[Zarquon]

Book review: Private Empire - ExxonMobil and American Power, by Steve Coll (2012)

I've never written a review before, but IMO this book is a must-read for anyone interested in oil, energy or US politics. The book was published in 2012 and I was surprised there's no review on this site yet.

Steve Coll is a veteran journalist who covered SE Asia for many years for the Washington Post. He's written another six books before, among them the breakup of AT&T, the CIA's wars in Afghanistan and the Bin Laden family and Saudi Arabia, and is now dean of the Columbia School of Journalism. It took him four years of research to write this one, and he certainly didn't get much help from ExxonMobil.

The softcover edition I have is a massive tome at over 600 pages, plus appendixes, but Coll is an excellent writer and storyteller. If you'd judge a writer by which paragraphs or chapters he could have left out to make the book better - there aren't any (IOW he's not George RR Martin).

The book is about a company that is bigger, richer and more powerful than most countries. "We're not a US company, we're an international company". In fact, ExxonMobil is its own country and makes its own foreign policy. And that's a big factor shaping the world today (and now Rex Tillerson becomes US Secretary of State, which Coll couldn't foresee). Big Oil is forced into more and more risky environments. They invest many billions in places where there is no or little political stability - and they need to produce their wells for 30 or 40 years.

At face value it's not a book about Peak Oil. In fact, the topic is hardly mentioned at all. Instead, Coll makes it clear what is behind Big Oil's predicaments today: the reserve replacement problem, plus dealing with political risks. Why operate in Central African hellholes, or try to cut a deal with Putin? Because they need to book new reserves, and that gets harder every year. Coll is good at explaining the main technical aspects of global markets, reserves booking, SEC rules etc. without getting bogged down in the details.

Private Empire deals with armies of lawyers and lobbyists, corporate culture, shady banks, South African mercenaries, tipsy tanker captains, Indonesian rebels, Dick Cheney, fleets of private jets, Russian oligarchs and much more. Its focus is not history; Standard Oil and what became of it is mentioned, but the story really begins in the late nineties. It's as current as any book on the subject can be.

Coll doesn't paint ExxonMobil as the Evil Empire many environmentalists see in them. He explains what the corporation is and why it does things its own way. And despite its large influence in politics, they don't own the US government. They don't want to. They actually prefer to be left alone and do things their own way.

Instead of going into more detail on the contents, I'll just list the chapters to give you an idea:

Prologue: "I'm Going To The White House On This"
The 1989 Exxon Valdez disaster and how it shook up the company. Why is getting a paper cut at the office copy machine a reportable incident at Exxon now?

"One Right Answer"
Executive gets kidnapped. Corporate culture. How to be the most unpopular corporation in the US.

"Iron Ass"
A portrait of Lee Raymond, Tillerson's predecessor. Also: replacing reserves gets harder.

"Is The Earth Really Warming?"
Exxon lobbying, US energy policy set by Dick Cheney, and climate change.

"Do You Really Want Us As An Enemy?"
Exxon inherited Mobil's operations in rebellious Aceh, Indonesia, where the company paid the wages of the government soldiers who filled the mass graves. They helped suppress the rebellion by getting the US government to threaten putting the rebels groups on the official US terrorist organizations list.

"Unknown Injury"
How US government scientists tried to assess the long-term ecological damage from the Valdez oil spill and how they were bullied by XOM.

"E.G. Month!"
Another inheritance from Mobil - oil in Equatorial Guinea, a hellhole if there ever was one. Exxon practiced "strict non-interference", while quietly helping the dictator getting a foot in the door in Washington.

"The Camel And The Jackal"
The US gives about $10 million annually in humanitarian, military and development aid to Chad. ExxonMobil in 2006/7 alone sent the dictator a cheque for oil royalties of about $750 million.

"We Target Oil Companies"
Greenpaece vs. ExxonMobil.

"Real Men - They Discover Oil"
Qatar, giant gas fields and western majors trying to get back into Saudi Arabia.

"It's Not Quite As Bad As It Sounds"
Corporate image, BP and Exxon.

"The Haifa Pipeline"
Geopolitics and broken dreams: Bush, China, ExxonMobil and Iraq.

"How High Can We Fly?"
More geopolitics: this time it's Bush, Putin, Khodorkovsky, Lee Raymond and Rex Tillerson. Exxon wants 51% and bookable reserves or nothing.
Putin, meeting Lee Raymond in New York: "If you have fifty-one percent, that means if I want to have Yukos [Khodorkovsky's Russian oil company] do something, I'm going to have to come and talk to you?"
Raymond: "Yeah, that's not so awful. That's true in a lot of places in the world."
Khodorkovsky is arrested six weeks later.

"Assisted Regime Change"
An attempted coup in Equatorial Guinea. More lobbying in Washington. If you can't get the CIA to train your secret police, they'll send you to the Israelis.

"Informed Influentials"
How XOM runs their information campaigns targeting elites in politics, business and media.

"On My Honor"
Rex Tillerson, the boy scout. Democrats take over Washington. Exxon's climate-change policy changes.

"Chad Can Live Without Oil"
Oil field security, rampant corruption and more lobbying in Washington. Everyone agrees that stability matters most.

"I Pray For Exxon"
25,000 gallons of gas go missing from a gas station in Maryland. Lawyers smell blood, lots of blood.

"We Will Need Witnesses"
More lawsuits, this time about real blood (also lots of it) spilt in Aceh.

"The Cash Waterfall"
How to screw Hugo Chavez out of $300 million in one afternoon.

"Moonshine"
Energy independence is a pipe dream. Alternatives and new technology are no threat to Exxon's business and will not become any for a long, long time.

"Can The CIA And The Navy Solve This Problem?"
Why the Nigerian Navy isn't a great help in securing oil rigs off the coast. Hint: it is part of the problem.

"A Person Would Have To Eat More Than 3,400 Rubber Ducks"
Environmental and public health campaigners posing a problem for the chemical industry, i.e. Exxon's downstream business.

"We Must End The Age Of Oil"
US elections, and why Exxon "felt like a candidate".

"Are We Out? Or In?"
Patient lobbying pays off. Equatorial Guinea is now an official friend of the United States.

"It's Not My Money To Tithe"
Climate action. Some argue for cap-and-trade, but ExxonMobil loves a carbon tax.

"We're Confident You Can Book The Reserves"
More adventures in Iraq. The US government has a policy for Iraq's oil. Several, actually. They all get ignored while deals are made.

"One Plus One Has To Equal Three"
Another mega-deal to buy XTO Energy and its reserves, and why the deal wasn't as sweet as it might have looked. But you need to replace reserves.

"It Just Happened"
The Deepwater Horizon explodes in the Gulf.

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I saw a few YouTube videos where Coll speaks about his research for the book, why he wrote it and what difficulties he faced. They actually complement the book very well and if you've read it or are interested in it, I recommend watching them:
https://www.youtube.com/watch?v=lvPobwco-AE (long but worth it)
https://www.youtube.com/watch?v=VMWkIgLMe8U
https://www.youtube.com/watch?v=C3GW_BaSRbE