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After the jump, my review.
Grade: B+
ExxonMobil is huge by any measure. Revenues. Profits. Market capitalization. Number of employees. Geographic reach. Impact on the economy, the environment. Influence on legislation, foreign policy, and the courts.
ExxonMobil traces its history back to John D. Rockefeller's Standard Oil, but Steve Coll's story begins much more recently, with the 1989 oil spill caused by the Exxon Valdez oil tanker running aground in Prince William Sound, Alaska. The book covers ExxonMobil's role in many of the world's top stories in the two decades since. ExxonMobil challenged environmentalists on the ability of nature to recover from oil spills. ExxonMobil funded scientific research to deny scientific consensus surrounding climate change (while secretly internally using climate change science to help guide its own oil discovery strategies). ExxonMobil CEO Lee Raymond was a key player in Vice President Dick Cheney's secret White House task force which influenced the energy policy of the Bush administration. ExxonMobil influenced American foreign policy in places as remote as Indonesia's Aceh province, where a nasty independence movement threatened ExxonMobil's gas extraction business. ExxonMobil's negotiations with Vladimir Putin to open Russia's oil and gas industry to foreign investment put ExxonMobil almost on the same level as a sovereign country - almost. ExxonMobil's size meant it had outsized influence in all these areas, and as the quote above suggests, ExxonMobil's number one priority was first, last, and always, ExxonMobil itself.
As I read deeper and deeper into the book, the title, Private Empire: ExxonMobil and American Power seemed inappropriate. ExxonMobil is more its own empire than American. The power is not American state power, but the power of the multinational energy industry. ExxonMobil reminds me of such enterprises as the 17th century British East India Company. That company may have been British in origin, but it was a private company that effectively governed large chunks of the globe for its own economic interests, not necessarily the crown's or nation's interests. ExxonMobil may have American origins, but the company's interest is purely selfish. National interest, human rights, planet Earth, none matter as much as ExxonMobil's bottom line. ExxonMobil's CEO feels invulnerable enough to freely admit, "I'm not a U.S. company, and I don't make decisions based on what's good for the U.S."
No matter what you may think of ExxonMobil's current behavior, its huge size alone carries with it significant risk. How to preserve liberty and democracy in the face of rising private empires like ExxonMobil is going to be a big challenge facing America and the world in the coming century.
In the oil business as in all other businesses, the easy money is made first. As the easily extracted oil from friendly locales, like western Pennsylvania and Texas, is exhausted, oil companies are forced to go into regions with more and more corruption and violence in a never-ending search for new oil reserves. Coll shows that the consequences of that business imperative are already a serious problem and only getting worse. Big American interests like ExxonMobil have no choice but to engage in unstable parts of the world (more and more, that's where the oil is). In fact, oil money triggers much of the instability in the first place.
The US government inevitably follows where ExxonMobil and other oil giants go, first to protect American interests overseas and, second to ensure a steady supply of energy to maintain the American economy. The lesson from Coll's story of ExxonMobil might be that American involvement in messy wars is bound to increase as long as the world's thirst for oil persists. This, too, is going to be a big challenge facing the world in the coming century.
ExxonMobil believes that oil inevitably finds its way to market no matter what. If so, American military adventures don't help to secure oil. Instead, they muck things up. One of the surprising things revealed in Private Empire is how often ExxonMobil tells the US government to, in effect, butt out. ExxonMobil wants to handle relationships with foreign governments themselves. Conspiracy theorists, take note.
It will be interesting to watch China, also with a voracious appetite for oil, to see how it approaches the same problem. Will China follow the American strategy and grow its own military and inject its own military power around the world, or will it be content to wait for oil to inevitably come to it? The answer will help determine how high international tensions will rise in the twenty first century.
Private Empire is told in a relatively nonjudgmental manner. The Tea Party and the Occupy Wall Street movements both will find facts here to support their notions about the good or evil of companies like ExxonMobil. CEOs will find lessons on how to run a business with the most serious global challenges. Congressmen and cabinet secretaries will find lessons on how to manage risks to the national interest. Everyone will get a clearer understanding of the precarious position the whole world is in at the beginning of the 21st century.
Private Empire: ExxonMobil and American Power was chosen as this year's selection for The Dallas Morning News's Points Summer Book Club.
Although 'global economy' is a relatively new term, globalization in the hydrocarbon space is not. ExxonMobil and the perspective expressed by Lee Raymond exemplify one of the major issues of globalizatin - this is corporations with more wealth than many nations. Likewise, these organizations have cadres of accountants, tax attorneys and other professionals to ensure they contribute as little as possible to any sovereign nation or political subdivision.
ReplyDeleteAnd just as Lee Raymond said "I'm not a U.S. company, and I don't make decisions based on what's good for the U.S." let's take a broader view . . . Haliburton announced it was moving it's global headquarters to Dubai. After a political firestorm it relented somewhat, to say it would have 'dual' corporate headquarters. So as time passes and corporations become more powerful and the American economy less so, does that mean these global corporations will move to tax havens and view the United States as just another sheep to be sheared? Should we as Americans find this an acceptable perspective? Should we be taking a longer (and perhaps less global) view? Or should we just hang on, let the future unfold, and hope for the best?