THE RISK CYCLE
“On My Honor”
Ken Cohen’s public affairs team in Irving crafted a formal transition plan to shape outside perceptions of ExxonMobil’s change at the top. The essential message was continuity. “Clearly the financial model was working,” an executive involved said later. “You do not change a winning game.” The new Management Committee sought to reassure Wall Street that the corporation’s scale of profit making would continue, and that Rex Tillerson was not arriving with grand new ideas about how the business should be restructured. When he met analysts in March 2006 for the first time as chief executive, Tillerson recited the doctrine of 2030 and pledged that ExxonMobil’s strategy “remains unchanged.”
Tillerson sought nonetheless to reset the corporation’s communications with its opponents and the public. “It’s true that I wanted to change the tone of ExxonMobil and of our industry,” he said later. He felt the corporation was “misunderstood” and that he “owed it to the industry” to try to reduce some of the friction ExxonMobil generated. “The industry was so good to me, [but it] was given a bum rap,” and it was in his power to correct some of that image problem, he believed. “Let me assure you we never set out for the company to be public enemy number one,” he said. At issue was more than just feel-good public relations strategy. By choosing Tillerson over Ed Galante, the board and Lee Raymond had handed the corporation back to an upstream executive with a presumed gift for forging international partnerships with oil and gas owners from Moscow to Luanda, at a time when a question hanging over the company and the industry was its long-term ability to replace reserves. Raymond had demanded that the world deal with ExxonMobil on its own terms—and had often succeeded. But the unilateralism by which he steered his private empire mirrored an American hubristic age that was fading by 2006, and the oil and gas properties on which ExxonMobil profits mainly relied as Tillerson took charge had mostly been acquired during the 1990s or earlier. To win new oil and gas access in what the author Fareed Zakaria would soon call a “post-American world,” Tillerson might benefit from a collaborative touch. At the same time, Cohen’s department worked as much as possible to depersonalize the leadership transition. They certainly did not want to promote some sort of cult of corporate leadership centered on the new man in charge.
It would not have been an easy cult to construct in any event. Tillerson had grown up mainly in small towns in Texas and Oklahoma, the son of a midlevel, modestly compensated professional organizer at the Boy Scouts of America. His mother was a devout but independent-minded Christian who volunteered as a social worker on ambulance runs. From these influences Tillerson grew up to identify himself as a lifelong Eagle Scout. He frequently cited the Scout Oath and Scout Law in corporate speeches. (The Oath: “On my honor I will do my best to do my duty to God and my country and to obey the Scout Law; to help other people at all times; to keep myself physically strong, mentally awake, and morally straight.” The Law: “A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.”) Boy Scout language soon found its way into ExxonMobil promotional materials, to describe the corporation’s values and ambitions.
Apart from a divorce and remarriage during his early career, there was little evidence of complexity in Tillerson’s life. He was fifty-three when he succeeded Raymond: Exxon was the only company for which he had worked after college. He did not possess the fierce intellectual independence (or the sometimes gratuitous meanness) of Lee Raymond. If Tillerson were to match Raymond’s financial achievements as ExxonMobil’s leader, however, he would have to learn to think for himself. If he were to successfully manage adversaries that ranged from environmentalist campaigners to sub-Saharan insurgents, he would also have to grapple with the world as it really was, not as the Boy Scouts wished it would become.
Tillerson’s parents both grew up in Wichita Falls (motto: “The City That Faith Built”), a North Texas plains town that continually reckoned with tornadoes and had a population of just more than one hundred thousand in 1952, when Rex was born. On the day of his birth, the Wichita Daily Times happened to publish its annual oil edition, which contained about two dozen stories with headlines such as “U.S. Oil Production Reaches New Record.” (A public service ad in the edition observed, “There Is No Security in Foreign Oil for the Defense of Our Own Borders.”) The city had been an oil boomtown in the 1920s and 1930s, after the discovery of the giant Electra oil field. By the fifties and sixties, its oil revenue was declining, and the town was struggling to diversify. The Tillersons lived in a modest one-story house in a working-class neighborhood called Faith Village that had been erected for returning veterans. When Rex was six, his father, Bobby Joe, who had been a bakery salesman, took a job that would change the family’s destiny: He became assistant district executive for the Boy Scouts of America’s Wichita Falls Council. The family moved several times during Rex’s childhood before Bobby Joe took a job in the Sam Houston Council, one of the country’s largest, and settled in Huntsville, Texas.
The focus of Rex Tillerson’s young life was scouting, and he diligently pursued the public service and other tasks required to earn his Eagle Scout rank. In 1970, he left Huntsville to enroll at the University of Texas at Austin. He was by his own account a “slightly above average” civil engineering student. He evaded the city’s blossoming music counterculture and served instead as a bass drummer in the Longhorn marching band. He joined Kappa Kappa Psi, which was less a fraternity than a service organization within the university band. It nonetheless had an initiation ritual in which new recruits would be “taken on a ride.” The euphemism described a rule-constrained kidnapping regimen. During a prescribed window of time, fraternity pledges could be seized unexpectedly, often in the middle of the night, bundled into a car or truck, driven into the countryside, often stripped of all clothing, and abandoned. A mercy rule required the kidnappers to provide each victim with at least a dime to make a phone call. Another rule required that victims be kidnapped in pairs, so no one would be abandoned alone.
Faith in free enterprise also influenced Tillerson; he later listed his favorite book as Atlas Shrugged, Ayn Rand’s 1957 philosophical novel that became a touchstone for diverse conservatives, libertarians, and advocates for unfettered capitalism. Exxon recruited him when he was a senior at U.T. He had offers from two corporations and turned down a higher salary to work for the Standard Oil successor. His intuition that he would fit in proved correct. Tillerson worked initially in south Texas and passed successfully through the corporation’s vetting for potential managers and leaders; after that, he began the typical eighteen-month rotations and reassignments that Exxon employed to groom future executives.
About two years out of college, Tillerson married a Huntsville High band mate, Jamie Lee Henry; they soon had twin boys. As Tillerson’s career took off, however, his marriage fell apart. By 1983, Jamie Lee had returned to Huntsville with the twins, and Rex had married a divorced mother of one, Renda House. In 1988, Rex and Renda had their own child, another son. They shared a passion for horses and settled eventually in Argyle, Texas, away from the Dallas social scene and closer to Fort Worth.
Renda was an effusive cowgirl, a barrel racer at rodeos. She continued to race competitively well into middle age. The Tillersons became leaders and intimate members of the Texas barrel-racing community. They also became active in Fort Worth’s world of cutting horses and attended auctions to bid tens of thousands of dollars for seasoned competitors. They bought a ranch in Kamay, about a dozen miles south of Wichita Falls. They called it Bar RR Ranches (for Rex and Renda). As Tillerson rose into ExxonMobil’s Management Committee and enjoyed more and more of the wealth and privilege that came with success at the corporation, they also purchased a $2.5 million lake house in the Hill Country, outside of Austin. Texas was his world; nothing but the demands of business travel could persuade him to leave. Renda served on the board of the National Cowgirl Museum, and the couple gave generously to Republican office seekers in the state, often to middle-of-the-road conservatives such as Kay Bailey Hutchison, as well as to Rex’s alma mater in Austin.
Increasingly, Tillerson gave over much of his extracurricular charity work to the Boy Scouts of America. He served on the boards of the Dallas chapter and the national organization. Tillerson had never lived outside the United States—even when working closely on the Russian operations, he had been based in Houston—and he had never served on the board of a global corporation besides ExxonMobil, as Raymond had done at J.P. Morgan. If his emphasis on scouting seemed parochial to some within ExxonMobil, Tillerson seemed to regard it as a constructive, universal moral and management system. Within ExxonMobil, he implemented a program of medals or coins for outstanding performance that employees understood to be modeled on the Boy Scouts’ merit badge program. Employees with exceptional ability or motivation could meet certain criteria and obtain a full collection of ExxonMobil medals, which were minted in the style of the coins handed out to troops by military commanders. There was a medal available for team leadership, another for teamwork, one for safety performance, and one for technical excellence, which was particularly difficult to obtain. Even managers who laughed and scoffed ironically at Tillerson’s merit badge–inspired regime competed to complete their collection, either because they were naturally competitive and couldn’t help themselves or because they thought it would enhance their career prospects.
Tillerson asked Ken Cohen to remain in his role overseeing all public policy and outside communication strategies. The decision to keep Cohen in place spoke to the consensus at the top of the company that ExxonMobil had no profound public affairs crisis to solve, only a need to change the tone of its messaging. Tillerson did recognize that ExxonMobil had backed itself into a corner on the climate question and that the arrival of a new chief executive presented an opportunity to chart some sort of new direction—at a minimum in the way the corporation characterized climate change, and perhaps in its lobbying and advocacy positions as well. Yet he viscerally resisted concessions to the corporation’s campaigning opponents. The message he heard from environmentalists as he came to power at ExxonMobil was, he said, “Get in line. You’re outta line right now, get in line.” Instinctively, he refused. Privately, he ordered a review of the issues.
During 2006, he formed a small interdisciplinary group at headquarters, of which Ken Cohen was a member, to review ExxonMobil’s climate policy, think tank funding, and public affairs strategy. The group included economists, scientists, and corporate planners. They intensively analyzed alternatives to the climate policy positions ExxonMobil had articulated and supported under Lee Raymond. One manager who participated saw the exercise as an effort by Tillerson to carefully reset the corporation’s profile on climate positions so that it would be more sustainable and less exposed. The review, conducted in secret and rolled out only to selected executives upon completion, included a case-by-case evaluation of think tanks and advocacy organizations funded by ExxonMobil and active on climate issues. The committee’s work was deliberate; it would be late 2006 before it produced firm conclusions about how to gradually unveil a modified position on both the validity of climate science and the implications of that science for public policy. “We just looked at it,” said another participant. “We took each option and said, ‘Okay,’ and analyzed each one.” ExxonMobil was well known in the oil industry for passing on an oil field auction if the timeline did not align with its by-the-book evaluation process; the same was true for public policy questions.
The Tillerson committee’s assignment was tricky because it involved legal risks. Greenpeace, the Union of Concerned Scientists, and other campaigners had accused ExxonMobil of replaying the science-manipulating techniques of tobacco companies. The comparison itself served as a warning: To achieve their goals, environmental groups might, as antitobacco activists had done, file class-action tort litigation, accusing ExxonMobil of fraudulent efforts to suppress greenhouse gas regulations. It was hard to imagine how ExxonMobil could ever be as badly affected by lawsuits over global warming as tobacco companies had been by suits over smoking’s dangers, but Cohen and other corporate lawyers could not afford to be complacent. (The tobacco companies had initially regarded their own class-action suits as an immaterial nuisance and had been proven wrong.) One of the challenges facing Tillerson’s interdisciplinary climate team, then, was to reposition ExxonMobil’s arguments about warming to more fully account for consensus scientific opinion, without admitting that any of the corporation’s previous positions had been mistaken, for that might open a door to lawsuits.
This was doubly difficult because climate scientists themselves issued stronger and stronger warnings after 2005—these included scientists funded by ExxonMobil. The scientists who refined and perfected the Global System Model at the Massachusetts Institute of Technology, for example, reported steadily more dire forecasts when compared with those Lee Raymond had earlier cited to support his arguments about such forecasting. In 2003, the Global System had issued a median prediction of a 2.4-degree-Centigrade rise in global temperatures by 2100; a few years later, that number had more than doubled.
If possible liability lawsuits had not been a factor in the corporation’s choices, ExxonMobil might have crafted a straightforward climate communications plan for Tillerson: We have been following the science closely all along; that science is now more alarming than it used to be; and so we have adjusted our thinking and our policies. In any event, Cohen’s committee crafted a more convoluted plan whose core message sounded something like: We were always right, but we were misunderstood.
The political climate in which they considered the dilemma Lee Raymond had bequeathed them was changing even faster than the weather. Early in 2006, An Inconvenient Truth debuted at the Sundance Film Festival. The documentary highlighted Al Gore’s lectures about the dangers of climate change; it would earn a record $50 million at the box office and eventually win an Academy Award. In ExxonMobil’s K Street office, the corporation’s lobbyists screened the film a half dozen times, scribbling notes and fashioning talking points about how to attack Gore’s arguments. They gamely went forth on Capitol Hill to do so, yet increasingly they felt like front-trench soldiers battling on in a losing war that required new eyesight from the generals at the top, in Irving. And as the Bush administration’s attitude toward climate policy wobbled and Gore’s advocacy swept through popular culture, and particularly through opinion-shaping elites on the two coasts, the sense among the planners and strategists at ExxonMobil’s Irving headquarters was “Uncle. We get it. We won’t capitulate, but we will reconsider.”
Cohen had dispatched a public affairs colleague named Lauren Kerr to Washington to work on climate issues. By the time of the ExxonMobil leadership transition, she had grown into a significant force on K Street, working from an office next to the Washington chief, Dan Nelson. Kerr spoke out publicly to defend ExxonMobil’s climate policies, but she also managed a plan to reposition the corporation as a patron of serious, credible scientific and technological research in the field. She shepherded the large, continuing ExxonMobil donations to M.I.T. and also to Stanford University, to support research into breakthrough alternative energy technologies—programs ExxonMobil thereafter cited as evidence that it was not anti-science. Kerr fed advice, policy research, and political analysis into Irving’s climate policy review process.
The committee was restrained not only by the questions about legal liability, but also by a desire among Tillerson and other senior executives to remain loyal to Lee Raymond’s legacy. Tillerson had served as Raymond’s executive assistant early in his career; he and Raymond had worked closely on the Management Committee in the midst of the most intense climate policy controversies; and it was Raymond, after all, who had chosen Tillerson as his successor. Raymond had tried, as he departed, to deliver to his successor an ExxonMobil board of directors that was as united in its support for Tillerson as possible, despite the fact that at least a handful of directors had favored Ed Galante for the top job. Initially, at least, a smooth leadership transition and mutual loyalty between Tillerson and his new aides, and Raymond and his old-school loyalists, seemed possible.
Even a Boy Scout–loyal protégé will distance himself from a mentor once in power—the story is at least as old as Shakespeare—and in doing so he may generate resentments, even conflict. The more Tillerson made clear that he intended to change the tone of ExxonMobil’s communications, the more he implicitly criticized Raymond’s approach to climate lobbying and to leadership, in particular. Tillerson also relentlessly spoke of his desire to perpetuate the management culture of discipline and exactitude that Raymond had built, even if he sounded at times as if he was overcompensating. “In terms of showing my predecessor respect . . . he doesn’t need anybody’s endorsement,” Tillerson said later. “He has my great respect. His accomplishments will never be equaled again.”
And yet the uncomfortable truth was that Tillerson and Raymond disagreed: The former believed that ExxonMobil had a communications problem on climate, whereas Raymond, now under contract to consult for the corporation and moving toward full retirement, did not. In Raymond’s view, as he made clear through his residual loyalists inside the corporation, the question was whether ExxonMobil had the courage of its convictions. The history of Standard Oil, in Raymond’s reading, was one of standing firm and taking the heat when necessary.
Tillerson’s own views about climate science were not greatly different from Lee Raymond’s. Tillerson held a bachelor’s degree in civil engineering; Raymond held a doctorate in chemical sciences. Tillerson did not claim or wish to project the same sort of independent scientific expertise that Raymond had offered about climate science. Tillerson remained relatively quiet on scientific questions. “During Lee’s reign, Rex never expressed any concern whatsoever” about ExxonMobil’s policy positions, recalled an executive on the board of directors. “He was fully on board. . . . Lee would say, ‘The scientists on the other side are wrong.’ Rex would say, ‘It’s more complicated than most people understand.’”
As the 2006 midterm elections approached, an era of Republican hegemony in Washington faded. War, corruption cases, and episodes of sexual misconduct by several Republican officeholders set conditions for a Democratic surge in November. As Tillerson settled into authority and Raymond departed toward the end of the year into full retirement, Ken Cohen and his Washington colleagues refined their public policy strategies so they could respond not only to the proselytizing of Al Gore, but also to the larger challenge of inconvenient Democrats.
Under Lee Raymond, ExxonMobil had aligned itself with the Republican Party to a greater extent than many other large oil and industrial corporations. Ken Cohen chaired the ExxonMobil Corporation Political Action Committee, reporting to the chairman’s office. Cohen made decisions about the P.A.C.’s political donations only after holding internal hearings with senior executives from Washington and the major business divisions in Houston and Fairfax. The P.A.C. distributed about $700,000 during each two-year election cycle; during the 2000 and 2004 cycles, only 5 percent of those contributions went to Democrats. That was the lowest percentage of any of the largest oil corporations active in American politics. The P.A.C.’s rate of contribution to Democrats crept up slightly as the party’s tide seemed to be lifting during the 2006 cycle, but it remained in single digits. (BP did not make political donations in the United States under John Browne; Chevron and Shell’s American subsidiary generally gave between a fifth and a quarter of their contributions to Democrats. Even Conoco, the most explicitly conservative oil company after ExxonMobil, gave about 15 percent of its P.A.C. money to Democrats.) Ken Cohen had dispatched Walt Buchholtz of the Washington office—the issues manager who advised anti-Kyoto groups such as The Heartland Institute—to work as a volunteer at the 2004 Republican Convention in New York, alongside other lobbyists. Raymond had also approved a six-figure donation to fund George W. Bush’s second inaugural festivities. The ExxonMobil chief maintained a few friendships with industry-friendly Democrats, such as John Dingell of Michigan, but the party knew where ExxonMobil stood as a corporation in partisan competition. “There is no question there is a new phase of scrutiny for Exxon. . . . They have a self-righteousness that sooner or later will catch up with them,” said New York senator Charles Schumer, a longtime nemesis of the K Street office. Wisconsin’s Democratic senator Herb Kohl, a career business executive whose family founded an eponymous retail chain, declared that ExxonMobil reminded him “of the tobacco industry.”
“We need a conversation with Democrats,” Dan Nelson told his colleagues in the ExxonMobil office on K Street as the 2006 midterms neared.
That meant redirecting more ExxonMobil P.A.C. donations to Democratic candidates. The problem was that ExxonMobil made almost all of its decisions on the basis of mathematical analysis—and under the corporation’s internal, unpublicized political ranking system, the Key Vote System, Democrats looked hopeless. The system was linked to the issues management binder that Cohen kept—the key public policy issues on which ExxonMobil had formulated positions. Analysts identified legislative votes in Congress that were related to the issues list in Cohen’s binder. Congresspeople and senators were then each rated on the basis of the votes they cast on these issues—much as liberal and conservative advocacy groups publicly rated members on votes tied to ideological litmus tests. No Democrat in Congress scored above a 50 percent rating under the ExxonMobil Key Vote System; John Dingell, an industry-friendly committee chairman, did no better than 30 percent. Even rock-solid Republicans from midwestern farm states scored poorly because they supported subsidies for corn-based ethanol, which ExxonMobil opposed.
Overall, in the view of its internal critics, the system failed to distinguish between truly key votes and routine ideological votes in Congress, when congresspeople and senators cast votes because, effectively, they had no political choice but to appease local voters or ride the party line. ExxonMobil’s rigid adherence to the Key Vote numbers had helped drive P.A.C. giving toward the very safest Republicans—a fact that had seemed to bother Lee Raymond not at all, but which had deprived ExxonMobil of ties to Democrats who might be sympathetic to at least some of its lobbying priorities. Cohen and Tillerson eventually agreed, after discussions within the P.A.C. committee during 2006, that they would have to take a wider view.
The Washington office was a generally congenial place to work. Anniversaries marking longevity as an ExxonMobil employee—ten years, fifteen, twenty, twenty-five—were celebrated with cakes and huzzahs, as were birthdays. There was some ideological diversity in the office—Susan Carter, a Democrat, lobbied the Bush administration on ExxonMobil’s behalf, and Lorie Jackson worked to make global health and women’s issues a priority, influenced by the multiple Hillary Clinton connections at the office. On the whole, however, this was a lobbying shop constructed by and for Republicans. Nelson’s congeniality went only so far; to insist that his lobbyists become good time managers, he would lock them out of meetings if they turned up late. Inside the Washington offices of Chevron and British Petroleum, there was an explicitly international atmosphere; Chevron’s Nigeria lobbying specialist was a Nigerian, for example. At ExxonMobil’s office on K Street, there was less diversity and more of a military flavor.
The ExxonMobil lifers who lobbied Capitol Hill—Jeanne Mitchell in the House of Representatives and Buford Lewis in the Senate—worked alongside “issue” managers with subject specialties such as tax policy or chemical industry regulation. The largest contingent of lobbyists remained the foreign policy specialists working with Robert Haines, who spent most of their time maintaining relations at foreign embassies and at Foggy Bottom. The only Democrats the K Street team knew well on Capitol Hill tended to be those from southern or western states who voted like moderate Republicans on energy and tax issues. What a House of Representatives ruled by Nancy Pelosi would mean for ExxonMobil was not a question the corporation’s Washington office could answer with great sophistication.
Ken Cohen worked closely in Irving with ExxonMobil’s chief in-house Democrat, Theresa Fariello. She had joined the corporation from the Clinton administration’s Department of Energy in 2001 and managed worldwide public policy issues at headquarters, reporting to Cohen and acting as a liaison with the K Street office. Fariello was a single woman, traditional in some of her views, liberal in others, and she worked comfortably in ExxonMobil’s corporate culture. She, too, was a committed supporter of Hillary Clinton’s and worked actively to aid her candidacies when Clinton ran for the United States Senate and later plotted a presidential bid. Fariello had attended George Washington University as an undergraduate and then earned law degrees at Georgetown and George Mason. For more than a decade, she worked in the Washington office of Occidental Petroleum during a period of controversies that arose from the corporation’s work in war-torn Colombia. Fariello arranged a few consultancies and retainer contracts with lobbyists in Washington closely connected to Democrats—she chose outside lobbyists she knew and trusted, such as David Leiter, who had worked as chief of staff to Senator John Kerry during the 1990s and then worked on alternative energy technologies at the Energy Department during the second Clinton term. Intelligence from Fariello’s Democratic network fed into the climate policy review and the preparations for a Democratic-controlled House after November. Dan Nelson also brought on Louis Finkel, who had worked for years for a moderate Democrat representative from Tennessee, Bart Gordon, then the ranking member on the House Committee on Science and Technology.
On November 7, 2006, Democratic candidates swept to victory nationwide, and the party took control of the House with a thirty-one-seat gain. A few weeks later, Ken Cohen flew to Washington to deepen his scrutiny of what this might mean for ExxonMobil.
He drove west on Interstate 66 on a chilly, dry afternoon in early December to Warrenton, Virginia, in the foothills of the Blue Ridge Mountains. A few miles along Country Road 605 he turned through split-rail fencing into the secluded grounds of the Airlie Center, a large farm that had been converted into a self-styled “island of thought” a half century earlier, and which served as a retreat for government and business leaders. Cohen had scheduled a three-day Opinion Leader Dialogue with environmental and human rights activists. The program would be an opportunity to test out ExxonMobil’s emerging climate policy and to engage more deeply with nonprofit activists. Checking in, too, at the elegant reception desk were Sherri Stuewer, who had succeeded Frank Sprow as ExxonMobil’s vice president in charge of climate and environmental policy; Jamie Spellings, a vice president for corporate planning; David Kingston, a vice president for the downstream, or refining, side of the corporation’s business; and Mark Sikkel, a vice president on the upstream side with responsibility for Asia and the Middle East.
As part of ExxonMobil’s broader campaign to engage and persuade Informed Influentials, Cohen’s department had developed the dialogues as a hybrid institution—part private retreat, part focus group, and part lobbying briefing where ExxonMobil could roll out its 2030 PowerPoint slides for environmental leaders, human rights researchers, journalists, and think tank analysts, as well as test some of its advocacy positions. The dialogues were designed and managed in such a way as to suggest that ExxonMobil considered its Irving and Houston executives on the one hand, and influential Democratic-leaning nonprofit leaders in Washington on the other, to be members of slightly different species who would require a safe, controlled setting in which to assess each other peaceably.
That evening the ExxonMobil executives mingled awkwardly with their fourteen invited guests—two senior energy-policy analysts from the Brookings Institution, a human rights activist at Freedom House, climate specialists, business ethics professors, socially responsible investors, and religious activists. Most of the guests were very liberal, but the group included at least one conservative Christian leader. They shared concerns about ExxonMobil’s record of corporate citizenship. During the cocktail hour, one of the guests, who worked at an environmental nonprofit, chatted casually with Cohen about her most recent project, and she mentioned the brutal hours she was putting in to get it finished. “He was shocked,” she recalled. “He said that he thought people who worked in environmental groups in Washington had a cushy life.”
Another participant recalled thinking of his corporate hosts: “These were clearly thoughtful, smart, articulate people—they just lived in a totally different world than we live in.” The New York Times had just published a story about Lee Raymond’s $398 million retirement package; in response to the incredulous asides of their guests, the ExxonMobil executives labored to explain the difference between pensions and stock options and restricted stock, in an effort to suggest that the package was not as rich as it might appear. “You know you can’t win on that message, right?” the participant thought as he listened. “You’re talking to people who can’t even take the Acela to New York.” The Acela was a fast, expensive intercity train between Boston and Washington; to conserve funds, some nonprofit groups ordered their employees to take slower, cheaper trains—or the bus.
The next morning they assembled in a conference room around a table arranged as a hollow square. The agenda included two “dialogue sessions” on climate change and a third on corporate transparency and human rights. As ever, the ExxonMobil team ran through the PowerPoint slides laying out the corporation’s forecasts of oil-and-gas-dominated energy demand and sources until 2030.
Cohen shared some of his internal polling about the corporation’s reputation. In one survey ExxonMobil had received 47 percent approval for overall corporate citizenship and 24 percent for environmental stewardship. Environmental issues remained a challenge. In countries such as China, the ExxonMobil executives acknowledged, environmental regulation was being taken more and more seriously. As middle classes grew around the world, so would environmental concerns, they knew.
On climate change, Cohen and Stuewer flashed PowerPoint slides outlining draft language of a new formulation of ExxonMobil’s position. “They were really dancing around the question of certainty” about the risks of global warming and the evidence that man-made activity contributed, recalled Leslie Lowe, one of the participants.
Lowe introduced the metaphor of having insurance against fire: Why not work against man-made contributions to climate change, even if there remained uncertainty about every last detail of cause and effect?
Yes, the ExxonMobil side responded, but you don’t spend all of your money in life on insurance. You calculate how large and valuable an asset you are trying to insure, and how big a risk you face. Climate was like everything else ExxonMobil did: It was a matter of risk management, Cohen emphasized.
The participants talked about imposing a price on carbon, through gasoline taxes or other formulas. “If you tax gasoline, people will be hurt,” Cohen said. Even if you tax gasoline and then rebate the money to middle-class and working households, commuters would just be forced to take the rebates and “go out and buy gas with it,” the ExxonMobil executives argued.
The nonprofit leaders asked Cohen about the funding he had provided to groups such as the Competitive Enterprise Institute and The Heartland Institute that had so stridently attacked the validity of mainstream climate science. Cohen told them that as part of ExxonMobil’s review of its options on climate policy, the corporation had decided to pull funding from the most controversial groups. The disclosure was the beginning of a quiet campaign to clarify that ExxonMobil had altered some of its public policy funding—without quite admitting that what it had done earlier was wrong or misguided. The more strident groups were a distraction, Cohen indicated; they were focused heavily on the validity of climate science, whereas ExxonMobil now wanted to leave that subject to focus the debate on research and policy choices.
The participants on both sides spoke gently; they were trying “to be ever so polite,” Lowe recalled. That night at dinner, she found herself sitting with Dave Kingston, the downstream vice president. In an unthreatening tone, she asked, “Look, you’re a science-based organization. How can you not accept the science that is basically confirmed by most mainstream thinkers?”
Kingston talked about the inherent uncertainties in weather modeling and forecasting.
She listened patiently, then asked, “What are you going to say to your grandkids when they say, ‘Grandpa, why did you fuck up the planet?’”
The ExxonMobil executive just chuckled.
It proved difficult for each side not to simply ratify its assumptions about the other and move on. “They did get defensive, but they didn’t lose their temper,” a participant recalled. “It was sort of, ‘You don’t understand.’ I felt like someone was sort of patting me on the head, ‘You poor thing.’” Some of the nonprofit leaders felt disrespected, manipulated, and sensed little but condescension and closed mindedness from Cohen’s team over the course of the Airlie Dialogue; others left more impressed by the corporation’s subtlety and sophistication than they had been when they went in. One guest in the latter group marveled, nonetheless, about how the ExxonMobil executives “were so wedded to their oil and gas image, identity.” It seemed perplexing to him that such intelligent, research-driven executives could come up with a communications and positioning strategy that seemed so obviously to be self-limiting, if not an outright loser. Perhaps they let the research tell them what they wanted to hear.
On January 11, 2007, ExxonMobil forwarded an e-mail from Ken Cohen to the Airlie participants. The Irving climate policy committee’s work had now yielded firm decisions by Tillerson to support a new communications campaign to try to clarify and redefine ExxonMobil’s position without creating legal jeopardy.
“ExxonMobil’s position on climate change continues to be misunderstood by some individuals and groups,” Cohen began. As to the new stance: Climate change presented risks, Cohen wrote, despite the scientific uncertainties, and so it would be “prudent to develop and implement strategies that address the risks, keeping in mind the central importance of energy to the economies of the world. This includes putting policies in place that start us on a path to reduce emissions . . . among other important world priorities, such as economic development, poverty eradication, and public health.” Tillerson was prepared to say publicly, “We know our climate is changing, the average temperature of the earth is rising, and greenhouse gas emissions are increasing.” That went further than Lee Raymond had ever gone, yet Tillerson would not go so far as to accept a causal link between rising greenhouse gas emissions and rising temperatures—the fundamental finding of climate scientists about global warming.
In 2007, the Intergovernmental Panel on Climate Change reported that it was now an “unequivocal” fact that the earth’s surface temperature was rising and that there was “very high confidence” that human activity was a factor. Amid an emerging scientific consensus of such a firm character, Rex Tillerson’s evasive silence and small concessions could hardly be counted as a decisive turn. Subtly, however—so subtly that it was very difficult for outsiders to detect the change—the corporation slid during 2007 into a new position.
Even after the dialogue at the Airlie Center, it was as if Cohen and Tillerson felt they needed to keep auditioning and refining the nuances of their advocacy language in public, adjusting to each audience’s reactions, like theater producers developing a risky new musical in secondary cities. In essence, however, ExxonMobil would henceforth decline to offer a formal opinion about whether the burning of fossil fuels contributed to global warming (a neutrality that protected its legal defenses), but the corporation acknowledged, for the first time, that it would be sound public policy, nonetheless, to limit man-made greenhouse gas emissions to at least some extent, because of the potential risk that the worst climate change forecasts might prove to be correct.
It remained palpably painful to extract this last admission from Ken Cohen’s lips, however.
“Are you saying you now accept that human intervention is the main source of global warming?” a climate researcher asked during one of Cohen’s early 2007 appearances aimed at publicizing ExxonMobil’s new lobbying language.
“There is no question that we understand the physics of the warming caused by CO2 and we welcome the discussion of what the in-depth link is. . . . We are involved in this discussion.”
Still, he went on, having learned by now to interrogate himself before others did: “Should we be on a path to do something about anthropogenic emissions? The answer is yes.”