ExxonMobil is only a business, yet for a century and a half it has vexed, baffled, and unsettled us. Take Hannibal Lecter, Daniel Plainview, and Darth Vader, roll them into a single sinister character, and you start to grasp the feelings of generations of critics. "We need policy change on a global scale, and Exxon has been at the forefront of those blocking change," former Vice President Al Gore wrote a week ago on his blog.
But why? There are its outsized profits, of course -- $41.1 billion last year alone -- plus the remarkably enduring heartless persona of John D. Rockefeller, its founder in the old Standard Oil days. But Gilded Age ruthlessness and success in the contemporary capitalist West do not sufficiently explain the shadow that ExxonMobil seems still to cast on our collective imagination. After all, today's Apple is bigger than ExxonMobil, and the last of the robber barons have been dead for the better part of a century.
Enter a surprising and trenchant new decipherer of our confounded anxiety: Rex Tillerson, boss of the oil giant. Since becoming CEO six years ago, Tillerson has muddled the company's traditional image with a polished and deliberate nuance that seems to project caring. He has been "cautious, genial, accommodating and eager to soften [the company's] hard edges," Steve Coll, the author of Private Empire, a new book on ExxonMobil, told me.
But two weeks ago, the mild-mannered, pin-striped executive seemed to abruptly throw caution to the wind. In a speech before the elite Council on Foreign Relations (CFR) in New York, he suggested that Americans suck it up and adapt to global warming. "We have spent our entire existence adapting, OK? So we will adapt to this," Tillerson said in reply to a question from the audience. "Changes to weather patterns that move crop production areas around -- we'll adapt to that. It's an engineering problem, and it has engineering solutions." For starters, Tillerson said, ExxonMobil had set out to educate the "illiterate" public as to the facts, and move them away from the purveyors of "manufactured fear."
At once, we are back to the Exxon we once knew.
What got into the "cautious" Tillerson is a question between him, his board, and their shareholders. But conspiracy theories are unnecessary to explain the resulting nervousness of critics: As Coll's book describes, Tillerson's predecessor as CEO, Lee Raymond, declared war on efforts to restrain CO2 emissions, spending millions of dollars of company money starting in the late 1990s to fund writers and think tanks that cast doubt on climate science. The cash went both directly from ExxonMobil's public affairs unit, and was channeled through the American Petroleum Institute, the industry's lobbying arm in Washington, D.C., Coll writes, and it managed to help roil four decades of U.S. environmental politics.
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The world according to Rex Tillerson: What are we to make of the CEO of ExxonMobil, who in a speech lasting just over an hour managed to tarnish journalists covering his industry as "lazy," the public as "illiterate," and critics as "manufacturers of fear"? As for worries about global warming, Exxon's Rex Tillerson suggested they relax about rising seas and disappearing agriculture -- "we will adapt," he said.
Cynics might say, ‘What should one expect from ExxonMobil'? But if so, they would not have been listening to Tillerson since he became CEO six years ago, a period in which he has been much more measured: In flat, evenly delivered and nuanced language, the 60-year-old native Texan has softened Exxon's sharpest and most-criticized edges, most conspicuously repudiating its funding of a clutch of scholars whose tracts -- challenging conventional climate science -- have been seized upon by global warming critics as evidence of a hoax. So was his speech Wednesday before the Council on Foreign Relations in New York simply a bad hair day? Or are we essentially watching a reversion to the days of Exxon's abrasive former CEO, Lee Raymond? Here, watch the video yourself:
The last time we witnessed such a philosophical lurch by Exxon was in January 2009, when Barack Obama was about to take the oath of office, and the sense of Washington politics was the inevitability of a federal cap on carbon emissions. Explaining explicitly that he sensed this political shift, Tillerson appeared at the Wilson Center in Washington, and announced that Exxon now accepted climate science. As an ameliorative, Tillerson proposed that emissions of heat-trapping gases be discouraged through the use of a carbon tax. It was after this speech that Exxon stopped funding hoax die-hards.
Exxon did not respond to two emails seeking to plumb its latest thinking. But with this week's talk, which I describe at EnergyWire, Tillerson seems to comes full circle. Look for the company to pour its lobbying might into campaigns that twin climate adaptation with head-long development of American oil and gas resources.
Go to the Jump for the rest of Rex Tillerson, and more of the Wrap.
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David Biello is associate editor for environment and energy at Scientific American magazine.
So far in 2012, ExxonMobil has made $104 million a day -- and that's an off year. In 2005, the oil giant earned a net profit of $36.1 billion, or "more money than any corporation had made in history," writes Steve Coll in his illuminating saga of the most successful and largest heir to John D. Rockefeller's strangling monopoly, Standard Oil. Simply put, ExxonMobil has been among the world's largest and most profitable companies since the 1950s, and it is so confident of its future that it recently raised the dividend paid to shareholders by a whopping 21 percent.
Private Empire begins in 1989 with the tale of the Exxon Valdez, the company oil tanker that ran aground in Alaska's Prince William Sound, and ends 22 years later with ExxonMobil's credit rating surpassing that of the U.S. government. The title derives from the company's need to control actual physical territory in order to profitably pump. The result is amassed power and influence, used mostly for ill (if one's interest is human rights, economic development or combating climate change), or good (if one's focus is cheap gasoline).
Coll, a two-time Pulitzer Prize-winning author of previous books on the CIA's history in Afghanistan and on the Bin Ladin family, here weaves a work around a profile of the reigns of two emperors. There is South Dakotan Lee "Iron Ass" Raymond, who parlays a relentless focus on safety in the wake of the Exxon Valdez into imperial corporate control, whether it is the initiation of a "safety minute" at the start of any meeting or the installation of tracking devices in the vehicles of known speeders. Raymond's successor, the Texan Rex Tillerson (the "Eagle Scout"), attempts to soften the company's image by doling out medals for good work, an incentive reminiscent of scout merit badges, and embracing a carbon tax to control greenhouse gas emissions.
ExxonMobil perhaps looms largest in the U.S. on this subject of climate change. Early in the book, Coll lays out the company's apparent objectives via an American Petroleum Institute memo from the 1990s:
Average citizen "understands" (recognizes) uncertainties in climate science; Recognition of uncertainties becomes part of the "conventional wisdom"; media "understands" (recognizes) uncertainties in climate science; media coverage reflects balance on climate science and recognition of the validity of viewpoints challenging current "conventional wisdom"; those promoting the Kyoto treaty on the basis of extant science appear to be out of touch with reality.
If that was also ExxonMobil's goal, the many millions of dollars that the oil company spent worked. Each item on that memo can be checked off -- thanks largely to Raymond's close relationship with then-Vice President Dick Cheney. "We just gave away the environment," observed then-Treasury Secretary Paul O'Neill after the Bush Administration repudiated action on climate change in 2001.
Similarly, just 12 days before Obama's inauguration, Tillerson publicly advocated a carbon tax. In fact, that thumbs up seemed to have more to do with further delay of any regulation than a change of heart on climate change. As Coll puts it nicely, quoting a company lobbying meeting with the new Administration, Tillerson "was happy to have a position that nobody was going to embrace."
The irony is that ExxonMobil found good use for climate change: It cut its greenhouse gas emissions as a result of its focus on profits, largely by avoiding the flaring of natural gas co-produced with oil. It even used climate predictions to inform exploration, banking on global warming to melt more ice and thus allow access to Arctic oil, a nice side benefit of the company's intransigence on climate change. "Don't believe for a second that ExxonMobil doesn't think climate change is real," Coll quotes a former manager.
Such quotations as well as anecdotes humanize the massive cast of characters in this sprawling book. Raymond is revealed as kind to the air crew of his private corporate jet while routinely excoriating journalists, analysts and underlings for alleged stupidity. Fine phrases -- "Chad's politicians and labor leaders might be poor and some of them might be unsophisticated, but they had been schooled in obduracy and provocation by French colonialists, which made them formidable" -- leaven the work. And Coll puts the reader inside very closed rooms, such as a barbecue thrown for Russian President Vladimir Putin by U.S. President George W. Bush in November of 2001.
The book reads much like Dan Yergin's magisterial The Prize, absent the zest of conquest and with just a whiff of distaste. Coll handles science -- whether climate change, endocrine disrupting chemicals or geologic estimates of natural gas reserves -- with clarity and power. There are tantalizing hints of massive technological feats, such as Sakhalin I, ExxonMobil's massive engineering project off the western coast of Russia. Yet the poetry of the vast machines that enable oil's journey from well to gas tank is foregone in favor of the endless mundanity of bureaucratic power.
In a 2006 cover story in FP, the columnist Thomas Friedman described what he called "The First Law of Petropolitics." In it, Friedman revealed an inverse relationship between oil prices and the kindliness of petrocrats: As oil prices surge, the rulers of oil-producing countries tend to become inflated jerks; when prices are low, they are high-minded pussy cats.
Yet for all its genius, Friedman's law is limited: He was talking about pure petro-states such as Russia, Nigeria and Saudi Arabia. Isn't the behavior of freely elected leaders in developed economies influenced by any oil commandments?
I raise this question while observing President Barack Obama and oil companies act upon some other mutually understood political principle in the heat of the election-year campaign: Over the last week or so, American oil giants Chevron (see interview below) and ExxonMobil have suggested that Obama wise up and embrace America's inner-petrostate. Obama has responded by embracing his inner-cudgel, urging oil companies to accept a non-fossil fuel future, and meanwhile surrender $4 billion in tax breaks.
Oil is pivotal in the campaign platform of Obama's opponents. We see this most recently in finger-pointing over gasoline prices. But gasoline is not the operative hothouse for the top-line political battle. Instead, it is a sideshow to the central backdrop, which is the nation's high-stakes oil boom, a projected surge in the U.S. oil supply over the coming decade from shale oil, deepwater Gulf of Mexico reserves and imports from Canada's oil sands.
The opposing sides are capitalizing on high gas prices to advance competing, long-existing agendas -- Big Oil to pry open coveted basins underlying coastal and federal areas, and Obama to keep incubating still-early clean-energy technology.
Toward these aims, the oil industry's strategy is to persuade Americans that these closed-off lands are all that stand between U.S. independence from foreign oil, and continued fealty to those fellows governed by Friedman's First Law. For Obama, it is to contextualize the oil boom as big but historically ephemeral: Americans can bask in their gas-guzzling ways now, but must also begin to pave the way for the inescapable post-hydrocarbon era.
To state this as a corollary, there is a direct relationship between the vigor of an oil boom, and the temperature of high-flown political rhetoric. (Given the apparent hurt feelings afflicting both sides, one observes another active corollary -- a direct association between rising wealth and thinning skin, a sublaw that seems to straddle the oil and financial industries.)
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When it comes to energy policy, is the United States worse than Turkmenistan? How about Russia, where a contract is a contract only when President-elect Vladimir Putin so decides? Is it less congenial than Brazil, where according to Reuters, Chevron executives seem likely to face criminal charges over a leak of 2,400 barrels of oil, 0.1 percent the size of BP's 2010 Gulf of Mexico spill?
In a speech Friday, ExxonMobil CEO Rex Tillerson (pictured above left, with Putin) said the U.S. compares unfavorably from an energy policy standpoint not just to those countries, but also to China, Argentina and Kazakhstan. The backdrop is a humongous, high-stakes boom in U.S. oil and gas drilling, and a superlative election-year battle between the U.S. industry and the Obama Administration. Both sides think the bonanza will much improve the U.S. economy and its balance of payments, but after that their respective fact sheets barely coincide.
I won't parse the whole flurry of industry and Administration statements. But Tillerson's speech -- delivered at the IHS CERA annual oil conference in Houston -- caught my eye both because he runs the industry's most successful company, and for his atypical rhetorical flourishes. You can watch yourself.
Montana's governor says he's going to ride ExxonMobil "like smell on a skunk," not to mention mete out more conventional unpleasantries like going to court. In case the oil giant has any funny ideas while being subject to these measures, "There ain't nobody gonna blow smoke up the south side of this north-facing governor." Gov. Brian Schweitzer, who is a soil scientist, has been driven to this display of trash-talking by the July 1 spill of some 1,000 barrels of crude oil into the pristine Yellowstone River, about 100 miles downriver from Yellowstone National Park.
Does Exxon deserve this scale of rudeness? After all, when BP suffered this treatment last year, it had spilled 5,000 times that volume into the Gulf of Mexico. Unlike the 56 minutes it took Exxon to sever the flow of oil, BP took five days short of three months to shut off the Macondo oil well. In addition, as far as I know, nobody at Exxon has asked to get his life back, the innocently delivered but unfortunately received remark that then-BP CEO Tony Hayward will rue for the rest of his days.
The answer is yes. The main reason is that Exxon has all but danced on BP's grave since the Macondo spill. For example, back in March, BP's new CEO, Bob Dudley, delivered his first full-blown speech since the spill, sort of a coming-out address at Dan Yergin's annual oil show in Houston. Dudley's main message was that what happened to BP could happen to anyone and that all oil companies would have to change their procedures. It is "unrealistic" to dismiss Macondo as a "'black swan', a one-in-a-million occurrence that carries no wider application for our industry as a whole," Dudley said.
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Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.