Please buy gas!

This e-mail reprinted below, which is circulating incredibly widely, may represent a new low in economic thinking. It declares September 1st “No Gas Day.” I got three copies today. Still, I wasn’t going to blog about it, until I went on the web-search engine technorati and saw that all sorts of bloggers seem to be embracing the concept.

So here is the original e-mail:

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 WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.

THEREFORE SEPTEMBER 1ST HAS BEEN FORMALLY DECLARED “STICK IT TO THEM DAY” AND THE PEOPLE OF THESE TWO NATIONS SHOULD NOT BUY A SINGLE DROP OF GASOLINE THAT DAY.

THE ONLY WAY THIS CAN BE DONE IS IF YOU FORWARD THIS

E-MAIL TO AS MANY PEOPLE AS YOU CAN AND AS QUICKLY AS YOU CAN TO GET THE WORD OUT.

WAITING ON THE GOVERNMENT TO STEP IN AND CONTROL THE PRICES IS NOT GOING TO HAPPEN. WHAT HAPPENED TO THE REDUCTION AND CONTROL IN PRICES THAT THE ARAB NATIONS PROMISED TWO WEEKS AGO?

REMEMBER ONE THING, NOT ONLY IS THE PRICE OF GASOLINE GOING UP BUT AT THE SAME TIME AIRLINES ARE FORCED TO RAISE THEIR PRICES, TRUCKING COMPANIES ARE FORCED TO RAISE THEIR PRICES WHICH EFFECTS PRICES ON EVERYTHING THAT IS SHIPPED. THINGS LIKE FOOD, CLOTHING, BUILDING MATERIALS, MEDICAL SUPPLIES ETC. WHO PAYS IN THE END? WE DO!

WE CAN MAKE A DIFFERENCE. IF THEY DON’T GET THE MESSAGE AFTER ONE DAY, WE WILL DO IT AGAIN AND AGAIN.

SO DO YOUR PART AND SPREAD THE WORD. FORWARD THIS

EMAIL TO EVERYONE YOU KNOW. MARK YOUR CALENDARS AND MAKE SEPTEMBER 1ST A DAY THAT THE CITIZENS OF THE UNITED STATES AND CANADA SAY “ENOUGH IS ENOUGH”

Thanks and have a wonderful day :o}

Here is a (no doubt) partial list of totally idiotic mistakes in that e-mail:

1) If nobody buys gas today, but everybody drives the same amount, then it just means that we either had to buy more gas in anticipation of not buying any on September 1, or that we will buy more a few days later. So even if you believed this would take a $4.6 billion dollar bite out of the oil companies that day, consumers would hand it right back over. If this was “No Starbucks coffee day” it might have some chance of mattering, because people buy and drink Starbucks coffee the same day, so a foregone cup of coffee today may never be consumed. But this is not true of gasoline, especially if no one is being asked to reduce gas consumption. All you will get is longer lines at the pump the day after.

2) A one day total boycott of gas would not reduce oil company bottom lines by anything like $4.6 billion, even if it was accompanied by a one day moratorium on all gasoline use. Americans consume about 9 million barrels of gas a day. There are about 42 gallons in a barrel, so that equals 378 million gallons of gas sold a day in United States, or about one gallon per person. Toss in another 10% for Canada. At $3 a gallon, that is about $1.2 billion in revenues. Profit as a share of revenues in this industry is probably 5% or less, so the bottom line impact is a max of $60 million…about 1/100th of the stated number. And from point (1) above, even this is a gross exaggeration of the true impact.

3) One day of no purchasing of gasoline would certainly not cause the oil industry to choke on their stockpiles. Gasoline inventories in the US are typically about 200 million barrels, but right now they are on the low side — a big part of the reason why gas prices are high. 9 million extra barrels would create no problems whatsoever for stockpiles.

So everyone, please buy gas on September 1st.

And if you ever have the bright idea to circulate an email like this, at least tell people not to use gas, rather than not to buy gas.


Anonymous

haha.

I recieved this email and I live in Australia. Thanks for giving the exact statistics (although I think anybody who reads this blog would probably understand the asinine nature of the message)

-fan from Australia
Michael.

Broker

This post has been removed by the author.

Sean

These E-mails have been circulating ever since 1999, when we were all complaining about having to pay $1.45 a gallon. You'd think the people writing them would have noticed the complete lack of impact the last five or six such messages made, but apparently not.

If we're going to protest something, why not protest the 30-50 cents per gallon that goes to state and federal governments instead?

Anonymous

I'm in Australia too and these things just make me wanna hurl quite frankly! *rolls eyes*

Fuel is fuel is fuel and I quite agree it's using it that is at the root of the problem not the buying of it.

Incidently, but we in lil ol' Downunder pay a good third or more for our 'gallon' of petrol than in the US. Most of what we pay is actually government taxes and even the petrol station owner gets a mere poofteenth of any fuel "profits". Conspiracy theories aside, I do think it's not so much the fuel companies that are the cause of the problem but the governments who are subsidised by the industry. If they made more money from green fuels we might not have had this petrol crisis at all!

*steps off soapbox*

Nice post btw! Thanks for some sense on the subject! :)

Mitch

Matt Hertz

Nice rebuttal, Levitt.

Though I didn't receive any such e-mail the past few days, I do recall receiving a similar one a few years back.

Saar Drimer

Nearly all (actually all the ones I looked into) chain emails contain false statements and information or are completely made up. From deforestation in Brazil, Bonsai kittens, MS pays millions and making my day great by forwarding the email to 5 people and many more.

But seriously, what's the real harm if people have the feeling that they are doing something about fuel prices while realistically they have very little they can do to influence it. So they vent by giving the finger to the local Chevron station as they drive by on fuel fumes in their tank.

Thanks for the analysis.

Anonymous

There is no problem per se, Saar, besides continuing to contribute to collective ignorance. However, the author of the e-mail could have perhaps used the e-mail as an opportunity to educate.

Explain to people that if they feel the higher prices are eating away at their budget they should carpool, take public transportation, ride a bike...activities that in aggregate may reduce demand, but in the very least at an individual level they reduce the pain of higher prices.

I'm rambling, but the sentiment of the original e-mail is of getting a free lunch - I will alter my behavior is a small way that doesn't cause me any discomfort and the rest of the world will bend to the power of my will.

rini

The no gas day, at least, has some symbolic value. It demonstrates that people do have beefs with the oil companies' policies. I don't see what is wrong with demonstrating that we have some control over our consumption patterns (if not yet our total consumption.)

You guys are smart and I loved your book. Please don't turn into obnoxious know-it-alls.

Saar Drimer

Anonymous,
you are absolutely right. However, the content you suggested would not propagate very well because it does not spark vengeful emotions or disgust that is needed for a successful chain letter. People also don't respond well to long term arguments... there is no immediate "fix" with the methods you suggest (I might add buying a hybrid to the list.)

JohnMcG

It's probably also worth noting that having private consumers not buy gas would have zero impact on cosunmption and purchasing by airlines and trucking compaines the e-mail frets so much about.

Anonymous

I've been good, and I've been bad. I haven't driven since the hurricane (that's easy, I'm retired, and have a bike). On the other hand, I did top up my tank the night before the hurricane hit (that's what I get for reading The Oil Drum).

Anonymous

Good points by Dr. Levitt, but he is missing the very nature of this act--it is symbolic. To pull in a historic parallel, the diner and bus boycotts were to draw attention to segregation.

The value of a symbolic act (and concommitant publicity) can be quantified in the terms used above. Nonetheless, they can change alter the course of history.

odograph

Question for those who support the "sympolic act" ... why do the words "empty" and "symbolism" sometimes appear together?

If ANYTHING comes out of this thread it should be (as the Dr. says) "at least tell people not to use gas, rather than not to buy gas."

... put something real into your symbolism.

Jonathan Schwartz

Prof. Levitt,

You are right (obviously) in your analysis of the chain mail but I think you give that nonsense too much credibility by even responding to it.

Anyway, keep up the good work. I especially liked your posts on peak oil.

Anonymous

Good post here-- I hate getting this email over and over. As was stated, a one-day boycott won't help much. If you could get people to NOT buy gas from one certain company for week after week, you could impact that individual company, but I wish you good luck to get the public to even do that.

Anonymous

In my opinion, the whole idea of "Freakonomics" (if indeed there is a "unifying theme"!) is that it is generally a good idea to think critically about things. I, too, had seen this e-mail a number of times and felt that somehow it was bogus. Now, with the numbers provided, I have a sense of why this is bogus.

To me that's a lot more interesting than the "symbolism" of the e-mail. And as for Levitt being a "know-it-all", that's not such a bad thing either.

Anonymous

Levitt may be a know_it_all. If so it would seem he has a lot of company. I, however, am a know-almost-nothing when it comes to economics. Perhaps the posters might suggest an easy intro to the dismal science.

Anonymous

How does Sean want to pay for roads if he does not like a gas tax?

Jennifer

Buy gas? Done and done, along with a dozen other Costco customers, this morning.

Anonymous

For those not familiar with www.snopes.com, it's a wonderful resource for debunking all manner of chain letters, urban legends, etc. This particular chain is reviewed at http://www.snopes.com/politics/gasoline/nogas.asp. But Mr. Levitt's tearing into the premise was a good read...