10/02/2008 05:12 am ET | Updated May 25, 2011

Gustav and Oil Price Hysteria

Watching media reportage of the advent of Gustav has become a classic example of how the media and the oil patch has herded us into sheeplike panic accepting of most any set of events to rationalize ever egregiously higher oil prices.

Gustav is about to slam through the Gulf coast. Oil rigs and refineries are in danger. Near 25 percent of our oil production capacity is at risk. Refineries are shutting down. Talking heads on television are predicting an energy Armageddon. Oil prices will skyrocket. Remember Katrina!

Here you have the classic plot of media hype and oil patch propaganda meant to assuage us into complacent acceptance of higher oil prices. It is, has been, a theme repeated over and over again in one form or another. Sadly the oil producers, the oil industry, have gotten away with it time and again. This, while our media has been snoozing away.

Where are the media skeptics asking hard questions and pointing out the following:

*Oil rigs in the Gustav's projected path in the Gulf area produce some 2.2 million barrels a day.

*Even if all rigs were brought to an unlikely standstill for a period of ten days that would entail an interruption of production of 22 million barrels (please note 'interruption' not 'lost" as it will simply be pumped at a later date).

*The United States currently holds some 300 million barrels of commercial/industrial stocks.

*The Department of Energy has over 700 million barrels in its Strategic Petroleum Reserve (STP).

*The Department of Energy has signaled it is prepared to tap the Reserve if needed by industry.

*The International Energy Agency, a consortium of 26 nations, with petroleum reserves comparable to our STP has also signaled its willingness to make its reserves available in case of need.

*Oil refineries in the region are shutting down as a precaution ahead of Gustav.This means significantly reduced demand for crude oil.

*After Katrina, demand for gasoline dropped sharply and one can assume that will be the case after Gustav passes. Again a reason for lessened crude oil demand.

*Refineries nationwide are operating at about 85 percent of capacity. At the time of Katrina capacity usage was circa 95 percent so it is even questionable that the shortfall in oil production because of Gustav will even be missed.

Now this kind of information is not rocket science. Why is it that our media hardly ever gets it right and lets the oil industry and the speculators run roughshod over our pocketbooks?