Leave it to The New York Times to worry about government “losing” money with Chevron’s (NYSE: CVX) recent discovery of a multi-billion-barrel reserve of oil deep beneath the Gulf of Mexico.
Chevron and other oil companies planning to drill at the Jack No. 2 drilling site could “avoid more than $1 billion in royalty payments to the federal government,” complained Times reporter Edmund L. Andrews in the September 12 paper.
Yet Andrews acknowledged the oil companies planning to drill at the site “have said that they would renegotiate their leases” with the federal government, even though according to Andrews both Republicans and Democrats in Congress existing federal leases are binding agreements that the oil companies have no obligation to renegotiate.
In a story from January 22, Andrews sought to portray taxpayers as shareholders in a corporation being cheated out of a return on investment. He complained that “the nation’s taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy bonanza.”
Yet unlike oil company stock and dividends, American taxpayers don’t necessarily see financial return from the government from oil royalties, which in essence are federal property taxes on oil company drilling operations.
What’s more, Andrews’ reporting put the onus on oil companies to live up to regulations which don’t exist. Since legislators were careless in crafting royalty laws in the late 1990s, it would be Congress that should be to blame for “lost” revenue when a company thrives under a law that was poorly written.
Echoing his original reporting on a GAO study from March 2006, Andrews returned to lament how the expected oil returns from Jack No. 2 would add to the government’s expected “loss” of oil revenue.
“Even before Chevron and its partners confirmed the discovery last week, the Government Accountability Office, the investigative arm of Congress, had estimated that the Treasury could lose as much as $20 billion over the next 25 years,” Andrews added.
Nowhere in his story did Andrews drill into how the American consumers would benefit from the increased oil supply, how better oil drilling technology made the hard-to-reach oil accessible, or how the new site would generate jobs into the foreseeable future.
The Times is not alone in presenting a negative spin to the Gulf oil discovery. The September 5 “Nightly News” began with anchor Brian Williams lamenting that while “some cheered the news that this huge expanse of oil has been found” that “others heard the news and wondered how America would ever end what the president has called this nation’s addiction to oil.”
The “discovery is not expected to trigger a significant reduction in America’s dependence on foreign oil,” correspondent Martin Savidge complained in his story.
The Business & Media Institute has found that the media repeatedly drilled oil companies in the past year for their profit margins, attacking them as greedy and unconcerned with providing affordable energy to consumers.
In a story on proposed windfall taxes on oil profit on the March 14 “Nightly News,” NBC’s Chip Reid subtly suggested oil company executives are a patently dishonest bunch.
“Unlike the last time they testified before Congress, today the nation's top oil executives had to swear to tell the truth to frustrated senators who are getting an earful from constituents,” said Reid as he opened his story.
Four months later on the July 28 “Early Show,” co-host Hannah Storm failed to press liberal Rep. Dennis Kucinich (D-Ohio) on his idea to levy “a 100-percent tax on excess profits” earned by oil companies. Storm didn’t ask Kucinich what exactly constituted “excess” profits nor if he felt his tax plan unfairly enriched the government while punishing oil companies.
