Exxon – What They Are Still Hiding

Written for EcoAlert

By Melinda Pillsbury-Foster and David Lincoln

About the article

We have been investigating the connection between Exxon’s Climate change denial and their policies towards refinery maintenance and operations policy. In particular, we are interested in how decisions at the highest levels of the major oil companies have impacted the rate of accidents and other major refinery incidents.

Today we sent information to the Attorneys General in each state with evidence of further wrong doing by Exxon. You need to know about this, too.

 

While we all know Exxon is being charged civilly for withholding information on Climate Change, the company was at the same time carrying out a campaign of climate change denial. This distracted our attention from an ongoing shell game involving the refinery industry. 

 

Research done by our organization, EcoAlert, revealed further acts by Exxon, and other oil companies, which resulted in the deaths of plant employees because the companies failed to maintain their equipment or provide adequate training and oversight. Further implications of refinery sales, fires and shutdowns are enormous. 

 

While we were still doing the research we realized the strategy Exxon followed was really very simple, so simple a child could easily 'get' it. We began calling this Greedville – The Oil Game. We refer to the game in the article and use some graphics. We may actually produce the game, as it worked well explaining these events to our associates.

Here is what we found out. 

What Exxon is Still Hiding 

At about the time Exxon defunded their studies on climate change, decisions were being made and a strategy agreed on to cut costs on refinery operations. Exxon began its campaign of Climate Change Denial to distract you. Now, for the real story.

The very small group of individuals who run ExxonMobil are highly motivated and extraordinarily well compensated for the work they do. Each of these individuals, vice-presidents up, expected to leave the company at least as a multi-millionaire. The last ExxonMobil CEO Lee Raymond, received a compensation package of about $400,000,000 when he retired in 2006. Raymond came onboard Exxon while these events were playing out.

Their present CEO, Rex Tillerson, made a little over $40,000,000 last year and is expected to retire with a very nice golden parachute soon.

These men had ambitions, dreams, and in 1985 they were firmly invested in a sense of entitlement for what they were then earning and for their future compensation.

This is the real governing body, the club, the people who can be trusted with the facts and would actively carry out the decisions made.

If the public had known the damage oil was already doing, and the potential for more, steps would have been taken to get us off oil far sooner, cutting off the millions to be paid to the individuals making these decisions. Of course, many vice-presidents also sit on the Board of Directors of other companies.

Exxon did not tell their stockholders, lower level employees - or us, about their plans.

Exxon's management must have been shocked when they realized what was causing climate change. It may even have been shattering for them. A very vocal faction of the public was becoming ever louder and more active on the issue of oil in the 80s. At the same time, expectations for long term goals were irrevocably altered.

These men did not view themselves as bad guys, quite the contrary. But they were also angry. Those of us around then saw that boiling anger in this bumper sticker. 

 

Perhaps the penny that dropped was due to advances in solar energy. We'll never know. But it is probably safe to assume they realized their industry was not going to remain the dominant energy source for as long as they had believed. Each of them would feel the impact personally so they decided to take steps to protect themselves. If there were problems to be handled, they would give the orders.

One of those problems was liability. Their strategic group included attorneys and seasoned geologists and engineers. They knew the risks of doing nothing to fight climate change and they knew the implications for the supply and price of their products.

Did they think about those ordinary people making maybe $10 - $40 an hour who their orders would intentionally place in harm’s way? It seems the risk to their employees was something they were willing to accept as long as they could avoid paying for the consequences.

Liability would be hard to avoid, however. Since the victims did not know the full nature of the risks and injury and death could result from neglect and cost cutting, (to say nothing of the losses to stockholders), they needed a way to immunize themselves from what could amount to enormous damages.

Oil refineries were shut down frequently and refinery ownership was often shuffled between the major players. In a market with a growing demand for gasoline and other petroleum products they all began to cut back on maintenance and upgrades for their refineries. This would save them money in the long run. Knowing most people knew nothing about their business, lying worked when questions were asked.

Excuses were made about why major incidents kept reoccurring – but the evidence shows they were deliberate falsehoods. They also knew failure to maintain the refineries would lead to more incidents – and explosions and malfunctions can kill people.

Restitution was definitely something to be evaded, and the Exxon Club, and their fellow corporations, successfully avoided being found out by obscuring the records and providing misleading and contradictory statements. 

Greedville – Ticket to Lie Card

For example, the 10,000 clean up workers from the Exxon Valdez, harmed in 1989 have never been fully compensated and Exxon has made health studies difficult. Another stall to keep a precedent from being created. Exxon never followed up on what happened to these people, who trusted Exxon and cleaned up their mess. Exxon applies the same tactics when it comes to the poor residents near refineries. Exxon knew if they had no information nothing could be subpoenaed. The last time someone, not Exxon, tried to contact the clean-up workers most were dead.

Notice the form the Exxon disinformation campaign took. Instead of looking at the impact on air, water and land, and human health, (where damage already could have been proven in many cases), they focused on the impact to the climate, a subject they knew, better than most, was more complex and harder to prove.

It was the best possible approach for their purpose. Using the uncertainties of science and politics they divided possible opposition, stalling so they could take steps to reduce their potential liabilities, which would only increase over time. It would be a long stall focused on ensuring the appearance of forward momentum and increasing the value of their stock.

That brings us to what is going to seem a completely different set of players, beginning with a man named Thomas D. O'Malley. You can usefully think of Mr. O'Malley, CEO of PBF Energy, Inc., as a trash collector who makes sure companies like Exxon are not found liable for the failure of critical infrastructure. It is a shell game; you have to keep your eye on the liability to understand what is happening. This has made Mr. O'Malley very wealthy. 

This was a step toward the going out of business sale or bankruptcy sell offs which were inevitable. The step was taken to save them money, and it has. 

By taking this step, intentionally and covertly, corporations, run by similar management 'clubs' cooperated in actions which took the lives of employees and also impacted the health of tens of thousands of people living near the facilities. The companies likely realized this opened them up to charges of conspiracy and decided the risk was worth it.

Offsetting costs to others had always been part of their business strategy. The game involved selling obsolete, damaged or derelict refineries to O’Malley through his numerous corporations and shell companies, who would then pretend to add value by pushing these facilities to their productive capacity while at the same time cutting operations and maintenance costs to the bone. This would push up his stock value and give the appearance of maximum efficiency while those in the trenches would know something really bad was about to happen. Then when the inevitable fire or explosion occurred, he would quickly close the facility, cash in on insurance, subsidies or development schemes and restructure into a new company with no track record.

Just today Californians are learning how much this really cost them. In an article published this morning in the Daily Breeze by Nick Green, said, the February 2015 explosion, “that shuttered the ExxonMobil plant in Torrance was the costliest disruption at a California refinery in the past 16 years, with motorists paying at least $2.4 billion in higher pump prices in the following six months, according to a recent RAND study.

Soaring prices stemming from the lost gasoline supply sucked a staggering $6.9 billion from the California economy in the first six months after the explosion alone.

But the total economic loss is likely more than double that figure, RAND researchers noted.”

Our research into Exxon introduced us to Thomas D. O'Malley and his interesting career. He has used the 'Greedville Lie Card' multiple times. He has also known the Exxon Club folks for a long time and assisted them before. 

 

We are running out of time, this week Exxon will restart their refinery in Torrance, Calif which blew up in Feb 2015. If it doesn’t catch fire in the next 15 days, ownership will transfer to O’Malley’s PBF Energy company. We know what he will do next, he has done it a dozen times before. He will cut costs to the bone and push production to maximum capacity. When the inevitable happens, he will once again declare bankruptcy and leave the employees and residents with a lifetime of hurt.

Tom O'Malley and Rex Tillerson shaking hands

We know the number of employees who were previously ordered into danger after management had refused to carry out routine maintenance. We know how many died, as a result. The number of incidents, including explosions, has been steadily increasing since the 1980s. Many refineries are now closed, no longer in use. 

The number of incidents taking place since 1987 has risen dramatically.

 

This has happened in ten states.

And which state had the most 'incidents?' California, with 47. Texas is second with 34. 

 

And which company caused the most 'incidents?'

Exxon owned refineries suffered 19 explosions followed by Valero, 12, Conoco Philips and Tosco, ten each, BP and Sinclair, 9 each, and Chevron, 8. The evidence for how they managed to evade accountability is now in the hands of the Attorney Generals. The states have stepped in to do what the Federal government ignored.

An accident is not an accident when the conditions which caused explosions were planned.

Fatalities for the industry were 134 dead. The number of people injured was over 20,000.

There are steps to be taken now. The first has already been carried out. The evidence we compiled went by email to the Attorney Generals in the 10 states where the fatalities and injuries took place. Several of these have already filed civil lawsuits against ExxonMobil on their evasions over Climate Change. Other corporations, following the same strategy, can be added and the matter tried criminally.

The goal must include real compensation for those harmed, not just fines. Officers for the corporations should not be allowed to hide behind their corporate shields. Sign the petition demanding action be taken. MovetoAmend.org.

 

What Next?

 We must get off oil.

This project started over three years ago. As we wrote this we talked about solutions. Every one of us is vulnerable. You do not have to work in a refinery to suffer major health damage from petroleum. Right now, 1,000 children are dying each year in the Central Valley of California from asthma caused by the air quality. This is due to multiple uses of petroleum products.

Knowing this, the second step is to confront all presidential candidates with this issue. We need to know the candidate elected will stand with us, not with the corporations. 

This will happen via petition and by targeting their appearances.  

Corporate greed has done enormous damage to all of us and the environment.

The next step is to start, simultaneously, providing justice for those harmed by corporate greed and get off the grid which put all of us under their control. To do this we must achieve sustainable energy, rebuild our failing infrastructure, and home those most in need.

This can be done much faster than people now realize because energy is only one part of the equation. The other factor is the materials used for building. We will need far less energy using Geopolymer based materials which last for generations. These inexpensive NetZero materials are now available. This way, we will also solve the problem for rebuilding infrastructure across the country.  

We call this Sustainable Social Justice. Help those most at risk first.  

It is a sad fact that the best Green technologies have been reserved for the wealthiest among us. Today, using these materials, we can give the best to those who need it most and demonstrate to all Americans what the future can hold.

You can find us at EcoAlert.

Copyrighted May 6, 2016 by EcoAlert and the Arthur C. Pillsbury Foundation. This article may be quoted with accurate attribution.

Graphics are from Greedville – The Oil Game. Copyrighted May 6, 2016 by EcoAlert and the Arthur C. Pillsbury Foundation.