All three broadcast networks provided extensive coverage of
President Clintonís decision, announced on September 22, to release
30 million barrels of oil from the nationís Strategic Petroleum
Reserve, and all three of their evening newscasts dealt with the
fact that Clintonís action had political overtones. "When you fiddle
with oil prices, or attempt to fiddle with oil prices, in the middle
of a presidential campaign, youíre going to get skepticism at the
very least," ABCís Peter Jennings explained that night on World
while most reporters seemed to understand that political motivations
were in play (it is the fall of an election year), some seemed
ill-equipped to deal with the factual questions that underlay each
sideís arguments. "[Vice President Gore] was asked the question
today in his first press conference in more than two months whether
this crisis, if it is a crisis, really rises to the level of what
the strategic reserve was originally designed for," ABCís Terry
Moran related on September 22. "He said he helped write the
strategic reserve, that he was involved in the lawmaking there and
that, in fact, this is the kind of emergency that it was designed to
Moran seemed completely unaware that Gore was not, as he implied,
a member of Congress in 1975 when the Strategic Petroleum Reserve (SPR)
was authorized and initially funded. Gore was first elected to serve
in the House of Representatives in November, 1976. Instead, Moran
appeared to simply accept Goreís version "that he was involved in
the lawmaking" as evidence that the Vice President was an expert on
the original purpose of the SPR.
Contrast Moranís inexperience with NBCís Tim Russert, who
interviewed Bill Richardson, the Secretary of Energy, on the
September 24 edition of Meet the Press. Russert knew that the
oil reserve couldnít legally be tapped simply to lower prices; the
relevant provisions of
the law focus on supply interruptions, emergency situations or
energy supply shortages. Richardson acknowledged as much at his news
conference on September 22, but Russert asked him again: "So, this
is not about price. Itís about disruption of supply?"
"This is about disruption of supply," Richardson agreed. "This is
to increase the supply. We are not trying to manipulate prices."
Then, Russert asked Richardson about comments made by his two
bosses: "You say itís about supply, not price. And, yet, the Vice
President and President seem to contradict that. They keep
emphasizing price." He showed videotape of Gore speaking on Thursday
("In the face of rising prices for gasoline and home heating oil, I
support oil releases from our national Strategic Petroleum Reserve")
and Clinton speaking on Saturday ("Families shouldnít have to drain
their wallets to drive their cars or heat their homes").
"Gore/Clinton keep saying itís about price," Russert told
Richardson who, faced with the fact that his boss ó the man who
actually authorized the oilís release ó had stressed the price
benefits to consumers, lamely responded that "all of this is
consistent." But Russert had effectively revealed to viewers the
fact that Richardson was mouthing a legalistic line about
"potential" shortages because such an argument was needed to conform
with the statutory rules on SPR withdrawals.
Next, Russert placed the amount of oil that would be released to
the market in its proper context. "The United States uses 20 million
barrels a day," he told Richardson. "Yes," the Secretary agreed.
"Youíre releasing 20 million barrels total. That would last 36
hours," Russert calculated. He could also have said that the
released oil would amount to less than one percent of the total U.S.
consumption from October 1 to March 31, when most Northerners would
be heating their homes.
Richardson did not dispute the figure, but insisted that "the
objective, Tim, is to produce, through refining capacity, from 3
million to 5 million barrels more of distellate, of home heating
"But the refineries say theyíre working at full capacity and this
will make no difference," Russert responded.
"No, theyíre at 96 percent," Richardson countered, adding, "we
think the refiners can do this." Such a conclusion apparently
depends on what your definition of "full" is.
The refinery question reflects a key issue thatís been missing
from much of the coverage. After all, Americans consume refined
products such as gasoline, heating oil or diesel fuel; crude oil
isnít worth much without available refinery capacity. As the economy
has grown over the past two decades, fuel consumption has naturally
increased, but there has not been a corresponding increase in
refinery capacity, which will eventually be necessary to meet the
structural increases in demand. But "no new [refinery] plants have
been built since the 1970s because of a spate of new rules,"
Investorís Business Daily reported on September 22.
Russert concluded by heading straight for the bottom line. "Will
consumers still pay about 30 percent more in home heating this
winter," he asked. Richardson vaguely said that "we expect prices
slightly to go down."
"The Secretary of the Treasury said two cents a gallon at most,"
Russert continued. "And this is why itís being seen as a political
ploy: youíre only using 30 million barrels, which is a day and a
halfís worth; it is not going to drop the price all that much,
unless you can guarantee this morning to consumers that their home
heating is not going to go up 30 percent."
"What everybody wants, Tim, is moderation in oil prices,"
Richardson finally said. "The problem is increased demand and an
exceedingly high price of crude. If we moderate those prices, if we
improve the level of crude oil stocks in the world, in our country,
and home heating oil stocks in our country, the effect is a positive
one. The first one for us, to protect our consumers from a possible
By the conclusion of the interview, Russert had effectively
unmasked the decision to release oil as largely, if not completely,
rooted in political calculation. As an interviewer, Russert had
prepared himself for the interview by discovering the past law
governing the Strategic Petroleum Reserve, the average daily U.S.
oil consumption, current refinery usage, and projections of heating
oil prices this winter.
Business reporters typically have such information available, or
know which analysts to call upon for expertise. Consequently, most
of the discussion of this issue on CNBC, CNNfn, and other business
news outlets has gotten it right from the very beginning. On
September 25, for example, CNNfn correspondent Greg Clarkin showed
an oil industry analyst, Fadel Gheit of Fahnestock & Co., who
reminded viewers that Clintonís action would mean little over the
"It will give the politicians what they, what they believe the
public wants to hear, and that is lower oil prices," Gheit
explained. "But itís a Band-Aid. Itís a good solution in the near
term, but it really doesnít get us anywhere in the long term."
The smart money apparently agreed with Gheit, as Clarkin noted
that "brokerage houses told clients to buy oil stocks on weakness,
saying the new oil does little to change the tight supply and demand
Political journalists, though, are often put in the position of
covering market issues, such as the oil price increases, without the
resources typically available to full-time business correspondents.
Kudos to Tim Russert, for challenging Richardson with the facts and
offering viewers an informative look at the issues surrounding the
Strategic Petroleum Reserve.