ExxonMobil acts like a nation-state unto itself. But we can’t expect it to change its ways until we do.
In early 2009, just in time for the Obama years, CEO Rex Tillerson introduced the world to the new ExxonMobil. In a speech at the Woodrow Wilson Center in Washington, he reversed the company’s longstanding denial of global warming, calling manmade climate change an “important global issue.” That may not sound like much, but it represented a significant departure from the views of his predecessor, longtime CEO Lee “Iron Ass” Raymond, who had rejected outright what scientists know about our effect on the planet.
Tillerson then went on to propose a policy solution for dealing with climate change that perfectly captured the company’s way of dealing with the world. Looking askance at the baroque complexity of cap-and-trade proposals (which many oil-industry rivals were backing, but which would later die in the U.S. Senate), he announced that ExxonMobil would support a simple, across-the-board tax on carbon emissions—a policy that had little or no chance of becoming reality.
At the time, critics assumed that the company was proposing a “poison pill” to undermine cap-and-trade. But if so, they didn’t know ExxonMobil. When the company took a stance, it always stood by it—solidly, implacably. Tillerson wasn’t going to admit that his predecessor had been wrong to deny global warming—or to fund think tanks that attacked climate science and sought to sow doubt in the public’s mind about it—but he wasn’t going to engage in political posturing, either. That wasn’t the ExxonMobil way. Instead, he offered what he truly viewed as the simplest, most sensible solution.
Private Empire: ExxonMobil and American Power is international investigative journalist Steve Coll’s massive and sprawling book about this massive and sprawling company. It achieves what we might once have considered impossible: The company’s string of transgressions notwithstanding, Coll helps us understand, and even occasionally admire, the ExxonMobil view of the world. This isn’t revisionism, or the rehabilitation of a villain: Coll knows nothing will erase ExxonMobil’s costly and irresponsible role in the denial of global warming—a behavior, he writes, that future employees are “likely to look back on with regret.” But his portrait of the country’s largest oil and gas company just might leave you awed at the Tiger’s sheer force of will. And it captures, most of all, the staggering and largely unaccountable power of this worldwide moneymaking machine—one of the most successful corporate behemoths we’ve yet seen.
The saga of ExxonMobil in the modern era begins, in Coll’s account (and in any other conceivable one), with the 1989 Exxon Valdez oil spill, which befouled Alaska’s pristine Prince William Sound. The tanker wreck dumped more than 250,000 barrels of oil, killing off several thousand sea otters, a quarter of a million seabirds, and billions of salmon and herring eggs. Not only was the spill environmentally devastating, but its victims were highly telegenic—and within a matter of days, it seemed, the whole world was outraged at Exxon. While the disaster had obvious and direct causes (like Valdez captain Joseph Hazelwood’s drinking habit), Coll traces indirect factors as well, including a decade of market-driven staffing cuts that ate into the company’s environmental and spill-response capacity. Fully 40 percent of Exxon’s job positions vanished in the seven years before the Valdez ran aground.
The man who helped design those cuts—and the dominant, almost preternatural force in Coll’s narrative—is Lee Raymond, ExxonMobil’s president and then CEO during both its greatest successes and also its greatest controversies. A rigid, authoritarian character, Raymond was the central factor behind the corporation’s uncompromising and increasingly impolitic denial of global warming. He also brewed a way of reporting the corporation’s booked oil reserves that, Coll suggests, may have misled many on Wall Street. Securities and Exchange Commission (SEC) regulations barred oil companies from reporting their tar-sands holdings as part of their total reserves because of the different type of measures required to extract these resources. Raymond considered this nonsense, so he counted the company’s tar-sands holdings in his communications with investors—“ExxonMobil math,” Coll calls it—while telling the SEC a different tale.
And yet no one can deny that Raymond presided over record-breaking profits, a safety record that suggested true penitence after the Valdez spill, and a doubling of the company’s share price over the course of the George W. Bush Administration (a fitting time period for analysis, as Raymond was good friends with Dick Cheney). From the shareholder’s point of view, he took a company moored on the rocks (literally so, in the case of the Valdez) and charted a new and wildly successful course for it.
Coll’s narrative presents the 20-year saga of how Exxon (which became ExxonMobil in 1999) bounced back from the low of the Valdez spill and, under Raymond’s guidance, triumphed in the dawning era of post-communist global resource exploitation. From Equatorial Guinea to Nigeria, from Qatar to Venezuela, the company danced with dictators, fended off pirates and kidnappers, and weathered the occasional coup attempt—always putting its own goals first (although naturally, it called on the U.S. government in a pinch). The chief objective: ensuring that the company was able to replace the oil reserves it depleted on an annual basis, a task that left little margin for error.
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