Take Over ExxonMobil Instead

The Federal government is acquiring an investment portfolio that resembles my own—all losers, no winners. Why can’t the government take over a profitable company for a change and maybe help solve climate turmoil at the same time?

A suggestion: Take over ExxonMobil.

But that’s socialism, you object. That’s what Hugo Chavez did. Some would say he was just putting “Country First,” protecting his country’s resources. We can debate that later, but until we do, keep in mind national oil companies manage over 90% of the world’s oil, and 16 of the 20 largest oil companies in the world are state owned or controlled.

Remember, too, our government had to take action with ExxonMobil’s great-grandfather, the Standard Oil Company. Because of cut-throat anti-competitive business practices, the Supreme Court decided in 1911 to break the company up into 34 different companies. Two of these, merged in 1999, became ExxonMobil. Maybe, the company can’t help its bad behavior; it’s in its genes.

In the current crisis in the financial markets, even free market enthusiasts have had to recognize the string of bailouts and interventions in the financial sector for what it is, “Wall Street socialism.” We’re already in for a really, really big dime, let us taxpayers make some windfall money for a change. And as I write this, MarketWatch reports that the price of crude-oil futures rose toward $100 a barrel, propelled by anticipation that government officials will successfully intervene to solve the financial crisis. So, big oil starts taking in windfall profits again.

Why target ExxonMobil? Well, it is the worst of the bad guys. In 2007, ExxonMobil took the top position in the Corporate Accountability International Corporate Hall of Shame, as worse than Halliburton and Wal-Mart. Up until this year, ExxonMobil was funding groups denying that human activity was impacting the climate. Its former CEO, Lee Raymond, financed global warming skeptics long after other big oil companies, like BP and Shell, conceded to the scientific consensus. (See more about this in Paul Krugman’s column, where Raymond was called an “enemy of the planet.”) And don’t forget, the Exxon Valdez disaster occurred when this guy was president of ExxonMobil. In 2006, he left the company with what Ralph Nader dubbed a “platinum parachute” amounting to $400 million. Same old, same old, but his company definitely made money.

ExxonMobil topped another list. Last year, according to Fortune magazine, ExxonMobil earned $39.5 billion, the largest profit in U.S. history, surpassing the previous record of $36.1 billion the company set in 2005. Once the company is nationalized, what do we do with it? By referendum or after debate by elected representatives we could liquidate its assets, sell off its chemical division, and its real estate and top off our strategic petroleum reserve, which has a capacity of 727 million barrels. Exxon Mobil’s own worldwide reserves total 1.6 billion. At least, we’d be taking on usable oil, not bad debt.

We could continue to operate it as a state-owned oil company, sending its public relations and governmental affairs people off to work for a living. Its customers are still going to need oil for cars and heating. Even if the free market fundamentalists are right and the firm proves not be quite as profitable in the hands of pesky bureaucrats as it was as a private company, the oil revenues would cushion the shock of the financial takeovers and might give the government additional leverage over prices at the pump. For those still advocating “market solutions” with a straight face, its carbon footprint, 138 million tons of CO2 equivalent emitted yearly, could be a profitable opportunity, as the world moves toward cap and trade.

Yes, if this big, stubborn company were being run right, for the public benefit, instead of for management and big stockholders, we might fill up gas tanks and throw off revenue until we’ve transitioned to wind and solar and re-engineered clean cars.

The danger of global warming is as grave a threat to our country’s and our world’s future as the meltdown of its credit markets. What’s more, the bill for the financial bailouts is likely to constrain new environmental programs and incentives in the next administration. Let’s use this moment to intervene and punish the worst of the worst.

If we nationalized AIG, we can nationalize ExxonMobil. We don’t have to create an entire command economy to take a big stick to a company that actively delayed a response to global warming by funding climate change deniers, that continues to fight payment of damages for despoiling the Prince William Sound after 20 years, and has proved again and again it can’t be trusted to protect our environment. It persists in business as usual as people here and abroad move to a green economy. A take over will signal that the United States is serious about transitioning off of fossil fuel. More immediately, “take over Exxon” has the same shout-out-the-car-window ring to it as “drill, baby, drill,” and makes more sense. It lets environmentalists stop playing defense and start making a winning demand.

Sources

Really Big Oil (The Economist)

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