A Free-Market Energy Blog

Exxon Mobil Rejects Crony Energy (Tillerson channels Lee Raymond)

By Robert Bradley Jr. -- June 18, 2015

“We in the petroleum industry are not dismissing the global climate change issue. But I don’t believe anyone should have the moral authority to deny people the opportunity to improve their way in life by arbitrarily depriving them of the means…. I hope that the governments of this region will work with us to resist policies that could strangle economic growth.”

– Lee Raymond, CEO, ExxonMobil (2010)

ExxonMobil CEO mocks renewable energy in shareholder speech, the headline of Adam Lerner’s May 27th Politico article read. Lerner’s piece began:

“The CEO of one of the world’s largest oil companies downplayed the effects of climate change at his company’s annual meeting Wednesday, telling shareholders his firm hadn’t invested in renewable energy because ‘We choose not to lose money on purpose.'”

How refreshing! Energy executive and energy engineers worth their salt know that renewables are a politically correct, economically incorrect profit play. Special government favor–and a lot of it–are necessary. And Exxon Mobil, to their credit (and the integrated oil model in general) is about free-market energy consumerism, not crony capitalism.

On the question of climate change, Lerner reported Exxon Mobil’s take as follows: “‘Mankind has this enormous capacity to deal with adversity,’ ExxonMobil CEO Rex Tillerson told the meeting, pointing to technologies that can combat inclement weather “that may or may not be induced by climate change.’”

Honest, refreshing, and right again!

Remembering Lee Raymond

Kudos to Rex. And what an appropriate time to remember his predecessor, no-nonsense Lee Raymond, who stated back in 2010:

We in the petroleum industry are not dismissing the global climate change issue. But I don’t believe anyone should have the moral authority to deny people the opportunity to improve their way in life by arbitrarily depriving them of the means…. I hope that the governments of this region will work with us to resist policies that could strangle economic growth. [1]

Lee Raymond (1938–), the head of Exxon and then ExxonMobil from 1993 until his retirement in 2005, created a lot of economic value for stockholders and societal wealth for the world’s energy consumers. And with energy developments since his retirement, history is treating his worldview and record very well.

An online biography summarized the “reluctant public figure” as follows:

Lee R. Raymond headed one of the most powerful corporations in the world, Exxon Mobil Corporation. He began his career after receiving a PhD in chemical engineering from the University of Minnesota. The son of a railroad engineer from Watertown, South Dakota, Raymond kept his personal life out of the limelight while steering one of the world’s largest corporations.

Raymond set his course with Exxon early on with innovative moves that cut costs and increased profits, the hallmark of his entire career. With a changing view on petroleum-based products, Raymond defended Exxon against environmentalists and human rights activists while denying the viability of renewable energy sources.

He continued to pursue natural gas projects and grew Exxon in other parts of the world, despite war and threats of war in oil-rich countries in the early years of the 21st century. As a result, Exxon continued to grow even though the protests grew louder.

Raymond vs. Enron’s Ken Lay

Raymond was the antithesis of Enron’s founder and chairman Kenneth L. Lay. Raymond was an engineer; Lay a big -picture Ph.D. economist. Raymond worked his way up the corporate ladder in a variety of businesses; Lay, after regulatory jobs in Washington, D.C., entered the industry with a focus on federally regulated interstate natural-gas pipelines.

Raymond liked to stay inside the office working on details; Lay liked to give speeches just about anywhere and to visit political capitals. He was lobbyist-in-chief for a business strategy seeking first-mover regulatory advantage.

Lay tried to make Enron into a new energy major, while ExxonMobil stayed focus on hard-asset energy operations most in demand by consumers. Enron’s newness was exploiting the new competitive space created by mandatory open-access with interstate gas pipelines and electricity transmission.

Lay went big for solar and wind; Raymond, who had to get Exxon out of those-type businesses in the 1970s, stayed focused oil on fossil fuels. As stated in his online biography:

As the 21st century loomed, Raymond still remained steadfast in his defense of the fossil fuel business, stating at an industry conference in 2000 that Exxon would stay away from renewable sources of energy. He cited Exxon’s history of concentrating on oil and said that oil would continue to be the corporation’s focus.

The Oil Daily reported that Raymond was a “vehement campaigner on behalf of the fossil fuel lobby [and] has argued for years that limiting the greenhouse emissions from fossil fuels believed to cause global warning will have a devastating impact on world economic growth” (February 16, 2000).

Raymond made this announcement despite the entrance into the renewables business of such competitors as BP, Amoco, and Shell. Those companies predicted that renewables would provide half of the world’s power within 50 years.

Real, Not ‘Politically Correct,’ Energy

The above online biography added:

Raymond continued his campaign to discredit the viability of renewable energy sources. Weekly Petroleum Argus reported that Raymond said “Even ‘green’ energy has an impact on the environment, noting that large-scale solar and wind farms take up land and can affect wildlife” (June 3, 2002).

But as an engineer and realist, Raymond knew that wind and solar were politically correct but economically incorrect–that they were energy dilute versus energy dense oil, gas, and coal. He knew that Exxon and other deep pockets fell for the renewable hype in the 1970s and lost. [2]

In a Houston Chronicle interview in 2004, Raymond explained his thinking:

One of the difficulties people have, even some who work in this business, is understanding the scale and size of the energy industry. This is important to understand in order to put in perspective what some of the alternatives are and to judge if they are significant in the context of the whole.

There are many alternative forms of energy that people talk about that may be interesting. But they are not consequential on the scale that will be needed, and they may never have a significant impact on the energy balance. To the extent that people focus too much on that—for example, on solar or wind, even though they are not economic—what they are doing is diverting attention from the real issues.

And 25 years from now, even with double-digit growth rates, they will still be less than 1 percent of the energy supplied to meet worldwide demand. I am more interested in staying focused on the 99 percent than the 1 percent. [3]

Less diplomatically, Raymond elsewhere trashed renewable energy as “a complete waste of money.”

One can only applaud the recent performance of Rex Tillerson, and fondly remember the timeless insight and honesty of Lee Raymond. History will treat their words kindly because basic physics of energy is one their side.


[1] Lee Raymond (CEO, ExxonMobil). Quoted in Kevin Mooney, “BP’s Fall From Grace: Disgraced Oil Giant Was Once Favored by Green Groups,” Capital Research Center, December 2010.

[2] “The largest corporate conglomerates in America have long devoted themselves to making renewable energy markets a reality. Starting the mid-1970s, Exxon, Shell, Mobil, ARCO, Amoco, General Electric, General Motors, Texas Instruments, and Grumman all initiated aggressive renewable energy R&D projects.” Jerry Taylor and Peter VanDoren, “Evaluating the Case for Renewable Energy, Is Government Support Warranted?”, Cato Policy Analysis, January 10, 2002, p. 2.

[3] Lee Raymond, chairman and CEO, Exxon Mobil Corporation, in staff article, “Exxon Chairman Looks to Future after Time of Great Change,” Houston Chronicle, January 25, 2004, p. 1D at 4D.


  1. John W. Garrett  


    Thank goodness for people like Raymond and Tillerson.

    The contrast with the sniveling obeisance (and comparatively poor financial results) of Shell, BP, Statoil, ENI and Total could not be more stark.


  2. Mark Krebs  

    I greatly valued the opening quote. I just wish he would have used “oil & gas” instead of petroleum.


  3. Exxon and the Carbon Tax: 'Upon Further Review' - Master Resource  

    […] presided over a major public policy change while CEO of Exxon Mobil, reversing the prior policy of the great Lee Raymond. Political forces, as well as a doomed attempt at appeasing its enemies (ending up in the AG […]


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