The Great Debate

Should ExxonMobil be broken up?

This book review was originally published in the American Prospect, and is republished here with permission.

Even granting that testifying to congressional committees is not on the list of an oil CEO’s favorite things to do, when ExxonMobil CEO Lee Raymond, known to his employees as “Iron Ass,” arrived at the Dirksen Senate Office building one morning in November 2005, he was in an especially reticent mood. Among other things, the Senate Energy Committee wanted to know about the corporation’s role in formulating policy with Vice President Dick Cheney’s energy task force. Raymond – who was chummy with Cheney and seven weeks away from his retirement, after 12 spectacularly profitable years at the helm first of Exxon and then Exxon-Mobil – did not think the committee needed to know. Thus when New Jersey Senator Frank Lautenberg asked Raymond whether he or any ExxonMobil executives participated in a 2001 meeting with Cheney, Raymond responded with a single syllable: “No.”

The truth of that statement was something only a lawyer or a comedian could love, but it was consistent with how the company prefers to be seen: independent, apolitical, above the muck of any particular political fight. Yet as Steve Coll documents in his groundbreaking investigation, Private Empire: ExxonMobil and American Power, sometimes even the aloof need a little assistance. Just days before the hearing, the company had found itself frustrated with the government of the United Arab Emirates (UAE), which seemed to be stalling on giving ExxonMobil its slice of a hugely valuable 50-billion-barrel oil field. The State Department did not seem to be pressing ExxonMobil’s case as hard as Raymond wanted, so he called Cheney and asked, according to Coll’s paraphrase, “What in the hell is with this country?” Cheney called the UAE government himself, and ExxonMobil got what it wanted.

Coll gained a unique perspective on the history of ExxonMobil’s power from his two-plus decades covering business and the Securities and Exchange Commission, Middle East politics, and national security – early on for The Washington Post, in recent years for The New Yorker, and most notably in Ghost Wars, his book on Afghanistan and the CIA. He approaches the company almost as if reporting on the State Department, finding a sprawling global network led by insular executives often unaware of what is being carried out in their name. At the heart lies a contradiction best illustrated by Raymond’s duplicity. The corporation long ago decided it was best to flex its immense muscle as discreetly as possible, because almost all publicity – whether it’s news of gas prices, climate change, or congressional fights over industry subsidies – is bad.

Indeed, ExxonMobil may have reached the point of being more powerful and entangled than any government. The company’s leaders look at an untapped oil or gas field as a relationship that might last a half-century or more; during that time, politicians and policies will come and go even in settled democracies. Its perspective is so geological, so Olympian, that it has been willing to anger sitting American governments – as in 1997, when Raymond, a Republican, challenged the Democratic administration’s policy with a speech in Beijing urging China’s communist rulers not to sign the Kyoto Protocol climate agreement. At the same time, because so much oil and natural gas is locked up in places with unstable regimes or unsavory leaders – from Equatorial Guinea to Indonesia to Russia – ExxonMobil often finds itself with more power to affect the local society than the best-intentioned State Department functionaries. In a nail-biting chapter on a showdown between the World Bank and the besieged government of Chad, Coll writes that “Exxon-Mobil had made its own choice clear: It was more interested in the survival of Chad’s oil production than it was in the World Bank’s experiment in nation building.”

from The Great Debate UK:

Squandered oil wealth, an African tragedy

arvind ganesan-Arvind Ganesan is the Director of the Business and Human Rights Program at Human Rights Watch. The opinions expressed are his own.-

Equatorial Guinea is a tiny country of about half a million people on the west coast of Africa, but is the fourth-largest oil producer in sub-Saharan Africa.

Most of the investment in the country’s multi-billion dollar oil industry comes from the United States. ExxonMobil, Hess and Marathon are all there. Right now, the U.S. imports up to 100,000 barrels of oil a day from Equatorial Guinea, or about a quarter of the country’s oil production.