Oil War: The Media Crusade
Thereâs an oil war going on, but it isnât raging in the
On July 31 and August 1, NBC and CNN attacked oil companies â namely Exxon â for making too much money. As the presidential candidates argued over solutions to the âenergy crisis,â August 4 broadcasts on ABC and CBS repeated Sen. Barack Obamaâs, D-Ill., claim that Sen. John McCain, R-Ariz., is âin the pocket of Big Oil.â Journalists have even opposed offshore oil drilling â despite widespread public support â and repeated liberal talking points about oil companies not drilling currently leased properties.
âAnother kick in the gas tank,â CNBC correspondent Trish Regan called it. Regan interviewed drivers who wondered why they have to suffer while oil companies make âso much money.â
CNNâs senior correspondent Allan Chernoff also focused on disgruntled drivers in his August 1 segment on âAmerican Morning.â
âItâs sickening to see that they make so much money and we suffer for it. They should take less of profit and help all the little people outâ driver Debra Perette said.
On camera interviews in Chernoffâs report were stacked 4-to-1 against oil companies; two upset citizens joined Obama and Sen. Charles Schumer, D-N.Y., in railing against the industry while McCain promoted offshore drilling.
But the attacks on oil companies donât end with criticism of the industryâs success. Journalists have long fought against âBig Oilâ by dismissing calls for more drilling, promoting windfall profits taxes and repeating unfounded claims of âprice gouging.â The oil industry canât even catch a break in entertainment where it is often the villain of choice (see: âThere Will Be Bloodâ and âSyrianaâ).
Journalists saw red on July 31 and August 1 as ExxonMobil profits were solidly in the black and Chevron was prepared to release its quarterly figures. But that was typical of media treatment of the industry. In 2007, NBCâs Meredith Vieira cited the perception of oil companies as âa bunch of thieves âŠ ripping people off.â
âExxonMobil is laughing all the way to the bank,â said NBC âTodayâ co-host Vieira on August 1. âPeople having their cup of coffee today, and they are boiling mad when they hear those numbers. We are drowning in debt, so many people, while the oil companies seem to be rolling in dough.â
Trish Regan complained to âNightly Newsâ viewers on July 31: âItâs a record. Exxonâs profits are exploding. The company earned nearly $12 billion in the last three months. Exxon earns nearly $90,000 a minute â thatâs almost $1,500 every second. The reason profits have gone up so much: the price of oil has exploded on the world market, up 61 percent in the last year.â
Reganâs NBC report included four attacks on the industry including three people pumping gas and Obamaâs campaign rhetoric. On the other side was a push for offshore drilling from McCain and industry representative John Felmy of the American Petroleum Institute (API).
Felmy defended the industry that employs 1.9 million people and
People from all walks of life
Oil and natural gas companies made about 7.4 cents on the dollar in the first quarter of 2008, according to API. According to MarketWatch, CBSâs margin is higher â at 8.9 percent.
In contrast to many other news reports, CNNâs John Roberts mentioned that point on August 1 following Allan Chernoffâs slanted segment. âThatâs only a 7-percent profit margin. If you were talking about that sort of volume in financial services industry or retail or something like that â profits would be much, much higher,â Roberts said.
CNNâs personal finance editor Gerri Willis has already dismissed that defense a day earlier, on July 31. âI don't really understand that being a business reporter and having looked at the numbers,â she said. âIt doesn't make sense to me. When you look at net profit here, it's astonishing.â
Many reports didnât mention that the real windfall is reaped by governments because a large portion of oil companiesâ incomes go to taxes. âGood Morning
Chris Cuomo asked Barronâs Mike Santoli to âlook at each dollar that comes into the company.â
âBiggest chunk, believe it or not, goes to taxes around the world, various types of taxes. About 45 percent of the income that ExxonMobil last year, by the way, had from a barrel of oil, went to taxes,â Santoli said.
Not to Drill, Donât Ask the Question
McCain, who formerly opposed expanding domestic drilling, has been promoting offshore drilling lately. Even Obamaâs rhetoric is shifting toward begrudging compromise on the issue. Polls from Rasmussen and others found that a majority of Americans favor offshore drilling. But the ârealityâ is that some news networks remain firmly opposed.
âEvening Newsâ also attacked offshore drilling on July 30. Katie Couricâs tease said it all: âIn this country, some believe at least part of the solution lies right offshore. Bill Whitaker now with a reality check.â (Emphasis added)
Whitaker then undermined supporters of offshore drilling by complaining that it would take too long to get the oil, have little impact on prices before 2030 and be quickly used up.
CBS aired another slanted segment against drilling by Whitaker on June 18. That time he didnât balance the story evenly with proponents and opponents. Instead he promoted the âgreenâ views of environmentalists and Gov. Arnold Schwarzenegger. The ratio of offshore drilling opponents to proponents was 2-to-1 in Whitakerâs story.
Politicians, including Obama, have claimed oil companies arenât using the land or ocean they have access to and the media have repeated the talking point. Whitaker included that argument in his June 18 report: âDemocrats say oil companies havenât yet drilled on some 68 million acres offshore and on that theyâve already leased. The CBS report didnât include the industryâs rebuttal of that point.
Red Cavaney, president and CEO of the American Petroleum Institute, wrote an op-ed for The Wall Street Journal on June 20 exposing the argumentâs flaws.
â[C]laims of âidleâ leases are a diversionary feint,â said Cavaney. âA company bids for and buys a lease because it believes there is a possibility that it may yield enough oil or natural gas to make the cost of the lease, and the costs of exploration and production, commercially viable. The
According to Cavaney, leases are listed as ânonproducingâ throughout the exploration and evaluation phases as companiesâ determine exactly where there is enough oil to extract. âThere is nothing âidleâ about it,â said Cavaney.
CBS and CNN both consulted offshore drilling opponent Gov. Bill Richardson, a former Democratic presidential candidate, on the issue in June.
Co-host Harry Smith didnât challenge
But Cathy Landry of API told the Business & Media Institute that the â10-yearâ argument is âsilly.â âYou canât say that. Itâs a silly argument. Ten years from now weâll be even worse off that we are now if donât do anything,â said Landry. âIf we had opened the OCS [Outer Continental Shelf] 10 years ago we wouldnât be in this problem.â
Although President Bush lifted the executive order preventing drilling in the OCS, Congress has yet to lift its prohibition. Other domestic sources including the Arctic National Wildlife Refuge (ANWR) and oil shale have been blocked politically. President Clinton vetoed opening up ANWR (with its estimated 10.6 billion barrels of oil) in 1996.
As for the estimated trillion barrels or more in oil shale in the western part of the country: â[T]he Senate Appropriations Committee in a 15-14 party line vote rejected an amendment by Sen. Wayne Allard, R-Colo., to allow oil shale drilling,â in May 2008 according to Investorâs Business Daily.
Media vs. Oil: A War that Drags On
As gas and oil prices have climbed, news reports have stoked envy and anger among consumers and even claimed the companies were conspiring to manipulate prices to fix the 2008 and 2006 elections.
In 2007, the Business & Media Institute exposed the springtime media ritual of hyping rising gas costs by pointing to states with the highest prices like California. In 2006, BMI reported that as gasoline prices fell, network journalists were still hyping âhighâ or ârisingâ gas prices.
âRecord profitsâ fuel an almost yearly call for investigations into âprice gougingâ as the media egg Congress on.
âKinda suspicious, huh?â said CBSâs Julie Chen when âEarly Showâ co-host Harry Smith mentioned that âhigher than everâ gas prices are prompting politicians to call for another investigation.
âIt makes you wonder at least a little bit,â Smith replied on the May 23, 2007, show.
The media havenât seemed to notice there have been more than 30 investigations into price gouging over several decades, and no conspiracy by oil companies has ever been found, according to the American Petroleum Institute (API). And 28 states and one territory already have their own price gouging laws on the books as of 2004.
When it came to gas price manipulation, CNN could have earned the moniker âConspiracy News Network.â On May 18, 2008, Greg Hunter predicted price manipulation this election year: âtheyâre going to drive that price down, theyâre going to pop the dollar up, theyâre going to drive the price down, they're going to work this, say, for the election."
âYou know, if you were a real cynic, you could also wonder if the oil companies might not be pulling the price of gas down to help the Republicans get re-elected in the midterm elections a couple of months away,â suggested Cafferty on the Aug. 30, 2006, âSituation Room.â
A Global Crusade
Part of the mediaâs relentless attack on oil is related to another media crusade â the one to stop global warming. After all, oil is a fossil fuel that alarmists say causes climate change.
Media reports on climate change are rarely balanced, usually hyping the threat of global warming or promoting a costly solution without mentioning the cost. A BMI analysis of 2007 coverage found that skeptics were outnumbered by a 13-to-1 ratio. Skeptics were also tarred by reporters linking them to the oil industry.
CBSâs Bill Blakemore targeted the Competitive Enterprise Institute and oil companies on Sept. 23, 2007 when he attacked CEI â accusing them of receiving oil industry funding.
Blakemore blamed that funding for muddling the debate, âPublic awareness [about global warming] lagged behind, partly because of a disinformation campaign funded by the fossil-fuel industry,â he said.
Using footage from a Competitive Enterprise Institute (CEI) commercial, ABC insinuated it was âdisinformation.â âWorld Newsâ didnât include anyone from CEI or the fossil-fuel industry to respond to Blakemoreâs attack.
That was not the first time Blakemore expressed his opinion that oil companies have âdisinform[ed]â the public about climate change. In fact, at an American Bar Association conference on environmental law in March 2007 the correspondent was even more forceful:
Newsweek also blamed industry in its Aug. 13, 2007, issue. An article called skeptics a âwell-coordinated, well-funded campaign by contrarian scientists, free-market think tanks and industryâ and this âcampaignâ has âcreated a paralyzing fog of doubt around climate change.â
Other scientists like Fred Singer who disagree with the so-called âconsensusâ on global warming have also been criticized in the media for being âfunded by oil and coal companies.â Ironically, Al Gore is rarely criticized for funding an ad campaign to end global warming or for making money off the problem by selling carbon credits.