The government’s fingerprints were all over the recent
astronomical price increases in gasoline in Milwaukee and Chicago,
but you wouldn’t necessarily know that from watching national TV
news coverage of the issue. In recent days, the networks have
contentedly repeated assertions from the Environmental Protection
Agency that its new clean air regulations — the ones which took
effect immediately before the surge in prices — had little to do
with the price increases.
national networks had hardly touched the story when EPA officials
began pointing fingers at the oil industry in mid-June, but CBS’s
Cynthia Bowers told viewers what was really going on. She reported
on the June 7 Evening News that "new EPA guidelines went into
effect last week requiring 16 cities with poor air quality to sell
cleaner-burning reformulated gas. It costs more to produce, and with
supplies tight, prices are soaring."
By the time Bowers had filed her report, the EPA’s role was well
known locally in Chicago and Milwaukee, where the rising cost of gas
had been a huge story for weeks. In late May, Wisconsin officials
had requested that the EPA grant their state a waiver from the
reformulated gas requirement, an appeal which the EPA rejected (and
would later reject again in mid-June when prices were even higher).
With Midwestern tempers flaring, the EPA made a stab at damage
control on June 12, insisting that their rules shouldn’t account for
more than a few cents per gallon. EPA spokesman Robert Perciasepe
landed soundbites on all three evening news broadcasts. NBC
Nightly News showed him saying that "we see no good explanation
as to why these differential prices exist in the Midwest and
particularly Milwaukee and Chicago," while both ABC’s World News
Tonight and the CBS Evening News quoted Perciasepe saying
that "our analysis shows adequate supply and the cost of producing
the fuel doesn’t, isn’t anywhere near the costs, the prices we’re
seeing at the pump."
After that, the big three national networks — encouraged by a
government bureaucrat — turned their attention toward Big Oil,
dropping terms like "price gouging" and "profiteering," while
ignoring independent experts who argued that the clean air rules
were too onerous.
The numbers tell the story: From June 1 to June 12, the ABC, CBS,
CNN and NBC evening newscasts ran four stories which spent more than
30 seconds discussing the EPA’s rules as a probable cause. From June
13 to June 26, those same newscasts aired only two such stories,
compared with 16 that promoted the government’s idea that "price
gouging" was at fault.
The networks began portraying the EPA as the price police, not
the pollution police. "The EPA wants to know why the price of
gasoline in so many parts of the country is as high as it is," Peter
Jennings intoned on June 12. "The EPA is on the case because cleaner
burning gas may be an issue, but so might price gouging."
While oil industry spokesmen continued to protest their innocence
in soundbites, reporters stopped suggesting that the clean air
regulations were to blame and started looking for the government to
find the real culprits. "The EPA suspects price gouging," ABC’s Dean
Reynolds warned on June 12, "and agents were out looking for it
today." In the same vein, "The White House has now put the oil
industry on notice," stated CBS’s Bob Orr on June 12. "If any
evidence of price gouging surfaces, regulators will come down hard."
If any evidence surfaces? There’s already quite a lot of evidence
that the regulators themselves are at least partly to blame. Every
day, the American Automobile Association (AAA) surveys more than
60,000 service stations to track gas prices across the nation.
Here’s how the consumer group assessed the situation in their June
"The current survey shows the Great Lakes region as having the
nation's highest gas prices. Great Lakes prices have been impacted
by huge supply problems. Key pipelines in the Detroit and Chicago
areas have been interrupted in recent weeks," AAA reported. "Major
cities mandated to use the new Phase II environmental gasoline have
had the biggest run-ups in price, and other cities served by the
same refiners and distributors that are supplying the new gasoline
have also seen big price increases. In addition, demand for gasoline
continues to be strong and is up more than four percent over last
In mid-June, AAA called on the EPA to suspend its clean air rules
for 90 days, to provide relief for motorists and time for refiners
to build up supplies of reformulated gas. Network evening news
coverage of the request: zero stories.
A Congressional Research Service study released on June 21 — and
rejected by the EPA — determined the clean air requirements had
increased pump prices by about 25 cents per gallon in Milwaukee and
Chicago, the cities required to use a unique gasoline-ethanol
mixture. The report attributed another 25 cents per gallon to
pipeline problems that plagued the Midwest.
The author of that study, economist Lawrence Kumins, told the
Milwaukee Journal Sentinel that the problem was with the
EPA-mandated gas. "It’s difficult stuff to make. There’s a limited
call for it. It’s difficult to transport, and there’s a shortage of
transportation capacity," Kumins told the newspaper. "Then you have
to factor in a fundamentally tight crude oil supply underlying the
whole situation." Network coverage: one mention on ABC’s World
News Tonight, zero coverage on the other networks. (See the June
23 CyberAlert for details.)
The networks aren’t obligated to buy into the concept that the
government’s regulatory schemes have contributed to consumers’
problems, of course. But viewers should have been exposed to the
factual evidence — such as that provided by the CRS study and by AAA
— that cast doubt on the government’s storyline.
But, as another critic of unnecessary and counter-productive
government regulation, Jerry Taylor, the director of natural
resource studies at the Cato Institute, put it in
recent report, "Demonizing the oil industry, however, always
pays more dividends than telling the messy and complicated truth
about how policy chickens come home to roost."