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The Intellectual Dishonesty of a "Consumer Watchdog"

I am having an internal debate with myself regarding which aspect Oil Watchdog I find most annoying: Their intellectual dishonesty, their reprehensible tactics, or just their plain old-fashioned stupidity. I can give lots of examples of each, but I really think it’s their dishonesty that bothers me the most. When a “consumer watchdog” stoops repeatedly to dishonesty and distortions to sell their story, it calls into question their true motivation. And when the press picks up these distortions and reports them as news, the credibility of the reporting organizations is damaged (as it should be when they don’t do their homework).

We see the tactics of Judy Dugan and her cronies all the time with politicians: One distorts the record of another, because they must win that election. Say and do whatever it takes, just get those votes. We have come to expect this from politicians. But why does Oil Watchdog employ the same kind of dishonest smear tactics? What is behind their lies, distortions, and just plain clueless statements? Let’s investigate some examples:

Reprehensible Tactics

For someone who constantly accuses Big Oil of misdeeds, Judy Dugan lives in one of the most fragile glass houses I have ever seen. Take a recent story:

Big Oil’s Big Bribes?

She starts out:

I absolutely can’t vouch for the truth of this story,

You know there’s a “but” coming. She doesn’t know if there is any truth to the story, but she’s going to repeat the smear anyway because it makes oil companies look bad:

…but it’s no wonder that people would believe it. A Bahraini publication claims that oil companies are offering Iraqi legislators $5 million each to vote for the Iraqi oil law, which would give the oil companies control of Iraq’s huge untapped oil reserves. Five million a head to a few dozen key “legislators” would be pocket lint out of this year’s record oil profits, wouldn’t it? It would probably be less than Chevron shelled out last year to sponsor Iraq”s commercial oil summit. And it would at least be more direct than the lobbying that Big Oil does in Congress, or its exclusive entree to the White House.

So there we have it. Judy Dugan – one time journalist for the Los Angeles Times and United Press International, reduced to spreading rumors. She has certainly fallen a long way.

Someone challenged her in the comments (which as I have previously reported, they now hide by default since not too many were in their favor):

Dugan should be ashamed of herself for spreading rumors. US firms are bound by the Foreign Corrupt Practices Act. It is illegal and immoral to bribe officials. Besides, one could believe a small bribe, but $5 million each? Such a large some of money would be difficult if not impossible for a public company to hide from the auditors and shareholders.

This rumor doesn’t pass the smell test.

Indeed. Shame on you, Judy Dugan. You have a lot of nerve accusing anyone else of “misdeeds.”

Intellectual Dishonesty

Here is a prime example of the intellectual dishonesty of Oil Watchdog:

Congress Must Act On Energy Prices

Santa Monica, CA — A weekly national increase of more than a nickel a gallon for regular gasoline has motorists paying a “speculative bonus” to hedge fund traders and others who have kept the price of crude oil near $100 a barrel, said the Foundation for Taxpayer and Consumer Rights (FTCR). With pump prices up nationally to $3.109 from $3.054 over the past week, at a time of year when prices are historically at their lowest, spring is all but certain to bring new record prices.

I will get to the dishonesty in a moment. But consider the previous paragraph. Gasoline prices have lagged far behind oil prices, and refining margins have been very poor as a result. The price of gasoline went up by a nickel, and the FTCR felt the need to issue a press release. What is interesting is their actions since this January 7th press release. Gasoline prices have actually fallen every week since then, and the national average is down to $2.98 as of this writing. What would you expect a non-biased organization to do after gasoline prices fell for 4 weeks in a row? Since they issued a press release when gas prices climbed by a nickel, did they issue another when prices fell by three times that amount? Answer: No, they didn’t – their press releases are anything by non-biased.

Now, here’s the dishonest piece:

“While the speculation-driven price of oil could be blamed for $3.00 gasoline in January, $4.00 gasoline in May will again be laid at the door of oil companies and refiners,” said Dugan. “Oil companies refuse to expand or even modernize their refineries, then every spring they blame their self-caused shortage of gasoline for price spikes. The economic effect of a price spike from $3.00 to $4.00 would be far more serious than a spike from $1.99 to $2.50, which seemed outlandish only a few years ago.”

I have lost track with the number of people who have commented and corrected them each time they have claimed that oil companies have refused to expand their refineries. Yet Judy Dugan, who has probably never even set foot in a refinery, continues to spout this lie. In fact, “armchair261”, who has been labeled as “a suspected shill for BigOil” and whose comments there have been censored (and reports that he was finally banned) challenged Dugan’s claim:

Ms. Dugan says that “oil companies refuse to expand or even modernize their refineries.”

The figures below, from the Energy Information Administration, prove otherwise.

Note the drop in 2005 due to loss of capacity caused by Hurricane Katrina. By 2006, the oil industry had repaired much of that lost capacity and delivered a record volume of gasoline to the market. This does not sound like an industry that’s trying to maximize profits by reducing capacity. That figure was then exceeded in 2007, which saw the highest annual gasoline production on record.

http://tonto.eia.doe.gov/dnav/pet/hist/wgfrpus2w.htm

U.S. Annual Finished Motor Gasoline Production (Barrels)

2000: 2,993,802,000
2001: 3,011,960,000
2002: 3,058,104,000
2003: 3,083,493,000
2004: 3,220,735,000
2005: 3,152,527,000
2006: 3,227,532,000
2007: 3,279,465,000

Your comments, Ms. Dugan? In particular, could you address the recovery in refinery capacity and increased gasoline production immediately following Katrina? Refinery capacity grew from around 70% after the hurricane in late August to around 90% by the end of the year. This is not consistent with your claims in this article.

Thank you.

Stupid Press Releases

The integrated oil companies – specifically those that both produce oil and refine it – had a very good 4th quarter. The reason for that is specifically that world oil prices were very high in the 4th quarter. Refining margins were terrible, but the high price of oil was enough to offset weak margins. Shell had a good quarter, but they did come in short of estimates due to their poor refining margins. Naturally, Oil Watchdog weighed in with their typical uninformed opinion by making the following press release:

Shell’s Record Profit Is a Thumb In the Eye of Recession-Wracked Nation, Says Group

The first thing I noted was the story tags, which included “Cash Register Politics, Greed, Influence, Misdeeds, Price Gouging, and Profiteering.”

The story starts out in their typical hysterical style:

The record run of 2007 oil profits, which came as the U.S. economy slid into recession and consumer debt soared, portrays an industry run amok, said the Foundation for Taxpayer and Consumer Rights.

For those who don’t know, the Foundation for Taxpayer and Consumer Rights (FTCR) is the parent entity of Oil Watchdog. Continuing on:

While Shell may have slightly “missed analysts’ estimates,” it’s profit figures show that integrated oil companies continue to find ways to increase profits even as the economy falls. In Shell’s case, the company replaced the refining profits of recent years by escalating income from selling crude oil, often to their own refiners, said the nonprofit, nonpartisan FTCR.

Nonpartisan? In what way? Politically? They are certainly partisan when it comes to oil companies. They scream when oil and gas prices are rising, and then when prices are falling they just find something else in the oil industry to scream about. As shown above, they even stoop to spreading rumours to further their agenda.

And, they conclude with the need for more federal oversight:

FTCR has called for oversight of unregulated electronic energy trading markets and of oil company refining operations, including investment in new capacity and updating of aged, unreliable refineries.

One wonders what the point of that news release actually was. They left the implication that Shell was complicit in these high oil prices. They even tagged the article with “misdeeds.” The article blamed the housing collapse on higher energy prices. Thus, Shell is at fault and more regulation of refining operations is required? You read that release and it just looks like nothing more than a hatchet job by a political operative. No point, other than smear – plus a continued demonstration of ignorance for thinking that Big Oil controls the price of oil. OPEC controls about 40% of the world’s oil supply. ExxonMobil, the biggest of Big Oil controls 3%.

Summmary

Of course I could go on and on with examples like this. And I haven’t even mentioned Oil Watchdog’s multiple personalities: Complain about oil company greed, but if oil companies donate money, complain that they are “greenwashing” and trying to buy off universities. It is just incredibly ironic to me that a group staffed with former journalists would constantly accuse oil companies of misdeeds, when their own reporting misdeeds would get them fired pretty quickly from any reputable newspaper. Of course, we know who is paying the bills there, so rest assured that people like Judy Dugan – and apparently her ethics – are bought and paid for.

February 5, 2008 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog, Shell | 121 Comments

Who’s Watching Oil Watchdog?

NEWS RELEASE

November 14, 2007

“Consumer Advocacy” Group Under Investigation

Group Charged with Deceptive Journalism and Misrepresentation

Santa Monica, CA — Judy Dugan, Research Director for the Foundation for Taxpayer and Consumer Rights (FTCR), again finds herself defending against allegations of misconduct. Dugan is being investigated for consistent misleading press releases originating from the FTCR’s Oil Watchdog project. Oil Watchdog ostensibly exists to protect consumers from rising oil and gas prices. However, an investigation has revealed that the organization is actually funded by trial lawyers, and that the misleading information promoted by Dugan’s organizations is aimed at stirring anger toward corporate interests. Dugan, who could not be reached for comment on these allegations, clearly understands that angry consumers are litigious consumers.

Factual Errors

Dugan’s outlandish claims consistently undermine the credibility of both Oil Watchdog and FTCR. For instance, in a recent Oil Watchdog press release, Dugan claimed that “oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil.” Such a notion is preposterous, notes Dugan’s critics.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan,” said Fadel Gheit, a senior energy analyst at Oppenheimer. “The costs don’t stop there. On top of the $5-$7 production costs, there’s also the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel. And that’s the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s,” said Gheit.

Still not bad, considering the selling price. Enter government. Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya. “It’s a very complex equation,” he said of trying to figure out just how much it costs oil companies to produce oil.

A very complex equation? Not according to Dugan, who assures readers that oil and gas prices are not dictated by market forces, but instead by the profit levels oil companies wish to make. Dugan claims that oil and gas prices are easily manipulated, and if there is an energy bill being debated or an upcoming election, oil companies simply drop prices in a direct attempt to hijack the political process.

Frequent Dugan critic Robert Rapier scoffs at that notion. “Dugan has a clear lack of understanding of market forces,” Rapier said. “The world is much easier to explain if you ignore the underlying complexities. Primitive people could just conjure up gods to explain things they didn’t understand. Dugan conjures up evil oil companies to explain the ups and downs of the oil markets. This may not be surprising, given the qualifications of FTCR staff members: Lawyers and philosophers, political and social scientists. There is no technical expertise on their staff, and this makes it hard to take them seriously when they try to discuss technical topics.”

Inconsistencies in Reporting

Oil Watchdog has a history of inconsistent reporting. They have complained that oil companies are producing a polluting product, but they have also ironically complained that the price is too high, making it more difficult for consumers to afford that polluting product. They have complained that oil companies are greedy, yet they also complained about oil company donations to charities or universities, charging that they are attempting to “greenwash” their image.

They have complained when gas prices rose, but then when gas prices fell they complained that oil companies were trying to influence public opinion. They have complained that oil companies aren’t making biofuels, yet they have also complained that oil companies are making biofuels. They have complained that oil companies fund research into finding more oil, and then again complained that oil companies fund research into alternative fuels. Their history of complaints – regardless of the actions that oil companies are taking – supports the contention that they are merely paving a litigious path for their trial lawyer backers. Perhaps the ultimate irony is that the FTCR demands transparency from politicians, universities, and corporations, yet they refuse to publicly disclose their own source of funding.

Censorship of the Opposition

While Dugan and company have presented themselves as knowledgeable about the inner workings of the oil industry, their actions tell a different story. When Oil Watchdog was launched, readers were encouraged to comment following the essays that were published. However, as technical challenges to points were raised, Dugan started hiding comments by default. Shortly thereafter, she attached the following label to each of her critics: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” Finally, they simply started locking comments after most stories. It is as if they are saying “It is better for us if it looks like we are open to comments, but we simply don’t have the technical expertise on staff to address them.”

Oil Watchdog’s Future

Oil Watchdog could evolve into a legitimate consumer organization, but they are going to have to change tactics. Presenting themselves as “watchdogs,” while showing a juvenile grasp of the oil industry, does not serve consumers. If they spent some time trying to understand how the world oil markets work, and showed some balance in reporting, over time they could rebuild their lost credibility. Time will tell if the interests of consumers win out over deceptive journalism designed to reward Oil Watchdog’s backers.

November 14, 2007 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog | 11 Comments

Who’s Watching Oil Watchdog?

NEWS RELEASE

November 14, 2007

“Consumer Advocacy” Group Under Investigation

Group Charged with Deceptive Journalism and Misrepresentation

Santa Monica, CA — Judy Dugan, Research Director for the Foundation for Taxpayer and Consumer Rights (FTCR), again finds herself defending against allegations of misconduct. Dugan is being investigated for consistent misleading press releases originating from the FTCR’s Oil Watchdog project. Oil Watchdog ostensibly exists to protect consumers from rising oil and gas prices. However, an investigation has revealed that the organization is actually funded by trial lawyers, and that the misleading information promoted by Dugan’s organizations is aimed at stirring anger toward corporate interests. Dugan, who could not be reached for comment on these allegations, clearly understands that angry consumers are litigious consumers.

Factual Errors

Dugan’s outlandish claims consistently undermine the credibility of both Oil Watchdog and FTCR. For instance, in a recent Oil Watchdog press release, Dugan claimed that “oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil.” Such a notion is preposterous, notes Dugan’s critics.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan,” said Fadel Gheit, a senior energy analyst at Oppenheimer. “The costs don’t stop there. On top of the $5-$7 production costs, there’s also the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel. And that’s the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s,” said Gheit.

Still not bad, considering the selling price. Enter government. Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya. “It’s a very complex equation,” he said of trying to figure out just how much it costs oil companies to produce oil.

A very complex equation? Not according to Dugan, who assures readers that oil and gas prices are not dictated by market forces, but instead by the profit levels oil companies wish to make. Dugan claims that oil and gas prices are easily manipulated, and if there is an energy bill being debated or an upcoming election, oil companies simply drop prices in a direct attempt to hijack the political process.

Frequent Dugan critic Robert Rapier scoffs at that notion. “Dugan has a clear lack of understanding of market forces,” Rapier said. “The world is much easier to explain if you ignore the underlying complexities. Primitive people could just conjure up gods to explain things they didn’t understand. Dugan conjures up evil oil companies to explain the ups and downs of the oil markets. This may not be surprising, given the qualifications of FTCR staff members: Lawyers and philosophers, political and social scientists. There is no technical expertise on their staff, and this makes it hard to take them seriously when they try to discuss technical topics.”

Inconsistencies in Reporting

Oil Watchdog has a history of inconsistent reporting. They have complained that oil companies are producing a polluting product, but they have also ironically complained that the price is too high, making it more difficult for consumers to afford that polluting product. They have complained that oil companies are greedy, yet they also complained about oil company donations to charities or universities, charging that they are attempting to “greenwash” their image.

They have complained when gas prices rose, but then when gas prices fell they complained that oil companies were trying to influence public opinion. They have complained that oil companies aren’t making biofuels, yet they have also complained that oil companies are making biofuels. They have complained that oil companies fund research into finding more oil, and then again complained that oil companies fund research into alternative fuels. Their history of complaints – regardless of the actions that oil companies are taking – supports the contention that they are merely paving a litigious path for their trial lawyer backers. Perhaps the ultimate irony is that the FTCR demands transparency from politicians, universities, and corporations, yet they refuse to publicly disclose their own source of funding.

Censorship of the Opposition

While Dugan and company have presented themselves as knowledgeable about the inner workings of the oil industry, their actions tell a different story. When Oil Watchdog was launched, readers were encouraged to comment following the essays that were published. However, as technical challenges to points were raised, Dugan started hiding comments by default. Shortly thereafter, she attached the following label to each of her critics: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” Finally, they simply started locking comments after most stories. It is as if they are saying “It is better for us if it looks like we are open to comments, but we simply don’t have the technical expertise on staff to address them.”

Oil Watchdog’s Future

Oil Watchdog could evolve into a legitimate consumer organization, but they are going to have to change tactics. Presenting themselves as “watchdogs,” while showing a juvenile grasp of the oil industry, does not serve consumers. If they spent some time trying to understand how the world oil markets work, and showed some balance in reporting, over time they could rebuild their lost credibility. Time will tell if the interests of consumers win out over deceptive journalism designed to reward Oil Watchdog’s backers.

November 14, 2007 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog | Comments Off on Who’s Watching Oil Watchdog?

Who’s Watching Oil Watchdog?

NEWS RELEASE

November 14, 2007

“Consumer Advocacy” Group Under Investigation

Group Charged with Deceptive Journalism and Misrepresentation

Santa Monica, CA — Judy Dugan, Research Director for the Foundation for Taxpayer and Consumer Rights (FTCR), again finds herself defending against allegations of misconduct. Dugan is being investigated for consistent misleading press releases originating from the FTCR’s Oil Watchdog project. Oil Watchdog ostensibly exists to protect consumers from rising oil and gas prices. However, an investigation has revealed that the organization is actually funded by trial lawyers, and that the misleading information promoted by Dugan’s organizations is aimed at stirring anger toward corporate interests. Dugan, who could not be reached for comment on these allegations, clearly understands that angry consumers are litigious consumers.

Factual Errors

Dugan’s outlandish claims consistently undermine the credibility of both Oil Watchdog and FTCR. For instance, in a recent Oil Watchdog press release, Dugan claimed that “oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil.” Such a notion is preposterous, notes Dugan’s critics.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan,” said Fadel Gheit, a senior energy analyst at Oppenheimer. “The costs don’t stop there. On top of the $5-$7 production costs, there’s also the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel. And that’s the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s,” said Gheit.

Still not bad, considering the selling price. Enter government. Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya. “It’s a very complex equation,” he said of trying to figure out just how much it costs oil companies to produce oil.

A very complex equation? Not according to Dugan, who assures readers that oil and gas prices are not dictated by market forces, but instead by the profit levels oil companies wish to make. Dugan claims that oil and gas prices are easily manipulated, and if there is an energy bill being debated or an upcoming election, oil companies simply drop prices in a direct attempt to hijack the political process.

Frequent Dugan critic Robert Rapier scoffs at that notion. “Dugan has a clear lack of understanding of market forces,” Rapier said. “The world is much easier to explain if you ignore the underlying complexities. Primitive people could just conjure up gods to explain things they didn’t understand. Dugan conjures up evil oil companies to explain the ups and downs of the oil markets. This may not be surprising, given the qualifications of FTCR staff members: Lawyers and philosophers, political and social scientists. There is no technical expertise on their staff, and this makes it hard to take them seriously when they try to discuss technical topics.”

Inconsistencies in Reporting

Oil Watchdog has a history of inconsistent reporting. They have complained that oil companies are producing a polluting product, but they have also ironically complained that the price is too high, making it more difficult for consumers to afford that polluting product. They have complained that oil companies are greedy, yet they also complained about oil company donations to charities or universities, charging that they are attempting to “greenwash” their image.

They have complained when gas prices rose, but then when gas prices fell they complained that oil companies were trying to influence public opinion. They have complained that oil companies aren’t making biofuels, yet they have also complained that oil companies are making biofuels. They have complained that oil companies fund research into finding more oil, and then again complained that oil companies fund research into alternative fuels. Their history of complaints – regardless of the actions that oil companies are taking – supports the contention that they are merely paving a litigious path for their trial lawyer backers. Perhaps the ultimate irony is that the FTCR demands transparency from politicians, universities, and corporations, yet they refuse to publicly disclose their own source of funding.

Censorship of the Opposition

While Dugan and company have presented themselves as knowledgeable about the inner workings of the oil industry, their actions tell a different story. When Oil Watchdog was launched, readers were encouraged to comment following the essays that were published. However, as technical challenges to points were raised, Dugan started hiding comments by default. Shortly thereafter, she attached the following label to each of her critics: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” Finally, they simply started locking comments after most stories. It is as if they are saying “It is better for us if it looks like we are open to comments, but we simply don’t have the technical expertise on staff to address them.”

Oil Watchdog’s Future

Oil Watchdog could evolve into a legitimate consumer organization, but they are going to have to change tactics. Presenting themselves as “watchdogs,” while showing a juvenile grasp of the oil industry, does not serve consumers. If they spent some time trying to understand how the world oil markets work, and showed some balance in reporting, over time they could rebuild their lost credibility. Time will tell if the interests of consumers win out over deceptive journalism designed to reward Oil Watchdog’s backers.

November 14, 2007 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog | Comments Off on Who’s Watching Oil Watchdog?

Who’s Watching Oil Watchdog?

NEWS RELEASE

November 14, 2007

“Consumer Advocacy” Group Under Investigation

Group Charged with Deceptive Journalism and Misrepresentation

Santa Monica, CA — Judy Dugan, Research Director for the Foundation for Taxpayer and Consumer Rights (FTCR), again finds herself defending against allegations of misconduct. Dugan is being investigated for consistent misleading press releases originating from the FTCR’s Oil Watchdog project. Oil Watchdog ostensibly exists to protect consumers from rising oil and gas prices. However, an investigation has revealed that the organization is actually funded by trial lawyers, and that the misleading information promoted by Dugan’s organizations is aimed at stirring anger toward corporate interests. Dugan, who could not be reached for comment on these allegations, clearly understands that angry consumers are litigious consumers.

Factual Errors

Dugan’s outlandish claims consistently undermine the credibility of both Oil Watchdog and FTCR. For instance, in a recent Oil Watchdog press release, Dugan claimed that “oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil.” Such a notion is preposterous, notes Dugan’s critics.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan,” said Fadel Gheit, a senior energy analyst at Oppenheimer. “The costs don’t stop there. On top of the $5-$7 production costs, there’s also the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel. And that’s the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s,” said Gheit.

Still not bad, considering the selling price. Enter government. Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya. “It’s a very complex equation,” he said of trying to figure out just how much it costs oil companies to produce oil.

A very complex equation? Not according to Dugan, who assures readers that oil and gas prices are not dictated by market forces, but instead by the profit levels oil companies wish to make. Dugan claims that oil and gas prices are easily manipulated, and if there is an energy bill being debated or an upcoming election, oil companies simply drop prices in a direct attempt to hijack the political process.

Frequent Dugan critic Robert Rapier scoffs at that notion. “Dugan has a clear lack of understanding of market forces,” Rapier said. “The world is much easier to explain if you ignore the underlying complexities. Primitive people could just conjure up gods to explain things they didn’t understand. Dugan conjures up evil oil companies to explain the ups and downs of the oil markets. This may not be surprising, given the qualifications of FTCR staff members: Lawyers and philosophers, political and social scientists. There is no technical expertise on their staff, and this makes it hard to take them seriously when they try to discuss technical topics.”

Inconsistencies in Reporting

Oil Watchdog has a history of inconsistent reporting. They have complained that oil companies are producing a polluting product, but they have also ironically complained that the price is too high, making it more difficult for consumers to afford that polluting product. They have complained that oil companies are greedy, yet they also complained about oil company donations to charities or universities, charging that they are attempting to “greenwash” their image.

They have complained when gas prices rose, but then when gas prices fell they complained that oil companies were trying to influence public opinion. They have complained that oil companies aren’t making biofuels, yet they have also complained that oil companies are making biofuels. They have complained that oil companies fund research into finding more oil, and then again complained that oil companies fund research into alternative fuels. Their history of complaints – regardless of the actions that oil companies are taking – supports the contention that they are merely paving a litigious path for their trial lawyer backers. Perhaps the ultimate irony is that the FTCR demands transparency from politicians, universities, and corporations, yet they refuse to publicly disclose their own source of funding.

Censorship of the Opposition

While Dugan and company have presented themselves as knowledgeable about the inner workings of the oil industry, their actions tell a different story. When Oil Watchdog was launched, readers were encouraged to comment following the essays that were published. However, as technical challenges to points were raised, Dugan started hiding comments by default. Shortly thereafter, she attached the following label to each of her critics: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” Finally, they simply started locking comments after most stories. It is as if they are saying “It is better for us if it looks like we are open to comments, but we simply don’t have the technical expertise on staff to address them.”

Oil Watchdog’s Future

Oil Watchdog could evolve into a legitimate consumer organization, but they are going to have to change tactics. Presenting themselves as “watchdogs,” while showing a juvenile grasp of the oil industry, does not serve consumers. If they spent some time trying to understand how the world oil markets work, and showed some balance in reporting, over time they could rebuild their lost credibility. Time will tell if the interests of consumers win out over deceptive journalism designed to reward Oil Watchdog’s backers.

November 14, 2007 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog | 1 Comment

Who’s Watching Oil Watchdog?

NEWS RELEASE

November 14, 2007

“Consumer Advocacy” Group Under Investigation

Group Charged with Deceptive Journalism and Misrepresentation

Santa Monica, CA — Judy Dugan, Research Director for the Foundation for Taxpayer and Consumer Rights (FTCR), again finds herself defending against allegations of misconduct. Dugan is being investigated for consistent misleading press releases originating from the FTCR’s Oil Watchdog project. Oil Watchdog ostensibly exists to protect consumers from rising oil and gas prices. However, an investigation has revealed that the organization is actually funded by trial lawyers, and that the misleading information promoted by Dugan’s organizations is aimed at stirring anger toward corporate interests. Dugan, who could not be reached for comment on these allegations, clearly understands that angry consumers are litigious consumers.

Factual Errors

Dugan’s outlandish claims consistently undermine the credibility of both Oil Watchdog and FTCR. For instance, in a recent Oil Watchdog press release, Dugan claimed that “oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil.” Such a notion is preposterous, notes Dugan’s critics.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan,” said Fadel Gheit, a senior energy analyst at Oppenheimer. “The costs don’t stop there. On top of the $5-$7 production costs, there’s also the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel. And that’s the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s,” said Gheit.

Still not bad, considering the selling price. Enter government. Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya. “It’s a very complex equation,” he said of trying to figure out just how much it costs oil companies to produce oil.

A very complex equation? Not according to Dugan, who assures readers that oil and gas prices are not dictated by market forces, but instead by the profit levels oil companies wish to make. Dugan claims that oil and gas prices are easily manipulated, and if there is an energy bill being debated or an upcoming election, oil companies simply drop prices in a direct attempt to hijack the political process.

Frequent Dugan critic Robert Rapier scoffs at that notion. “Dugan has a clear lack of understanding of market forces,” Rapier said. “The world is much easier to explain if you ignore the underlying complexities. Primitive people could just conjure up gods to explain things they didn’t understand. Dugan conjures up evil oil companies to explain the ups and downs of the oil markets. This may not be surprising, given the qualifications of FTCR staff members: Lawyers and philosophers, political and social scientists. There is no technical expertise on their staff, and this makes it hard to take them seriously when they try to discuss technical topics.”

Inconsistencies in Reporting

Oil Watchdog has a history of inconsistent reporting. They have complained that oil companies are producing a polluting product, but they have also ironically complained that the price is too high, making it more difficult for consumers to afford that polluting product. They have complained that oil companies are greedy, yet they also complained about oil company donations to charities or universities, charging that they are attempting to “greenwash” their image.

They have complained when gas prices rose, but then when gas prices fell they complained that oil companies were trying to influence public opinion. They have complained that oil companies aren’t making biofuels, yet they have also complained that oil companies are making biofuels. They have complained that oil companies fund research into finding more oil, and then again complained that oil companies fund research into alternative fuels. Their history of complaints – regardless of the actions that oil companies are taking – supports the contention that they are merely paving a litigious path for their trial lawyer backers. Perhaps the ultimate irony is that the FTCR demands transparency from politicians, universities, and corporations, yet they refuse to publicly disclose their own source of funding.

Censorship of the Opposition

While Dugan and company have presented themselves as knowledgeable about the inner workings of the oil industry, their actions tell a different story. When Oil Watchdog was launched, readers were encouraged to comment following the essays that were published. However, as technical challenges to points were raised, Dugan started hiding comments by default. Shortly thereafter, she attached the following label to each of her critics: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” Finally, they simply started locking comments after most stories. It is as if they are saying “It is better for us if it looks like we are open to comments, but we simply don’t have the technical expertise on staff to address them.”

Oil Watchdog’s Future

Oil Watchdog could evolve into a legitimate consumer organization, but they are going to have to change tactics. Presenting themselves as “watchdogs,” while showing a juvenile grasp of the oil industry, does not serve consumers. If they spent some time trying to understand how the world oil markets work, and showed some balance in reporting, over time they could rebuild their lost credibility. Time will tell if the interests of consumers win out over deceptive journalism designed to reward Oil Watchdog’s backers.

November 14, 2007 Posted by | FTCR, Jamie Court, Judy Dugan, oil watchdog | Comments Off on Who’s Watching Oil Watchdog?

Where I Go for Comic Relief

I am going to have to start issuing my own press releases. That’s what our good friends at Oil Watchdog – the oil-hating arm of the FTCR, like to do. They write their own press releases – daily – and use as reference material other press releases they have written. Their sources are frequently “Insider”, who frequently says very silly things. Not the kind of things an actual insider would say. Things like this: “Oil companies have cut back production in refineries to a mere 87 percent of potential and the surplus in storage tanks is drying up fast.”

Sounds like someone never heard of fall turnaround season. You know, that time of year – every year – where utilization falls and finished product inventories tend to get pulled down. Let me make a stunning prediction: It will happen again next spring. And again next fall. An insider would know that, and they would know why it happens in fall and spring. But I digress.

Oil Watchdog had fallen to the level of occasional comic relief for me, but I see that their latest press-release has even been picked up by the New York Times, which apparently has very low standards:

Spike in Crude Oil Price to $88/Barrel Without New Runup in Pump Price Exposes Oil Industry Deception, Profiteering

“Oil companies exert nearly complete control over the supply of gasoline, through decisions about their refineries, their oil and gasoline imports, and the supply they keep on hand,” said Dugan. “They can roughly tune the supply to match their price targets.”

This is truly priceless. Let’s refresh our memories here.

They whined about oil company greed.
They whined about oil company generosity.

They whined when gas prices went high.
They whined when gas prices went low.

They whined that oil companies aren’t making biofuels.
They whined that oil companies are making biofuels.

They whined that oil companies were funding research into finding more oil.
They whined that oil companies were funding research into alternative fuels.

I could go on. Really. They wrote an article called Defining Gouging. I thought, “Finally. At least someone made an attempt.” Then I read the article. They didn’t define gouging. They just went on and on about the need for anti-gouging legislation. As far as I can tell, they must sit around in a room and brainstorm every day on how to put a negative slant on any story involving oil companies.

So, you can see why I finally got bored with Oil Watchdog. After a while, you figure out that your opponent has an energy IQ of 60, and then you realize that there is no sport in the debate. After all, look what Oil Watchdog did in response to being challenged on their claims.

First, they chose to hide the comments. Originally they were visible by default. Second, they chose to label critics with: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” But, they must have felt like they were still getting pummeled, because now they have taken the step of requiring comments to be approved before posting. That’s right, they now censor those who challenge their ludicrous claims. For their current entry, it looks like they have locked comments. Don’t know if this is the newest trend.

Perhaps the biggest irony is their frequent criticisms of oil companies donating money to various causes. Why? Because they won’t reveal the source of their own funding. It has been established that they are a front for trial lawyers. Their many articles on the “hot gas lawsuit” could have provided a hint. Not that there is anything wrong with that. But don’t be hypocrites. Be up front about what you are doing. Let the world know why you are promoting anti-gouging legislation and hot gas lawsuits. Who might benefit there?

You could have used your organization to promote an actual discussion of the critical energy issues facing the world. Instead, by hiding behind the veil of “consumer advocates”, and by writing about subjects that you are ignorant of, you have made yourselves into laughingstocks.

October 17, 2007 Posted by | Chevron, ConocoPhillips, ExxonMobil, FTCR, Jamie Court, Judy Dugan, litigation, Shell | Comments Off on Where I Go for Comic Relief

Where I Go for Comic Relief

I am going to have to start issuing my own press releases. That’s what our good friends at Oil Watchdog – the oil-hating arm of the FTCR, like to do. They write their own press releases – daily – and use as reference material other press releases they have written. Their sources are frequently “Insider”, who frequently says very silly things. Not the kind of things an actual insider would say. Things like this: “Oil companies have cut back production in refineries to a mere 87 percent of potential and the surplus in storage tanks is drying up fast.”

Sounds like someone never heard of fall turnaround season. You know, that time of year – every year – where utilization falls and finished product inventories tend to get pulled down. Let me make a stunning prediction: It will happen again next spring. And again next fall. An insider would know that, and they would know why it happens in fall and spring. But I digress.

Oil Watchdog had fallen to the level of occasional comic relief for me, but I see that their latest press-release has even been picked up by the New York Times, which apparently has very low standards:

Spike in Crude Oil Price to $88/Barrel Without New Runup in Pump Price Exposes Oil Industry Deception, Profiteering

“Oil companies exert nearly complete control over the supply of gasoline, through decisions about their refineries, their oil and gasoline imports, and the supply they keep on hand,” said Dugan. “They can roughly tune the supply to match their price targets.”

This is truly priceless. Let’s refresh our memories here.

They whined about oil company greed.
They whined about oil company generosity.

They whined when gas prices went high.
They whined when gas prices went low.

They whined that oil companies aren’t making biofuels.
They whined that oil companies are making biofuels.

They whined that oil companies were funding research into finding more oil.
They whined that oil companies were funding research into alternative fuels.

I could go on. Really. They wrote an article called Defining Gouging. I thought, “Finally. At least someone made an attempt.” Then I read the article. They didn’t define gouging. They just went on and on about the need for anti-gouging legislation. As far as I can tell, they must sit around in a room and brainstorm every day on how to put a negative slant on any story involving oil companies.

So, you can see why I finally got bored with Oil Watchdog. After a while, you figure out that your opponent has an energy IQ of 60, and then you realize that there is no sport in the debate. After all, look what Oil Watchdog did in response to being challenged on their claims.

First, they chose to hide the comments. Originally they were visible by default. Second, they chose to label critics with: “This commentor has been flagged as a suspected shill for BigOil. You can view the history of their comments by clicking on the user’s screen name at the end of this entry.” But, they must have felt like they were still getting pummeled, because now they have taken the step of requiring comments to be approved before posting. That’s right, they now censor those who challenge their ludicrous claims. For their current entry, it looks like they have locked comments. Don’t know if this is the newest trend.

Perhaps the biggest irony is their frequent criticisms of oil companies donating money to various causes. Why? Because they won’t reveal the source of their own funding. It has been established that they are a front for trial lawyers. Their many articles on the “hot gas lawsuit” could have provided a hint. Not that there is anything wrong with that. But don’t be hypocrites. Be up front about what you are doing. Let the world know why you are promoting anti-gouging legislation and hot gas lawsuits. Who might benefit there?

You could have used your organization to promote an actual discussion of the critical energy issues facing the world. Instead, by hiding behind the veil of “consumer advocates”, and by writing about subjects that you are ignorant of, you have made yourselves into laughingstocks.

October 17, 2007 Posted by | Chevron, ConocoPhillips, ExxonMobil, FTCR, Jamie Court, Judy Dugan, litigation, Shell | 1 Comment

More on Hot Gas Lawsuit

I really love my Site Meter at the bottom of the page. I check it most days, and it gives me a lot of good information about who is linking to the site and where they are coming from. Incidentally, you can access the same information I can see by clicking on it.

Anyway, a few days ago I wrote Hot Gas Lawsuit in Utah. It is about a class action lawsuit that claims that oil companies are making a killing from overcharging customers because gas expands in the summer. According to my Site Meter, I was getting some hits on this article, which I ultimately tracked back to here. The discussion was fine, until one of my beloved fringe elements weighed in:

Rapier works for an industry that lobbies against temperature sensing smart pumps in the United States, but lobbied FOR regulatory changes requiring these devices in Canada in the 1990’s. I don’t believe they got the regulation they wanted, but in any case the market did its job and about 95% of retail outlets now have these devices installed.

Why? Because they were losing money in Canada because of cold fuel; i.e. selling more energy per volumetric unit because of shrinkage due to cold temperatures.

Rapier’s line on ground temperatures is a crock.

I have engaged this guy before. He reads a few websites, and thinks he is an expert. You see it all the time. Now, I have no idea about the claim on the situation in Canada, and I guarantee you that neither does he. He read it on a web site, and it became fact. But in this case, the troll actually provided the very evidence that showed that my “line on ground temperatures” was spot on. Here is what I wrote previously:

In fact, those tanks are probably pretty close to 60 degrees year round, which means the class action lawsuit is just a waste of the court’s time.

Now, recall the reasoning behind the lawsuit. From the original article:

When a gallon of gasoline is 60 degrees it exactly will fill a one gallon container. But that same gasoline at 90 degrees would spill over the sides of the container. It is that spillage that represents the energy drivers allegedly paid for, but didn’t get, when they purchased a gallon of “hot gas.”

But, my troll, following his charge that my line was a crock, provided the link that showed that it wasn’t:

Technology, new rules a hot-fuel fix

The Star’s $2.3 billion estimated annual cost to consumers from hot fuel is based on fuel storage tank temperature data, the impact of varying temperatures on fuel volumes, and state-by-state consumption data.

The fuel temperature data was gathered by the National Institute of Standards and Technology from storage tanks at 1,000 gas stations and truck stops in 48 states and the District of Columbia during a period from 2002 to 2004.

The NIST data revealed that the average temperature of fuel across the country and year-round was 64.7 degrees Fahrenheit — almost 5 degrees higher than the government standard of 60 degrees.

As a liquid, gasoline expands and contracts depending on temperature. At the 60-degree standard, the 231-cubic-inch American gallon delivers a certain amount of energy to your engine. But that same amount of gas or diesel fuel expands at higher temperatures, to about 235 cubic inches at 90 degrees. Yet consumers still get only the 231 cubic inches at the pump.

As I said, pretty darn close to 60. Definitely not close to 90. So what does this really cost consumers? I suspect the Star made a math error in their calculation. Here is why. The average gasoline consumption from 2002 to 2004 was 8.9 million barrels per day. You can get all of that data here. That translates into an average over that time period of 136.5 billion gallons per year. The average spot price of gasoline, which can be retrieved from here, was only $0.93/gallon over that time period. Don’t believe me? Look it up at the link. We forget that it wasn’t want that long ago that gasoline was still quite cheap relative to today. Also remember that these are spot prices, which don’t include taxes. This is an indicator of what refineries got for their gas during the 2002-2004 period that the Star investigated.

Now, note the change in going from 60 degrees to 90 degrees. The difference is 4 cubic inches, an increase of 1.7%. (My chemical engineering handbook says it is more like 1%, but we will give them the benefit here). But the average wasn’t 90 degrees, was it? It was 64.7 degrees. Interpolating, the change for that is going to be 0.27% (based on their 1.7% for the full range). That’s right, between 2002 and 2004, consumers were ripped off to the tune of 0.27%. That means that for every gallon of gas sold during this period, consumers were getting ripped off by less than 1/4th of a cent per gallon. So, each time you put 4 gallons of gas in, you lost almost a penny on average (and some fraction of a penny more to the government for taxes). And as I have pointed out, the energy difference from blend to blend can easily amount to more variation than this.

So, what was the total lost? Was it $2.3 billion per year as the Star claimed? Not even close. The actual number is about a tenth of what the Star claimed. I suspect their error was to assume the entire expansion to 90 degrees, instead of using the average annual number of 64.7%.

Frankly, I hate wasteful spending, but if they force the equipment to be installed, that’s just one more thing that will drive up the price of gas (you don’t think there’s a free lunch, do you?). I am all for things that drive up the price of gas and spur conservation. Of course Jamie Court, president of the FTCR, claims he is waging war on this issue to keep consumers from getting ripped off. He has got to be one of the most naïve individuals I have ever seen. He seems to have in his mind that he is going to “sock it to” the oil companies and score one for consumers. And the lawyers are also out trying to make sure the consumers are protected. I just wonder if any of them actually believe that any of this is going to bring down the cost of gasoline?

March 27, 2007 Posted by | FTCR, Jamie Court, litigation, Utah | 10 Comments

More on Hot Gas Lawsuit

I really love my Site Meter at the bottom of the page. I check it most days, and it gives me a lot of good information about who is linking to the site and where they are coming from. Incidentally, you can access the same information I can see by clicking on it.

Anyway, a few days ago I wrote Hot Gas Lawsuit in Utah. It is about a class action lawsuit that claims that oil companies are making a killing from overcharging customers because gas expands in the summer. According to my Site Meter, I was getting some hits on this article, which I ultimately tracked back to here. The discussion was fine, until one of my beloved fringe elements weighed in:

Rapier works for an industry that lobbies against temperature sensing smart pumps in the United States, but lobbied FOR regulatory changes requiring these devices in Canada in the 1990’s. I don’t believe they got the regulation they wanted, but in any case the market did its job and about 95% of retail outlets now have these devices installed.

Why? Because they were losing money in Canada because of cold fuel; i.e. selling more energy per volumetric unit because of shrinkage due to cold temperatures.

Rapier’s line on ground temperatures is a crock.

I have engaged this guy before. He reads a few websites, and thinks he is an expert. You see it all the time. Now, I have no idea about the claim on the situation in Canada, and I guarantee you that neither does he. He read it on a web site, and it became fact. But in this case, the troll actually provided the very evidence that showed that my “line on ground temperatures” was spot on. Here is what I wrote previously:

In fact, those tanks are probably pretty close to 60 degrees year round, which means the class action lawsuit is just a waste of the court’s time.

Now, recall the reasoning behind the lawsuit. From the original article:

When a gallon of gasoline is 60 degrees it exactly will fill a one gallon container. But that same gasoline at 90 degrees would spill over the sides of the container. It is that spillage that represents the energy drivers allegedly paid for, but didn’t get, when they purchased a gallon of “hot gas.”

But, my troll, following his charge that my line was a crock, provided the link that showed that it wasn’t:

Technology, new rules a hot-fuel fix

The Star’s $2.3 billion estimated annual cost to consumers from hot fuel is based on fuel storage tank temperature data, the impact of varying temperatures on fuel volumes, and state-by-state consumption data.

The fuel temperature data was gathered by the National Institute of Standards and Technology from storage tanks at 1,000 gas stations and truck stops in 48 states and the District of Columbia during a period from 2002 to 2004.

The NIST data revealed that the average temperature of fuel across the country and year-round was 64.7 degrees Fahrenheit — almost 5 degrees higher than the government standard of 60 degrees.

As a liquid, gasoline expands and contracts depending on temperature. At the 60-degree standard, the 231-cubic-inch American gallon delivers a certain amount of energy to your engine. But that same amount of gas or diesel fuel expands at higher temperatures, to about 235 cubic inches at 90 degrees. Yet consumers still get only the 231 cubic inches at the pump.

As I said, pretty darn close to 60. Definitely not close to 90. So what does this really cost consumers? I suspect the Star made a math error in their calculation. Here is why. The average gasoline consumption from 2002 to 2004 was 8.9 million barrels per day. You can get all of that data here. That translates into an average over that time period of 136.5 billion gallons per year. The average spot price of gasoline, which can be retrieved from here, was only $0.93/gallon over that time period. Don’t believe me? Look it up at the link. We forget that it wasn’t want that long ago that gasoline was still quite cheap relative to today. Also remember that these are spot prices, which don’t include taxes. This is an indicator of what refineries got for their gas during the 2002-2004 period that the Star investigated.

Now, note the change in going from 60 degrees to 90 degrees. The difference is 4 cubic inches, an increase of 1.7%. (My chemical engineering handbook says it is more like 1%, but we will give them the benefit here). But the average wasn’t 90 degrees, was it? It was 64.7 degrees. Interpolating, the change for that is going to be 0.27% (based on their 1.7% for the full range). That’s right, between 2002 and 2004, consumers were ripped off to the tune of 0.27%. That means that for every gallon of gas sold during this period, consumers were getting ripped off by less than 1/4th of a cent per gallon. So, each time you put 4 gallons of gas in, you lost almost a penny on average (and some fraction of a penny more to the government for taxes). And as I have pointed out, the energy difference from blend to blend can easily amount to more variation than this.

So, what was the total lost? Was it $2.3 billion per year as the Star claimed? Not even close. The actual number is about a tenth of what the Star claimed. I suspect their error was to assume the entire expansion to 90 degrees, instead of using the average annual number of 64.7%.

Frankly, I hate wasteful spending, but if they force the equipment to be installed, that’s just one more thing that will drive up the price of gas (you don’t think there’s a free lunch, do you?). I am all for things that drive up the price of gas and spur conservation. Of course Jamie Court, president of the FTCR, claims he is waging war on this issue to keep consumers from getting ripped off. He has got to be one of the most naïve individuals I have ever seen. He seems to have in his mind that he is going to “sock it to” the oil companies and score one for consumers. And the lawyers are also out trying to make sure the consumers are protected. I just wonder if any of them actually believe that any of this is going to bring down the cost of gasoline?

March 27, 2007 Posted by | FTCR, Jamie Court, litigation, Utah | 20 Comments