Follow the Money: Great Advice for Hotel Break-Ins and Policy Decisions

Jon Margolis [1], former chief political reporter for the Chicago Tribune and the author of "The Last Innocent Year: America in 1964 [2]," lives in northeastern Vermont, where he writes and teaches.

Money is the root of … well, of a whole lot of stuff.  Probably not, as it turns out, “of all evil,” which at any rate is not exactly what the man said. What the man (St. Paul) said in I Timothy 6:10 was that the love of money was the root of a great deal of evil.

As, no doubt, are other passions – for power, for glory, for love or its reasonable facsimile. But it is hard to deny the primacy of money in most human affairs, for good and ill, especially in the realms of government and politics. Hence, the well-worn advice to both prosecutors and journalists: Follow the money.

Making it quite peculiar that so few journalists followed the money last week after both President Bush and his party’s de facto presidential nominee, Sen. John McCain, said the country should drill for more oil under the oceans.

After all, both men asserted that their proposal – which in McCain’s case was a 180-degree switch from his prior position – was a good idea because of money, specifically the $4-plus that American motorists are now paying for a gallon of gas.

Pumping more oil from the sea bottom off the Atlantic, Pacific and Gulf coasts, the president said, would “take pressure off gas prices over time by expanding the amount of American-made oil and gasoline.”  And McCain senior adviser Charlie Black told NPR [3] that his candidate changed his mind because “it’s an economic crisis for the average American, who are paying triple what they paid for gasoline only a couple of years ago.”

In fairness, Bush and McCain had other reasons for urging Congress to lift the 27-year-old ban against expanded offshore drilling, including the potential national security advantages from producing more American oil and relying less on petroleum from foreign sources.

Still, you’d think that the first, most obvious, question that would occur to reporters and editors covering the story would be: Will it work? Will more offshore drilling in fact mean that American drivers will pay less for gasoline?

You’d be wrong. Only a few major news organizations bothered to explore that question. Instead, the coverage concentrated on the conventional political factors: McCain’s “flip-flop” (usually juxtaposed with Barack Obama’s on campaign financing); the likely political impact, what with polls showing how angry voters are about the price of gasoline; and quotes from the usual suspects.

All of which belonged in the stories. But so did some exploration of whether those voters would in fact get lower gasoline prices from the Bush-McCain plan. Except for Time [4] magazine and the McClatchy-Tribune News Service [5], though, there seemed to be precious little of that exploration.

What makes this failure harder to understand is that this is a question that can be answered – if not conclusively, then at least quite persuasively – from official data. Without doing a whole lot of work, a reporter could find an actual answer rather than falling back on the usual “one side says yes, the other side says no” opining so common in stories about policy disputes.

Come to think of it, maybe the easily obtainable and (almost) un-debatable answer helps explain the journalistic disinclination to ask the question, or at least to disseminate the answer in print, on the air or over the cable. Reporters don’t like to take sides in policy debates. They don’t even like to seem to be taking sides in policy debates, and it’s hard to provide the answer to this question without appearing to take sides against Bush and McCain.

Because the answer is: No. More offshore drilling (we already do some, in the Gulf of Mexico) would not work. It would not bring down the price of a gallon of gasoline at all for years, maybe not for decades. Even then, the impact would be minimal, probably a few cents a gallon.

The Washington Post [6]did mention the first part of that negative answer in its June 19 story by Michael Abramowitz and Juliet Eilperin, citing the Federal Energy Information Administration’s projection that “access to the Pacific, Atlantic and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” 

That’s fine as far as it goes, but it doesn’t go far enough to note that the EIA’s projections indicate that offshore drilling would have a minimal impact on prices after 2030, or 2050 or probably ever.

Actually, one didn’t even need the EIA to figure that out. One needed only arithmetic. The United States sits on or near roughly 3 percent of the world’s known recoverable petroleum reserves (and that includes all the stuff we now put off limits). The United States uses 24 percent of the world’s petroleum. This means that no matter how much we produce, it won’t have much impact on price.

As Time Magazine’s Bryan Walsh put it, “petroleum is a global commodity, and the world market would soak up any additional American production.” In other words, and despite a disinclination to rely on old saws, what we have here is best described as the old drop in the bucket situation.

That probably explains why reporters could find almost nobody who would project any substantial price reduction from expanded offshore drilling. Neither Bush nor McCain dared to suggest a price-per gallon saving from their proposal. When the Post asked that question of Keith Hennessy, the director of the White House’s National Economic Council, the most he would say is that the very expectation of more production could have some unspecified impact on the oil market. “We would expect it to have an effect on the price; it’s very difficult to quantify,” he said.

In other words, he didn’t know.

But Jim Lacamp did, or said he did. On CNN’s “American Morning” on June 19, Lacamp, described as an “energy coordinator,” whatever that may be, said more drilling in the oceans would cut “at least” 50 cents off the price of each gallon of gas. He didn’t explain how that would work, nor did CNN anchor John Roberts bother to ask him how it might work, as though the very notion of an anchor-person pressing an interviewee was alien to the CNN ethos.

Lacamp sounds like an interesting guy. How many stockbrokers also sing for a rock band? His is called “Six Feet High and Rising” according to a CNBC profile [7] of him. But basically he is a Dallas stock-broker, and while he is no spear-carrier for McCain – he criticized McCain’s gas tax holiday proposal recently on Fox News – he is (in the words of that CNBC profile) known for “outspoken support of free markets and … frequent criticism … of policies that undermine free market thought.”

In other words, a conservative Republican. CNN could have let its listeners know that, or it could have interviewed someone with another – and, in this case, more defensible – point of view. Or better yet, both.

The McClatchy and Time magazine stories were not anti-Republican, pro-environmentalist screeds. Both of them quoted advocates of more drilling making the plausible arguments that drilling technology has improved since the 1961 oil spills off the Santa Barbara, Calif., coast. This diminishes, though it does not eliminate, the likelihood of environmental catastrophe from drilling in the oceans.
Even as he knocked down the claims that offshore drilling would mean lower gas prices, Time’s Bryan Walsh pointed out: “A 2003 report by the National Research Council found that only 1% of the oil that entered U.S. waters came from petroleum operations, like the offshore drilling platforms that run in the Gulf of Mexico – which also weathered Hurricane Katrina without massive spills. If it can be done in an environmentally friendly fashion – and with oil companies themselves footing the bill – opening up some new territory to drilling might be worth it.”

Separately, in his “Curious Capitalist [8]” blog, Time columnist Justin Fox concluded that offshore drilling would have “almost no impact” on prices, but might be a good idea anyway.

“It would take some of the money now flowing from U.S. consumers to the Persian Gulf (and worse, Canada) and divert it to domestic oilworkers, domestic oil-company executives and shareholders, and state and federal government coffers. Those are the positives.”

The negatives, he said, “are the risks of spills … and the despoiling … of the views of beachgoers and coastal property owners,” which he said he  “can’t get all that excited about” because they are “on the petty, NIMBYish side.”

Legitimate points, but here are two legitimate challenges:

(1) “Beachgoers” is potentially all of us, in an era in which an unobstructed view of the horizon may become rarer – and therefore more valuable – than cheap gasoline. Fox did not, but many other commentators do, dismiss the degraded seascape issue as “merely aesthetic.” But by what perverse turn of mind is there anything “mere” about aesthetics?

(2) All of us who complain about the NIMBYism of others are only being NIMBYish ourselves. Because what we’re saying is, “Hey, it’s only your neighborhood, Shorty; as long as it ain’t mine, why should I care?”

See, money is not the root of all evil. But that still doesn’t excuse the reporters and editors who don’t see fit to follow it.