Gas price coverage is up and down

Henry Banta writes on the Nieman Watchdog site that business media coverage of higher gas prices shows a gap between sophisticated coverage and what’s reported in the “popular media.”

Banta wrote, “As any reader of the Wall Street Journal knows, there is information available. And there are other good sources; Steven Pearlstein of the Washington Post consistently provides first rate analysis.Â

“But the popular media, network television in particular, abandon all pretense at serious journalism when dealing with gasoline prices. What passes for coverage is usually a microphone stuck in the face of a motorist who confirms what we all know, prices have gone up. This is followed by a brief interview with an expert who invokes the notion that it is all a matter of supply and demand, as if that ended the discussion. This is followed, no doubt for sake of ‘balance,’ by someone labeled a ‘consumer advocate’ who invokes the even more useless notion of ‘price gouging.’ There the matter is left to rest. Even ‘in depth’ coverage rarely gets beyond further interviews with experts from the window-shade-school of economic analysis: this number will go up; that one down; this one down; that one up.

“What is lost in this ritual is some basic journalism. There are some simple common sense questions that are not asked. Start with the question of supply. Gasoline prices are up because refineries do not have the capacity to meet demand. It is frequently pointed out that no new refinery has been built since the late 1970s (implying that the problem is the fault of environmentalists.) But this fact alone raises a host of questions. Certainly gasoline demand has grown considerably since the late 1970s. Until now the industry has been able to meet demand growth with the expansion of existing refineries? Why not now?

“Granted Hurricane Katrina did considerable damage to the refining industry, but Katrina was almost two years ago. Has not there been time to line up more gasoline imports?  Surprisingly, the head of the Energy Information Agency recently told Congress that imports were down. If refining capacity was a problem, why were imports down?  If, as has been occasionally suggested, there is a worldwide shortage of refining capacity, why is the explosion of refined product prices limited to the United States?”

Read more here.