"[L]ive from an oil rig": NBC, MSNBC aired multiple reports on offshore drilling without explaining "environmental concerns" or disclosing GE's drilling connection

››› ››› BRIAN LEVY, JEREMY SCHULMAN, JOHN DELICATH, MARK BOCHKIS, DEEKSHA SHARMA, DIANNA PARKER & DAVE SALDANA

NBC's Today and Nightly News and MSNBC Live aired segments in which correspondent Janet Shamlian reported live from an offshore drilling platform in the Gulf of Mexico. But while two of Shamlian's reports included quotes from a Chevron spokesperson, none of her reports included an interview with or quote from environmental organizations or explained the "environmental concerns" that Shamlian acknowledged exist. Further, neither Shamlian nor the hosts and anchors disclosed that General Electric, which owns 80 percent of NBC Universal, also has an affiliated business unit that is invested in the acquisition and production of oil and natural gas and another that is a major supplier of equipment and services for the offshore drilling industry.

In the midst of the debate over lifting the federal moratorium on offshore oil and gas drilling, NBC's Today and Nightly News, as well as MSNBC Live, aired segments on June 26 in which NBC correspondent Janet Shamlian reported live from a drilling platform in the Gulf of Mexico owned by Chevron Corp. But while two of Shamlian's reports included quotes from a Chevron spokesperson, none of her reports included an interview with or quote from any environmental organizations. And though Shamlian acknowledged the existence of "environmental debates" in one report and in another that "[m]any people believe there are environmental concerns," Shamlian did not explain those concerns. Further, neither Shamlian nor the anchors and hosts of the broadcasts on which her reports aired mentioned that General Electric Co., which holds a controlling interest in NBC Universal, has an affiliated business unit that is invested in the acquisition and production of oil and natural gas and another that is a major supplier of equipment and services for the offshore drilling industry. Shamlian's reports come after MSNBC has repeatedly failed to disclose guests' lobbying ties to oil and gas companies. As Media Matters for America noted, MSNBC has hosted current and former energy industry lobbyists in recent weeks to discuss energy policy, including offshore oil drilling, without disclosing their work on behalf of oil and gas clients.

Both of Shamlian's reports on NBC quoted from interviews with Chevron employees, including Chevron spokesman Mickey Driver. On Nightly News, Shamlian noted that offshore platforms like the one she was reporting from "are at the center of the debate over energy in this country" and told viewers: "Besides the Gulf, there are reserves off the Atlantic and Pacific coasts, but no one knows how much there is, and there are political and environmental debates. So even if exploration started next year, it could be a decade before production." NBC then showed video of Driver saying, "We haven't even taken an inventory here in the United States of what we have. So much of our resources are off-limits to even look." At no point during the segment did Shamlian or NBC provide a statement from an environmental group or any other opponent of offshore drilling, nor did NBC indicate it had attempted to obtain such a statement. Shamlian did not elaborate on the substance of the "environmental debates."

On Today, Shamlian reported: "Suppliers like Saudi Arabia say speculators are pushing up the price of oil, while others say it's all about supply and demand. In these Gulf waters, companies believe there's plenty of supply yet to be tapped." She added: "And that's the discussion now under way. Should more of these waters -- not just here in the Gulf but off the coast of Florida, California, and Alaska -- be opened to production facilities like this and exploration? Those who work in the industry, Meredith [Vieira, co-host], say the surface here has yet to be scratched." During that segment, Shamlian provided a quote from Sen. John McCain in support of lifting the offshore drilling moratorium and a quote from Sen. Barack Obama -- who Shamlian reported "does not" support lifting the moratorium -- stating that "Senator McCain wants to open up our coastlines to drilling, a proposal that his own top economic adviser admitted won't provide any short-term relief at the pump." But despite airing three quotes from Driver, Shamlian and NBC provided no quotes from environmental groups during the report and gave no indication that they had attempted to obtain one.

Shortly after the report from the drilling platform on Today, co-host Matt Lauer asked CNBC anchor Erin Burnett what lifting the moratorium on offshore drilling would "actually mean to consumers." Burnett responded:

BURNETT: Passionate debate, and we have run a lot of those numbers. You add it all together, seven to 10 years to even get it, Matt. So it's not going to happen overnight. But if we did, a couple of years at current rates of consumption from offshore, a couple years from the Alaska National Wildlife Refuge, the holy grail would be all that rock in the middle of the country, the shale. Hard to get, but that would actually make a difference.

MSNBC Live aired three live reports with Shamlian as well as a recorded report from her in the 9 a.m. and 4 p.m. ET hours of the show. During a live report in the 11 a.m. ET hour, Shamlian stated: "[A]s you know, it's a hot debate from Main Street to Washington. Many people believe there are environmental concerns here, that we shouldn't be exploring in some of these waters. And the company has allowed us to come here and take a look at actually what they do, perhaps in part to justify some of the expenditures, or rather, the profits that these companies are coming up with." But while Shamlian acknowledged the existence of "environmental concerns," she failed to explain those concerns. Shamlian did, however, report: "Ninety people come here for two weeks at a stretch. They work as engineers, cooks, cleaners. The accommodations -- we spent the night with my team -- are a little bit like a modest cruise ship, if you will. I had a roommate, and it's just been a really interesting slice to see what actually happens out here, how the oil comes up from the floor about 3,000 feet below, is processed here, and then goes back down and travels by pipeline to the shore, and then is in your gasoline station within about a week."

Shamlian and the hosts and anchors of the broadcasts that ran her reports also failed to disclose the fact that General Electric -- which owns 80 percent of NBC Universal, the producer of Today, Nightly News, and MSNBC Live -- has affiliated business units that are invested in acquiring and producing oil and natural gas and that supply equipment and services for the offshore drilling industry. NBC Universal took a controlling stake in MSNBC in 2005.

GE has an "Energy Financial Services" unit as part of its "GE Infrastructure" operating segment. According to a June 2 GE press release:

Since 1991, GE Energy Financial Services' Oil and Gas team has provided more than $3 billion in partnership equity for its independent private and public oil and gas partner-operators in the United States. Based in Stamford, Connecticut - with offices in Houston and Denver, Colorado -- the Oil and Gas unit is active in all major onshore basins and in shallow water Gulf of Mexico. Its 21 partnership investments own interests in 8,200 wells and produce an estimated 21,350 barrels of oil equivalent daily.

The "Oil & Gas" section of the GE Energy Financial Services website features a list of "[r]epresentative transactions," including a $70 million limited partnership with F-W Oil Exploration. According to an August 22, 2005, GE press release about the deal:

GE Commercial Finance Energy Financial Services announced today it has invested, for the first time offshore, $70 million in a limited partnership with F-W Oil Exploration L.L.C. to acquire and produce natural gas and associated liquid hydrocarbons in the Gulf of Mexico. Energy Financial Services will also finance the completion of a 48-mile pipeline system to transport gas from F-W's gas fields in the South Padre Island area.

[...]

The transaction represents a new avenue of growth for GE's Energy Financial Services unit. "Investing in offshore reserves significantly increases the opportunities for expanding our oil and gas portfolio," said John Schaeffer, Managing Director of Oil and Gas at Energy Financial Services. "This transaction also allows us to apply our technical and financial expertise in pipelines to bring more gas to an increasingly supply-constrained market."

GE's 2007 annual report states that its Energy Financial Services unit took in more than $2.4 billion in revenue and $724 million in profit in 2007.

GE also has an "Oil & Gas" unit as part of its "GE Infrastructure" operating segment. According to its website, GE Oil and Gas "provide[s] integrated solutions including engineering, manufacturing, packaging, installation and startup, and full services for the oil and gas industry." The website lists a number of "offshore production platform" technologies and states that "GE Oil & Gas can provide optimum technical solutions and the project management experience needed to maximize production while helping customers to meet or accelerate their 'First Oil' date." GE Oil and Gas' website further states:

The Offshore segment is defined as all equipment used in offshore drilling and production equipment that is on the waters surface. Offshore facilities are becoming more diversified as a result of vast differences in water depths and field characteristics. We offer an extensive portfolio of proven systems and products used on fixed platforms, jackups, floating drilling rigs, TLP/Spars and FPSOs. The Offshore Segment includes subsea wellheads, surface wellheads and surface production equipment used from these platforms.

A GE Oil and Gas publication touting its "Offshore Solutions" includes an image labeled "Fixed Platform -- Gulf of Mexico F606 Compressor." GE says its floating platform systems are "used on >50% of all" floating production platforms. In addition, Reuters' company profile of General Electric reports:

Oil & Gas supplies technology-based equipment and services for the entire oil and gas industry -- from drilling and completion to production, transportation, refining, processing, petrochemicals and plastics. The Company offers a range of surface and subsea drilling and production systems, equipment for floating production platforms, compressors, turbines, turboexpanders and industrial power generation equipment.

GE's 2007 annual report states that its Oil and Gas unit took in more than $6.8 billion in revenue and $860 million in profit in 2007. The report also says:

GE's acquisition of Vetco Gray positions us to capitalize on nearly $50 billion of new oil opportunities in the next few years, accelerating an already fast-growth business. By combining Vetco Gray's subsea expertise with GE's technology and financial resources, we are now positioned to bid on much bigger and more complex production opportunities -- both on land and off-shore.

From the June 26 edition of NBC's Today:

MATT LAUER (co-host): And now to a special look at America "Over a Barrel." You know you're shelling out more and more for a tank of gas these days, but the question is why. Is it simply supply and demand, or is it something more sinister? We have three reports this morning -- live from an oil rig in the Gulf of Mexico; from China, where the need for oil is skyrocketing; and right here in New York -- with a look at who's profiting. Let's start with NBC's Janet Shamlian, who's in the middle of the Gulf. Janet, good morning to you.

SHAMLIAN: Matt, good morning. It's been called black gold, and this is its mining field. We are deep in the waters of the Gulf, about a hundred miles offshore on a floating oil and gas platform. And when people talk about offshore oil, this is exactly what they mean. Right now, about 3,000 feet below me, oil and natural gas are being brought up from the seafloor, processed on this facility, sent back down, and then pipelined to refineries in the United States, where that oil could be in your gas tank within a week.

[begin video clip]

SHAMLIAN: It rises from the Gulf like something out of Star Wars. This is the new frontier in the quest for offshore oil: deep-water exploration aboard production platforms. Genesis, a Chevron-owned facility, is pumping out natural gas and 8,000 barrels of oil every day.

DRIVER: This is the other end of the gasoline hose. This is where the gasoline comes from right here.

SHAMLIAN: Right here is 100 miles south of New Orleans and literally floating in 2,600 feet of water, pumping around the clock. Each barrel yields about 26 gallons of gas. Criticized for record profits, companies like Chevron say every dollar coming out is going right back in to the quest for more.

DRIVER: Chevron's spending $63 million every 24 hours on our exploration and capital budgets to find the new energy resources that we need.

SHAMLIAN: A promising discovery, called Tahiti, in the same region will start producing next year. They call it an "elephant field." It could yield a half a billion barrels.

DRIVER: The future's where we have access, and that's the key to the Gulf of Mexico. There's two things here. One, there's oil. And two, we have access.

SHAMLIAN: The Gulf produces more than a quarter of all oil produced in the United States. Oil companies would like to expand and search for even more. It's a hot topic from Washington to the campaign trail.

McCAIN: This is a way of bridging the gap between achieving where we are today and achieving independence from foreign oil.

SHAMLIAN: John McCain supports more drilling in these and other U.S. waters. Barack Obama does not.

OBAMA: Senator McCain wants to open up our coastlines to drilling, a proposal that his own top economic adviser admitted won't provide any short-term relief at the pump.

SHAMLIAN: Today, two-thirds of our energy is imported, and the international blame game over the cost of our oil is in full swing.

KING ABDULLAH OF SAUDI ARABIA: [speaking Arabic]

SHAMLIAN: Suppliers like Saudi Arabia say speculators are pushing up the price of oil, while others say it's all about supply and demand. In these Gulf waters, companies believe there's plenty of supply yet to be tapped.

[end video clip]

SHAMLIAN: And that's the discussion now under way. Should more of these waters -- not just here in the Gulf but off the coast of Florida, California, and Alaska -- be opened to production facilities like this and exploration? Those who work in the industry, Meredith, say the surface here has yet to be scratched. Meredith.

VIEIRA: All right. Janet Shamlian, thank you very much. Now we're going to go from the Gulf halfway around the globe to China. Of course, world demand for oil plays a huge part in how much you pay at the pump, and one of the reasons: emerging markets like China. NBC's Mark Mullen is Beijing. Good morning, Mark.

[...]

LAUER: And just real quickly, offshore drilling, lifting the ban. It's a heated debate in the presidential election. You did your homework. What would it actually mean to consumers?

BURNETT: Passionate debate, and we have run a lot of those numbers. You add it all together, seven to 10 years to even get it, Matt. So it's not going to happen overnight. But if we did, a couple of years at current rates of consumption from offshore, a couple years from the Alaska National Wildlife Refuge, the holy grail would be all that rock in the middle of the country, the shale. Hard to get, but that would actually make a difference.

LAUER: Expensive to get to.

From the 9 a.m. ET hour of MSNBC Live on June 26:

MONICA NOVOTNY (anchor): With record oil and gas prices threatening to send the U.S. economy into a recession, there's been a clamoring for solutions, including lifting a ban on offshore oil drilling. NBC's Janet Shamlian went straight to the source to learn more, an oil rig deep in the Gulf of Mexico.

[begin video clip]

SHAMLIAN: [inaudible] talk about offshore oil from the political campaigns and the White House. We've got a very unique vantage point this morning. We are deep in the Gulf waters, about 100 miles offshore on an oil and gas production platform. It's called Genesis. It's owned by Chevron. And really, this is the battleground when people are talking about offshore oil.

This facility, about 3,000 feet below me at the seafloor, is bringing up oil and natural gas, processing it here, sending it back down, then through pipelines to the United States. Oil companies and others are suggesting opening up more of the waters here in the Gulf, off of Florida, off of California for more of this type of development and exploration. This is kind of a unique platform. It's kind of a hybrid, meaning it has a drilling rig on board. You're seeing that now. The rig is used usually to dig wells. The wells on this platform are already dug. In this case, they are used solely for repair. It is a unique perspective here in the Gulf of Mexico of offshore drilling. Back to you.

From the 11 a.m. ET hour of MSNBC Live on June 26:

NOVOTNY: With record oil and gas prices threatening to send the U.S. economy into a recession, there's been a clamoring for solutions, including lifting a ban on offshore oil drilling. NBC's Janet Shamlian went straight to the source to learn more, an oil rig in the Gulf of Mexico. So Janet, how far out to sea are you?

SHAMLIAN: Good morning, Monica. Well, I think we're very far out. In fact, Craig, can you go around with me? Let's take a look in all directions. And do you see anything here, Monica? I think we're about 100 miles offshore from the coastline of Louisiana, which is that way. We're deep in the Gulf waters. We're aboard a floating oil and natural gas production platform called Genesis. And what's happening here about 3,000 feet below me is the focus of offshore oil right now. They are producing and harvesting oil and natural gas, and this is what many right now are proposing in other waters, off the coast of Florida, California, and Alaska. And as you know, it's a hot debate from Main Street to Washington. Many people believe there are environmental concerns here, that we shouldn't be exploring in some of these waters. And the company has allowed us to come here and take a look at actually what they do, perhaps in part to justify some of the expenditures, or rather, the profits that these companies are coming up with.

They say they're putting every dollar and cent back into production facilities just like this. It has been a really unique look for us. It is a 24-hour facility -- works around the clock. Ninety people come here for two weeks at a stretch. They work as engineers, cooks, cleaners. The accommodations -- we spent the night with my team -- are a little bit like a modest cruise ship, if you will. I had a roommate, and it's just been a really interesting slice to see what actually happens out here, how the oil comes up from the floor about 3,000 feet below, is processed here, and then goes back down and travels by pipeline to the shore, and then is in your gasoline station within about a week. Monica?

NOVOTNY: Wow. Looks fascinating. All right, Janet, thank you.

From the 12 p.m. ET hour of MSNBC Live on June 26:

CONTESSA BREWER (anchor): Oil prices are soaring today, up more than $3 a barrel, right around the $138 mark. From the campaign trail to the corner gas station, there's a debate over whether we should tap further into the United States' offshore oil resources. NBC's Janet Shamlian is getting an exclusive look in the Gulf of Mexico, about 100 miles south of New Orleans. Oh, it looks beautiful out there, Janet.

SHAMLIAN: Contessa, and the water is the bluest I've ever seen. But unfortunately, that's not in the cards for us here today. What we are doing is getting a great look at what's really on the front lines of offshore oil right now, a production facility. This is called Genesis. It's a deep-water facility. And what's happening about 3,000 feet below here, at the seafloor, is that they're harvesting oil and natural gas. And as you know, and as you mentioned, they want to open up waters, oil companies and others, in other areas, Florida, California, off the shore of Alaska, to do the exact same thing as we're seeing here in the Gulf.

We've had really great access over the past 24 hours. We spent the night here. This is a 24-hour operation. Right now, about 95 people are here. They work 12 hour shifts for two weeks at a time, and then they leave. Everything from cleaning the rooms to taking samples of the oil as it's coming up into this facility, processed, and then sent back down to the refineries offshore. Contessa?

BREWER: Janet Shamlian, thank you.

From the 2 p.m. ET hour of MSNBC Live on June 26:

CHRIS JANSING (anchor): Market alert. Take a look at what's been going on in the Dow. Two seventy-seven in the negative, 281 now. This is in response to oil futures soaring today on a forecast of sharply higher prices. Oil now above $140 a barrel. That surge after OPEC's president said oil prices could shoot past 170 bucks a barrel, before declining later this year. And these record oil and gas prices are threatening the U.S. economy and sparking political discussions about lifting a ban on offshore oil drilling. NBC's Janet Shamlian joins us live from an oil rig deep in the Gulf of Mexico. And Janet, explain to us exactly where you're at and what's going on there.

SHAMLIAN: Well, hello, Chris. And we are 100 miles off the shore of Louisiana, and you are looking at the oil and natural gas production platform called Genesis, in full operation right now as you can see behind me. A crew of about 90 people work around the clock to essentially mine natural gas and oil from 3,000 feet from below where I'm standing. This is a deep-water platform, and I want to show you something kind of interesting. This is oil that has come from two separate wells, just out of the ground within the last hour. This is from the A4 well and the A2 well. There are 12 wells on this platform. And look at the difference in these bottles. You turn them around -- this one is pure oil and will go on to a refinery. This one has a significant amount of water in it, and what they do on this platform is they separate the water from the oil. They treat the water here and put then the water back in the Gulf, and then send this oil on to a refinery by underground pipeline system. And something like this could be in a gas station within a week. But just the differences here in what they do. This is the work of an oil production platform.

And as you were saying, it is such a discussion point right now from Washington to Main Street as we decide: Should we open more of these waters to offshore drilling and oil exploration? This facility is owned by Chevron, and as you'd expect, they are very much in favor of more of this. Now, you know, they've been criticized for record profits. Their argument is they put every dollar back in. And they're showing us this facility because they say it's quite expensive to run. And it gives us a look at kind of the nuts and bolts of an oil production platform. This certainly is not the only one in the Gulf. It is one of the bigger ones. But by helicopter ride, we are an hour from New Orleans. And we saw these dotted all along our trip. And it's certainly timely, Chris, right now with all these discussions about whether we should open more waters off the coast of Florida, California, and Alaska.

JANSING: Yeah, and so many of us have talked over the years about our dependence on foreign oil. Exactly how much of our oil does come from where you are?

SHAMLIAN: Twenty-four percent of the oil used in the U.S. comes from the Gulf, and only the western Gulf is open for drilling and for exploration right now. And that is only -- I'm sorry -- 15 percent of U.S. waters, only 15 percent is available for drilling and exploration, and that's all here in the Gulf.

JANSING: All right, Janet Shamlian with a very cool assignment out there. An hour off the coast of New Orleans. Thanks so much.

From the June 26 edition of NBC's Nightly News with Brian Williams:

WILLIAMS: Because oil has become an issue this election season, now the discussion has turned, as you may know, to drilling for more of it, some of that off the shore of this country. To see how it's done, tonight, our own Janet Shamlian has traveled far out into the Gulf of Mexico. And tonight, she is on an offshore rig, where she now joins us live. Hey, Janet, good evening.

SHAMLIAN: Brian, good evening. This is the front line in the debate over offshore oil. We are deep in the Gulf on the floating platform Genesis, where about 3,000 feet below us, they are pumping up oil and natural gas in the quest for energy.

[begin video clip]

SHAMLIAN: It's a city unto itself. More than 100 miles offshore, in Gulf waters almost 3,000 feet deep, 90 people and 12 wells work round the clock.

SCOTT NIMELSTEIN (Chevron engineer): There's an outer pipe, then there's an inner pipe through which the oil, the natural gas, and the water flow.

SHAMLIAN: Producing 8,000 barrels a day.

This is oil, as raw as it comes, right out of the seafloor. They're now going to take it to the lab for some testing.

NIMELSTEIN: What they're going to figure out just from that one sample is how much water is actually mixed in with the oil.

SHAMLIAN: Platforms like Genesis are at the center of the debate over energy in this country. Besides the Gulf, there are reserves off the Atlantic and Pacific coasts, but no one knows how much there is, and there are political and environmental debates. So even if exploration started next year, it could be a decade before production.

DRIVER: We haven't even taken an inventory here in the United States of what we have. So much of our resources are off-limits to even look.

SHAMLIAN: Human resources are in constant demand here. Workers stay for two weeks at a stretch in jobs that aren't all related to energy. There are people to feed --

GARRETT GAMBERI (oil platform worker): This is my bunk right here.

SHAMLIAN: -- rooms to clean --

GAMBERI: We have a great time. You know, it's like a second family out here.

SHAMLIAN: -- and regardless of where you're working, it feels like an airport. Helicopters take off and land more than a dozen times a day, whirling like the debate over offshore oil itself. Where, as the sun goes down, the search goes on.

[end video clip]

SHAMLIAN: The only way to reach a spot like this is by helicopter. We came in on Chevron's, reimbursing them for our expenses, so that we could get a glimpse of what was happening here. Now, it's not an everlasting supply. This production platform has been in -- working for about a decade. Its engineers expect it only has eight years left, and it's likely the debate about offshore oil will go on far longer than that. Brian?

WILLIAMS: Janet Shamlian, far out into the Gulf tonight. Janet, thanks for that report.

Posted In
Environment & Science, Drilling
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MSNBC, NBC
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Today Show, MSNBC Live, NBC Nightly News
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Media Ethics
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