That Time When George W Bush Delivered a Nasty Shock to the Oil Industry

In this DeSmog UK epic history series post, we remember the moment when George W. Bush declared: “America is addicted to oil.”

President George W. Bush delivered a nasty shock to his oil industry sponsors when, on 31 January 2006, he delivered his State of the Union Address – watched by millions – and declared: “America is addicted to oil.”

This was a precipitous alarm raised at the beginning of what would be a truly miserable year for ExxonMobil in terms of its climate change public relations campaign.

Bush said his administration had spent $10 billion developing alternative fuels in the last five years, announced a 22 percent increase in “clean energy” research funding, and promised “zero-emission coal-fired plants”, solar, wind and nuclear energy.

The man who presided over the disastrous war in Iraq called for better electric cars and competitive ethanol “to replace more than 75 percent of our oil imports from the Middle East by 2025.”

Bush concluded: “By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.”

ExxonMobil Transition

This electric speech coincided with the announcement that Lee Raymond would retire as the boss of ExxonMobil. Raymond was richly rewarded with a $98 million immediate payment, $183 million in shares (alongside a further $70 million in stock options), a $1 million consultancy contract, and then his country club fees.

As Steve Coll, author of Private Empire: ExxonMobil and American Power, writes: “Altogether, his retirement package was worth just under $400m.”

Paul Sankey, the then oil analyst at Deutsche Bank, and his colleagues seemed to think this one man was worth such extraordinary riches, writing that “the single biggest and most powerful legacy of Lee Raymond” was “raw profitability”.

They added: “The current level of cash flow being generated by the company is unprecedented by historic standards.”

Denial Think Tanks

The following month, the party continued for the free market think tanks benefiting from the Exxon fortunes.

The oil giant sponsored the Marshall Institute’s 20th anniversary dinner at the same time the sceptic pioneer offered its ‘24 Frequently Asked Questions on Climate Change’, which included such gems as: “Will climate change lead to massive species extinctions? No. The warming of the 20th century was implicated in the extinction of only one species, indicating that species are more resilient to climate change than indicated in modeling studies.”

The Competitive Enterprise Institute (CEI), a Libertarian think tank, also manifestly failed to read the change in winds and continued unabated in its robust attack on climate science. In February 2006, protesters reportedly funded by the think tank heckled Dr David King, the chief scientific advisor to the British Government, during his public lectures in the US.

Raymond and Cohen

Rex Tillerson, ExxonMobil’s new chief executive, threatened a revolution in the way the firm dealt with the climate crisis. The 53-year-old was a fierce advocate of the free market; his favourite novel was Atlas Shrugged by the extreme Libertarian Ayn Rand and, during his entire working life, he had only served ExxonMobil.

Yet, from the beginning of his command, he signalled a different approach to Raymond: “Let me assure you we never set out for the company to be public enemy number one,” he said.

One of his first moves was to call Ken Cohen, the vice president for public affairs, into his office as part of “a small interdisciplinary group” tasked with overhauling the entire strategy on climate and communications.

Coll records: “The review conducted in secret included a case-by-case evaluation of think tanks and advocacy organizations funded by ExxonMobil and active on climate issues.”

The result of this investigation was an announcement by Cohen to the world’s media that the company would stop funding a “small handful” of think tanks without naming any particular culprits.

ExxonSecrets

Greenpeace US examined the published company reports and established that cash taps would be turned off for Fred Smith, founder of the CEI and also the Environmental Literacy Council, Free Enterprise Education Institute, the Center for the New Europe USA and the Center for the Defense of Free Enterprise.

The Cato Institute, inspired by free market economist Friedrich von Hayek and founded with the help of Charles Koch, was unceremoniously cut off. The think tank was handed $270,000 in 2005, which lifted the total for the last seven years above $2 million.

Greenpeace then launched its campaign ExxonSecrets, exposing hundreds of individuals and think tanks – many descended from the Libertarian Antony Fisher – that were still in the pay of the oil company.

The environmental activists showed that, over the previous eight years, ExxonMobil had donated $23 million. Meanwhile, the Union of Concerned Scientists named 24 beneficiaries that were attacking climate science.

The scientists named four think tanks in the infamous Global Climate Science Communications Plan that continued to receive cash after Cohen’s promise, including the Heartland Institute and the George C. Marshall Institute.

Climate and Tobacco

The pressure from the environmental movement had made the funding of the CEI and other free market think tanks a reputational hazard, and it seems Exxon executives began to understand that the harm outweighed the good from this relationship.

The following year, Cohen explained to reporters: “The fact that we were supporters of some of those groups had become a real distraction to the issue at hand, which is: how do we produce the energy the world needs without more greenhouse gas emissions.”

The oil company was taking dramatic action as environmentalists tried to tar its climate campaign with the same brush as the tobacco denial of cancer research. Sceptics in the United States were also under sustained attack from environmentalists.

Climate denier Dr Seitz, a close collaborator with Fred Singer, head of the sceptic Science and Environmental Policy Project (SEPP), was subjected to a Vanity Fair investigation plastered on the front cover of its May edition, which reported that he directed $45 million in funding from tobacco companies to hide the link between smoking and lung cancer.

James Hansen from NASA joined the National Environmental Trust, a press conference in April 2006 announced to promote the magazine.

Hansen was on hand to “discuss” the evidence “linking one of the most prominent scientific sceptics on global warming and his tactics to the three-decade industry conspiracy to hide the connection between smoking and lung ailments.”

Next time on the DeSmog UK epic history post, we examine the demise of one UK free market climate-denying think tank after its funding was linked to ExxonMobil.

Photo: Image Editor via Flickr