Private Empire: ExxonMobil and American Power

by Steve Coll

  “The great lingering question is whether the government of Chad will indeed adhere to the oil revenue management plan and whether the income will benefit the people. I’d say the odds are good, but it’s still a crapshoot.”28

  ExxonMobil judged the risks it had taken to pump oil in Chad to be a success: “On target to reach full production status as scheduled.” The corporation had so far drilled 115 oil wells in its southern zone; it had paid out millions of dollars in compensation to local farmers for land rights, and it continued to dole out about $25 million in wages to local employees annually, a large infusion of cash to the country’s economy. ExxonMobil “has had and will continue to have significant positive economic impacts in Chad,” the corporation declared.29

  These were still early days; hope was in the air. A few years on, the World Bank’s assumptions about Chad’s potential as a socioeconomic experiment would be more fully tested, and the distribution of costs and benefits from oil production would be clearer.

  Eight

  “We Target Oil Companies”

  Frank Sprow, the ExxonMobil vice president in charge of safety and environmental issues at the corporation after 2000, was a trim, athletic man who stood about six feet one inch tall. He had worked at Exxon since the 1960s; as he reached the corporation’s executive ranks, he wrote and oversaw its rigorous post-Valdez safety rules. He was also, in his private life, a thrill seeker.

  In off-hours and on weekends and vacation days, Sprow sometimes went hang gliding. He tried extreme skiing. He raced motorcycles. He raced midget sports cars at Soldier Field in Chicago. He flew stunt helicopters and went parachuting. One of his friends owned a stunt plane, a mini Messerschmitt, and on the weekends the two of them occasionally went for a ride—they would fly straight up, cut the engine, and dive. To manage his hobbies while carrying out his professional role as the chief enforcer of ExxonMobil safety codes so pervasive that they encouraged employees to confess paper cuts, Sprow mainly chose to keep his off-campus activities to himself.

  At one stage he developed a particular passion for bicycle racing. He competed in Europe and the United States. Racing proved hazardous, however; he was hospitalized a number of times after accidents. One day Sprow was lying in a Princeton, New Jersey, hospital bed, nursing a broken collarbone, when the telephone rang. An ExxonMobil colleague who was visiting him, and who was aware of his friend’s private passions, answered the call. It was Lee Raymond. Sprow shuddered a little and took the receiver.

  “You’re probably thinking that I’m calling to ask how you’re doing and to wish you a speedy recovery,” Raymond said. “The reason I’m calling you is to tell you that this is your last injury as an employee of Exxon. Do you understand that?”

  “Yes, I understand,” Sprow managed. Raymond hung up.

  Sprow gave up bike racing and entered triathalons; he managed to avoid additional injuries, at least of the type that led to missed workdays and unfavorable safety statistics. He did not slow down much, however. He typically started his days by running ten or twelve miles. After the Mobil merger, despite a general awareness of Sprow’s hobbies, Raymond appointed him to run Safety, Health, and Environment for the worldwide corporation.

  Sprow had shown that he could deliver measurable improvements in ExxonMobil’s safety and operational performance. Alongside Raymond, he proselytized the belief that zero accidents and defects was achievable, and that a fanatical devotion to safety in complex operational units such as refineries could lead to greater profits because the discipline required to achieve exceptional safety goals would also lead to greater discipline in cost controls and operations.

  Sprow had studied chemical engineering and physics at the Massachusetts Institute of Technology, and he earned a doctoral degree in chemical engineering at the University of California at Berkeley. His advanced knowledge of chemistry gave him special credibility with Raymond, a fellow doctoral degree holder in the field. So, too, did Sprow’s ability, in a succession of management assignments, to break through Exxon’s habitual, bureaucratic resistance to change. Even so, along with many other managers, he occasionally suffered Raymond’s withering scorn. “He’s a pretty brusque guy,” Sprow conceded. “That’s probably an understatement. I have been cursed at by him a few times, and perhaps demeaned. . . . There were a few times when I came home and told my lovely wife, ‘This is probably going to end soon.’”

  After taking charge of worldwide safety and environmental matters at ExxonMobil, Sprow became interested in dangerous game hunting—a hobby at least a little more in keeping with the masculine corporate culture. Sprow sought more challenging landscapes than ExxonMobil’s sprawling Texas hunting ranch; he traveled to Africa periodically to shoot lions and rhinos. This bolstered his resolve when facing down Raymond.

  Sprow served as one of Raymond’s key lieutenants on climate change matters. Ken Cohen and his public affairs shop, in tandem with the K Street office in Washington, oversaw contributions to free-market advocates who published, spoke out, and filed lawsuits to challenge policies designed to reduce greenhouse gas emissions or assess the long-term impact of global warming. On the ExxonMobil organization chart, however, climate policy fell within Safety, Health, and Environment because it was, like oil spills or air pollution, an environmental issue that required worldwide corporate edicts and continuous management attention. Sprow was among those, like Raymond, who believed that “some of the environmental groups, with relatively little science behind it, at least in the early days,” had “rallied way over to the side that we just need to flat move away from fossil fuels.” He agreed with Raymond that poorer governments should be very cautious about the economic damage they might do to their struggling populations if they moved to tax or limit carbon-based energy sources too quickly or severely.

  By 2002, however, it had become apparent to Sprow and other senior executives that ExxonMobil had, at a minimum, a communications problem surrounding its climate policy advocacy. The corporation was being vilified, and it seemed, at the same time, to be undertaking no constructive activities to address or even acknowledge the risks climate change might pose. Early in 2002, the Bush administration had developed a strategy for fending off critics of its own: The administration pledged to invest in scientific research, while resisting any legislation or treaty that would tax or limit carbon-based energy. Around the same time, Sprow pitched Raymond on a similar positioning for ExxonMobil.

  “Okay, we cannot prove that climate change is being driven by man-made activities,” Sprow said. Also, even if the burning of coal and gasoline was warming the planet, there were no “cost-effective steps” that would ease the problem, at least not “steps that are available now.” Thus far, he was in lockstep with Raymond’s views.

  The science of climate change might contain significant uncertainties, he continued. Yet the uncertainties also cut in the other direction: It was at least possible that global warming was indeed under way and that it could create large disruptions in the future. Sprow put a question to Raymond: “Is it not the case that the risk of climate change is high enough that responsible efforts . . . to mitigate risk would be worthwhile?”

  Raymond did not denounce him as an idiot, which was a start. The two of them, other senior ExxonMobil executives, and members of the corporation’s board of directors who oversaw environmental and public policy “talked about that a long time.” They decided during 2002 that ExxonMobil should invest in research that might bring breakthrough clean energy technologies forward, without altering the corporation’s opposition to greenhouse gas regulation—a policy evolution that exactly mirrored the Bush administration’s approach.1

  ExxonMobil wanted “partners with a faultless reputation” whose work on alternative energy technology could burnish the corporation’s reputation in the field, Sprow recalled. Although he remained skeptical of what he regarded as General Electric’s favor mongering in Washington, Raymond reached out to Jeffrey Immelt, G.E.’s chief executive and the success
or to Jack Welch, to explore a joint venture: Perhaps ExxonMobil could benefit from some of G.E.’s carefully honed image making. ExxonMobil, G.E., Toyota, and Schlumberger eventually agreed, late in 2002, to provide $225 million in funding to a new Global Climate and Energy Project, housed at Stanford University; ExxonMobil’s contribution would be $100 million.2 The project would conduct basic research, overseen by independent scientists, into alternative energy technologies promising enough to address the huge demand for energy worldwide, while at the same time offering pathways to reduce greenhouse gas emissions.

  ExxonMobil had also funded computerized climate modeling work at the Massachusetts Institute of Technology. The Stanford project would provide the corporation with something new and credible to point to in response to accusations that it put its profits before the public welfare. The Stanford investment soon became a familiar element of ExxonMobil PowerPoint slides and media talking points, but it would prove to be a limited basis for enhancing the corporation’s reputation on the issue. For one thing, Lee Raymond had not abandoned his fundamental doubts about whether the planet was warming at all. Nor was he prepared to yield the issue to environmentalists. Like his friend Dick Cheney, Raymond believed that the best way to defeat or at least contain an enemy was to remain clear-eyed and unsentimental about the enemy’s intentions.

  Greenpeace’s penchant for direct action, guerrilla theater, and civil disobedience had attracted more than two million members since its founding in the counterculture coffeehouses of Vancouver during the Vietnam era. Greenpeace now ran its global campaigns from Amsterdam and maintained offices in more than three dozen countries; its portfolio of issues had expanded to protecting whales and warning of the dangers of climate change.

  The 2000 election had forced a reevaluation of Greenpeace’s strategy in the United States. With Al Gore out and George W. Bush in the White House, “Climate [was] suddenly on shaky ground,” recalled Kert Davies, the organization’s Washington-based research director, who had arrived that year from a group called Ozone Action. The question for Greenpeace was how to best launch a worldwide campaign targeting Bush. “The first instinct was, ‘He’s Big Oil,’ so we target oil companies.” Greenpeace began with a generalized campaign highlighting “oil addiction” and distributing posters of Bush holding a gas nozzle like a weapon. That campaign soon evolved into one that explicitly targeted “Exxon as a proxy for Bush . . . a proxy for corporate power over government in the United States.”3

  Davies played a prominent role in shaping the new campaign. He knew the art of media advocacy; he could remember the “killer quotes” he had placed with particular reporters from major newspapers to advance his messaging. He was a tall, thin man who biked to work at Greenpeace’s office, a warren of desks made from recycled materials, in the Chinatown section of Washington, D.C. Davies had grown up in central Philadelphia, a child of “campers and hippies.” His father was an architect, and his mother was a computer programmer and elections judge. In the midst of the Reagan administration, he studied environmental issues at Hampshire College, whose reputation for crunchiness was the subject of a recurring skit on Saturday Night Live. After graduation, he backpacked around the world and earned a master’s degree in environmental studies at the University of Montana before taking up green campaigning as a formal profession.4

  He had substantial experience by the time the ExxonMobil challenge fell to him. His thinking was forged as well by Greenpeace’s rigorous internal culture. The organization engaged in ruthless internal reviews and self-criticism in regard to the effectiveness of its advocacy; Davies repeatedly had to defend his choices before colleagues in meetings and in conference calls, some of whom were no less direct than Lee Raymond in their cross-examinations of his decision making. He proved persuasive: ExxonMobil seemed the best target for Greenpeace’s climate work during the first Bush term, because “it was the biggest and the ugliest and . . . had said the worst things about climate.” Lee Raymond, in particular, seemed a gift.

  Davies’s strategy was to “pillory this company,” document its “wrong behavior” on climate, and “force other companies to run away from that model.” In July 2001, Greenpeace released “A Decade of Dirty Tricks: ExxonMobil’s Attempts to Stop the World [from] Tackling Climate Change”; an unflattering photograph of Lee Raymond, jowly and thick-lipped, stared out from the report’s cover. The next year, in “Denial and Deception: A Chronicle of ExxonMobil’s Efforts to Corrupt the Debate on Global Warming,” Greenpeace documented the corporation’s funding for proxy groups that raised doubts about climate science. In an introductory note, the executive director of Greenpeace described ExxonMobil as “now standing in the path of history.” In its environmentalist opponents, he continued, the corporation faced a force akin to “the movement led by Gandhi to free the Indian people, the U.S. civil rights movement, and Solidarity’s defeat of Polish communism. The goliath ExxonMobil may provide the perfect catalyst for much needed reform of corporate power. . . . Rave on.”

  Greenpeace did not fantasize that it could change ExxonMobil or curtail its profit making; the campaign Davies oversaw did not rely on calls for formal boycotts against ExxonMobil products. “Those objectives would be too hard to reach,” Davies said. Instead, the idea was to show the world—and other multinational corporations—“what it means to be wrong on climate change” and to drive other chief executives away from Lee Raymond’s position. The real targets of the campaign, Davies said, were the “BPs and the Fords and the Coca-Colas” that were iconic in their markets and led by executives less determined than Raymond to challenge climate science and the Kyoto Protocol.

  ExxonMobil’s corporate culture prescribed “very careful action,” as Davies put it. This meant that Irving executives would be slow to react to Greenpeace’s provocations and accusations, and when they did react, their responses would often be so heavy-handed that they would only reinforce the Greenpeace message. “They basically held their ground,” Davies said. “They didn’t give an inch on the policy. They didn’t try to moderate their voice at all.”5

  Greenpeace and allied researchers filed Freedom of Information Act requests seeking documents about early corporate contacts between major oil companies and the Bush administration. Davies already knew that ExxonMobil funded small think tanks and science policy groups in Washington that issued reports and statements arguing that climate change was unproven and of no public concern. The documents produced to Greenpeace under the F.O.I.A. request turned up additional briefing memos and PowerPoints prepared for the White House by ExxonMobil lobbyist Randy Randol and the corporation’s astrophysicist Brian P. Flannery. “Gaps and uncertainty in observations and scientific understanding of critical climate processes limit current ability to predict the rate and consequences of future climate change,” Flannery wrote in a March 2002 memo. An accompanying PowerPoint urged the administration to “avoid near-term caps on CO2 emissions” and “expand nuclear energy.”6

  The Bush White House did not require ExxonMobil’s bullet points to adopt these recommendations; a majority of the president’s cabinet and the Republican leadership in Congress already shared many, if not all, of Lee Raymond’s views. Davies and his Greenpeace colleagues believed, however, that the documents they discovered established some degree of cause and effect: that ExxonMobil and other politically influential fossil fuel companies had, in effect, through their campaign contributions, purchased the Bush administration’s climate policies, and then reinforced this achievement by sowing public doubts about climate science through the systematic funding of proxy groups.

  ExxonMobil had, in fact, self-consciously invested in the dissemination of doubt about climate change. Under Lee Raymond, ExxonMobil had persistently funded a public policy campaign in Washington and elsewhere that was transparently designed to raise public skepticism about the science that identified fossil fuels as a cause of global warming. ExxonMobil ran some aspects of its campaign clandestinely; that is, it did not initially di
sclose the full scope and purpose of contributions it made. ExxonMobil’s opponents were guilty of lumping together the corporation’s support for small, havoc-making groups focused heavily on climate issues with ExxonMobil’s support for legitimate, well-established conservative and free-market research institutes such as the Cato Institute for Public Policy Research, the American Enterprise Institute, and the Heritage Foundation.7

  What distinguished the corporation’s activity during the late 1990s and the first Bush term was the way it crossed into disinformation. Even within ExxonMobil’s K Street office, a haven of lifelong employees devoted to the corporation’s viewpoints and principles, an uneasy recognition gathered among some of the corporation’s lobbyists that some of the climate policy hackers in the ExxonMobil network were out of control and might do shareholders real damage, in ways comparable to the fate of tobacco companies. The more it went on, and the more Greenpeace and other activist groups exposed ExxonMobil’s more clandestine investments, the more it became clear that the corporation was taking on risk. If ExxonMobil were ever judged in a courtroom to be cooking science to appease Raymond’s personal beliefs about warming issues, it could be devastating. The corporation was not alone in its support of fringe activists on climate, but it persisted longer than many other business groups and individual Fortune 500 corporations. The available record suggests that ExxonMobil was more aggressive than all but a handful of peer companies during this period, despite the fact that the corporation, because it produced no coal, did not belong to the energy industry’s most vulnerable sector if restrictions on carbon fuels were enacted.

  Raymond regarded the groups he supported as entirely legitimate participants in mainstream scientific debate. The credibility of this claim seemed increasingly doubtful, however. Science published a review of 928 peer-reviewed papers on climate science written during the late 1990s and the first Bush term; none of the papers, the survey’s author found, “disagreed with the consensus position” about the probable man-made causes and dangerous trajectory of climate change—an assessment Raymond and his allies rejected.8 ExxonMobil funded a few institutions that supported the consensus position on climate science, but the corporation’s allies in climate science advocacy were more aligned with James Inhofe, the United States senator from Oklahoma, who asked on the floor of the Senate, in 2003, “With all of the hysteria, all of the fear, all of the phony science, could it be that man-made global warming is the greatest hoax ever perpetrated on the American people? It sure sounds like it.”9