Steve Coll discusses “the World according to ExxonMobil”

“ExxonMobil does not make decisions based on what is good for the U.S. It makes decisions based on what is good for its stakeholders.” Steve Coll, the Dean and Henry R. Luce Professor at the Columbia Journalism School, as well as the author of “Private Empire: ExxonMobil and American Power,” spoke about ExxonMobil’s past and future with a focus on its power and interaction with states on a lecture on Tuesday, November 7, 2017. This lecture was part of the speaker series of Sawyer Seminar on Corporations & International Law at Duke University.

 

Coll began the lecture by describing the crash of the Exxon Valdez oil spill. “Its influence on Exxon is so huge even today when people are asked about their impression on Exxon, 70% of them will say, oh, Valdez.” He showed the audience a picture he took in Alaska, where the oil has been extracted for four decades before the disaster happened. What the audience saw from the picture was a beautiful inland sea. But behind the peaceful scene, crude oil is just inches below the surface. The environmental damage to the water, biodiversity, and the ecosystem will never disappear. Then, he brought the audience back to that night to see what happened. “Joseph Hazelwood, the experienced and highly-educated Captain, with drinking habit in his middle-life crisis, violated the standard procedure.” After Hazelwood realized what happened, he said, the world I know has just come to an end.

 

That night became not only the turning point of Hazelwood’s life but also Exxon’s. The safety measure and operation standard, and the underlying corporate culture have been profoundly changed in the 1990s. After the disaster, Lee Raymond, the President of Exxon when the disaster happened and later the CEO, decided to take a zero-tolerance attitude towards accidents of safety. Exxon adopted a whole series of integrated global systems called the Operations Integrity Management System (OIMS), telling the worker everything including how to park the car and walk across a plane. Even paper cut and food poison are required to be on the record to evaluate the safety performance.

 

This rigidity and autonomy have also given the company tremendous power thus influence the state sovereignty. While the energy policy is in a constant state of flux due to frequent partisan administrative changes in federal government, the preferences and ideals of ExxonMobil are well established and constant — profit. ExxonMobil almost unwaveringly adheres to its own policies, Coll noted. “One of the things that surprised me when I started interviewing and reporting was to find right away that that’s how they see themselves… ‘We don’t follow other people’s principles, we follow our owns’.” This is why Exxon could survive in the dramatic political change in Russia in the 1990s, and ignore the pressure from groups concerned with human rights violations in Chad and other African countries. Further, Coll emphasized that Exxon’s former CEO, Rex Tillerson became the new Secretary of State, “this is very different from other corporate executives move into a political position.” It is not only because of Exxon seeing its interest superior of state policy, but also Tillerson’s close relationship with Russia.

 

However, there is a big difference between the world Exxon faces when Coll finished the book five years ago and today. In the end, Coll provided some updates to encourage the audience to think about the future of Exxon. He highlighted the change in transportation is bringing huge uncertainties to the future of world energy. “Exxon’s major business is in transportation. Given that Bloomberg and big Wall Street Banks predict the share of electronic cars will be around 30% in 10 years, Exxon is afraid the huge breakthrough in battery technology will change the trajectory of oil and gas.” Like the Valdez, it might be a new turning point for Exxon and it is interesting to see what will happen, “the future belongs to the future,” Coll concluded.

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