I was challenged in
this thread about some information I and another respondent provided about the effectiveness of a so-called "buy-cott" designed to benefit Citgo and by extension poor people who benefit from the success of Citgo. (That other information is at
Snopes and requires a thorough reading to understand the relevance.) Specifically I was offered an "education" on what logos mean, although the lesson didn't provide much substance and merely asserted that when you buy from a place displaying the Citgo logo, you are benefiting Citgo and by extension the poor. That is the context of this post, which contains comments that appear directed at an individual and may see somewhat disorganized because of that. I decided to provide this its own thread because I really don't feel like spending the effort I did on this and having it buried somewhere it might never be seen. This is very long, so I know most people won't bother anyway. So be it.
As a preface I'll note that I have no particular gripe with Hugo Chavez and think he has done some fine work in his own country and has offered valuable help to the needy in the US. This isn't about Chavez. It's about the energy business and the consumption of energy. A *enormous* level of misunderstanding exists about this. I've tilted at this windmill for a long time now, but this is the first time I've started a thread about it. I may regret it, but I'll dawn my flame-resistant suit and deal with it. I hope we're all here because we want to know things and want to receive accurate information, not run off on crusades based on wishful thinking. Finally, if you want to buy your gasoline at a Citgo station, that's perfectly fine with me. I'll even encourage it because it might have some small, positive impact. But, please be aware of what you are actually doing and do not fool yourself that you've engaged in any kind of "boycott" of other energy companies merely because you drive into a station with a Citgo symbol on it.
Before escaping to a better life, I worked for a time as a purchasing agent for gasoline and kept the books at several retail locations that sold gasoline and other products such as convenience store items. Gasoline sales were the most obnoxious part of the business because they require massive levels of expense in the form of permits, maintenance, paperwork, and headache yet provided very little in the way of profit to the retail operator. (4 cents per gallon gross was a great day. Enough to pay for the electricity required to run the pumps was acceptable.) Gasoline sales were necessary as what we call a "draw." People come into buy gasoline, and while they're there, they spend another $20 on items we purchased for half that. At any rate, one of these stations was a so-called Citgo station, one of the independently owned stations mentioned in the following.
The main point: Just because you buy your gas from a Citgo station does not mean you are buying Citgo gas or even directly supporting the Citgo company. The gasoline in the ground comes from many sources and is made from oil that comes from other sources.
Here are some bits to chew on.
The Citgo marquee at the one station I ran was there because the parent company that owned the station had an agreement with Citgo's credit division to honor Citgo credit cards from which we made a (very small) percentage of the profits on interest. Citgo paid us, IOW, and, yes, they made a tidy sum from interest payments. Citgo "markets" their products through approximately 145,000 *independently owned* stations throughout the US. The "logo" is essentially an advertising expense for Citgo. Now, if you use your Citgo credit card every time you fill up, you might have some level of a point, but I'm not real sure we should be encouraging racking up debt at an interest rate often in excess of 22%. Direct contributions to the poor would be more efficient and less costly. But, if that's what you want to do, go ahead. Just be honest about it and stop kidding yourself about "using Citgo gasoline." What you're advocating is acquiring Citgo sponsored debt.
Some data to consider: the refining capacity of US Citgo refineries is approximately 140 million barrels of gasoline per year (about 315 million barrels of all products, including jet fuel, etc.). In the United States, we consume approximately 9 million barrels of gasoline per day, about 3.2 billion barrels per year. (A barrel is approximately 42 gallons.) So, Citgo is capable of providing about 15 day's worth of gasoline to the US through its refineries assuming it runs at full capacity every day, but it actually provides less.
Citgo imported about 82 million barrels of crude into the US in the first half of 2005 (the most recent time period for which I could find good data). About 530,000 of those barrels came from the Persian Gulf, the rest mostly from Venezuela and Mexico. Assuming the second half of 2005 was similar to the first, we can estimate that Citgo imported about 165 million barrels of oil. Each barrel can be used to produce about 19.5 gallons of gasoline. With the number of barrels of oil Citgo imported, it could produce about 77 million barrels of gasoline, about 3% of US consumption. At capacity, it could produce about 4.5%
Citgo is associated with about 145,000 stations, which I mentioned previously were independently owned, meaning Citgo doesn't own them. If Citgo were running at capacity within the US, it could produce about 383,000 barrels of gasoline per day or around 110 gallons of gasoline per station per day. Now, I've worked at some very low volume stations. The smallest volume of gasoline any of them ever sold was 400 gallons in a 24 hour period. Some averaged in excess of 16,000 gallons per day during the summer.
I suggest no conclusion with this. I simply want to offer the data and allow others to draw their own conclusions regarding the depth to which you're helping the poor by patronizing Citgo.
But wait, there's more.
Citgo fully owns some relatively small refineries in Illinois, Texas, and Louisiana. These account for roughly half the Citgo interested refining capacity. The other half is included in Citgo's 41% interest in the massive Lyondell-Citgo refinery in Houston that everyone was worried about this past fall when the hurricanes were battering the coast. The controlling interest in this company is maintained by Lyondell Chemical Company. Lyondell has a PAC. Let's explore some of its contributions in the last few year:
These could be good, depending on your perspective:
Democratic Congressional Campaign Cmte, Washington $2,500
Democratic State Senate Campaign Cmte, Harrisburg, $1,000
What about these?
Friends of Jeff Piccola Committee, Harrisburg, PA $500
FRIENDS OF JEFF PICCOLA COMMITTEE, HARRISBURG, PA $1,000
FUND FOR A CONSERVATIVE FUTURE PAC, ALEXANDRIA, VA $5,000
HOUSE REPUBLICAN CAMPAIGN COMMITTEE, HARRISBURG, P $1,000 (Annual contribution)
House Republican Campaign Committee, Harrisburg, P $1,000
HOUSE REPUBLICAN CAMPAIGN COMMITTEE, HARRISBURG, P $700 (Annual contribution)
House Republican Campaign Committee, Harrisburg, P $500
NATIONAL REPUBLICAN SENATORIAL COMMITTEE, WASHINGT $15,000 (Annual contribution)
I could go on with individuals, such as contributions to Rick Santorum and Tom Delay, but I won't bother.
And here's the point, since I'm sure you think I've run astray. All these companies have connections among themselves. They compete for resources but they also cooperate to try to leverage their position. If you support one, you support them all. If you purchase Citgo products directly, you will be supporting the Lyondell-Citgo refinery's operations and Lyondell every bit as much (more based on percentage of ownership) as Citgo, which means, using your own logic, that you're supporting these donations to such odious causes as the "Fund for a Conservative Future."
I don't mind being wrong and will readily admit to being wrong if I am, but this empty cheer-leading of Citgo by people who seem not to understand or have a desire to understand how the energy business works and then jump all over my ass when I try to provide a little valid information is getting more than tiresome. I'm all for giving Citgo as much business as you can, just be educated about what exactly you're doing when you do it.
(All data and information comes from browsing opensecrets.org, doe.gov, and citgo.com. Large numbers have been rounded, resulting in some variations that may not add up exactly when we get into the realm of millions and billions.)
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