In an article by Robert Fisk published in THE INDEPENDENT, the crisis of the American dollar in oil dealings is explained a little deeper than was known the last time we visited this topic. More former allies have agreed to leave the dollar, thus hastening its demise.
IN THE MOST PROFOUND financial shift in recent Middle East history, Gulf Arabs are planningalong with China, Russia, Japan and Franceto end all dollar purchases for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
The Americans, who are aware the meetings have taken placealthough they have not discovered the detailsare sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oilyet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.
The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial poweralong with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial systemwhich has prompted the latest discussions involving the Gulf states. After a while, familiarity breeds contempt, and thus allegiances tend to change. And we are seeing that sort of thing here.
But here is a more sober take from a poster whose handle is Solomon2, posting on Debbie Schussel's blog covering the same story within the context of a book review. This leveled advice smiles upon the survival of dollar, but cautions that all is not well. Read on...
It is possible for these parties to destroy the dollar, but by doing so they would sacrifice a great deal of their own wealth (in dollar-denominated assets) and future income (because of the worldwide depression caused by such a crash.)
After WWII the U.S. accounted for 50% of the world’s GNP. Thus there was really little alternative to using the dollarthat the British pound held its own for two more decades can be attributed to the economic influence of its fading Empire. Now the U.S. represents under 30% of world GNP and is no longer the world leader in providing capital, so it makes sense to revive the 1970s mechanism of the SDR for capital growth. Eventually the dollar will come down and manufacturing revive compared to the financial and services sector. It’s all quite naturalthough we will have to get used to the fact that we cannot enjoy the benefits of great seignorage much longer.
Found this online, fitting enough for the thought of the day...
Early in our country's history, in response to the Barbary pirates, the halls of Congress were filled with Congressmen shouting "Millions for defense, not a penny for tribute!" How things have changed! Now it is "Billions for jizya, not a penny for self-respect!"
But just as the afternoon follows the morning, here is an even more profound and rewarding find called Turning Oil Into Salt:
One hundred and fifty years after the discovery of oil in the U.S. gave rise to the global oil industry, two of America’s leading energy security experts present a compelling plan to diminish the strategic value of oil through competition, fuel choice, removal of trade barriers on alternative fuels and other domestic and international free-market-based solutions.
In their provocative book Turning Oil into Salt: Energy Independence Through Fuel Choice, Gal Luft and Anne Korin, co-directors of the Institute for the Analysis of Global Security (IAGS) and co-founders of the Set America Free Coalition, argue that energy independence is not a function of the amount of oil we consume or import; it's about turning oil from a strategic commodity second to none (as salt once was) to just another commodity (as salt is today.)
As the sole means of food preservation, salt once determined the course of world affairs. Technologycanning and refrigerationstripped salt of its strategic status turning it into just another commodity, something to be bought and sold that no longer has geopolitical importance. Turning Oil into Salt describes how we can do the same to oil, whose strategic status stems from its virtual monopoly over transportation fuel. The book addresses the following questions:
Why can't we drill or conserve our way to independence?
How are China, Brazil, and Iran leapfrogging to energy independence and leaving America behind?
Why do competition and the free marketrather than Soviet style central planninghold the key to independence?
How can we bring down the cost of batteries?
Ethanol: scam or panacea?
How can we run our cars on CO2?
What will be the strategic energy commodities of the post-oil era?
Have I just stepped into a large steaming pil eof liberal largesse? I frankly don't know. The propagandists still hold sway on both ends of the spectrum. Boom or bust. Info, it's the key. To order click HERE.
"The Bible for everyone who is serious about energy and national security. A seminal work." Robert C. McFarlane, former National Security Adviser
"A small masterpieceright on the money both strategically and technically, witty, far-sighted, and barbeques a number of sacred cows. Absolutely do not miss this." R. James Woolsey, former CIA Director
All Americans, right or left, Dems, or Republicans, should deftly ponder this letter I received from Sean Brodrick who has described precisely what I would like to see happen to all that disappearing BIG money that the Obama administration, AKA the Obamanation, is trying to shovel to its ACORN cronies after already flushing the toilets of that host of bankers, thieves, and swindlers who continue to live lifestyles of the rich and famous while pillaging the American landscape of every industry and value American was once famous for...
Brodrick's suggestions just make sense in this time of rising joblessness and economical collapse. President Barack Hussein Obama (it's okay to admit, honor, apotheosize that now, right?) promised this great nation an American way out but is delivering chaos and continued crisis instead. Did I mention the slippery slope towards Marxist and Islamic values? No, but I should have.
Solution? Muster those thousands upon thousands of hyperactive ACORN shock troops into the business of real work instead of repeatedly putting them into situations where it is too easy to succumb to temptation and face being hauled into jail for voter registration fraud and other illegal activities, so we can energize this country with righteous industry, and get moving again. Just maybe these folks would feel good enough about themselves after an honest day's work to quit hating America. The psychological warfare going on within the Democratic Party is sad, sad how the party perpetuates the same dysfunctional thinking generation after generation upon its own constituents. Corruption is its own reward. By their fruits ye shall know them.
But rebuilding this country as a first priority is a deserving and capital idea on so many fronts. I applauded these ideas when I first heard Lyndon Larouche suggest them in a long detailed speech I heard off the television from the next room unaware of who I was hearing, about five years ago, but I was cheering nevertheless, and I applaud them now when I read them in an email from a Wall Street market analyst.
By the way, all you guttersnipes lurking in the tall tender grass of assimilation waiting to target my references and arguments with smear jelly, let you be reminded that La Rouche was bulls-eye dead-on in predicting this crisis, complete with critical numbers and important names. He knew about the economical doom headed our way years, even decades before we crashed, not unlike the Soviet splat two decades earlier, so why didn't our entrenched leadership class take heed and siphon off some intelligence in the matter instead of piling on with greed and redirection?
It is important to note that Congressman Ron Paul was also warning us years ahead of time, the lone harbinger of economic truth in Washington it appears, but did we listen, did our bankers listen, did our government listen? For all their conspiratorial and isolationist faults, both of these marginalized men of great knowledge and critical powers were right on the mark in this money game, and several other things, too, but let's stay on track, and keep to the topic at handtrains, planes, and automobiles, oh, and infrastructure, too!
WE'RE ALWAYS HEARING THAT TRAINS can't survive in this country without public subsidy. That may be true. But you can say the same thing about the big banks, can't you?
Personally, I'm wondering how much of a public transportation system we could buy if we took the money we're spending bailing out Wall Street banks$70 billion on AIG, $52.5 billion for Bank of America, and $50 billion for Citigroup, just to name threeand spent it on passenger rails.
Still, $8 billion isn't much when we're spending $50 billion propping up a single bank. And that's small potatoes compared to the $79 billon spent on highways and bridges in 2008 and the $80.2 billion spent on highways in 2009, not including spending from the stimulus package.
And sure, we drive a lot more than we ride trains, so more should be spent on highways. But public policy has pushed us away from trains and into cars for the past 60 years. If we start funding trains more, people will start riding more trains.
Now for the really bad news: If Amtrak spends that money on new railcars, it's going to have to go shopping outside our borders. Amtrak only has about 630 usable rail cars. Some are more than 30 years old. Dozens more are worn out or damaged but could be reconditioned and put into service.
But there aren't any U.S. companies that build passenger rail cars. While there are some subway car makers and trolley car makers in the United States, for passenger rail cars you have to buy from Canada's Bombadier, Germany's Siemens or France's Alstom.
Do you think maybe GM could retool and start building passenger trains? Sure, GM knows nothing about building railcars. Well, it didn't know anything about building tanks in World War II, either, and GM learned that pretty quickly. It could always partner with foreign firmsUncle Sam didn't have a problem forcing Chrysler into a marriage with the Italians.
It's also true that GM's assembly lines are set up to put out cars at a high volume. Well, I'm sure the quarries on Easter Island were designed to turn out Giant Stone Heads as fast as possiblebut sometimes, you have to change with the world before the world comes crashing down on you.
Cars Should Be Only Part of GM's Future...
It's not like I want GM to stop making cars. I just think GM should probably make a lot fewer automobiles, but much better ones. Anyone who wants to pay the giant stone head tax can still drive a gas-sucking SUV.
But GM can also make small cars, with a focus on quality, good mileage, and multiple power sources. The Japanese, Europeans, Koreans and Chinese will be making these cars, too, so GM will have its work cut out for it.
In fact, I have news for President Obama and GM: Detroit has already lost the battle over who is going to build cars. Check out this chart from Clusterstock, showing the sources of auto production in the United States:
The "transplants" are Toyota, Honda, and Nissan factories here in the United States. They may be called transplants, but they employ American workers, pay U.S. taxes and have plenty of American shareholders.
In 2002, the Detroit Big 3 produced 80 percent of 12 million cars, or 9.6 million vehicles. In 2009, they will build just over 50 percent of a total production of 5 million cars, or roughly 2.6 million vehicles. That is a plunge of about 73 percent in 7 years.
So yes, I think maybe GM should find something else to make besides automobiles.
Start Building the Transportation System of the Future...
Do you notice how oil and gasoline prices are going back up again? The recent plunge in oil was short-lived, and we're probably heading for another oil crisis by 2012 at the latest — and maybe by as early as next year.
The United States consumes around 20 million barrels of oil a day and imports roughly 65 percent of it. The amount of oil our country consumes is equal to the output of the world's two largest oil producing nations (Saudi Arabia and Russia) combined. It is absurd for a country that has less than 3 percent of the world's oil reserves to consume 25 percent of the world's produced oilbuying much of it from people who hate us!
At some point, we're going to have to move beyond oil. Maybe electric cars or alternative fuels will be the answer for some people. But trains are a cheap solution for most people.
Yeah, GM's Volt and other electric cars will be rolling off the production line in 2010 (so we're told). In the meantime, how many of Detroit's new muscle cars — the new Chevrolet Camaro, Dodge Challenger and Ford Mustang — will also be rolling off the production line? The Challenger gets 13 mpg in the city, 19 on the highway. That sucks ... gas!
I'm not trying to dictate what kind of cars people should drive. I just think gas guzzlers should pay a tax — let's call it the "giant stone head" tax, because when it comes to the energy problem this country faces, gas guzzlers are part of the problem, not the solution.
So for our $60 billion, I'd like to see GM start to build things we really needpassenger rail, as well as electrified streetcars and hybrid streetcars/buses.
Jobs, Jobs, Jobs...
It's also true that a factory that makes trains won't employ as many people as a factory that makes cars. Canada's Bombardier employs 34,000 people to make trains.
On the other hand, trains don't run themselves. France's national rail company employs about 200,000 people, and France has only one-fifth the population of the United States in an area the size of Texas. Amtrak has only 18,000 employees. So a push into rail would potentially create a lot of good, middle-class jobs.
Meanwhile, the railroad tracks themselves are a mess. Again, highways are publically funded, railroads aren't. This makes it cost far more to ship things reliably in the United States, since you have to use air or trucks, both of which are very inefficient compared to rail. I think it's time to change that.
A problem with rail is that sharing the tracks with current passenger trains is iffy at best, and virtually impossible with high-speed trains. We need to build new railroads. Building new rail would keep America's steel makers busy.
The railroads and local trolley services will need to be electrified, of course, so we can tell OPEC where they can stick their oily thumbs. Electrification is work that can be done by U.S. companies and U.S. workers.
And there's something else we need to do that will help ALL U.S. manufacturers, including GM...
SHANGHAIbustling Chinese companies have been on a shopping spree in the past month, snapping up tens of billions of dollars' worth of key assets in Iran, Brazil, Russia, Venezuela, Australia and France in a global fire sale set off by the financial crisis.
The deals have allowed China to lock up supplies of oil, minerals, metals and other strategic natural resources it needs to continue to fuel its growth. The sheer scope of the agreements marks a shift in global finance, roiling energy markets and feeding worries about the future availability and prices of those commodities in other countries that compete for them, including the United States.
Just a few months ago, many countries were greeting such overtures from China with suspicion. Today, as corporations and banks in other parts of the world find themselves reluctant or unable to give out money to distressed companies, cash-rich China has become a major force driving new lending and investment.
On Feb. 12, China's state-owned metals giant Chinalco signed a $19.5 billion deal with Australia's Rio Tinto that will eventually double its stake in the world's second-largest mining company.
Nn three other cases, China has used loans as a way of securing energy supplies. On Feb. 17 and 18, China National Petroleum signed separate agreements with Russia and Venezuela under which China would provide $25 billion and $4 billion in loans, respectively, in exchange for long-term commitments to supply oil. And on Feb. 19, the China Development Bank struck a similar deal with Petrobras, the Brazilian oil company, agreeing to a loan of $10 billion in exchange for oil.
On Saturday, Iran announced that it had signed a $3.2 billion agreement with a Chinese consortium to develop an area beneath the Persian Gulf seabed that is believed to hold about 8 percent of the world's reserves of natural gas.
Even as global financial flows have slowed sharply overall, China has dramatically stepped up its outbound investment. In 2008, its overseas mergers and acquisitions were worth $52.1 billiona record, according to the research firm Dealogic. In January and February of this year, Chinese companies invested $16.3 billion abroad, meaning that if the pace holds, the total for 2009 could be nearly double last year's.
Worldwide, the value of mergers and acquisitions transactions so far this year has dropped 35 percent to $384 billion. By comparison, the United States had $186.2 billion in outbound mergers and acquisitions in 2008 and Japan had $74.3 billion.
China's state-run media outlets are calling the acquisition spree an opportunity that comes once in a hundred years, and analysts are drawing parallels to 1980s Japan.
"That China started investing or acquiring some overseas mineral resources companies with relatively low prices during the global economic crisis is quite a normal practice. Japan did the same thing in its prime development period, too," said Xu Xiangchun, consulting director for Mysteel.com, a market research and analysis firm.
It's not just Chinese corporations that are taking advantage of the economic crisis to help others while helping themselves.
The Chinese government also has come to the rescue of ailing countries, such as Jamaica and Pakistan, that it wants as allies, extending generous loans. Even Chinese consumers are taking their money abroad. In a shopping trip last month organized by an online real estate brokerage, a group of 50 individual investors from China traveled to New York, Los Angeles and San Francisco to purchase homes at prices that have crashed since the subprime crisis.
OIL-RICH NIGERIA, population 140-million, now is very close to an all-out"Islamic takeover', warn two Dutch MPs. And this would have a massive impact: from Nigeria, Africa's islamisation would spread fastresulting in hundreds of millions of refugees.
This would have a massive impact on the future of all of Africa and of the West, warn Dutch parliamentarians Geert Wilders and Martin Bosma of the Party for Freedom, writing in an editorial in the Dutch religious daily, the Reformatorisch Dagblad.
A similar situation of course, also exists in Sudan on the Eastern side of the north-African continent: in this rudderless northern African state, the Jihadist-north's warlords are carrying out an ethnic-cleansing campaign against all the southern tribes, who are mostly animist and/or Christian followers. Nigeria and Sudan also have another important feature in common: Nigeria is rich in oil, and Sudan is located very strategically, straddling the shipping lanes to all the Middle-Eastern oil export terminals.
They said in their joint Dutch-language editorial that the international news media 'often describes such warfare erroneously as isolated conflicts, without placing any importance on the wide-ranging effects these 'isolated local conflicts' will have on any other countries, but especially on the West.
"A conflict is far too often described as a 'civil war', and journalists will write of 'religious tensions' or 'sectarian violence' - thus also constantly creating the immediate impression that these are mere dog versus cat fights which would not affect Western countries in the least.
"However, when one examines such 'civil wars' closely however, these often are imperialistic wars of conquestin which Islam is always the engine which drives their stated end purpose of Islamic world dominance'.
Nigeria situation is very serious
"A very important expansion of this aggressive islamic war of conquest is now taking place in Nigeria. The situation there now is very serious and will have a most devastating effect on Africa and on the entire Western World."
Nigeria, they point out, has Africa's largest population, namely 140-million people. It also has the second-strongest economy on the African continent because of its oil and other minerals.
Islamic Apartheid: Sharia law:
"Already, in twelve of the 36 states of Nigeria, Sharia has already become the law^#151;this is the Islamic Apartheid law which discriminates against all non-muslims and which treats women as inferior creatures'.
"And once the Jihadists have gained the majority in only seven more Nigerian states, the federal government of Nigeria will be forced into adapting the country's constitution to include Sharia lawwhich means that in effect, all of Nigeria will then become an Islamic country'.
This damnable but mighty spirit of delusion continues to spread across the blue planet. Wake up, my sleeping ones. This is Good versus Evil, no less today than yesterday. The whole world stacked against Islam. Islam stacked against the rest of the world. But wait, nearly the entire planet joins up with Islam, each group goes along for its own short-sighted reasons. It's the economy, stupid. No, it's our dear political idealism. No, it's the peculiar lure of strange gods who promise us supremacy. The will to power. The blind and the maimed leading the blind and the maimed.
Will Islam actually achieve this Big Takeover? Will no nation under the sun finally rise up against these blood lust barbarians to extinguish this blood whore forever?
We've seen this movie somewhere. The plot line seems familiar. But few can quite remember the details. Those who remember cannot believe. Whether the nations continue to cling to its old ways of grubbing for gold at the expense of all else once held sacred, or whether the nations refuse to cling to its old ways, preferring to practice multicultural peace, love, and understanding instead of taking up arms to defend what is natural, the barbarians continue to creep into every camp.
If you were to ask the average Westerner what "civil war" in Nigeria, the "restive South" in Thailand, the MILF rebels in the Philippines, the newly-formed state of Kosovo, the resurgence of the Taliban in Afghanistan, the London tube bombings, and riots in Sweden had in common, how many people would have the slightest idea?
Woe to those of us who will never know the difference between zero and nothing.
ARAB INVESTORS HAVE LOST $ 2.5 trillion from the credit crunch, Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah, whose country hosts an Arab economic summit next week, said yesterday. “The Arab world has lost $ 2.5 trillion in the past four months” as a result of the global financial crisis, Sheikh Mohammad told a press conference following a joint meeting of Arab foreign and finance ministers in Kuwait. This is most excellent news, and if the 25% hit my family took in its own modest financial portfolio went to sandbag the financial jihad (jihad al-mal) being leveled against the west, I will gladly stop worrying about my own personal losses. It may be twisted to think so, more so to say so, but in some small way, I took a bullet for America, and will gladly take another hit if it would help stop those enemies who aggressively target the weak underbelly of the West with its myriad of jihadi techniques, For all of al-Qaeda's talk that it will economically "bleed" the West dry, and that Allah is on "their" side, this story implies otherwise. If the West is limping, the Arab world appears to have been hobbled.
However, another glance at the details of this story suggest another interpretation of the facts.
"This very public lament is deliberately designed to head off demands in the West that the rich Arabs start to take care of the poor Muslims who so far have been bleeding the West drysee Pakistan, Afghanistan, even oil-rich Iraq, see Egypt, see Jordan, and of course see the "Palestinians" who never have to suffer, and are constantly replenished, and who have been living off the Infidel dole for 60 years, on the UNRWA roles, in so-called "refugee camps" that have DVD stores, and cell-phone stores, and apartment skyscrapers, and are nothing like the real refugee camps in which black Africans in Darfur or the southern Sudan, or Rwandans in the Congo, or the hundreds of millions of refugees, since World War II, have had after a short time to fend for themselves, while the "Palestinian" Arabs receive, by themselves, almost as much from the U.N. as all other refugeesreal refugeesall over the world together manage to receive. The rich Arabs don't like what they fear may come, and so they are poor-mouthing it all they can.
If you read the report, you will see that their investments suffered as have all investments everywhere. But they refer to only 40% of that $2.5 trillion as being a loss reflecting stock and bond prices. What about the rest? That is not a real loss, but merely their calculation of the diminishing of oil revenues because of a drop in the price of oil. Their calculation of that $2.5 trillion loss, in other words, assumes that anything less than oil at $150 a barrel can be considered a loss."
On a whim today, I decided to research these new Liberty gas stations that are becoming ubiquitous in the Tri-State area of Maryland, the District of Columbia and Virginia. Imagine my surprise to learn that this gasoline supply outfit is a Virginia founded and operated company, and pumps up fresh American Gulf of Mexico crude via pipelines to Fairfax and Richmond refineries. It's a remarkable story. Finally my conscience can rest. Goodbye Saudi and Venzuelan oil.
For my research efforts, I now have a family gasoline pump wholly American, and I salute with all I havedear Virginia Liberty!
Thank you, Mr. Holtzman...
THREE AREA OIL PRODUCERS at the turn of this new century were tired of competing against Sheetz's low gasoline prices so they did something about it. They formed Liberty Petroleum LLC to sell unbranded gas at some of their convenience stores.
In 2001, Bill Holtzman, owner of Holtzman Oil in Mt., Jackson, (Shenandoah County) Va., has joined with Blackie Bowen of Ewing Oil in Hagerstown and Frayser White of Valley Oil in Charlottesville to form the new company. Earl Cox, a former oil industry executive, is heading up the Liberty Petroleum operation based in in Staunton, Va.
Holtzman said the three Liberty owners met while serving on committees with major oil companies. "I said that I was going into the private brand business. The three of us said, 'Yes, it's a good idea to join together because we're not in each other's territories.' That was about a year and a half ago, and now things are really rolling."
Within the next few years, the trio hopes to sign up 90 oil distributors (also known as jobbers) to form a group of as many as 2,000 C-stores east of the Mississippi selling private-branded Liberty gasoline. About 95% will be conversions of existing stations, the balance new builds.
"Liberty is a LLC and the three of us own it," said Holtzman. "It's like a major oil company. Holtzman Oil, Ewing Oil and Valley Oil will all buy from Liberty, and Liberty will sell to other jobbers. We just picked up another one in Bedford [Pa].
"It could snowball with monster numbers. There are lots of jobbers who need a private brand. For gasoline customers, it's 40% who buy by brand and 60% who buy on price. This puts us on both playing fields and gives us the ability to compete with Sheetz."
Altoona, Pa.-based Sheetz has 270 C-stores, mostly in Pennsylvania, Maryland, West Virginia and Virginia. Its sales are estimated by Hoover's Online to be $1.6 billion, or about $5 million per store. Another competitor, mainly in Pennsylvania, is Wawa with 500 stores that do about $1 billion in annual sales.
In the past, Holtzman and Bowen have spoken out against Sheetz's business tactics. Holtzman complained about a so-called Sheetz C-store at the Mt. Jackson Interstate 81 exit really being a truck stop, while Bowen testified before the Maryland legislature in support of a law that would outlaw pricing gas below wholesale cost. It passed, as did similar legislation in Pennsylvania and West Virginia that prevents gas retailers from selling below cost for extended periods of time to drive out local competition.
The Liberty Petroleum may yet encounter another competitor, the Petroleum Marketers Association of America (PMAA) based in Arlington, Va. "We've formed the Petroleum Marketers Oil Company LLC, and we're looking into it as a separate company," said Holly Tuminello, director of communications at the PMAA. "We're just in the beginning stages, talking to potential suppliers. We haven't yet come up with a brand name, but it will be a national brand."
Tuminello said driving the PMMA strategy is concern over "all the mergers of big oil companies. Eighteen months ago we did a survey of our members and they are looking for an alternative to the majors." Through its state associations, PMAA represents 8,000 oil distributors.
As for the Liberty operation, Tuminello said, "They're members of our organization, and we think it's a great idea and support their efforts."
Holtzman said Liberty's gasoline supplier is Energy Merchant Corp. out of its Baltimore office, but the gas comes from the Gulf of Mexico by two pipelines into Fairfax and Richmond, where jobbers will pick it up in their own tanker trucks.
Sheetz and Wawa sell their unbranded gas at four to five cents below the price at Exxon, Chevron and Amoco stations. Liberty will be in that same price range. All claim their gas is the same as that of the big oil companies, the only difference being in the additives used. In fact, Liberty's pumps display a logo which says, "100% Certified Quality Gasoline."
Echoing Holtzman, Cox said demographic changes are dictating that Cstore owners consider selling unbranded, less expensive gas. "This is an important marketing situation, where the older age population, 45 to 50 years old and up are more brand loyal, where they say, `What's good for Dad is good for me.' However, Gen X and Gen Y people look for price and convenience. Sheetz has done a good job in that area because they're capturing the customer that is price conscious."
Cox said Liberty Petroleum is basically a licensing agent. "Liberty does not invoice or have receivables. We license them [other jobbers] to use the brand, and we earn a fractional cent on aper gallon basis."
Liberty hopes to have funneled of between 50 million and 60 million gallons by the end of the year, said Cox, earning $.002 on each gallon purchased by participating jobbers. This will pay for Liberty's salaries, office overhead, travel and advertising. By next year, Cox hopes volumes increase to between 75 million and 100 million gallons.
A native of Mount Jackson, Va., Bill Holtzman initially began his career in agriculture in the Shenandoah Valley of Virginia. In 1972, while working full time in the apple industry, he purchased a small, local Gulf fuel business for $37,000, and worked tirelessly in the evenings and on weekends to launch his new business, Holtzman Oil. Today, Holtzman Oil Corp. is a Chevron, BP, Exxon, Texaco, and Liberty supplier in Virginia, Maryland, and West Virginia, and is one of the largest employers in Shenandoah County, Virginia.