In the eight weeks since BP's Deepwater Horizon rig explosion and oil spill, many have come to the conclusion that there's only one way to send BP a message: stop buying their gas.
According to one national poll, 51% are ready to boycott BP, and a website and Facebook page calling on consumers to stop buying from the oil giant are rapidly growing.
For some, it's a moral decision: They don't want their money going to a corporation they see as irresponsible or worse. For others, a BP boycott is viewed more strategically -- a way to hit BP where it hurts most, in the pocketbook, and force them to change their ways.
But will a BP boycott really work? It's a subject I feel qualified to comment on; it's something I've thought about for years.
In the early 1990s, I worked for the Student Environmental Action Coalition, a national group that launched a boycott against BP due to a host of ecological ills we thought they were inflicting on the world (let's just say that even then, their environmental track record was less than stellar).
We were righteous. We were determined. SEAC members even got a meeting with higher-ups at BP America's corporate offices, where we boldly declared that unless BP changed their ways, our members -- a few thousand students around the country -- weren't going to buy their gas anymore.
I can only imagine now what the BP suits were thinking: "A few college tree-huggers (who probably all ride bikes anyway) won't buy our gas? We're sooo scared." If "whatever" had been popular lingo back then, they might have said it.
Needless to say, we didn't win any major concessions from BP. Our hearts were in the right place, but we misjudged the power dynamics at hand: Our band of student environmentalists didn't have the power to influence BP through a boycott.
That lesson about power is at the heart of debate about a BP boycott today: It's fine to boycott BP for moral reasons, but will it really cause BP to change?
BOYCOTT ECONOMICS 101
Economists tend to dismiss consumer boycotts, saying it's extremely hard in today's economy to affect a company's bottom line -- especially big multi-nationals like BP. Success stories from history like Rosa Parks and the Montgomery bus boycott worked because they hit a small, local market that immediately felt the impact when 90% of African-American bus riders refused to pay fares.
But global and viral media might be expanding the power of boycotters. In a 2006 study, Stanford economists Larry Chavis and Phillip Leslie looked at the "boycott French wine" campaign organized by right-wingers upset with France's opposition to the Iraq war. The boycott enjoyed prime-time TV and front-page newspaper coverage (crucial to their success, the authors say).
The result? U.S. sales of French wine dropped 26% at the height of the boycott.
Still, buses and wine are different than global oil. They're smaller markets and more sensitive to consumer pressure. Americans drink 767 gallons of wine a year; they guzzle up 378 million gallons of gas a day.
Boycotting an "oil major" is also more complex. As many local BP gas stations have pointed out, they're only franchising the BP name. Declining sales and losing affiliates sends a message to BP headquarters, but also hurts local businesses in the process.
Because oil companies both supply and sell gas, there's also the problem that you never know when you're buying BP. As Atlanta-based businessman Russ Scaramella -- who bought 32 BP stations a month before the Deepwater Horizon debacle -- pointed out: "If you stop coming to me, you're probably buying BP gas somewhere else and you just don't know it because it doesn't say it on the sign."
And the fact is, Exxon and Shell hardly have pristine records either.
THE KEY INGREDIENT: CLEAR DEMANDS
Despite all of that, we know a boycott of an oil major can work -- it has already. When Greenpeace called for a boycott of Shell in 1995 over the company's decision to dump the Brent Spar oil platform at the bottom of the Atlantic, sales plummeted by 70% in some countries. Shell changed its decision within days.
But the Shell boycott had another key ingredient for success: Clear demands. Greenpeace -- and boycotting consumers -- called on Shell to take a specific action, after which the boycott would stop.
What are the demands against BP? Public Citizen's "Boycott BP" petition doesn't call on BP to do anything. The boycottbp.org website says it will keep the boycott going until:
...until all legal disputes are settled and paid in full.
...until reparations to those who lost work or income are paid in full....until government assistance is repaid in full with interest.
...until a solid, meaningful testing plan to avoid this type of disaster is developed, implemented, and published.
One can agree with all of those positions and still realize it's an unwieldy list -- and the group is unlikely to ever declare victory.
One place BP clearly is feeling pain is in its stock prices, which were down 16% by the close of business last Thursday. Since Deepwater Horizon exploded, BP has lost half of its market value -- a staggering $95 billion.
Which points to the final way boycotts can influence a company: Bad publicity, which can spook investors. BP shareholders are fleeing due to lost dividends and the growing costs of the spill, but also thanks to the perception that BP's a "damaged brand," something a boycott helps fuel.
Such a shift in public perception can help push institutional investors, from pension funds to college endowments, to dump BP stocks -- a strategy that was enormously successful in the movement against South African apartheid in the 1980s and 90s.
But while the South Africa movement had clear goals and demands, right now BP is just taking an economic beating. Consumers and investors would have much more influence if they united to say, "We will only buy from and invest in your company once you do X, Y and Z." Otherwise, BP could go bankrupt, and the Gulf oil spill's victims will get nothing.
So can a BP boycott work? If it's about the morality of your personal buying decisions, that's up to you. It can also succeed in changing BP's corporate behavior -- but only if it has broad reach, focused targets and clear demands.
Only by learning these lessons of boycott history can consumers and investors turn their anger into something that will really help the people and environment of the Gulf.
Follow Chris Kromm on Twitter: www.twitter.com/chriskromm
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That number cannot possibly be correct.
Did You Know?
BP engineers alerted federal regulators at the Minerals Management Service that they were having difficulty controlling the Macondo well (Deepwater Horizon) six weeks before the disaster, according to e- mails released by the Energy and Commerce Committee.
“I don’t think this would have happened on Exxon’s watch,” Tom Bower, author of “The Squeeze: Oil, Money and Greed in the 21st Century,” said in a June 11 Bloomberg Television interview. “They’d be much more careful and much more conscious of the need to supervise subcontractors.”
WELL excuse me your sainted Exxon....... and Chevron and ConocoPhillips.
Let’s just take a look at a few of your past misdemeanours, and then we can consider again – if the moratorium on deepwater drilling should be lifted, and place it all firmly back into your nice clean hands!
http://just-me-in-t.blogspot.com/2010/06/fairy-stories-about-oil-companies.html
Ha, just kidding, if it werent for my inquisitive nature and the fact I own a 2002 diesel VW I wouldn't have known gas brand marketing is all a joke.
As a Diesel owner I found this out when one day I noticed that the same supplier that brought heating diesel to my house, also supplied the mobil, sunnoco and generic stations.
You want to boycott BP, drive less, carpool more and spread the message.
The only thing that has changed is that the oil we love so much is possibly going to destroy our country and our earth via a man made spill.