gusher-the power of exxonmobil

7/28/2019 Gusher-The Power of ExxonMobil

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THE POLITICAL SCENE

GU5HERThe powerof ExxonMobil.

BY 5TEVE COLL

In late February, President Obaimi pro-posed, not for the first time, that Con-gress end four billion dollars' worth ofsubsidies for oil and gas companies.Theycan either -stand up for th e oi l companies,or they can stand up for die Americanpeople," the President declared duringon e ofliis weekly radio addresses notlongafterward. I ie seemed to be signallingthat he will be r u n n i n g fo r President thisyear, as he did fouryears ago, in open op-position to the American oil industry:"These are the same oil companies thathave teen making record profits of f diemoney you spend at the pump.. . . It'soutrageous. It's inexcusable."

The President's policies toward the oilindustry are not easy to categorize. He hasbacked oil and natural-gas alternativessuch assolar power and wind power, andalso the development of electric cars. Y ethe has encouraged new domestic oil pro-duction as well. "We arc drilling more,".hedeclared in Oklahoma last month, stand-ingbefore ahuge stack of copper pipelinesegments. "Anyone who says that we'resomehow suppressing domestic oil pro-duction isn't paying attention,"

The President's actionsattackingoil-company profits while proposingmore oil drillingcan be best under-stood as political responses to rising gas-oline prices. The average price of a gal-lon has risen by more than fifteen percent since January, arid congressionalRepublicans have repeatedly attackeddie President for not doing enough tokeep prices down. Between 2010 and2011, over-all spending on gasoline inthe United States rose by twenty-fivepercent; the percentage of household in-come that Americans spend on gas hastripled since the late nineteen-nineties.The President lias acknowledged thatthere is no way that the expansion ofdrilling can affect gasoline prices anytimesoonit takes a long time to add to thesupply, and, i n any event, ga s prices aretied to the global oil price, which is de-28 THE Nt? YORKER, APRIL 9, 2OI2

termined by factors such as turmoil inthe Middle East and Chinese consump-tion rates. But, by calling for more drill-ing, Obama can saythat he is taking ac-t ion . By lambasting the oil companies,he can suggest that he is not at fault.

The contest between die Democratsand Big Oil this .year will be reciprocal,am i Big Oil will be led by ExxonMobil,by for the largest and most profitable oilcorporation headquartered in the United.States. In recent election cycles, the cor-poration has directed more of its politicai-action-comruittee spending to Republi-cans than an yother oi the largest Americanpublic corporations. About ninety percent of ExxonMobil's PA C giving duringthe 2010 election cycle went to Republi-cans.An even higher percentage has goneto them dlis year, according to databasesmain tained by th e Center fo r ResponsivePolitics. Among the other krge share-holder-owned corporations that maintainactive PACs, Walmart, General Electric,Bank of America, and Ford gave abouthalf or more of their contributions toDemocrats during die 2010 cycle. EvenDow Chemical , historically wary ofDemocratic politicians, because of envi-ronmental and regulatory issues, directedabout half of its PAC contributions toDemocrats in the kst cycle. Chevron andConocoPhillips, the second- andthird-Largest American oil companies,gave to Democrats at twice the rate ofExxonMobil.

The evolution of the country's biggestan d most powerful oil company into afinance arm of the Republican Party is astoryofboth energyeconomics and style.ExxonMobil describes itself as a non-ideological corporation, yet it has devel-oped an algorithmic formula for politicalspending and lobbying that has rein-forced its alignment with Republicancandidates in ways that 1 Jemocrats couldhardly see as anything but antagonistic.Over the past six years, the company hastried to adapt to the revival of the Dem-

ocratic Part)',but it has struggled to do so,in krge part because of its own rigid in-ternal culture.

ExxonMobil was created by a hostileact of the United States govern-ment. In 1911, the Supreme Court or-dered the dismemberment of the Stan-dard Oil monopoly, founded by John D,Rockefeller. Some of its executives, judg-ing by the skepticism they express towardWashington, seem not to have got overthe initial breakup. ExxonMobil's chair-ma n and chief executive, Rex Tillerson,who is active in the Boy Scouts of Amer-ica, told the magazine Scouting recentlythat his favorite bookis "Atlas Shrugged,"A yn Rarixf s dystopian 1957 novel,a touch-stone for libertarians. The company has aculture of secrecywith nondisclosureagreements and internal securitythat canmake it seem like an intelligence agency.Company executivesdeflect press cover-age; they sometimes withhold coopera-tion from congressional investigators, ifthe letter ofdie law allows; andwhen theyspeak in public, they typically read outsanitized, carefully edited speeches, orPowerPoint slides.

On March 23, 1989 the Exxon Val-dez, an oil tanker, ran aground on a reefin Alaska's Prince William Sound. Thecaptain ha d been drinking, an d he left thebridge shortly before midnight, in viola-tion of companypolicies. I tfe crew mem-bers became confused, attempted to turnthe ship, and lost track of their positionaltogether. At a few minutes past twelve,there was a ter rib le sound . "Vesselaground. We're fucked," die chief matecalled out.

The Valdez dumped more than twohu ndr e d thousand barrels of oil into th ewafer. Soon, the pleading black eyes ofoil-soaked sea otters became tile symbolsof a broad wildlife massacre. The Valdezdisaster became a catalyst fo r reforms atExxonMobil that, still influen ce every as-pect of its operations, including its ap-proach to politics add lobbying. Almostsince its founding, the companylias em-phasized procedure and orthodoxy. Butafter the wreck Exxon'sexecutives placedextraordinary emphasis o n u n i f o r m ,scientific, idiot-proof, automated systemsof safety, management, finance, andbusi-ness analysis.

Some of the reforms made the com-pany resemble a cult. ExxonMobil de-


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partnients worldwide organized regularsafety meetings andcompetitions. Work-ers were awarded prizes for insuring hatoffice clerks did not leave file drawersopen, lest someone bump into them.Failing to turn oft a coffee pot might drawa written reprimand. Cars had to bebacked into parking spaces, so that incase ofan emergency the driver could secclearly whi le speedingaway. Group safetyconfessionals coveredconduct beyond theworkplace and included discussions of thecorrect use of a ladderwhile cleaning gut-tersathomeandthedanger ofgetting toomuch sun on a beach vacation. Employ-ees Stood op and shared stories of "near-misses" with personal accidents, as in atwelve-step recovery program. One man-ager who had been at the company fortwenty-eight years recalled l istening to acolleague confess dial while cutting thegrass in his yard he had mishandled hislawmnower, causing an object to fly outof it and strike hi s leg.

'Hie atinosphere'within ExxonMobil'soffices is one of studied formality; thecorporate aesthetic suggests a Four Sea-sons hotel, without many guests. At in-dustry meetings, the ExxonMobil partic-ipants can usually lie identified easily:diew o m e n in charcoal pants suits and themen in dark suits mid white, shirts, withshort andproper haircuts."They encour-aged you to get married," a former em-ployee recalled. Such values were"notjusta lot of lip service," another longtime ex-ecutive said. "J. D. Rockefeller went tochurch every Sunday and his employeesbetter byGodgo to church on Sunday orthey were notgood employees."

According to interviews withcurrentand former ExxonMobil managers andlobbyists, the corporation'spolitical spend-ing largely reflects the free-market out-look of its senior executives; virtually all otdiem joined die company out of collegeor graduate school an d stayed on for life.ExxonMobil ha s engineered its free-mar-ket creed into a ranking and evaluationprocess, tlic "key vote system," fo r direct-ingpofaical-accion-eornrnitteecontribu-tions. The corporation's public-affairsanalysts identify important votes in Con-gress that affect ExxonMobil's businessinterests; politicians are then rated on thebasis of these votes. The corporation'sheavy spending on Republicans is the

5 outcome of objective analysis, an execu-$ tive involved in political strategy said.

Le e Raymond, the ormer C.E, O., once said, "We see governments come and go , *"We are a business-oriented PAC," hetold me. "Now, when you apply that lit-mus, our PAC s righdy criticizedthatwe tend to give more money to Republi-cans than to Democratsbut it is aresultof the approachwetake, and not adesiredresult"

Exxon's annual revenues, of more thanfour hundred billion dollars, are about thesame as the gross domestic product ofNorway. Since theninetem-ftft'tes, Exxonhas always been in the top five on the an-nual Fortune 500 list. (In 1999, Exxonmerged with Mobil, reuniting; tw o Stan-dard Oil descendants and forming thelargestnon-state-owned oil corporation inthe world.) During the past decade, asglobal oil prices have risen, ExxonMobil'sprofits have smashed records. It functionsas a corporate state within the Americanstateconstructing its own foreign, eco-

nomic, and human-rights policiesandits executives are self-conscious about theirsovereignty. Its business modeldrillingholes in the ground all over the world andmaintaining oi l an d ga s wells profitably fo rup to fo rty years at a stretchmeans thatthe political and economic time horizonsfor its corporate strategies extend muchfarther tha n those of almost any govern-ment Lee Raymond, Tillerson's predeces-sor, once remarked, "We seegovernmentscome and go."

E xxonMobil's headquarters arc inIrving, Texas, on a placid campusnear the Dallas-Fort Worth airport. ItsWashington office is in a pink granite-and-ooncrete office buildingonK Street Aturret, topped by an American flag, dis-tinguishes the building from the bland,conforming architecture of the capital'sTHE NWYORKER, ATM. 9. 2OB 2


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lobbying corridor. Inside ExxonMobil'ssuite, the furniture is dark cherry. Oilpaintings of American landscapes line thewalls; antique Mobil oilcans and signs forEsso decorate the shelves of conferencerooms.

In 2005, Dan Nelson, a six-foot-eightformer Marine officer who served inVietnam, took charge of the Washing-ton office. ExxonMobil has long reliedmainly on career employees, not outsidelobbyists. Last year, of die thirteen mil-lion dollars it disclosed that it spent onlobbying in Washington, only abouttwenty per cent went to outside con-sultants or influence-peddling firms. "1think we did it in-house so we could getit done right," Joseph A. Gillan, whoworked on environmental issues in theExxonMobil office early in the .Bush Ad-ministration, said.

During the Bush years, the corpora-tion's Washington strategists informallydivided the capital's officeholders intofour tiers, in descending order of sympa-thyfor ExxonMobil's agenda.Therewerethose who represented the oil patchsenators and congressmen, from Texas,Louisiana, Oklahoma, NewMexico, andWyoming. This group included, after2000, President George. W. Bush andVke-President Dick Cheney. The sec-ond tier consisted of free-market Repub-licans who didn't particularly understandthe oil-and-gas industry but who gener-

ally supported ExxonMobil's positions.The third tier consisted of Democrats orliberal Republicans who regularly votedagainst ExxonMobil's interests but whowere open to discussion and might bepersuaded to vote the industry's way.From 2001 to 2009, when Hillary Clin-ton served in the Senate, she fell intothis category. Tier four was "the enemy,"as some of the military veterans in theK Street office occasionally put it. Thesewere Democrats and environmental ac-tivists who, ExxonMobil's executivesbelieved, wanted to disenfranchise thecorporation and use. its unpopularityto galvanize liberal constituents andflinderssenators such as Charles Schu-mer, of New York, and Dick Durbin, ofIllinois.

Kenneth P. Cohen, ExxonMobil'svice-president for public and governmentaffairs, has overseen the corporation'spolitical-action committee for more thana decade. Cohen, who has worked atExxonMobil since 1.977, is a mild-lookingman of modest height with a thick heat!of grayinghair. His operating manual forpolitical strategy is a dark binder that iskept on a shelf in his second-floor officeat the Irvingheadquarters.The first pagecarries the title "Public Policy Issues.'" Alist of about two dozen subjects follows,from climate change to government sub-sidies for gasoline alternatives such as etbrand. For each policy area, the notebook

contains a summary of ExxonMobil'slobbying position, which the corpora-tion's public-affairs teams support world-wide, often using common language andPowerPoint slides. The notebook alsoprovides a guide for judging Americanpoliticians.

Duringboth theBush andtheObamaAdministrations, ExxonMobil has con-centrated its efforts in Washington onprevcn ring certain tax and regulator}' billsJroiii being enacted, such as Obama'sproposal, this winter, to strip away ndus-try tax advantages. The corporation hasinvested mainly in a blocking strategy, fo-cussing itsPAC donations on Republicanswho can try to assure, that no damaginglaws go through. "Whoever s in. powerin the House has almost dictatorialpower," a Washington consultant wholias worked on oil-industry Issues says. "Ifyou control what's going on in die House,you have huge influence over the final"legislation, aswell as over the budgets andspending mandates ha t shape regulation.In tlie past decade, the leading recipi-ent of ExxonMobil PAC contributionshas been RepresentativeJoe Barton, aRepublican from Texas,who has heldse-nior positions on the House .Energy andCommerce Committee, where most leg-islation affecting the oil industry origi-nates, Anne Northup, a former Republi-can congresswoman from Kentucky, wh onow serves on the Consumer ProductSafety Commission, received the second-largest amount of campaign money.ExxonMobil's ten leading campaign-contribution recipients in that decadewere all House Republicans, accordingto research done by the journalist AnnOllanlon.

ExxonMobil's political-action com-mittee has not made contributions to re-cent Presidential campaigns, but its topexecutives have made it abundantly clearthat they prefer Republicans in the White1 louse. After President Bush won reelec-tion, the company donated a quarter of amillion dollars to help fund the celebra-tions for his second inaugural

We need a conversationwi th Dem-ocrats," Dan Nelson told his col-leagues in the ExxonMobil office onK Street as the2006election neared. The

7 J&fah < 0 company's Washington analysts could seethat the Democrats were gaming mo-mentum, and the corporation's unpopu-

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larity created a risk that Congress mightenact a windfall tax or costly climate reg-ulation. Leading Democratic electionstrategists were well aware of ExxonMo-bil's investm ents in the Republican Party,and they openly criticized the corporation."There is no question there is a new phaseof scrutiny for Exxon," Schumer, who wasthen chairing the Democratic Party's Sen-ate Campaign Committee, said.

Normally, one of the easiest ways toopen a c onversation with a member ofCongress is to donate to his or her reelec-tion committee. The problem was thatExxonMobil made almost all of its con-tribution decisions on the mathematicalanalysis of the keyvote system. NeitherObama (when he was in the Senate, after2004) nor other leadi ng Democrats head-ing for leadership positions in Congressor considering a Presidential run in 2008scored very well. During die Bush Ad-ministration's second term, not a singleDemocrat in Congressscored above fiftypercent In the view of the system's infer -na l critics, it failed to distinguish ade-quately between truly keyvotes and rou-tine party-line votes, and this skewed thenumbers against Democrats. ExxonMo-bil lobbyists maintained strong ties withsome Democrats from industrial states,like the Michigan congressman JohnDingcll, and with other Part}' membersfrom Southern or conservative Westernstates whovoted like Republicans on en-ergy and tax issues. But the corporation'sWashington office was not well preparedfor a f louse of Representatives ruled byNancy Pelosi or influenced by the envi-ronmentalist 1 leruy Waxman, both fromCalifornia.

ExxonMobil's most influential Dem-ocrat was Theresa Fariello, who hadjoined the corporation from the ClintonAdministration's Department of Energy,in 2001. According to Alan Jeffers, anExxonMobil spokesman, she was valu-able because of "her skills and experiencegained from leadingExxonMobil's globalissues management process." A commit-ted supporter of Hillary Clinton, shehelped arrange a few consultancies andretainer contracts with lobbyists inWash-ington who were closely connected, toDemocrats, One such lobbyist wasDavidLeiter, 'who had worked as die chief ofstaff for Senator John Kerry during thenineties. (Starting in 2006, Letter's lobby-ing firm, ML Strategies, has received

about twenty-five thousand dollars amonth from ExxonMobil.) Dan Nelsonalso brought on Louis Finkel, who hadworked for years for a Democratic con-gressman from Tennessee, Bart Gordon,Still, in the K Street office. Democrats'were seen at times as a mysterious speciesrequiring specialized anthropologicalinsights.

On November 7, 2006, the Demo-cratic Party took control of theHouse. A few weeks later, Ken Cohenflew to Washington. On a chilly after-noon in early December, he travelled weston Interstate 66 toWarrenton, Virginia,in the foothills of the Blue Ridge.Moun-tains, lie turned in to the secludedgrounds of the Airlie Center, a retreat fa-cility for government and business lead-ers. Cohen had scheduled a private,three-day Opinion Leader Dialogue be-tween ExxonMobil executives and envi-ronmental and corporate-responsibilityactivists, with whom he planned to testout some of ExxonMobil's strategies fordealing with an ascendant Democraticmajority.

The ExxonMobil executiveshad in-vited fourteen guests, including two se-nior energy-policy analysts from theBrookings Institution, a human-rightsactivist at Freedom House, climate-pol-icy specialists, a busi ness-ethics professor,and a specialist, in socially responsible in-vesting. During the cocktail hour, one ofdie guests, who worked for an environ-mental nonprofit, mentioned to Cohenthe brutal hours shespent at herjob. "Hewasshocked,"she recalled. He seemed tothink tliat "people who worked in envi-ronmental groups in Washington hadcushy lives."

Another participant recalled thankingofherhosts, These were clearly thought-ful, smart, articulate peoplethey justlived in a totally different world than welive in." ExxonMobil had recently awardeditsretiringchief executive, Lee Raymond,a compensation package worth four hun-dred million dollars. At the retreat, in aneffort to suggest that die package was notas rich as that number might suggest,some of th e ExxonMobil executives triedto explain the differences between pensionbenefits, stock options, and restrictedstock. "You know you can't win on thatmessage, right?" the participant says sheremembers thinking as she listened. You're

talking to people who can't even take tlieAcela train to NewYork"

Hie next morning, the group assem -bled in a conference room around tablesarranged in a hollow square. The agendai nc luded two "dialogue sessions" onclimate change arid a third on corporatetransparency and human rights. Cohenshared some of his internal surreys aboutExxonMobil's reputation. In one, forty-seven per cent approved of its over-allcorporate citizenship,bvit only twenty-four per cent approved of its environ-mental stewardship.

The corporations notoriously badreputation on climate issues was almostcertainly a factor in its lagging environ-mental marks.. In the aineteen-ninetiesand through the first Bush term, Exxon-Mobil funded free-market research andcommunications groups that attacked theemerging science documenting globalwarming. The Union ofConcerned Sci-entists, Greenpeace, and other environ-mental and public advocacy groups ex-posed the corpotatkwi's investments inclimate-change skeptics and accused ex-ecutives of adapting science-smearingstrategies similar to those employed bythe tobacco industry,which long tried todownplay the dangers ofsmoking. Cohenhad been involved .in some ofthe contro-versial funding decisions,but after Tiller-son became chairman, early in 2006,ExxonMobil reviewed and eventuallyhalted its support for the more polarizinggroups. It also experimented with newlanguage and lobbying positions aboutthe causes of, and risks posed by,globalwarming.During the dialogue, according toLeslie H. Lowe, one of dieparticipants,who was at that time the director of theerjerg>'-and-enwonmcnt program at theInterfaith Center on Corporate Respon-sibility, They were really dancing aroundthe question of certainty" about the risksof global warming and the evidence thatman-made activity such as oil an d gas usecontributed.The group talked about set-ting a new tax on gasoline as a way tocontain greenhouse-gas emissions.

"If you tax gasoline, people will behurt," Cohen said. He argued that, evenif the tax's proceeds were rebated to needydrivers, they would be forced to take therebates and go out and buy gas withthem.

The participants on both sides wereTHE NW YORKER, Af'M. 9. 8OE 31


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t r y i n g , "to be ever so pol i te ," Lowe re-called. That n i g h t at dinne r , she foundherself sittingwith an ExxonMobil exec-u t i v e . In w h a t sh e hoped was an un-threaten ing tone , she asked, referring toclimate policy, "Look, you're a science-based organ ization. How can. y ou not ac-cept the science that is basically confirmedby most mainstream thinkers?"In response, the executive talked aboutthe i nhe r e n t un ce r t a i n t i e s i n wea the rmodelling and forecasting.Lowe listened, andthen asked, "Whatare y on go ing to say to you r g r an dk idswhen they say , 'Grandpa, why didyoufuck u p dieplanet?'?"

The execut ive , Lowe recalls , j u s tchuckled good-naturedly.

O all t h e cand ida te s w ho star tedrunning for President in 2007,non e spoke more often or more point-edly about .ExxonMobi] than BarackObama. He criticized the corporation'sprofits and contrasted it s wealth with thestruggles of middle-class families. Hiscampaign sought to link Senator JohnMcCain to the pro-oil policies of Vice-President Cheney, a former chief execu-t ive of the oil-services corporation Hal-l i b u r t o n . By the s u m m e r of 2008,sixty-two per cen t of Amer icans sur -veyed had an un favo rable view ofCheney . "President Bu sh , he had an en -e r gy po l icy , " Obama dec la r ed . "Het u r n e d to D i c k Cheney and he said,'Cheney, yp take care of this.',., Mc-Cain has taken a page, out of the Cheneyplaybook,"

Oft the campaign trail , Obama's viewsabout energy an d climate policy were sub-tle. I Ic studied the issues and learned th enuan ces of automobile mileage standards,i n t e r na t i ona l oi l markets, an d dean-coaltechnologies, and how different forms ofene r gy p roduc t ion con t r ibu t e to globalwarming . But h is strategists knew that tom a n y i ndependen t vo te r s an d dis i l lu-sioned Republicans the idea of an Exxon-Mobil-Cheney complex represent ed allthat had gone wrong in the Bush years:die Iraq war and the r ise in Am erican eco-nomic insecurity. And so Obama saltedhis campaign speeches wi t h ExxonMobilreferences even when they were gratuitous."It's not going to be easy to have a sensibleenergy polity in this country," he said atone pr imary debate. "ExxonMobil madeeleven billion dollars last quarter. They're

n ot going to give up those profits easily."The highest average retail pr ice for agallon ofgasoline inAmerican historyjust over four dollarswas recorded inJuly , 2008- Obama seized upon Exxon-Mobil's unp r eceden ted prof i t s at thet ime, about ten billion dollars per quar -te r . When McCain announced a planto reform corporate taxes, Obama's re-searchers f igured out how much of thebenef i t s would go to ExxonMobil . "At at ime when we're f i g h t i n g t w o w a r s ,when millions of American s can' t affordtheir medical bills or their t u i t ion bills,when w e 're pay ing more than, four dol-lars a gallon for gas, the man who railsagai n s t gove r nmen t spend ing w an t s tospend $1.2 bi l l ion on a tax b rea k fo rExxonMobil," Obama declared. "Thatisn't just ir responsible. It's outrageous!"

That summer, the Bush Administra-tion an d the McCain campaign studiedpolls showing t hat m a n y Amer icans fa -vored new ofishote oi l drilling as a strat-eg y to reduce high gasoline prices. TheW hi t e House an d McCain 's s t ra teg is tscoordinated announcements to promote.more domestic exploration in ocean, wa-ters; this inspired chants of "Drill, baby ,drill!" at Republ ican campaign rallies.Obama promptly l inked McCain's off-shore-drilling plan to ExxonMobil ' sprofits and denounced it as merely an"oil-company wish list."More than his profit-bashing, how-ever, Obama's climate and alternative-ene rgy policies on the campaign t ra il g otthe a t t e n t i o n of ExxonMobil ' s public-afiairs executives an d the K Street lobby-ists. Obat ii a pledged to impose a price oncarbon-based fuels such as gasoline, andto make large n ew inves tmen t s in w i n dpower and solar power . "We m ust endthe age of oil,*' Obama declared. By thefall, th e ExxonM obil execut ive nvolvedin political strategy recalled, th e corpora-t ion had been scolded by nam e so man yt imes that "we felt like a candidate," Headded, "We clearly knew tha t we werenot dcctablc,"E xxonMobi l ' s i n i t i a l r e spon se toObama's ascendancy was to engagewith Democrats and search for commong round on climate policy. Shordy beforeElection Day , Ken Cohen organized ameeting in Connecticut with abou t ahundred of ExxonMobil's public-affairsan d media-relations specialists. [ le invi ted

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charitable and development work there.Yet even die relationship with die Clin-ton organizationproved awkward at times.

On the morning of September 23,2009, .Rex Tillerson arrived at the Sher-aton on Seventh Avenue in New York,to participate in a plenary session at dieGlobal initiative's annual conference.The session was entitled "Investing inGirls and Women." It. took place in aballroom decorated in purple and red,with large television screens to helpthe audience see celebrities like MattDamon and.Bono; delegates sat withname tags dangling around their necks.Diane Sawyer came onstage to moder-ate. Next to her were Edna Adan, thefounder of a maternity hospital in So-malUand; Melanne Verveer, the U.S.Ambassador-at-Large for Global Wom-en's Issues (and a neighbor of Dan Nel-son's); and Zainab Salbi, an Iraqi-bornactivist who had started a network calledWomen for Women International. Alsoon the panel were Tfflerson and LloydBlankfcin, theC.E.O.ofGoldman Sachs.The atmosphere suggested the laying onof liberal hands to cleanse tvvo sinfiil mul-tinational corporations.

Tillerson,who hasarichTeasaccent,talked about initiatives to support girlsand women In some of the poor coun-tries where the corporation extractedoil. ExxonMobil, he said, was inter-ested in exploring, on behalf of impov-erished women: "What arethe technologies.., that willprovide them capabilities toundertake their activities in amore effective an d efficientway?"

Sawyer, Adan, Verveer,an d Salbi. fell into an intensediscussion of female genital,cutting. Adan said It 'was es-sential to "educate die menand the fathers to take a deci-sion and stand and not justpass it off, and sayThis Is awoman's problem.1 " Salbi leanedacross Tillerson to make another point;he shifted uncomfortably. He was notasked to offer an opinion.

Sawyer then asked him, "What is theresponsibilityof a multinational corpora-tion to make the world better throughcharitable activity? Is it a tithe often percent? 1 low much?"

"Ultimately, this is our shareholders'

money we're spending," Tillerson said."So it's not mymoney to tithe. It's not diecorporations. It's our shareholders'."

ExxonMobil's Initial efforts to reachout to the Obama Administrationgave way, during 2009 and 2010, to asuccession of legislative and policy bat-tles in which, the corporation and thenew President found themselves on op-posite sides. Tillerson sought meetingswithTreasury and WhiteHouse officials,to explain ExxonMobil's views onenergymarkets, domestic drilling, climate leg-islation, and the recession. On one occa-sion, Tillerson joined a group of chiefexecutives at dinner with Obama. Ingeneral, however, wary Administrationofficials saw no reason to favor Exxon-Mobil with access.There was little basisfor trust on either side. ExxonMobil lob-bying sessions with Ghana's teamat theTreasury Department or the .Depart-m e n t of Energy could be stiff, withFariello and Other, lobbyists enunciatingExxonMobil's advocacypositions, some-times just by reading from notes and pre-pared materials. During the first threeyears ofObama's Presidency, the corpo-ration spent more than fifty-two milliondollarson lobbying inWashington,aboutfifty per cent more peryear than duringthe Bush Presidency.1he most important challenge that

ExxonMobil faced was the climate bill,known as "cap-and-trade,"which Obama and congres-sional Democrats introducedearly in 2009. The House ofRepresentatives pissed a ver-sion of the law in June andmoved It to the Senate, wherethe most difficult negotiationswere expected. The proposedlaw would have established anew regulatory system underwhich polluting corporationscould buy and sell permits toemit greenhouse gases, under

an over-all "cap" that would seek to re-duce the rate of global warming,

ExxonMobil denounced the cap-and-trade system as unwieldy and bureau-cratic. It.did, however, announce that itwould support a straight "carbon tax,"which would create incentives for reduc-tions in cod and oil use.Th e proposalwas a major policy shiftfo r die corporation, which had come ro

it after years of isolated, deliberativepolicy analysis. But there was little sup-port for the idea among Democrats.They knew that Republicansmany ofwhom had signed pledges never to raisetaxeswouldn't go for it. And theyhaddetermined that cap-atid-trade wasthe climate-change policy they wouldtry to pass. Exxon's support for a carbontax would have been welcome in , say,the early nineties, when Al Gore waspushing the idea. But the debate hadmoved on.

Tillerson's support for a carbon taxmarked the first time that airy Exxon-Mobil chief executive had advocated re-sponding to die threat of global warmingby raising the cost ofoil and gas produc-tion. But, because ExxonMobil ardentlyopposed Obama's cap-and-tradc billf rom the start, It managed to leave theImpression, as a senior Obama adviserpu t it, that it sought to "follow a trickthat was quite different from the othermajorsbeing firmly fixed In the Tuckyou, no apologies, oil-Is-here-to-staymode."

The story of how Obama's climatebill died in the Senate, during 2010, in-volves many politicians, industry inter-est groups, and corporations. Ultimately,it was probably hurt most by the highunemployment rate, which made mod-erate Democrats an d Republicans fretmore about imposing new costs on theeconomy.

Throughout the lobbying scrum,ExxonMobil persisted with its lonely ar-gument for a carbon tax. I ts lobbyists 1 eftbehind in congressionaloffices Power-Point presentations documenting a pri-vate Hart Research Associates poll,"Energy and Climate Change Policy,"showing that Americans preferred Til-lerson's straight carbon-tax idea to cap-and-trade, especially when the differ-ences between the two approaches wereexplained. But Tillerson had tied thecorporation's lobbyists to a proposal thatwas Irrelevant to diepractical discussionsthen taking place on climate policy.

ExxonMobil's strategy inWashingtonwasvindicated during Obama's first term:not only did cap-and-tradc die but thewindfall taxes on oil companies proposedby Obama during the campaign failed,too. When Republicans took back theMouse in the 2010 midterm elections,ExxonMobil's lobbyists no longer had

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reason to fear that Obania or congressio-nalDemocrats could upend their indus-tr y with climate or tax laws.

A I of ExxonMobil's business strate-gies remain oriented toward thevery long run. With little sign that cli-mate legislationcan be revived success-fully, the roost important issue duringthe next Presidential term likely will bethe regulation of hydraulic fracturing, or"tracking," drilling for unconventionalgas trapped in shale rocks and other for-mations, an issue that will shape the cor-p o r a t i o n ' s business prospects in theUnited States for a generation or more.Obama and Mitt Romney, the mostlikely Republican nominee, disagreeover oil-and-gas regulations, and thisha s reinforced ExxonMobil's alignmentwith the Republican Party. Exxon's in-terest in the matter increased substan-tially in 2010, when it bought America'sl e a d in g unconventional-gas producer,XTO Energy.

Obama and his advisers have an-nounced support for expanded domes-tic production of natural gas, includingfrom unconventional gasbeds, but envi-ronmentalists have-raised concerns thatf r a c k i n g techniques might damagewater supplies or cause other environ-mental problems, such as i n d u c i n gearthquakes, particularly if regulation isleft to the states, which often don'thaves u f f i c i e n t expertise. The E.P.A. hasbeen investigating the practice. Exxon-Mobil strongly argues that regulation isbetter left to states and local communi-ties. Mitt Rorruiey, meanwhile, haspledged to deregulate the oil-and-gasindustry-and to get the E.P.A. out ofthe industry's way. He has complainedthat Obama's approach has unnecessar-ily limited domestic oil and gas produc-tion. "1wa n t regulators to see businessesand enterprises of all kinds as theirfr iends, and to encourage them, andmove them, along," Romney said whilecampaigning in Mississippi.

In recent weeks, Tillerson has beenspeaking out, too, against greater regula-tion. "You can be afraid of a lot of thingsthatyo u don't \inderscind,*TJIctson toldan industry conference in Houston inMarch. He pledged to bring forward"facts" and to encourage a "science-baseddiscussion.",In an interviewwith the WallStreet Journal, he expressed his impa-

tience -with tile layers of regulation liiscompany laces. ''There are a thousandways you can be told 'no' in this country."In January, Tillerson and Ken Cohengave twenty-five hundred dollars each,the maximum for individual contri-butions, to Romney's Presidentialcampaign.

Tillerson and Obama appear to shareat least one understanding aboutenergy policy and die 2012campaign: they are bothaware that the partisan andmedia-amplified war overwhere to place the blamefor rising gasoline prices islargelyaphony one.

Global oil prices, andtherefore gasoline prices,have been increasing thisyear fo r geopolitical reasons:for example, the economicsanctions imposed on Iran,accompanied by threats of war, whichhave caused speculators to bet on a possi-ble oil-supply disruption. Obama mayhave spooked the oil marketsby suggest-ing that, if necessary, he might wagewaron Iran to prevent that country from ac-quiring nuclear weapons. But Israel hasbeen the main source of such threats, an dObama ha s chided these engaged in "loosetalk" about war. Overall, short of trying toavoid w ar in th e Middle East, there is notmuch that an y President of the UnitedStates can do to determine the price ofgasoline. In theory, he could seek tempo-rary tax rebates for drives or attempt toflood world oil markets by selling off diecountry's Strategic Petroleum Reserve,which is intended to protect the Americaneconomy from oil-supplydisruptionscaused by war or natural disaster. Bu tthese would be temporaryarid expensivemeasures that would not alter die globalfactors that drive oil, prices, or the pricevolatility exacerbated bywaves of specula-tive moneyflowingontoelectronic oil-fu-tures exchanges. In late March, PatihBird, diechief economist of die Interna-tional Energy Agency, an intergovern-mental forum, warned that high oilprices now posed a greater risk to theworld economy than even Europe'ssovereign-debt crisis.

ExxonMobil and other large oil cor-porations do not have much inf luenceover the changing retail price ofgasoline,

either. Big oil companies make the vastmajority of their profits by findingoil andgas, pumping it out, and selling it whole-sale. ExxonMobil can neither controlprices at the pump nor make high profitsthere.

This year, Obama has been sayingthat, during his t i m e in the WhiteHouse,American oil imports have fallento their lowest level in years. The UnitedStates reduced oi l imports by a million

barrels a day, or about tenper cent, in 2011. "Lastyear, we relied less on for-eign oil than in anyof thelast sixteen years," Obamasaid in his State of theUnion speech, in.January,This is in some respects aperverse boast; oil im-ports h a ve dropped pri-marily because of the rc-cession and the weakrecovery. However, rising

domestic production of unconventionaloil in places such as North. Dakota, alongwith energy-efficiency drives supportedby the Administration, ar e also factors,and they could lead to a further declinein imports even as die economypicks up.

'Hie President has acknowledged thatthere is no cheap or quickway to changeAmerica's gasoli neeconomy or to relievedrivers from their vulnerability to pricespikes. Producing and using alternativetransportation fuels on a large scale acrossdie United States, Obama has noted, is a"problem that .may not be solved in oneyear or one term or wen one decade."

That happens to be ExxonMobil'sview aswell. Earlier diis year, die corpo-ration published an annual forecast ofglobal energy demand, to the year 2040.Its latest analytical models, developedwi th the same rigoras dieke y vote system,take into account all of the electric-cardreams of the Obama Administration,aswell as the promotion of solar power an dwind powerin the United States, Europe,and elsewhere. The models forecast thatworldwide gasoline consumption for usein cars ma y well decline in the next threedecades. Truck, airplane, and ship fuelconsumption, however, will increase bysixty per cent, mainly in fast-growingpoor countries. Decades f rom now, oil,gas, and coal, ExxonMobil's analysts pre-dicted, "will continue to be the mostwidely used fuels." *

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gusher-the power of exxonmobil

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