THINKPROGRESS
By Climate Guest Blogger on May 3, 2012 at 11:32 am
Perhaps you recall Milo Minderbinder, the ambitious World War II mess hall officer from
Catch-22. An avatar of capitalist ambition, Minderbinder expands his modest operation into a full-fledged multinational corporation.
It starts innocently enough — Minderbinder starts buying eggs from
Sicily, then arranges a series of increasingly ludicrous deals to turn a
profit. The absurd logic of untrammeled capitalism soon drives him to
outrageous action, including accepting money from the Germans to bomb
his own platoon. He justifies his behavior by pointing out that, as
everyone in the troop is an investor — “everybody has a share,” as his
catchphrase has it — they are in fact profiting from their own demise.
In Steve Coll’s new book
Private Empire, a history of ExxonMobil in the years since the March 24, 1989,
Valdez
spill in Alaska, CEO Lee Raymond doesn’t quite reach Minderbinderian
levels of amorality, but he gets mighty close. His company pays the
torture-happy Singaporean military to protect its oil fields from rebel
forces. He hires a team of scientists to browbeat researchers
attempting to assess the damage from
Valdez. He publicly
dismisses the very notion of climate change, even as his company
explores how global warming might offer new opportunities for oil
exploration and profit. “Don’t believe for a minute that ExxonMobil
doesn’t think climate change is real,” Coll quotes a manager as saying.
Coll conducted hundreds of interviews to compile this exhaustive —
sometimes exhausting — history of one of the world’s most secretive
companies. In piercing Exxon’s crude-black veil, Coll is doing more than
describing the inner operations of a successful multinational. He is
investigating an organization that, in size and influence, may as well
be its own nation with its own sovereign interests — a “corporate state
within the American state,” as Coll puts it. In capturing the
mind-boggling scope of Exxon’s activity, Coll also offers crash courses
in the finer points of oil exploration, the bizarre and brutal history
of Equatorial Guinea, the rise of piracy in Nigeria, the eco-guerilla
movement, resource management in post-Soviet Russia, the finer points of
campaign-finance law, the apportionment of oil field contracts in
post-war Iraq, and the battle for Acehnese independence. (NB: This is a
much-abridged list.)
It is to Coll’s credit that Raymond never comes across as a
moustache-twirling supervillain. He is merely the master of a proudly
cloistered society, one that values loyalty and rule-following over
free thinking and flexibility. That kind of rigorous mindset is
probably necessary to oversee a business as complicated and sprawling
as Exxon. Routinely one of the most profitable companies in the U.S. —
its quarterly earnings topped $10 billion last year — Exxon’s tradition
of consistent financial performance belies the chaos inherent in
practically every level of its operations. Like all oil concerns, Exxon
is on a constant hunt for “reserve replacement” — finding enough new
oil to make up for the huge amount that the company extracts every year
— a requirement that has led Exxon into ever more far-flung (and
unstable) parts of the world.
At the same time, the size of its balance sheet means that even
modest legislative adjustments — a small tax increase, for instance —
could result in billions in losses. Factor in the occasional
class-action suit, oil leak, or executive kidnapping, and even the
least sympathetic reader can have some appreciation for Raymond’s
rigid, top-down culture. “[U]nless Raymond used his bully pulpit … to
pound hard and even intimidate his employees,” Coll writes, “the
natural drift and compromising tendencies of such a large workforce
would produce mediocre results.”
Raymond takes a similarly uncompromising attitude toward his many
critics. Alternative-energy proponents are dismissed as soft-headed
idealists. SEC regulations that conflict with Exxon’s own accounting
practices are glibly disregarded in its public statements. Human-rights
compacts are refused, not because Exxon doesn’t agree with the ideals
behind them but because, in the words of one executive, “We don’t sign
on to other people’s principles.” Raymond, in other words, was well
suited for the early 21st century Age of American Imperiousness, an
attitude best personified by his close friend, Dick Cheney.
And woe to scientists who reach conclusions that Exxon finds
distasteful. Government researchers studying how much oil still lurked
beneath the beaches of Prince William Sound 12 years after the
Valdez
spill dug 7,000 holes on 91 beach segments — all while being trailed
by Exxon-funded scientists on cruise ships and helicopters, who mapped
their movements and double-checked their work. When the government’s
team leader, Jeffrey Short, published his findings, Exxon rushed out a
response, all but accusing the researchers of fraud. “We saw no evidence
that Short dug 7,000 pits,” the paper stated. “Had thousands been dug,
we would have located many more.” Exxon filed dozens of Freedom of
Information Act requests, burying the scientists in paperwork, and
representatives showed up at every public presentation to attack their
work. Eventually, Short retired from his government post, in part
because he was fed up with the harassment.
About halfway through Coll’s treatise, he loses his main character.
In 2006, Raymond steps down. His replacement, Rex Tillerson, is chosen
in part as a softer corrective to Raymond’s alienating ways. Coll
unearths some great details from Tillerson’s reign, none more
heartbreaking than the story of Tillerson’s ill-fated flirtation with
support for a carbon tax. Tillerson ordered a review of the company’s
climate strategy when he took the helm, which concluded that some form
of carbon price hike was likely inevitable, and that a predictable tax
was preferable to the gyrations and bureaucracy of a cap-and-trade
system. Despite Exxon’s aggressive lobbying campaign, politicians
pursued a cap-and-trade policy, which died in the Senate.
Still, without Raymond’s single-minded drive as an anchor for the
story, Coll’s narrative falls prey to some of the same aimlessness and
drift that Raymond feared would befall Exxon without his authoritarian
touch. Regardless, the book concludes with a satisfying — if depressing
— geometry. Coll begins his tale with an account of the
Valdez
spill, an event that the author credits for inspiring Exxon’s fierce
discipline, giving the company “a sense that Exxon’s leaders might need
to find new ways to exert greater control over the world in which they
operated.” In the intervening years, Exxon succeeds remarkably at this
goal, influencing US foreign policy, environmental regulations, and
tax policy, all while negotiating successfully with an assortment of
tin-pot dictators and executing the multibillion dollar purchases of
Mobil and XTO.
And yet, at the book’s final chapter — an account of the Deepwater
Horizon disaster, for which Exxon shared cleanup responsibilities — the
company is no better prepared than it was for the
Valdez spill.
“When these things happen,” Tillerson admits before a congressional
committee, “we are not well equipped to deal with them.” It’s hard to
imagine the ever-arrogant Exxon making a similar confession about any
other aspect of its business. Then again, it doesn’t seem to have
mattered much. In the two years since Tillerson made that statement,
Exxon’s stock has jumped 39 percent. And one way or another, everybody
has a share.
Jason Tanz is the New York editor at Wired, where he heads up the magazine’s business coverage. This piece was originally published at OnEarth and was re-printed with permission.
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