The New York Times' Hidden Hand On Oil's Agenda

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)

Comments

[KillTheMessenger]

When I read this article, it immediately occurred to me that denial of peak oil is no different from many other historical instances of denial: denial that the Earth is a sphere, denial that it is not the center of the universe, denial that black, African slaves are human, denial that a doctor's dirty hands can kill a woman at child birth, denial that bacteria and viruses are the cause of disease, denial of evolution as the fundamental force in the living world, denial that relativity and not Newtonian physics rules the universe, denial that the Holocaust occurred, denial of the Big Bang as the observable physical beginning of the universe, denial of AIDS as a sexually transmitted disease that can hit anyone and not just homosexuals, denial that climate change is real and that man has a hand in it, denial that the US tortures and commits war crimes. You name it.

The common thread in all these cases is that the denialist does not dare to confront reality but resorts to character assassination to suppress the unwelcome truth.

Sad that this mindset of unlimited ignorance can find an outlet at the Huffington Post. I would have expected better.

[legalgirl]

The unprecedented Oil Co. profits are already on the record. So, how about a big windfall profits tax and a permanent end to oil co. subsidies? If it's hardball, then time for the American consumer to start playing. Oh yeah, and all you non-OPEC countries with new oil, let's talk.

[johnie2xs]

It's amazing, don't you think, Mr. Learsy. The internet(s) are veritably wasted on most of those who have posted on this blog. Besides being willing apologists for Big Oil they fail to see the complicity of our oil encrusted Executive Branch and the many nefarious minions within the administration. Keep screaming into the wind, sooner or later someone may her you. I add my voice on my radio show, so I'm with you. Good luck to us.

[racetoinfinity]

Congress should investigate the big oil companies for price gouging.

[frenchynyc]

price gouging!!?? how about the american people grow up and stop complaining! gas has been a global issue for years...if you were stupid enough to run out and buy a 10mpg suv...start planning your gas usage like an adult...

[bigdoug1053]

As much as I hate the corporate welfare queens the oil majors have become, they only control around 10% of production and supplies. They are a convenient boogie man and scapegoat, but their glory days are over - despite recent obscene profits. OPEC is a cartel, yes. But they are taking dollars for their oil. Dollars that have progressively become more worthless since 1972 and have been re-invested right back into our crap game of an economy and stock market. And the Saudis have bailed our asses out on many occasions by opening the spigots to moderate price increases. So OPEC is also a convenient boogie man.

The truth is that Peak Oil is already here. Production has been flat the past 3 years despite increasing world demand and rising prices. It's not a conspiracy - it is in fact, a fundamental law of nature. And the peak is here because you and I, and now many millions of Chinese and Indian people have been burning the stuff up at an exponential rate. Sorry. Oil and all resources are finite, and it has taken 6.8 billion souls to finally test Malthus' hypothesis.

Commentators like Mr. Learsy - and the NYT and other mainstream media - are like most of the American and European energy wasters - in denial. It is much easier to rage and blame, rather than buckle down and start figuring out we are going to handle progressively less energy, transportation, food, and convenience in our lives.

[mmckinl]

The Oil situation has been well discussed, by geologists, engineers, financiers and oil executives. We are running out of oil. The oil that remains is the most difficult oil to drill, except perhaps in Iraq.

Demand is increasing around the world. China, India and the exporting countries themselves. Mr Learsy can easily expound about the evils of OPEC or Big Oil but he cannot explain away what is right in front of his face, Peak Oil.

Does Mr Learsy think that the powers that be in the United States is willingly spending these amounts on oil ? Mr Learsy is trapped in the conundrum of of a finite world with an infinite appetite for energy.

[RRonin]

OK, here's the deal. The strength and vitality of our economy is a matter of national security. The strength of our economy idepends on a plentiful supply of fuel at affordable prices. Think about it: EVERYTHING we consume travels by plane, train, container ship and truck. Most folks drive themselves to work, and in a lot of communities it is very difficult to use public transportation. The cost of fuel is always factored into the cost of what we consume. The cost of fuel directly affects the ability of the nation to defend itself. THEREFORE the supply of gasoline/diesel/heating oil is a matter of national security and energy production within our borders must be nationalized.

[Joeseo]

Mr. Learsy is correct. This "reporter" is a shrill for Opec, especially the American Corporate and Aramco parties. Any search engine you choose will tell you this guy is bought and paid for.

It's my view this guy is doing exactly what the TIMES requires for its on-going backing of any American Administration protecting Israel. This is pure propaganda. His distortions are surely welcomed and praised by Bush/Cheney.

[SamEllison]

When it comes to uncle Leon be careful what you ask for.

H(olidays)
E(venings)
S(aturday and)
S(unday)

[cylindar]

Many good points. Yes, Russia has loads of oil. They just need investment, but they have to create a better atmosphere for that. As far as the Brazilian find goes, that would not be online until at least 2010 I believe. The Brazilian thing is also a bit iffy because they have to work in much deeper waters than they have ever worked. In the meantime China is becoming a real drain on resources and will continue to do so for years to come. I would presume that there are more oil reserves about but the oil companies don't want to let the cat out of the bag--possibly?

[balance]

Golly gee the New York Times is reluctant to think that any industry would be manipulative or misleading with its information in order to reap greater profit.

Maybe the NYT & the rest of the MSM hasn't heard of the cigarette industry?

Umm... duh? It can, and does happen.

If the MSM could divert some of its dissecting doubt and inquisition from the democratic candidates to the real huge story of our times (Energy and all its crazily apparent malfeasance) , then perhaps things of substance could be found.

Iraq, Iran, record food prices, record energy prices, recession --- it's all linked to Oil.

PS: the tax rebate is coming. Alot of it is going to be used to pay for necessities, like gas & heating oil & the increased cost of food. It's a temporary band aid, intended for the political benefit of Bush Jr exit strategy, & the ineffectual pandering of spineless dem congress.

[tommy_slothrop]

Let's hope that the Saudi king isn't serious about saving some oil for future generations so we can get on with "economic growth", a.k.a, the Pave the Planet Project. We wouldn't want our children to have to live in a world that wasn't completely paved over.

[argeec]

Most of the increase in the price of oil is explained by the falling dollar and speculation. The ragging on OPEC is for political reasons - not sound economics.

[GetAbike]

I am not sure if Mr. Learsys' attack on Jad Mouawad qualifies as "ad hominem", but he likes to tarnish the message of anyone who discusses peak oil by associating them with the boogie-man Big Oil.

First, Mr Learsy could be accused of the same thing- being a mouthpiece for the cornicopians (USGS, IEA, CERA). This group of True Believers has also included Big Oil, Dick Cheney, and OPEC. They seem to believe that the earth has an oily nuget center, meaning that there is unlimited oil and growth.

What we are beginning to see is the MSM trying to get educated and wrestle with the concept of Peak Oil, which isn't about running out, but rather declining exports for a myriad of reasons. So we will hear more from both the NYT and Mr Learsy I am sure. Cable news will stick to their Gas is Expensive! story and leave it at that.

So thank you NYT for making the attempt to dissect this Mega issue. Good luck to us all!

[WebHubbleTelescope]

Good comment. The math supports you. Learsy has been saying the same thing the last two years. I think he does a post about once a month and it is always the same thing. Depletion analysis is an exacting quantitative science, one which Learsy refuses to understand.

[Christian]

And we find the new path off of Brazil, what will we find next year, or the year after that? Looks like a land grab at the North Pole going on. Who can tell me there is not a chance in hell that we have some Enron like manipulation going on with huge national funds and Saudi prince funds, etc.... ? The wealth of this country is being transfered to oil producing countries and about 1% of the people in is country, that cannot be denied.

[8MoonRiver]

Mr. Learsy,
I suggest you submit this -- slightly shortened, perhaps -- as an op-ed piece in The New York Times, for balance. If they have any sense of journalistic integrity, they will print it.