$2.3 Million Fine to ExxonMobil Subsidiary Amounts to Just Over 1/2 Hour of Company’s Third Quarter Earnings
Back in 2012, Steve Coll’s book, Private Empire: ExxonMobil and American Power chronicled how “ExxonMobil — the energy behemoth that recently displaced Wal-Mart atop the Fortune 500 list, with more than $450 billion in revenue — operates in failed states, keeping the oil flowing when no one else can, and how it handles hapless bureaucrats charged with regulating it, scientists challenging it, rival companies trying to outsmart it and activists bent on changing it.” The picture was not a pretty one. For instance, here’s a disturbing excerpt from the Washington Post review by Moises Naim:
The company’s size, its profits, internal discipline and the critically important product it sold — energy — gave ExxonMobil inordinate power, which it used ruthlessly. “Compromise was not Exxon’s way” Coll states wryly.
That conclusion is borne out by Coll’s detailed examination of many instances where the company had to confront rivals, critics, governments or any group it felt could threaten it. A classic example was the company’s successful lobbying of the U.S. Congress to continually change obscure provisions in the tax code that would yield billions in savings. “A sardonic line among ExxonMobil lobbyists in the Washington office held that the corporation’s number-one issue of concern was taxation; its number two-issue was tax; its number-three issue was tax; and its number four-issue varied from year to year,” Coll writes.
The number-four issue that quickly became as important as taxes — and that did not change from year to year — was ExxonMobil’s crusade against efforts to lower carbon emissions. The company aggressively fought initiatives aimed at slowing the increase of global temperatures caused by the burning of fossil fuels. It did everything from funding congressional campaigns to supporting think-tanks, “climate coalitions” and so-called experts who would spread doubts about the science behind global-warming concerns.
All of which is why it’s striking to see an ExxonMobil subsidiary fined $2.3 million “or allegedly polluting waterways as part of hydraulic fracturing operations.” Of course, that’s a mere pittance compared to ExxonMobil’s 3Q14 earnings of $8 billion — about $90 million a day, or $3.7 million an hour. In other words, that $2.3 million fine amounted to just over half an hour of ExxonMobil’s earnings in the third quarter of 2014 alone. Which means, unfortunately, that it’s hard to believe this fine will alter this company’s behavior in any way. Perhaps next time the government might want to add a few zeroes to the end?