Wednesday, February 5, 2014
How Oil Industry Doublespeak has Influenced the Media
In an article by Sami Alnuaim, for example, he writes, "The observer of what is happening in some OPEC countries finds some undesired voices that question the successful, wise and balanced OPEC strategy which — in my opinion — was the main reason for the unprecedented oil prices stability in the global oil markets in the last few years."
Okay, he is a Saudi obviously defending Saudi Arabia's commitment to keep world oil prices high (which allows them to make maximum profit on their oil and not use it up too fast). But what about the rest of the writers on the oil market? What could they be thinking? In an article in Gulf Times, the author describes Saudi Arabia's heroic efforts: They are "willing" to increase production to "steady the market." How nice of them. World oil prices are high because of Saudi Arabia's leadership within OPEC (an illegal price-fixing cartel that has gouged the world for 40 years). And because some oil production in other OPEC nations temporarily dropped, Saudi Arabia "came to the rescue" to sell more of its oil.
In other words, the Saudis could have been producing more oil all along, but they haven't because they want the world's oil price to remain high. So the entire world has been paying extra for a product that the Saudis are making deliberately scarce, and now the Saudis are heroes for selling some extra oil at top dollar? This is doublespeak at its finest.
In an article in Trend, OPEC Secretary General Abdalla El-Badri is quoted as saying, "The Organization is making sure its consumer's needs are met. At the same time, spare capacity remains at comfortable levels. And we see these comfortable levels remaining for the foreseeable future." Comfortable levels of spare capacity? The Energy Information Administration says that in September and October 2013, "OPEC pumped an average of about 2.3 million barrels a day below its capabilities..." And that doesn't even count the oil fields they have deliberately left undeveloped.
El-Badri also was quoted as saying, "It is important that prices do not witness extremes — neither too high nor too low."
Yes, God forbid we have low oil prices. The whole world might experience an economic boom!
Okay, so these people might be excused because they're in favor of high oil prices. They benefit from them, of course, and need some way to justify it. But what about the language from this article in Business Week: "OPEC may have to reduce crude output next year (2014) amid increasing supply from producers outside the group..."
What an odd thing to say. Or what? The price of oil will come down! I want to grab the author by the lapel and yell, "Whose side are you on?!"
What about this one from Bloomberg? "Analysts at banks including BNP Paribas SA, Citigroup Inc. and Deutsche Bank AG predict that some members of OPEC, notably Saudi Arabia, will probably need to reduce output in 2014 to prevent a global glut."
A global glut? What a strange way to put that. Oh my God! Cheap fuel prices! Further in the same Bloomberg article is this little gem from Michael Lewis, head of commodities research at Deutsche Bank in London, saying: “Downside risks to the oil price may require OPEC to cut production to defend oil prices.”
Defend oil prices? I might expect that kind of language from someone rooting for OPEC. But from Deutsche Bank of London?
This perspective is common in writers all over the world. Here's one from South Africa's Business Day Live: "In the months ahead, new oil supply is expected to outstrip new demand, largely following improvements in output in Iraq and Libya. By the end of the first quarter of 2014, Saudi Arabia will likely have to reduce production to keep prices stable."
In other words, if Saudi Arabia doesn't reduce production, the world price of oil will drop. So "stable" is doublespeak for "high." Wouldn't that sound completely different without the doublespeak: "Saudi Arabia will have to reduce their oil production to make sure oil remains expensive for the whole world."
Everybody in the world — rich people and poor — have to pay double or more for their fuel because Saudi Arabia has bills to pay. They've got to pay off all their non-working citizens (which is most of them) so the people don't revolt against the dictatorship, and the Saudis have mosques and madrassas to build all over the world, spreading Wahhabi fundamentalism (Saudi oil money funds 90% of all Islamic institutions around the world), and they've got American lobbyists to pay (they have 100 full-time lobbyists in America promoting their agenda to our representatives). So yes, I guess Saudi Arabia will have to reduce its production to keep prices "stable."
I think if the language in the media was more straightforward, the level of outrage at this ridiculous situation we're in would reach a threshold and everything would change overnight. People would immediately grasp how pathetic it is that the greatest nation on earth hasn't solved the problem of oil's monopoly yet. It is clear to anyone with better than a tenth grade education that the answer to a monopoly is, of course, competition. And yet the icon of free markets — the United States — hasn't yet allowed a free market with the most important commodity on earth?
The media probably won't change. So it's up to us. Please take up this cause. Explain to your friends and family what is at stake here. You will know you've succeeded when they become outraged. Light them on fire and encourage them to light others on fire. We need to hit that threshold. Sooner is better than later.
Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom.