Steve Coll's Private Empire provides oil spill-to-oil spill coverage of the recent history of Exxon-Mobil, and in that course brings us Bush/Cheney adventures, climate change deniers, armed conflicts in lost and forgotten places, and the rise (and fall) of Russian oligarchs. In this complex work, Exxon-Mobil appears misunderstood and misunderstanding.
Coll begins his story with the 1989 crash of the Exxon Valdez, the moment that seared Exxon in the public consciousness as an environmentally reckless brute, pandering to America's oil addiction at the cost of America's soul. Exxon reacts from this crisis in both positive and negative ways. It becomes obsessed with safety -- though the company's pursuit of safety is not to assure accident avoidance as much as it is a premise for increasing demands for precision and attention from its workforce. The safety culture Exxon creates becomes, in a menacing way, grounds for enforcing discipline, regimentation and uniformity-of-voice throughout the enterprise.
The second formative moment Coll relates is the 1993 removal of Exxon's headquarters from New York City (Exxon was the former Standard Oil of New Jersey) to Irving, Texas. Neither bi-coastals nor Texans would be surprised by the resultant shift in company worldview.
Exxon CEO Lee Raymond dominates the first half of this book. It is he who responds to the Exxon Valdez affair, he who engineers the merger that forms Exxon Mobil, he who denies the science behind climate change. And he's one tough cookie. His message to an Exxon Mobil executive recovering in a hospital after a bicycle accident: "[T]his is your last injury as an employee of Exxon."
Raymond is depicted as a credible scientist who takes pride in Exxon-Mobil as a science-based organization. Yet he refused to abandon his skepticism about climate change despite the accumulation of scientific evidence. Raymond and Exxon-Mobil's public affairs department are in no small part responsible for the emergence of the contemporary denier culture in American politics -- the often successful strategy for blocking unwelcomed regulation by attacking the soundness of its underlying scientific premises.
Coll's larger story is of the relationship between Exxon-Mobil and the United States. While Raymond and most of the senior executives at Exxon-Mobil are U.S. nationals, their allegiance (in their roles of agents of Exxon-Mobil) lies elsewhere. Exxon-Mobil's 'private empire' is independent of, and operates at times in opposition to, the various imperial ambitions of the United States.
Exxon-Mobil's attitudes toward Washington shift during the story. During the initial years, Exxon-Mobil displays by-and-large a 'go it alone' posture, calling on Washington only when necessary: that is selectively and at times out of the blue. U.S. ambassadors in countries where Exxon-Mobil operate are generally left in the dark as to the company's intentions - Coll suggests that company intelligence is rarely shared.
Exxon-Mobil's distance gives way in more recent years to a much more activist stance, where the Washington lobbying arm of the firm grows in stature and importance. In part, this reflects Exxon-Mobil's increasing defensiveness. But there is certainly rent seeking involved.
Overseas Exxon-Mobil charts its own course, and constantly collides with the U.S. government. Cheney can be helpful (on occasion), but he hardly carried water for Exxon-Mobil. Notably, Raymond could see little upside to the U.S. intervention in Iraq.
There are two striking ideas that run throughout the book. The first is skepticism about the pursuit of a 'strategic oil supply' -- the notion that the United States (or any other country) requires secure access to particular sources of oil. Not so, thinks Exxon-Mobil: if oil is fungible and global markets exist, what any importing country sources from this or that producing country will not affect the global price or the global supply. Little meaningful security is gained by currying favor with, or intimidating, oil producing states. Exxon-Mobil finds itself in a global scramble for reserves; it will pursue them anywhere, but the assets it acquires are in no sense dedicated to or controlled by the United States.
The second idea is an extension of the 'resource curse' affecting oil rich countries in the developing world to the companies that operate in them. Private Empire follows Exxon-Mobil's activities in Indonesia, Chad, Equatorial Guinea, and Venezuela. Resource curse pathologies are evident in each: oppressive dictators, exploitative elites, human rights abuses, continuing immiserization. And they are nasty places to conduct complex, expensive and vulnerable operations. Here too Exxon-Mobil oscillates, from maintaining a cultivated distance from the particular thug of the day in power to periodic pleas for help from Washington.
But Exxon-Mobil itself has a 'resource curse'. It is trapped by expectations of profits (created by current pricing of historic reserves) that are unsustainable. As Coll argues, the days of easy oil have long passed.
Private Empire: Exxon-Mobil and American Power is shortlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award. The winner of the 2012 FT/GS Book Award will be announced November 1.
See my reviews of these other shortlisted books for the 2012 FT/GS Book Award:
Acemoglu and James Robinson, Why Nations Fail - The Origins of Power, Prosperity, and Poverty
Walter Isaacson, Steve Jobs
Michael J. Sandel, What Money Can't Buy - The Moral Limits of Markets
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