It wasn’t long ago that American journalists were busy chronicling the record windfalls of big oil companies and American columnists were opining themselves dizzy over the question of what should be done with all those trillions of dollars. Conspicuously absent from the debate were any practical suggestions — such as, um, maybe spending the money on a whole bunch of buckets and some paper towels.
This week, however, in the wake of BP’s decision to shut down America’s largest domestic oil field because of some leaky pipes, the media has all of a sudden zeroed in on the state of oil infrastructure in this country.
“The vulnerability of U.S. pipelines, refineries and oil fields has become an ever-larger issue for the industry as energy demand and prices have risen sharply in recent years,” the Wall Street Journal reported yesterday. “Critics say the oil companies have underinvested in new production facilities, while older ones deteriorate as companies emphasize cost controls over maintenance.”
Yesterday, those critics could be found in seemingly all corners of the American media.
“As BP shuts down its corroding pipelines in Alaska’s North Slope, some analysts are wondering why the problem wasn’t caught sooner and say that the company’s problems foreshadow a larger mess with the world’s aging oil infrastructure,” reported CNN.
“It was almost guaranteed to happen,” the director of the Alaska project for the Natural Resources Defense Council told CNN. “These companies have not been putting the money into infrastructure up there.”
Those ubiquitous critics, however, were nowhere to be found in one curiously timed article that appeared yesterday in the Washington Times.
The piece offered a rosy assessment of the oil industry’s long-term investment strategies without ever mentioning that nagging little oil shutdown or that pesky question of aging infrastructure.
“Big Oil’s record profits attract attention and outrage, but an independent study has found that oil companies do exactly what economic textbooks say they should do with all that money: They invest it in oil exploration and development efforts that eventually should relieve pressure on prices,” reported the Times.
While the Times was busy delivering the good news about oil companies acting to relieve prices, news of the Alaskan shutdown was ratcheting already high oil prices even higher.
So with the article’s author willfully ignoring the Alaskan-sized news hook, what bit of news was driving publication of the story? According to the Times, the insight came courtesy of a study by the Ernst & Young accounting firm.
“The Ernst & Young study, which was not done on behalf of any client firms, confirms what the oil companies have been saying about the high cost and difficulty of exploiting the world’s remaining petroleum reserves,” reported the Times.
A brief search of the Ernst & Young Web site, however, failed to turn up any recently published studies about the oil industry, though back in February, the accounting firm did produce a report entitled, “Investment and Other Uses of Cash Flow By the Oil Industry.” That study was prepared for the American Petroleum Institute, which subsequently promoted the report on its Web site.
Could that be the study in question?
Actually, no. According to the Ernst & Young public relations department, the study at the heart of the Times article wasn’t really a study at all — but rather “an analysis done for a bylined article” which Ernst & Young pitched to various news outlets including the Times (the full article is expected to appear at some later date in the Houston Business Journal).
In other words, in the midst of this year’s largest domestic oil crisis, the Times is happily taking its cues from an accounting firm’s PR department. After all, who has time to scour Alaska for a relevant news angle when you can simply scour your inbox.