by Steve Coll
Then there was tier four: the enemy, as some of the military veterans who manned ExxonMobil’s Washington office did not mind putting it from time to time. These were Democrats and environmental activists who, it seemed to the corporation’s executives, wanted to disenfranchise ExxonMobil and to use the corporation’s unpopularity to galvanize liberal constituents and funders. These activists did not believe in the legitimacy of the profit motive, in the estimation of some ExxonMobil executives. Senators Charles Schumer and Dick Durbin fell into this category; Senator Hillary Clinton, on the other hand, did not. Lee Raymond accepted that there was not much he could do about the company’s permanent opposition in Washington; these people were not going to change their views. Nor should ExxonMobil bend to them. Clifton Garvin’s flirtation with solar investments during the Carter administration was regarded within the corporation as an object lesson in what not to do. Even Raymond accepted that it had made sense for Garvin to explore alternative energy businesses during the oil supply upheavals of the 1970s, but the lesson, he believed, was that alternatives to oil were not economically competitive and would not be for the foreseeable future. The corporation should stick to its core expertise and not chase after fleeting political or policy fashions. “In hindsight it appeared that we were abdicating who we were,” Raymond recalled. “Presidents come and go; Exxon doesn’t come and go.”9
Some of ExxonMobil’s Washington lobbyists also believed that the most extreme anti-oil activists could be contained only by direct counterattack and pressure. There was no sense in pretending otherwise, they argued. The industry’s uncompromising opponents had to be taken on uncompromisingly.
As the Bush administration took office, one issue was rising in Washington that was of far-reaching, even existential importance to the oil industry, an issue that would test ExxonMobil’s lobbying prowess: climate change. As policy debates about global warming intensified, two men, one in government and the other in industry, would increasingly distinguish themselves by their ardent skepticism toward climate scientists and their opposition to all government regulation: Dick Cheney and Lee Raymond.
In a large color ad taken out in Life magazine in 1962 by ExxonMobil’s precursor Humble Oil, a small, smartly dressed cartoon character saluted a photograph of a majestic glacier. “Each Day Humble Supplies Enough Energy to Melt Seven Million Tons of Glacier!” the ad’s headline declared.
Such was the John F. Kennedy era of scientific optimism, as marketed by Madison Avenue. Four decades later, of course, many scientists regarded the retreat of glaciers and mankind’s unembarrassed capacity to melt them as signs of a slowly unfolding global catastrophe. (Of the 144 glaciers monitored by researchers between 1900 and 1980, 2 advanced and 142 retreated, an indicator of the earth’s warming surface temperature during the twentieth century.)10 Climate change became a galvanizing priority of science and public policy in a remarkably short time. It took less than two decades from the time of Humble’s ice-melting ad campaign for Exxon’s executives to recognize that climate change would arrive as a public policy challenge in Washington and other global capitals, and that it might undermine the corporation’s business model. Characteristically, Exxon began to prepare itself well before the phrase “global warming” saturated public consciousness.
The “greenhouse effect” is a natural process in which sunlight is trapped by the planet’s atmosphere; without it, the earth would be very cold. The question that scientists gradually examined during the twentieth century was whether additional gases released by the clearing of forests and the burning of fossil fuels—coal, oil, and natural gas—accelerated the greenhouse effect. It was not until the 1950s and 1960s that a few scientists began to document credibly that human activity was releasing more and more carbon dioxide, a greenhouse gas, and that warming might be the result. Their findings did not immediately stick. The earth’s climate had undulated across millennia. Orbital variations, the intensity of sunlight, and other natural factors had produced alternating ice ages and periods of boiling seas long before the rise of smokestacks and automobiles. Scientists remained divided as late as the 1970s about essential questions such as whether the earth was warming markedly, whether a warming or cooling trend posed the greatest future danger, and how human and industrial activity fit into the picture.
James Hansen, an astrophysicist at the National Aeronautics and Space Administration, was among the first scientists to call attention to the danger that greenhouse gas emissions could produce dramatic warming within a relatively short time. His and other work prompted the first National Academy of Sciences examination in 1979. The academy’s study group found that if man-made CO2 emissions—from coal-burning electricity plants, automobile exhaust, truck fumes, airplane exhaust, deforestation, and other sources—continued to grow, there was “no reason to doubt that climate changes will result and no reason to believe that these changes will be negligible,” as the chairman of a study for the National Research Council’s Climate Research Board put it. The findings might be “disturbing to policymakers” because “a wait-and-see policy may mean waiting until it is too late.”11
The National Academy report attracted Exxon’s attention. Any effort to tax, limit, or eliminate carbon dioxide emissions on environmental grounds would have obvious implications for Big Oil. Exxon emitted tens of millions of metric tons of carbon dioxide in the course of its own oil production, refining, chemical manufacturing, and electricity-generating operations. Not only did the corporation burn carbon-laden fuels, it then sold such fuels for profit to other users, who also burned them.
In 1980, just after the publication of the National Academy study, the corporation hired its own astrophysicist, Brian Flannery, who had taught at Harvard University. A few years later Flannery recruited a chemical engineer named Haroon Kheshgi, who had worked at the Lawrence Livermore National Laboratory. Flannery and Kheshgi started to produce, while salaried employees for Exxon, peer-reviewed research for the United Nations’s Intergovernmental Panel on Climate Change, or I.P.C.C. This was a network of many dozens of mostly academic and government scientists established to create definitive assessments, at multiyear intervals, of the scientific evidence about global warming. Exxon’s climate scientists also used corporate funds to support climate-modeling research at the Massachusetts Institute of Technology. They produced internal assessments of the scientific and policy questions for Exxon’s Management Committee. In the early years of this Exxon climate work, constructing an accurate model of future Earth temperatures seemed daunting. When Flannery arranged contracts with the M.I.T. climate modelers, he told them, by his own account, “Embrace the uncertainty in all of this.”12
Lee Raymond had no particular background in climate science, but as a chemical engineer whose doctoral thesis had concerned mathematical modeling, he considered himself adequately qualified to reach his own judgments on the underlying scientific questions. (He was the first Exxon chief executive to have a doctorate.) At the University of Minnesota, where he had earned his advanced degree on a scholarship, his academic mentor, Neal Amundson, a renowned figure in chemical engineering, had instructed him, “Science is science, and don’t let these damn politicians ever screw you up.”
During the 1980s, when global warming first emerged as a public policy matter, Raymond turned to the scientists in Exxon’s oil exploration department, who by profession studied the history of the planet. The corporation’s scientists told him that climate measurements on Earth were very recent relative to the planet’s longevity, and that this was a reason to be skeptical about extrapolating data.
Raymond also entered the incipient climate debate with deep skepticism about nonpolluting alternatives to oil and gas such as solar and wind power, which were relatively costly but might seem more attractive if climate change was a concern. “I’ve been there and done that,” Raymond would say of his history with green technologies.13 He was referring to successive management assignments he undertook during the late 1970s and early
1980s. In one, he served as second-in-command at New York–based Exxon Enterprises, which housed alternative energy initiatives, including solar power. The division had been conceived during the 1960s as a kind of in-house venture capital arm that might incubate new and profitable businesses outside of oil and gas. The embargoes and oil price shocks of the 1970s made this goal seem all the more appealing. Exxon went into the office equipment business, selling electronic typewriters, fax machines, ink-jet printers, flat-panel displays, voice recognition hardware, home computers, and computer chips. The corporation studied the possibility of merging with Bristol-Myers, the drug maker; Colgate-Palmolive, the consumer products giant; and Hewlett-Packard, the computer company. In retrospect, such diversification looked like folly to oil industry strategists, but at the time, it was a corporate fashion.
Raymond’s contribution to Exxon’s experimental thrust was to recommend that it be shut down. He dumped the corporation’s solar investments. Any business that required government subsidies to be viable was not for Exxon, he declared.
In the summer of 1988, amid a record-breaking heat wave, James Hansen testified before Congress about the findings of a paper he had coauthored with six other N.A.S.A. scientists. Using three different forecasts of releases of CO2 into the atmosphere during the century to come, Hansen and his colleagues predicted that even in the best case, future temperature changes would be “sufficiently large to have major impacts on people and other parts of the biosphere.”14
His work fortified the first attempt by governments to regulate greenhouse gases. Delegates to the 1992 Rio Earth Summit negotiated a treaty, the United Nations Framework Convention on Climate Change. President George H. W. Bush signed the agreement, and the United States Senate ratified it. The treaty divided the world’s governments into categories, distinguishing between wealthy industrialized countries and poorer, industrializing ones. It embraced the principle that wealthy countries should pay the greenhouse gas reduction costs of poorer countries, on the grounds that the privileged nations had created much of the problem in the first place and could afford to fix it, whereas it would be unfair to penalize or restrain the industrial growth of poor countries as they tried to lift their citizens out of poverty. The convention exacted no binding commitments from any of its parties. However, the governments and leaders of industrialized countries, including President George H. W. Bush, pledged to adopt national policies that would “aim” to reduce their overall greenhouse gas emissions to 1990 levels by the year 2000.
Three years later, the United Nations’s assessment group, the I.P.C.C., reported that most of the observed warming on Earth’s surface since 1950 was likely to have been caused by human and industrial activity. “The balance of evidence . . . suggests a discernible human influence on global climate,” its summary report stated.15
Lee Raymond publicly rejected even the qualified formulations of the 1995 assessment. In October 1997 (which would prove to be the fifth-warmest year on the planet, to that point, since the mid-nineteenth century), he flew to Beijing to deliver a speech to the Fifteenth World Petroleum Congress, an event hosted by the People’s Republic of China. At the time, the Clinton administration was in the last round of international negotiations that would produce the Kyoto Protocol, an enhancement of the 1992 Framework Convention, with commitments that would require rich governments to reduce their emissions. Raymond’s purpose in Beijing was to denounce the Clinton administration’s negotiating position. He devoted thirty-three paragraphs of his seventy-eight-paragraph speech to the argument that evidence about man-made climate change was an illusion and that a binding agreement to reduce greenhouse gas emissions was therefore unnecessary:
Is the Earth really warming? Does burning fossil fuels cause global warming? And do we now have a reasonable scientific basis for predicting future temperature?
In answer to the first question, we know that natural fluctuations in the Earth’s temperature have occurred throughout history—with wide temperature swings. The ice ages are a good example.
In fact, one period of cooling occurred from 1940 to 1975. In the 1970s, some of today’s prophets of doom from global warming were predicting the coming of a new ice age. . . . The Earth is cooler today than it was twenty years ago.
We also have to keep in mind that most of the greenhouse effect comes from natural sources. . . . Only four percent of the carbon dioxide entering the atmosphere is due to human activities—96 percent comes from nature.
Leaping to radically cut this tiny sliver of the greenhouse pie on the premise that it will affect climate defies common sense and lacks foundation in our current understanding of the climate system. . . . It is highly unlikely that the temperature in the middle of the next century will be affected whether policies are enacted now or 20 years from now.
He went further: He urged poor, rapidly industrializing countries such as China to defy the United States and Europe by blocking any agreement in Kyoto that would result in “slower economic growth, lost jobs, and a profound and unpleasant impact on the way we live.” China and other developing nations might be exempted from the treaty’s direct economic costs, but this “will not prevent them from being hurt. Their exports will suffer as the economies of industrialized nations slow. So all of us would suffer from these proposals.” Moreover, China and other poorer countries had an obligation, on behalf of their impoverished citizens, to ignore the fears of environmentalists comfortably ensconced in the wealthy West, Raymond argued:
The most pressing environmental problems of the developing nations are related to poverty, not global climate change. Addressing these problems will require economic growth, and that will necessitate increasing, not curtailing, the use of fossil fuels.16
It was extraordinary for the chief executive of a U.S.-headquartered multinational to lobby against a treaty he disliked by appealing to a Chinese Communist government, among others, to adopt a negotiating position opposed to a sitting American president.
Raymond believed, however, that his obligation as Exxon’s chief executive was not primarily to support American diplomacy—and certainly not when he disagreed with its assumptions so profoundly. The Beijing address was “seminal,” recalled Frank Sprow, a senior Exxon executive who worked closely with Raymond on the climate issue.
Exxon’s message was that governments should avoid steps that would curtail economic growth. Raymond adamantly believed that Kyoto was both an impractical and an unjust economic agreement—impractical because it would require the United States to make sacrifices in its national way of life that its people would never undertake, and unfair because it laid too much of the climate policy burden on developing economies whose governments had an urgent moral duty to lift their people out of poverty, which required, in his estimation, burning fossil fuels.
Exxon might withstand the financial and business burdens that would likely follow from treaty-imposed limits on greenhouse gas emissions, but Raymond feared that the global economy would slow markedly and the knock-on effects of reduced growth would hurt the oil industry and the country. He also viscerally resented what he regarded as the fear-mongering of the environmentalist movement. Only by hyping the threat could they justify immediate, even drastic policy intervention: “Just give me a break!” Raymond told his colleagues.
“They had come to the conclusion that the whole debate around global warming was kind of a hoax,” said an executive who had direct access to Raymond. “Nobody inside Exxon dared question that.”
China and scores of other poor countries ignored Raymond’s pleadings and signed the Kyoto Protocol, along with the United States, in December 1997. Thirty-seven industrialized nations, including America, accepted binding targets (although without any enforcement mechanism) that between 2008 and 2012, they would reduce their emissions 5 percent below 1990 levels. For the first time—almost two decades after the first National Academy of Sciences study had suggested that climate change might be “disturbing to policymakers”—a regime to
control greenhouse gas emissions threatened to impose real costs on industrial corporations like Exxon.
Arthur G. “Randy” Randol III, who served as ExxonMobil’s senior environmental adviser in Washington at the time, led climate lobbying for the corporation’s K Street team. Randol had earned his doctoral degree in nuclear engineering at the University of Florida in Gainesville. During the 1990s, he had immersed himself in the issues around climate change. A large man, he could be blunt in argument. He was “brilliant,” an admiring colleague said, but he had “a reputation for being pretty aggressive. Lots of people in Washington are very polite in meetings, and Randy is a bull in a china shop.” He could “talk about climate studies and carbon technology projects the way other people I know talk about the 1986 Red Sox outfield,” another colleague recalled.
For political cover, Exxon increasingly worked the climate account through the American Petroleum Institute, the industry trade and advocacy group. Randol provided technical expertise, while Raymond offered authority and funds. During the late 1990s, with emphatic support from Exxon, climate became the “eight-hundred-pound gorilla” within the institute, a “really, really big issue—bigger than anything else,” a former executive recalled. The oil industry did not want “to risk a reduced reliance on petroleum based upon provisional science, emerging science, or based upon harmful public policies,” as Philip Cooney, an A.P.I. attorney who worked on climate policy at the time, put it. Lee Raymond took the lead within A.P.I., strengthened by the expertise of Exxon’s in-house astrophysicist, Brian Flannery.17
They recognized that if they oiled the opposition to Kyoto in Washington—if they allowed environmental groups to frame the issue as one pitting greedy oil corporations against planet Earth—they would undermine their own interests. To evade direct assaults by environmentalists, Exxon and other A.P.I. members joined a newly invented and more broadly based group, the Global Climate Coalition, with influential members from every part of the country and many different industries. Exxon and Royal Dutch Shell joined, but so did the Aluminum Association, General Motors, Ford, and DaimlerChrysler. They won endorsements from autoworkers concerned that Kyoto would lead to American job losses. During the last years of the Clinton administration, the coalition became “the most effective industry association I’ve ever seen at working to block progress on climate change,” Kert Davies, the research director for Greenpeace, said later. Under Raymond’s spur, A.P.I. also poured money into independent think tanks and advocacy groups that were predisposed to attack Kyoto, or were invented for the purpose by individual anti-Kyoto campaigners aligned with industry. Their strategies emphasized “the promotion of free-market principles,” as the institute’s lawyer, Phil Cooney, later put it.18
