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tv   Book TV After Words  CSPAN  June 2, 2012 10:00pm-11:00pm EDT

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in the 1930's we did not have that. or germany and japan were aware of that. factories have to be converted. overnight to the restricted products to consumers. january 84 the to you could not find tires for your car. if they were getting aged and you thought you will go obtuse years, you were out of luck. the only way was to go in front of the government tire board to prove you have to resend. radios, bicycles, clocks and
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a comment america and could not purchase. they were all used in the war effort. . . it really redlich nonfiction in places, which i'm sure as a writer you encounter some of that feeling as well and i know it's a report was. lets kind of start there.
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y. exxonmobil? how did you come to the subject? i know you said getty oil previous in your career but why this company and how did it differ from some of your other subjects like the bin laden's? >> guest: it's interesting, to me ernie. i started out as a business reporter on wall street when i was very young and that i won abroad and worked more in international subjects and after 9/11 i wrote about the origins of the 9/11 attacks and the 20 years of american covert policy in afghanistan and this book goes towards that end after that was over i thought you know i want to keep writing about america and the world after 9/11, this sort of asymmetric, strange groping that we had as a country to understand what the attacks were about and what they meant to the united states, what the relationship with the middle east was. then the bin laden's which was a book intended to be about saudi
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arabia organization and how complicated it was for this generation of oil shot boomers that osama bin long to do kind of age in the seventies when the kingdom was just awash in wealth and we have to all go out out and buy a wendy's in the world and one of them became the know terry is terrorist of the others moved to florida and so forth. that interested me up when i was finished with that project i wanted to write about oil and american power in the post-9/11 context. geopolitics. i wanted to essentially take the prize, the book by dan yergin that inspired me as a young man a long time ago, and update it. i have thought of the prize is a great work of nonfiction about the air of oil that was a air of expansion and discovery and what i wanted to do was to write a book about global oil in the era
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of limits and constraints and climates and the rest of it. so i started out on that kind of open framework and i got about six or eight months into the research not thought to myself, really needed a subject here. once i came to that conclusion, then for an american audience i thought exxonmobil was the only i sort of backed into it as a subject and i didn't quite realize what i was getting into when they were sort of forced upon me at least in my opinion as a subject. i didn't know how close they were and how difficult they were to report on. i thought they would just be normal reparation and i also didn't understand that much about their distinctive internal culture. a lot of the three and a half years that remained was about discovering what exxonmobil at that point like, did i pick the wrong company? >> guest: i had mixed feelings. i joke to my journalist friend, there must be a word in german
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that describes what journalists feel when other people suffer but you get an ending to your book. i thought well, this bill the catastrophe of an environmental disaster on that scale even though it wasn't exxonmobil's response did provide a kind of book and for the valdez spill which is sort of origins story for modern exxonmobil. it's a story they tell themselves. they pay tell themselves the story that they were the deepwater horizon accident some
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of your narrative i thought made it knew. and then ending with the deepwater horizon disaster in the gulf of mexico in april of 2010. as a person that really delved into a lot of the transcripts from the exxon valdez incident, did you see any parallels, because i did a little bit. as a reporter i didn't cover the valdez. i did cover deepwater horizon and your description of valdez and exxon's response to it i did see, it was a page out of the playbook. did you see that at all as you are seeing the coverage of bp? >> guest: there were definitely parallels. you could probably list even more than come to my mind but the one to come to mind are in a decade running up to valdez there were warning signs that exxon was not operating in a consistent manner, in a way that would give you the highest
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possible reassurance that such a catastrophic accident could not take place. in fact the decade before the valdez the exxon caught 80,000 not up 180,000 employees. they reorganized their entire safety department and their entire environmental department and obviously the fact that the tanker captain with a drinking problem, who had dui arrest, was still in the job making more than $100,000 a year, that is not the exxonmobil you would expect today so there were a series of warning signs that culminated in the accident and the same was true with bp. i don't know what you would say that i had the impression from the industry that bp's record as a weak operator and the texas city plant, the osha record, the fact that they basically had a culture and a strategy that emphasized financial engineering at the expense of operating
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discipline was pretty well-known in the industry and i sort of came to the conclusion after talking to people for three or four years that if you were called up and warning of deepwater horizon and said to them, the following thing has happened. who do you think was operating that platform and you would have gotten a strong majority for bp at that point. the second parallel was, the preparation for actually mitigating the disaster. in both cases there were a lot of paper planned saying we can handle this and then the reality was they were not at liberty to do so. and then, the kind of public-relations narrative, and learning how to deal with all of the communities and dramas. i think probably bp have the benefit 20 years of learning about corporate racist management that exxon, in those days of 89, the whole philosophy of how you communicate and immediately go on television and tell people you're going to make things right was not as well
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developed as a strategy in exxon today. but anyway. >> host: i agree. i think the aftermath strikes me more than what happened before in both of the disasters in terms of -- i was a reporter after deepwater horizon when bp gobbled up every expert on -- hugh could not find a blowout expert to save your life. that was not on bps payroll. i think the control that emanates through this book i think emanated after bp in terms of controlling the message, controlling access to people that could independently talk to reporters about what happened. a very technical subject again. so you go everywhere in this book. you globe trot in the word and you also tackle numerous environmental issues from global warming to obviously the tanker
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to leaky underground storage tanks, and mtbe which i'd covered in my early career in upstate new york. all which have collections to the oil company and control of the oil from cradle to grave. how did you pick out the anecdote? it goes back to standard oil days. there's a treasure trove and as a reporter i know it's difficult how did you pick out the anecdote for this book? >> i started out with a map. once i chose exxonmobil is a subject i basically looked at the map where they owned oil and gas and basically asked myself as a reporter, what kind of world business? why are are they there? then i became interested in traveling across that map because as you pointed out earlier there are a close subject. they were not excited to know
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that i was doing this book and i didn't volunteer. they handled my inquiries in a professional way but they didn't really cooperate much. i think they would say relative to some projects they cooperated more than usual but the perspective of the ambition of the book while it was helfer, it was pretty limited so i think they had to go outside in. once i started with the outside in prospect i started with the map. the first year i traveled, try to understand their role in the world and their sense of themselves and how they operated on the ground, why are they in these united countries learning about why equity oil in the weak states have sort of a fall this part of their portfolio and so on. then i came back back to the united states and i thought well, i have a pretty good first draft on how they operate abroad but i really need to concentrate on the washington strategy and
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their lobbying and their political strategy so i then turned to the tools that you use as a reporter to go outside in, and the united states which is basically disclosure. i filed for information requests for all the overseas work but to get out the american subject, it if you looked at all their lobbying disclosures, what are they lobbying about? an example of something that popped out, why are they -- and in the summer of 2008 there were they were all over that subject. so it was really the data that basically said okay there's got to be something here and just to finish on the lawsuits, they get sued by everybody over everything so it's a great tool of reporting to look at civil litigation, because in those cases, records and testimony or produce and even if the exxonmobil's policy never to give interviews, so i was
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looking for cases that told structural stories that were points of entry to the corporation when i found was this gasoline spill in maryland where i realized searching the litigation record started with mtbe and i fought my way down and i finally realized there was a huge trial record around what had been one of the largest gasoline spills in an area that depended on fresh groundwater supply through aquifer so is a particularly dangerous spill in an environmental sense. it gone to trial in the trial was over with this massive record of testimony by a exxonmobil executives close documents at 10 reduce and it was just -- i went straight into the retailing and downstream division of exxonmobil through the trial record in the way i could never done through interviewing so opportunistic is kind of the short answer for how you choose the subjects. you just keep looking on the map and suddenly it tells the story. >> host: what is interesting though is how broad they are and
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in terms of geography and in terms of subject matter. the lesson i think is the same over and over again, which is, i think it also comports with the public's perception of exxon which is this company that is rigid, that is all powerful, that you don't want to mess with. so i guess, did anything that you came across surprise you or kind of sit outside of that narrative because it seems to me the book, all the stories kind of comeback to that. in different ways, you are right. each one has a different kind of take on it but some of it is this image of this company that really comports with what everybody kind of in their gut feels. >> guest: they are who they are and the reasons that is true across the seventies, the same kind of decision-making in the same kind of culture and insularity and rigidity where they might say focus,
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consistency, is present in indonesia and equatorial indie and suburban maryland and the washington offices because they have constructed a global system and global policies that are so unified and so codified and so distributed down all of their channels of operations that i think more than any corporation i have every countered as a journalist, everyone who works there gets up in the morning and is reading off of the same playbook. it's almost like a military operation or a sports team that is exceptionally well organized around the same playbook. i think there are subconscious about the military metaphor. they are unusual among corporations and that everyone at the top grew up together. if you took the top 100 publicly traded corporations in the united states and you chose the top jobs in each of those corporations and you match to the people or you would find there the significant number of people who came from eight
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competing company. they moved over or they came from another industry as a marketing specialist and they came in with reforming ideas. most corporations are informed at the top by some inside -- outside perspective. everyone comes from college graduate school. if you are selected for management tracking you would grow up together over 30 or 40 years and you look like the marine corps. you don't become a marine corps general by having a successful career at ibm. you grow up together as a cohort and share a common view of the world. what you observe is a rate of the book, whether it is loss in venezuela or civil war in indonesia or a gas leak still in maryland, the stories all seem to end the same way. enforcing their well and there is a reason for that. that is their system. >> host: late in the book and i think is as a person that is covered the environment for as long as i have, this surprised
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me. you get into hydraulic fracturing which is now all over the news and today rules for fracking on public lands. you almost make the case that corporate philosophy gave them a blind spot when it came to hydraulic fracturing. even more surprising because you make an amazing.and this was page 600, that rex tillerson as a young engineer of the company actually was using the technique, and so do you think in that one case in the fracking case, that corporate philosophy of the managed risk would make a certain return on what we do hinder them from hacking into what is now this huge gas boom, this huge economic opportunity? >> guest: they were slow but
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they were decisive when they decided they want to go in the direction so they get to places laid them buy their way in. they have never had a great reputation as the world's greatest oil and gas discovers. i'm sure they had some stories they told themselves about their successes and exploration. they have some but by and large their strength is financial so they have more cash than anybody else and more discipline about choosing opportunities and generally if they fail to discover something for themselves they can buy it. they have been trying to develop a natural gas as it emerged in 2005, 2006 and looked like a real opportunity. they were going out and doing the kind of land games and buying up pieces and putting together one patch at a time in trying to build something but for them to be a player they needed to become big so they bought -- in 2010. one of the things that is
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interesting to me about the fracking story, now they are the largest producer of unconventional -- >> host: of course they are. >> guest: if you have $40 billion they can lay down you become the largest. what's interesting and i wonder what you think about this because i see the climate as a challenge of climate legislation, carbon pricing as an analogous strategic challenge that they faced as an earlier generation where they dealt with resistance to their investments and their thinking with a pretty aggressive strategy. now fracking, it's not just a business challenge and not just a geological challenge of not just in ensuring challenge but it's also a political challenge because there is an enormous amount of anxiety building up in the country about some of these fracking techniques and their environmental consequences and land-use consequences. are you going to reduce
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earthquakes in places that didn't have them? if exxon mobil becomes the poster child of the rigid very corporate, very kind of stiff and profit driven approach to these challenges, it may strategically have a problem over time. can they actually adapt themselves to the kind of trust building and political coalition building that will prove durable or will they take the systems approach, our way or the highway and sort of end up beating themselves in some respect. they could end up with a tougher public response to fracking than they would otherwise get. >> host: will they align themselves with the other companies that are doing this? in some cases and you touched on it in the book, that they are the odd man out. they are kind of pursuing what they want to pursue and doing it their way and taking no punches
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and no excuses for it which brings me -- i had a conversation this morning with alec jeffries, the chief spokesman for exxonmobil. i asked him about the book, and i wanted to get a reaction -- his reaction from you which i think you will find very as gone mobile eska but i'm paraphrasing here. he basic he said essentially how we see the book is telling the story of exxonmobil commitment to safety and community. it may not be a popular or professional conservative approach but deserving of the quality of a company of this type. that is how we are and take it. obviously does that surprise you in the course of this book? what is your response to that? >> guest: i appreciate dealing with it in a professional way. they are basically about media,
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but journalist, bob lyrical opposition, about environmental issues, they basically stay in their channel and that is what he's doing so he is saying you know, we are who we are. that is essentially their strategic position. sometimes we are who we are feels a little bit like a sense of pride and and and that gets to this fracking question. can you really be -- have the strengths of the operating system which are considerable. they are safety driven, they are focused on operating and they have a pretty good reputation as project operators. if you and i were the co-dictators and be wanted someone to develop a oil and we want the project to come in on time on budget and to get paid, early, we are definitely entertained their powerpoint presentation because they have a record of project management. where they get into trouble is where they extrapolate these kind of operating systems, this
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rigidity into political affairs, the human factor, things that are made up of social change and their own record for example as a social into the themselves as the women, diversity and responding to the world we live in is not great. you can say that these conservative values are out of fashion and we think that they are powerful. that is fine if you're talking about safety in the workplace but can they really succeed with this strategy in a world where they are so close to changing the social makeup. who is the educated workforce in the united states anymore? it is mostly women and it's more and more diverse. if you work at exxonmobil and go to your family thanksgiving dinner and you say i work at exxonmobil and after in their
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breath and disdain or worry, that is not a winning strategy over 30 years. something has got to give i think. i'm not sure -- >> host: that is one of my questions too, is that it seems to me that kind of we are who we are and take it or leave it, we don't care what anybody else thinks about that, has that backfired? it seems that could've been a force to cult aboard -- cultivate more distrust and help make them as you say in the book, public enemy number one at points in their history. >> it is a great question in a complicated one. one of my goals as a reporter was to understand and think about what's it like to be so unpopular? does that matter? their default view is it doesn't matter just like allen's statement, we are who we are but in truth i think there are
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consequences. part of it is talent recruitment and retention in the real world, a world of the arab spring generation. you cannot get away with the disdain by everybody. how are you going to do that? scientists are ornery independent-minded people. some may be willing to adapt to the economic rewards in a place of exxonmobil but not of the government doesn't feel like an open and changing place today. and b, if you only have one way of living in the world and risk management are getting more and more diverse, you can't afford to go into communities that already have a presumption. it shows up for jury trials. yeah they can appeal all these verdicts, million-dollar verdict's and eventually get that knock down to zero but do you really want to go into every jury and basically know you have to overcome a presumption that they are evil?
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i? i do think there are consequences, but the problem from their perspective, let's think of a way out of the box. one of the things they did was they said let's go back to our history. is there some golden age of oil industry popularity that we could model as a basis for more winning strategy in the answer is no. so the bake is -- the basic question of, if we are who we are, is there a way to communicate that will change anybody's mind? isn't that just putting lipstick on the as they say in the pr business? should we have a strategy that just says we are who we are again and again and hope that allows enough people to come into engagement with us to realize their interest. >> host: john say he in new york who is an excellent energy writers also writing a book and we were talking about it in the beginning. he brought up apple. apple is now more valuable than
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exxonmobil. and it's also secretive. it is also thin-skinned thin skin but apple is cool. >> guest: exactly. >> host: and what a difference that was so to bring that question oh, it's kind of the two-parter. do you think exxonmobil strategy has tarnished the rest of the oil business. people associate big oil with exxon and everybody in big oil is bad, and you think it is spread to other companies or in a case of apple being since grand and controlled in secretive and still be really hip and cool so people will like you? >> guest: it's really interesting. i looked back and look -- from 1949 to the present and exxon is always on the list. they are always in the top. u.s. steel didn't even exist anymore so you look today at
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apple and exxonmobil are one and two in 10 years ago was exxonmobil and walmart. microsoft has always been the next that you look out at a few years further which one do you think is more likely to still be around, exxonmobil or apple? i read the jobs biography by walter isaacson which is a terrific book and it is striking how completely different and similar apple is to exxonmobil. what a country. only the united states that is produced apple and exxonmobil because on the one hand, apple is a completely california bred, creative 60's -- and in the book i point out the steve jobs used to going to interviews and asked job candidates if they have editors done lsd in the hopes of the answer would be yes. exxonmobil would say take this cup and provide us a sample. on the one hand they are very
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different hand they are both a closed system, they both have a command management and they both are driven by the desire to control their environment. job so desperately wanted to control every element of the customers experience, every element of the design and they both were not get partners. they didn't really believe in partnership. they believed in the advantages of total control. that makes them secretive because it's the secrecy that follows the desire for control, not secrecy is an end in itself. so it is fascinating. the other point about exxonmobil that i came to think about every time is, you know most big industrialized democracies because of the nature of art economy they'll have big oil companies. and yes, industrialized west most of the states have privatized them but even bp --
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so, but only in america. there and much more coherent expression of our national energy policy, that's for sure and they are just as powerful relative to the state to france in even more so and yet only in america what what would we have the state oil company that lives in opposition to the state. bricks tillerson recently told scouting magazine that his favorite book is "atlas shrugged" by ayn rand. that is the sort of touchstone for libertarians and it suggests an attitude of sort of skepticism let's say generously towards the government that is peculiar. the equivalent company in france or italy or even in britain, it would have all gone to the same university as the president of the united states part pert a would be buddies there had be an interlocking sense of worldview and maybe even, they would work arm in arm with the french
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government abroad to secure the saudi interests and so forth but this country, they are skeptical of our government and build lost irony is we are skeptical of concentrated power so here at exxonmobil is an institution with an enormous concentrate chief executive reads a book that is basically about the dangers concentrated power and celebrates the book. we are a funny country. >> host: one of the things that came up interesting to what you just said about influence on washington. it's actually fascinating because out of one side of their mouth based with that direct line to dick cheney and what it helps them and this interest to get the geopolitical context so what i found interesting is, a toxin here about politicians getting it wrong.
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i looked on the page number and it's even more apt today. here it is. a quote from tillerson. the global free market for energy provides the means of achieving u.s. energy security. isn't that the theory? it? it doesn't really matter, songs you get more oil and put it in the bathtub so we have more supply. in the globe will market the nationality of resource has little relevance. energy made in america is not as important as energy simply made wherever it's most economic. get exxonmobil had carried that message for a long time. it goes back to raymond and back to tillerson. they are obviously communicating it to a lot of the republican allies at that point politicians today. you are hearing in almost and almost a resource nationalist approach to energy production
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all of venezuela. >> guest: and exxonmobil is embarrassed to go into that. >> host: i guess it is shocking to me and i'm asking for an explanation here, how can this all-powerful company with the huge influence not to to a change that political discourse to make it actually more adhere to the facts of how the oil market works? >> guest: i think there is influence on educating. they have carried out this very intense education campaign to try to bring what they call an informed influential's, government around government media into the conversation about the how the global oil markets actually work that most politicians don't have the time or interest to study these kinds of complexities and one of the executives i interviewed told me that one of the world leaders who under best, how the global oil markets are integrated,
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illiquid and is talking with says you are one of the few people who run the government who actually understands how the oil markets were, isn't that a shame? lair supposedly said something like you would want the politicians knowing are they naked think they would do something about it. >> host: that is happening right now in washington with both parties. both parties are trying to kind of get a handle and show they are reacting to gasoline prices whether in fact they have their little power over gasoline prices. >> guest: but this question of what are the benefits of energy and what is energy independence mean? even though the wait is used in political campaigns is frustrating because it is so divorced from the actual subject matter, but there is a real
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subject that is important and interesting and it is changing. exxonmobil's quest for energy independence is also changing. basic we while it is true that being the net exporter or net importer of oil is not really the right way to think about energy security, because everybody is a price taker. doesn't matter whether you are selling or buying, the prices of global bus. that is not true of natural gas which is more regionally priced and there have been some evolution toward a global integrated market but we are not there yet. in the united states if we have on short natural gas that is cheap for a long period of time, that could nick a big difference in a commonly and reduce the cost of manufacturing. it could change or energy mix in a way that's fair probes to climate change. while being the net importer or the net exporter may not matter
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in the way politicians talk about it, does matter to the amount of dollars that we send abroad to unfriendly regimes to reinvest. so if we do shift towards more energy independence, what do we call it, nationalistic or economic language, they are just not the same, they are not the same advantages. >> host: one of the other current events i was thinking about in reading this book was going back to lee raymond, because i was a brilliant chapter. they are an oil company and their business is oil so they don't really want to hear about hydrogen for cars or electric cars or what have you. it's an excellent point which is one of my frustrations as an energy reporter how people mix energy production with transportation. but i couldn't help think there
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are pieces in the book where the raymond talks into the air of alan greenspan and alan greenspan is on the hill basically saying lee raymond's speech. if on solyndra which is the solar company that has grabbed headlines, if they coiled was behind that given their animosity towards kind of renewable subsidies renewables require. did you see any evidence of that? >> guest: the government making a bad bone? >> host: not necessarily a bad loan but fans the flames of criticism and alone like that. >> guest: their political allies to the do the same thing, but i think the underlying question about alternatives and exxonmobil is they are a corporation and they can pursue whatever business strategy they
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want. the question is a country is, do we want to create subsidies and incentives for ship to the alternative to the loan program that ended up with celinda providing and why would we? if you look at it, we have been talking about how everybody in this country shares an interest in the lowest-cost energy possible, consistent with a sustainable environment. that is the dilemma. you want the lowest-cost energy but you also want to achieve your environmental goals. we may not define those goals the same way but if you talk about the rapid shift and costly shift from cheap coal and oil and gas to more expensive but cleaner renewables, you had better have a good reason to do that. the reason that is the most compelling in the world we live in today is climate so if you believe as i do, i find 97% of mainstream scientists and their warnings and their findings entirely convincing. so if you believe that, now you
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have a reason to endure short-term cost for long-term gain but if you want to try to convince the public that there is no risk, then the case gets much harder which is why exxonmobil's resistance to the basic findings of climate science and so damaging because there is a residue of doubt it to the public about the validity of climate science. scientist tell us there shouldn't be such. why is there? these interested parties funded it communications campaign. now of course the mac and people are entitled to their own opinion but that campaign clearly -- >> host: i thought that was a really interesting part of the book because, and i don't want to put words in your mouth but to me it read as if exxon of that strategy, as a texan with a company that really was in the business of scientific doubt,
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funding research which is great and i love that part with the noaa scientist on the beaches of the prince william sound and they are being tagged by a yacht of exxonmobil hired scientists who want to know what they are up to and criticize their method to cast doubt on the science that the oil was still there after all those years. that tactic now seems to rampant in our political culture. as a reporter, you are now seeing it, where science of climate change theory by many people, now you are seeing it in areas that were almost rocksolid. there are politicians now on the floor talking about the linkage between smog and asthma. there are people that are questioning the cost-benefit analysis of the epa when it drafts regulation.
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do you look at exxon like that and say hey exxon is responsible for that kind of tactic and it seems now to very common one. let's not talk about the regulation. >> guest: i think that they have a responsibility for some of that and they really were in a distinctive investor in that specific strategy. look, when the kyoto accords were accords were signed there was a lot about the mission in the industrialized world on economic grounds, on fairness grounds. some of it was about science that are urgent that we need to impose these costs on ourselves. but there were a lot of different groups that opposed kyoto for economic and fairness reasons. exxonmobil was very unusual in my judgment in the aggression that they brought to the science part of the campaign, really
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funding groups whose principle activity was to communicate as non-just a narrative of doubt about what was emerging as a mainstream client scientist and that is i'm afraid a that tactic that is more and more present where science and public policy intersect. and it is dangerous because our whole progress as an industrialized democracy depends on an honest argument about science and the public good. if we are going to have, especially in these fractured media times, a completely polluted argument where the public, even the public trying to act in good faith, we are going to end up damaging our society. >> now this book makes clear that exxon is almost an impenetrable fortress of the company but when you get to climate change i am biased here because i'm a climate junkie, it
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really seems that this scares them. there's this great, until then there was only one development, one black swan intervention that could shift the curb -- curve of oil demand. a decision by government to limit greenhouse gas emissions by heavily taxing or having the use of carbon-based fuels. is that a fair estimation? that issue because of what it can do to oil is what really kind of has them shaking their boots. get skyping was the combination of how was a rare x. essential -- the reason we were talking about before. they have overcome the previous systematic threats to oil production in the world which was bills and environmental damage and the seepage of oil into water and drinking supplies
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and air pollution. all of that had been more or less brought into a sustainable compact of regulator and regulated. they themselves accepted the validity of the zimmerman two goals when it comes to spills and air pollution and so forth and adapted themselves and impose costs on themselves in order to build a sustainable compact or coaches of the moment when they have cruising. >> on all the other environmental issues that have rows in the first three or four decades, now comes this other existential more abstract global challenge to the primacy of fossil fuels in our system. so i think that was one factor. lee raymond is a trained chemical engineer and is a very direct and determined chief executive decided that he would just say what he thought to prosecute his views. most corporate executives would not have active as aggressively
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as he did but that is who he was. you know the book reflects -- i interviewed raymond and i asked them at one point, you know, surely you could have handled the cost of modest carbon price legislation. look at the cash flow and look at your profitability. you have adapted to air pollution regulations and adapted to spill regulations. you pride yourselves on your compliance with regulatory regimes that impose costs on you for making the oil industry sustainable and a political and environmental sense. why not just adapted these regulations? he sort of said we thought the cost of the whole aconda me was too great and that would break up economic progress and so forth but there was a visceral reaction to kyoto that exxonmobil have that was kind of out of line with their actual
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business. i would understand if you are coal company and you see kyoto come think -- coming. the oil industry, because of the mick so guess which is a lower footprint, they had an opportunity to adapt to this any more in a more forward-leaning way and frank a. the european company saw that and their public was already there are. >> host: another idea that i found interesting in the book is and you raise a couple of times, at least twice that i remember, but we are not hearing it at alright now in washington with gasoline prices is regulating gasoline per we all want the lights on and it's a public right in how we regulate that. it got out of control in people wouldn't be able to turn their lights on. why are we hearing that more when it comes to gasp and should we be hearing it more as a
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solution to something the government could do? >> i think it's a very good question and the reason we don't hear more about it is the political arguments we had during campaign season about gas prices. the point you make is really important which is if you flip on a switch in this room and you generate power and a company profits from the esa power, that company is utility regulated by a public standard in every state or jurisdiction. the public interest standard is there and that is her history with the provision of electricity. we think it's so fundamental and so inescapable that we require companies that provided to meet certain public standards and to be accountable to the public for their performance. now, the exxonmobil's case, they are a global company. they are out discovering oil and
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so forth. nobody is going to regulate them in the public interest in that sense but in the provision of gasoline, it is a similar utility function and in fact if the construction worker has to drive to a job site, you go to the pump and you have no choice. you have to put in what other prices than you can understand why you have no accountability and no control over that trap that you are in. i think it is sort of an accident of history that we treat the provision of gasoline as an entirely free market function without any public oversight and some environmental regulations. that we treat public electricity as a public utility. in many other countries they organize. i don't know if there's any easy way to fix it but exxonmobil recognized the problem because their unpopularity recognizes their brand name is stuck on all these pumps and people are
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angry. no business deliberately tries to put its customer and to to a pooser japan while they are staring at their brand. >> host: you make that point in your book. otherwise people don't understand the whole process and people are watching exxonmobil drilling holes in the ground. all we really see is that in the tiger in the tank and their brand name. >> guest: lee raymond toward the end of his career, for all the reason use just listed, not only got out of the gas business for why but why not take our signs out? nobody gets up in the morning saying dupont is evil but whatever it strengthens weaknesses it's invisible by comparison. >> host: one of the other points he made you made later in the book in reference to the discussion about energy policy and the lack of u.s. energy
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policy and you made the point earlier in a conversation that really exxon is the u.s. and politics is associated with that because at the end of the day it requires the public to make some sacrifices and they really don't want to sit there. they don't want to go there because unless you go there people start to say i don't want to do that. in every poll by the "associated press" on energy, yeah we want to reduce lima change we want clean air but were really don't want to have our electricity bill go up to do the which is a consequence of any kind of market scheme and the consequence of the carbon tax. that dwindles down to consumer and changes his habits. it seems to me that our inability as the public to make sacrifices mixes more for holden to these companies. >> guest: there is truth to
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that and it was interesting i tried to think about this question of the price of people would have to pay to address climate change in particular and i think while no public in any era wants to volunteer for higher prices in their household expenditures, our policy shows that where the public saw a threat to the generation if they thought their children were more like we too develop respiratory disease because of their pollution that was not addressed or their children were likely to, more likely to be exposed to cancer as a result of pollution in the water supplies, the people are willing to pay a price, whatever the price was to protect their living generations the problem with climate is it is over the horizon and the dangers are serious but abstract. so you may be motivated to -- i don't want to put my grandchildren and a world where it is three degrees celsius
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higher than it is now and rising seas but it's not the same so this cost benefit equation is part of the problem. and the other thing about what you observed is there is the government and the world where politicians don't want to make gas as cheap as possible. its two chickens in a pot. most of the world governments over subsidized gasoline just so they don't have to deal with the public's anger about the cost of a let market prices rule and so we let market prices rule up to point and then we add a bunch of taxes for remediating some of the impairment of cost and try to reduce driving and so it is expensive already. ugoda politicians and you say, i've planned plan to make gasoline even more expensive and you are not going to find it a caucus lining up. >> host: that quote from obama and i think somewhere in california where he says as a result of cap-and-trade gasoline
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will necessarily skyrocket. we are going to have to go out if you put a price on carbon. but that has come back to bite him over and over and over again. on subsidies, you mentioned subsidizing gasoline. lee raymond has a disdain is clear in the book for the -- that renewables need to be economic and exxonmobil is one of those crutches. >> guest: they pulled him out of the closet. >> host: there's a huge debate right now in congress and the president is pushing the tax break that oil companies have enjoyed and they make enormous profits and why should they continue to have them? did that come up in your conversation with raymond at all? it kind of sounded like, it's pointing out a little bit of hypocrisy there? >> i felt stalemated about that
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question. i still feel like i don't quite know what to think about it. i don't know what you think about it but basically there are some tax breaks to oil companies alone get through interpretive appeals about how the oil industry is located but most of these allowances are manufacturing allowances. they just happen to happened to the manufactures of gasoline is supposed tractors or something else. so okay, we can say that is -- let's eliminate those subsidies for drivers who have to drive to work. that is a reasonable public policy but to just say that these are subsidies only for the oil industry, i'm not sure that is even correct so i don't quite know -- ii notice great politics. [laughter] one of the reasons why this keeps happening is because these politics for both sides and there is no danger of people -- say you can say what you want about them.
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i think it is serious question as to how you restructure american energy policy imposing greater costs on exxonmobil. i think they should be doing more to facilitate a national energy policy goal of addressing the serious risks of global warming by moving as rapidly and economically as possible to the new energy mix but i don't think stripping out manufacturing subsidies and not repurposing those funds to achieve that goal is necessarily very persuasive. the first thing we needs do is put a price on carbon and put it in a substantial and predictable way so that all companies can respond to it and we can get moving in this direction when to go. >> host: we have a few more minutes and i have a half to get to canada. i found this canadian section later in the book really interesting in light of -- it is very clear from what you write that prior to keystone xl,
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exxon was infuriated with the u.s. approach to the canadian imports because of the tar sands and as you and i both know, energy intensive to extract huge amounts of greenhouse gas emissions in the extraction process. but now, the keystone happened after the book was written. that kind of goes right to the heart of that. obama rejects the keystone pipeline and environmentalists were furious because of the climate change issues. i'm assuming that you would conclude that exxon was as serious as it was back then. >> guest: i think they don't quite know what to do about the politics with the keystone pipeline because in their book, it is such, it is so irrational that they almost can't overcome their own ubiquity about how disconnected the politics of the
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pipeline is from the underlying questions of climate change regulation, the tar sands are the oil sands in their role in that and global. the keystone is a continuation. it's basically just trying to attack the problem. look, even the environmentalists would admit i am sure that if they could enact a universal price on carbon as the basis for addressing climate change and global warming they would but they fail to do that. they couldn't get a bill through congress so now on how they are looking understandably to keep their issue alive by looking for opportunity to call attention to the problem and to keep challenging the status quo. so they chose the oil sands because it's available, not because they are preferred solution to global warming. basically they are trying to
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leverage the unpopularity of pipelines in general and the not in my backyard politics that are common in the united states. they are kind of keeping this issue moving and from canada's perspective i'm sure it is aggravating and from the oil industry's perspective it is definitely aggravating because the pipeline that would otherwise make economic sense is being punished for it campaign reason, not because of some policy framework overall. i mean, the truth is that keystone is anism bill then i will be built i think after the election. either. either present a bomb is going to reverse the judgment he made to get himself through the campaign in one way or another or the romney will build a pipeline. that and $3 will get you a cup of coffee at starbucks, that is my prediction. even if keystone were not built, the canadians would export it through china. it is not that big of a deal.
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>> host: the greenhouse gas issue will happen either way. >> guest: unless canada changes as policy. >> host: thank you very much. i enjoyed the conversation and congratulations for the book. >> guest: thank you very very much. ..


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