Private Empire: ExxonMobil and American Power (12 page)

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.
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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.

I
n 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 CO
₂
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.”
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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.
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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.
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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.”

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hina 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.

A
rthur 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.
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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.
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Greenpeace launched its own well-funded campaign to strengthen Kyoto. In the United Kingdom it attacked British Petroleum. In the United States it focused its efforts on the Global Climate Coalition’s most unpopular member: Exxon.

From Greenpeace’s Washington, D.C. office, the group’s highly committed activist cadres scoured the capital for evidence that might discredit their oil-funded opponents. An allied group, the National Environmental Trust, dug up an A.P.I. document suggesting that the oil industry association had decided to rerun the tactics of the tobacco industry. Between the 1960s and 1980s, that industry had spent millions of dollars to fund dissident scientists and think tanks willing to challenge scientific evidence about smoking’s dangers.

The document was an “Action Plan” drafted by the American Petroleum Institute’s Global Climate Science Team that called for up to $7.9 million in spending to influence public opinion about Kyoto. It declared that “victory” would be achieved when:

Average citizens “understand” (recognize) uncertainties in climate science;

Recognition of uncertainties becomes part of the “conventional wisdom”;

Media “understands” (recognizes) uncertainties in climate science;

Media coverage reflects balance on climate science and recognition of the validity of viewpoints challenging the current “conventional wisdom”; . . .

Those promoting the Kyoto treaty on the basis of extant science appear to be out of touch with reality.

The document also recommended that A.P.I. “identify, recruit, and train” a team of scientists “who do not have a long history of visibility and/or participation in the climate change debate” and fund them to “add their voices to those recognized scientists who already are vocal.”
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