Ironically, last Sunday the New York Times' front page headlined " Behind TV Analysts, Pentagon's Hidden Hand". On the front page of the Week in Review section Jad Mouawad set out to instruct us that oil's future is murky ("The Big Thirst"). If ever a commentator on a given issue is freighted with prescribed points of view the New York Times' reporter Jad Mouawad would be a standout candidate for the oil patch's "golden goose" award for espousing the preprogrammed pieties that are wont to make us continue our soporific acceptance of the greatest heist, and transfer of wealth in human history. Where there are arguments to be contrived and oil patch rationalizations to excuse the heist inherent in today's oil prices or to explain them away, leave it to the New York Times and Mouwad to convey the imprimatur of what once passed for serious journalism to this greatest of all con games.
Mr. Mouawad and his New York Times have been writing ceaselessly and irresponsibly on the issue of oil. Mouawad has never been held to account by the Times' editors nor its editorial page. His writings could easily be attributed to an OPEC or oil patch pitchman. With Mouwad it is never the industry, its willing allies in and out of government, nor the perverting hand of the Organization of Petroleum Exportng Countries (OPEC). It is us, and a bevy of reasons that are repeated ad nauseum that are the cause of what has become a dysfunctional oil market. Let me explain by citing a few examples from his Week in Review article "The Big Thirst". More would run me out of ink and you out of patience:
"no exporter turning off the spigot...Producers are struggling to pump as much as they can..."
Here alone the full dimension of Mouawad's freighted reporting is laid bare. Clearly and seemingly purposefully no mention of the fact that OPEC by its own admission has held 1.2 million barrels/day off the market since the end of 2006 that it could readily produce. That Saudi Arabia and OPEC have turned a cold shoulder on President Bush's lame entreaties as well as that of the International Energy Agency (IEA) to produce more, not because they can't but because they wont.
"The North Sea and Alaska are slowly running out of oil and producers there are struggling to keep production from falling. Russia's phenomenal surge is coming to an end".
Ah, shortages on the horizon, one of the oil patch's banner headlines to screw up the price another notch. No mention of the new finds off shore Brazil, the massive revised upward revision of Saudi Arabia's reserves (please see "Peak Oil' RIP. Official Obit Frontpaged in the New York Times" 03.08.07 -- commenting on an article penned by Mouawad himself on the NYTimes' front page March 5, 2007, so he will not be able to claim ignorance, upwardly estimating Saudi Reserves alone at some 700 billion to one trillion barrels), the burgeoning oil development activities in Iraq ("35 Firms OK'd to Bid on Iraq Oil Deals" The Huffington Post 04.13.08) whose reserves are estimated to be comparable to those of Saudi Arabia with barely 10 percent of its land mass having been prospected for oil. As to Russia, no explanation that the slowing of the 'oil surge' is structural and hardly due to an inherent diminishment of oil potential under the right rules and management. But that is how the oil boys and the New York Times try to scare us into ever higher prices. That the oil shortage is inherent and imminent, that we are running out of accessible oil. We are not, there are still trillions of barrels of oil around to be found and tapped, from offshore Alaska in the Chukchi Sea (please see "Royal Dutch Shell's 'New Heartland', Alaskan Drilling Rights, The Abject Surrender of Our National Patrimony" 02.25.08) to coastal Africa, the South China Sea, the Gulf of Siam, Greenland, the Arctic, offshore Sakhalin, Kazakhstan, Uzbekistan and untapped reservoirs offshore the United States, the Gulf of Mexico and on. At current and significantly lower oil prices all are economically viable. But leave it to Mouawad to pull out the 'arms length' opinion from his friends at BP, "Another 1.2 trillion barrels of known conventional oil reserves wait to be tapped...But given the current rate of growth in demand, a trillion of those barrels will be used up in in less than 30 years". Feel better now? Once upon a time the same argumentation was flagged to oil consumers, and yes we did run out of oil in Pennsylvania. You all remember that, don't you?
-And on, bringing praise and glory to the heroic efforts of the oil companies (and advertisers in the New York Times?) Exxon Mobil, BP, and Chevron by name, the Times instructs us of their selfless magnanimity that they together with the two other of the largest international oil companies ("the five largest international oil companies") had spent $100 billion on exploration last year, by implication to presumably ease our pain at the pump. Of course no mention that $100 billion after tax credits is closer to $50 billion in bottom line money, or the approximate earnings of Exxon-Mobil alone. In New York Times fashion, a nice plug for the oil companies as to what they sow, no mention of the egregious profits they reap.
- Then leaving caution to the wind, citing the 'benefits' of high oil prices. "High oil prices might end up forcing people to conserve and encourage the development of alternatives". No argument there. All that cheering you hear in the background are the oil companies and oil producers cheering, "go Jad, go", and reminding him not mention the enormous transfer of wealth that these high oil prices have facilitated, the growing risks to our national security given the nature of the regimes benefiting by this transfer of wealth, the crippling impact on our currency (by the way since beginning 2007 the price of oil has advanced more than 110% whereas the dollar has depreciated less than 30%. Correlation?), on our balance of payments, on the steadily engulfing stagflation and the toll on our economic well being.
- Citing John Hess, chief executive of the Hess Corporation, the international oil company, who reportedly warned at a recent energy conference that an oil crisis was looming if the world didn't deal with runaway demand and strained supplies. Mouwad would have given us an especially instructive insight into what is happening had he quoted John Hess' father, Leon Hess the legendary founder of Hess Oil. Hess Senior testified before the Senate Committee on Government Affairs hearing on the role of futures markets in oil pricing back on November 1st, 1990 (no mistake, yes 1990):
"I'm an old man, but I'd bet my life that if the Merc (the NY Mercantile Exchange) was not in operation there would be ample oil and reasonable prices all over the world, without this volatility".
Mr. Leon Hess, where are you? We need you now. But please don't apply to the New York Times. Your incisiveness and clarity of vision would be very confusing to them.
For those who might be interested in previous posts on the Times' 'Perils of Pauline' reporting on oil, please see:
"The Energy Wimps at the New York Times", (01.12.06)
"The New York Times Shamelessly Shills For OPEC" (09.12.06)
"The New York Times', Mouthpiece for The American Petroleum Institute" (07.23.07)
"The New York Times' Paroxysm of Mutual Self Congratultion With the Oil Patch" (08.06.07)
"The New York Times Wins the Alfred E. Newman Award For Its OPEC Coverage" (11.19.07)