Book: Private Empire: ExxonMobil and American Power

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Prologue

 

“I’m Going to the White House on This”

 

As the Exxon Valdez churned through chalky turquoise port waters toward the Gulf of Alaska, Captain Joseph Hazelwood descended to his quarters. It was shortly after 9:30 p.m. on the evening of March 23, 1989, and he had some paperwork to complete, he told his subordinates. He was a taciturn man, forty-two years old, balding, about six feet and 180 pounds. He dangled the Marlboro cigarette he smoked on the corner of his lips. His father had flown torpedo bombers for the United States Marine Corps in the Western Pacific and then served as an international pilot for Pan American World Airways. Joseph Jr. won admission to the elite State University of New York Maritime College; the carefree notation in his college yearbook read, “It Will Never Happen to Me.” He scored 138 on an I.Q. test. While at sea he read widely; in conversation, he quoted Stonewall Jackson and Oscar Wilde. He had by now sailed for the Exxon Corporation for twenty-one years, ten of those as an oil tanker captain.

He was attempting to recover that spring from what he would later call a “midlife crisis.” It had taken hold of him several years before. Long stretches at sea had caused him to miss much of his daughter’s childhood, and this weighed on him. His wife, he recalled later, “detected that I was moodier than I had been before.” He drank heavily—four or five doubles before dinner, wine with the meal, then several doubles afterward—but he did not feel immobilized by alcohol. Even after such a drinking regimen, although he could “detect a little clumsiness on my part,” he “didn’t trip over any furniture” and he “wasn’t blotto,” as he put it. While ashore, he periodically drove while intoxicated, attracted the attention of police several times, and lost his driver’s license. He sensed that he might be in some sort of descent: “I didn’t know what I was suffering from, if I was suffering from something.” An Exxon supervisor told him, “If you’ve got a problem, take care of it.” In 1985, he had checked himself into a New York hospital and underwent treatment for mild depression and alcohol abuse. Afterward he attended Alcoholics Anonymous meetings but continued periodically to drink. Exxon executives said that they had started to monitor his alcohol intake, prompted by incidents such as one in which the captain was overheard ordering beer over an Exxon ship’s radio, but Hazelwood remained in service as a tanker captain and said he had no indication that he was being monitored by anyone. In the port town of Valdez on the afternoon of March 23 he drank what he would recall as two or three vodkas at the Pipeline Club before passing unexamined through the oil terminal gate and boarding his ship.

The livelihood Hazelwood put at risk by his drinking was a privileged one; his salary at Exxon was about $180,000 a year, including benefits. He was one among many thousands of Americans whose incomes that spring could be traced in part to the work of a British Petroleum geologic field party that had surveyed Alaska’s Brooks Range, north of the Arctic Circle, in the summer of 1958. The Suez Crisis and turmoil in Iran (the latter partially engineered by the Central Intelligence Agency) had made plain to B.P.’s executives that their oil holdings in the Middle East were politically insecure. Alaska’s storm-swept seas and icy glaciers might look forbidding, but at least they were situated in a nation that welcomed private capital. American government surveys had suggested for years that Alaska’s north was rich with oil and natural gas; B.P. was among the first of the major international oil companies to bear the uncertainties of the harsh climate and invest. By the early 1970s, it had established a large position as a leaseholder on Alaska’s North Slope. Transport was the major obstacle to maximized profits in a region iced over for months at a time. Oilmen had talked for years about wild-eyed schemes to build an overland pipeline from the Arctic to the south, but the project would require money and political alignments that seemed preposterously ambitious. Only another Middle Eastern crisis—the oil embargo of 1973, directed by Arab producers at the United States over its support of Israel—at last spurred construction of the Trans-Alaska Pipeline System to carry crude eight hundred miles from Prudhoe Bay across permafrost to the ice-free port of Valdez. To finance and operate the pipeline, B.P. formed a consortium with Exxon’s precursor Humble Oil and with Atlantic Richfield. The first oil flowed in June and reached the Valdez Marine Terminal on July 28, 1977.

A dozen years later, it poured through Valdez at a rate of about 2 million barrels per day—an amount equal to more than a quarter of all of America’s domestic crude oil production. The Valdez terminal had grown into a labyrinth of pipes, oval storage tanks, and strings of festive-looking white safety lights—an improbable man-made installation tucked on a rise amid snow-draped mountain crags and majestic glaciers. Tankers as long as several football fields passed to and from the docks one after another. The Coast Guard funneled them through a ten-mile-wide shipping lane in Prince William Sound, an inland sea teeming with salmon, halibut, whales, seals, sea lions, porpoises, and sea otters. Inbound traffic traveled in a corridor to the east, outbound traffic to the west. That Thursday, the Brooklyn and the ARCO Juneau had departed Valdez for the Pacific only hours before Hazelwood embarked with a load of 1,264,155 barrels of crude. It was a misty night, but the winds were light, the seas were calm, and visibility extended eight miles. Hazelwood had navigated this passage at least a hundred times before.

He returned to the bridge shortly after 11 p.m. His Valdez port pilot had disembarked, and a tugboat escort had also peeled away. Bligh Island now lay ahead to the southeast, shaped in the water like a sleeping crocodile with a curling snout. To the island’s west a red light pulsed every four seconds to mark Bligh Reef, which spread beneath the surface at between one quarter and nine fathoms. (The draft of a loaded oil tanker could be ten fathoms or more.) White icebergs from the Columbia Glacier bobbed ahead as well, visible to eye and radar, and several of them now appeared to block the outbound shipping lane. Hazelwood decided on a common maneuver, one taken earlier without incident by the two ships ahead of him. The Exxon Valdez would turn south across the inbound shipping lane toward Busby Island, near Bligh, evade the ice, and then turn back to the outbound corridor toward the Hinchinbrook Entrance and the open sea. The captain radioed the Coast Guard’s Vessel Traffic Service to secure permission. “Judging by our radar, I will probably divert . . . and end up in the inbound lane if there’s no conflicting traffic—over,” he announced.

The Coast Guard’s monitors did not question him. One of the men on duty was on a coffee break. In any event, it was not as if he or anyone else in the Coast Guard could easily track the Exxon Valdez’s movements once it reached the vicinity of Bligh. Budget cuts during the 1980s had left the Vessel Traffic Service without a radar system that could follow ships reliably once they moved thirty or more miles south of Valdez. Even if the Coast Guard had possessed such radar, it might not have mattered; blood tests administered later to the two men on duty showed traces of marijuana and alcohol. Regulators and the regulated had fallen into a slothful embrace, reflecting a national political atmosphere that emphasized the benefits of light government oversight. There was intense pressure to reduce costs within the oil industry. A decade of operations around Valdez had passed free of major accidents.

On the bridge, Hazelwood told Gregory Cousins, his third mate, “Bring it down to abeam of Busby and then cut back to the lanes.”

Cousins was an experienced sailor who had made the passage through Prince William more than two dozen times, but he was not legally qualified to take control of the ship in these waters.

“Do you feel comfortable with what we are going to do?” Hazelwood asked him.

“Yes.”

“Do you feel good enough that I can go below and get some paperwork out of the way?”

“I feel quite comfortable.”

At 11:50 p.m., Hazelwood left the bridge again for his quarters. Like the drinks he had downed less than four hours before boarding the ship, this decision was a violation of Exxon Shipping Company policy. He said later that he left “because there wasn’t a compelling reason to stay.”

What occurred on the bridge in the minutes that followed would never be fully explained. Cousins, helmsman Robert Kagan, and other crew members became confused, attempted to turn the ship as their charts instructed, made technical mistakes, and soon lost track of their position altogether. At last Cousins telephoned Hazelwood: “I think we’re in serious trouble.”

A terrible shock and sound engulfed them around ten minutes after midnight. Cousins felt a series of sharp jolts, heard some of the ship’s relief valves open, and smelled oil. The ship’s chief mate, James Kunkel, banged on a crew member’s door to wake him: “Vessel aground. We’re fucked.” Bligh Reef had cut open the ship’s belly across its length. Oil pools surfaced on the dark sea.

Hazelwood raced upstairs. He saw two officers peering overboard at the gushing oil, its roiling blackness illuminated by a spotlight. He retreated to a toilet and vomited. He found that he had trouble catching his breath; he felt that he had “been hit in the breadbasket with a ten-pound maul.” He knew that “the world as I’d known it had come to an end.”

About eighteen minutes after the first sounds of steel on rock echoed through his ship, Hazelwood radioed the Coast Guard. “We’ve—should be on your radar there,” he said. “We fetched up hard aground north of Goose Island off Bligh Reef. Evidently we’re leaking some oil and we’re going to be here for a while.”

The watch stander in Valdez telephoned the Coast Guard’s commander, Steve McCall. “I’ve got the Exxon Valdez hard aground Bligh Reef.”

“Are you serious?”

“I’m serious as a heart attack.”

Just over thirty minutes later McCall pulled off the Valdez dock in a fast boat with two other Coast Guard officers, a representative of the state Department of Environmental Conservation, and two local pilots. The night had turned crisp and clear, and when they reached the Exxon Valdez, “you could see oil bubbling out from underneath,” recalled Mark Delozier, one of the Coast Guard officers aboard. As the oil surfaced it “made a gurgling noise and big bloops would leap right out of the water two to four feet. Then it would settle down to the surface.” The slick around the ship was already twelve to eighteen inches thick.

They boarded and approached Hazelwood. “How did this happen?”

“You’re looking at it.”

Delozier stepped back and pulled a colleague into a huddle. “Did you smell what I smelled?”

“Yeah.”

“We need to get someone out here to do an alcohol test on the captain as well as the crew.”

In the days ahead Hazelwood’s intoxication would simplify perceptions of the accident. It provided Exxon a means to narrow its responsibility. The corporation soon dispatched a telegram to its tanker captain informing him that he had been fired. (Hazelwood later testified that he learned of his dismissal only through media reports.) For late-night comedians the drunk-driving imagery proved irresistible. Hazelwood’s number-one excuse, according to a David Letterman Top Ten list: “I was just trying to scrape some ice off the reef for my margarita.” It did not take long for government investigators to discover, however, that the grounding had been caused by a more complex chain of human error, abetted by inadequate regulations and corporate safety systems.

When Steve Cowper, the governor of Alaska, arrived on the scene the next afternoon, one of his colleagues told him that Hazelwood “may have been drinking but I’m not sure that had anything to do with it.” A Coast Guard study would soon conclude that the service’s own multiple deficiencies contributed significantly, along with a pattern of expediency within the oil and shipping industries: “The game rules now are for a professional investor to move freely within the marketplace spending as little as is necessary. Today’s adage is to do more with less, make two tankers do the work done by three previously.”

That had certainly been the adage at Exxon in the years before the wreck. In 1982, the corporation employed 182,000 people. Unexpectedly, oil prices dropped. In response, chief executive Lawrence G. Rawl advanced a slashing campaign begun by his predecessor, Clifton C. Garvin Jr. The campaign eliminated about 80,000 jobs by 1989—more than 40 percent of the workforce in just seven years. At Exxon’s headquarters in a white skyscraper on Sixth Avenue in New York City, employment fell from 1,362 to 330. The corporation’s top environmental officer at headquarters was demoted; his staff was reorganized and absorbed by a research group. The experts in oil spill response that wrote Exxon’s manual for disaster management also lost their jobs. The cuts buoyed Exxon’s financial performance at a time when competitors struggled. In 1987, Exxon reported more annual profit per employee than any other major American corporation.

The National Transportation Safety Board concluded that third mate Cousins and his shipmates were overworked and that cutbacks of the number of crew assigned to Exxon tankers had compromised the ship’s ability to detect potential hazards. The N.T.S.B. cast blame not only on Exxon Shipping, but also on the state of Alaska, the Coast Guard, and the performance of the individuals aboard, including the captain. Hazelwood’s decision to leave the bridge was a factor in the accident, and his drinking may have contributed to that decision, but the failings that led the Exxon Valdez onto the rocks ran deeper than his own.

By Saturday, Exxon executives estimated that 240,000 barrels of crude had poured into Prince William Sound, more than had ever been dumped into American waters at one time. Television camera crews arrived in Valdez by the scores and beamed out images of saturated birds and blackened sea otters. The immediate damage to wildlife caused by a spill arises from direct contact with the oil while it is exposed on the water or the shore. A marine mammal such as an otter will lose vital insulation on the contaminated section of its fur, preen itself for relief, ingest the petroleum, and soon die. Nearly 1,000 sea otter carcasses appeared in Prince William Sound after the spill. Federal scientists never established an exact count of the total dead, but they estimated that about 2,800 sea otters perished. With their furry faces and pleading black eyes the otters became the symbols of a broader wildlife massacre. Scientists later estimated that about 300 harbor seals, 250 bald eagles, 22 killer whales, 250,000 seabirds, and billions of salmon and herring eggs were destroyed by the initial exposure to Exxon Valdez oil.

On Saturday afternoon, March 25, Don Cornett, Exxon’s director of its office in Anchorage, a silver-haired veteran of the corporation, telephoned George Nelson, one of his counterparts at the pipeline consortium. Cornett would play a leading role in representing Exxon before the media and the public in the days and years ahead. His past assignments had included a stint as an environmental manager in the corporation’s marine department; he had experience with oil spills. He flew by chartered helicopter to Valdez and hit the telephones. He would later reflect that because of the chaotic flow of information, “it was hard to always make the right calls. . . . The emotions surrounding the damage to the mammals and the birds were totally understandable and totally unmanageable.” That Saturday, because he was calling from an emergency response center, his telephone line was recorded.

“Are you getting a lot of press contacts into your office?” Nelson asked him.

“Jesus Christ. I can’t get off the telephone.”

“I thought you probably were, but many, many hundreds of them—how many of them are down in Valdez? A whole bunch, aren’t there?”

“‘Yeah, yeah. Well, they’re taking some in Houston, some in New York, and I’m taking some here. . . . They’re getting prank calls.”

“They’re getting what?”

“Prank calls.”

“Like what?”

“‘You dirty bastard.’ . . . We’re getting those over here too,” Cornett said.

“Well, this is going to be a public relations nightmare.”

“Nightmare,” Cornett agreed.

“Nightmare, to say the least. Yes, to say the very least.”

“Do you know how I feel?”

“How?”

“Do you remember when Patton looked out over the battlefield and said, ‘God help me, I do love it so.’ . . . When they were going to invade Europe, he said, ‘God wouldn’t let this happen and not make me be in on it.’ That’s the way I feel.”

Lee R. Raymond, the president of Exxon Corporation and then its number-two executive, heard about the grounding of the Exxon Valdez while on company business in Jacksonville, Florida. Raymond had helped to design the ambitious reorganization plan that had eliminated more than 40 percent of the corporation’s employees in the years before the wreck. He was in Jacksonville because Lawrence Rawl had sent him there to scout real estate. As part of their campaign to remake Exxon, Rawl and Raymond had decided to move the company’s head office out of Manhattan; Jacksonville was a possible destination. As he absorbed the news from Alaska, Raymond said later, he was “chagrined . . . horrified and to an extent devastated.” His wife, Charlene, told him, “It’s the first time I have ever been embarrassed that we work for Exxon.”

Raymond was ill with a severe spring cold and could not fly for a few days, on doctor’s orders. Pent up in Jacksonville, restless, he began to assess the cause of the accident and to coordinate Exxon’s response. Raymond had grown up in Watertown, South Dakota. His father was a railroad engineer who drove trains between Watertown and Aberdeen. In high school the younger Raymond decided to study chemistry, particularly its mathematical aspects; he attended the University of Wisconsin as an undergraduate and ultimately earned a doctoral degree in chemical engineering at the University of Minnesota as a National Science Foundation fellow and on other scholarships. He took his first job at Exxon and rose through the ranks. He could mist up when speaking about his father or the people who worked for him at Exxon. Normally, however, he did not come across as a sentimental man and could be a blunt and demanding manager. At the time of the spill he was fifty years old and had worked at Exxon for twenty-five years.

In time Raymond would draw a number of conclusions about the Exxon Valdez. One of his earliest assessments was that environmentalists and confused politicians in Alaska—particularly Alaska’s governor, Cowper—had prevented Exxon from reducing the effects of the disaster by refusing to allow the company to spray chemical dispersants on the oil slick during the first days, as provided for in a spill response plan previously filed by Exxon with the state. Chemical dispersants do not eliminate oil, but if applied correctly in favorable conditions, they can break up concentrations and drive oil droplets underwater. That can reduce the impact on birds and marine mammals that feed or travel at the surface. Chemically dispersed oil may also be less likely to wash up on beaches in dangerous concentrations. Oil driven beneath the surface might harm fish or other subsurface life, however. Fisheries were the most important source of income and employment in Prince William Sound. Also, several factors can limit the effectiveness of dispersants. The chemicals are less effective in cold waters than in warmer waters. They are typically released by aerial spraying. If the seas below are calm, as they were in Prince William Sound during the first days after the Exxon Valdez gashed itself on Bligh Reef, the chemicals may not churn and mix adequately. If the particular composition of spilled oil or the chemistry of the water is unknown, then the impact of dispersants may also be uncertain.

Chaos reigned around the decision makers on-site in Valdez on Friday and Saturday. Local fishermen arrived at hastily arranged press conferences at the town’s civic center, shouted questions, made speeches, and threatened to take the cleanup into their own hands. On the stage at the press conferences stood Exxon employees “wearing three-piece suits,” recalled Dennis Kelso, then in charge of Alaska’s Department of Environmental Conservation. Meanwhile, in the crowd, “there was so much fear and anger you could hear it crackling through the audience.” Valdez was a small and isolated town; local oil and government representatives struggled to make decisions while consulting with their superiors over long-distance telephone lines. There were multiple sources of overlapping authority: the Coast Guard, the state of Alaska, the pipeline consortium, and Exxon. British Petroleum, the lead owner of the pipeline consortium, Alyeska, was supposed to have ensured that preparations for response to an oil spill in the sound would be adequate, but the consortium had failed to equip tiny Valdez with adequate boats, vehicles, booms, leased aircraft, and other vital materials.

The Coast Guard had emergency procedures to respond to oil spills and had supervised cleanups in the Gulf of Mexico and elsewhere, but it, too, lacked the equipment to take full charge in Prince William Sound. Exxon lacked the means as well, because it had been relying on the B.P.-led pipeline consortium. Exxon “had more experience,” as a senior Coast Guard officer put it, so the Coast Guard yielded to the corporation. Raymond later said that Exxon in fact had access to “a lot of cleanup equipment on the ground,” but he blamed Alaskan officials for not granting permission to use it. He also deflected any suggestion that his and Rawl’s decision to lay off Exxon’s oil spill specialists during their cost-cutting spree had hindered the corporation’s response: “We have people all over the world trained to handle oil spills, even if they don’t have the exact title of oil spill specialist.”

Fishermen in Valdez believed that spraying chemical dispersants would do more harm than good to salmon and other fish populations on which they depended. Hundreds of thousands of young salmon were about to be released into the sound at the start of their annual migration—if they swam through toxic oil driven beneath the surface by dispersants, they might be destroyed before they reached maturity. Locals voiced these fears to Steve Cowper and his advisers. Cowper authorized a few tests, which did not turn out promisingly—the chemicals were dumped accidentally onto cleanup crews. Coast Guard officers were not enthusiastic about using dispersants; neither Alaskan state officials nor Environmental Protection Agency specialists recommended going forward aggressively.

Lee Raymond fumed. Running limited experiments in these circumstances was “like testing the fire hose after the house is on fire,” he thought. He accepted that in cases where the chemistry of oil and water was unknown, a dispersant plan might best be implemented cautiously—but that was not the case here. “There is only one kind of crude on a vessel leaving Valdez,” he said later. He was referring to the fact that only well-known Alaska crude blends came down the pipeline and their chemistry had been well studied. “It is one of the most susceptible of all crude oils” to dispersants. “Therefore, that information didn’t need to be established.”

Early in his Exxon career Raymond had worked at the lab that developed COREXIT, the dispersant available to use in the sound; he felt he knew the issues from the molecular level on up. But Exxon executives on the scene kept telling him that “the state and special interest groups trying to influence the state” were opposed to using Exxon’s previously approved dispersants, and Dennis Kelso, in particular, was “flat opposed.” Alaskan officials and federal scientists later concluded that there had been neither enough chemicals nor delivery systems to make a decisive impact in the time available, but Raymond held just as firmly to the opposite view. The deeper this conviction took hold of him, the more it seemed to harden his belief that once the oil began to pour into Prince William Sound, the corporation acted blamelessly, while environmentalists did not.

“I asked you a moment ago . . . what, if anything, you felt Exxon did wrong, and I think your answer began by saying, well, you didn’t really think it was a matter of right and wrong,” Jim Sherman, a lawyer for the State of Alaska, asked Raymond later at a deposition.

“Well, I don’t mean to be argumentative, but assigning blame isn’t the same as being right or wrong,” Raymond said.

“Well, do you think the State of Alaska’s actions in the first seventy-two hours after the spill in regard to dispersant use were wrong?”

“My own view is that dispersants should have been applied. If you are suggesting that the state didn’t think they should be applied, then I guess we would have a difference of view. And since I’m right, I guess by your supposition you are wrong.”

“By those same terms, did Exxon do anything in the course of the weeks that followed the spill that was wrong?”

“The state may have a view on that and I have a different view.”

“I’m asking for your view, sir.”

“I think— I’m never going to say that we are always doing everything exactly right. I would be naive to do that; but if you are asking me, are there any major decision points that we faced in how to respond to that spill, that in hindsight we would go back and say we think we were wrong, and I don’t think there are any.”

As the oil spread, Samuel Skinner, the secretary of transportation, summoned Admiral Paul Yost, commandant of the United States Coast Guard, to a meeting at the White House. They waited in the West Wing for President George H. W. Bush, a former oil wildcatter who earned his fortune in West Texas before embarking on his career in politics, intelligence, and diplomacy. That spring President Bush was preoccupied by events abroad—spreading dissent in Eastern and Central Europe, pro-democracy students camped out in Beijing’s Tiananmen Square, and the rising radicalism of Mikhail Gorbachev’s perestroika.

Admiral Yost had made his professional reputation as a patrol boat commander in Vietnam. As Coast Guard commandant since 1986, he had pulled the service toward military discipline. He banned beards, earning the enmity of a generation of officers, and he moved to install naval weapons systems aboard Coast Guard vessels.

In the Oval Office, Yost briefed President Bush on the militarylike dimensions of the Exxon Valdez crisis, “trying to explain what was needed to mobilize in a major oil spill, and what Valdez looked like, with one or two motels, and one or two little restaurants,” as Yost recalled it.

Bush looked at his watch. “I’ve had the German ambassador waiting for ten minutes,” he said. “I’ve got to go see him.”

The president turned to his chief of staff, John Sununu, a former governor of New Hampshire. “You take this into your office and get this thing moving,” he said.

Yost and Skinner trailed Sununu through the West Wing. When they sat down, Sununu told him, “Admiral, you’re going to Alaska and you’re going to supervise this oil spill.”

“Mr. Sununu, I’m not going to Valdez,” Yost answered. “I can’t run the Coast Guard from Valdez. It’s a worldwide operation.”

Sam Skinner laid his hand on Yost’s shoulder. “Paul, you’re going to Alaska.”

By the time he arrived, the debate about chemical dispersants was no longer relevant.

On the night of Sunday, March 26, about seventy-two hours after the initial grounding, a fierce spring storm raged through Prince William Sound. Southwesterly gales up to seventy miles per hour blew and scattered the oil from the sea surfaces around Bligh across to rocky island beaches dozens of miles away, on the far side of the sound: Knight Island, Eleanor Island, Ingot Island, Disk Island, Naked Island. It was as if someone had blown very hard on an ashtray and scattered its ashes. The swirling winds were so strong that crude even appeared in treetops on the distant islands. The gales rendered the earlier debates about chemical dispersants academic; if they had been applied all out during the first three days, they might have reduced by a little the amount of oil that the winds blew, but not enough to forestall catastrophe.

The storm transformed the cleanup. Now the challenge became to remove the contamination from dozens of beaches during the summer months before the snow and harsh weather of late autumn returned. Otto Harrison, a bespectacled veteran of Exxon’s international operations and offshore oil production, led the effort. Harrison was to work alongside Commandant Yost. Exxon reported that it spent $2.1 billion on cleanup operations in 1989, and even some critics of the company credited the vigor of its efforts once the operation became organized. Disagreements persisted, however, about whether Exxon was doing all that it could.

In public, Exxon president Lee Raymond suggested that the corporation would take its orders about its cleanup decisions from the Coast Guard’s on-scene commander. “That is the man we look to,” he said. “That is the man who approves our plans.”

In private, Exxon and the Coast Guard found themselves in conflict. The commandant “didn’t get along with [Otto] Harrison at all,” Yost recalled. His Exxon counterpart “was a big man. He made decisions very quickly. He stood by his guns and he wouldn’t be pushed around. . . . I told him what to do and he sometimes did what he wanted. It was that kind of a relationship, but he was good. He was plenty good.”

To build political support for Harrison’s decisions, Raymond and Lawrence Rawl flew regularly to Washington to meet with Sununu, Skinner, Interior secretary Manuel Lujan Jr., and Environmental Protection Agency director William K. Reilly. In Juneau they pressed Governor Cowper and his aides to back Exxon’s cleanup plan.

Commandant Yost argued about the number of workers they should deploy on the beaches. Yost told Harrison that he wanted five thousand people hired for the summer crews.

“Admiral, I can’t support five thousand people on the beaches,” Harrison replied.

“Then get the support up there—that’s your problem. I want five thousand on the beaches.”

“I’m going to the White House on this,” the Exxon executive said.

“Go ahead,” Yost replied.

Soon the commandant received a call to return to Washington. He met with Skinner again, and the Transportation secretary accompanied him to the White House to see John Sununu.

“Admiral,” Sununu announced, “I’m not going to require five thousand people on the beach.”

“In that case,” the Coast Guard commandant answered, “I can’t guarantee the president that this is going to be cleaned up this summer.”

He added, “Let the record show that you’ve got a very unhappy commandant.”

At a congressional hearing that spring, Senator Slade Gorton of Washington State pointed out to Exxon’s chairman that Japanese executives routinely accepted responsibility for serious corporate failings, no matter the cause, by resigning from their positions. Gorton asked Lawrence Rawl whether he had considered doing the same.

Rawl was the Irish American son of a New Jersey truck driver who had enlisted in the United States Marines, made sergeant, and then became a petroleum engineer at the University of Oklahoma using the G.I. bill. He had spent his entire professional life at Exxon. “A lot of Japanese kill themselves as well,” Rawl answered Gorton, “and I refuse to do that.”

Lee Raymond never surrendered his conviction that irrational environmentalists had exacerbated Exxon’s problems in Alaska by their opposition to dispersant use, but he did scrutinize the catastrophe for other lessons. One of these was that “no matter what you decide is the right thing to do in terms of trying to deal with the spill, you have to get after it very quickly. The lesson learned here was to try and make sure that there were procedures both in the company and in the respective governments that they knew and we knew that if an incident were to happen, exactly what to do and how to do it.”

Raymond conceded that the Exxon Valdez episode suggested the need for “perhaps a rebalancing of risk-reward in many of our operations.” The risks of accidents of the sort that poisoned Prince William Sound that spring and summer of 1989, he said three years later, “apparently are much higher than anybody in either our company or the industry had envisioned.”

John Browne—later Lord Browne of Madingley—joined British Petroleum, as it was then known, in 1966, as a university apprentice. In comparison with Lee Raymond of South Dakota, Browne was an international and cosmopolitan figure. He was half Hungarian, half British; he was born in Germany and spent parts of his childhood in Singapore and Iran. As a young oil executive assigned to New York, he lived in Greenwich Village, taught himself to cook, and spent his spare time at the opera and in Soho art galleries. He was a charismatic young man with floppy ears and a mop of dark hair. As he rose through B.P.’s leadership ranks, Browne began to think that corporations “must behave consistently with the will of society,” as he put it. He puzzled over what that insight might imply for the practices of a large oil corporation.

The oil in the holding tanks of the Exxon Valdez had been pumped from Arctic Alaskan fields partially owned by B.P. On the morning of the ship’s grounding, Browne happened to be asleep at a company base camp on the North Slope, where he had come to say good-bye to colleagues as he departed for a new assignment. At 5:00 a.m., B.P.’s Alaska general manager woke him up. “We’ve got a message,” he reported. “There’s some oil seeping around Valdez. It’s from a tanker and they say it’s Exxon’s. But no one seems to be doing anything.”

Browne would recall that he “knew right away that something terrible had happened.” He boarded a plane and flew over Prince William Sound, “home to precious wildlife” where “whales would be returning from the warm water in the south soon.” As he peered down from above, he could see that white ice floes already were tinged with black. It seemed to him that too little was happening by way of response and cleanup. Where were the response boats and the booms to keep oil off the beaches? In fact, that was a question that British Petroleum’s senior executives should have been able to answer; the inadequate response was their failure, too, but it would soon be overshadowed by Exxon’s culpability.

Browne sensed that the spill’s “repercussions for the industry would be huge. It was the start of a new chapter.”

The Exxon Valdez had “damaged not just a fragile environment but also the flimsy trust in oil companies.” Environmental groups would “have a field day,” he expected. Unfortunately, “it was no use” saying to them “that B.P. was better than its competitors. The industry was now measured by its weakest member, the one with the worst reputation. That oil company was now Exxon.”

A few days before the Exxon Valdez ran onto Bligh Reef, tens of thousands of Hungarians marched through Budapest. The demonstrators turned the commemoration of an 1848 uprising against Austrian rule into a revolt against Soviet-backed communism. “Resign!” they shouted outside downtown buildings housing Communist Party bureaucrats. “Freedom! . . . No more shall we be slaves!” They carried flags from Hungary’s pre-Communist era and demanded the withdrawal of Soviet military forces. “Ivan, Aren’t You Homesick?” and “Legal State, Not a Police State” declared their protest signs.

The defiant march added to the cracks spreading that spring through the structures of global politics. The Berlin Wall fell a few months later, in November. The Soviet Union fissured and then disappeared. Democratic and free-market revolutions and revivals swept through Central Europe, Africa, Asia, and Latin America. Ethnic, religious, and territorial conflicts, long subdued by the cold war, erupted one after another. The world was remade, tossed, liberated—and reopened for international business.

The Valdez wreck stunned Exxon and its rising leader, Lee Raymond. The disaster would change the corporation profoundly. Internal reforms imposed by Raymond in response to the accident would turn one of America’s oldest, most rigid corporations into an even harder, leaner place of rule books and fear-inspiring management techniques. At the same time, Raymond and the rest of Exxon’s leaders would gradually pass through the introspection triggered by the Valdez spill and seek out the oil and gas plays that opened so unexpectedly after 1989. An age of empire beckoned America and Exxon alike.

In a bracingly short time, Anglo-American optimism and idealism about free markets, foreign investment, and the rule of law found adherents in the most unlikely world capitals. Brand-new nations brimming with oil and gas and others previously closed to Western corporations hung out FOR LEASE signs to lure geologists from Houston and London: Russia, Kazakhstan, Azerbaijan, Angola, Qatar, and tiny Equatorial Guinea, on the West African coast, soon to market itself through its Washington lobbyists as the “Kuwait of Africa.” These post–cold war opportunities for American, British, French, and Italian oil companies could be ambiguous, risky, and sometimes fleeting. Resentful nationalism and suspicion of the United States and Europe persisted in many capitals of the new oil powers. State-owned petroleum companies from China, India, Brazil, and elsewhere were rising quickly as competitors. Exxon might be America’s largest and most powerful oil corporation, but it would require all the political influence, financial resources, dazzling technology, speed, and stamina that its leaders could muster to seize the lucrative oil deals made possible by communism’s fall and global capitalism’s revival.

The United States now stood unchallenged as a worldwide military power. Exxon’s empire would increasingly overlap with America’s, but the two were hardly contiguous. Pentagon policy, after the Soviet Union’s demise, sought to keep international sea-lanes free; to reduce the global danger of nuclear war, terrorism, and transnational crime; to manage or contain Russia and China; to secure Israel; and to foster, against long odds, a stable Middle East from which oil supplies vital for global economic growth could flow freely. Exxon benefited from the new markets and global commerce that American military hegemony now protected. Yet the corporation’s activity also complicated American foreign policy; Exxon’s far-flung interests were at times distinct from Washington’s. Lee Raymond would manage Exxon’s global position after 1989 as a confident sovereign, a peer of the White House’s rotating occupants. Raymond aligned Exxon with America, but he was not always in sync; he was more akin to the president of France or the chancellor of Germany. He did not manage the corporation as a subordinate instrument of American foreign policy; his was a private empire.

Exxon’s power within the United States derived from an independent, even rebellious lineage. The corporation had been hived off from John D. Rockefeller’s Standard Oil monopoly in 1911, after a bruising antitrust campaign led by economic reformers and populist politicians. The visceral hostility toward Washington sometimes eschewed by Exxon executives eight decades later suggested some of them had still not gotten over it.

Exxon’s size and the nature of its business model meant that it functioned as a corporate state within the American state. Like its forebearer, Standard, Exxon proved across decades that it was one of the most powerful businesses ever produced by American capitalism. From the 1950s through the end of the cold war, Exxon ranked year after year as one of the country’s very largest and most profitable corporations, always in the top five of the annual Fortune 500 lists. Its profit performance proved far more consistent and durable than that of other great corporate behemoths of America’s postwar boom, such as General Motors, United States Steel, and I.B.M. In 1959, Exxon ranked as the second-largest American corporation by revenue and profit; four decades later it was third. And more than any of its corporate peers, Exxon’s trajectory now pointed straight up. The corporation’s revenues would grow fourfold during the two decades after the fall of the Berlin Wall, and its profits would smash all American records.

As it expanded, Exxon refined its own foreign, security, and economic policies. In some of the faraway countries where it did business, because of the scale of its investments, Exxon’s sway over local politics and security was greater than that of the United States embassy. In impoverished African countries increasingly important to Exxon’s strategy, such as Chad, the weight of the corporation’s investments and the cash flow it shared with local governments overwhelmed the economy and became the central prize in violent local contests for power. In Moscow and Beijing, Exxon’s independent power and negotiating agenda competed with and sometimes attracted more attention than the démarches issued by American secretaries of state. Yet the corporation could also be insular and even passive in the faraway places where it acquired and produced oil and gas. It fenced off local operations and separated its workforce from upheaval outside its gates. If its oil flowed and its contract terms remained intact, then Exxon often followed a directive of minimal interference in local politics, especially if those politics were controversial, as in the case of the African dictatorships with which the corporation partnered, or the countries, such as Indonesia and Venezuela, where civil conflict swirled around Exxon properties. In Washington, Exxon was a more confident and explicit political actor. The corporation’s lobbyists bent and shaped American foreign policy, as well as economic, climate, chemical, and environmental regulation. Exxon maintained all-weather alliances with sympathetic American politicians while calling as little attention to its influence as possible.

The cold war’s end signaled a coming era when nongovernmental actors—corporations, philanthropies, terrorist cells, and media networks—all gained relative power. Exxon’s size, insularity, and ideology made its position distinct. Unlike Walmart or Google (to name two other multinational corporations that would rise after 1989 to global influence), the object of Exxon’s business model lay buried beneath the earth. Exxon drilled holes in the ground and then operated its oil and gas wells for many years, and so its business imperatives were linked to the control of physical territory. Increasingly, the oil and gas Exxon produced was located in poor or unstable countries. Its treasure was subject to capture or political theft by coup makers or guerrilla movements, and so the corporation became involved in small wars and kidnapping rackets that many other international companies could gratefully avoid.

The time horizons for Exxon’s investments stretched out longer than those of almost any government it lobbied. “We see governments come and go,” Lee Raymond once remarked, an observation that was particularly true of Washington, with its constitutionally term-limited presidency. Exxon’s investments in a particular oil and gas field could be premised on a production life span of forty or more years. During that time, the United States might change its president and its foreign and energy policies at least half a dozen times. Overseas, a project’s host country might pass through multiple coups and political upheavals during the same four decades. It behooved Exxon to develop influence and lobbying strategies to manage or evade political volatility.

American spies and diplomats who occasionally migrated to work at Exxon discovered a corporate system of secrecy, nondisclosure agreements, and internal security that matched some of the most compartmented black boxes of the world’s intelligence agencies. The corporation’s information control systems guarded proprietary industrial data but also sought to protect its long-term strategic position by minimizing its visibility. Exxon’s executives deflected press coverage; they withheld cooperation from congressional investigators, if the letter of the law allowed; and they typically spoke in public by reading out sanitized, carefully edited speeches or PowerPoint slides. Their strategy worked: Exxon made a fetish of rules, but it rarely had to justify or explain publicly how it operated when the rules were gray.

As the Valdez wreck made obvious, Exxon’s massive daily operations—soon to produce 1.5 billion barrels of oil and gas pumped from the ground each year, and 50 billion gallons of gasoline sold worldwide—posed huge environmental risks. After the Valdez, Exxon would become again, as it had been in the first decades of Standard Oil’s existence, the most hated oil company in America.

When gasoline prices soared, American commuters felt powerless before its influence. In effect, Exxon was America’s energy policy. Certainly there was no governmental policy of comparable coherence. After fitful, failed efforts to wean itself from imported oil during the 1970s, the United States had evolved no effective government-led energy strategy. Its de facto policy was the operation of free markets amid a jumble of patchwork subsidies, contradictory rules, and weak regulatory agencies. The very weakness of policy favored Exxon. As the public’s frustration grew over rising pump prices and dependence on oil imports that transferred billions of dollars to hostile regimes overseas, Exxon became a natural lightning rod. The corporation managed this criticism with the same coolheaded patience and indifference that it employed to endure political risk in tin-pot African dictatorships. Compromise was not the Exxon way.

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