Reporters asking the wrong questions: Avoid rumors, follow the money when covering the oil business

The most useful diagramming of how a rumor spreads was provided last week by the Sacramento Bee's "Capitol Alert" under the headline, "Slow news day? Old, new media push Schwarzenegger/Obama rumor."

Reportedly, Gov. Arnold Schwarzenegger said on Sunday morning TV that he would be open to serving as "energy czar" in an Obama administration -- and many new and old media ran with this -- even though he actually said no such thing. All he said is that his "acting" and bodybuilding days were over, adding: "I've committed myself to be a public servant, because as I said, this country has given me everything."

So, in a clear effort to dwell in the hypothetical realm, ABC "This Week" host George Stephanopoulos, who attributed the original report to Newsweek, went on to ask, "So if he [Obama] were president and he called, you'd at least take that call."

Schwarzenegger responded: "I'd take his call now and I'd take his call when he's president, anytime. But remember that no matter who is president, I don't see this as a political thing. I see this that we always have to help no matter what the administration is."

I too am committed to public service AND not increasing California's deficit. I also would take the president's call now and later. But my role here is to point out, again, that this is another distraction from real issues even though getting the current governor out of Sacramento is not altogether a frivolous consideration.

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On the energy front, Schwarzenegger is against the idea of renewing or expanding offshore drilling for oil, something which has gained more traction in the world of nearly $5-a-gallon gas.

"It just doesn't sound like a bad idea," explained Robert Kaufmann on NPR's "Talk of t he Nation" this past Friday. ("Exploring Realities Of Offshore Oil Drilling") "That's the genius of political spin."

Kaufmann is the head of Boston University's Center for Energy and Environmental Studies.

"More oil's better," Kaufmann said, in explaining what most people reflexively fall back on and why there is seemingly more support for drilling in the Outer Continental Shelf. "The question is, what are your alternatives?"

This, Kaufmann said, is a question that reporters are not asking enough because they really don't understand to ask that and other challenging20questions because they're, well, sheep?

"They're asking the wrong question because they've been guided by the political dialogue rather than what's really happening in the market," Kaufmann said on NPR. He offered help.

Kaufmann urged listeners, presumably some of them could have been reporters, to visit Facsnet.org where there is archived a tele-seminar Kaufmann gave to reporters to help them navigate the oil issue. "Kaufmann offered insight on meeting global oil demand," the site says. He really has been doing a lot more than that.

He said on NPR that the U.S. producing more oil would be "postponing the problem for a couple of minutes." Kaufmann adds: "There's nothing we can do in the United States to [increase the global pool of oil] in a significant way."

Pitting the idea of drilling immediately for more oil against environmental concerns is not a relevant argument with respect to increased OCS production, Kaufmann said. The process of "deep drilling" -- going down 28,000 feet below the surface to get 90 percent of the oil -- would necessitate an investment of "$100 to $150 billion to drill a single well in this environment."

Take a look at Kaufmann's presentation on the Web or listen to the radio show and you'll learn, among other things, why it'll take a decade or more to bring offshore oil into the mix and why reporters, in covering the oil industry need to follow the money.

"Oil companies produce profits, not oil," Kaufmann explained. "They will only produce oil as long as it is profitable. They'll do other things if that's more profitable."

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These stories popped up the week that Al Gore offered a challenge to the nation to get off carbon-based fuels in 10 years. (Gore was on "Meet the Press" this past Sunday) and a little after lifelong oilman T. Boone Pickens offered wind power as a plan, saying "we can't drill our way out of this."

A piece in the Los Angeles Times a couple of weeks ago by columnist David Lazarus also made the point that the oil biz is not really about oil:

"Mr. Pickens is a very intelligent man," said Don Martin, vice president of 20Enmark Energy, a Texas oil and natural gas company. "People in the oil and natural gas business are rich for a reason. They know where the money is."