Private Empire: ExxonMobil and American Power (25 page)

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 CO
₂
emissions” and “expand nuclear energy.”
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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 disclose 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.
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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.
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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.”
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These investments in skeptics of the scientific consensus coincided with what at least a few of ExxonMobil’s own managers regarded as a hypocritical drive inside the corporation to explore whether climate change might offer new opportunities for oil exploration and profit. One of ExxonMobil’s most accomplished earth scientists, Peter Vail, had won acclaim for his insights into how changes on the earth’s surface affected ocean levels and other geological shifts. Vail had developed a calculation known as the Vail curve to describe some of these ocean events. In the ExxonMobil upstream division in Houston, scientists in charge of finding new deposits of oil and gas began to explore whether Vail’s scientific insights might give them a leg up in exploration by allowing them to predict how climate change—if it did materialize—might alter surface and ocean trends and lead the corporation to new oil finds. “So don’t believe for a minute that ExxonMobil doesn’t think climate change is real,” said a former manager involved with the internal scientific review. “They were using climate change as a source of insight into exploration.” This work remained unpublicized.

A
raiding party of about four dozen arrived at ExxonMobil’s headquarters in Irving, Texas, shortly before eight in the morning on May 27, 2003. The raiders divided themselves into three units. The first group pulled up at the main entrance in two panel trucks marked “ExxonMobil Global Warming Crimes Unit.” They scrambled out, blocked the driveway, and chained themselves to the trucks in front of the gate. A second team wearing business suits and toting briefcases arrived at the maintenance gate at the rear of the one-hundred-acre campus. They cut a lock and drove inside in two rented Jaguars. Two vans pulled up at the delivery gate carrying the third unit of attackers. Most of that group had dressed in tiger costumes, mocking Exxon’s old “Put a tiger in your tank” advertising slogan. They unpacked a ladder and a raft and climbed over the gate, chaining it shut behind them. Some of them dragged their raft to the pond within view of the executive suites and set themselves afloat. Other tigers climbed onto the roof, where they unfolded a banner that declared ExxonMobil’s headquarters to be a global warming crime scene and tossed around a balloon designed as a globe.

The protesters wearing business suits drove their Jaguars across an unpaved road, entered the employee garage, and found their way inside the headquarters building. They fanned out and offered spontaneous lectures and leaflets on climate change to bemused ExxonMobil executives and staff. Two activists in tiger suits also made it inside the headquarters. Some of the oil corporation’s employees thought a terrorist attack might be under way. The Irving Fire Department eventually brought in one of its ladder trucks to remove the tigers on the roof.

It had taken Greenpeace three months and several tens of thousands of dollars to plan the raid. It did so in strict secrecy. The group’s activist coordinator, Maria Ramos, had dispatched a recruiting notice seeking those who might be interested in “challenging the world’s largest company . . . and engaging in guerrilla tactics.” One of the volunteers, Anne Nunn, traveled from Australia, where she had recently completed a raid on a Mobil tanker off the Australian coast. The Irving raid was timed to influence news headlines before ExxonMobil’s 2003 annual shareholder meeting; it succeeded. “If you’re a fringe, radical organization like Greenpeace,” said Tom Cirigliano, of the corporation’s public affairs department, “you need a target, you need an enemy, and you need a villain.”
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Increasingly, inside ExxonMobil, the corporation’s image strategists reflected upon whether they could find some way not to play the role Greenpeace had assigned them. The raid provided additional evidence, if more was required by this time, that Lee Raymond’s visibility on the climate issue had drawn extraordinary attention that was unlikely to dissipate. The attention had reached a point where it was undermining Raymond’s own cause. ExxonMobil’s many allies in Washington who opposed the Kyoto Protocol on economic and fairness grounds—utilities, carmakers, free-market conservatives in academia and journalism—found themselves tarred by the accusation that all of their arguments might be merely a front for the oil industry’s largest corporation.

ExxonMobil executives consoled themselves by saying that the Greenpeace campaign was just part of the price of doing business in the modern oil industry. In the marketplace of nonprofit fund-raising, ExxonMobil’s notoriety offered an attractive opportunity for environmentalists to raise money by promising to hold Big Oil to account, and there was nothing much they could do about that.

The corporation’s executives did not have to passively accept Greenpeace’s assault, however. After the Irving raid, ExxonMobil approached its Greenpeace problem as an aggressive litigator would. The corporation encouraged the Dallas County district attorney to prosecute fully the Greenpeace protesters who had participated in the Irving action. ExxonMobil also sued Greenpeace and thirty-six individuals who had been arrested on its campus. By threatening fines and jail terms, the corporation eventually won a seven-year standstill accord in which Greenpeace agreed not to commit any crimes while campaigning against the corporation. As a result of this settlement, the group’s anti-Exxon campaign migrated from newsmaking direct action and civil disobedience into online publishing.

Investigators from the Internal Revenue Service turned up at the Chinatown office in Washington to conduct an audit. A small nonprofit group called Public Interest Watch had raised questions with the I.R.S. about whether Greenpeace was compliant with federal laws governing groups that received tax-deductible contributions. Greenpeace passed the audit and opened its own investigation of Public Interest Watch.

The group’s tax form, filed about two months after the activists in tiger costumes had scaled the Irving headquarters’ roof, showed that a single donor was responsible for $120,000 of Public Interest Watch’s $124,000 in annual revenue: ExxonMobil Corporation.
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A
s Raymond battled Greenpeace, the international oil company he most admired after his own, Royal Dutch Shell, stunned stock market investors by revealing that it had overstated its true proven reserves of oil and gas; the company eventually calculated that it had puffed up its holdings by 4.35 billion barrels of oil, an amount equivalent to more than a fifth of ExxonMobil’s total proved reserves worldwide. Three top Shell executives resigned. The scandal made plain that the pressure on the very largest international oil companies to replace reserves in the era of resource nationalism had become so severe that it could induce grotesque distortions.
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Shell’s revelation galvanized regulators at the Securities and Exchange Commission in Washington to look at reserve counting and reporting practices by major American oil corporations. That review in turn brought fresh attention to a practice ExxonMobil had gotten away with for many years: The corporation still claimed each winter in press releases and in Wall Street presentations that it had an unbroken record, dating back to 1993, of replacing, through the discovery and purchase of new reserve additions, at least 100 percent of the oil and natural gas it pumped or otherwise disposed of each year. But the assumptions ExxonMobil used in making these public claims did not conform to S.E.C. regulations—and the commission and its staff had done nothing, under either the Clinton or Bush administration, to force ExxonMobil to modify its public statements.

To protect stock market investors from oil operators that inflated their reserves to boost their share prices, Congress had mandated in the Securities Act of 1933 and the Securities Exchange Act of 1934 that Washington regulators oversee how publicly traded companies reported their numbers. The S.E.C. had later issued detailed regulations, under Rule 4-10, about how a corporation such as Exxon should count its oil and gas holdings and report them in mandatory S.E.C. filings. Among the regulations: To report proved reserves, a company had to show there was a “reasonable certainty” that the reserves would be “recoverable in future years from known reservoirs under existing economic and operating conditions.” That meant, too, a company had to be able to transport the oil to market by sea or pipeline at a profit-making cost. This was obviously an imprecise standard—the reserves being counted were by their nature difficult to measure scientifically, so oil companies retained, by regulatory design, some discretion to decide what was proved and what was not.
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To calculate the economic viability of reserves, companies were required to mark oil prices on the last date of every year. Also, certain forms of oil, such as bitumen or oil sands extracted by techniques that resembled mining, could not be counted. The latter rule remained the main reason ExxonMobil’s public claims about reserve replacement differed from the disclosures it made officially in S.E.C. filings. If ExxonMobil had not disregarded the S.E.C. oil sands rule, it would not have been able to boast of an unblemished record. “This marks the tenth year in a row that we’ve exceeded 100 percent reserves replacement,” Raymond declared in a press release disclosing the corporation’s 2003 results. Yet that was true only by using ExxonMobil math. According to S.E.C. rules, the corporation had replaced reserves fully in only two of the previous four years. And the fudging involved issues that were material to investors: As Raymond put it himself, “Continued high-quality additions to ExxonMobil’s resource base are the foundation of our long-term profitable growth.”
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