Among the tales of pump-price pain that the media is throwing out there lately, I just couldn't let this one go without comment.
Today I read that an ExxonMobil (NYSE:XOM) station owner in Wisconsin is fed up with high gasoline prices. Disappointed with the failure of last week's botched gas boycott -- it was May 15, in case you missed the chain email -- Harvey Pollack took a stand and shut off his pumps for a day. This move was ostensibly taken in solidarity with his customers, but Pollack's business is hurting, so he really feels their pain.
Pollack's $1,500 experiment had a few supporters, like one woman who drove 10 miles out of her way to buy something from the convenience store as a way of saying thank you. I was almost empathizing with this woman for a second. Until, that is, I read that she commutes 100 miles round-trip on a daily basis in an SUV.
No, this article did not appear in a certain leading satirical newspaper. The story reflects a very real disconnect between consumer behavior and expectations. I have no interest in getting preachy here, but high prices today are to a great degree a consequence of choices made by the public, not a few oilmen sitting in a smoky room in Houston. Boycotts may shift purchases by a day, but they aren't going to change anything. Your long-term driving behavior, however, has an impact.
Yes, refiners like Valero (NYSE:VLO) and Tesoro (NYSE:TSO) are failing to keep up high throughput at their refineries. But over the full cycle, returns on refining have historically been the lowest along the entire oil and gas value chain, so good luck convincing any refiner to dramatically build out their capacity. Today's biofuels push makes the demand for future crude refining capacity even more uncertain than it already would be.
It's hard to square the difference in public opinion toward health care and energy in this country. When anyone floats the idea of universal health care, the inevitable outcry is "socialized medicine!" For some reason, it seems that people are much more receptive to the idea of having the government do something to provide universal cheap gas. I gently suggest you be careful what you wish for.
Fool contributor Toby Shute doesn't own shares in any company mentioned. The Motley Fool has a universal disclosure policy.
