Exxon’s Private Empire
Steve Coll’s new book on ExxonMobil, Private Empire: ExxonMobil and American Power, is a masterful portrait of one of the world’s most powerful corporations.
Coll (with help from a team of investigators) traveled around the world and conducted hundreds of interviews with former executives, whistleblowers, activists, regulators, and lawyers familiar with the company (the company itself provided only “limited” access, including 8 authorized interviews w/o attribution), combining the results into a series of chapters that key upon different operations and events in the company’s recent history, starting from the Valdez oil spill (managing the crisis marked the beginning of ex-CEO Lee Raymond’s ascent to the top of the company) and extending to current CEO “T. Rex” Tillerson’s decision to acquire XTO and make Exxon the number one natural gas producer in the country.
Coll, who calls the Exxon his most difficult and secretive subject to date (compared to the war in Afghanistan and the bin Laden family, both topics of previous books), nevertheless manages to explore various tentacles of the “corporate state” — from the “Death Star” (the company’s Irving, TX headquarters) to controversial overseas outposts, including Aceh (where the company “seemed to be both part of the problem and part of the solution” when it came to human rights abuses), Russia (Raymond’s aggressive handling of the company’s negotiations for the purchase of Yukos almost certainly induced Putin to have Yukos oligarch Mikhail Kodorkovsky arrested before he could outmaneuver him in an upcoming election), and Ecuatorial Guinea, Nigeria and Chad (“an emblematic case of the challenges Exxon faced abroad”) – i.e. countries where, as Raymond’s good friend Dick Cheney once explained, the company deals with unsavory dictators and corrupt regimes because “the good Lord didn’t see fit to put oil and gas only where there are democratic regimes friendly to the United State.”
As a result there are numerous revelations both about Exxon’s operations around the world, and here in the U.S. (There is also a chapter on Jacksonville, MD, where an Exxon gas station leaked 24,000 gallons of gasoline into the ground in a neighborhood where most homes relied on backyard wells for their drinking water — resulting in major litigation).
Of course there is a great deal of coverage of the battles over climate change (PR and legislative). Although Exxon rightly deserves close scrutiny for its driving role in the climate denial movement, which peaked during Raymond’s tenure, some readers will be surprised to learn that in recent years Exxon has shifted positions, and even supports a carbon tax.
(Coll says that was not a red herring, but rather reflected Tillerson and company’s belief that a straight carbon tax would be much simpler than any “cap and trade” system that would be difficult to administer, “vulnerable to manipulation by speculators and other distorting complexities” and (are you listening Koch brothers and allied libertarians?) result in far less government bureaucracy. Perhaps Tillerson should make an effort to convince the API to come around to this position).
The book confirms what many have suspected about the Iraq war — that if oil was not the primary motivation to invade Iraq, once it started, Exxon realized it would have to compete for the country’s vast reserves once they were made available to foreign companies. It bears repeating, however, that this was a war rationalized and legitimized by various spurious arguments promoted by leading neo-conservatives who sat at think tanks funded by Exxon, including the American Enterprise Institute, where Lee Raymond (Dick Cheney’s close friend and neighbor) was Vice Chairman of the board.
There is much to Coll’s book that I won’t dig into here, even if there are many “missing chapters” to the Exxon story that Coll could not possibly have covered or completed in 624 pages.
For example: Exxon funded a group called Public Interest Watch, which somehow convinced the IRS to audit Greenpeace at a time when Greenpeace was exposing Exxon’s underwriting of a vast climate denial network (a story first reported by the WSJ’s Steve Stecklow — see “Did a Group Financed by Exxon Prompt IRS to Audit Greenpeace,” March 21, 2006). Coll mentions that, but does not add that a few years before that, Exxon representatives also met with representatives of the corporate espionage firm, Beckett Brown Inc (BBI) at the offices of the CMA (Chemical Manufacturing Association, then the leading trade association of the chemical industry) to discuss a “Greenpeace” job, a meeting apparently arranged by PR hatchet man Nick Nichols of Nichols Dezenhall (now with CounterPoint Strategies). (Greenpeace is currently suing Dezenhall and other parties, along with the principals of BBI for stealing campaign plans, donor lists and other important information that would presumably be valuable to the PR firm’s clients).
Worse, perhaps is the pass he seems to give the company on its current environmental footprint, probably in the interests of tying the book together around a theme running throughout: that Tillerson’s Exxon is somewhat different than Raymond’s.
Despite covering the company’s climate denial strategy, Coll largely attributes the worst of it to Lee Raymond’s tenure and the attacks on science that were fostered during that time (Raymond didn’t believe climate change was fully proven, despite a vast consensus to the contrary).
By contrast, Coll suggests, Tillerson should get “credit for accomplishments not visible on ExxonMobil’s balance sheet,” including pulling back from funding the worst climate denialists. Certainly Exxon’s campaign against climate science has been scaled back. In part that’s due (as Coll suggests) to the overwhelming consensus that could not longer be denied even in Texas (the reputational risks of continuing to deny the facts had grown so high that even loyal shareholders began voting against management on climate-related resolutions).
Coll also gives the company props for reducing its direct greenhouse gas emissions by 11 million tons, “a significant achievement” that reflects a disciplined operational and engineering culture that became much safer and process-efficient after the Valdez spill (due in no small part to Raymond, as we learn early on in the book).
But “not visible on ExxonMobil’s balance sheet,” are also certain externalities that conveniently reflect the company’s current and projected business strategy, “externalities” that Exxon continues to assiduously work to keep invisible, including major greenhouse gas emissions such as fugitive methane releases from its new fracking and natural gas production and delivery operations.
If denial and obstruction were a thing of the past (in fact, Exxon has started funding groups like the George Marshall Institute again), then Tillerson would not continue to fund groups like the American Legislative Exchange Council (ALEC), which has been promoting weak fracking regulations in states across the country. In fact, Exxon was THE company inside ALEC that sponsored that chemical disclosure loophole bill, as the http://www.nationofchange.org/
Despite claims that natural gas is “cleaner” than “clean coal” (a compound myth), both investors and and academics like Cornell’s Robert Howarth have made it pretty clear that the surge in natural gas is in reality a potential “carbon bomb” (e.g. methane is tens of times more potent as a greenhouse gas than CO2 in the short term) which, because it is so cheap, could potentially set back the urgent transition to clean energy for as many years as Exxon’s climate denialism did in years past.