ExxonMobil Corporation

Last edited by crocodyl on July 18, 2008 - 4:59pm

Company Snapshot:

ExxonMobil (NYSE: XOM) is the largest publicly traded integrated petroleum and natural gas company in the world, and the world's largest company measured by revenues ($404.5 billion in 2007) and market capitalization ($517.92 billion on July 20, 2007).

Ownership status:

Publicly traded

Number of employees worldwide:

83,000

Chief executive officer:

Rex Tillerson, CEO and Chairman of the Board

2008 Global Fortune 500 rank:

Website:

Exxon Mobil Home Page

Tel:

972-444-1000

Fax:

972-444-1350

Corporate accountability

Tax issues:

Royalty Payments

On January 1, 2001, Exxon agreed to pay $ 7 million to resolve claims of underpayment of oil-related royalties, in association with a complaint filed by J. Benjamin Johnson, Jr., and John Martinek in District Court in Lufkin, Texas under the qui tam provisions of the False Claims Act.

Environment and product safety:

Exxon's Campaign to Deny Global Warming

On June 23, 2008, Dr. James Hansen of NASA testified before Congress about global warming. In his testimony, which was given on the twentieth anniversary of his first testimony alerting Congress and the country about global warming, Hansen compared Exxon's campaign to spread doubt and confusion about climate change to the tobacco industry's attempt to deny that cigarettes can cause cancer and other diseases.

"CEOs of fossil energy companies know what they are doing and are aware of the long-term consequences of business as usual. In my opinion, these CEOs should be tried for crimes against humanity and nature."

Exxon's funding of climate skeptics (more below) has been tracked by Greenpeace at Exxon Secrets. According to Greenpeace, Exxon has spent $23 million since 1998 to fund the climate denial industry.

In its 2008 Corporate Citizenship Report, however, Exxon began to shift its stance: "[I]n 2008 we will discontinue contributions to several public policy interest groups whose position on climate change could divert attention from the important discussion on how the world will secure the energy required for economic growth in an environmentally responsible manner." (page 41)

Reuters reports that groups dropped by Exxon include the George C Marshall Institute, the Committee for a Constructive Tomorrow (CFACT), The Capital Research Center, Frontiers of Freedom and the Institute for Energy Research -- groups that Greenpeace's Cindy Baxter described as "the engine room of the climate denial industry." (Exxon previously dropped two other groups -- the Competitive Enterprise Institute and the Heartland Institute).

Yet Baxter noted that Exxon's 2007 WorldWide Giving Report included a total of 37 global warming denial groups (which received a total of nearly $2 million): "Even cutting nine of them means the company is still funding 28 groups engaged in climate denial."

Climate Change Lawsuits

400 Inupiat villagers in the Alaskan town of Kivalina who are being forced to relocate because of flooding caused by global warming have filed a groundbreaking lawsuit with the help of attorney Steve Susman. The suit accuses twenty oil, gas and electric companies, including ExxonMobil, of being responsible for emitting millions of tons of greenhouse gases causing the Arctic ice to melt.

Exxon Valdez Oil Spill

On March 24, 1989, the Exxon Valdez oil tanker ran aground in Prince William Sound, Alaska, spilling 10 - 30 million gallons of oil, which spread out over 1,200 miles of coastline, immediately killing thousands of animals, including an estimated 250,000 sea birds, 250 bald eagles, 22 orcas, 2,800 sea otters and 300 harbor seals. The disaster caused Congress to pass the Oil Pollution Act of 1990. The company was fined $1.1 billion, the largest fine in U.S. government history.

On June 25, 2008, the U.S. Supreme Court dramatically lowered the civil damages Exxon would have to pay for the 1989 spill in Prince William Sound to $500 million.

Of the more than 32,000 fishermen and small-business owners who filed the class action suit, 20 percent were already dead at the time of the decision. The 1994 class action suit against Exxon resulted in a jury verdict of $5 billion in punitive damages, knocked down to $2.5 billion by the federal appeals court.

On October 19, 2005 US EPA published a consent decree with Exxon for Clean Air Act and related violations at seven U.S.-based refineries (representing 11 percent of U.S. refining capacity) in states including Illinois and Louisiana. Exxon agreed to pay a $7.7 million civil penalty for settlement of the claims in the complaint and undertake $6.7 million in federal and state environmentally-beneficial projects.

In June, 2008, Exxon agreed to sign a CERCLA consent decree and pay $3 million for its portion of responsibility for clean up of Big John's Salvage Site, Marion County, WV.

Human rights:

In Doe v. Exxon 2007 WL 79007 (C.A.D.C. Jan. 12, 2007), eleven villagers in the Indonesian province of Aceh alleged that Exxon-Mobil hired security forces from the Indonesian military who committed murder, torture, sexual assault, battery, and false imprisonment. The complaint, which was filed with the help of U.S. NGO International Labor Rights Fund alleged that Exxon-Mobil retained and equipped the Indonesian forces despite being aware that the Indonesian military had committed human rights abuses in the past. Exxon moved to dismiss the case, and the district court granted the motion in part, including all claims under the Alien Tort Statute and the Torture Victim Protection Act for failure to state a claim and for lack of subject matter jurisdiction.

However, the court denied the motion to dismiss the plaintiffs’ common law tort claims. Exxon-Mobil appealed, claiming that the issues in the case were non-justiciable political questions, and the resolution of that appeal was the subject of this opinion. The court disagreed, reasoning that discovery could be tailored to avoid any such problems, and that Exxon had failed to otherwise identify any other collateral rights that could only be protected through an interlocutory appeal.

Anti-competitive and consumer protection:

In 2005, the Alaska Gasline Port Authority filed an antitrust suit against Exxon and BP, alleging that the two companies were restricting U.S. natural gas supplies and keeping prices at record highs. In June, 2006 Exxon moved to have the case tossed out. (Alaska Gasoline Port Authority v. ExxonMobil Corp. et al., No. 05-cv-00026, complaint filed (D. Alaska Dec. 19, 2005).) The district court granted the motion to dismiss the action; an appeal was filed and dismissed.

A Montgomery County jury returned a verdict in December 2000, finding that Exxon defrauded Alabama on royalties from natural gas wells in state waters. The jury awarded the state $87.7 million in compensatory damages and $3.42 billion in punitive damages (Athan Manuel, 2007).

Allapattah Services, Inc., et al. v. Exxon Corp., Case No. 91-0986-CIV (S.D. Fla. 2004))

Plaintiffs alleged that Exxon overcharged its direct served dealers for the wholesale price of motor fuel: "Under Exxon’s Discount for Cash (DFC) program, which was implemented in August 1982, Exxon charged dealers a separate 3% credit processing transaction fee. Exxon allegedly claimed that it would offset this fee by reducing the wholesale price of motor fuel by that amount. Exxon allegedly collected the credit processing fee but did not reduce the wholesale price of motor fuel. ... the Court returned a verdict in favor of the dealers. All Exxon direct served dealers who purchased motor fuel from Exxon between March 1, 1983 and August 28, 1994 according to a Sales Agreement were eligible to file claims for reimbursement of the overcharge on every gallon of motor fuel bought, regardless of whether they participated in the DFC program."

Political influence:

The Center for Political Accountability reports that ExxonMobil has no disclosure policy for contributions to politically active trade associations and tax-exempt organizations used for political purposes, and does not disclose the recipients of state level political contributions. For details on Exxon's political contributions see [ CPA's ExxonMobil update.

"Tobacco-Like Science"

On January 3, 2007, The Union of Concerned Scientists published published "Smoke, Mirrors & Hot Air: How ExxonMobil Uses Big Tobacco's Tactics to "Manufacture Uncertainty" on Climate Change" -- a study documenting Exxon's expenditure of $16 million on a "tobacco-like disinformation campaign on global warming science."

According to UCS, like the tobacco industry in previous decades, Exxon created the disinformation campaign to:

raise doubts about even the most indisputable scientific evidence
fund an array of front organizations to create the appearance of a broad platform for a tight-knit group of vocal climate change contrarians who misrepresent peer-reviewed scientific findings
portray its opposition to action as a positive quest for "sound science" rather than business self-interest
use its access to the Bush administration to block federal policies and shape government communications on global warming.

"When one looks closely, ExxonMobil's underhanded strategy is as clear and indisputable as the scientific research it's meant to discredit," said Seth Shulman, an investigative journalist who wrote the UCS report. "The paper trail shows that, to serve its corporate interests, ExxonMobil has built a vast echo chamber of seemingly independent groups with the express purpose of spreading disinformation about global warming."

ExxonMobil has used the laudable goal of improving scientific understanding of global warming—under the guise of "sound science"—for the pernicious ends of delaying action to reduce heat-trapping emissions indefinitely. ExxonMobil also exerted unprecedented influence over U.S. policy on global warming, from successfully recommending the appointment of key personnel in the Bush administration to funding climate change deniers in Congress.

"As a scientist, I like to think that facts will prevail, and they do eventually," said Dr. James McCarthy, Alexander Agassiz Professor of Biological Oceanography at Harvard University and former chair of the Intergovernmental Panel on Climate Change's working group on climate change impacts. "It's shameful that ExxonMobil has sought to obscure the facts for so long when the future of our planet depends on the steps we take now and in the coming years."

To learn about the groups and individuals funded by Exxon, see ExxonSecrets, ExxposeExxon.com, and the "Integrity in Science" page (CSPI).

Although CEO Rex Tillerson ruffled some feathers at the 2006 shareholder's meeting when he said (w/reference to the company's funding of climate skeptics) that the phrase "scientific consensus" was an "oxymoron," arguing that Exxon was simply taking part in the "debate" over global warming. ("Exxon Mobil Shareholders Defy Board," Washington Post, June 1, 2006)

Corporate Governance

At the 2008 shareholder meeting, the company beat back an effort led by shareholder activists, including big retirement funds and the Rockefeller family, to split CEO/chairman Rex Tillerson's job and appoint an independent chairman of the board, considered an important step in pushing the company to reduce its dependence on oil and develop energy that doesn't make global warming worse. (The Rockefeller family has become more vocal in its demands that Exxon accept climate change and spend a fraction of its $40-billion yearly profit on developing non-petroleum energy. Exxon currently spends only $10 million a year on such research, and zero on commercial development. CEO Rex Tillerson responded that Exxon should focus on what it does best -- produce oil -- and that the alternatives will come from outside the industry.)

Hard Truths (for Exxon's ex-CEO to Swallow)

ExxonMobil is a member of the National Petroleum Council, which released "Hard Truths: A Comprehensive View to 2030 of Global Oil and Natural Gas" [http://www.aei.org/events/filter.all,eventID.1614/event_detail.asp# at the American Enterprise Institute on December 10, 2007].

AEI took $925,000 from ExxonMobil between 1998 and 2003, according to Greenpeace, while its former CEO — Lee Raymond — sat on its board of trustees. During that time, AEI sponsored global warming skeptics and pushed for the war in Iraq. At the presentation, Raymond suggested that he'd “be amazed if companies like Exxon used numbers well above $40/barrel for their 20 year forecasts” and, when asked, said he remained "unconvinced" about global warming.

Financial information

Stock ticker symbol:

XOM

Total revenue:

$404.5 Billion

Fiscal year:

2007

Net Income:

$40.6 billion

Fiscal year:

2007

Major lines of business/segments:

Oil Exploration and Development; Pipelines; refineries (38 in 21 countries w/a capacity of 6.3 million barrels/day). Exxon Mobil is also a major petrochemical producer.

Link to annual report:

Annual Meeting 2008

Additional descriptive data

Link to full list of subsidiaries:

10-K Exhibit 21

Link to complete list of brands:

Exxon Products and Services Around the World

Investor website:

CERES