Armen Keteyian was befuddled by oil companies’ unwillingness to start drilling in leased land. The CBS correspondent filed a report on the CBS “Evening News” on April 13 wondering why the oil companies, ExxonMobil in particular, are allowing some of their equipment to sit idle. Last summer, when gas prices were at their highest, the media was with environmentalists in [1]fighting against popular opinion demanding more domestic oil drilling.
Keteyian went with the misleading claim that oil companies leaving their equipment idle and ignoring available leased land in favor of causing gasoline prices to rise once more. BMI covered this issue earlier in 2008 and noted [1]that, “According to API, leases are listed as ‘nonproducing’ throughout the lengthy exploration phases that are necessary to determine whether oil exists in the area in commercial quantity.”
Keteyian did offer John Felmi, the chief economist of the American Petroleum institute, a chance to comment on why the oil industry was not drilling. Felmi argued that oil firms are bound to their shareholders first and that the huge economic downturn eliminated a lot of capital to expand production.
Keteyian didn’t understand that it makes no sense to pump more supply into the market when demand is already low. He countered, in the report and not to Felmi, claiming ExxonMobil’s profits were a staggering $45 billion and that it is “pumping $35 billion back into stock, shareholder dividends and cash reserves.” ExxonMobil increased spending on oil production by $3 billion over the prior year. Keteyian editorialized, saying, “At a time when
After all the media hand-wringing the past few months over imploding financial institutions, they might praise ExxonMobil for taking care of it shareholders first and keeping ample reserve funds, rather than running on risky investments and toxic assets.
“Consumer advocate” Dan Weiss closed the story saying, “Big oil is swimming in profits with money drained from the pockets of American families.” CBS mentioned he was a senior fellow at the “Center For American Progress” yet neglected to mention that it is an avowedly liberal think tank. The founder of CFAP is former Clinton Chief of Staff John Podesta.