Tuesday, June 05, 2012

"Demon Oil" Again

This is the sort of demonization of oil companies that makes one wonder why we even bother to have a news media any more. A piece at Philly.com, written by Will Bunch, starts off with the following paragraph,

They are the world's second largest corporation by revenue, and last year Royal Dutch Shell made an astronomical $31 billion in profits - more than triple what the global oil giant was earning just two years earlier.

The link that is included in that paragraph sends you to a list of corporation rankings by size. It shows Wal-Mart in first place, and Shell Oil in second with revenue of $378 billion and profit of $20 billion, not the “$31 billion in profits” which he claims in his article. The profit margin, which he doesn’t mention, is 5.3% on revenue; which is hardly "astronomical."

For comparison, drug companies, whose profits were protected when Obama and Congress negotiated ”health care reform,” average 35% profit.

He goes on to say that the governor of Pennsylvania “wants to give them your tax dollars, too - perhaps as much as about $1.7 billion over the next 25 years.” That’s much more impressive that saying $67 million per year, and notice the “perhaps as much” in that accusation, which means he doesn’t have any real facts.

He repeatedly refers to the deal as an “additional cash giveaway,” because the state is granting Shell Oil a tax exemption as an incentive to build a major plant in their state, providing thousands of new jobs. Why this is remarkable escapes me, because states have been doing this for decades. Why it’s a bad deal also escapes me; it' not a "giveaway" at all, it's a waiver of collection of taxes which, if the plant were not built, they would not have anyway, and this way they get new jobs.

The impression I get in reading the article is that it's about how evil the oil company is, and how corrupt the governor is, and the author is weaving this instance to fit his larger narrative, because I see nothing in the particulars of this specific event that seems in any way unusual. The author tries very hard to make it an episode of corruption exposed by his intrepid reportage, but it just comes off as holding a candle and screaming for a fire engine.

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