Energy: Regulation and Rewards, not Freedom
Media blast oil companies, lawmakers but fail to investigate financial boost to inefficient energy source.

By Amy Menefee
August 3, 2005

     Broadcasters used coverage of the recently passed energy bill as another chance to frown on profitable oil companies and bemoan gas prices.

     News anchors went so far as to call lawmakers “worms in the nation’s Capitol that call themselves the Congress.” Most reporters weren’t as feisty as CNN’s Jack Cafferty, who likened legislators to the squirmy creatures on the July 30 “In the Money” show. But in the two weeks leading up to the energy bill’s July 29 passage, broadcasters emphasized the need for more regulation and lamented oil company profits, ignoring the larger issue of what would make the market more efficient.

Who’ll Fix Our Gas Prices?

     The mantra that the energy bill did nothing to slash today’s gas prices assumed that the government should  be doing something in the first place, rather than allowing the free market to determine prices. Many news reports on NBC, CBS, Fox News and CNN embraced that approach.

     Chip Reid on the July 28 “NBC Nightly News” said “the bill does nothing, critics add, to bring down the price of gasoline.” He included a comment from Keith Ashdown of Taxpayers for Common Sense: “The hidden story here is taxpayers are going to continue to pay record prices at the pump while energy companies make off like bandits.”

     Likewise, on the July 28 “CBS Evening News,” John Roberts said, “So what will the new energy bill mean for consumers? In the near term, not much.” He followed that with President George W. Bush responding to that very question, “I want to warn you my signing that bill is not going to drop your gasoline prices.”

     Was Bush undermining his own bill? No. He was simply stating a fact. Congress isn’t going to pass a law keeping gas prices down – that isn’t what the energy bill is about, said The Heritage Foundation’s energy analyst Ben Lieberman.

     “There are no easy answers like that, and there may be unrealistic expectations,” Lieberman said in an interview.

Tax Breaks and Subsidies Galore

     Though the bill was a mixed bag of tax breaks and subsidies for various energy industries, especially ethanol, reporters focused on “big oil” and the fact that it’s an already-profitable industry.

     On the July 30 edition of CNN’s “In the Money,” anchor Jack Cafferty said, “A new bill in Washington will give America’s traditional energy companies a boost. This as the oil companies make record profits in the tens of billions of dollars every quarter.” He continued, “It’s aimed at ramping up production of old school energy sources like oil, gas, coal and nuclear power.”

     Cafferty interviewed Public Citizen’s Tyson Slocum, who was identified as research director of Public Citizen’s energy program. Cafferty called the organization a “consumer protection group.” The reality is that Public Citizen is a left-wing group that advocates increased regulation.

     CNN.com calls “In the Money” “an irreverent, straight-shooting take on the week's news.” Maybe that’s why there was no one representing a view opposing Slocum’s. Cafferty could hardly be considered unbiased – he described “the energy bill, which was voted on at midnight under cover of darkness by those worms in the nation’s Capitol that call themselves the Congress.”

     Anchor Susan Lisovicz added, “I mean the oil companies are only making record profits from $60 a barrel oil.” Fellow anchor Andy Serwer finally attempted to rein in his colleagues, noting that provisions for more domestic drilling the industry wanted were dropped from the bill. “You can’t say this is a total giveaway to the oil and gas industry,” Serwer said.

     The Heritage Foundation’s Lieberman agreed with Serwer, adding that a lawsuit liability shield for a maligned gasoline additive – much-pursued by the industry – was not in the bill.

     “The No. 1 thing on the oil industry’s agenda was not in there,” he said. “Any argument that this is a big giveaway to them is inaccurate.”

     “They (oil) probably don’t do as well as some of the renewable sources like ethanol,” Lieberman said of the bill’s handouts.

     The Washington Post reported on July 30 that the “already-subsidized ethanol industry got a federal mandate that will nearly double its output by 2012 – as well as new subsidies to develop ethanol from other sources.” In fact, USA Today listed oil and gas in its list of the energy bill’s “losers” on July 29.

     Several reports made only passing references to the ethanol subsidy, ignoring some key facts about the gasoline additive. A July 2005 study from Cornell University and the University of California-Berkeley concluded that “turning plants such as corn, soybeans and sunflowers into fuel uses much more energy than the resulting ethanol or biodiesel generates.” Supporters of ethanol include the left-wing Natural Resource Defense Council, which advocates greater use of “biomass energy.”

Energy Markets: Anything but Free

     The coverage missed a key point: the premise of the entire energy bill was increased government intervention in the energy market. As Lieberman wrote in a July 29 Heritage WebMemo, “there almost always is a good reason why the subjects of these tax breaks can’t catch on without government help.” Winners and losers should be allowed to emerge on their own merits, not chosen by politicians, Lieberman wrote. “In sum, there has never been any reason to believe that the tax code can do a better job than markets in making the right energy choices for America.”