Private Empire

"Full review and highlights at <a href="https://books.max-nova.com/private-empire">https://books.max-nova.com/private-empire</a><br/><br/>"Private Empire" is a surprising book about the history of ExxonMobil, America's largest company. Not only did Exxon come off as less evil than commonly portrayed, but the oil company seemed to be significantly less powerful than I had anticipated. Two-time Pulitzer-Prize winner Steve Coll wants to convince us that America didn't invade Iraq to steal its oil and that ExxonMobil played no role in the decision to invade. And I've gotta say, I'm pretty convinced. Coll clearly delineates the boundaries between ExxonMobil's profit-focused, engineering-driven enterprise and the messy, internally-conflicted, and constantly shifting world of official US geopolitics. Exxon's stated policy was that "ExxonMobil did not want anything from the American government, but it did not want the government to do anything to the company, either." I was struck by how often Exxon seemed to get boxed out by Russian and Chinese state-owned enterprises because they had much stronger domestic government support than Exxon. If Exxon were actually running some shadowy power cabal to use the US military to secure access to oil, how could something like this possibly be true:<blockquote>The U.A.E. depended upon American military protection for its very existence, yet American oil companies had managed to secure only 13 percent of the foreign participation available to international majors; European and British firms had 60 percent.</blockquote>But at the same time, Coll claims that, "There were many favors, executive orders, lobbying meetings, and laws ExxonMobil sought and obtained from the American government." I highlighted this 700 page book pretty exhaustively and I didn't really see evidence of this. The most hardball lobbying I saw was about preventing a precautionary nationwide phthalate ban pushed by alarmist environmental groups (see Deutsch's <a href="https://books.max-nova.com/the-beginning-of-infinity">"The Beginning of Infinity"</a> for a strong indictment of the precautionary principle)... and Exxon ultimately had to compromise pretty hard on that. And Coll documents plenty of other cases where Exxon paid out billions in government-mandated fines.<br/><br/>My overall impression of Exxon is that it is an enormous company that manages a hugely complex global operation and uses lots of solid, boring physical and process engineering to ensure that gargantuan profits continue to flow with relatively few major screw-ups. I was particularly intrigued by Coll's first chapter about the engineering-driven culture of Exxon and their very non-postmodern belief in the "One Right Answer":<blockquote>“They’re all engineers, mostly white males, mostly from the South... They shared a belief in the One Right Answer, that you would solve the equation and that would be the answer, and it didn’t need to be debated.”</blockquote>Is there a connection between lines like "ExxonMobil earned a net profit of $36.1 billion, more money than any corporation had ever made in history" and the relentless, boring, engineering perspective described above...? The scale of the operation doesn't hurt either. As Rex Tillerson said:<blockquote>Everything we do, the numbers are very large. I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost. We spend $1 billion a day just running our business.</blockquote>But this scale is a double-edged sword. Coll shows us how Exxon's recent history has been increasingly characterized by anxiety about replenishing its reserves. This has forced Exxon into large mergers (Mobil for overseas oil and XTO for domestic shale) and into increasingly dicey projects in developing countries. From Venezuela and Nigeria to Indonesia and Equatorial Guinea, Coll takes us on a global tour of Exxon's quest to acquire and exploit oil reserves. It's messy. Coll talks about the Foreign Corrupt Practices Act and how Exxon walks a fine line to gain access to oil while respecting international norms. The notorious French Elf Affair (also mentioned in <a href="https://books.max-nova.com/looting-machine">"The Looting Machine"</a>) comes up, as does a lot of the offshore money dynamics detailed in <a href="https://books.max-nova.com/treasure-islands">"Treasure Islands"</a>. Overall, Exxon comes off looking pretty clean - at least relative to other major international oil companies.<br/><br/>The one thing that still doesn't sit quite right with me though is Exxon's domestic political influence. Coll claims it's there, and it seems like it should be. But the numbers cited just don't add up. Their Washington, DC lobbying office didn't seem particularly huge and their PAC only "distributed about $700,000 during each two-year election cycle." That's peanuts! For comparison, Exxon straight up gave $100 MILLION to Stanford for its Global Climate and Energy Project... and that's not even that much when you think about the scale of Exxon's operations (that's about 18 hours of profit). So either buying US politicians is super cheap or there's something missing here."