressive action to teach them that BUYERS control the marketplace - not sellers.  With the price of gasoline going up more each day, we consumers need to take action.  The only way we are going to see the price of gas come down is if we hit them in the pocketbook by not purchasing their gas!  And we can do that WITHOUT hurting ourselves.  How?  Since we all rely on our cars, we can't just stop buying gas.  But we CAN have an impact on gas prices if we all act together to force a price war.

Here's the idea: For the rest of this year, DON'T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL.  If they are not selling any gas, they will be inclined to reduce their prices.  If they reduce their prices, the other companies will have to follow suit.  But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers.  It's really simple to do!!  Now, don't wimp out on me at this point...keep reading and I'll explain how simple it is to reach millions of people!!

I am sending this note to about thirty people.  If each of you send it to at least ten more (30 x 10 = 300) ... and those 300 send it to at least ten more (300 x 10 = 3,000)...and so on, by the time the message reaches the sixth generation of people, we will have reached over THREE MILLION consumers.  If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it.....  THREE HUNDRED MILLION PEOPLE!!!

Again, all you have to do is send this to 10 people.  That's all. (If you don't understand how we can reach 300 million and all you have to do is send this to 10 people.... Well, let's face it, you just aren't a mathematician. But I am ... so trust me on this one.)

How long would all that take?  If each of us sends this e-mail out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!!!  I'll bet you didn't think you and I had that much potential, did you! Acting together we can make a difference.

If this makes sense to you, please pass this message on.  PLEASE HOLD OUT UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN. IF YOU SEE SOMEONE PURCHASING GASOLINE AT ANY OF THESE STATIONS THEN PRESS YOUR HAND ON THE HORN AND DON'T LET UP.  THIS CAN REALLY WORK!.

Whether it works or not will only be told in time. Either way, it is an interesting idea…

Sources

(1) Various email messages sent to author
(2) Fuel Economy - Federal web site
(3) Grand Rapids Gas Prices web site