The Wall Street Journal published an op-ed pushing for a lift on a decades-old ban on crude oil exports without disclosing that the authors' work was funded by the oil industry, which stands to benefit from its claims.
A Wall Street Journal op-ed by the lead authors of a study for the consulting group IHS Inc. argued that the Obama Administration "needs to lift the ban on oil exports." The co-authors advanced their report's claims that ending a 41-year-old ban on crude oil exports would spur domestic oil production, resulting in lower gasoline prices and fueled job creation. However, the Journal did not disclose that this study, titled U.S. Crude Oil Export Decision: Assessing the Impact of the Export Ban and Free Trade on the U.S. Economy, was funded almost entirely by oil and gas corporations, including industry giants ExxonMobil, Chevron, Chesapeake Energy, Devon Energy, and ConocoPhillips:
This research was supported by Baker Hughes, Chesapeake Energy, Chevron U.S.A., Concho Resources, ConocoPhillips, Continental Resources, Devon Energy, ExxonMobil, Halliburton, Helmerich & Payne, Kodiak Oil & Gas, Nabors Corporate Services, Newfield Exploration, Noble Energy, Oasis Petroleum North America, Pioneer Natural Resources, QEP Resources, Rosetta Resources, Weatherford and Whiting Petroleum.
In fact, several top business media outlets repeated the report's boldest claims when it was released in late May -- like that it would lead to $746 billion in investment into the U.S. economy or save U.S. motorists $265 billion by 2030 -- without disclosing its industry funding. CNBC, Bloomberg, USA Today's Money section, and the Wall Street Journal all covered the study with no mention of the oil giants that have a financial incentive to lift the ban on crude oil exports because it would allow them to sell more of their oil at the higher world price. USA Today even noted that two of the report's funders, ExxonMobil and ConocoPhilips, have been pushing for the White House to lift the ban -- but did not disclose their investment in the IHS report. Some outlets got it right: Reuters and conservative news site Breitbart (surprisingly) did mention that the IHS study was funded by oil and energy companies.
The crude oil export ban was enacted in the 1970s in response to an Arab oil embargo, which shocked the U.S. economy. The Center for American Progress explained that lifting the ban would "enrich oil companies," but "could increase domestic gasoline prices and reduce our energy security":
The increase in domestic oil supply, combined with the decline in demand, has also led to a significant decrease in foreign oil imports. These changes make us less vulnerable to a sudden foreign oil supply disruption that could cause price spikes. Unfortunately, the oil industry would squander this newfound price stabilization and energy security by lifting the ban on crude oil exports. Doing so would enrich oil companies by enabling them to sell their oil at the higher world price, but it could increase domestic gasoline prices and reduce our energy security.
Even Goldman Sachs supports keeping the ban - at least until the U.S. market reaches "saturation" where it's producing more oil than it can consume -- because it benefits the economy by keeping refining for U.S. workers.
Lifting the ban on crude oil exports would also be catastrophic for the climate, according to the Sierra Club. Oil Change International published a study finding that keeping the ban on crude exports is imperative for the United States to achieve its climate goals.
The Journal's failure to disclose the background these op-ed authors shared with the oil industry falls in line with a repeated lack of transparency about who the newspaper publishes. In 2012, the Journal was found to have "regularly failed to disclose the election-related conflicts of interest of its op-ed writers."
Image at the top obtained via Flickr user roseannadana with a Creative Commons license.