Boycott BP? That Hurts Station Owners -- Not the Company

BP gas station protest
BP gas station protest

Across the country, American consumers are voicing their disgust with BP (BP) over the worst oil spill in U.S. history the only way they can -- by not buying gas sold under the oil company's name. Despite their good intentions, however, it turns out that this will do little harm to the U.K. company's bottom line.

In 2008, BP announced it was exiting the retail gasoline business because the margins were lousy. Rivals ExxonMobil (XOM) and ConocoPhillips (COP) did the same thing. Today, BP owns only about 100 of the 900 or so gas stations bearing its name. The rest are operated by independent business owners such as Jay Ricker, the president of Ricker Oil in Anderson, Ind.

Ricker co-founded the company with his wife, Nancy, in 1979. He operates 35 BP stations in Indiana acquired via acquisitions from the U.K. company in 2000 and 2008, so the protests that are hitting BP stations concern him. He's also worried that some consumers are so angry with BP that they're not stopping at his station's convenience stores.

"If they don't buy that gallon of gas from the local BP store, they are hurting the local business more than anybody else," says Ricker, who's also the president of the National Association of Convenience Stores. The group's members are responsible for about 80% of U.S. gasoline sales. "Where we really make our money is in inside the store. Gasoline sales have been down. Yeah, it's tough."

Ironclad Contracts

BP is providing station owners with information about the progress -- or lack of it -- of the Gulf cleanup. It's also advising owners on how to answer questions from the public, but it's not offering "financial support at this point," according to Ricker.

Stations that bear the BP brand probably couldn't distance themselves from the beleaguered oil company if they wanted to because they are under contract. "These are contracts that stretch multiple years," Ricker says. "They are just about impossible to break."

Ricker is an exception in gasoline retailing industry. About 56% of motor fuel sold at convenience stores comes from operators who own just one store, according to trade publication National Petroleum News. Many of these owners are also immigrants to the U.S.

They're up against a growing crowd of angry consumers. More than 250,000 people have joined the Boycott BP group on Facebook. Though some posters argue against the boycott, more typical is the opinion expressed by the person who wrote: "In creating this disaster you have galvanized my spirit to fight against evil the rest of my days. I will never waver. I will quit using oil and its by-products as much as I can, forever."

Minimal Impact Locally?

The Boycott BP website claims over 8,000 unique visitors. A group of outraged moms in Atlanta is boycotting the oil company. Ralph Nader's Public Citizen has an online boycott petition urging people to "send a clear message to BP by boycotting its gas and retail store products." In an interview, Tyson Slocum, director of Public Citizen's Energy Program, defended the boycott as a legitimate way for people to vent their frustrations about BP's actions and its repeated violations of law found in a deadly 2005 refinery explosion in Texas City and 2009 leaks in an Alaska pipeline.

"We don't mean [station owners] any harm," Slocum says, adding that he's aware that most BP stations aren't owned by the oil company. "The vast majority of our members are angry, extremely angry." The boycott's objective is to "tarnish" BP, says Slocum, who adds that since it's national in scope, the impact on individual businesses will be minimal. He stresses that the group advocates nonviolent action. Ricker dismisses this notion as "ridiculous."

One example of vandalism: Protesters painted the sign at a Manhattan BP station with black paint a few days ago. The station's owner was furious, anonymously telling the New York Daily News, "They don't understand that they're not hitting BP, they're hitting an independent business man."

People also gathered at stations in Florida , Virginia and Indiana (though not at any owned by Ricker). The bad publicity is starting to hurt the bottom line of some BP stations, particularly in those areas near the spill, Ricker says.

"More Effective Outlets"

Other arguments raised in favor of boycotting BP include outrage over the company's role in the CIA-backed coup in Iran that brought the Shah to power in 1953. While the coup represented a dark chapter in American history, it doesn't have much to do with what's happening today.

Some environmental groups such as the National Wildlife Federation argue that boycotts aren't the answer to problems with U.S. energy policy, which the spill has raised. The Los Angeles Times argued in an editorial that "there are far better and more effective outlets for public outrage" than boycotting BP

The company's many critics have long accused it of cultivating an undeserved image of environmental responsibility through its support of groups such as the Nature Conservancy, according to The Washington Post. This may explain the vitriolic nature of the criticism leveled at the BP.

Like the Gulf fishermen whose businesses have been ruined, BP station owners are finding that the spilled oil's spreading stain is unavoidable -- and the effects are beyond their control. About the only thing that they can do is hope that the country's worst oil disaster begins getting resolved before their businesses are further destroyed.