Oil & Gas Prices

Do you remember all those predictions in September that gasoline prices were going to $5 per gallon? As a reminder, here’s a report from CNN/Money on September 21:

“Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.”

“‘We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do,’ said energy analyst Peter Beutel of Cameron Hanover. ‘This storm is in the wrong place. And it's absolutely at the wrong time,’ said Beutel.”

At 7:17am, in promoting an Anne Thompson piece on how "Big Oil" is enjoying record profits Couric, used the "we" word.

Katie Couric: "They say one man's pain is another man's pleasure. And it turns out the pain we all shared at the gas pump this summer brought an awful lot of pleasure in the form of big profits to the nation's oil companies.

Newsbusters fans will remember Couric tried this line before on August 15th when she declared: "I had to take out a loan to fill up my minivan. It’s crazy.”

NBC's Tim Russert proclaimed, "It's a year away but the Democrats are feeling almost giddy this morning," as he ran down the negative news from NBC's own poll. Matt Lauer opened this morning's Today show with a teaser for the Russert political analysis segment: 

Lauer: "Then to Washington where it rains it really pours. President Bush says he doesn't look at the poll numbers. He might not want to. The latest NBC News/Wall Street Journal poll shows his approval rating is at its lowest level ever. And there's some astounding numbers when it comes to African-Americans and their support for the President. Tim Russert's gonna be here and crunch those numbers in a little while."

During the media's coverage of Katrina the race card was played again and again so it's no surprise that Lauer and Russert led with the fruits of their labor.

Ever wonder where the media find those people for the heart-wrenching personal interest stories used to illustrate a point? Me too.

The Today show aired a doozy this morning, and used it to make a hair-raising prediction that pointed the finger at insufficient government welfare spending.

The topic was increasing fuel prices, and in particular the rising cost of home heating.

Reporter Tom Costello sagely informed us "those high heating bills will hit low-income families especially hard." Well, yeah. That's one of the things about being low-income, you can't afford as much stuff, nachos to natural gas..

We were then treated to a clip of Joanne Baker, a not-elderly black Philadelphia woman living in what appeared to be a comfortable two-story home who lamented:

The results of the most recent NBC News/Wall Street Journal poll were released last night, and pressrooms around the nation appeared to be pleased. “NBC Nightly News” reported it this way (video link to follow):

Tim Russert: Brian, not good news for George W. Bush's second term thus far. Only 39% of Americans approve his job. 54% disapproval. That 39% approval is the lowest in the five years of his presidency. And Brian, listen to this: Only 2%, 2% of African Americans in the United States approve of George Bush's handling of the presidency. The lowest we've ever seen in that particular measurement.

Broadcasters turn news into 24-hour speculation cycle about $5 per gallon post-hurricane gas prices.

Broadcast journalists have been the only ones bidding up gas prices lately. While they foretell a horizon of $4 and $5 gas, consumers on U.S. streets are paying an average of $2.81 – up just 6 cents since hurricane Rita.

ABC, NBC, CBS, CNN and Fox News all covered the constant speculation about Gulf refinery damage and subsequent gas price spikes before and after Hurricane Rita’s September 24 impact. CNN used its 24 hours each day to raise fears about higher gas prices with show after show. A Nexis search of CNN transcripts around Rita’s landfall (from September 21 to 25) showed more than 20 mentions of the possibility of $4 or $5 gas from at least 12 different reporters in just five days on that network.

On this morning's Today Katie Couric and Tim Russert looked like NFL linebackers diving for a loose ball as they piled on Bush from so many different directions. First up was the gas price angle:

Couric: "I know the President is calling on the American public to conserve gasoline by driving less and he even sent a memo to all federal agency and department heads saying, the federal government, quote, 'must lead by example and further contribute to the relief effort by reducing its own fuel use during this difficult time.' How much political pressure is the President under given these rising fuel costs?"

Russert: "Enormous, Katie. It's the one issue that cuts across all class and geographic lines and as we just heard in Alexis' report it's not only gasoline cost for this fall but come this winter particularly in the Midwest and Northeast there's expectations that fuel heating costs can go up as much as 70 percent. Enormous political pressure. Why? Those are the battleground, undecided states that Republicans must continue to control to retain and control both houses of Congress."

In a telethon that would have been the envy of Jerry Lewis, the Today show's first half-hour painted a portrait of wall-to-wall gloom for America and for the political fortunes of George Bush.

This was done against a backdrop of Jimmy Carter's pet charity Habitat for Humanity quite literally pounding home the message - as it builds homes for the displaced in Rockefeller Center - of the difference a Democrat president can make.

In the news recap, a quartet of woe for Republicans:

• Hapless former FEMA Director Michael Brown getting grilled by Congress.
• Bill Frist denies wrongdoing in the sale of hospital stocks.
• Sen. Pat Leahy importuning the president, when it comes to the nomination to replace Sandra Day O'Connor, to "be a uniter, don't be a divider." Yes, there's nothing like a towering giant of the bench like David Souter to bring a troubled nation together.
• Abu Ghraib even puts in an appearance, with news of Lynndie England's conviction.

David Gregory, antagonist extraordinaire of GOP White House press secretaries, then did a segment on the issue of whether "taxpayers are getting ripped off" by the hurricane relief effort. Calling it "the splurge after the storm," Today aired a clip of liberal Dem stalwart Henry Waxman wringing his hands over possibly excessive profits being rung up by the contractors.

Washington Post pits motorists against ‘profit-guzzler’ oil companies.

“Winners and losers” is a familiar journalistic story construction that often oversimplifies situations. The September 25 Washington Post dubbed motorists the “big losers” and oil companies the “clear winners” in U.S. gas prices, turning the free market into a battlefield.

Justin Blum’s article was based on the fact that “the recent rise in gasoline prices has not benefited everyone in the production and distribution chain equally.” Thus began an unfair distribution of commentary on the market forces at work, including a reference to the economic laws of supply and demand as the “view” of oil refiners.

Inflation is a dirty word in business reporting – except when it’s the journalists themselves doing the inflating.

In the recent Katrina-driven gas scare, network news shows pumped up actual gas prices an average of 75 cents — higher than any state’s gas taxes. Prices shown on the screen were up to $3.25 higher than the national average for the day’s gas. On the other hand, when prices started dropping after Labor Day, the networks’ daily price patrols were scarce.

NBC was the worst offender, with prices shown averaging $1.01 higher than the national price. The network’s Anne Thompson said on the August 31 “Nightly News” that “no matter what kind of gas is sold, today it’s now unbelievably expensive.” Though the national average that day was $2.62, Thompson showed the “unbelievably expensive” backdrop of $3.49 for regular.

It took the force of Hurricane Katrina to wake up the media to a big story: U.S. oil refining.

Following a summer of relentless gas price coverage, the storm’s threat to refineries in the Gulf of Mexico added urgency to reports about the oil industry. But only one network news story in three months of summer coverage has attempted to explain the role of U.S. oil refining in the nation’s gasoline supply. Instead, networks have made passing references to the causes behind pricing and have criticized the free market.

One way the networks addressed refining was to hype the profits oil companies were gaining from higher prices. As NBC’s Katie Couric said on the August 17 “Today,” “As we pay through the nose, someone has to be smelling some pretty big profits.”

Likewise, the August 11 “World News Tonight” pounded the oil market for making a profit. ABC’s David Muir asked, “But are any of those increasing profits, both overseas and at home, being spent to fix those refineries or to help solve the shrinking U.S. gas supply?” Mike Rothman, an oil industry analyst, replied: “There has in fact been an increase in investment, both for production of oil as well as refining. But the impact of those is not immediate.” Muir responded as if he had not heard what Rothman said, continuing his attack: “But analysts say they’ve yet to see any improvement. And oil companies are busy spending billions in their profits reinvesting in themselves.” Muir didn’t look into how much of that “reinvesting” went to compliance costs for regulations on the industry.

Many times the bias in the mainstream press shows itself in just the stories it chooses to run. The homeless disappeared from the press when a Democrat was in the White House, President Clinton's vacations were never a big story the way that Reagan's and Bush's have been. Well, another story has crossed the wire tonight that falls, I believe, into the same category. Of All Gas Consumers, Bush May Be Biggest

Getting President Bush from here to there consumes an enormous amount of fuel, whether he's aboard Air Force One, riding in a helicopter or on the ground in a heavily armored limousine. The bill gets steeper every day as the White House is rocked by the same energy prices as regular drivers. Taxpayers still foot the bill.

So you've been waiting for your electric car? The car that's better than a Prius? The car you can just plug in at night and drive all day? The car that doesn't even use oil or even any fossil fuels? Wait on. AP and Denver Post salivating aside, energy independence at a reasonable price is not just around the corner.

Politicians and automakers say a car that can reduce greenhouse gases and free America from its reliance on foreign oil is years or even decades away. Ron Gremban says such a car is parked in his garage. It looks like a typical Toyota Prius hybrid, but in the trunk sits an 80- miles-per-gallon secret: a stack of 18 brick-sized batteries that boosts the car's high mileage with an extra electrical charge so it can burn even less fuel.

In a stunning example of how the mainstream press manipulates public opinion, as well as a clear explanation as to why the majority of the American people believes that the economy is doing poorly despite mountains of statistical evidence to the contrary, the press today decided to largely ignore one of the biggest one-day declines in energy prices in many months.

As I reported here yesterday, oil prices at the NYMEX dropped by almost three dollars per barrel, with gas prices declining by almost ten cents. Yet, after scaring the American public with regular predictions of economic gloom and doom concerning inflationary fears tied to escalating energy prices the past few weeks, America's two most prominent newspapers -- the New York Times and the Washington Post -- must have decided that good news on the energy front wasn’t deserving of the public’s attention.  (cont'd...)

Oil and gas prices had their biggest one-day decline in months today after an Energy Department report suggested that the highly-touted shortage that has been all over the news in the past couple of weeks is actually not the case.

The September crude oil contract declined by $2.78 to $63.30 per barrel -- a 4.2% decline -- while September gas fell by 9.86 cents to $1.885 per gallon -- a 5% decline.

According to Bloomberg:

Demand for gasoline fell 75,000 barrels to an average 9.4 barrels a day, the lowest in a month, according to the report.

``There are signs that gasoline demand is tapering off, which has reduced supply fears," said [Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York].

U.S. gasoline demand last month was lower than in July 2004 because of higher retail prices, the American Petroleum Institute said in a report released today. The total amount of gasoline supplied in the U.S., a measure of demand, was 9.28 million barrels a day in July, down 0.8 percent from a year earlier, the industry-funded group's report showed.

Isn't that fascinating? Gasoline demand was lower this July than last July. Moreover, crude oil supplies are now 9.6% higher than they were this time last year.

That's right -- I said HIGHER. (cont'd)

On Tuesday night, ABC's World News Tonight ran a report placing some of the blame for high gas prices on government regulations that make it difficult to build new refineries in a timely manner. Charles Gibson introduced the piece by noting that since 1981, "the number of refineries [in the U.S.] has fallen by more than half."

Betsy Stark did start her piece on an anti-business note, saying that "refiners are a pretty content group right now" who are "making record profits" and are "under growing pressure to spend some of those profits on new refineries," but she later outlined the difficulty of building a new refinery in Arizona: "It's taken five years to get the air quality permits. The site had to be moved from Phoenix to Yuma for environmental reasons. And after a decade of planning, they still haven't broken ground." Stark ended the story by noting that many Americans also oppose building refineries in their neighborhoods, the "not in my backyard" syndrome. A complete transcript of the story follows:

Unlike last week's brief but welcome departure from biased coverage on gas prices, CBS's Early Show was back to form with its biased reporting today, this time with correspondent Mark Strassmann faulting businesses for factoring higher gas prices into the price of goods and services: "And as prices keep going up, more businesses want customers, want you, to pay fuel surcharges, as if paying for your gas wasn't enough, now you're expected to pay for other people's."

Of course, it shouldn't have to take a brilliant economist to tell Strassmann that all businesses always pass on all their input costs to consumers in the final price of their goods and services, including the costs of fuel as well as wages, health care, taxes, and regulation, and that if not for a separate "surcharge," the additional fuel cost would just be factored and hidden into the "regular" price.

Read the entire transcript below:

As Mark Finkelstein accurately noted earlier this morning, NBC’s Today gave big play to the supposed havoc that rising fuel prices are having on American society. But the hype reached ridiculous levels when Katie Couric insisted during Monday’s show opening that “I had to take out a loan to fill up my minivan. It’s crazy.”

Couric makes at least $15 million a year co-hosting Today.

Here’s how Couric and co-host Matt Lauer teased their upcoming segment on the “pain” of “sky high” gas prices:

So, have you noticed that gas prices are heading higher?

The San Francisco Chronicle certainly has. In fact, after reading this Sunday's front-page article on the subject, as well a business section cover story from the same issue, one gets the sense that the economy is about to crumble at any moment as a result.

Of couse, that's if you only read the portion of these articles on the covers of their respective sections, for inside the body of the paper, things are mysteriously much less dire:

On Friday night, reporting on the rise in the price of a barrel of oil to $66.87, CBS anchor Bob Schieffer inaccurately described that as a “record high,” ABC anchor Bob Woodruff erroneously referred to it as “another new high” and NBC's Brian Williams fallaciously declared: “Oil prices at an all-time record again today.” But NBC reporter Andrea Mitchell, in a piece on what is causing the rising prices of oil and gas, soon conceded the reality which her colleagues studiously avoid: “As bad as prices are now, the surprising fact is that gasoline is still cheaper than in 1981, at least adjusted for inflation.” A barrel of oil will need to top $90 to set an actual record high price.

Below is an August 12 MRC CyberAlert article, “Nets Falsely Cite 'Record High' Gas Prices, Target Oil Profits,” about Thursday night and earlier mis-reporting of energy prices:

NBC Nightly News anchor Brian Williams on Tuesday night wondered, “with many of the numbers and many economists saying the economy is in good shape in this country, the question is: Why isn't President Bush benefitting from that?” Reporter Kelly O'Donnell inadvertently provided part of the answer when she suggested the lack of public confidence in the economy is “fueled most notably by record gas prices, an issue the White House concedes overshadows other economic successes." But while gas prices are rising, they are far short a “record” high price. NBC isn’t alone in spreading this canard. On Monday’s CBS Evening News, anchor Bob Schieffer asserted that “the government reported today that gas prices jumped eight cents in the past week to a record high of $2.37 a gallon. And oil soared to another record high, today just short now of $64 a barrel." The same night, ABC anchor Charles Gibson falsely cited how the cost of gas and oil “hit new highs.”

Full August 10 CyberAlert item follows. For today's MRC CyberAlert, click here.