Private Empire: ExxonMobil and American Power (64 page)

This was not a conventional portrait of the powers of the largest publicly traded corporation in the most powerful military nation in the world. It was, nonetheless, the reality ExxonMobil employees stationed offshore of West Africa endured in an age of uncontrolled piracy, massive corruption, and the covenants of corporate responsibility won by international human rights groups.

Rex Tillerson might boast that ExxonMobil did business on its own terms around the world and walked away when conditions were unacceptable, but ExxonMobil determined that it could not afford to abandon its booked reserves in Nigeria, even as M.E.N.D.’s provocations deepened. After 2006, ExxonMobil relocated many of its Nigerian managers to a secure headquarters building on Victoria Island in Lagos, and reinforced its passive defense systems offshore. Periodically, after kidnappings and speedboat raids of particular virulence, the corporation evaluated whether the Delta’s violence had crossed a threshold that might argue for the corporation’s total withdrawal. None of the ExxonMobil reviews reached such a radical conclusion, however. “Where are they going to go?” asked an American official who worked with the company’s managers. “They don’t want these reserves off their balance sheets. . . . They need the reserves.”
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Twenty-two

“A Person Would Have to Eat More Than 3,400 Rubber Ducks”

T
he rising dependency of the United States on oil imports from the Gulf of Guinea did not only result from Americans’ unusually high per capita guzzling of gasoline and diesel. About a quarter of American oil imports were taken up for industrial uses. The manufacture of commercial chemicals from oil and natural gas “feed stocks” accounted for a large proportion of this industrial use.

ExxonMobil Chemical, headquartered in Houston, made up the third of the corporation’s major divisions, alongside upstream (oil and gas exploration and production) and downstream (refining and fuels marketing—the gasoline station companies). In 2007, the chemical division accounted for about 10 percent of ExxonMobil’s record $40.6 billion in profits. Upstream dwarfed chemical, and the latter’s executives often labored in the shadows of their oil brethren. Yet if ExxonMobil Chemical had been a stand-alone corporation that year, it would have been among the fifty most profitable companies in the United States. In many of its business lines the division quietly held the first or second market position in the world.
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The early-twenty-first-century politics of global oil and gas production turned on security, nationalism, climate change, and taxation. The politics of the chemical industry were distinct. They drew ExxonMobil’s management and lobbying teams into legislative and regulatory debates about how best to manage the risks to human health posed by the use of industrial, agricultural, and household chemicals. Ken Cohen, the public affairs chief, had forged his career as an attorney in ExxonMobil Chemical. The communications and political strategies he developed for the entire corporation after 2000 reflected, in part, the science-debating, my-study-versus-your-study ethos of chemical regulation in Washington and Brussels, the headquarters of the European Union.

Since the 1970s, ExxonMobil Chemical and its brethren in the industry’s principal U.S. lobbying arm, the American Chemistry Council, had won more regulatory battles in America than in Europe. As with climate change, chemical industry lobbyists feared and fought the migration of European regulatory philosophies across the Atlantic. And, after 2000, the regulatory issues that mattered most to ExxonMobil increasingly drew the corporation into a war of ideas about risk.

Some scientists and scholars advocated a “risk analysis” model to evaluate the dangers of chemicals. This relied on mathematical calculations about the probability that a certain use of chemicals might hurt people. The chemical industry favored this approach because it effectively placed the burden of scientific proof on those who wanted to stop a chemical’s sale. Even where scientists might establish some risk to human health, that measure of risk could then be weighed against the benefits of the product. ExxonMobil and other opponents of greenhouse gas regulation had used risk analysis frameworks to strengthen their arguments in opposition to the Kyoto Protocol’s goals. The corporation’s allies in academia demanded that environmentalists “prove” cause and effect in climate-change science beyond a reasonable doubt, and even then, after 2006, when ExxonMobil finally conceded that human activity might be contributing to global warming, the corporation still resisted specific restrictions on carbon use on the grounds that the economic costs outweighed the environmental benefits. This was the burden of proof demanded by some advocates of risk analysis: First, prove the harm; then, if the harm is established, prove that the cost-benefit equation of proposed regulation is well balanced. ExxonMobil applied the same lobbying strategy to proposed regulation of its manufactured chemicals.

After 2000, a new idea arrived from Europe to challenge the assumptions of the risk analysis school: the precautionary principle. The idea can be traced to West German environmental regulations enacted during the 1970s on the basis of
Vorsorge
, or “precaution.” Advocates of the precautionary principle argued that in cases where damage to society or people might be severe and irreversible, preventive action should be taken up front, even if there were important uncertainties about the relevant science. Although “it sounds like common sense . . . in fact, the precautionary principle poses a radical challenge to business as usual in a modern, capitalist, technological civilization,” author Michael Pollan has noted. Under the principles of risk analysis, industry lobbyists could often overcome objections by environmentalists or food safety advocates “until someone finds the smoking gun,” Pollan continued. The precautionary principle reversed the burden of proof and sought to address the problem of traditional regulation, namely “that long before the science does come in, the harm has already been done. And once a technology has entered the marketplace, the burden of bringing in that science typically falls on the public rather than on the companies selling it.”
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To combat climate regulation, ExxonMobil had hired a pair of in-house astrophysicists to present scientific analysis. Yet ExxonMobil was not in the business of meteorological science. It did not operate satellites or sensing stations to measure glaciers or sea ice. The corporation’s capacity and credibility as a participant in scientific argument about global weather proved, therefore, to be finite—ExxonMobil was obviously self-interested in pressing its arguments, yet its claims to expertise were at best limited.

As the corporation fought the rise of the precautionary principle in chemical industry regulation, however, its position was more favorable. ExxonMobil employed scores of chemists; it was on the front lines. At ExxonMobil Biomedical Sciences in New Jersey, a research-driven division of the company, the corporation had constructed laboratories that could conduct rat studies about the health effects of commercial chemicals. The lobbyists the corporation flew in to Washington to work on ExxonMobil Chemical’s regulatory issues—Laura Keller, a senior issues adviser on chemical regulation, and Leslie Hushka, another registered lobbyist—were scientists who published in peer-reviewed journals; behind them stood dozens of other ExxonMobil scientists as well.

The ExxonMobil scientist-lobbyists engaged not only in debates about specific research and regulation, but also attended academic and regulatory conferences that reviewed the competing, overarching philosophies of risk management. ExxonMobil joined other corporations in funding the Harvard Center for Risk Analysis at Harvard’s School of Public Health; the center “focused broadly on developing risk, economic, and decision analysis methods that are well-grounded in the natural and social sciences.”
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ExxonMobil’s lobbyists derived from Harvard’s work insights for their own Washington arguments.

The corporation’s chemical division lobbyists urged federal regulators to adopt a “Hazard Index” approach to regulatory evaluation because it was a “defined, transparent methodology” that could draw upon mathematical analysis, as one of the corporation’s PowerPoint packages put it.

Paul Thacker, a congressional investigator for a Republican senator who looked into the corporate uses of science to shape law and regulation, concluded that “the whole field of risk analysis has been compromised by the companies. . . . Risk analysis is like an op-ed,” that is, just another form of argument, not a reliable or objective science in and of itself, as its proponents often suggested.
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Yet ExxonMobil’s lobbyists often enjoyed a much better command of facts about proposed bills or regulations than the generalist, harried congressional aides who worked on legislation.

By early 2008, the regulatory battle in which ExxonMobil Chemical’s lobbyists were most heavily engaged was an unusual one. It concerned the corporation’s defense of rubber ducks.

P
hthalates are a man-made group of chemicals that were first introduced during the 1920s. Their use spread after they were added to polyvinyl chloride, a popular plastic, to make the vinyl softer and more flexible. Exxon Chemical’s phthalates business grew during the 1970s. A market opportunity arose when another class of chemicals sometimes used to soften plastics, polychlorinated biphenyls, or PCBs, were banned by Congress because of evidence that they were toxic to humans.

As American and European households used more and more plastics, phthalates became commonplace. They could be found in flooring, electrical wire casing, garden hoses, car seats, medical tubes, tape, pool liners, shoes, and cosmetics. Of particular concern was the presence of some phthalates in children’s toys. The plasticizer used most commonly in vinyl toys was called diisononyl phthalate, referred to as DINP. ExxonMobil Chemical described itself as one of the world’s leading makers of plasticizer chemicals, and in that role it had become one of the world’s leading manufacturers of DINP. ExxonMobil did not make toys, but it sold its softening chemicals to worldwide companies that made vinyl balls, ducks, dolls, and bendable superhero action figures. (The bathtub ducks at issue were referred to colloquially as “rubber ducks,” but they were not actually made from rubber; they were made from vinyl softened with DINP.)
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Scientific knowledge about a particular chemical’s potential to harm people can be derived from a number of sources. Scientists may be able to infer the likely toxic properties of a chemical on the basis of detailed studies of other, similar compounds. In addition or separately, laboratory tests on rats or other animals may provide insight into whether a chemical may be carcinogenic or otherwise harmful. Another form of study is to track the effects of actual human exposure to a chemical over a long period of time. Such studies offer the promise of high accuracy, but are by their nature slow and expensive.

In the case of DINP, by the early 2000s, a number of scientific and animal studies had been conducted about its possible impact on human health, but there were no long-term human studies. The Centers for Disease Control and Prevention had discovered one striking fact by randomly examining humans—about three out of four people tested had some phthalates in their systems. The chemicals had become so ubiquitous in household and consumer products that they had become, in effect, a part of the human ecosystem; if it turned out that they were unsafe, it would be a real concern.
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On DINP in particular, the findings of animal studies, including one rat study carried out by ExxonMobil scientists at their own laboratory in New Jersey, were not particularly alarming, but the results were in some respects ambiguous, and their implications were disputed. Male rats exposed to phthalates in utero later exhibited abnormalities in their reproductive organs; this led some researchers to conclude that phthalates could interfere with testosterone. Some researchers and nongovernmental health lobbyists, such as those at the Breast Cancer Fund, feared that DINP might interfere with the development of reproductive organs if very young children were exposed as their bodies developed.
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In 1998, public interest health groups filed a petition at the Consumer Product Safety Commission demanding that it ban DINP in children’s toys and issue a national advisory about the threat to child health. The commission opened a review. Its staff scientists concluded initially that regulation of phthalates was “worthy of additional future consideration” because of the way DINP seemed to act on human development, but that “more studies are needed.”
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The commission next convened a study known in Washington-speak as a C.H.A.P. (Chronic Hazard Advisory Panel). The panel acknowledged concerns about the genetic or reproductive effects of massive DINP exposure, but concluded that the actual exposure children might experience was so low as to be of negligible risk. The full commission voted in 2002 to deny the petition to ban DINP from toys.

Throughout the commission’s review, ExxonMobil scientists and lobbyists argued that DINP was safe enough to be used because the dangerous dosages seen in the rat studies were much, much higher than those that would realistically be encountered by children. The only way young children would be likely to absorb DINP through toys would be by mouthing, teething on, or swallowing the toys. (Baby bottle nipples and teething rings typically were made from rubber or latex, because those materials provided a more natural feel; they generally contained no phthalates.) To follow up on this issue, after the pro-DINP vote, Consumer Product Safety Commission scientists sponsored an observational study in which they watched babies and toddlers handle rubber ducks and other toys to see just how often they stuck the toys in their mouths; they reaffirmed the commission’s earlier finding that even the most oral children would not be at risk.

“A person would have to eat more than 3,400 rubber ducks made with DINP over their lifetime to exceed safe DINP exposure limits,” PowerPoint slides left behind on Capitol Hill by ExxonMobil lobbyists declared. “If you took water and saturated it with DINP, an infant would have to drink more than 41,500 gallons to exceed safe DINP exposure limits.”
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Given the lack of definitive human studies, phthalate regulation presented a test case pitting those—such as the authors of ExxonMobil’s PowerPoint slides—who favored traditional risk analysis philosophies against those who favored the precautionary principle. Of course, even advocates of the latter had to make judgments about how much risk from a particular chemical was severe and irreversible enough to demand costly government action. In the case of phthalates, the issue was complicated by the fact that some versions of the compounds—those with low molecular weight—clearly were dangerous to human health, whereas the evidence about DINP, which had a high molecular weight, was more favorable. It required a knowledgeable and careful regulator or congressperson to hold in mind the distinctions among different phthalates.