A Different Standard: Gas Price Coverage Shifts since 2008 High

During the summer of 2008, on the eve of the collapse of the global financial markets and the presidential election, the price of oil and gas at the pump hit record levels and commanded a lot of attention from the media.

As prices rose higher and higher, eventually topping $4 per gallon, reporters were quick to point to possible reasons – speculators, oil companies generating windfall profits, unrest in the Middle East and a host of other factors. And, to give viewers a frame of reference, correspondents were quick to remind consumers how much worse off they were due to the price of oil than they had been the previous year.

“Today the average price of a gallon of gas in the United States is $4.07 – up 20 cents in the last month, up $1.09 in the last year and nerves are fraying,” NBC correspondent Kevin Tibbles said on the June 22, 2008 “Nightly News.” “As the summer travel season arrives, analysts say the high prices are forcing Americans to stay closer to home, drive fewer miles and get aggressive when booking flights.”

A year later, broadcast network reporters are still showing how gas prices are causing pain at $2.67 a gallon ($1.38 per gallon less than the 2008 peak price). But with a Democrat in the White House, network journalists haven’t been making that yearly comparison in their reports – and they’ve been much less interested in discovering the factors inflating gas prices.

Higher Prices for Summer Still Causing ‘Pain’

According to historical data from the U.S. Department of Energy’s Energy Information Administration, U.S. regular conventional retail gasoline prices were just over $4 a gallon one year ago, and went on to top out at $4.11 a gallon by mid-July. Then prices took a precipitous plunge over the next six months and fell to $1.59 by year’s end.

Since bottoming out, the average price for a gallon of gas has rallied back to over $2.60 a gallon, and the network broadcast media haven’t hesitated to remind viewers how bad “rising pain at the pump” feels.

“And now to your wallet and rising pain at the pump,” NBC’s Ann Curry said on the June 15 “Today.” “This morning the national average for a gallon of regular unleaded gas is up to $2.67. That is a 37-cent increase in the past month and the highest that they've been since last fall.”

ABC’s Dan Harris, in a gas price segment that aired on June 10, explained that although these gas prices weren’t as high they were a year ago, they presented a threat to a “fragile” economy.

“After peaking over $4 a gallon last summer, prices mercifully swooned all the way down to $1.61 a gallon at the end of last year,” Harris said. But now, with gas prices rising six weeks in a row to more than $2.60 a gallon, economists say these costs could threaten a fragile economic recovery. Just look at this graph. You can see that as gas prices have gone up in recent weeks, consumer confidence has gone down.”

Before this year, the media consistently complained about rising gas prices and even predicted prices would climb to $7 a gallon. In 2005, the networks emphasized rising prices or “high” prices 79 percent of the time despite roughly three weeks of falling prices. In 2006, the media continued that theme after 35 straight business days of declining prices. As prices climbed to records in 2008, price predictions became inflated and CBS insisted that “high gas prices are here to stay.”

Less Scrutiny of Price Influences Now

Although the media have speculated about the slight rise in prices the market has dictated recently, they’ve been far less interested in the influences of today’s prices than a year ago.

A year ago, the media were looking at every possible way these prices could be engineered lower. One possibility – go after the speculators, as both CBS and ABC did on June 23, 2008.

“There’s no doubt speculation plays a role in the skyrocketing price, but how much?” ABC correspondent Ryan Owens said June 23. “Experts say if it were just simple supply and demand a barrel would cost $75. Today it closed north of $135.”

CBS even assigned its chief investigative correspondent Armen Keteyian to a story questioning the merits of the speculative oil trade and labeled it as “dark market,” on its June 18, 2008 “Evening News” broadcast.

One exception was CBS correspondent Dean Reynolds’ gas price segment on the “CBS Evening News” on June 10.

“Nationally since December, the average price of a gallon of regular gas has risen a dollar, a 62-percent increase – the largest over a six-month period in history,” Reynolds said. “And while gas prices go up every spring as refineries switch to more expensive summer blends and consumption increases because of vacation driving, demand right now is flat. So why are prices rising?”

According to Reynolds, the price jump was based on two factors: A weaker dollar and optimism about economic recovery, which suggests demand will be renewed. Since oil is priced in dollars, it creates a perception the price of oil is increasing, whereas the reality is the value the dollar is declining.

“For one thing, the dollar is weak, and that means everything it buys, such as oil, costs more,” Reynolds said. “And investors are driving up the price further by buying more oil as they see signs of an economic recovery and the potential for increasing demand. Of course, the rising price could stall the very recovery they’re anticipating, so not everyone is jumping in.”

You’re Worse off Now than You Were a Year Ago

Unlike this time in 2008, references to the previous summer have been an exception more than the rule. Throughout the summer of 2008, reporters tried to show how much worse things had become in just a year.

Tom Costello reported on the effects of gas prices by using traffic as a gauge on the June 20, 2008 “Today” show. According to Costello, the effects of higher gas prices showed a decrease in travel from the previous year.

“Americans drove 1.4 billion fewer highway miles in April than they did a year earlier; so far this year, 20 billion fewer miles traveled,” Costello said. “Total vehicle miles down nearly two percent. That's the first pull back since the oil crisis of the '70s and '80s. Meanwhile, demand for gas appears to have peaked last year. So far this year, deliveries down two and a half percent, the first drop in 17 years. At $4.20 a gallon, many Americans have reached a pain point.”

And ABC “Good Morning America” co-host Chris Cuomo used the “last year” comparison as a talking point to attack oil company executives on the day they had to go before Congress.

“Congress is calling all the oil companies on the carpet today," Cuomo said on the April 1, 2008 “GMA.” “Lawmakers want to know why big oil needs billions in tax breaks while posting record profits of $123 billion. Consumers want answers too. Gas now runs $3.29 a gallon, up three cents from last week and 58 percent higher than last year. Oil executives argue they need tax breaks to expand production.”

Iran Unrest: A Non-Issue?

Energy price reporters aren’t just treating financial market factors differently, but geopolitical issues as well. In 2009, with a Democrat president in charge of foreign policy, factors such as the turmoil in Iran that may cause prices to change have drawn less attention. In July 2008, NBC News warned gas prices would to $300-400 a barrel if Israel attacked Iran.

But with the exception of Fox Business Network’s Eric Bolling June 19, the events in Iran haven’t been examined in terms of their potential impact on gas prices and the economy. CNBC’s Jim Cramer said the market was smart enough to have already priced it in.

North Korea, Syria – I mean these are places when they always have elections, there’s always a couple of people who don’t vote for the right guy,” Cramer said on June 15. “But I think the price of oil is going to tell you exactly how everything is going to play out in Iran, which is it’s much ado about nothing.”