tv Book TV After Words CSPAN June 3, 2012 9:00pm-10:00pm EDT
winning journalist investigates the corporation that has greater revenues than the economies of many western nations. he discusses the company's power and influence with associated press energy reporter dina cappiello. .. >> host: but why this company, and how was it, how did it differ from some of your other summits like the bin ladens? >> guest: uh-huh. and it's an interesting -- to
me, it was an interesting journey because, as you point out, i started out as a business reporter on wall street when i was very young, and then i went abroad and worked more on international subjects. and after 9/11 i wrote about the origins of the 9/11 attacks in 20 years of american covert policy in afghanistan, and this book "ghost wars." and 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, what they meant to the united states, what our relationship with the middle east was. and that led me to the bin ladens which was a book intend bed to be about saudi arabia and its modernization and how complicated it was for this generation of oil shock boomers that osama belonged to to come of age in the '70s when the kingdom was just awash in wealth, and they had to all go out and buy identities in the world, and one of them became a notorious terrorist, and the others all moved to florida and
so forth. so that interested me. and when i was finished with that project, i really wanted to write about oil and american purr in the post-9/11 -- power in the post-9/11 context. so i started out, actually, the project didn't begin as a book about exxonmobil, it began as a book about oil and geopolitics. i wanted to take the book that had inspired me as a young man a long time ago and update it. you know, i sort of thought of "the prize" as a great work of nonfiction about the era of oil that was an era of expansion and discovery. and what i wanted to do was write a book about global oil in the era 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, eight months into the research, and i thought to myself, i really need a subject here. i need a company. and once i came to that conclusion, then for an american audience i thought exxonmobil was the only choice.
so i sort of backed into them 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 thinking as a subject, because be i didn't know how closed they were, how difficult they were to report on. i just thought they would be a normal corporation. and i also didn't understand that much about their distinctive internal culture. so a lot of the three-and-a-half years that remained was about discovering what exxonmobil really was. >> host: and during the course of this reporting the bp deepwater horizon spill happened. >> guest: right. >> host: were you at that point, did i pick the wrong company? [laughter] >> guest: i had mixed feelings. i joked to my german friends that there must be a word when other people suffer, but you get an ending to your book, and i thought the catastrophe of the environmental disaster on that scale even though it wasn't exxonmobil's responsibility, it did provide a kind of contextual end to the value d.c.
spill. -- valdese spill. they tell themselves the story that they were scared straight by the valdese, that they reformed themselves and a lot of who they are traces to the reforms that started with that accident. so i thought, well, the deepwater horizon accident could be a book end. at one stage when i was regularring with how to make -- wrestling with how to make this book more expressive, my regret at deepwater horizon was maybe i should have done that. but looking back on it, it would have been too much reporting, i would never have gotten underneath the surface if i hadn't concentrated on one corporation. >> host: first, talk about that. that's a really interesting point, starting the book out with valdese and, to be honest, making it new. i thought some of your narrative made it new. and then ending with the deepwater horizon disaster in the gulf of mexico in april, 2010. as a person who deviled into, i know you -- delved into, i know you read a lot of the transcripts of the valdese incident, did you see any
parallels? because i did as a little bit. as a reporter i didn't want cover valdese -- i was young then. [laughter] i did cover deepwater horizon, and in your description of valdese and exxon's response to it, i did see some -- it almost seems like bp took a page a little bit out of their playbook. >> guest: yeah. >> host: did you see that at all as you were seeing the coverage of bp? >> guest: definitely, there were definitely parallels. you could probably even list more than come to my mind, but a few that come to mind are in the decade running up to valdese, there were running signs that exxon was not operating in a consistent manner in a way that would give you the highest possible reassurance that such a catastrophic accident could not take place. in fact, in the decade before the valdese, exxon caught 80,000 out of 180,000 employees, they reorganized their entire safety department, their entire environmental department, and, you know, obviously, the fact
that a tanker captain with a drinking problem who had dui arrests was still in his job making more than $100,000 a year in 1989 dollars, that's not the exxonmobil you would expect today. so there was a, there was a series of warning signs that culminated in the accident. the same was true with bp. i mean, i don't know what you would say, but i had the impression from people in the industry that bp's record as a weak operator and the texas city plant, the osha record, the the fact that they basically had a culture and a strategy that etch sized financial -- emphasized financial engineering at the expense of discipline was pretty well known in the industry. i sort of came to the conclusion after talking to people for three or four years that if you had called up people in the oil industry on the morning of deepwater horizon and said to them, the following thing has happened, who do you think was
operating that platform? you would have gotten a strong majority for bp at that point. so that was there. second parallel was the preparation for mitigating the disaster. you know, in both cases there were a lot of paper plans saying we can handle this, and the reality was they were not able to do so. >> host: right. >> guest: and then the kind of public relations narrative and learning how to deal with all of the communities and and traumas, i think probably bp had the benefit of 20 years of learning about corporate crisis management that exxon, you know, in those days, '89, this whole philosophy of how you communicate and heedly go -- immediately go up on television telling people you're going to make things right, that wasn't as well developed as a strategy in exxon's day, but anyway -- >> host: i agree. i think the aftermath strikes me more than what happened before both of the disasters in terms of, you know, as a reporter after the deepwater horizon, i mean, bp had gobbled up every
expert on any kind of -- you couldn't find a blowout preventer expert to save your life. >> guest: right. >> host: that wasn't on bp's payroll. i think the control that emanates through this book -- >> guest: that's a good point. >> host: -- i think emanated after bp in terms of controlling the message, controlling access to people that independently talked to reporters about what happened. and very technical subject, again -- >> guest: right. >> host: so you go everywhere in this boom. [laughter] you globe trot, and you also tackle numerous environmental issues from global warming to, obviously, the spill at sea at a tanker to leaky underground storage tanks, mtbe which i covered in my early career in upstate new york, to the risk of fall lates, all of which have connections to the oil company because it's integrated and controls oil from cradle to
grave. how did you pick out the anecdotes? this is a company that goes back to standard oil days. >> guest: right. >> host: there's a treasure-trove. and as a reporter i know it's difficult to be that sifter and which nuggets are you going to pick. >> guest: yeah. >> host: how did you pick out the anecdotes for this book? >> guest: i started out with a map. once i chose exxonmobil, i basically looked at the map of where they owned oil and gas, and i just basically asked myself as a reporter, what kind of world is this? why are they there, why are they there? and then i became interested in traveling across that map because as you pointed out earlier, they're a closed subject. they were not excited to learn that i was doing this book. they didn't volunteer to be written about. they handled my inquiries in a professional way, but they didn't really cooperate very much. i think maybe they would say that relative to some projects they cooperated more than usual, but from the perspective of the ambition of the book, while it was helpful everything that they
offered, it was pretty limited. so i basically had to go outside in. and so once i started with this outside-in process, i started with the map. so the first year i traveled a fair amount out into the field where they operated, tried to understand their role in the world, their sense of themselves as an independent sovereign, how they operate in the ground, why are they in some of these beknighted countries learning about why equity oil in weak states had sort of evolved as part of their portfolio. and so on. then i came back to the united states, and i thought, well, um, i have a pretty good first be draft sense of how they operate abroad, but i really need to concentrate on their washington strategy and their lobbying and political strategies. so i then turned to the tools that you use as a reporter to go outside in in the united states which is, basically, lawsuits and disclosures. so i had filed freedom of information act requests for all the oversea work, but to get at the american subject i basically
looked at all their lobbying disclosures and mapped those out too and said, okay, what are they lobbying about? fall lates is an example of something that popped out of that. and in the summer of 2008 they were, like, 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, you know, they get sued by everybody over everything, so it's a great tool of reporting to be able to look at civil litigation because in those cases records and testimony are produced even if exxonmobil's policy is never to give interviews, their executives have to testify in these cases if they choose to contest them. so i was looking for cases that told structural, deep stories that were points of entry into the corporation. and one i found was this gasoline spill in maryland where i realized searching the litigation records started with mtbe and then 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 supplies through aquifers, so it was a particularly dangerous spill in an environmental zone that had gone to trial. and the trial was over, and there was this massive record of testimony by exxonmobil executives plus documents that had been produced, and it was just a gift. i went straight into the retailing and downstream division of exxonmobil through this trial record in a way i could never have done through interviewing. so opportunistic is the short answer. you just keep looking at the map, and suddenly you see a way to tell the story. >> host: despite how broad they are in terms of geography and 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.
>> guest: right. >> host: to put it cloak wallly. >> guest: right. >> host: did anything you came across surprise you or fit outside of that narrative? it seems to me the book, all the stories kind of come back to that in different ways, you're right. each one has a different take on it, but the sum of its parts is this image of this company that really comports with what everybody kind of in their gut feels. >> guest: yeah, they are two they are. and the reason that it's true across settings, the same kind of decision making and the same kind of culture and insularity, rigidity, they might say focus, consistency is present in indonesia and equatorial guinea 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 operation that i think more than any corporation i've ever encountered as a journalist everyone who works there gets up in the morning and is reading off of the same playbook. you know, it's almost like a military operation or a sports team that's exceptionally well organized around the same playbook. and i think they're kind of self-conscious about that military metaphor. you know, they're unusual among corporations in that everyone who's at the top grew up together. if you took the top 100 publicly-traded corporations in the united states and you chose, say, the top 40 jobs at each of those corporations and you mapped who the people were, you would find there would be a significant number of people who came from a competing company laterally late in their career as an executive. they moved over, or they came from another industry as a marketing specialist, and they came with reforming ideas. so most corporations are informerred at the top by at least some outside perspective. everybody comes up from college, graduate school. you know, if you're selected for
management tracking, you know, you you up together over 30 or 40 years, and, you know, it's like the marine corps. you don't become a general by having a successful career at ibm and deciding you want to wear two stars on your shoulder. you grow up together as a cohort and share a common view of the world. whether it's a lawsuit in venezuela or a civil war in indonesia or a gasoline spill in maryland, the stories all seem to end the same way. >> host: right. that's exactly right. >> guest: forcing their will, and there's a reason for that, that's who they are. >> host: but then late in the book, and i think that as a person that's covered energy and environment for as long as i have, this surprised me. um, you get into hydraulic fracturing which is now all over the news, the interior department actually today is going to put out some rules for fracking on public lands. >> guest: i uh-huh. >> host: and correct me if i'm wrong, but you also make the case that that corporate philosophy gave them a blind
spot when it came to hydraulic fracturing. and it was even more surprising because you make an amazing point, and i actually remember this. this is, like, page 600. that rex tillerson as a young edge mere that at the -- engineer at the company be actually was using the technique. >> guest: right. >> host: so do you think in that one case, the fracking case, that corporate philosophy of let's manage our risks, let's make sure we make a certain return on what we do hindered them from tapping into what is now this huge gas boom, huge economic opportunity in this country with natural gas? >> guest: well, they were slow, but they're often slow, and then they're decisive once they decide they want to go in a direction. so they get to places late, and then they buy their way in. that's their pattern. so they've never had a great reputation as the world's greatest oil and gas discoverers. i'm sure they have some wins, and they probably have stories they tell themselves about their successes in exploration. they have some.
but by and large their strength is financial and operating strength. so they have more cash than anybody else, they have more discipline about choosing opportunities, so generally if they fail to discover something for themselves, they can buy it. that's what they did with fracking. so they had been trying to develop natural gas strategy as conventional gas emerged after 2005 and 2006, increasingly looked like a real opportunity, and they were going out and doing the kind of land games and buying up leases, putting it together one patch at a time and trying to build something. but at their scale for them to be a player, they needed to come in big. so they bought sdo in 2010. now, one of the things that's interesting about the fracking story, now they're the largest producer of unconventional -- >> host: of course they are. they make the decision, and then they control, right? >> guest: if you've got $40 billion that you can lay down, you can become the largest at almost anything. but what's interesting, and i wonder what you think about this
because i think of climate and a challenge of climate legislation, carbon pricing as an analogous, strategic challenge they faced in an earlier generation where they dealt with resistance to their investments and their sort of thinking with a pretty aggressive strategy. now, fracking is not just a business challenge, it's not just a geological challenge, it's not just an engineering challenge, it's also a political challenge. because there's an enormous amount of anxiety building up in the country about some of these fracking techniques and their environmental consequences, their land use consequences. the unknown. are you going to induce earthquakes in places that didn't previously have them? now, if exxonmobil becomes the poster child of a rigid, very corporate, very kind of stiff and profit-driven approach to these challenges, then they may strategically have a problem over time. can they actually, um, adapt
themselves to the kind of trust building and political coalition building that will prove durable, or will they take their systems approach, our way or the highway, and, you know, sort of end up defeating themselves in some respect? they could end up with a tougher public response to fracking than they would otherwise get if they were a -- >> host: or will they align themselves with the other companies that are doing this? in some cases, you touch on others in the book, that they are the odd man out. >> guest: yeah. >> host: they're not pursuing what they want to pursue and doing it their way and, or taking no punches and making no excuses for it. >> guest: yeah. >> host: which brings me, i had a conversation this morning with ellen jeffreys, which i know you know the name well, chief spokesman for exxonmobil. and i asked him about the book. and i wanted to get reaction to his reaction from you which i think you'll find very exxonmobil-esque. but i'm paraphrasing here, and
he basically said, um, essentially, how we see the book is it's telling the story of exxonmobil's commitment to safety and community. it may not be a popular or fashionable, these conservative approaches, but we think these are good qualities in a company of this type. and so, basically, i said to al, i said, that's how we are and take it. and he said, yeah, that's what we're saying. so, that obviously, does not surprise you in the course of this book. and they actually have read it, as you probably know. numerous people have pored through this book. what is your response to that? >> guest: well, i appreciate that he's dealing with it in a professional way. and, you know, their -- they, basically, about media, about journalists, about political opposition, about environmental groups they basically stay in their channel, and that's what he's doing. so he's saying, you know, we are who we are. that's essentially their, um, strategic position. now, sometimes we are who we are
feels a little bit like a defensive crouch, and that kind of gets to this fracking question. can you really be, um, have the sort of strengths of the operating system which are considerable? i mean, they're safety-driven, they're focused on operating excellence and so forth. they have a pretty good reputation in the business as project operators. i mean, if you and i were the co-dictators of an oil land and we wanted someone to develop our oil and wanted the project to come in on time, on budget and to get paid early, you know, we would definitely entertain their powerpoint presentation because they have a record of project management that's good. where they get into trouble is where they extrapolate these kind of operating systems, this rigidity into political affairs, you know, the human factor -- >> host: right. things that aren't -- >> guest: things that -- yeah, things that are suppler, they're made up of commitment, of social change. and their own record, for example, as a social entity themselves as a corporation on the promotion of women, on diversity, on responding to the
kind of world that we live in, it's not great, you know? >> host: right. >> guest: he can say that these conservative values are out of fashion, but we think that they're powerful, um, you know, that's fine if you're talking about crossing your ts on safety at the workplace, but can they really succeed with this strategy in a world where they're so closed to, um, the changing social makeup of, say, you know, who's the educated work force in the united states anymore? it's mostly women, it's more and more diverse. and if you work at exxonmobil and you go home to your family thanksgiving dinner and you say i work at exxonmobil and half your cousins, you know, suck in their breath in disdain or worry, you know, that's not a winning strategy over 30 years either. so somehow something's got to give, i think. i'm not sure that they think that though. >> host: let's go to that, because that's 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 really don't care what anybody else thinks about that -- >> guest: right. >> host: has that backfired on them? it seems that could have been a force to cultivate more distrust and distaste and help make them, as you say in the book, you know, public enemy number one at points in their history. >> guest: right. yeah. well, it's a great question and a kind of complicated one. one of my goals as a reporter was to try to understand as best i could and to think about what is it like to be so unpopular? does it matter? because their sort of view, their default view is it doesn't matter just like alan's statement to you, you know, we are who we are. but in truth, i think there are consequences. part of it is talent recruitment and retention in the real world, a world of the arab spring generation. you can't get away with just being disdained by everybody and hold your technological and scientific edge? how are you going to do that? scientists are independent-minded people. some may be willing to adapt to
the economic rewards of a career at a place like exxonmobil, but not if it doesn't feel like an open and changing place, a. you know, b, if, you know, if you only have one way of living in the world and problem sets and risk management are getting more and be more diverse, you know, you can't afford to go into communities that already have a presumption that you're evil. it shows up at jury trials. >> host: right. >> guest: yes, they can appeal all these billion dollar verdicts and eventually get them knocked down to zero, but do you really want to go into every jury setting and basically know that you have to overcome a presumption that you're evil? >> host: right. >> guest: so i do think there are consequences. and, but the problem from their perspective is let's think of a way out of this box. one of the things they did was they said, all right, let's go back through history. is there some golden age of oil industry popularity that we could model as a basis for a more winning strategy? the answer is, no.
so it goes to the basic question of if we are who we are, is there really a way to communicate about that that will change anybody's mind? you know, isn't that just putting lipstick on the pig, as they say in the pr business? shouldn't we just be straightforward? shouldn't we have a strategy that just says we are who we are again and again and hope that that allows enough people to come into engagement with us to realize our interests? >> host: right. >> guest: so that's what they've done, basically. >> host: you know, it reminds me, our business righter, john fahey in new york is an excellent energy writer, and he's also reading your book. and i said, hey, you know, i'm interviewing steve, any questions for him, and he brought up apple. because apple is now more valuable than exxonmobil. >> guest: right. >> host: and it's also secretive, and it's also thin-skinned. >> guest: right. >> host: but apple's cool. >> guest: exactly. you say i work on the ipod, everyone's going to crowd around -- >> host: right. and so to bring that question full circle, i mean, do you -- i
mean, it's kind of a two-parter which is do you think exxonmobil's strategy has kind of tarnished the rest of the oil business and kind of people associate big oil with exxon and everybody in big oil is bad, and do you think it's spread to other companies, or in the case of apple, it seems to be kind of thin-skinned and control and secret i have and still be really hip and cool, people can like you? >> guest: yeah, it's really interesting. i went back and looked at the top five corporations in the united states from, say, 1945 to the present. and exxon's always on the list. the companies around them rise and fall. where the companies in the '50s were number one or two, u.s. steel, don't exist anymore. today apple and exxonmobil are one and two. ten years ago it was exxonmobil and walmart, microsoft is always in the mix. but you look out 50 years further, which one do you think is likely to still be around, exxonmobil or apple? that's one question. i read the jobs' biography by
walter isaacson, terrific book, and it is striking how different and how similar they are to exxonmobil. only the united states could produce both apple and exxonmobil because on the one hand, you know, apple is a completely california-bred, creative, '60s -- >> host: black turtle neck -- [laughter] >> guest: in the book isaacson reports that steve jobs used to go into interviews and ask serious candidates if they had done lsd in the hopes the answer would be yes. [laughter] would you, please, take this cup and provide us a drug test? [laughter] on the one hand, they're very, very different, and on the other hand, there are these similarities you referred to. they're both closed systems, they both have a command management, they both are driven by a desire to control their management. steve jobs desperately wanted to control every element of the customer's experience, every element of the design. and they both were not good partners, they didn't really believe in partnership. they, you know, they believed in
the advantages of total control. and that makes them secretive because it's really the secrecy that follows the desire for control, not secrecy as an end in itself. and so it's fascinating. the other point about exxonmobil and its unpopularity, you know, most big industrialized democracies because of the nature of our energy economy, they all have big state oil companies. bp, and, yes, in the industrialized west most of those states have privatized them, but even bp and dutch were partially state-owned as recently as the 1980s. but only in america do we have -- exxonmobil is our state-owned oil company. they're a much more coherent expression of our national energy policy than anything the federal government does, that's for sure. and they're just as powerful relative to the state as toal is to france and maybe even more so. and yet only in america would we
have a state oil company that lives in opposition to the state in which it resides. i mean, rex tillerson recently told scouting magazine that his favorite book is atlas shrugged by ayn rand, that's sort of touched on for libertarians, and it suggests an attitude of sort of skepticism let's say generously toward the government that is we call off-- peculiar. now, the equivalent country in france, italy or britain, they would have all gone to the same universities as the president of the united states, they would be buddies, there would be an interlocking sense of world view and maybe even as with totale, they would work arm in arm with the french government abroad in order to secure totale's interests and so forth. but, you know, this country we're skeptical of our government, and the last irony is we're also skeptical of concentrated power. so here in exxonmobil is an institution with enormous concentrated power whose chief executive reads a book that is,
basically, about the dangers of concentrated power and celebrates it. >> host: right. [laughter] >> guest: so we're a funny country. one of the things that came up i think is really interesting and goes to what you just said about their influence on washington, it was actually really fascinating because out of one side of their mouth they say they really don't want to play ball, and yet they're playing ball harder than some others in some cases because they have direct lines, for instance, during the lee raymond days to dick cheney and call on washington when it helps them in their business interests. but what i found be interesting is it talks in here about politicians getting it wrong. i think i put down the page number, it's even more, more apt today. yeah, here it is. so a quote from tillerson. the global free market for energy provides the most effective means of achieving u.s. energy security. this is their theory that it doesn't really matter where you
get oil from, as long as you get more oil, and you put it in the bathtub, and we have more supply. >> guest: right. >> host: the nationality of the resources have little relevance. energy made in america is not as important as energy simply made wherever it's most economic. >> guest: right. >> host: yet exxonmobil has carried that message for a long time. >> guest: right. >> host: it goes back to raymond, it went into tillerson. they're, obviously, communicating it to a lot of their republican allies. you make that point that their lobbying is heavily skewed to the republicans under the party, yet that's not the message you're hearing from politicians today. [laughter] you're hearing a very almost resource-naturalist approach to u.s. domestic energy production a la venezuela. >> guest: and exxonmobil's not too embarrassed to join in that. >> host: right, right. >> guest: their philosophy's the opposite. >> host: so it's kind of shocking to me, and i'm asking for an explanation here. how can this all-powerful company with huge influence not have changed that political discourse to make it, actually,
more adhere to the facts of how global oil market works? >> guest: yeah. >> host: and also engage in it, as you say? >> guest: well, i think they've had influence in sort of the leaks in the united states -- in the elites in the united states. educating. they've carried out this intense education campaign to try to bring what they call informed influentials in government around government and media into their conversation about how the global oil markets actually work. but, yeah, most politicians don't have time or interest to study in depth these kind of complexities, and one of the executives i interviewed told me that one of the world leaders who understood it best, how the global oil markets really are integrated in liquid and nationalism though it can be relevant is not what it seems, energy independence, was tony blair. and this executive was talking to tony blair, and he said, you know, you're one of the few people who runs a government who actually understands how the oil markets work, you know, isn't that a shame? is and blair supposedly said
something like, well, you really wouldn't all the other politicians of the world to know, because they'd know they could do something about it. >> host: that's a brilliant quote in the book because that's what's happening right now in washington in both parties. >> guest: right. >> host: you know, both parties are trying to kind of get a handle and show that they're reacting to gasoline prices when, in effect be, they really have very little power over gasoline prices. >> guest: exactly. but this question of what are the benefits of energy independence or what does energy inagainst mean even though the way it's used in political campaigns is frustrating because it's so sort of divorced from the actual subject matter. but there's a real subject in that's important and interesting, and it's changing, and exxonmobil's position in the quest for energy inagainst is also changing -- independence is also changing. because, basically, while it's true that being a net exporter or a net importer of oil, um, is not really the right way to think about energy security because everybody's a price
taker, doesn't matter whether you're selling or buying, the price is a global price, um, that's not, um, true of natural gas which is more regionally priced. and there's been some evolution toward a global, integrated gas market, but we're not there yet. so in the united states if we have onshore natural gas that's really cheap for a long period of time, that could make a big difference to the economy. it could reduce our cost of manufacturing, it could change our energy mix in a way that's favorable in response to climate change. and while, you know, being a net importer or a net exporter may not matter in some of the way politicians talk about it, um, it does matter to our balance of trade, to the amount of dollars net-net that we send abroad to unfriendly regimes versus those we keep at home to reinvest. so, you know, if we do shift toward more energy independence as it's called whether we call it nationalistic language or economic language, there will be
advantages. they're just not the same -- they're not the advantages that politicians often describe. >> host: you know, one of the other current events i was thinking about in reeding this book -- in the reading this book, um, was going back to the days of lee ray monday, which i thought was a brilliant chapter. exxon has kind of shunned alternatives, for good reason. they're an oil company, their business is oil, so, you know, they don't want to really hear about hydrogen for cars or, you know, electric cars, what have you. and you also made an excellent point which is one of my frustrations as an energy reporter of how people mix the electricity side of energy production with transportation. right. but i couldn't help think there's places in the book where lee ray monday talks into the ear -- raymond talks into the ear of alan greenspan, and alan greenspan is on the hill and basically saying lee raymond's speech. it's on solyndra which is the solar company that has grabbed headlines and failed.
>> guest: right. >> host: if big oil was behind that given that their animosity towards kind of renewables and the subsidies renewables require, would you see any evidence of that? >> guest: seduced the government into making this bad loan -- >> host: not seduce the government into making bad loans, but fan the flames of criticism when the loan went bad? >> guest: yeah. i think the trade controlling group in washington may have spun up the communications machine that seizes every opportunity, and their political allies did the same thing. but, yeah, i mean, i think the underlying question about alternatives and exxonmobil is, you know, they're a corporation that can pursue whatever business strategy they want. the question is as a country do we want to create subsidies and incentives for a shift to alternatives of the sort that the loan program that ended up with solyndra provided, and why would we? so if you look at it, we've been talking about how everybody in this country shares an interest in the lowest cost energy
possible consistent with a sustainable environment. that's the, that's the definitely ma, right? >> host: right. >> host: so you want the lowest cost energy, but you also want to achieve your environmental goals. if you talk about a rapid shift and costly shift from cheap coal and oil and gas to more expensive but cleaner renewables, you better have a good reason to do that. now, the reason that's 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 findings entirely convincing. so if you believe that, now you have a reason to endure short-term costs for long-term gain. um, but if you want to try to convince the public that there's no risk, then the case gets much harder which is why exxonmobil's resistance to the basic findings of climate science after kyoto was so
pernicious and so damaging. because there is a residue of doubt in the public about the validity of climate science and the climate threat. and scientists tell us there shouldn't be such doubt. now, why is there? well, these interested parties funded a campaign, a communications campaign to plant that doubt. now, of course, you know, the american people are adults, they're entitled to their own opinion, but that campaign clearly was influential. >> host: right. let's talk about that because i thought that was a really interesting part of the book because you make -- and i don't want to put words in your mouth, so, but to me it read almost if exxon invented that strategy, that exxon was a company that really was in the business of planting this scientific doubt, you know, funding research. it was great, i loved that part with the noaa scientists on the beaches of the prince william sound -- 12 years after the spill, and they're being tagged by a yacht of exxonmobil-hired scientists who want to know what
they're up to and criticize their methods, kind of cast out on the science showing that the oil was still there after all the years. >> guest: right. >> host: and that tactic now seems rampant in our political culture. as a reporter that pays attention to this closely, you're now seeing it, you know, where the science of climate change, you know, is a theory, a theory by many, many people, and it's a valid theory, now you're seeing it in areas that were almost lock solid. there's politicians now on the floor talking about the linkage between smog and asthma. >> guest: right. >> host: there's people that are questioning the cost benefit analysis of the epa when it drafts regulations. >> guest: right. >> host: do you, i mean, do you look at exxon's kind of track of that and be like, hey, exxon is responsible for that kind of, that kind of tactic? because it seems now it's a very common one. let's not talk about the regulations, let's just attack the subject the regulations are trying to address. >> guest: right.
no, i think that they have a responsibility for some of that in that they really were a distinctive investor in that specific strategy after key kyo. look, when the kyoto accords were signed, there was a lot of opposition to them in the united states and in the industrialized world on economic grounds, on fairness grounds. some of it was was about is the science really that urgent that we need to impose these costs on ourselves? but there were a lot of different groups that imposed kyoto for economic and fairness reasons. but exxonmobil was very unusual, in my judgment, in the aggression that they brought to the science part of the campaign. really funding groups whose principle activity was to communicate as nonscientists a narrative of doubt about what was emerging as mainstream climate science. and that is, i'm afraid, you know, a tactic that is more and more present where science and public policy intersect.
and, um, it's dangerous because our whole progress as, you know, an industrialized democracy depends on an honest argument about science and, you know, the public good. and if we're going to have especially in the these fractured media times, you know, a completely polluted argument where the public, even the public trying to act in good faith isn't sure who to believe about what, we're going to end up damaging our society. right. now, this book makes clear that exxon, um, is almost an inpenetrable fortress as a company. but when you get to climate change and, i'm biased here because i'm a climate junkie, it really seems that this really scares them. there's this great, um -- until then there was only one unexpected development, one black swan intervention that could shift the curb of rising global oil demand which, obviously, exxon enjoys -- those
are my words -- a decision by government to heavily tax the use of carbon-based fuels. is that a fair estimation? i mean, that issue because of what it could do to the oil -- >> guest: right. >> host: -- is what really, really kind of had them shaking in their boots. >> guest: i think it got their attention. it's the reason we were talking about before, they had overcome the previous, um, systematic threats to oil production in the world which were spills and environmental damage and the seepage of oil into water and drinking supplies and air pollution. all of that had been more or less brought into a sustainable compact of regulator and regulated. and they had themselves adapted. they had accepted the validity of these environmental goals when it comes to spills and air pollution and so forth. and they had adapted themselves. imposed costs on themselves in order to build the sustainable
compact be. so just at the moment when they've got cruising speed on all of the other environmental issues that arose in the first three or four decades of the oil world, now comes this other existential, more abstract, global challenge to the primacy of fossil fuels in our system. now, so -- and i think that was one factor. lee raymond personally as a trained chemical engineer and as a very direct and, you know, determined chief executive decided that he would just say what he thought and use exxonmobil's resources to prosecute his views. most corporate chief executives even if they have that personal conviction would not have acted as aggressively as he did, but that's who he was. so that was a second factor. you know, the book reflects -- i interviewed raymond, and i asked him at one point, you know, surely you could have handled the costs of modest carbon pricing legislation, right? i mean, look at your cash flow, look at your profitability.
why resist it? >> host: right. >> guest: you've adapted to air pollution regulations, you've adapted to spill regulations, you run -- you pride yourselves on your compliance with regulatory regimes that impose costs on you for making the oil industry sustainable in a political and environmental sense. why not just adapt to these regulations? and, you know, i found his answer not that convincing. he sort of said, um, we thought the costs on the whole economy would be too great, that would break up america's economic progress and so forth. but i -- there was a visceral reaction to kyoto that exxonmobil had that was kind of out of line with their actual business interests. i would understand if you're a coal company and you see kyoto coming, you see a price on carbon coming. okay, this really could be existential. but the oil industry because of the mix of gas which is a low, lower footprint, they had an opportunity to adapt to this in a more forward-leaning way and, frankly, the european companies saw that, and their publics were
already there, and they moved with much more adeptness, i thought. >> host: now, another idea that i found really interesting in the book, um, because you raise it a couple times, at least twice that i can remember, um, but you're not hearing it atal right now -- at all in washington when you talk about gasoline prices is regulating gasoline prices like we do electricity -- >> guest: right. >> host: and how we all the lights on are a public right, and we regulate that because if it got out of control and prices soared, people wouldn't be able to turn the lights on. why aren't we hearing that more when it comes to gas, and should we be hearing it more, um, as a solution to, as something the government could do? >> guest: right. the reason we don't hear more about it is because, in fact, the political arguments during campaign seasons about gas prices are just theater. they're not serious arguments, so there's no reason to bring a serious policy question into
them. >> host: right, right. >> guest: but the point you make is really important which is you flip on a switch in this room, and you generate power, and a company profits from that use of power. that company is the utility that is regulated by a public interest standard in every state or jurisdiction separately, but the public interest standard is there. and that's our history with the provision of electricity. we think it's so important, so fundamental and so inescapable that we require the profitable companies that provide it to meet certainublic interest standards and to be accountable to the public for their performance. and we cap their profits often. now, in exxon b mobile's case they're a global -- they're a global company, they're discovering oil under ice and in seas and so forth. nobody's going to regulate them in the public interest in that she their owe. but in the provision of gasoline, it is a similar utility function. and, in fact, if you're a commuting construction worker who has to drive 60 miles a day to your job site, you go to the
pump, you've got no choice. you've got to put it in at whatever price is there, and you can't understand why you have no control over that kind of trap that you're in. and i think it's a serious -- it's sort of an accident of history that we treat the provision of gasoline as entirely a free market function without any public interest oversight, basically. some taxes and some environmental regulation. but we treat public electricity as a public utility. in many other countries, they organize things differently. i don't know that there's any easy way to fix this, but exxonmobil recognizes the problem because their unpopularity arises from the fact that their brand name is stuck on all these pumps where people are angry. no business deliberately tries to put its customers into a position of pain while they're staring at their brand. >> host: right. and you make the point in the brand that that's actually the only way they're visible. >> guest: yeah. >> host: otherwise people don't understand the oil process. people aren't watching exxonmobil drilling holes in the ground or deep offshore in
equatorial guinea as you travel in the book. all we see of them is the tiger and the tank, and their brand name. >> guest: and there's a board meeting that's described in there when lee raymond towards the end of his career says to the board for all the reasons you've just listed, why don't we get out of the gasoline business? why don't we just be like dupont? nobody gets up in the morning saying dupont is evil. >> host: right. >> guest: but dupont is a huge industrial corporate. it's invisible by comparison. >> host: right. now, one of the other points that you make later in the book, and it's in reference to a discussion about energy policy and kind of the lack of a u.s. energy policy or at least a coherent one, and you made the point in earlier conversation that really exxon is the u.s. oil, that politicians have kind of struggled with that. at the end of the day, it requires the public to make some sacrifices. and they really don't want to step there. they don't want to go there because once you go there, people start to say, hey, i
don't want to do that. i mean, every poll we've done at the associated press on energy always says, well, yeah we want, you know, to reduce the risks of climate change, and we want clean air, but we really don't want to have our electricity bills go up to do that, right? which is a consequence of any kind of market scheme and also a consequence of a carbon tax. >> guest: right. >> host: that trickles down to the consumer and changes habits. >> guest: right. >> host: so to turn the tables a little bit, exxon as the bad guy, i mean, it seems to me that our inability as the public to make sacrifices makes us more beholden to these companies this this -- that we don't like. >> guest: right. there's truth in that. you know, it's interesting, i was trying to think about this question of the price that people would have to pay to address, um, climate change in particular, and i think while no public at any era wallets to volunteer -- wants to volunteer for higher prices in their household expenditures, our
politics shows that where the public saw a threat to living generations, they thought that their children were more likely to gets a ma or develop respiratory disease because of air pollution that was unaddressed or that their children were more likely to be exposed to cancer as a result of pollution in water supplies, that people were willing to pay a price, whatever the price was, to protect their living generations from that danger. the problem with climate is that it's over the horizon, and the dangers are serious but abstract. so, yeah, you may be motivated to think my grandchildren, i don't want to put my grandchildren in a world where there's three degrees celsius higher than we have now and rising seas, but, you know, it's not the same. so this cost benefit equation is part of the problem. and the other thing about what you observe is that there isn't a government in the world where politicians don't want to make gasoline as cheap as possible. it's like bread and circuses.
it's two chickens in a pot. >> host: what would it be, $2.50 or something? >> guest: in most of the world, governments oversubsidize gasoline just so they don't v.a. have to deal -- have to deal with the public's anger. here we let market prices rule up to a point, then we add a bunch of taxes for remediating some of the environmental costs and try to reduce driving, so it's expensive already. so you go to politicians, and you say i have a plan to make gasoline even more expensive, and you're not going to find a big caucus. >> host: that quote from obama was in an edit board somewhere in california where he says, you know, as a result of cap and trade, gasoline prices would necessarily skyrocket. that has been recycled. he was being honest. >> guest: exactly. >> host: they're going to have to go up if you put a price on carbon, but that has come back to bite him over and over and over again. on subsidies, let's talk about that. you mentioned subsidizing gasoline. lee raymond, obviously, has a
disdain -- it's very clear in the book -- for the crutch that renewables need to be economic, and exxonmobil as a company thinks -- [laughter] >> guest: when they want them for their own. >> host: right, right. >> guest: then they pull them out of the closet. >> host: i mean, a huge debate right now in congress, you know, and the president is pushing to end tax breaks that oil companies have enjoyed, and they make these enormous profits, why should they continue to have them? >> guest: right. >> host: did that come up with your conversation with raymond at all? because it doesn't seem to come out in the book, and it's kind of pointing out a little bit of hypocrisy i think there. >> guest: yeah. i sort of stalemated, i still feel like i don't know quite what to think about it. i don't know what you think about it. you know, basically, there are some tax breaks that oil companies alone get through interpretive kind of appeals about what -- how the oil industry in specific terms is located. but most of these allowances are
manufacturing allowances. they just happen to be manufacturers of gasoline as opposed to tractors or something else. >> host: right. >> guest: so, okay, we can say let's discriminate against the oil industry because they're making too much money, and people are paying too much gas, let's eliminate those subsidies and rebate it to drivers who have to drive to work and can't get -- okay, that's a reasonable public policy. but to just say these are subsidies only for the oil industry, i'm not sure that's actually even correct. i know it's great politics, i get that. [laughter] >> host: right. >> guest: part of the reason why this keeps happening is because it's great politics for both sides, and there's no danger of these laws actually passing. >> host: right. >> guest: say what you want about them. >> host: right. >> guest: but i think it's a serious question as to how you should restructure american energy policy. i'm all for imposing greater costs upon exxonmobil. i'm sure they'd be delighted to hear that. 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 a new energy mix. but i don't think that stripping out manufacturing subsidies and then not repurposing those funds to achieve that national goal is necessarily very persuasive. so i think the first thing to do is to put a price on carbon, and put it in a tan and predictable way -- substantial and predictable way so that all companies can respond to it, and we can get moving in this direction we need to go. >> host: we have a few more minutes, and i have to get to canada. because i found, i found the canadian section later in the book really interesting. again, in light of modern events. >> guest: right. yeah. >> host: it is very clear from what you write that prior to keystone xl, exxon was infuriated with the u.s. approach to canadian -- >> guest: right. >> host: -- imports. >> guest: right. >> host: because they're from the tar sands, and as you and i both know, energy intensive to extract, huge amounts of greenhouse gas emissions just in the extraction process.
>> guest: right. >> host: but now, i guess, the keystone happened, obviously, after the book was written. >> guest: right. >> host: that kind of goes right to the heart of that. >> guest: right. >> host: obama rejects keystone pipeline, nominalists were furious about it because of the climate change issues. i'm assuming that you would conclude that exxon is also as furious as it was back then -- >> guest: oh, yeah. i think that they're just, they don't, um, quite know what to do about the politics of the keystone pipeline because in their book it is such a, it's so irrational that they almost can't overcome their own sort of indignity about how disconnected the politics of the pipeline is from the underlying questions of climate change regulation, the tar sands or the oil sands and their role in that and the global oil markets. i mean, basically, the keystone pipeline is a continuation of the things that made them mad earlier -- >> host: absolutely. it's the same thing.
right. >> guest: yeah. it's basically just trying to attack the problem -- look, even the environmentalists would admit, i'm sure, that if they could enact a universal price on carbon as the basis for addressing climate change and the dangers of global warming, they would. but they failed to do that. they couldn't get a bill through congress. so now they're looking to keep their issue alive by looking for opportunities to call attention to the problem and to keep challenging the status quo. so they've chosen the oil sands because it's available, not because it's their preferred sluice into global warming. but they've made it an example. >> host: correct. >> guest: and, basically, they're trying to leverage the unpopularity of pipelines in general and the not-in-my-backyard politics that are common in the united states to kind of keep this issue moving. and, you know, from canada's perspective, i'm sure it's aggravating. from the oil industry's perspective, it's definitely aggravating because a pipeline
that would otherwise make economic sense is being punished for a campaigning reason, not because of some, you know, policy framework overall. and, i mean, the truth is that if keystone isn't built -- and it will be built, i think. as soon as this election is over either president obama is going to reverse the judgment he made, or the romney administration will build the pipeline. that's my -- that and $3 will get you a cup of coffee at starbucks. that's my prediction. but in any event, even if keystone weren't built, the canadians would just export it to china. it's actually not that big a deal -- >> host: right. the greenhouse -- [inaudible] are going to happen out of their way. >> guest: unless canada changes its policy towards the sands. >> host: well, thank you very much. i really enjoyed the conversation, and congratulations again on the book. >> guest: thank you very, very much.
>> here's a list of best-selling conservative books. no order of appearance on their web site as of may 31st. first, mark levin writes about conservative approaches to education, immigration, health care and more in "liberty and tyranny." second, conservative talk radio host laura ingraham writes about her take on the obama administration in "the obama diaries." and that's followed by sarah palin's "going rogue." fourth on the list is glenn beck's "common sense." the abuses of power by government. then in "guilty," ann coulter argues that liberals pretend to be victims as part of their attack strategy on conservative positions. sixth, glenn beck makes the list for a second time with his novel, "the overton window," about a public relations executive facing the challenge of exposing truth during a terrorist attack on american soil. seventh is bernard goldberg's "a
slobbering love affair." he explains how he believes favorable media coverage of barack obama influenced the outcome of the 2008 presidential election. former speaker of the house newt gingrich is eighth with his book, "to save america." he explains how he thinks liberals are ignoring the lessons of history and moving further into ideological extremism. dick morris and eileen mcgann criticize obama administration policies in" catastrophe." it appears ninth on the site. followed by "the case against barack obama." a side of president obama the author says the media refuses to acknowledge. for more conservative bestsellers, go to conservative book service.com. >> now on booktv, arthur herman recounts president franklin d. roosevelt's call to industrial business magnates will y'all knudsen and henry