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REAL WORLD EVENT DISCUSSIONS
Inside the Death Star; Also Known as Exxon
Sunday, May 06, 2012 4:45 AM
Gettin' old, but still a hippie at heart...
Quote:Like all the Big Oil players now operating in the Gulf of Mexico, ExxonMobil was required to file a spill response plan with the Department of Interior that detailed how the company would react to a serious accident. Exxon's plan was virtually identical to those of the other oil companies, which wasn't surprising, as they were all drafted by the same Texas consultancy. But Exxon — as the journalist Steve Coll describes in his damning new book Private Empire: ExxonMobil and American Power — added something unique to its spill response plan. The company included an appendix entitled "Media" that outlined Exxon's plans for communication with the press and the public in the wake of a spill.
An oil-spill worker takes part in a cleanup along the Yellowstone River near Laurel, Mont., on July 11, 2011, after an ExxonMobil pipeline beneath the riverbed ruptured days earlier.
At 40 pages, the appendix was more than four times longer than the plan for oil removal, and it described — down to the exact wording — how Exxon's spokespeople would respond to media inquiries. If criminal charges were a possibility, for example, the pre-emptive statement would be: "We believe that there are no grounds for such charges. This was clearly an accident and we are working to respond to the immediate needs of the incident." As Coll told Politico in an interview this week, the memo amounts to a "playbook of deliberate obfuscation in an accident, whatever the cause."
The memo is a near caricature of corporate venality — the meganational that operates under its own code of secrecy and silence. But while the oil companies' spill response plans came to light after the BP–Deepwater Horizon blowout in 2010, Coll also notes that such a catastrophic failure would have been less likely to happen to Exxon than BP, in part because of that rigid corporate culture — as well as the searing experience of the 1989 Exxon Valdez spill. As Coll, the former managing editor of the Washington Post, details in over 685 exhaustively researched pages, Exxon may have earned its status as Corporate Villain No. 1, but it's also the best at what it exists to do, which is finding and extracting oil.
Coll and his assistants interviewed more than 400 people for the book, including Exxon's hard-bitten former CEO Lee Raymond and a number of other former Exxon employees — a task Coll has said was harder than getting inside the Central Intelligence Agency. That makes sense — in many ways Exxon operates almost as an independent country, with its own diplomats, intelligence analysts and security services. And that's led it to do some of the same sketchy things countries do.
There was Exxon's meddling in a 2006 standoff between Idriss Déby, the authoritarian leader of Chad — a Central African country with rich oil reserves — and Paul Wolfowitz, then the leader of the World Bank. Déby wanted weapons to fight rebels supported by nearby Sudan, but good-governance clauses in loans Chad had received from the World Bank restricted the country's ability to purchase arms. Wolfowitz was ready to freeze some of Sudan's bank accounts, prompting Déby to threaten to effectively kick Exxon out of Chad. That could have cost the company billions of dollars. So Exxon lobbied the U.S. ambassador to Chad to fix the problem, which led to Déby getting his weapons and Exxon its oil.
"By now ExxonMobil had made its own choice clear," Coll writes. "It was more interested in the survival of Chad's oil production than it was in the World Bank's experiment in nation building."
The book also captures a 2001 exchange between then President George W. Bush and then Indian Prime Minister Atal Bihari Vajpayee. Worried that Exxon was delaying a deal with India's largest state-owned oil company, Vajpayee asked Bush: "Why don't you just tell them what to do?" The President's response was telling: "Nobody tells those guys what to do."
Much of Coll's best reporting takes place in Africa, South America and Asia, on the new frontiers of the oil world where Exxon is king. That exalted status is a consequence of decades-old changes in the oil industry that saw international companies like Exxon tossed out of the crude-rich Middle East as nations like Iran and Saudi Arabia seized national control of their resources. The oil majors thus struck out into the oil fields of the developing world, where their ability to extract oil was able to buy them access to the deposits — and, of course, a generous share of the profits that would flow from them. Those deals often put Exxon in a position of powerful influence; the U.S. government, Coll notes, gives Chad only a few millions dollars a year in aid, while Exxon's taxes and royalties can be worth as much as $500 million.
Such influence can get murky. Coll describes how Exxon was drawn into the 2000 war of independence being waged in the Indonesian region of Aceh. Exxon paid off Indonesian military forces to fight rebels from the Free Aceh Movement — known by its Indonesian initials GAM — around the company's highly profitable natural-gas field. GAM attacked Exxon employees, viewing the company as essentially in league with the Indonesian government. Exxon lobbied its contacts in the U.S. government, and got the Bush Administration to threaten to designate GAM as a terrorist organization if it did not stop attacking Exxon. Then U.S. ambassador to Indonesia Robert Gelbard put it bluntly to GAM officials in a 2001 visit: "Do you really want us for an enemy?" The U.S. and Exxon were indistinguishable.
Though Exxon was unusually close with the Bush Administration — and especially former Vice President Dick Cheney — it was also independent. "I'm not a U.S. company, and I don't make decisions based on what's good for the U.S.," Raymond, Exxon's former CEO, told Coll. Exxon views itself as pragmatic — it does what's needed to get the oil that runs the global economy, and if that leads the company to gray territory in some parts of the world, so be it.
But Coll makes it clear that Exxon's strict corporate code — which helped the company bounce back after the Valdez disaster and which guides its actions around the world — may not be sustainable. In the U.S., Exxon has been extremely partisan, its political action committee essentially acting as a finance arm of the Republican Party. (That distinguishes Exxon from most big U.S. companies, which give to both parties knowing that power tends to change hands.) When Barack Obama took office in 2009, Exxon was essentially shut out of the White House. The few Democrats the company has strong ties with were connected to Hillary Clinton's campaign. And even among oil companies, Exxon was unusually aggressive in the fight against mainstream climate science, only ending its investments in climate-skeptic groups in 2006. Obviously any oil company would be wary of climate science, given what cutting carbon would mean for fossil fuels, but Exxon went far beyond in its opposition. None of that puts it in a most-favored-company position when the anticlimate science, pro-oil GOP is not in power.
Not that I suspect the current CEO of Exxon, Rex Tillerson, is much concerned with what environmentalists think, but Exxon's culture of secrecy and obstruction could hold it back in the battle for the next great prize in the oil-and-gas contest: U.S. shale gas and shale oil, unlocked by fracking, which has given domestic oil-and-natural-gas production new life. Exxon spent $31 billion to buy a major natural-gas producer in 2009, and is clearly betting big on fracking. The U.S. is not Chad, however, and the battle over regulating fracking for gas and oil is already shaping up to be bloody, one that will require on-the-ground engagement around the country. "They're going to have to get down into town halls, and into communities and into regulatory settings and be more open and more of a partner than they habitually have demonstrated that they can do," Coll told Politico. "I think they are in denial about how hard the politics of this is going to prove over time."
Exxon has made tens of billions by being as opaque as the windows of its Texas headquarters — nicknamed the Death Star. But "no comment" won't be enough this time. http://www.time.com/time/health/article/0,8599,2113546,00.html
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