Gas Prices and the News Media

If we ever hope to become at least sophisticated enough to avoid voting yet another parlous disaster into the presidency, we’re going to have to give up our naivete, however comforting and familiar it might be, and grow up. To achieve this lofty goal (lofty for Americans, anyway) we’re going to need a press full of cynics and skeptics rather than propagandists, ideologues, and sycophants like the one we have now. We’re going to need people who recognize lies when they hear them and can – at a minimum – tell empty-gesture political theater from political theater with a legitimate purpose behind it.

Case in point:

For two solid years, gas prices have risen based on excuses that wouldn’t fool my 6-yr-old nephew, and the oil industry has raked in 8 quarters of record profits, profits so high that even Richard Nixon would have frozen them a year ago or else pushed Congress to pass a windfall-profits tax. The Pubs, of course, did neither of those things, instead periodically producing an “Outrage at Oil Prices Dance Ritual” wherein they made lots of noise and a Big Show fulminating against the absurdly high price of gas and unconscionable, equally absurdly high profits ripped from unsuspecting consumers’ dwindling pocketbooks by the oil industry. All of this was dutifully reported by a breathless press as proof that Republicans cared about the little guy.

Then, when the ballet was over and the cameras and klieg lights were turned off, the Pubs would go back to Congress and write more bills giving more money in tax breaks and incentives to already obscenely fat oil companies. Which our kiss-ass press did NOT report because, after all, today’s news media doesn’t report on bills that are never written. You can’t, they will piously explain to anyone who dares criticize them, report on a negative. That would be showing bias.

No, but what they could have done was mention, say, after the second year of watching this performance, that the very same outraged Republics frothing at the mouth over high gasoline prices had just finished awarding the energy industry $$$BILLIONS$$$ in corporate welfare for projects they had more than enough money to do for themselves. They might even have told us about the money the energy industry had donated to the campaigns of those who voted for that welfare. But they didn’t do either of those things because then they’d have been guilty of partisan reporting.

Comes this week and six Democratic Senators staging a little political theater of their own.

A week after U.S. gasoline prices hit a near-record $3.05 a gallon, Democrats in Congress are promoting legislation taking aim at the big oil companies, although industry experts say that the efforts aren’t likely to have any effect.

Standing in front of an Exxon station near the Capitol on Wednesday with the posted $3.05-a-gallon price for unleaded regular in the background, half a dozen senators railed against the oil industry.

Sen. Charles E. Schumer (D-N.Y.) said Congress would look into breaking up the giant companies. Sen. Maria Cantwell (D-Wash.) promoted her anti-price-gouging bill, which the Senate Commerce Committee adopted on Tuesday. And Sen. Bernard Sanders (I-Vt.) backed a windfall profits tax, pointing to $440 billion in profits over the past six years for the nation’s five biggest oil companies.

“I think it’s time to say to these people, ‘Stop ripping off the American people,’ ” Sanders said.

So what does our intrepid WaPo reporter, Steven Mufson, do with this piece of political performance acted out primarily to get people like him to pay attention finally? Well, first he emphasizes the political nature of the stunt –

It was no mystery what brought the lawmakers to the station on Massachusetts Avenue: Gas prices are climbing, and people aren’t happy about it.

– and then he minimizes its meaning by quoting Cheney’s Energy Dept –

The government’s Energy Information Administration said this week that “continuing problems for refineries in the United States and abroad, combined with strong global gasoline demand, have raised our projected average summer gasoline price by 14 cents per gallon.” Its earlier forecast was made just last month.

EIA predicted that regular unleaded gasoline would average $2.95 a gallon this summer, 11 cents a gallon more than last summer.

– without even attempting to explain what “continuing problems for refineries” might refer to. What problems? Last I heard they were running full bore, 24/7. I haven’t seen anything about “problems”. Although I did hear an oil executive say during a television news interview that the profits weren’t really as high as they looked because the energy industry had very large R&D costs, and the reporter doing the interview didn’t bother to clarify that profits are what’s left after you subtract the cost of things like R&D from your gross revenues.

Which means that either a guy who runs a multi-$$$Billion$$$ oil company doesn’t know what the word “profit” means or else he was lying through his teeth. Neither of those would give me much confidence in anything he said, nor would it give me much confidence in the intelligence of a “journalist” who didn’t pick up on a manipulation that obvious. Which in turn means that Mr Mufson is going to have to provide some details of what the hell the EIA is talking about or blow his credibility.

I won’t keep you in suspense. The details were NOT forthcoming.

But Mr Mufson isn’t done. He tops it off by comparing the Democratic Senators’ theater with the Pub’s version, dismissing both.

Over the past four years, price increases and congressional outrage have become a spring ritual. Last year, Republican leaders discussed similar measures — including a $100 rebate for consumers, a tax on oil inventories, steps against price gouging, new drilling opportunities and regulatory changes — most of which faded away toward the end of the legislative session.

You don’t have to be a genius to get the implication that the Dems will do likewise, but Mr Mufson wants to be sure to get all sides to this this drama, so he follows up first by quoting Pub party hack Joe Barton on Democratic “naivete” –

Republican lawmakers this week poked back at the Democrats’ ideas. “I think it shows that they’re either unbelievably naive about how markets work or unbelievably cynical,” said Rep. Joe L. Barton (R-Tex.), former chairman of the House Energy and Commerce Committee.

Barton said most Democrats opposed opening up new areas of Alaska or the Outer Continental Shelf for oil and gas drilling. “If you want to get prices down, you’re going to have to have a supply component to energy,” he said.

– and then Bush’s tame and overtly-politicized FTC (Federal Trade Commission) on how confusing it is even to define the term “price-gouging” –

The bill, which has 100 co-sponsors, would instruct the Federal Trade Commission to define gouging to stop “unconscionably excessive” pricing or instances of “gross disparity” between the prices of crude oil and gasoline. The measure stipulates tough penalties, including fines up to $150 million and up to 10 years in prison for executives found guilty of price-gouging. Stupak has scheduled a hearing for May 27.

Congress asked the FTC to define price gouging last year. The FTC said the term mainly applied to local cases and that those could not last long without competition forcing prices down again.

“It’s difficult to understand precisely what price gouging is,” said John H. Seesel, the FTC’s associate general counsel for energy. “The term is usually defined in terms of other phrases that are equally hard to get a handle on, such as ‘unconscionable’ or ‘excessive.’

– ending with a Big Time oil industry lobbyist engaged in a little creative intimidation.

American Petroleum Institute economist John C. Felmy said the price-gouging legislation was “of grave concern.”

“It is so vaguely written in terms of what is price gouging and has such onerous penalties that we are very concerned that it could have unintended consequences,” Felmy said. Gasoline suppliers, uncertain about their ability to raise prices, “might just shut down.”

Felmy is an “economist” the same way a proponent of Intelligent Design is a “scientist” or Bill O’Reilly is a “journalist”. Mr Mufson doesn’t think it necessary to point out that an official of the APC just threatened to have the oil industry “shut down” if anybody interferes with its ability to gouge.

After which – without in any way referencing the EIA’s “problems” excuse to the contrary – he explains that oil refining is a fucking gold mine.

For the moment, however, business is too good for that. After years of being a low-margin business with lots of regulatory hassles, oil refining has become lucrative. Eitan Bernstein, oil analyst with the investment bank Friedman, Billings, Ramsey, wrote last month that “refining margins have pushed to new highs” in the first quarter, averaging $15.75 a barrel, about 30 percent more than last year. He increased earnings estimates for U.S. refiners.

Oh. What happened to the oil companies have to raise prices to cover “refining problems”?

Mr Mufson doesn’t say. Mr Mufson doesn’t even notice the contradiction. Mr Mufson is too busy making sure he gives the last word to the president of Shell –

Oil executives disagree. “I would beg to differ about whether this is a question of industry concentration and instead a factor of supply-and-demand economics,” said David Sexton, president of Shell Oil Products.

– before moving on to ridicule the rest of the Democratic agenda for his Big Finish.

The other part of the Democrats’ strategy involves standing up to Big Auto, not Big Oil. The Senate, with broad Republican support, is poised to mandate a 10-miles-per-gallon increase in fuel efficiency for new vehicles over the next 10 years.

But oil experts say that such measures won’t lower gasoline prices. “This is the usual song and dance that politicians feel the need to go through when prices go up,” said Severin Borenstein, director of the University of California Energy Institute.

Borenstein said the proposed boost in fuel efficiency standards was “so modest that it sort of makes a joke of any real attempts to deal with either climate change or our growing demand for oil.” He said that the increase in mileage standards would not be enough to offset the growth in demand as the economy and population grow.

Even if true, that’s hardly the point. You raise fuel efficiency standards to conserve oil, not to lower the price. Mr Mufson, who appears not to be the brightest bulb on the tree if he isn’t a Republican operative in disguise (not that the two are mutually exclusive), seems unable to digest a simple two-part strategy if one of the parts fits something other than his chosen narrative.

If that’s the kind of brain-dead “journalism” we can expect from one of the nation’s biggest and most influential papers, just imagine what we’re getting from our local paper’s reporters. It’s scary.

We’ve got to learn to read between the lines instead of adopting them like orphan children or we will go on making the same mistakes over and over and over again (Nixon? Reagan? Bush? Ring a bell? Iraq/Viet Nam? Sound familiar?)

If we don’t mature at least enough to be able to deconstruct bullshit without rebelling because we think we’ve lost our precious “innocence”, we can pretty much kiss America good-bye.

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