Oil & Gas Prices

Washington Post staffer Eli Saslow introduced readers of his April 28 front-page article to a handful of newly registered North Carolina Democrats. But the hype about gas prices from the plight of one of the Democrats from Raleigh struck me to be a probable case of fuzzy math.

Meet 18-year-old Kyla White, a senior at Raleigh's Enloe High School and a part-time receptionist at a local Sports Clips hair salon who drives a 1997 Honda (emphasis mine):

She wanted to vote for a multiracial America, one in which peers wouldn't call her "too white" for being one of a handful of black students in the Enloe honors program. She wanted to vote for no more Code Reds. She wanted to vote for lower gas prices.

She wanted to vote for Obama.

In the past couple of weeks, NewsBusters has reported the media's sudden negative opinion of ethanol as a result of rising food prices and rationing of rice by certain retailors.

You can now add NBC to the list, and, in particular, the host of CNBC's "Mad Money," Jim Cramer, who on Friday's "Today" show actually blamed ethanol for the current crisis while stating emphatically, "You drop the mandate, prices plummet."

How delicious.

With this in mind, strap your seatbelt tightly across your waist, and prepare yourself for an alternate ungreen reality (video embedded upper right, use scroll bars to properly center):

A remarkable thing happened Thursday: a press member wanted to ask Nobel Laureate Al Gore about the growing international food crisis and how it relates to ethanol and global warming hysteria.

Not surprisingly, the man who cast the tie-breaking vote in the Senate fourteen years ago mandating the use of ethanol wasn't available, and a spokesman for his hysteria-driving Alliance for Climate Protection declined to comment.

Isn't that convenient?

Regardless, the good news is that press outlets continue to recognize this unholy connection, and that someone, even at the conservative New York Sun, would deign to report it (emphasis added throughout):

As food prices soar, and rationing of such things as rice begin, America's media are finally starting to wake up to the inconvenient truth that ethanol is not the energy panacea folks like Nobel Laureate Al Gore proclaim.

Leading the charge is conservative talk radio host Glenn Beck, who invited the Competitive Enterprise Institute's Iain Murray on his program Tuesday to discuss the looming crisis.

What follows is a partial transcript of this interview provided by the Science and Public Policy Institute:

And here we go again. I'm all for catchy headlines, but CNN has to be a bit more responsible with its choices when reporting on gasoline prices.

"Gas prices climbing with no end in sight," reads a hyperbolic April 22 CNN.com headline. "No end in sight" might make for great left-wing populist rhetoric, but it's hardly balanced economic reporting.

Indeed, the only thing to justify the "no end" language was citing gasoline analyst Trilby Lundberg as saying "she does not expect the prices to go down anytime soon," hardly a dire "no end in sight" forecast that conjures up notions of never-ending price increases rather than an eventual price plateau.

President George W. Bush’s days in the White House may be numbered, but that isn’t stopping the media from taking a few cheap shots on the way out. ABC’s April 21 “Nightline” reported on the increased cost of gasoline, but did so in terms of the Bush presidency.

“Tonight, $3.51 – that’s the average price nationwide of a single gallon of regular unleaded gasoline. That means a 15-gallon tank now costs more than $50 to fill. As a little reference point, the week George W. Bush was sworn in as president, the price of a gallon of gas was $1.47.”

Update at end of post: did ABC get these numbers from the DNC?

She didn’t stop there.

Tuesday's "Good Morning America" went into hyperbole meltdown over high gas prices. According to various anchors and reporters, Americans are foregoing church, prescription drugs and breakfast in order to cope. In a tease at the show's open, Co-host Diane Sawyer fretted, "As gas prices balloon, 12 cents in just one week, some Americans tell you how they skip breakfast and drugs just to drive." News anchor Chris Cuomo solemnly informed viewers of the "tough choice" many Americans face: "Food or fuel?"

Cuomo then introduced reporter Bianna Golodryga to explain "the sacrifices people are now making." Included in those sacrifices was one Juan Martinez who told Golodryga "Our church is approximately 35, 40 miles away. We've really cut down on the amount of times that we've come into service since the price has gone up." Now, as Golodryga admitted, this clip was actually from November of 2007, during a previous GMA segment about gas prices causing people to skip church and possibly cancel Christmas. So, ABC has resorted to recycling gas horror stories? Could that mean, perhaps, there's not enough of them to go around?

For months, NewsBusters has been warning readers of the likelihood that media will adopt the 1992 Clinton playbook of regularly depicting the economy as being far worse than it really is.

On Sunday, the Democratic National Committee released a new television advertisement attacking GOP presidential candidate John McCain with economic statistics that don't measure up to even the slightest scrutiny.

With this in mind, will press outlets this campaign season investigate the economic claims being made by the candidates and their supporters, or allow inaccuracies present in this ad (embedded video to the right), and likely others in the months to come, to go completely unchallenged?

Consider the following written statement in this ad supposedly answering the question "Are Americans better off than they were 8 years ago?":

Barack Obama has been airing a shamelessly anti-business TV ad in Pennsylvania for a while now. In the ad Obama himself, in his own voice, makes the claim that he doesn't "take money from oil companies." But there is a two-fold deception in this claim that Obama doesn't tell his sycophantic fans. So where is the media to pounce on these cynical deceptions? They’re nowhere to be seen.

Recently I saw the ad where Obama claimed he didn't take contributions from oil companies and the claim struck a chord in my memory. I was under the impression that oil companies could not legally donate to a campaign at all. So, I did some checking and it seems that FactCheck.org did an entire page on Obama's deceptive Pennsylvania ad.

Friday's Washington Post displayed that annoying trend of hyping already high gas prices with a photograph of astronomical gas prices. As reporter Steven Mufson reported that AAA marked that regular gasoline price at $3.36 a gallon, a photograph right next to it online (and on an inside page in the paper) displayed a gas station sign marking the regular price as $4.19. Mufson explained the prices this way:

On the eve of the summer driving season, crude prices defy gravity, hovering around $110 a barrel, keeping gasoline prices at record levels and sapping money from cash-strapped consumers. Yesterday, the AAA auto club said prices at the pump set records of $3.357 a gallon for regular unleaded gasoline and $4.045 for diesel, even though U.S. gasoline consumption fell 0.6 percent in the first quarter.

That could make oil prices a politically volatile issue this year among voters who think prices are excessive and are looking for someone to blame.

In other words, the oil companies could be a big target this year of Democrats. Mufson began the piece:

Is there a fair price for oil?

You're going to need a few extra bucks to pay for those corn flakes every morning.

CNN's senior business correspondent Ali Velshi let viewers in on an underreported fact about rising commodities prices: the government mandate for ethanol production is making corn and other agricultural products more expensive-making inflation a top priority for Americans.

"Several years ago, we made some decisions about how corn is going to be used to make ethanol, which is added to our gasoline," said Velshi on "American Morning" April 4. "A number of people think that that was meant to reduce our dependency on crude oil. What is does is it takes what is fundamentally a food source and makes it into a gasoline source. That's caused corn to go up."

The roundtable segment of Tuesday's The Situation Room offered CNN viewers opposite takes on the Bush administration's culpability in the rise of oil prices with Jack Cafferty and David Gergen on opposite ends. Cafferty, who has a history of blaming high oil prices on President Bush, argued that the administration's "idea of an energy policy is to put Dick Cheney in a closed, locked room out of sight of the public with some guys from Enron and some oil company guys, hammer out some kind of a deal, and then sit back and watch oil prices go from $28 when Bush was inaugurated to $111 now."

But Gergen later jumped into the discussion to explain the true origin of oil prices: "I think it's wrong to argue or suggest that somehow the oil companies have been manipulating these prices upward. These prices have not been, you know, rising sky high because of the Bush administration. They've been rising sky high because world demand is up so significantly."

Below is a transcript of the relevant portion of the Tuesday April 1 The Situation Room on CNN:

About once a year, Congress brings in oil executives, with the media piling on, and blames oil company profits for high gas prices.

Across the dial, all three network morning shows on April 1 - ABC's "Good Morning America," NBC's "Today," and CBS's "The Early Show" - characterized "big oil" as the culprit behind an increase in gas prices.

On ABC's April 1 "Good Morning America," which headlined one of its segments "April Fuel's Day," Chris Cuomo questioned why oil companies aren't taxed more while they're posting higher profits.

"Congress is calling all the oil companies on the carpet today," Cuomo said. "Lawmakers want to know why big oil needs billions in tax breaks while posting record profits of $123 billion. Consumers want answers too. Gas now runs $3.29 a gallon, up three cents from last week and 58 percent higher than last year. Oil executives argue they need tax breaks to expand production."

A fairly common media meme during the past year or so has been that the continually declining value of the dollar is driving up oil and gas prices (image courtesy Slate).

In the past three months alone, there have been over 100 stories involving this very subject, including this March 10 piece from U.S. News & World Report entitled "Why Gas Prices Rise as the Dollar Falls (emphasis added):

Here's one of those complex economic truisms the financial press assumes everybody understands: A big reason oil and gas prices are hitting record highs is that the dollar is hitting record lows.

The beauty of this "truism" is that it allows media outlets to blame oil and gas price rises on the Bush administration, as everybody knows that the lower dollar is all their fault (wink, wink...nudge, nudge).

Of course, an examination of oil and Dollar Index charts does show an inverse correlation, meaning that as oil prices rise, the dollar drops and vice versa (charts provided by TradingCharts.com):

It's a common trick the media employ when reporting on "skyrocketing" gas price stories: show photos or B-roll of price marquees that bear prices way above the actual average price.

MSNBC.com's front page this morning is no exception, as the screen cap at right shows regular unleaded for $3.979, or 21 percent higher than the national average of $3.27.

The article's headline reads, "Rising gas costs crimping budgets."

The caption for the same photo in the article reads, "Gas prices already top $4 a gallon at many stations including this Shell outlet in Menlo Park, Calif."

One of the global warming community's favorite alternative energy resources is solar energy. Since it emits no greenhouse gas, it gives alarmists a warm and fuzzy feeling. However, that feeling has affected NBC's global warming reporter Anne Thompson ability to apply basic economic principles to her stories.

According to Thompson, there are two drawbacks to solar power - 1) You're at the mercy of Mother Nature for sunlight; and 2) It's drastically more expensive than fossil-fuel electricity.

"And there is the matter of price," Thompson said. "The Electric Research Power Institute says this kind of solar power is two to four times more expensive than electricity from natural gas or coal."

On Wednesday's The Situation Room, CNN's Jack Cafferty suggested that blame for high oil prices rests not only with Bush administration policies, but also with its "relationship with the oil companies." During a discussion of John McCain and President Bush's recent meeting, Cafferty, who once pushed the liberal conspiracy theory that Big Oil deliberately lowered gas prices before the 2006 elections to help Republicans get elected, once again demonstrated his lack of understanding of the world oil market as he suggested that a "relationship" with oil companies could impact world oil prices: "Oil was $28 a barrel when George Bush was sworn in. It's $104 right now and could go to $120 soon. Now, why do you suppose that is? It wouldn't have to do with the policies of the Bush administration or the relationship they have with the oil companies, would it? Come on." (Transcript follows)

On Thursday’s CBS "Early Show," co-host Maggie Rodriguez hyped rising gas prices as she teased an upcoming segment and declared: "Still ahead for us, more pain at the pump. You'll be paying $4 a gallon or even more." Though $4 a gallon may happen, asserting that it will be that high, or higher, in the near future certainly paints an overly dire picture. While introducing the segment, Rodriguez went on to highlight one gas station in California with prices far above the average of $3.17 a gallon across the country: "It may be hard to believe, but seeing is believing. Take a look at that, regular unleaded at $5.19 a gallon at one California station."

Rodriguez talked to analyst Tom Kloza of the Oil Information Price Service and began by asking about the rise in gas prices, and admitting some of her earlier exaggeration: "Luckily nationwide we're not seeing gas at $5.19, but we hit a record high yesterday, $3.17 a gallon, which is 69 cents higher than a year ago. What's going on here?"

On CNN Sunday, correspondent Al Velshi reported in by phone from Texas with his story of "lifelong Republicans" who are planning to vote Democratic this time because of health care. Velshi: "They are retired, they've been lifelong Republicans who are actually looking to change over. They're probably going to vote Democrat this time around." (Transcript follows)

The eco-love affair Washington has with biofuels is starting to take a toll on the fragile U.S. economy. It's a shame no one in the media have that connection.

"World News with Charles Gibson" explained on February 20 that biofuels are driving up food prices, which is driving up inflation. The Consumer Price Index (CPI), a key inflation reading, rose 0.4 percent in January according to the Labor Department, matching December's rise.

"Blame it on the price of wheat," said ABC correspondent Sharon Alfonsi. "Demand for alternative energy has farmers planting less wheat and more corn - the key ingredient of ethanol. Add the growing appetite for wheat from developing countries and the supply is strained.

Early last month, when oil prices flirted with inflation-adjusted record highs, fears of sky-high gas prices were filtered through the media.

CNBC's Erin Burnett gave viewers a frightening prediction of $4-a-gallon gasoline during a January 2 appearance on the NBC "Nightly News." The "Street Signs" anchor cited John Kilduff, the vice president of risk management at the MF Global Ltd. Brokerage, as the source of this predicted high watermark for gasoline.

"And John Kilduff, who I know you speak with often, as well, Brian, he says we could see prices at the pump as high as $4 a gallon," Burnett said. "And that could be by the middle of February. So it could be anytime in the next six weeks. So that's going to be an increase, and we've seen it across the board, Brian. Commodity prices are going up, and that is causing worry for stocks."

The mainstream media are hard at work ginning up economic fears and class envy storylines. One need only look at CBSNews.com and two articles teased on the front page to get how the media are making the economy a melodrama scripted in favor of liberal Democratic talking points:

• Exxon Mobil Makes Monster Profit (AP)
  
• U.S. Economy Suffers Another Body Blow (CBS/AP)

Granted, that is far more subtle than other economic coverage we've noted at NewsBusters, but the media have a clear interest in furthering news items that fit into liberal Democratic talking points about the economy and the ever-so-evil oil companies.

Slate.com Editor Jacob Weisberg can now add "medicine" to his list of expertise. Weisberg told an audience the awkwardness some claim Bush shows during speeches can be attributed to a learning disability.

Weisberg linked it back to a pattern of dyslexia in the Bush family.

"I agree with that," Weisberg said when presented the possibility that Bush has a "learning disability." "The other thing I've done is collect ‘Bushisms' over the years and I sort of joke this book is my penance for doing that, because one of the things ‘Bushisms' do is I think they make Bush sound stupider than he is, or stupid in a way he isn't. And I do think he does have some sort of language processing impairment that is probably akin to dyslexia, and dyslexia does run in the family. But, I don't think it is dyslexia because if you watched the State of the Union, you could see he has no trouble reading a teleprompter."

Although former U.S. Congressman, Joseph Kennedy III has been criticized for his Citgo commercial last year promoting discount heating oil provided by the Hugo Chavez Venezuelan government as a PR ploy, his latest commercial goes way beyond mere syrupy praise. Kennedy is now using the most recent Citgo commercial as a launchpad to blast the U.S. government and "Big Oil" as you can see in this video. After an introduction similar to the previous commercial showing poor people suffering from the cold, Kennedy goes on the attack:

...Yet our own government cut fuel assistance. And the Big Oil companies with oil and money to burn all said "no" when we asked for help. All but one. Citgo. Owned by the Venezuelan people, is donating millions of gallons to non-profit Citizens Energy...

This is worse than a case of calling a glass "half-empty" when it is "half-full." This is like taking the glass and pouring it out.

Deirdre Bolton, an anchor for Bloomberg TV, appeared on CBS's January 9 "The Early Show" to report on a survey of economists Bloomberg conducted January 3-8 about whether or not a recession is in the immediate future of the U.S. economy.

"[W]ell, as you said the economy certainly is front and center," Bolton said. "And in fact in the latest survey of Bloomberg economists, economists putting the odds of developing a recession at about 40 percent. Jay Bryson - he's a global economist at Wachovia - he says we are skating on the edge of recession, but it's all going to come down to the consumer. Another economist that we spoke with said that consumers right now are really hanging on by their fingernails. And of course it's not really a surprise."

However, Bolton completely distorted the message of the survey - based on how Bloomberg's Web site reported it. An article by Shobhana Chandra and Alex Tanzi said the U.S. will escape recession, according to the economists in the survey.

Move over, Bill Clinton. There's a new kid on the block when it comes to looking into the camera and not telling the truth to the American people . . . and his name is John Edwards. To his credit, George Stephanopoulos caught Edwards out today on a key tenet of Silky's candidacy . . . but then let things slide.

Edwards was a guest on This Week, and it didn't take him long to don his scourge-of-greedy-corporations mantle. Central to Edwards' pitch is the claim that you don't sit down with corporate interests, you fight them.

View video here.

It wasn't good news by any means, but it also wasn't the end of the world.

The Bureau of Labor Statistics of the U.S. Department of Labor reported January 4 the unemployment rate rose to 5 percent in December, but if you're paying attention to the media coverage, you would think it's time to whip up some shoe leather stew and play "Brother Can You Spare a Dime."

A January 4 Associated Press story by Jeannine Aversa pointed to the job data as one of the "problems in the economy" that has "elevated fears about a recession." But even with all these "problems" - housing woes, the credit crunch, high oil prices, weak job numbers - the criteria of the economy being in a recession still haven't been close to being met.

The economy is about to dive off a cliff and it's all President George W. Bush's fault, according to The New York Times editorial board.

A January 2 Times editorial was pretty pessimistic about the economy in 2008, mocking Bush and forecasting doom.

"As 2008 begins, house prices are still skidding, bank losses are still mounting, oil is again flirting with $100 a barrel and consumers are buying less as prices rise," the editorial said. "To many, the wheels appear to be coming off the economy. To others, including President Bush and his aides, the economy is fundamentally sound and resilient."

♪♫ ♪ You better watch out, you better not cry, you better not pout I'm telling you why - Cramer Claus is coming to town ♪♫ ♪

Yes, that's right - CNBC "Mad Money" host Jim Cramer "Claus" appeared on NBC's December 19 "Today" to tell viewers Federal Reserve Chairman Ben Bernanke was on his "naughty list."

"He is a guy that doesn't get regular coal - I'm giving him high-sulfur stinky coal," Cramer said. "He is in the end an academic who is over his head frankly. I hate to say that. He's a volunteer official who is trying to do his best. But he had his chance and he's lost it."

Washington Post staffers Jonathan Weisman and Steven Mufson gaver readers of the December 7 paper an article on a "comprehensive energy bill" that passed the House of Representatives without delving into Republican criticism that the bill lacks any provision to produce or procure more energy domestically, such as from interior and off-shore natural gas and oil reserves.

Weisman and Mufson noted in the lede that the bill will raise "fuel-efficiency standards" and "require increased use of renewable energy sources" and later quickly dispatched with Republican opposition by finely chopping Minority Leader Rep. John Boehner's (R-Ohio) criticism:

Even House Minority Leader John A. Boehner (R-Ohio) -- who assails the measure as a "no-energy" bill and as a tax increase that would raise, not lower, energy costs -- lauded the CAFE (corporate average fuel efficiency) standards as a good and reasonable compromise.

Oh really? On it's "Online Newshour" Web page, PBS -- hardly a right-wing news venue -- gave readers more of Boehner's critical quote: