Written by Nathan Burchfiel
July 2, 2008
'Energy Independence Day': Take Two
by Nathan Burchfiel
Business & Media Institute
Pelosi's July 4, 2007, pledge unfulfilled one year later while media still promote freedom from foreign power. As Democrats solidified their control of Congress in early 2007, the newly empowered leadership pledged to “truly declare our energy independence” by July 4, 2007.
House Speaker Nancy Pelosi (Calif.) announced she would create a panel on energy independence, “accelerate the implementation of existing clean, energy-efficient technologies,” invest in domestic alternatives and “send our energy dollars to the Midwest not the Middle East.”
The broadcast networks – ABC, CBS and NBC – have mentioned “energy independence” more than 60 times since Pelosi first made her “Energy Independence Day” pledge in January 2007.
But one year later, gas is more expensive than ever – up 85 percent, from $2.21 the day Pelosi promised “Energy Independence Day” to $4.09 on July 2, 2008. Ethanol has been revealed as a grand mistake contributing to rising food prices in the U.S. and shortages in poorer parts of the world. And politicians continue to block expansion of domestic drilling that would ease supply strains and bring jobs to the United States, while pursuing fruitless investigations of “Big Oil.”
While the media continue to hype politicians’ pledges to work toward “energy independence,” they have failed to keep those elected officials accountable. The networks tied energy independence to Democrats or Pelosi in only half of the 64 stories.
“Energy Independence Day” seems no closer in 2008 than it did in 2007.
In May 2007, Pelosi reiterated the pledge to declare July 4 “Energy Independence Day,” promising a legislative package that would “develop and use clean alternative fuels,” invest in ethanol and “encourage an energy innovation economy that will create new jobs and help small business.”
“Years of the Bush Administrations’ policies that have favored Big Oil over the consumers have resulted in record dependence on foreign oil, leaving American families and businesses to pay even higher prices,” Pelosi said in a May 8, 2007, statement.
The media mantra sounds similar. To journalists, “energy independence” means capping carbon emissions, investment in alternative sources of energy – even at higher costs to American consumers – attacking coal and oil companies, and opposing expansion of domestic oil drilling.
New Mexico Gov. Bill Richardson (D) appeared on the June 18 “Early Show” on CBS. He bluntly expressed his opposition to offshore drilling without opposition from another guest or co-host Harry Smith.
“Another bad idea. It’s going to take 10 years to fully get that oil out of the ocean. It’s a fragile ecosystem,” said Richardson. “[T]his president, all he wants to do is drill, drill, drill. There’s very little on conservation, on fuel efficiency for vehicles. Just last week the Congress failed to pass a solar tax credit. Give more incentives to renewable energy.”
“Early Show” co-host Harry Smith didn’t challenge Richardson’s position, consult any other expert, or point out that renewable energy will also be time-consuming and costly.
The Ethanol Debacle
A common thread among “energy independence” advocates in early 2007 was investment in “clean alternative fuels.” Pelosi alone mentioned such investment several times through several different means, including the catchy if protectionist pledge to “send our dollars to the Midwest not the Middle East.”
By and large, the call for investment in alternative energy was code for further dedication to ethanol, specifically corn-based ethanol that would mean a harvest of cash for Midwest farmers.
In 2007, Congress overwhelmingly passed – and President Bush signed – legislation that mandated 36 billion gallons of biofuels be mixed into the gasoline supply by 2022. That’s a 380-percent increase over previous federal mandates of 7.5 billion gallons by 2012.
But the artificial growth in demand for corn to make ethanol has had a ripple effect on other parts of the economy, affecting food and other prices that, along with gas, have risen sharply in recent months.
While the media have recently started connecting ethanol to food price increases and food shortages in some parts of the world, they have largely failed to connect the increased demand for ethanol to the government mandate.
On the ABC “World News with Charles Gibson” April 10, David Muir reported that “the soaring cost of food is fueling anger and depression” in Haiti. Rice is up 147 percent in the last year, Muir reported. Grain is up 47 percent; dairy is up 80 percent.
“Those biofuels are, in fact, a large part of the equation,” Muir said, making him one of only three network reporters at the time to connect ethanol to the crisis. “Many farmers around the world who once grew wheat and rice, now grow corn and sugar cane instead, to produce ethanol.”
But Muir only described ethanol as “a more lucrative market,” rather than reporting that government mandates are what make it a more lucrative market.
Adding insult to injury, recent reports show production of ethanol is actually worse for the environment than burning fossil fuels. Environmentalists are complaining about demand for ethanol leading to deforestation of Brazilian rain forests.
Even environmentalists have abandoned calls for ethanol mandates, noting the unintended effect mandates have had on other parts of the economy. Yet the media have reported that ethanol demand is rising without explaining the artificial forces behind it. They have refused to hold politicians in Congress responsible, much less suggest a repeal of the requirements.
Price Gouging Nonsense
Politicians also set their targets on big, bad “Big Oil” as the new leaders in Congress pledged to go after the “windfall” profits enjoyed by oil companies in recent years.
Pelosi pledged investigations into allegations of price gouging and price manipulation, implying that oil companies worked together or alone to inflate the price of oil and gasoline artificially so they could make more money.
The American Petroleum Institute, an industry group, estimates there have been more than 30 investigations into price gouging over several decades, and none has found any evidence of manipulation.
Yet politicians and the media continued to imply over the last year that oil companies were purposefully driving the price of oil higher to increase their profits. Sen. Barack Obama (D-Ill.), the Democratic nominee for president, supports a “windfall profits” tax on oil companies.
In February 2007, Sen. Hillary Clinton (D-N.Y.), a former candidate for the Democratic presidential nomination, said she wanted to “take those profits and I want to put them into a strategic energy fund that will begin to fund alternative smart energy alternatives and technologies that will actually begin to move us in the direction of independence.”
Sen. John McCain (Ariz.), the Republican presidential candidate, opposes such a tax. His Web site states, “A windfall profits tax on the oil companies will ultimately result in increasing our dependence on foreign oil and hinder investment in domestic exploration. Jimmy Carter put a windfall profits tax in to place with little to no useful results.”
In 2005 CNN reporter Miles O’Brien said high gas prices were “something to get your blood boiling” and “get you a little outraged.” In an Oct. 28, 2005, NBC “Nightly News” report, correspondent Anne Thompson noted that Americans wanted to “stop shelling out wads of money to feed the profits that tonight have America fuming.”
In a July 2006 interview with liberal Democratic Rep. Dennis Kucinich, CBS host Hannah Storm asked how supporters of the free market “can justify these record profits by these oil companies at a time when consumers are struggling at the pump.” She allowed Kucinich to push a 100-percent “excess profits” tax without explaining how such a tax would likely make the price of gas go up.
“Congress is calling all the oil companies on the carpet today,” ABC “Good Morning America” host Chris Cuomo reported April 1, 2008. “Lawmakers want to know why big oil needs billions in tax breaks while posting record profits of $123 billion. Consumers want answers too.”
But a March 2006 Congressional Research Service report found that the 1980 windfall profits tax resulted in $80 billion in revenue over 10 years, far below the $393 billion the government expected to bring in.
Energy analysts like Ben Lieberman at The Heritage Foundation in Washington, D.C., argue that in addition to failing to raise government revenues, windfall profits taxes actually end up hurting consumers. “Raising taxes further is unlikely to lower gas prices and, over the long term, may discourage the domestic energy sector from expanding supplies,” Lieberman wrote in 2006.
Noticeably absent from Congressional leaders’ game plan is opening up restricted areas of the United States – the Arctic National Wildlife Refuge (ANWR) and the Outer Continental Shelf (OCS) – for drilling.
The media have played a prominent role in downplaying the potential benefits of drilling for oil domestically – including more jobs for Americans and increased “energy independence” – even though most Americans support expanding drilling in American waters.
A CBS “Evening News” report on June 18 – the same day a Reuters/Zogby poll showed 59.6 percent of Americans favor a boost in domestic drilling and refinery construction – highlighted “bipartisan” opposition to offshore drilling in California and featured no input from proponents of measures that would increase oil exploration.
The media have also latched onto a talking point used by Obama, who opposes increased drilling: it would take several years for new oil to hit the market, so it’s not worth going after.
New Mexico Gov. Bill Richardson, a former presidential contender who now supports Obama, made news-show rounds in mid-June 2008 to criticize calls for more drilling. On the CBS “Early Show” June 18, he said “it’s going to take 10 years to fully get that oil out of the ocean.”
Co-host Harry Smith didn’t challenge Richardson’s argument, or note industry estimates that the oil could hit the market in 5 years, or that developing alternative energy would also take time and investment.
But supporters of new drilling argue effects would be more immediate. Cambridge Energy Research Associates analyst Daniel Yergin told NBC new drilling “would send a psychological message to the world oil market, which would affect prices before any of that new oil actually started to arrive.”
And pursuit of other sources of energy would mean higher fossil fuel costs in the meantime, according to proponents like Obama, who told Fortune magazine in June that “there is no doubt that in the short term, adapting to this new energy economy is going to carry some costs.”
Alternative energy sources also bring their own pitfalls, according to Duke Energy spokesman Tom Shiel, who told the Business & Media Institute that sources like wind and solar are inconsistent – the sun goes down and the wind stops blowing – and the technology to store power created by those sources isn’t available yet.
Journalists’ apparent obsession with the idea of “energy independence” has prevented them from holding politicians accountable for empty or broken promises.
Left-wing politicians and the media are pushing an “energy independence” that means more government regulation of efficient sources of energy, preventing expansion of those sources of energy, and increased spending on inefficient alternatives.