OIL IS FUNGIBLE PEOPLE. There is no such thing as "BP oil" or "Exxon oil"

[Statistical]

Likely I will get flamed into oblivion for breaking some peoples fantasy but here goes.

Oil is oil. There aren't special BP oil pipes or Exxon oil pipes.

All the oil in the US from import super tankers, on shore oil wells, and off shore oil wells flows into the same network.

The same pipes, storage tanks, and transport network handles all the oil. Imagine how expensive and silly it would be to have an "Exxon oil" pipe going exact same place as a "BP oil" pipe. That is why there isn't.

Oil producers are simply paid for the oil they contribute to the network. This works similarly to a wind farm and nuclear reactor on same power grid. Each gets paid for the power they provide however once that happens all power is "mixed" it is not possible to say where the wind power goes and where nuclear power goes.

So where does gasoline come from?

The oil flows to refineries which crack the oil into gasoline (and other oil products). The refinery buys oil (from BP, and Exxon, and every one else) and sells wholesale gasoline.

Then the retail tanker trucks from every gas station in the country fill up with THE EXACT SAME GASOLINE! Now each retail "brand" adds their own detergent and additivie package to the gasoline but the raw gasoline is exactly the same.

So if you buy all your gasoline from RaceWay guess what it was made from Exxon and BP (and everyone elses) oil.

If you buy gasoline at a BP station it isn't 100% BP. It is the same blend of oil from dozens of oil producers.

So people saying Exxon hasn't made a single dollar from them since the Valdez are fooling themselves.
The only way that is true is if you have purchased no gasoline or any other oil product (plastics, lubrication, etc) in last 2 decades.

Likewise someone driving an extra 10 miles to avoid a BP station likely made BP MORE money.
Why? Increased gasoline consumption = increased oil consumption and BP gets a cut of all of it.

[Motown_Johnny]

1. so it wouldn't hurt anything for BP to see a drop in sales, it is all the same gasoline

[Statistical]

6. It would but it is negligble.

Oil companies use retail gasoline station to hedge oil prices. Ever notice how gas rates take longer to fall that oil prices.

They exploit that difference to remove some volatility from their earnings. Oil companies (BP included) make very little from gas stations (retail). There isn't much profit in retail gasoline and 90% of that goes to the owner operator.

The overwhelming lionshare of profits come from raw oil. I will see if BP provides a breakdown of revenue and profits by sector.

I mean I am not saying shop @ BP just be realistic about the effect it has.
If you use oil this year then BP profits.

The only way to "hurt" oil companies is simply to use less oil.

[FarLeftFist]

25. We all know it comes from the same place but....

Lacking safety devices IS BP's fault.

[Statistical]

29. No doubt about that.

Simply saying don't fool yourself into thinking that your choice in "brand" affects oil companies materially.

If you want to affect oil companies USE LESS OIL. If hundred million other people do that and do so sustainably it will hurt them.

[Egnever]

56. If by from the same place you mean from the ground then yes

if you mean as the OP suggests that the refineries are independent from the oil companies then no we don't all know that cause it doesn't approach the truth by any measure. These guys all own refineries where yes they turn the crude they extract into the gas they sell at their stations.

http://www.eia.doe.gov/neic/rankings/refineries.htm

Thats a listing of the top US refiners and amazingly enough BP is one of the biggest.

[Duer 157099]

2. Oil is fungible people? Is that like soylent green, too? n/t

[Statistical]

3. lol. Yeah maybe that wasn't the best sentence construction. n/t

[BlooInBloo]

7. Commas, are good things.

[Mother Smuckers]

10. Commas are frequently overused, too.

:rofl:

[BlooInBloo]

12. :P

[EFerrari]

19. There's an ad campaign that might work better than nagging

to get us off of oil.

:rofl:

[Silent3]

31. That was my immediate first reaction too. :)

Eats, shoots and leaves.

[dkf]

4. I thought I heard that bp specifically wasn't upkeeping their pipelines very well?

Reporters mentioned that Brazilian regulations would have prevented this.

[MrModerate]

5. Boycotts are a blunt instrument and frequently miss their targets, given . . .

But BP the corporation can be found and penalized, not just for the results of their currently unmistakeable ineptitude, but also for their deplorable safety record in refineries and a variety of other sins and crimes.

[RoyGBiv]

8. No flames here ...

I've been trying to beat this same damn drum since the day I joined DU. In fact, the reason I signed up at that particular moment was to attempt to correct a gross misunderstanding then taking place in a thread about Exxon.

Didn't work.

[customerserviceguy]

9. Yes, oil is indeed fungible

But all we have is avoiding the brand names that offend us. Hopefully, it makes the dicks shrink of those who are the heads of those brands, but it's all we have to fight back.

[FarCenter]

11. Decades of oil company advertizing have brainwashed people

Unless we get some "truth in advertizing" action, people will continue to thing that there is something special about "putting a tiger in your tank".

[Mother Smuckers]

13. I was watching some documentary this morning where a guy auctioned off a $20 bill

it ended up selling for $28. I think it's the same subset of mindset..."I want to win...even if it's not a sound result."

Isn't that like really fucking SCARY???

yikes

[FarCenter]

16. Probably the same people who buy premium grade gas for a car designed for regular

[frazzled]

14. BP dumps mercury and toxins in Lake Michigan--enough reason to boycott it

Haven't stopped at a BP station for some years. Do I care if their oil might be pumped into my 50-mpg Prius at some other station? No. I simply won't patronize a place that says BP. It makes ME feel better.

Rebuffing bipartisan pressure from members of Congress, the Bush administration's top environmental regulator on Tuesday declined to stop the BP refinery in northwest Indiana from dumping more pollution into Lake Michigan.

Stephen Johnson, administrator of the U.S. Environmental Protection Agency, said he saw nothing wrong with the permit Indiana regulators awarded in June to BP, the first company in years allowed to increase the amount of toxic chemicals pumped into the Great Lakes.

As part of a $3 billion expansion of its Whiting, Ind., refinery, the nation's fourth largest, BP won permission to release more ammonia and suspended solids into the lake. Indiana regulators also gave BP until 2012 to meet a stringent federal standard for mercury pollution set by the EPA in 1995.

http://www.chicagotribune.com/news/local/west/chi-bp_01aug01,0,7768873.story

This is a BP-owned refinery. It doesn't matter if they sell their gas to someone else. Kill their brand name. And thank GW Bush and Mitch Daniels (governor of Indiana) for the mercury that is ruining our Great Lake.

[unblock]

15. true enough, but the point is to hurt them where you can

most people aren't in a position to hurt them in terms of purchasing less crude oil, but are in a position to hurt them in terms of purchasing less retail gasoline.

we are limited to doing what we can.

[Statistical]

18. "most people aren't in a position to hurt them in terms of purchasing less crude oil' I dispute that

Most people are UNWILLING to consume less crude oil doesn't mean they can't.

Carpooling can cut an individuals annual crude oil consumption by a third or a half.

Get 20 million Americans to carpool and you would DESTROY BP (and Chevron, and Exxon) profits overnight.

That is just one example. However the reality is REAL CHANGE is hard and most people would rather feel good rather than do something hard.

[unblock]

26. i meant, to your original point, what hurt we do by purchasing less crude,

doesn't hurt bp any more than any of its competitors.

i agree that purchasing less crude overall would hurt the entire industry, but that didn't seem like your original point.

[grantcart]

17. And for the same reason national responses are futile

The problem has outstripped our formation of national government.

Ironically logic will stir no interest here on the subject:

http://journals.democraticunderground.com/grantcart/291

[bridgit]

20. 'fungible'? How much money, not the exact amount just you know ball park...

Do you have invested in China Oil? Cause when I see 'fungible' I wonder if it applies to morals. Are morals 'fungible'? http://money.cnn.com/2007/04/17/news/companies/pluggedin_gunther_darfur.fortune It all seems such an E-Trade Baby way of looking at things, and that's part of what got us here. Crack pushers think their product is 'fungible' too

[Statistical]

21. Sorry if you find reality unpleasant.

Crude oil IS highly fungible

http://en.wikipedia.org/wiki/Fungibility

If crack were ever commoditized to the extent that crude oil is it would be highly fungible too.

I don't have much knowledge of crack but I would suspect that currently there is a large amount of variability in quality and levels of impurities in street crack hence crack isn't very fungible despite what dealers may think.

[bridgit]

23. My husband retired out of the pipeline business, as for 'variability in quality/impurities'...

in *oil* products, however - and you're welcome for the opportunity to drag it all a bit further off field vis-a-vis crack - but go buy some gasoline in Mexico City, it was 'cracked' in a separate tower somewhere else under whole other regs & requirements so it isn't like a gallon of gas in the states. It is able to 'ping' your timing and effect the performance of your car's engine http://www.onepetro.org/mslib/servlet/onepetropreview?id=WPC-3329&soc=WPC and makes for a less fungible less this-for-that product. As are crude oils themselves; heavy, sandy, light, light-sweet (what many of the world's death, chaos andd wars are being fought for) and all the rest

I'll take your non-mention of the genocide in Darfur and the ways in which E-Trade Baby's are able to fund it, as a com si com sa - perhaps even Johnny Come Lately - position on the monies you have invested in such ventures especially after one such is destroying the gulf as we key these things. And I am sorry you find *that* reality unpleasant - most people would http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x2247910

[Rex]

22. True, but it was a BP oil rig that caused all this conversation in the first place.

I say sue them back into the stone age and let some competition take their place.

[Berry Cool]

24. In addition to the point this OP makes, petroleum companies make plastics too,

and those plastics are used to package many consumer products. So there's no way to know whether something you bought in a plastic container was made with plastic produced by BP or some company like it.

It's for this reason that I seldom participate in corporate boycotts, because the modern market is so awash in products with components from a gazillion different sources that it's pretty much impossible to avoid giving any company you don't like any of your business anymore.

[TexasObserver]

27. BP makes money when BP sells product. When its sales are impinged, so is its business.

Oil is a commodity, and it is owned by companies such as BP. They make their money in many ways involving oil and its products. That's why BP has commercials on television imploring consumers to buy their gasoline - because they make money selling gasoline to consumers.

When BP has claims against their company for things such as an oil spill, the value of the company drops. This is because the claims will generate heavy costs and cut into profits and reinvestment capital. When BP loses business because people buy gasoline from someone else, BP loses money.

Your statement that consumers boycotting BP gasoline doesn't affect BP's economics is incorrect.

Are you allowing your recent investment in BP stock to affect your analysis of the impact of a boycott?

[Statistical]

28. Hardly.

I am simply saying that buying less oil overall hurts BP far more than any token boycot of their retail operation.

Less than 10% of BP revenue comes from retail operations (according to their 2009 annual statement). While they don't break down retail profit per country the US represents about half (11K or 22K) retail locations. So likely about 5% of entire companies revenue comes from retail operations. Hell solar power makes a greater % of revenue than retail operations.

So even if 10% of American stopped buying gasoline from BP gas stations that would materially affect the companies overall revenue by 0.5%. Now if 10% of the company used 20% less crude oil (carpooling, mass transit, hybrids, electric vehicles) that would materially affect BP (and other oil companies).

The cold hard reality is if you want to hurt BP then use less oil. It really is that simple. If you want to feel good then drive by a BP station and fill up your gas guzzler at another "brand" but don't fool yourself into thinking you are materially affecting the compaby.

Retail operations are not materially important to BP (or any) oil company bottom line. They are used as a hedge and to control prices in the market (thus affecting upstream profit).

[TexasObserver]

32. Boycotting BP hurts BP. That's a simple fact no amount propaganda can avoid.

You're arguing as one would expect a person to argue once they had placed a bet on BP to outperform expectations following the spill.

[Statistical]

33. Boycotting BP hurts BP.

:rofl:

Yup because oil has to be sold at a BP station.

Have you notice any Saudi Arabian gas stations? Any Canadian gas stations?
Where do you think all that oil goes?

Oil IS fungible. It all flows into the same pipes and gets refined in the same 100 or so refineries around the country and then the same exact gasoline that fills up a BP tanker truck fills up a Hess tanker or a Exxon tanker.

Pretend it is different all you want but it doesn't make it true.

[TexasObserver]

34. Your inability to address this topic logically is noted.

BP makes and loses money in many aspects of the energy business. Sale of crude is only one of those. Their consumer activities also affect their profitability. Any boycott which curtails their consumer sales hurts them.

This is a simple truth no amount of propaganda from BP or its shareholders can negate.

[Statistical]

35. ROFL.

Retail operations contribute negligibly to overall profitability. A boycott would affect even that negligible portion by a tiny amount.

So a tiny amount of a tiny amount is going to materially change profitability of a multi-billion dollar company?
Really? You think that is logical.

Exxon must have had to close dozens of stations after the Valdez right? No wait they opened a couple hundred more over last 2 decades and BOUGHT their biggest competitors.

Hell a 0.01% in Crude prices would more than overshadow any token boycott of BP.

Of course even a boycott is subject to supply & demand. BP owner operators make more money from sale of non-gas compared to gas. If (and it won't) the boycott was enough to change their traffic flow they would simply compensate by dropping their retail prices (difference paid for by owner/operator not BP) by a penny or two and gain the "marginal business" (people who simply look for lowest price of the day).

Keep believing your fantasies about how you are going to sink BP with a retail boycott. Then fill up at Hess made with gasoline from (partially) BP oil. :rofl:

If you want to "feel good" then boycott BP. If you want to really do something than look for ways to significantly affect your oil consumption. Of course the later is "hard" and requires actual work and that is why it is less popular.

[TexasObserver]

38. Your lack of business acumen on oil and gas stocks has been admitted by you.

You bought BP at $52 on Friday, and it's already down to $49.50. You've lost 5% over the weekend, because you bet on your hunch. This is why people don't suddenly decide they're an expert on oil stocks and invest on hunches.

http://www.advfn.com/p.php?pid=staticchart&s=NY%5EBP&p=5&t=15

http://www.advfn.com/p.php?pid=staticchart&s=NY%5EBP&p=1&t=15

http://www.advfn.com/p.php?pid=staticchart&s=NY%5EBP&p=0&t=15

You have already acknowledged that you bought 300 shares of BP on Friday, April 30th, and that you bought at $52 a share. You have already admitted that you HAVE NEVER BOUGHT OIL STOCKS BEFORE you made that investment on your hunch that BP would make money. You are heavily invested - emotionally and economically - in your $14,800 worth (and declining) of BP stock.

[Statistical]

40. Hardly

I sold 3 June $57.50 calls against the position (covered calls).
Today I took advantage of the increased volatility and swapped by $47 limit order for 200 mores shares for 2 May $47.50 puts.

Between premium collected on calls & puts I am well covered even if the stock goes significantly lower of course my potential profit is capped at $57.50 plus value of premiums.

Worse case scenario I end up picking up another 200 shares @ $47.50 which lets me dollar cost downward.
Between the premium from call options (plus new 2 call options sold after stock gets put to me) plus premium collected from selling puts my break even ends up being much lower.

You didn't think I would just go naked long did you? :rofl:
You don't seriously measure the worthiness of an investment in days do you? :rofl:

Have fun with your "token" resistance rather than doing something real about it. You can have the last word I no longer care anymore.

[TexasObserver]

41. You bought Friday at $52 and it's at $49.50 now.

It was just Friday you announced triumphantly of your purchase at $52 a share, and how that was such a good deal because the stock was undervalued.

You've made what most would consider a small bet in the stock market ($15,000), the kind of crap shoot amateur investors often take. You got a hunch and acted on it, then came here to talk about it. When posters didn't fawn over your action, you started attacking all who urge a boycott against BP.

[bridgit]

47. Well, that was part of my point. When the investor class mentions "fungible"...

It does so as a front for their practices, however nefarious, in their pursuit of returns. But it is after a time we recieve these *I'm better than you are* glimpses into the ways in which they think - ways in which they are at least smart enough to purchase a piece of market software, like an adult Fisher Price busy box full of flashing/blinking hot spots they can massage - its all so FOX Buisness News Daily i.e.

I sold 3 June $57.50 calls against the position (covered calls). Um, heads-up language anyone could get from a Wall Street For Dummies primer ;)

Today I took advantage of the increased volatility and swapped by $47 limit order for 200 mores shares for 2 May $47.50 puts. Same stale ole blah, blah, blah, yip, yip, yip rationale in the making

Between premium collected on calls & puts I am well covered even if the stock goes significantly lower of course my potential profit is capped at $57.50 plus value of premiums.

Worse case scenario I end up picking up another 200 shares @ $47.50 which lets me dollar cost downward.

Between the premium from call options (plus new 2 call options sold after stock gets put to me) plus premium collected from selling puts my break even ends up being much lower.

You didn't think I would just go naked long did you? :rofl: make that more like :spray: if that *is* what the investor class really thinks

You don't seriously measure the worthiness of an investment in days do you? :rofl: Now you're starting to see what the investor class really thinks when it is standing in line with the rest of us, assuming they still buy their own coffee in public - not good

Have fun with your "token" resistance rather than doing something real about it. You can have the last word I no longer care anymore.

Cause you know, if it weren't for the E-Trade Babies of the world none of us would have a pot to piss in. Yeah, real smart stuff - reminds me of a time when Africans were considered "fungible" too

http://www.youtube.com/watch?v=lEXZ2hfD3bU&feature=channel

[merh]

39. If boycotting BP hurts BP

won't boycotting BP hurt the citizens affected by the spill and hurt the clean up and the federal taxpayers?

If BP goes under they cannot and will not pay for the costs of the clean up and the claims of the people harmed by this, can they?

[TexasObserver]

42. Why would you assume BP would "go under"?

You're making an argument that is typically made by the business conservative, not the progressive. We hold bad citizens responsible for their bad acts. If they do go out of business, that's how it goes.

[merh]

48. I didn't assume, a thing.

I asked a question.

The government is holding them accountable, you act like some vigilante - taking justice into your own hands. Your "punishment" will serve no purpose and is more likely to harm than it is to help. But you go ahead with your bad self.

[TexasObserver]

50. If you learn nothing else today learn this. A boycott is NOT vigilante action.

[merh]

52. I could learn nothing from you - your views are too twisted and

you have no clue why a boycott or what impact a boycott.

Your words are the words of a vigilante. "We hold bad citizens responsible for their bad acts." It is through the justice system that we hold bad citizens responsible for their bad acts, we citizens don't take it into our own hands to hold bad people responsible. The same can be said about this "bad" corporation. The litigation is filed, continues to be filed and the fault was not BP's alone.

[TexasObserver]

53. You're being irrational and misstating the facts.

Boycotts are a time honored tradition among progressives. We progressives use them when we want to express to a business that their conduct is unacceptable. You may feel free to sit on the sidelines or carry water for BP, but I'm not similarly inclined, since I'm knowledgeable.

[merh]

54. I'm well aware of the use of boycotts and the success of same.

over the years. You don't need to tell me about them and your pretense that you are so knowledgeable really doesn't fly. My posts are not based on any ignorance. My posts are in direct response to your nonsense posts. Your reasoning for a boycott has nothing to do with making a political statement and everything to do with punishment. You know, making bad people pay.

And the simple truth is, BP needs to have its money and it needs to stay viable so that it can continue to pay for the clean up and to pay for the damages. People will need jobs and they will find them as part of the clean up crews that BP has to pay.

[Mojeoux]

51. "Brands" can be damaged

They like their images to be all dimples.

[lonestarnot]

46. Welp in the form it is in floating out there in the gulf, it's not very fungible.

[merh]

49. I agree with you.

And now they want to "dilute it" with disbursing agents (more chemicals). I guess if you can't see the chemicals you are pumping into the wetlands and the gulf waters, those chemicals can't hurt you.

:argh:

[Cal Carpenter]

30. Symbolic boycotts are as meaningful as symbolic regulations

eg not at all, unless you define yourself by your 'consumer choices' and can feel self-righteous about them.

Thing is, economics and politics are not religion so one's belief system ain't worth shit when oil is spewing unchecked.

[BakedAtAMileHigh]

36. you are correct!

The fight is against the use of fossil fuels: it makes no difference if we are discussing BP's new spill, Shell's complete decimation of the Nigerian countryside, or Exxon's use of paid shills to discredit the science of climate change. It's all the same industry, business model, product and pollution.

[Statistical]

37. Thanks. The single greatest thing anyone can do to "hurt" oil companies is to simply use less oil

Pure and simple. Use less oil.

Car pool
Pick paper over plastic (or even better use re-usable showing bag for small trips
use (or support via legislation) mass transit
trade in to more efficient (smaller) vehicle
seriously consider buying an electric vehicle (Leaf, Volt, etc)
hypermile or at least make your driving more efficient
walk/ride bike for short trips
consolidate weekend chores into a single trip to get more done per gallon of gasoline
etc

Of course all these things take actual effort. Real change is hard and most people would rather have token effort. Like putting a "save the rain-forest" bumpersticker on a Hummer.

[Jennicut]

43. That is the truth and most people do not want to change their current

lifestyles. So we give more money every year to all the oil companies. I don't see any of this happening to make a real change, not enough people would do it. We are tied to oil (and coal) until real alternatives are in place, hopefully in my lifetime.

[Statistical]

44. Carbon tax and rising (due to demand globally) prices on fossil fuels are the only hope.

At $5 a gallon gasoline a smaller vehicle or carpooling or investing in a Nissan Leaf starts making a lot of sense. Hell even if you don't care about the planet it starts making a lot of financial sense.

[Jennicut]

45. Carbon tax probably would never pass in Congress. I agree with you

that people will not change unless forced to.

[Egnever]

55. Not really no

you say oil flows to refineries where it is made into gas which is then sold wholesale, as if BP extracts oil then sells it to a refinery then buys it bck for its gass stations.

Which is not even close to true. BP has its own refineries as does exxon and cheveron and all the big boys. They dont hand their oil off to a middleman and then buy it back.

http://www.eia.doe.gov/neic/rankings/refineries.htm


And with that your whole theory is fataly flawed. Despite all the yes men in this thread.

[TreasonousBastard]

57. You have no idea how the petroleum market works. All crude and product normally...

changes hands several times during its "lifetime." The crude at the wellhead has several owners of a joint venture (or possibly one national oil company) and the joint venture sells the crude to its members and others. Then the crude is shipped, and often changes hands several times while enroute, due to daily market conditions. The refiners accept oil pretty much as it comes in, regardless of who "owns" it and the product can again change hands several times before it reaches the final customer.

[nadinbrzezinski]

59. In san diego all the gas comes from teh same

tank farms by I-15... yep, all tankers go in there and line up to be filled and go to their appointed gas stations.

[nadinbrzezinski]

58. Ah another person that gets it

I also posted a long list of OIL derived products earlier in the day... we are literally swimming in the stuff. Hell the macbook (like any other computer) is full of it.