Wed May 2, 2012
ExxonMobil: A 'Private Empire' On The World Stage
Originally published on Wed May 2, 2012 12:30 pm
In Private Empire, Pulitzer Prize-winning investigative journalist Steve Coll investigates how ExxonMobil has used its money and power to wield significant influence in Washington, D.C., particularly during the Bush administration.
Executives at the company maintained close personal connections with members of the Bush administration — but Coll says the "cliched idea that Exxon-Mobil was just an instrument of the Bush administration's foreign policy — a kind of extension of the American government during the Bush years — is just wrong."
Coll has written extensively about Afghanistan and Pakistan and the uses of government power. But in Private Empire, he turns his attention to ExxonMobil, one of the largest private corporations in the United States.
Exxon, which merged with Mobil in 1999, descends from John D. Rockefeller's Standard Oil Co. and has ranked as one of the country's most profitable companies for the past 60 years. Each year ExxonMobil makes about $450 billion in revenue, exceeding the great majority of countries.
Coll says ExxonMobil executives "see themselves — ExxonMobil — as an independent sovereign with their own foreign policy," he says. "Sometimes their interests ally with the United States government, sometimes they find themselves in opposition to the United States — and sometimes they try to stay out of the way."
ExxonMobil And Climate Change
Until 2005, ExxonMobil was run by Lee "Iron Ass" Raymond, a close friend of Vice President Dick Cheney and a skeptic of climate change. During Raymond's tenure, Exxon funded campaigns to challenge the validity of emerging science about climate change — specifically the findings that a global warming trend existed.
"This not only borrowed from some of the tactics that the tobacco industry had used to delay public understanding of the dangers of smoking; in some cases there were even overlaps of individuals and groups that were engaged in this communications campaign," Coll tells Fresh Air's Terry Gross. "A lot of corporate America opposed the Kyoto Accords. But only a small set of companies did what Exxon did, which was to really go after the science as aggressively as they did."
Coll says the campaign helped manufacture confusion and perpetual controversy about climate change.
"It created an impression in the media and the public that there was a raging, deep controversy among scientists, and there wasn't a controversy, at least after 2002, when the doubts fell away in the face of evidence," he says. "It was the evidence and the modeling and the very science that ExxonMobil was calling into doubt that gradually became more and more alarming and attracted more and more support within the scientific community."
But as the company attacked global warming publicly, Coll says, geologists working within ExxonMobil were examining how a warmer Earth — resulting from global warming — could create new business opportunities for ExxonMobil.
"One of the big deals that ExxonMobil has announced in the past year involves access to the Russian Arctic, where it is partnered with a Russian firm to access many billions of dollars worth of reserves involving big investments ExxonMobil would make north of the Arctic Circle," he says. "Why is that oil accessible? It's because sea ice is melting in the Arctic. Global warming may, in fact, unlock enormous opportunities for oil companies."
TERRY GROSS, HOST:
This is FRESH AIR. I'm Terry Gross. My guest, Pulitzer Prize-winning journalist Steve Coll, has written a new book about ExxonMobil and how it has shaped American policy in the U.S. and around the world. The book is called "Private Empire: ExxonMobil and American Power."
Coll describes Exxon as one of the most powerful businesses ever produced by American capitalism, a company that now functions as a corporate state within the American state. To get access to oil, it partners with African dictatorships. In America, Coll says Exxon's lobbyists have bent and shaped American foreign policy, as well as economic, climate, chemical and environmental regulation.
Coll is also the author of "The bin Ladens," and "Ghost Wars," about the wars in Afghanistan. He's the president of the Public Policy Institute, the New America Foundation, and is a staff writer for the New Yorker.
Steve Coll, welcome to FRESH AIR. So you usually write about Pakistan, Afghanistan, the Taliban. Why did you write such a huge book about oil, and why specifically ExxonMobil?
STEPHEN COLL: Well, I wanted to write about oil and American power in the era after 9/11. So I started out wanting to write something broad about oil and American power. I got into the field, about six or eight months in, and I thought, you know, I really need to choose a company to tell the story. And ExxonMobil seemed the logical choice for American readers.
It's the largest corporation in some years by some measures, certainly one of the two or three largest in the United States. And it's very rarely examined. I think the other motive I had was as I turned towards ExxonMobil, I realized as a reporter that I'd spent quite a lot of my life scrutinizing government power, but we actually live in a world where non-state power, corporate power, the power of networks, terrorist groups, is if of greater significance than ever.
And as journalists, we don't, I don't think, spend enough time thinking about corporations in and of themselves as sources of influence in the world we live in.
GROSS: So, you know, in talking about non-state power, corporate power, one of the things you point out is that ExxonMobil right now, according to Standard & Poor's, has a higher credit rating than the U.S. Give us a sense of the amount of profits that ExxonMobil has brought in lately.
COLL: Well, they make about $450 billion a year in revenue, and they typically make up to 10 to 12 percent of that in pure profit. I think their best year was in 2008, when oil prices were very high, and they made something over $40 billion in profits, a record that may be challenged this year by Apple but which at the time was by far the greatest profit ever made by an American corporation.
GROSS: So among the questions you examine are how much political power does ExxonMobil have, how does it use that power and how does it spend money in Washington. And you say last year, ExxonMobil spent 13 million on lobbying, at least that's what it disclosed.
So what is ExxonMobil's vehicle for contributing to campaigns or, you know, to lobby in Congress? Does it have a lobbying arm?
COLL: It does. It has a couple of vehicles. First it has a Washington office, on K Street, right there in the heart of the lobbying district, and that's staffed by staff lobbyists who are all employees of ExxonMobil. And interestingly, they emphasize homegrown lobbyists. So they send their own executives on rotations into Washington to try to explain the company to Congress and to lobby on legislation, lobby at the White House and at federal agencies.
They minimize the use of hired outside guns because they like to tell their own story. It's typical of the way they operate. They're very much a corporation where you go to work after college, you stay for life, and that's the way they conduct their lobbying operation as well.
And then they also have a political action committee, which is funded by voluntary contributions by employees but directed by the corporation's political strategists at the headquarters in Irving, Texas. And they have a series of programs to communicate to employees about their political action committee to urge them to participate.
And then they direct spending from that political action committee into mostly congressional campaigns, is what they concentrate on.
GROSS: Are employees pressured to contribute to the PAC?
COLL: ExxonMobil insists not. Under federal law, there are certain rules they are supposed to follow to avoid coercing employees or executives into contributing to this PAC. There was a case that the book documents where a particular congressman who has been the recipient of the most ExxonMobil political contributions over the 10 years after 2000, a guy named Joe Barton, a Republican from Texas who was a ranking member on the House Energy and Commerce Committee, which is a very important source of energy legislation, he played a role in brokering a compromise on a bill that ExxonMobil was very, very interested in in the summer of 2008, had to do with chemicals called phthalates that ExxonMobil manufactures.
And the compromise worked out well from ExxonMobil's perspective. And immediately after the bill was signed, a group of ExxonMobil executives, more than a dozen of them, gave contributions all at once to Barton's re-election committee through this mechanism of communicating about who are our friends in Congress.
And when I asked ExxonMobil whether these executives were pressured to all join together, they said we absolutely do not pressure anybody. We don't track political contributions. Their response seemed lawyerly and designed to emphasize that they follow the rules about how much they pressure or don't pressure individual employees to participate in this program.
GROSS: Now, you write that ExxonMobil's main strategy in Washington is blocking unfavorable legislation and focusing its PAC donations on Republicans who can try to ensure that no damaging laws go through. So what are some of the laws - what are some of the bills that ExxonMobil has seen as unfavorable that it has tried successfully or unsuccessfully to block?
COLL: Well, every so often Democratic politicians, and President Obama in this case, has suggested that certain tax advantages that the oil industry enjoys be eliminated. Most recently, President Obama's called for the elimination of subsidies that he describes as favoring the oil industry uniquely, worth about $4 billion a year.
And now, when those bills are actually introduced in Congress, they never get anywhere, in part because ExxonMobil and the rest of the industry has been very effective at blocking them. So that's - in some ways, that's an easy one for them because the politics of those bills is more rhetorical than real.
I think more substantially, every time there's a tax bill, ExxonMobil is at risk because the oil industry is an easy target, and also their profits are so huge that any change in the tax law could mean billions of dollars to them at home or abroad. So they're all over tax legislation.
Somebody that I was interviewing said that in the office, in the Washington office, they said that they had three big issues in Washington: tax, tax and tax, and everything else was subordinate to that. Now, I think that's not quite right because what the record shows is that there was one other huge piece of legislation that was if not of existential, certainly of great importance to ExxonMobil, and that was the climate bill, the effort to impose a price on carbon fuels, carbon-based fuels in order to combat global warming and incent migration away from the use of oil and gas, certainly coal and oil most of all, toward cleaner-burning fuels.
And ExxonMobil lobbied hard and very aggressively funded a campaign to undermine mainstream climate science during the late '90s and the first Bush term, and then later during the Obama administration they got involved in the scrum over Obama's climate bill, which ultimately died in the Senate.
GROSS: Yet the climate change is a fascinating chapter in Exxon's history. Under the previous CEO of ExxonMobil, Lee Raymond - first of all, he was a skeptic about climate change. He didn't really believe that fossil fuels were contributing to climate change. Correct me if I'm wrong on that.
COLL: No, that's right, and he had a doctoral degree in chemical engineering and considered himself qualified to judge the science of climate, even though he wasn't a meteorologist, and he concluded and was not shy about saying that he not only didn't believe that manmade industrial activity was causing global warming, for quite a long while he said emphatically that he wasn't at all convinced that the Earth was warming in the first instance.
GROSS: And so under the CEO Lee Raymond, who was there from 1993 to the end of 2005, Exxon started a public policy campaign to raise skepticism about the science that concluded fossil fuels were a cause of global warming. And it basically tried to create an alternate science, an alternate pool of experts. What did it do to create that?
COLL: Well, remember, 1997 is when the Kyoto Accords come into being. And that is what really galvanizes Exxon and the oil industry. There were a lot of people who objected to the Kyoto Accords on economic grounds or fairness grounds because they required the industrialized countries to reduce their emissions but not the developing world and so on.
But Exxon's campaign was unique or distinctive because of its attack on science in the way that you describe. So they started, both themselves and through the American Petroleum Institute, to fund free-market communications groups and campaigns, some of them small, some of them larger, who developed a strategy for challenging the validity of emerging science about global climate change, and not just the fact that there was lots of evidence that industrial activity was contributing to global warming but also the finding that there was a warming trend.
And this not only borrowed from some of the tactics that the tobacco industry had used to delay public understanding of the dangers of smoking, in some cases there were even overlaps of the individuals and groups that were engaged in this communications campaign.
So, you know, a lot of corporate America opposed the Kyoto Accords. But only a small subset of companies did what Exxon did, which was to really go after the science as aggressively as they did.
GROSS: And you say one of the goals was to manufacture confusion and perpetual controversy. How does controversy work in Exxon's favor when it comes to climate change?
COLL: Well, we see in areas of public policy that involve science - science by its nature is a process of discovery, it involves argumentation, it involves uncertainty, it involves the free exchange of ideas and doubts. Great science usually arises and makes breakthroughs when an individual scientist has the temerity to challenge received understanding and to leap past it. So that is the nature of scientific truth, that it's constantly being argued about.
And yet the history of science also shows that there are sources of consensus and discovery that build foundations for understanding over time. And so what ExxonMobil did as the science of climate started to become a consensus, started to form such a foundation, was to fund groups that would undertake communications campaigns to keep the doubts alive, to keep the argumentation alive, to make it seem that small groups of skeptics, many of whom were not qualified in the areas of science that were most relevant to the climate debate, were heard disproportionately.
They created an impression in the media and in the public that there was a raging, deep controversy among scientists when in fact there wasn't such a controversy. At least after 2000 the doubts fell away in the face of evidence, really.
It was the evidence and the modeling and the very science that ExxonMobil was calling into doubt that gradually became more and more alarming and attracted more and more support within the scientific community.
GROSS: If you're just joining us, my guest is Steve Coll, and he is the author of the new book "Private Empire: ExxonMobil and American Power." He's also the author of the bestsellers "The bin Ladens" and "Ghost Wars," and "Ghost Wars" won a Pulitzer Prize for its telling of the wars in Afghanistan. Let's take a short break here, and then we'll talk some more. This is FRESH AIR.
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GROSS: My guest is Pulitzer Prize-winning journalist Steve Coll. His new book is called "Private Empire: ExxonMobil and American Power." When we left off, he was describing Exxon's campaign to manufacture confusion and perpetual controversy around climate change science in order to keep alive doubts that burning fossil fuels contributes to global warming.
So this campaign to create think-tanks and to find scientists who would counter global warming, a lot of that campaign was ended by the CEO who took over ExxonMobil in 2006, and that was Rex Tillerson. He was kind of skeptical about global warming too, but why did he discontinue a lot of that anti-global warming program?
COLL: It's not fully clear what he was thinking, but the reporting for the book and some of the available evidence gives us a pretty good sense of what he had on his mind. As you say, he has never said anything in public about climate science that would put him deeply at odds with the views that Lee Raymond so forcefully expressed in his time, but he did change ExxonMobil's policies.
So he pulled funding in 2006 from many of the most controversial groups, and...
GROSS: Like what?
COLL: Well, Competitive Enterprise Institute is one of the more prominent groups that ExxonMobil was funding and was litigating against the government for some of its work on climate policy and so forth. ExxonMobil was in a bit of a pickle when he started to undertake this review because there were threats that the oil companies might be sued for their activities on climate science in a way similar to how the tobacco companies were sued.
And so while changing their policies and their funding and some of their articulation about climate, ExxonMobil was careful not to admit that it had ever done anything wrong to create a pathway for liability for itself. So essentially the first iteration of their change was to say we were never wrong, but we were misunderstood. And to make sure that we're not misunderstood in the future, we're going to change some of our funding practices.
And they also began to say, without admitting that climate change was caused by industrial activity, they conceded that there was enough uncertainty and risk to justify public policy debate or, you know, the consideration of new policies, that it was a risk.
And then in 2009, they went further, and this I think is more significant. Under Rex Tillerson they announced support for carbon taxation - that is, the imposition - for the first time in ExxonMobil's history they agreed that the risks of climate change were significant enough to warrant a price, an extra price, on carbon-based fuels to incent migration away from those fuels.
They supported a carbon tax of $20 a ton, a perfectly respectable opening bid for an oil corporation, and now they've put themselves on record as supporting carbon pricing. They opposed the particular approach of the Obama administration and the European Union, the so-called cap-and-trade approach, and so because they were not supporters of that bill, some people regarded their announcement of support for carbon taxing as kind of cynical because it was politically implausible, gave them a way to say they had changed their stripes without actually endangering themselves with a bill passing.
I don't actually think they were that cynical. I think that they came to the view that carbon taxation was a better way to get a price on carbon-based fuels. And now they're on the record. So whenever the United States recovers economically and returns, as it will inevitably, to the challenge of carbon-based fuels and global warming, then ExxonMobil, I think, will be in a very different position next time around.
GROSS: Just one more thing about climate change. During the period when ExxonMobil was trying to defeat global warming science, at the same time scientists within Exxon were trying to figure out, well, if the planet is warming, how can we profit from that? So they work in both fronts at the same time.
COLL: Well, that's right. They're a science-based organization. They employ a lot of geologists, and the mission of those geologists is to understand the Earth's structure and how changes in temperatures, geology, technology, could intersect to create opportunities to find oil. And as the book reports, geologists in some of their most important kind of discovery departments were looking at how warming might unlock oil reserves and positioning ExxonMobil with advice about how to think about that.
GROSS: So in other words, Exxon wanted to defeat global science because that says that fossil fuels, burning fossil fuels is warming the climate and creating weather changes and climate change, and that would mean problems for Exxon because it's the fossil fuel industry.
But at the same time, its own scientists were saying, well, it looks like the Earth is warming, so let's see what new oil reserves that might open up to us.
COLL: Right, and this is not incidental. I mean, one of the big deals that ExxonMobil has announced in the last year involves access to the Russian Arctic, where it is partnered with a big Russian firm (unintelligible) to access, you know, many billions of dollars worth of reserves involving big investments that ExxonMobil would make north of the Arctic Circle.
Well, why is that oil accessible? It's because sea ice is melting in the Arctic. And so global warming may, in fact, unlock enormous opportunities for oil companies. And just to be clear, I mean, this is - ExxonMobil was very aggressive as a corporation about this science communications campaign. That really does make them distinctive.
But this opposition to regulation and Kyoto involves the coal industry and the rest of the oil industry, and ExxonMobil, I think, as I say, was aggressive about the science, but they had many partners in this campaign.
GROSS: Steve Coll will be back in the second half of the show. His new book is called "Private Empire: ExxonMobil and American Power." He's also a staff writer for the New Yorker and president of the Public Policy Institute at the New America Foundation. I'm Terry Gross, and this is FRESH AIR.
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GROSS: This is FRESH AIR. I'm Terry Gross, back with Pulitzer Prize-winning journalist Steve Coll. And we're talking about his new book "Private Empire: ExxonMobil and American Power." Coll describes ExxonMobil as one of the most powerful businesses ever produced by American capitalism. His book investigates how Exxon has bent and shaped American foreign policy, as well as economic, climate, chemical and environmental regulation.
So, throughout the Bush administration, I think a lot of Americans wondered since President George W. Bush and Vice President Dick Cheney were both oil men, what connections did they have with the oil industry and how did that influence their policy. So did you learn anything surprising about that that you didn't know from the documents that you went through?
COLL: Yeah. A couple of different things and they cut in two different directions. First, the CEO of ExxonMobil, Lee Raymond, who we were talking about earlier, who served up until 2005, he was a very close personal friend of Vice President Cheney. Remember during the 1990s, Cheney was the CEO of Halliburton, one of the world's largest contracting companies in the oil industry and they were business partners of ExxonMobil. But more than that, Cheney and Raymond were neighbors in Dallas, they were personal friends, their wives were friends, they went hunting together, they were both graduates of the University of Wisconsin and they were similar men. So when Cheney entered the White House, Raymond really had a relationship of long-standing and had a personal quality about it. And that created a sort of a forum where he would come to Washington and sit down with Cheney, one-on-one, sometimes in the vice president's residence, sometimes at the White House and they'd just talk through what was going on in the world - what's happening in Iraq, what's happening in Russia. Raymond would talk about his experiences negotiating deals and Cheney would brief him about what was happening in the Middle East. And once in a while, Raymond would call on Cheney to make a phone call to a foreign government where ExxonMobil was negotiating for a deal. United Arab Emirates in 2005 for example, had Cheney intervene to help ExxonMobil win a way a contract from Royal Dutch Shell at the end of a negotiation. So I found that fascinating that, you know, in some ways just what you'd think was going on, that quality of personal intimacy, shared experiences in the industry really was going on.
On the other hand, it was equally striking that the cliched idea that ExxonMobil was just an instrument of the Bush administration's foreign-policy, that it was a kind of extension of the American government during the Bush years, was also, I think, wrong. I mean they see themselves, ExxonMobil, as an independent sovereign, with their own interest, their own foreign policy. Sometimes their interests ally with the United States government. Sometimes they find themselves in opposition to the United States. And sometimes they did try to stay out of each other's way.
GROSS: So give us an example where Exxon's interests and the Bush-Cheney administration's interests were in conflict.
COLL: Well, the Bush administration, for example, was a major - had a major focus of its foreign policy in the promotion of human rights and democracy around the world. Some people attribute that to the kind of neoconservative ideology, but it was a continuation of American emphasis on human rights in especially poor and troubled countries. And Bush, you know, really pushed it in the people he appointed and the choices he made.
Now when many of the countries where human rights violations were most egregious - in Africa, places like Equatorial Guinea or Chad - well, ExxonMobil was the major oil company pumping oil out and paying hundreds of millions of dollars annually to dictators that the Bush administration was seeking to isolate. So ExxonMobil didn't want to be tainted in those countries with the Bush administration's emphasis on human rights, and tried to stay as far away from Bush administration policy in those areas as it could.
And equally, you know, the Bush administration found ExxonMobil frustrating in some of these places. In Chad, for example, the Bush administration, the World Bank and ExxonMobil were involved in a pretty radical experiment in development in a very poor country, in which Chad pledged to direct its oil profits to social sectors like education and health spending. And the World Bank and the Bush administration sort of enforced that deal. Now the dictator of Chad, Idris Deby, broke the deal in 2006 because he wanted to buy weapons because he felt threatened by rebels from Sudan. And what happened, ExxonMobil did not align itself with the Bush administration and enforce the deal. It didn't support Paul Wolfowitz, who was the president of the World Bank at the time and who challenged Deby around his defiance. Instead, ExxonMobil went separately to Deby and said by the way, we're going to be writing you huge tax and royalty checks this year - $700 million, roughly, circa 2006, in a very poor country - and you can use that money to get out of the World Bank deal and we can just keep pumping oil together. And that's what Deby did.
That's the sovereignty that ExxonMobil executives have often exercised. They see themselves as an independent entity. They have their own foreign policies. They have their own economic policies and they report to their shareholders, not to advance stuff interests of the government of the United States of the day.
GROSS: If you're just joining us, my guest is Steve Coll. He is the author of the new book "Private Empire: ExxonMobil and American Power." He also writes for The New Yorker and is president of the New America Foundation. Let's take a short break here, then we'll talk some more. This is FRESH AIR.
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GROSS: My guest is Steve Coll. He's the author of the new book "Private Empire: ExxonMobil and American Power." He also writes for The New Yorker and is president of the New America Foundation. He is also the author of the bestsellers "The Bin Ladens," about the bin Laden family, and the Pulitzer Prize-winning book, "Ghost Wars," about wars in Afghanistan.
So if you see the oil companies as like sovereigns, you know, with their own like foreign policy and their own American policy, did you learn anything new about the influence of ExxonMobil or other oil companies in the decision to invade Iraq?
COLL: Well, they really didn't want Iraq to be invaded, by and large. Their outlook on the Middle East is akin to what we think of in the foreign policy schools as a sort of a realist outlook. Think of their business model. They make money by drilling holes in the ground all over the world and then sitting on top of those holes, for up to 40 years at a time, to make back the cost of drilling the hole in the first place. They want a stable world. They want a world in which the holes they drill are not overtaken by wars, or coups or guerrilla uprisings. So when they look out at the Middle East, which is a pretty unstable place, what they urge for governments to promote stability. They're willing to compromise, I would say, on human rights or good governance for the sake of stability, that's where their business interests lie. So the idea of charging into the heart of the Middle East, invading Iraq with a conventional army, more than 100,000 soldiers, for the sake of democracy building, struck ExxonMobil as a kind of harebrained project. And...
GROSS: That's so interesting because so many Americans believe that the Iraq war was really about oil and suspected that oil company pressure had something to do with the invasion. And you're saying that was really the opposite.
COLL: At certainly at the beginning. Of course, ExxonMobil did not just sit on its hands once the war began. It began to watch the war and look for opportunity.
COLL: And there was a very interesting interview I had, along the way, with an Iraqi oil specialist who - we were talking about this very subject. And he said, I was asking him how, should I think about the relationship between oil and this war from your perspective, from Iraq's perspective? And he said something that really stayed with me. He said, you know, look, oil might not have been the cause of the war. It might not even have been supported by oil companies but it ends up being the result of the war that oil companies have access to Iraq in a way they did not before. And that is true enough.
GROSS: Well, that's interesting because, you know, you say that oil companies like stability. Exxon did not favor, initially, the invasion of Iraq. But favoring stability for a company like ExxonMobil, that sounds like sometimes that means favoring a corrupt dictator who will keep things under control, that's one version of stability.
COLL: Yeah, I think that's right. And if you look at the world from ExxonMobil's perspective at their headquarters in Irving, Texas, their business is to own oil and gas. And every year they pump out the equivalent of four and a half million barrels of oil a day, which is makes them, you know, about the same as Iraq as an oil producer. And every year they have to replace their ownership of that much oil and gas that they've pumped out and sold. So their basic problem is they wake up every day and they say where are we going to find oil and gas that we can buy in this world? And for the reasons that we were talking about earlier, that most countries or many countries in the Middle East won't allow them in the door. In Saudi Arabia you cannot own oil and gas. In Iran you cannot own oil and gas. In many parts of the world it's very difficult to get access because of this nationalism around oil. So the reality is that there's really only two places, if you're Exxon Mobil, where you can buy oil and gas. One is in the free market West where anybody can own property, but where there hasn't been a lot of growth in the discovery of oil and gas, at least until recently. And then the other place is in weak states, where governments can't do it themselves. And many of those weak states are run by dictators. So 25 percent, or so, of ExxonMobil's oil liquid's production in a given year today, takes place in West Africa - countries like Equatorial Guinea, Chad, Nigeria, Angola. Now these are troubled states and the stability that arises there is often enforced by an authoritarian leader whose power is, itself, paid for by the revenue he gets from oil companies and oil sales.
GROSS: Is it in part because it's so difficult to get access to new oil reserves now, that ExxonMobil got into the gas fracking business and that's extracting gas from shale, from rock, through a complicated process of chemicals and drilling?
COLL: That is the reason, exactly. When you look out at the world, not only is it hard to find oil abroad, but when you look at home where property rights are more favorable for any corporation, the only really new frontiers are either in deep water or very cold places that are opening up - like the Arctic, or Alaska or the Gulf of Mexico - frontiers in a technological sense - or these new sources of what are called the unconventional gas reserves, shale gas, gas located in methane beds and - that was previously known to exist but was difficult to access in an economical way. And now, as you know, there's this boom in the United States around these unconventional sources of natural gas, in particular, also some oil but mostly gas, and Exxon Mobil has moved into this in a big way because it is an answer to their basic problem of replacing reserves every year.
Overall, the balance of their portfolio, the oil and gas they own, is shifting from oil toward gas and its shifting onshore, as they say, back to the United States. They made a big purchase in 2010 of the leading unconventional gas producer in the United States, XTO and that has put them front and center into a fracking debate.
GROSS: Is ExxonMobil concerned about alternative energy sources like, you know, solar and wind power, you know, battery-operated, battery-fueled cars cutting into their business?
COLL: You know, not especially. It's very interesting. They have a kind of a rigorous analytical department, a kind of forecasting department that works on these subjects relentlessly. And so far their forecast has been not much. The oil business is basically about making cars run and trucks run and alternative fuels for transportation don't seem threatening yet. The one technology that they are most concerned about is batteries. A huge breakthrough in battery capacity could change the global transportation industry. Their best forecast is that it's not coming, that batteries are self-limiting, but they recognize that's the one risk to the transportation fuel business, that is the greatest one.
GROSS: Now is that an example of why ExxonMobil really wanted to convince Americans that climate science was unsettled, that we really don't have evidence that fossil fuels affect our climate, or climate change or weather change? Because if Americans believe that they might be motivated to get alternative fueled cars, to buy hybrids and to push for more research into alternative fuels, and that would be bad for the oil industry.
COLL: Well, it's true if you look out over 50 years or more, absent a perception by populations and government that global warming is a real threat, the oil industry looks pretty stable. The one game changer is if world governments came to the conclusion that global warming was a threat on the scale of nuclear war or, you know, truly an existential threat to the planet, then they might undertake the kind of Manhattan Project style investments and bear the costs that would be required to make a transition rapidly away from oil and coal in particular. And so, yeah, in that sense, it is - it's a deeper threat to the fossil fuel industry than any other form of environmental debate.
You know, at the same time - and I said this to the ExxonMobil executives I interviewed as I was working on the book: Look, the oil industry is actually not the big loser in a world of climate change regulation. The big loser is coal. The oil industry can shift to gas, which is not as problematic. The oil industry, you know, makes its money from lots of other endeavors, and oil has many other uses.
And, in fact, they can afford to pay a carbon tax and still make lots of money. So I asked the ExxonMobil folks that I had the chance to meet: You know, why did you fight so hard? Why put your own reputation at risk by being such an outlier campaigning against the science when your business interests, you know, are manageable?
And I think it really had to do with the leadership and the impression that Lee Raymond had that this was just phony science and that these were people trying to disenfranchise ExxonMobil, and he was going to fight them on principle in a sort of Cheney-esque way - not so much because they were really at risk of having their business fall apart on them any time soon. That really wasn't at risk.
GROSS: So your book is called "Private Empire: ExxonMobil and American Power." By calling ExxonMobil a private empire, you're saying they are very powerful - powerful almost to the extent of a government, but without anybody voting them in. What are your concerns about the amount of power that a private corporation like ExxonMobil has in America and around the world?
COLL: So, two things: We live in an era in the United States where the relative power of corporations is greater than at any time since the Gilded Age. And because of Supreme Court decisions like Citizens United that have created more space for corporations to act politically in our system, they're able to direct this influence into our campaigns and onto air waves with advertisements and through political contributions to a greater extent than ever before.
So corporations matter, and the biggest ones matter a lot. And ExxonMobil is one of the two or three largest corporations we have. And as we've been talking about, its interests are very specific and, I think, consequential to American politics. And then abroad: The one thing that struck me traveling in Africa and Asia and elsewhere on the ground in the countries where ExxonMobil operates is that its influence is most out of whack, most disproportionate in the very poorest countries that - whose people have the most at stake from oil production.
When you go to a place like Chad, you know, a poor, benighted country - fortunately, only about 11 million live there. But that's 11 million souls in a - basically, a fourth-world country. Their only natural resource is oil, and they're run by, you know, an authoritarian leader who hasn't done much to lift the people out of poverty.
Well, the United States government in Chad gives, in total, every year, as bilateral aid, you know, not more than $10 million. ExxonMobil's country representative office cuts a check to the leader of Chad every year for more than $700 million. Now, in a country that poor, if you're the dictator, who are you going to call?
GROSS: So in places like Africa where ExxonMobil has more sway than the U.S. government does because it gives so much money to the dictator in power, what responsibility do you think a corporation like ExxonMobil should have to the people there?
COLL: Well, it's a question that's been at the heart of their operations overseas for the last 10 years. When they bought Mobil, they inherited a war, for example, in Aceh, Indonesia where guerrillas, the Free Aceh Movement, were attacking ExxonMobil's gas fields and where the Indonesian army was under contract to ExxonMobil to defend the gas fields and was running detention centers right on the edge of ExxonMobil's property where young Acehnese men were being tortured.
And ExxonMobil had to come to terms with the fact that it generated some of this violence by essentially representing the prize in the war. If you carried out a coup in Chad or you carried out a coup in Equatorial Guinea, what did you win? You won ExxonMobil's cash flow. So they had to develop their own defense policies and, as typical, they were very slow to come to terms with their responsibilities.
Eventually, they adopted the sort of corporate responsibility pacts urged on them by groups like Human Rights Watch. And a Human Rights Watch researcher told me watching ExxonMobil implement human rights was like watching them being implemented by a police state: very thorough. And now they are, you know, a better practitioner in these places than before, but the dilemma is the same.
GROSS: Steve Coll, thank you so much for talking with us.
COLL: Thank you, Terry. Thanks for having me.
GROSS: Steve Coll is the author of the new book "Private Empire: ExxonMobil and American Power." He's also a staff writer for The New Yorker and president of the New America Foundation.
The second season of "Sherlock" begins on PBS Sunday. Coming up, John Powers considers the enduring popularity of Sherlock Holmes. This is FRESH AIR. Transcript provided by NPR, Copyright NPR.