Econintersect Ken Cohen (pictured), a vice president of Exxon Mobil, issued a statement on December 10, 2010 which indicated that if oil and gas companies are allowed greater access to off-shore areas the increase in government revenues would be large enough to cut the government debt by $1.3 trillion. He obtained the dollar amount from a referenced document from the American Petroleum Institute (API) entitled “Energizing America Facts.” Following the link provided on the Exxon Mobil website (http://www.api.org/aboutoilgas/upload/Energizing_America_Facts.pdf) produced a .pdf document with all 42 pages blocked out solid gray. Presumably, from the statement on the Exxon Mobil website, the original $1.3 trillion figure came from ICF International which was not otherwise identified.
With the help of Google, Econintersect was able to locate ICF International, a consulting firm, whose website states:
ICF International (NASDAQ:ICFI) partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment, and transportation; health, education, and social programs; and homeland security and defense markets.
Econintersect was not able to locate a 2009 or 2010 document on the ICFI website addressing offshore drilling.
The Exxon Mobil website post containing the $1.3 billion dollar federal debt statement specifies that the figure applies to the life of the resource (expanded offshore areas) and yet the title of the post is “A trillion-dollar missed opportunity – enough to pay the U.S. deficit.” The report also states that the 2010 U.S. deficit was $1.3 trillion.
The misinformation here is based on the following factor, which could easily slip by the quick scan by the average reader: The life of the resource (all offshore energy fields is presumably decades. If that lifetime were 20 years, for example, the average annual U.S. revenue would be $1.3 trillion divided by 20 years, or $70 billion per year. The implication of the headline is that the deficit, a one year quantity of $1.3 trillion, would not exist if offshore drilling had been in full operation in 2010.
How many people who read this quickly would walk away convinced that expanding offshore drilling would wipe out federal deficits for years to come? Econintersect expects that there would be quite a few, possibly even a majority.
Added note: From the Exxon Mobil Perspectives website:
Ken Cohen is vice president of public and government affairs for Exxon Mobil Corporation. He has worldwide responsibility for the company’s public policy, government relations, communications, media relations and corporate citizenship activities.
Sources: ExxonMobil Perspectives and ICFI website
Hat tip to Roger Erickson.
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