Well-Oiled Machine

PRIVATE EMPIRE
ExxonMobil and American Power
By Steve Coll
685 pp. The Penguin Press. $36.
In the great reach for colonies that Europe began hundreds of years
ago, at center stage were several curious entities that wielded more
power than many governments. The United Company of Merchants of
England Trading to the East Indies (commonly known as the East India
Company) and its counterpart, the Dutch East India Company, fielded
their own warships and armies, coined money and ruled territory
eventually taken over by Britain and the Netherlands. Later, the
seizure of land by Cecil Rhodes's British South Africa Company also
preceded the spread of British pink across the map.

Centuries from now, historians sweltering away on an overheated planet
and looking back to our own times will surely see multinational oil
companies as similar players. The way they're reshaping today's world,
however, is not by carving out future colonies, but by searching for
the oil and gas we're so hungry for in ever more risky places: beneath
oceans, in Canadian tar sands, in underground rock formations that
require "fracking" and in the environmentally fragile Arctic waters
newly accessible as the polar ice cap shrinks — thanks, of course, to
our addiction to fossil fuels. That addiction is likely to change the
very level of the seas the East India Company's ships sailed in their
hunt for cloth and spices, and the floods and droughts ahead may set
in motion desperate migrations dwarfing those of colonial times.

Steve Coll's mammoth portrait of Exxon Mobil, "Private Empire,"
abounds in empire-size figures. In the first half of last year alone,
the company's profits were $21.3 billion. When the chief executive Lee
Raymond stepped down a few years ago, his retirement package was worth
$398 million. If revenue were counted as gross domestic product, the
corporation would rank among the top 30 countries. Unsurprisingly,
Exxon Mobil runs one of Washington's biggest lobbying operations, with
not only a well-staffed office on K Street (where a Democratic
director was smoothly brought in to replace a Republican after the
2008 elections) but some 20 additional former senators,
representatives, legislative aides and others under contract.

Yet this book isn't so much a story of Exxon Mobil's influence over
the American government. Rather, it's a picture of a corporation so
large and powerful — operating in some 200 nations and territories —
that it really has its own foreign policy.

Coll quotes a 1999 cable from the United States Embassy in Chad noting
that Exxon was ignoring American diplomats there. He then asks: "And
why should it be other­wise? Exxon Mobil's investments in the
Chad-Cameroon oil project would amount to $4.2 billion. Annual aid to
Chad from the United States was only about $3 million."

Exxon Mobil's foreign policy, orchestrated by a political division
including National Security Council and State Department alumni,
sometimes coincides with that of the United States, and sometimes
diverges. For example, the corporation had no enthusiasm for invading
Iraq. Yes, Iraq has all that oil, but with most remaining reserves
ever harder to get at, oil executives knew that whoever ran Iraq would
ultimately depend on the technology and capital of the Exxon Mobils of
the world. And yes, it might have been nice to own Iraqi oil wells
outright, but long-term stability and security mattered more. Today,
although the company has billions invested in tearing up wetlands and
forests to extract oil from Alberta's tar sands, it doesn't much care
whether an expanded pipeline system that would stretch from Canada to
the Gulf Coast gets the go-ahead from the Obama administration. If
Exxon Mobil can't send that oil to the United States, it can easily
sell it to Japan or China.

Just like the British South Africa Company, which pioneered the use of
Hiram Maxim's machine gun during the Matabele War, Exxon Mobil has its
own armies — and, in these days of outsourcing, also hires those of
others. In Chad, its 2,500 security men patrolled the countryside in
white radio-equipped S.U.V.'s, watching for guerrillas as the company
set up an intelligence operation bigger and better than the ­local
C.I.A. station. In the war-racked Niger Delta, it gave boats to the
Nigerian Navy, deployed its own vessels at sea to scout for pirates
and "recruited, paid, supplied and managed sections of the Nigerian
military and police." On their uniforms, the ­Nigerian police sported
Mobil's familiar red flying horse. In Aceh, Indonesia, Mobil paid the
salaries of Indonesian counterinsurgency forces who tortured and
murdered prisoners on company property. Payments kept flowing even
after the American government cut off aid to the Indonesian military
because of such abuses.

Like other journalists before him, Coll points out that Exxon Mobil's
lobbying has not been confined to keeping oil and gas taxes low and
regulations lax. It has also shaped what people think on the biggest
issue of our time. For some years, the company claimed that human
contributions to global warming were negligible and gave millions of
dollars to organizations that churned out studies accordingly. In the
last few years, the corporation has subtly, gradually pulled its head
out of the sand on this issue, not admitting earlier errors but simply
stressing that the world's economies still demand huge amounts of oil
and gas — which is, alas, true.

Exxon Mobil executives care less about Americans' belief in climate
change, Coll suggests, than they do about Americans' belief in
punitive damages from lawsuits. After the next Exxon Valdez spill, or
the next Jacksonville spill (in which an Exxon service station leaked
24,000 gallons of gasoline into a Maryland community's water supply),
what a jury decides could subtract billions from the bottom line.
Small wonder that after the Valdez, a company representative quietly
called a University of Wisconsin professor to offer money if he would
write an article for a "respectable academic journal," arguing against
punitive damages. This man spoke up, but we don't know how many other
scholars received and may have acted on the same offer and said
nothing.

"Private Empire" is not as original and absorbing as Coll's excellent
Pulitzer Prize-winning "Ghost Wars," about the C.I.A.'s arrogant
bungling in pre-2001 Afghanistan. Oil company executives trained and
shielded by public relations staffers are inherently bland compared
with the earlier volume's C.I.A. cowboys and Afghan sheiks. Long a
correspondent and editor at The Washington Post and now a staff writer
for The New Yorker, Coll is a careful reporter but sometimes doesn't
know when to stop. "Private Empire" could easily afford to shed 150 of
its nearly 700 pages. Do we really need to know where all the major
Exxon Mobil figures grew up and went to college? Or do we really need
half a page listing all the names and amounts involved when over a
dozen executives gave to the campaign of an oil-friendly Texas
congressman?

Despite these quibbles, the book assuredly does what it sets out to
do: show the inner workings of one of the Western world's most
significant concentrations of unelected power. And just how that power
is wielded matters enormously because oil companies play such a
crucial role in the carbon economy to which we are so fatefully
attached.

Adam Hochschild is the author, most recently, of "To End All Wars: A
Story of Loyalty and Rebellion, 1914-1918." He is writing a book about
Americans in the Spanish Civil War.

NYT