Journal Contributes to ‘Widespread Misunderstanding’

March 19th, 2012 · No Comments · Uncategorized

By Denise Tessier

George W. Bush thinks building the Keystone XL pipeline is a “no-brainer.” Apparently, the Albuquerque Journal’s editorial board agrees.

The Journal once again editorialized in favor of the Keystone XL pipeline this past week (March 12), the sixth pro-pipeline editorial in four months.  Not to criticize consistency, but in doing do, it perpetuated what U.S. Sen. Jeff Bingaman has characterized as a “widespread misunderstanding” on rising gas prices. It’s right there in the first sentence of the editorial (“Keystone XL Pipeline Delay a Political Ploy”):

Gasoline prices are expected to hit $4 a gallon by Memorial Day.

The editorial then compared current pump prices ($3.77 at the time of the piece) with those at the time of President Obama’s inauguration ($1.83), ignoring that gas prices historically have gone up before Memorial Day from lows in January (when inaugurations are held).

But more importantly, the editorial misled the reader in positing that the president’s decision to delay approval of the pipeline is affecting gas prices.

And in doing so, the editorial also ignored the Senate floor comments made just days before by Bingaman, the New Mexico Democrat who chairs the Senate Energy and Natural Resources Committee, specifically to clear up misinformation.

Those comments were summarized in “Bingaman Takes a Stand on Gas Prices,” by Journal Washington Bureau reporter Michael Coleman, which appeared on the Journal editorial page March 11, the day before the latest Keystone editorial. Among the senator’s comments, as reported by Coleman:

“Let me state this as clearly as I can – what I believe is really without dispute among experts. That is, we do not face cycles of high gasoline prices in the United States because of a lack of domestic production. …

“We do not face these cycles of high gasoline prices because of lack of access to federal resources, or because of some environmental regulation that is getting in the way of us obtaining cheap gasoline.”

Coleman reported that:

In his speech, Bingaman said if boosting production was a silver bullet, we’d be enjoying cheaper gas already because the U.S. boosted production significantly in recent years, from 8.4 million barrels a day in 2006 to 9.6 million barrels in 2010, according to the federal Energy Information Agency. At the same time, American consumers, stung by painful price spikes in recent years, have reduced consumption.

In other words, supply is up and demand is down and gas prices continue to rise. Not only that, but the United States’ top export last year – for the first time in history — was fuel, beating out exports of aircraft, motor vehicles, vacuum tubes and telecommunications equipment. A decade ago, the Associated Press reported, fuel wasn’t even among the top 25 U.S. exports. Part of the reason the U.S. is able to export so much of its fuel, the AP reported, is because the U.S. is “using less fuel because of a weak economy and more efficient cars and trucks.” The AP reported:

The trend is significant because for decades the U.S. has relied on huge imports of fuel from Europe in order to meet demand. The U.S. is still energy dependent, however, because it’s still the world’s largest importer of crude oil.

A chart by Bloomberg Businessweek shows gas prices rising toward $4 a gallon, yet says they are not being driven by demand because domestic fuel consumption is the lowest it’s been since 1997.

But back to Coleman’s article on Bingaman:

“While domestic oil production plays an important role in the energy security and economy of our country, its contribution to the world oil balance is not sufficient to bring global oil prices down,” Bingaman said. “For this reason, increased domestic production unfortunately will not bring down gasoline prices in our country.”

“As part of whatever approach we take to energy and transportation in the weeks and months ahead, we need to be honest with our constituents about what works, keep moving in that direction, and allow the facts, and not myths, to be our best guide,” he said.

The comments by Bingaman, who is retiring from the Senate at the end of the year, were noted in a Sunday New York Times piece (March 18) that said Bingaman was being “senatorially polite” in characterizing the current discourse as a “widespread misunderstanding.”

And Bingaman isn’t the only senator trying to set the record straight.

Bernie Sanders, the Independent senator from Vermont, directly blamed Wall Street in a piece last month, noting that speculators control nearly 80 percent of the oil futures market, compared to about 30 percent a decade ago. In “Wall Street greed fueling high prices,” he acknowledged high gas prices and asked:

Is Big Oil to blame? Sure. Partly. Big oil companies have been gouging consumers for years. They have made almost $1 trillion in profits over the past decade, in part thanks to ridiculous federal subsidies and tax loopholes. I have proposed legislation to end those pointless giveaways to some of the biggest and most profitable corporations in the history of the world.

But there’s another reason for the wild rise in gas prices. The culprit is Wall Street. Speculators are raking in profits by gambling in the loosely regulated commodity markets for gas and oil.

A decade ago, speculators controlled only about 30% of the oil futures market. Today, Wall Street speculators control nearly 80% of this market. Many of those people buying and selling oil in the commodity markets will never use a drop of this oil. They are not airlines or trucking companies who will use the fuel in the future. The only function of the speculators in this process is to make as much money as they can, as quickly as they can.

Still, the Journal opined that the pipeline is needed because “U.S. consumers are crying out for relief at the pump,” and claimed:

Keeping the pipeline on the back burner is indicative of the administration’s agenda to push alternative clean energy sources at the expense of U.S. consumers and businesses — which happens only if they can succeed in making conventional energy ever more expensive. Can anyone say “Chevy Volt?”

As the New York Times piece noted:

Hardly a day goes by that some industry cheerleader somewhere — be it Gov. Bobby Jindal of Louisiana or Senator James Inhofe of Oklahoma — does not flay President Obama for driving up oil prices by denying the industry access to oil and gas deposits and imposing ruinous environmental rules. Senator John Barrasso, a Wyoming Republican, said last week that Mr. Obama should be held “fully responsible for what the American public is paying for gasoline.”

Add the Albuquerque Journal to the list of those doing the flaying.

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  • Susan Clair

    “No brainer.” Those are interesting words—almost Freudian—coming from you-know-who!
    Senators Bingaman and Sanders are two of the rare politicians calling the fuel increases what they really are—Wall St. greed. Conceptually, I’m not opposed to higher fuel prices, especially if it would help wean drivers off fossil fuels. The problem is, people still have to go to work and to the grocery store—at the very least—and higher fuel prices mainly hurt the poor. Where’s the fairness in that? Oil companies should be forced to contribute a significant portion of their windfall profits to help rebuild the U.S mass-transit system.

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