ExxonMobil acts like a nation-state unto itself. But we can’t expect it to change its ways until we do.
This necessity of showing investors that the company had acquired a wealth of new “equity oil” each year was a legacy of the wave of governmental oil expropriations in the Middle East and elsewhere during the 1970s. With much of the globe’s oil wealth now in government hands, investors worried about the long-term sustainability of private oil companies like ExxonMobil and Royal Dutch Shell. The reserve-replacement challenge bedeviled Raymond throughout his time at the helm, driving not only the Mobil merger but global deals and alliances with characters like Teodoro Obiang, the ruthless dictator of Equatorial Guinea who, by the end of Coll’s narrative, has thoroughly cashed in on his ExxonMobil allegiance—having his reputation rehabilitated enough to take a photo with President Obama. (Not everybody handles oil wealth so sagely, though: Coll reports that Obiang’s playboy son—who spent ExxonMobil-derived oil money buying fast cars and California mansions, and cutting rap albums—was being sued by the Justice Department.)
The beneficiaries of oil wealth may have been out partying, but within ExxonMobil itself, Coll reveals a neurotic culture of strict control. After the Valdez spill, Exxon felt like public enemy number one—and indeed, later focus-group research showed that the company’s name and the disaster were freely associated with each other by about half of the public. In the face of this, a siege mentality developed within the company. Raymond’s ExxonMobil set out strict systems and protocols, including a maniacal focus on safety—all the way down to monitoring in-office paper cuts. Driving too fast was also a big no-no: Corporate vehicles had electronic systems to monitor drivers’ speeds, all across the globe. Speeding could be a firing offense.
The company’s culture was white, male, Christian, and abstemious. And it reflected a curious paradox: While academic scientists lean heavily toward political liberalism, the same is not necessarily true of engineers—and especially not ExxonMobil’s. The battle to ascend in this corporate hierarchy was intense—“dog eat dog competition under the patina of working together,” one former executive griped. “Restless free thinkers and habitual dissenters who accidentally got hired (often as scientists) tended to decide quickly that they would be happier elsewhere,” notes Coll.
Over it all presided Raymond—head of the strict-father family, a man to be respected and feared. His office was dubbed the “God Pod”: a 20,000-square-foot executive suite at ExxonMobil’s campus-like headquarters in Irving, Texas that served just five top execs. But of course, Raymond was often away—flying around in the corporate jet named “Number One Hundred Alpha.” Onboard, the flight attendants were trained to bring him “a glass of milk with popcorn in it.” Raymond didn’t just fly for business: He was a golf aficionado and owned several million-dollar homes spread across the United States.
Raymond was a South Dakotan by birth, a Catholic by conversion, and a chemical engineer by training. He was a tough guy outwardly, but also had a conservative man’s weeping streak, a la Glenn Beck. In Coll’s account, his toughness seems part true character, but also part strategy—a means of governing a far-flung corporation where he couldn’t monitor all the parts closely. You can’t say it didn’t work: Raymond’s triumphs included the merger with Mobil, which gave the corporation access to a vast set of oil-reserve assets, and efficiency strides that, in turn, translated into unheard-of profits.
As the 2000s dawned, though, ExxonMobil’s board thought it was time for new leadership. The public had relentlessly negative views of the company—a growing liability, especially when it came to fending off tort claims in court, but also for the purposes of finding and retaining scientific talent.
Enter Rex Tillerson, a man who, in comparison to Raymond, comes across as a milquetoast. About the most interesting thing that Coll has to tell us about him (and it doesn’t at all seem like Coll’s fault) is that he was an Eagle Scout, and fond of drawing not-so-deep lessons from the scouting view of the world. Tillerson had distinguished himself making overseas deals for the company. Like Raymond, he was born a Christian in the heartland; his youthful reading of Atlas Shrugged further suggests an ideology similar to Raymond’s. Yet Tillerson lacked Raymond’s fire and domineering nature—and his flair.
But that’s exactly what ExxonMobil needed; it was time for a change. “We never set out for the company to be public enemy number one,” Tillerson tells Coll. And during his tenure, ExxonMobil’s approval ratings slowly began to creep back. Nowadays, the company isn’t even the world’s chief environmental villain any more—climate campaigners have trained their sights on the Koch brothers; and BP’s name was blackened by the Gulf oil spill even worse than Exxon’s was after the Valdez. Not only did ExxonMobil survive it all, then—it thrives and thrives, and most recently, bought its way into the booming U.S. shale gas market with its acquisition of XTO Energy in 2009.
Raymond, meanwhile, now lives off his nearly $400 million retirement package—and in light of the company’s market valuation and position, it’s hard to say he didn’t earn it.
Coll splits his book about evenly between the Raymond and Tillerson eras; the contrast between the two is sharp enough that he might almost have subtitled the work “War and Peace.” The story he tells is character based, which helps the reader remain anchored as chapters flit across the world and different issue areas. But the characters are not all equally intriguing. The Raymond era is by far the more dramatic part of the story, and the book inevitably feels rather front-loaded.
In Coll’s account, ExxonMobil’s undermining of climate science becomes just one aspect of the company’s across-the-board rigidity. If ExxonMobil was in the right on an issue, it would stand its ground doggedly. If it was in the wrong, it would do precisely the same thing. And on this topic, it was very, very wrong.
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