Sounding like a broken record, the media again are squawking about "record" profits for oil companies in light of a new round of congressional hearings on oil and gas prices.
Both CBS and NBC’s evening newscasts for March 14 noted congressional attacks on "record" oil industry profits. "CBS Evening News" also reported that oil companies are eager to reinvest profits into drilling leases in the eastern Gulf of Mexico, if only Congress will let them. CBS interviewed a left-leaning interest group that opposes the drilling, but the network skipped the group’s calls for a tax on oil company profits.
NBC’s Chip Reid subtly suggested oil company executives are a patently dishonest bunch. "Unlike the last time they testified before Congress, today the nation’s top oil executives had to swear to tell the truth to frustrated senators who are getting an earful from constituents," said Reid as he opened his story on the March 14 before mentioning that gas prices on average have gone "up 11 cents in the past two weeks."
The NBC correspondent put oil executives on the defensive against a liberal Democratic senator and moderate Ohio Republican Sen. Mike DeWine. Reid quoted DeWine charging that there "is something wrong when they are paying record prices at the pump while oil companies are making record profits."
Yet while Reid worried about "Big Oil" profit margins, his own employer enjoyed a profit margin higher than most American oil companies, according to data from CNN.com. General Electric (NYSE: GE), the company which owns Reid’s network, outpaced most major oil companies with a profit margin of 11.05 percent. Of the major oil companies, only Exxon-Mobil (NYSE: XOM) outpaced GE with a profit margin of 12.60 percent. Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), and BP (NYSE: BP) with 7.62, 8.33, and 8.96 percents respectively.
Nowhere in his story did Reid include an economist to explain how tight supply and heavy international demand for oil are driving up prices, nor did Reid explain that prices are not at a record high when factoring in inflation, as the Free Market Project has previously documented.
The "CBS Evening News" devoted only a few sentences to the congressional hearing as anchor Bob Schieffer announced that "America’s top oil company executives were in the hot seat on Capitol Hill today. They were asked to defend last year’s record profits of $112 billion." Schieffer added that Congress is considering legislation "to curb industry practices they say reduce competition and keep prices high."
Unlike NBC, however, the "Evening News" also hinted at federal regulation as a cause of high energy prices.
"Stuart Strife, Anadarko’s head of exploration, knows where the next big reserves are. But he can’t cross an invisible line east of this platform," reporter Jim Acosta informed viewers in his March 14 "Evening News" story. "It’s where the state of Florida’s political clout kicks in and drilling stops, a zone where geologists believe there’s more oil and natural gas than in all of the Arctic National Wildlife Refuge."
On camera Strife informed Acosta that he believed a two million-acre sized lease sale could provide enough energy to "heat 10 million homes for a six to 10-year time frame."
Yet Acosta went on to list his story leftward as he concluded that the "test for Florida’s power players [is] to convince either Congress or the White House that oil and these waters don’t mix," Acosta said, concluding his story.
Before reaching this conclusion, Acosta presented a representative from the Florida chapter of Ralph Nader’s U.S. Public Interest Research Group (U.S. PIRG) as a concerned environmentalist working to preserve Florida’s pristine resort coastline. Acosta did not inform viewers that the U.S. PIRG has been a vocal critic of oil industry "windfall" profits, and urged Congress in September 2005 to "immediately enact a windfall profits tax on oil that will recoup a portion of the oil industry’s record profits."
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