Posted by: bmeverett | July 25, 2012

“Private Empire” by Steve Coll (Part 3)


Let’s continue our discussion of Steve Coll’s new book “Private Empire: ExxonMobil and American Power.” As discussed in my previous posts, my basic theme is that Mr. Coll does some excellent story-telling, but much of his analysis is implicit and confused. Let’s take a look at his discussion of ExxonMobil’s opposition to climate change legislation.

Our climate change debate suffers from a mythical narrative which is not accepted by the vast majority of the American people, but is gospel among our political, academic and journalistic elites. The narrative runs like this: Climate scientists have determined that human emissions of carbon dioxide are raising the temperature of the atmosphere and that, without substantial government controls on emissions, the temperature increase will accelerate to catastrophic levels. The science is clear and irrefutable. This narrative has several obvious corollaries. First, the evidence for the climate change hypothesis is obvious: heat waves, droughts, storms and other instances of extreme weather. Second, the only climate “deniers’ are non-scientists, scientists untrained in climate science or crazies on the fringe of society. Third, corporations who oppose action on climate change do so only because they fear the consequences for their business. Fourth, the reason we have not enacted major climate legislation is that the deniers have confused the public with misinformation.

As I have discussed in many previous posts, this narrative is simply wrong. Catastrophic, man-made climate change is a hypothesis, and the evidence is distinctly mixed. Scientific knowledge is established by empirical evidence, not by “consensus” among scientists. Many mainstream scientists, including climate scientists, disagree with the climate catastrophe hypothesis, and most of the actions currently proposed to combat this problem would have no impact on the climate at all. In other words, opposition to climate change legislation is a rational position.

Mr. Coll’s discussion of ExxonMobil and the climate change issue shows that he fully accepts the mythical narrative and sees all of ExxonMobil’s actions through this prism. This is a subject on which I have extensive personal knowledge, having worked directly on this issue at ExxonMobil from 1997 until my retirement in 2002. Mr. Coll portrays Lee Raymond, ExxonMobil’s CEO during this period, as rigid and arrogant. Based on my personal experience, I would describe Mr. Raymond with two quite different words: brilliant and candid. He speaks his mind clearly, often bluntly, but you always know where he stands. He disdains “cleverness” insisting instead on clear, straightforward and rigorous analysis. In my experience, he wanted the corporation to state what it believed to be true and had no interest in anything other than straight talk. Normally, this quality is valued in our society. Why doesn’t this seem to be true in Mr. Raymond’s case? The answer is that the “climate community” seems unable to see Mr. Raymond except through the lens of the climate change narrative.

This bias is subtle, but it’s clear throughout the book. For example, Mr. Coll concludes that ExxonMobil’s positions on climate change can be attributed to “their ardent skepticism toward climate scientists and their opposition to all government regulation…” Both of these points are incorrect. Mr. Coll equates the catastrophic climate change hypothesis with climate scientists. In fact, Lee Raymond is a strong supporter of science and scientists. Mr. Raymond’s argument was that the science behind the climate change hypothesis is weak. One can disagree with this position, but it’s not based on skepticism of climate scientists. Second, ExxonMobil does not oppose all government regulation by any means. For example, during my tenure, the Corporation was an ardent supporter of a global ban on leaded gasoline. What ExxonMobil opposed was regulations that were costly and unnecessary, which unfortunately includes many of the proposals routinely floated around Washington.

At some points, Mr. Coll seems to accept Mr. Raymond’s good faith regarding his climate change positions. He says for example, “Raymond adamantly believed that [the] Kyoto [Protocol] 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.” He might also have noted that Mr. Raymond believed that the treaty would be totally ineffective in reducing carbon dioxide emissions. At the end of the day, however, Mr. Coll concludes that ExxonMobil saw the Kyoto Protocol as follows: “For the first time… a regime to control greenhouse gas emissions threatened to impose real costs on industrial corporations like Exxon.” So what exactly was ExxonMobil doing? Stating what it believed to be true or expressing a selfish private interest? Mr. Coll never seems to come to a landing on this point.

It would have been an interesting exercise for Mr. Coll to have had a look at the actual results of the Kyoto Protocol, rather than just considering the claims made when it was signed. In all, 191 countries signed and ratified the treaty. Despite its claims as a groundbreaking international effort and a first step toward combatting climate change, the Kyoto Protocol had virtually zero impact on carbon emissions. It was instead a web of accounting gimmicks that allowed participating governments to claim progress that wasn’t real. A thoughtful analysis of Kyoto’s impact, as opposed to its promises, would show that opposition to the treaty was well founded.

Which gets me to Mr. Coll’s next misleading comment. In October of 1997, Lee Raymond gave a speech at the World Petroleum Congress in Beijing outlining his views on global warming and his concerns with the Kyoto Protocol, then under negotiation. Mr. Coll’s comment is that “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.” Huh? Mr. Raymond was speaking at an international conference, which happened to be in Beijing. If the conference had been in Oslo, he would have given the same speech. He wasn’t in Beijing to visit the Chinese government and lobby them on Kyoto. Furthermore, since when is it the obligation of any US citizen to support the negotiating position of a “sitting president”? George Bush, who became the sitting president three years after Kyoto was signed, opposed the treaty. Did it then become the obligation of those who supported Kyoto to change their view or remain silent?

Mr. Coll’s discussion of climate change offers us no real insight into the issue of corporate responsibility and no answer to the question of whether ExxonMobil behaved responsibly or not. The definition of corporate responsibility implicit in “Private Empire” is that corporations are obligated to support good things, like carbon dioxide restrictions. Lord John Brown, the Chairman of BP from 1995 until 2006, was a hero of the environmental movement for endorsing the Kyoto Protocol on behalf of BP. From my personal experience, people in BP held the same views of the climate change issue as ExxonMobil people. Lord Brown simply decided that BP could gain some PR points by supporting the treaty, since they doubted that it would have any real impact. Why is it considered an example of corporate social responsibility to say things you don’t believe?

The only real criticism of ExxonMobil’s positioning on the climate change debate is that it put the corporation in the cross-hairs of the environmentalists and subjected the company to a campaign of harassment and bad publicity that could probably have been avoided. Keeping quiet would perhaps have been a more practical position, but certainly not a courageous one. There are many possible definitions of corporate social responsibility, but staying out of trouble is probably not one of them.

The other unfortunate result of ExxonMobil’s positioning on climate change is that it has offered the “climate community” an easy excuse for their failure to convince the American people to shut down the US economy. The Global Climate Coalition (GCC), which included ExxonMobil but also other oil companies, electric utilities, automobile companies, railroads, steel and chemical companies, spent about $15 million on TV ads in 1997 opposing ratification of the Kyoto Protocol. ExxonMobil also supported free-market think tanks like the Competitive Enterprise Institute, which happened to oppose Kyoto for very valid reasons. According to the “climate community”, these efforts so confused the American people that they are to this day unable to understand the true threat of climate change. It’s an interesting argument. ExxonMobil is not well regarded by the American public, yet with a small media campaign, they were supposedly able to overcome the torrent of pro-climate change argumentation offered by the Democratic Party, the entire US academic establishment, the broadcast media, The New York Times, The Washington Post, The Economist, Scientific American and Al Gore’s propaganda movie “An Inconvenient Truth” which grossed $50 million and is shown extensively in schools.

The reality is that the American people are quite capable of listening to a public policy debate and forming sensible opinions. While most Americans agree that climate change is an issue to be taken seriously, there is no appetite among the US populace to de-industrialize the society in an effort to “take the lead” in convincing China to reduce its carbon emissions. It seems to me that ExxonMobil did the country a service.

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