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 / Spring 2013 / Issue 70(originally published by Booz & Company)


Fill ’er Up

A review of Private Empire, by Steve Coll.

Private Empire: ExxonMobil and American Power

by Steve Coll
Penguin Press, 2012

In Private Empire: ExxonMobil and American Power, Steve Coll, a Pulitzer Prize–winning journalist, weaves a strong, behind-the-scenes narrative of how one of the largest companies in the world operates. It is a lengthy account; the book’s 685 pages track the ExxonMobil Corporation’s history since the Exxon Valdez spill in 1989, and Coll covers topics as seemingly disparate as lobbying in Washington, DC, and drilling for oil in the Arctic Ocean.

ExxonMobil is the largest remnant of John D. Rockefeller’s Standard Oil Trust, which was broken up in 1911 by the Supreme Court and divided into 34 separate companies. Today, the company stands atop the Fortune 500 list with 2011 revenues of US$452 billion and profits of $41 billion.

More than a century ago, another journalist found this company to be a rich subject for a book. In 1902, Ida Minerva Tarbell, a star among the muckraking journalists of the day, began publishing her exhaustive profile of the company created by Rockefeller to house and exploit his holdings in the burgeoning oil industry. Her exposé extended to 19 consecutive issues of McClure’s magazine, and in 1904, she turned those articles into a two-volume, 815-page book published by Macmillan under the title The History of the Standard Oil Company.

Few books have had the impact Tarbell’s had. Its compelling account of how Rockefeller assembled the pieces of his empire, buttressed with stories of competitors being smashed under his iron hand, led to a series of lawsuits that culminated in the Supreme Court’s declaration of the company as an “unreasonable” monopoly. Steve Weinberg, professor emeritus at the Missouri School of Journalism, called Tarbell’s book “arguably the greatest work of investigative journalism ever written” (see “Best Business Books 2008: Life Stories,” by Nell Minow, s+b, Winter 2008).

Rockefeller’s genius lay in his recognition that it didn’t matter who pumped the oil—the spoils would go to those who refined and transported it. He built a network of refineries and pipelines that dominated the industry, using his volume as leverage to extract low rates and rebates from the railroads. He coerced other refineries to join Standard Oil, warning them that if they didn’t, they would be “crushed.” Tarbell discovered from her assiduous research that Rockefeller’s chutzpah was such that he even bullied the railroads into granting him rebates based on the higher shipping costs paid by his competitors.

Steve Coll’s title, Private Empire, is an apt description of the fruits of Rockefeller’s labor, but his book is neither exposé nor hagiography. Nowhere is there a hint of the kind of skullduggery unearthed by Tarbell. Run now by engineers who keep a low profile, ExxonMobil has tentacles stretching to every corner of the world.

The company’s reach and power are obvious in the vignettes Coll relates. Rex Tillerson, who succeeded Lee Raymond as CEO in 2006, negotiated an oil-drilling deal with Iraqi Kurds without bothering to inform the Obama administration in advance. In 2001, when Indian Prime Minister Manmohan Singh asked then President George W. Bush to put pressure on ExxonMobil to allow India’s state-owned oil company to participate in an offshore Russian drilling project, Bush replied: “Nobody tells those guys what to do.”

Those guys are blunt, too. At an industry meeting in Washington, DC, Raymond was asked why the company wasn’t building more refineries in the United States. “Why would I want to do that?” Raymond responded.

“Because the United States needs it…for security,” said the questioner.

“I am not a U.S. company and I don’t make decisions based on what’s good for the U.S,” Raymond replied.

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