Since its creation a century ago, after the antitrust breakup of Standard Oil, Exxon has been a major American power player. But the moment that molded its contemporary shape took place on March 23, 1989 in the Prince William Sound in southern Alaska. Coll likened the Exxon Valdez oil spill to “9/11 if you think of it in nation-state terms.” The Exxon Valdez tanker was one of many coming into and out of the Alaskan port that night; it was operating under mostly standard procedure. But a series of human errors–a heavy-drinking ship’s captain who abandoned the bridge, crewmembers making mistakes atop mistakes, a short-handed coast guard without radar of the area–led to an ecological catastrophe that the world watched on TV.

The media likened the incident to drunk driving and blamed it on the captain’s alcohol consumption, but Coll said that what caused the spill was more like a failure of systems. In the decade before the spill, Exxon’s workforce went from 182,000 to 100,000 employees. “You cannot shrink yourself that fast without disorienting or changing the integrity of the culture or the management systems within” a company, he said.

“All of these corporations, especially the largest ones, are continually operating extremely complex industrial systems in high-risk environments under regulatory oversight that is often inadequate,” said Coll. “That has been the case for a lot of years, and it’s part of the tension that has shaped ExxonMobil’s place in the world for a long time. But this disaster had an enormous impact within Exxon itself.”

It gave executive Lee Raymond, who would become Exxon’s CEO, the opportunity to shake up the company’s bureaucracy and place an intense focus on rules, systems, and reforms. “His objective was to wring out as much fallibility from Exxon’s systems as possible,” said Coll, and Raymond succeeded in making it “perhaps the most idiot-proof organization that any corporation had ever been.”

Raymond’s Exxon held worker safety performance above all else. Before every group meeting–even when the same five people met in the same room every day–one person took a “safety minute” to announce the emergency exits and evacuation routes. Near-misses were treated the same as accidents: a file cabinet left open would lead to a reprimand because someone might trip over it.

Meanwhile, Exxon was moving its operations into some of the riskiest countries in the world. Unlike a typical retailer or an information business, an oil company runs on a model that keeps it grounded in the countries in which it operates: it drills holes in the ground and sits on them for 40 years to extract their value. This gives Exxon incentives to encourage stability in the countries where it drills–except that the money it pours into these countries can also be dangerous and destabilizing

After Middle Eastern nations took control of their own state oil companies, Exxon was forced to migrate to states that were too weak to build their own national oil companies: places like Indonesia, Nigeria, Venezuela, and Equatorial Guinea. For most of the 2000s, a quarter of Exxon’s oil production took place in West African countries like Chad, which ranks 181 out of 187 countries on the UN’s Human Development Index.

Climate change has also shaped Exxon’s policies. Pollution challenges have always been part of the oil business, but they typically carried a price tag. Cleaning up a spill costs a certain amount, as does compensating spill victims, or changing an operating procedure to decrease air pollution. “But global warming had an existential quality about it,” said Coll.

Exxon made an unusual decision in fighting the Kyoto Accord: to attack not policy but the science itself. It funded groups (many of them created for this purpose) to create uncertainty about climate science. But in 2005, when Raymond–who’d led the push–retired, with pressure from its board of directors and shareholders, Exxon changed its tone. Wary of Big Tobacco, Exxon executives didn’t admit that they’d funded campaigns that had been wrong. Instead, they claimed they’d been misunderstood. In 2009, they lent their support to a carbon tax. And, although this was presented in opposition to cap and trade, it was a turning point. For the first time Exxon had conceded that global warming was dangerous enough to merit regulation.

“I came to think of ExxonMobil as our state oil company,” concluded Coll. The U.S. is one of the few industrialized countries without one, and Exxon hasn’t just influenced our energy policy. “Truthfully, ExxonMobil is our energy policy.” Exxon’s leaders have been clearer on message and abler in carrying out their goals than the U.S. government has ever been. And their vision–the unabashed pursuit of dominating the oil and gas industry–has endured longer and more deeply than the declared policies of president after president.

ExxonMobil and the entire oil industry will always be operating under a tension between profit and risk–which will sometimes erupt, as it did with Exxon Valdez and more recently Deepwater Horizon. But, despite being embedded in the structure of our energy system, that tension is invisible to us most days of the week.

Watch full video here.
See more photos here.
Buy the book: Skylight Books, Powell’s, Amazon.
Read expert opinions on whether big oil has to be evil to survive here.
Read an excerpt from Private Empire here.

*Photos by Aaron Salcido.

The post ExxonMobil Might Not Rule the Planet appeared first on Zócalo Public Square.

It’s one thing to pledge to do no evil if your business is an Internet search engine born on the pristine Stanford campus, or selling organic tea to Angelenos. It’s another if your business model is predicated on drilling into the earth to extract fossil fuels needed to keep humanity on the move, and if the drilling has to be done in some of the most pristine ecosystems on the planet, or in some of its most corrupt political jurisdictions. The oil business is messy, dangerous and brawny, requiring massive capital investments and technological prowess to extract fuel from the planet. It’s never been an industry for the mild-mannered. Still, in advance of Steve Coll’s “Does ExxonMobil Rule the World?“, a Zócalo event, we ask a number of experts whether Big Oil needs to be evil to survive.

They sure thrive on being evil

Steve Coll’s remarkable book makes clear that Big Oil is actively conspiring against the planet. The news that Exxon is monitoring the development of renewable energy to make sure these efforts don’t get off the ground is as chilling as all the news about its actions in Africa. If you think about it, the fossil fuel industry is engaged on what is really the most radical act in human history: Exxon Mobil and its competitors are altering the chemical composition of the atmosphere. Now, all of us who use their products are in some ways implicated–but it is the big oil companies who use their profits to warp our democracy and make sure that change never happens. They have a lot to answer for.

Bill McKibben is the author of a dozen books about the environment, beginning with The End of Nature in 1989, which is regarded as the first book for a general audience on climate change.

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No, but drop the cardinal sin of pride

I have never thought Big Oil was “evil.” To be evil one has to have a soul to corrupt. Big Oil is in the business of making money for shareholders, and that is not evil. In many instances, actions of Big Oil may be illegal (as in bribery in foreign countries) or may appear immoral (failure to control toxic air pollution at refineries), but most of their actions are not “evil” as we understand the term.

That doesn’t mean that Big Oil isn’t guilty of something: the cardinal sin of pride. As the largest of all multinational corporate businesses, engaged in a very complex endeavor, and making loads of money, Big Oil does believe it is “the smartest guy in the room.” Sadly for all of us, that means the industry fails to listen to the public and is making many mistakes that will hamper it in the future. To talk with oil company executives is to move into a different world–a world where they feel persecuted, according to them, primarily for political gain or because the public just doesn’t “get” the important job they do.

But it is not our job to get them. It is the public’s right to either purchase or not purchase their product and to ask for reasonable regulation of pollution and climate change. It then becomes the job of Big Oil to either provide that product as the public wishes, or to get out of the business. It also has the right in a free democracy to try and influence public opinion (as long as it doesn’t commit fraud, as committed in trying to influence opinion on climate change).

Having the wealth, human capital, and connections that it has, Big Oil could be determining and creating tomorrow’s cleaner energy sources, but it may let its pride in its own rightness get in the way. And that is what goeth before the fall.

Victor B. Flatt is the Tom & Elizabeth Taft Distinguished Professor of Environmental Law and the Director of the Center for Law, Environment, Adaptation and Resources (CLEAR) at the University of North Carolina School of Law. He is also a Distinguished Scholar at the University of Houston’s Global Energy Management Institute, and a member scholar of the Center for Progressive Reform.

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How about a little crude transparency?

Big oil companies hold astonishing amounts of wealth and power–they are among the world’s richest companies–but this is partly because they have to be large to manage the financial risks, and engineering feats, that are necessary in the business. Only very large, deep-pocketed companies can risk tens of billions to search for oil miles beneath the ocean floor. There’s a reason that we have artisanal bakeries but not artisanal oil companies.

On top of that, these gargantuan firms must also work in some of the world’s poorest countries. When powerful companies want to do business with weak governments and impoverished communities, the stage has been set for corruption, exploitation, and not incidentally, remarkable profits. So there is a certain predisposition towards evil.

Still, there’s no reason why oil companies have to be quite as evil as they often are. Many of them are complicit in the corruption that helps cause the “oil curse”–enabling political leaders in oil-exporting countries to steal the revenues that should be going to help citizens. Right now, for example, the American Petroleum Institute (the lobbying arm of the oil industry) has threatened to sue the Securities and Exchange Commission (SEC) if it issues rules to implement a provision from the 2010 Dodd-Frank Act, which would force companies to disclose payments made to governments around the world. If they really support transparency and oppose corruption–which they claim to–oil companies should support these reforms, not obstruct them.

Michael L. Ross is a political science professor at UCLA.

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No, but it should be more risk-averse for its own good

No, Big Oil does not have to be evil to survive. And it is important to remember that in drilling and exploring aggressively, Big Oil answers a societal demand. Accidents from oil production–environmental in particular–are inevitable unless individual consumption habits change and the country broadens its energy portfolio to become less dependent on oil. Don’t shoot the messenger, or the driller who drills on our behalf.

That said, Big Oil can be a better partner and do a lot more to drill responsibly while still turning a tidy profit. The oil industry has identified hundreds of best practices for drilling that are inconsistently applied and usually not required by law. They range from well construction methods that could have prevented BP’s Macondo blowout to capturing waste so it isn’t dumped overboard or onto the ground.

Unfortunately history has taught us that without regulations to institutionalize such practices, most oil companies choose time and time again not to adopt them and to push aside their own best judgment in order to cut costs and maximize profits.

Why companies keep choosing not to do what their own engineers or managers know is best for business and the environment is a mystery. BP’s executives–over the two decades before 2010’s Gulf spill–repeatedly took huge gambles that put their workers’ lives and the environment at risk, sometimes to save a few thousand dollars. The company’s executives bemoaned their own lack of prudence and swore they would change, but then struggled to do so. Exxon and Shell and most other oil companies have faced similar challenges over the years.

The solution, according to some government officials, is to force an improvement in behavior and stop leaving it to choice that is too easily corrupted by the prospect of extra profits. Research shows that despite protests to the contrary, wisely and judiciously applied regulations can provide a level and predictable operating environment and help companies make more money. Forcing oil companies, for example, to capture and sell the climate-damaging methane produced from their wells, instead of venting or burning it, can pay for itself within two years, then lead to hundreds of millions in profits.

And its hard to imagine that if BP had been willing to slow down its drilling of the Macondo well–perhaps at a cost of $5 million–that the company wouldn’t be $30 billion richer right now as a result.

Abrahm Lustgarten is a reporter on energy and the environment for ProPublica, a former writer for Fortune, and the author of Run To Failure: BP and the Making of the Deepwater Horizon Disaster.

*Photo courtesy of jimbrickett.

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The aversion is admirable, rooted in concerns that state action, almost by definition, encroaches on press freedom. But the purism can be overdone. For one thing, it conveniently overlooks a great deal of existing government management of the media, including mail subsidies, spectrum-allocation decisions and support for public broadcasting. The most extreme anti-Washington attitudes voiced by prominent journalists in recent months would, if adopted, probably kill of Big Bird, Frontline, and PBS NewsHour, and seriously damage All Things Considered and Morning Edition.

The question of what constitutes a proper media policy isn’t an academic one reserved for places like the Annenberg School at USC.  The Federal Communications Commission has launched a Future of Media Project to “assess,” in the words of its leader Steve Waldman, “whether all Americans have access to vibrant, diverse sources of news and information that will enable them to enrich their lives, their communities, and our democracy.” The project is expected to set forth policy options to strengthen the media’s contributions to American democracy and civic health.   And it will behoove leading media players to set aside their purist sensibilities on the subject to enrich the debate likely to follow.

The media policy regime we have inherited – a patchwork stitched from the ideas of Calvin Coolidge’s Republican Party, Franklin Roosevelt’s New Deal, Lyndon Johnson’s Great Society, and Ronald Reagan’s deregulatory wave – is out of date and inadequate for the times in which we live.   One of the core underlying statutes is the Communications Act of 1934, which created the FCC in the first place, and charges the agency with regulating the nation’s airwaves in the “public interest.”

How, exactly, to interpret and meet this standard has been much debated since then. The practical issues flowing from Congress’s public interest aspirations changed continually as media technologies changed, and as powerful commercial interests lobbied for favors. The result is a system in which federal, state, and local regulators pervasively set the economic conditions in which for-profit and nonprofit journalism is produced, while, at the same time, they require certain noncommercial activities from licensees, meant to promote and protect the public interest.

The FCC oversees the ways in which the public is compensated – in cash or by mandated public interest endeavors – for the use of scarce spectrum on the airwaves. At the heart of this regime are rules such as “must carry” (requiring cable operators to carry local news channels) “public interest” obligations undertaken by broadcasters in exchange for their licenses to operate.

These rules offer a promising starting place for reform. In theory, radio and television stations must demonstrate a commitment to public issues as a condition for FCC license renewal. The stations report in quarterly filings about their performance. In reality, that tradeoff has devolved into something of a farce.   If you have an afternoon to kill and want some entertainment, visit a local broadcaster and ask to see their “PIO” filing (for “public interest obligation”) which they have to make available to viewers.   If nothing else, the exercise will make you admire the interns who creatively spin schlocky and gory “if it bleeds it leads” news stories as issues-driven reporting in the public interest.

Enough with the pretense.   Let’s relieve broadcasters of their obligation in exchange for spectrum user fees that would add funding to the Corporation for Public Broadcasting, which is purpose-built to serve the public interest in ways that licensed commercial broadcasters obviously are not. The National Association of Broadcasters estimates that stations spend $7 billion annually by donating airtime to support their public interest obligations, a figure that does not include the cost of paperwork filings; even 10 percent of that amount, redirected to the CPB, could remake public media in the United States.

There has been much experimentation with new forms of investigative journalism, and some non-profit efforts like Pro Publica are delivering impressive results.   But such experimentation may not produce a robust and sustainable business model for commercial journalism.  History in the United States shows that readers of the news have never paid anywhere close to the full cost of providing the news.  Rather, journalism has always been subsidized to a large extent by the federal government, political parties, or advertising.

On the broadcast front, commercial licensees are making profits from scarce public resources, the airwaves; they must compensate the public for their access, just as resource companies do when they mine ore or cut trees in public parks. Moreover, as the Founders envisioned, freedom of the press and a healthy public square are vital to the republic – so vital that their pursuit is worthy of modest, content-neutral public investments in what is otherwise an overwhelmingly free-market system.

We do have reliable evidence that the public continues to value mainstream professional journalism, however, even when so many new choices are available in digital spaces.  The total audience for the best newspaper journalism has grown markedly since 2000, if online readers are taken into account. The audiences for existing public media outlets in the U.S. are also healthy and growing. The country’s 365 public television stations have 61 million viewers each week, according to research by Barbara Cochran, the Curtis B. Hurley Chair of Public Affairs Journalism at the Missouri School of Journalism. Public radio has 30 million listeners. During the last two decades, the total audience for NPR member stations has grown 176 percent, including a 9 percent expansion during the last five years. Altogether, the public broadcasting system reaches 98 percent of the American population. Opinion surveys also show that the public media outlets enjoy considerably higher trust than do their commercial counterparts.

Our public media system has achieved this extraordinary result despite being starved for public funds, in comparison to other industrialized countries. The U. S. spends about $1.43 per capita, or $420 million a year, on public media. Great Britain spends about $87 per capita. Canada, one of the most miserly among industrialized countries, spends about $27 per capita. The Corporation for Public Broadcasting’s budget has increased less than 5 percent in real terms since 1982.

The U.S. has always taken less government-driven approaches to media policy than other rich countries, and in these fiscally challenged times it is unrealistic to consider increases in funding from the general tax base. But it should be possible to pursue reforms and add funding to public media without making any significant call on general revenues.   The FCC regularly auctions and allocates valuable broadcast spectrum. There should be opportunities to raise considerable funds from spectrum purchasers and users, and to redirect to more productive use the funds they already expend under regulatory mandates such as the P.I.O. system.

What can we achieve with this revenue? For a number of reasons, including political practicality, we should construct reform within the system we already have, rather than invent a new one. That means we should direct all or nearly all of the increased funds we get from public property users and other special interests to the Corporation for Public Broadcasting, in return for systemic reforms within the CPB-funded system.

The Public Broadcasting Act of 1967 created the CPB. The system was founded to promote the public interest amid pervasive commercial media – precisely the mission we need to revive now. The Corporation has contributed to the success of PBS and NPR. Some of its recent experiments, such as Argo, which is intended to fund multimedia local reporting in response to the loss of newspaper jobs, may be promising.

I’ve heard suggestions that new funding should be linked to more pluralistic formulas, including a restructuring of CPB to encompass new digital entrants, such as ProPublica, for example, or local sites like the nonprofit Voice of San Diego – a change that might be signaled by renaming the entity as the Corporation for Public Media. That may be ambitious politically, but it is certainly the right strategic direction. Any new funding regime should be measured by whether or not it will produce more serious, independent, diverse, public-minded reporting.

Any new funds routed through a reformed corporation should come with conditions. One should be that that PBS, NPR, and their member stations have incentives to work across digital media, and to embrace local reporting to a much greater degree than they do now (which is not much, overall; only 478 of the 901 stations airing NPR programming have staff of any kind, and only a fraction of those have a local news staff). The stations should also be given incentives to connect their audiences to other non-profit and commercial media outlets through open systems, just as web aggregators do, in order to strengthen innovators and new entrants.

The safeguards against politicization of the CPB must be strengthened and its bias towards mainstream television and radio curbed.  There is, in any event, no inherent moral difference between corporate advertising dollars and government dollars; both flow from institutions whose power over citizens journalists should be seeking to describe and challenge.

Conservatives see NPR as hobbled by liberal bias, an impression reinforced by the hasty dismissal last year of commentator Juan Williams. The network should be accountable to all of its legitimate constituents – to function as a public square it must be open and fair to all comers. The BBC provides an instructive example: listening to conservative criticism, its managers concluded that their problem was not bias in the way they reported, but an unconscious bias in the subjects they chose. Issues of concern to conservatives, such as immigration and business, were disproportionately neglected. A course correction broadened the BBC’s base of support.

In addition to civic information, civil debate, and investigations into governmental and corporate performance, a strong public media is becoming more essential than ever because technology is rapidly transforming the basic role of media within society and households.  Through television, Sesame Street educated a generation of American preschoolers. Through the web and mobile devices, Americans of the future will not just educate their toddlers, they will likely retrain themselves for the workplace; manage their health online; and join scores of virtual communities.

That is not a matter of left versus right, or of competition between political parties; it concerns the health of civil society. A campaign to reform and revitalize public media waged to advance such a vision will have many constituents: rural states left out of the urban media cacophony; independent voters and engaged citizens searching for reason and cross-checked facts, as well as in-depth reporting that will hold power to account; diverse community and ethnic groups seeking more inclusive sources of information; educators and public health institutions seeking reliable channels of public-minded reporting about subjects too often neglected; and politicians of all ideological stripes whose careers are unreasonably endangered by undisciplined, self-interested electronic publishers.

As Bill Kling, the retiring chairman of American Public Media, and others have argued, in the coming world of infinite channels, breathtaking challenges to privacy, and politics that threaten to be as fractured as the media, the country requires a reliable, public-minded virtual square to sort fact from fiction and honest debate from cynically funded manipulation.

Steve Coll, former managing editor of the Washington Post and an Occidental College alum, is the President of the New America Foundation.   A longer version of this article appeared in the November/December 2010 Columbia Journalism Review.

*Photo courtesy Colin Smith.

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