his new book is called every nation for itself, winners and losers it in a g-zero world. >> i think china is the voldemort of america's geo political fauxes, the word that must not be spoken, china. but the problem is if you have a problem out there right now, the way we are spending our money in concern about the long-term, whether you talk about economic state craft and our policy to try to create something to deal with state capitalism or you talk about the money we're spend on fiber or the pivot towards our allies and hard security with the australians and philippines and the rest. what is that becomes, it to the about al qaeda, it's to the about russia. it's about chinament don't listen what our politicians say, watch what america does. >> we continue with steve coll author of private empire, exxon mobile and american power. >> i was intrigued to discomfort extent of their independent attitude about foreign affairs an global affairs. and i came to understand that their self-conscious about their sovereignty like a lot of large

multinationals but maybe more so than the great majority. and in relation to the united states government, whether it is the clinton administration or bush administration or obama administration, they're probably better understood stood more like francement they're sometime as lined with the united states, sometimes o posed. postly they are just trying to stay out of the way and do their own thing. >> ann bremmer and steve coll when we continue. funding for charlie rose was provided by the following:

. >> rose: additional funding provided by these funders:. >> and by bloomberg:. >> from studios in new york city captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: ian bremmer is here president of eurasia group, his new book every nation for itself, winners and losers in a g-zero world t paints a picture in a world in which no single power is able to take be the responsibility of global leadership. larry summers says everyone who cares about our collective future will need to carefully consider this book's impressive arguments.

i'm pleased to have ian bremmer back at this table, welcome. >> hi, charlie. >> rose: let me begin with china today. the wife is being detained on suspicion of murder. what does that case say about china? >> well, it is as that lots of interesting things are certainly happening in the top levels of china right now. one of the things that i find most extraordinary about it is how there really haven't been leaks in the senior echelons of the chinese party throughout this. all right. the chinese government decide we don't want the story to get out until we're prepared for it to get out and that's the way we're going handle it right. >> rose: an that's the way it was. >> hey, 1.3 billion people, a government that actually controls them. it's breath take. the ability they have to really decide what they will and won't talk about. you know, we can't do that in this country, certainly. that's both an advantage and a disadvantage in china. ultimately it's a disadvantage, of course. but look, i don't think this is about a broader reformist

versus conservative fight. >> rose: even though we had taken a kind of marxist, not marxist but maoist language. >> he did. >> rose: and sim-- symbols. >> you can certainly paint him in that manner. but it wasn't what he represented that was a problem. it was the fact that he was engauged in surveillance of you had jintao when he came. it was the fact that hetion head of security went to the american consullate in chengdu and stayed there overnight and god knows what secrets the americans found out this was an embarrassment for the chinese and it was a very self-aggrandizing individual. keep in mind, this is a country where they've got blog sites that look at chinese officials and see what kind of a watch they are wearing and how much it's worth. they don't differentiate themselves very much to the public despite all of the billions that they're worth. and when you have someone whose's out there that is saying this is about me,

that's not someone whose's likely to survive very long in a party that is all about consensus. this was the nail sticking up and he's been hammered down. >> meaning what happens to him. >> meaning i don't think we're going to hear very much from his -- >> i think political future is the least of mr. bo's problems at this point. >> what are the worst of his problems. >> well, when you're talking about engaging in surveillance of the head of the chinese state, this guy could be executed. i wouldn't want to be him right now, i wouldn't want to be his wife, his family, one of his con fed rants. i think those folks are going to get purged one way or the other. >> rose: but the best days are behind them. >> their best days are well behind them. i also don't think this is an issue that spreads throughout the higher echelons of the chinese communist party nor does really affect the transes. >> rose: but there are those who look at this and say this is a problem china has. it's a problem of core runtion. >> oh, yes, it is. it is that. because let's face it, if

you live in an environment where your top hundreds of officials are not just engineers and not just really smart guys, though they are that, but they are also worth billions and billions and billions of dollars, well, you don't want that information to get out. and yet we live in an information society. you remember when wiki leex came out in the united states, right. >> rose: yes, i remember. >> i was in the emirates at the time and i was seated next to a minister. >> rose: you hang out in the emirates but i don't. >> i don't hang out in the emirates, that's not truement i was there for the weekend. >> rose: for a conference or something. >> some god forsakeen conference and i was sitting next to some minister from qatar without said to me that we believed that we actually leaked wiki leaks ourselves because it made us look so good. >> rose: there were those kinds of conversations in which diplomats were heard, unknowing to themselves, that they might be later seen and heard to everybody who could go on the internet ths

and positive things and things that were in the interest of good things. >> indeed. and look, what did it reflect. what we learned from wikileaks, we learned that karzai was corruption. we learned that christina kirchner in arg stin-- argentina was considered by hillary clinton was considered to be emotionally unstable, shocking, right, shocking. >> rose: bring it back to china. >> if wikileaks were to hit china which say real feasible possibility, if you were suddenly to have a dump of millions of documents between top level chinese party officials, and that were to become known by the average chinese, this would not make the chinese look good this without lead to purges. this would lead to executions. it could lead to a military coup. the brittleness of the chinese system requires the control of information at the top levels. and that's the corruption, the endemic core ruping that you are talking about. that's what what bo

represents, it's to the about a fight within the system, it's about the corruption of the system that they have to hammer down. an we're moving towards a world where this is going to be the largest economy. that has to concern us. all of us here in the united states. we have to worry about that. >> what is the moment that they are at, how would you characterize this inflection point for china? >> they are looking at new leadership. >> they are. >> rose: does the fall of bo affect the leader to be? does it give him more support because he represented some other -- >> i think it makes them a little more cautious. it makes them a little more risk averse, it makes them a little more careful making sure that they're not doing something that could necessarily draw too much attention to themselve. it basically reinforces the preexisting system. it's all about consensus. it's very incremental policymaking on currency, on

trade, on policy towards the united states. and this for a system that desperately needs to restructure itself to continue to succeed is a challenge. it's a very big challenge. i mean for five years now we've been focused on what, the financial crisis and the u.s. and then the european crisis. and now the middle east and iran and oil. the reality is what we should be paying attention to is china, that is by far the biggest issue out there and finally we're starting, i feel like we're just starting to turn our attention to that big issue. >> that brings me to every nation for itself, winners and losers in a g-zero world. china and the united states would seem to me to be a perfect g-2 world. do we want it, do they want it, if we want it could we have it, if they wanted it, could they have it? >> right now, no. the chinese don't want it. and they're very clear they don't want it. they do not want to be

responsible stakeholders, right. i mean this is what we need for a g-2. we tell the chinese this, bob zeller famously came up with this expression. but from the chinese ear, us telling them we want them to act that way, that says number one, we want you to act like a rich state even though you are not. number two, we would like you to also support a system and institutions and rules of theoad and standards that we created even though that benefits us and our corporations more than it benefits you. that is not the way we put it but that's the way they hear it. and the willingness of the chinese to sign up for that is not no but hell no as my mom used to say, right. it's not happening. so we're to the going to live in a g-2. and of course over the last four years since the financial crisis, if you had to paint a trajectory of the u.s. china relationship, it's not been in a more consensus sul direction. it's been towards much more managing of structural conflict. >> because it's in the united states interest or

not to have china, a strong china, united together, looking at problem areas in the world. >> it is clearly in our interest to get china to see the world through that lens. to the extent that obama has a doctrine and he tries to avoid doctrine because it ties them to long-term strategy and the rest, the doctrine that he has is really this pivot towards asia, right. articulated very clearly by hillary clinton, they've made trips over there, they met with the allies. and what the pivot to asia really means is we welcome a peaceful chinese rise. as long as they behave the way we want them to. but if they don't behave that way, and by the way we're not really expecting them to, then we have a hedge. and what's that hedge. the hedge is containment and it's being demand by all of our allies in the region because we don't expect the chinese are prepared to act constructively with the u.s. on a host of issues whether it is iran or syria or the east china sea or the souts china sea or cybersecurity.

the list goes on and on and on. >> rose: we do not see that. we're on different sides of all those issues. >> we're right-- . >> rose: certainly those issues close to them geographically. >> i think that's right and some of the issues that aren't close to them geographically. we don't expect that level of cooperation. >> rose: so therefore our policy is to contain them? or at least satisfy their neighbors that we are with them. >> i think our policy right now is not yet to contain them but it's to create cat passit ot contain them if we get to the point that we think that that is required. it's prudent. it's cautious. so funny when we saw that debate that little debate in the teapot around who was america's number one gee political foe, remember, romney said it was russia. which was, you know, only 30 years out of date. obama said it was al qaeda which is only a few years out of date. in reality, of course, it's china. i think china is the voldemort of perk's geo political pose. it's the war that must not be spoken, china. but the reality is if you've

got a problem out there right now, if you look at where we're spending our money in concern about the long-term, whether you talk about economic state craft and our policy to try to create something to deal with state capitalism or you talk about the money we're spending on cyber or the pivot towards our allies in hard security with the australians and philippines and the rest, what's that b it is to the about al qaeda, it's to the about russia. it's about china. don't listen what our politicians say, watch what america does, what america is doing is setting up a policy to be able to hedge, and if necessary, contain a chinese rise that is not aligned with the behaviors we would like to see. >> rose: and the chinese say to themselves, i assume, the most important thing for us is to continue and stabilize and sustain the rise. and to do that, we want to ensure our prosperity. we want to ensure that we have a steady supply of natural resources. and we want to ensure that some destabilizing event

doesn't overtake us. >> that's right. and all of those things as you very correctly pointed out are about china domestically. >> rose: right. >> none of them are about let's make sure iran doesn't close the straits of hormuz, none of them are about let's make sure the syrian civil war doesn't metastasize around its borders. none of them are about let's make sure the europeans don't have this horrible recession that they cannot emerge from. china just has no interest in providing that kind of leadership, the leadership that we have grown so accustomed to see through a g 5, g hfer 7, g- , a g-8, a g 1 which was america, its capitals allies and interests for the last half a century. >> rose: in terms of allies, who are china'slys? -- china's allies. >> you know, it's hard to say today that china has a strong system of allies. they certainly have a system of countries that rely on them greatly.

that's very different. because allies require a level of shared values and interests that have real permanence, or at least longevity to them. the united states certainly has that with many countries around the world. china as you know, they've had this policy of noninterference and nonintervention. they have a country economic system of state capitalism which is focused primarily on china. and they look to build quid pro quos. we'll give you x money, you'll provide us y resource. we'll give you x military support, will you provide us y political allegiances. this happens all over the world am but the number of countries out there that would say we consider ourselves a strong ally of china, even you go to chavez and venezuela, even burma, myanmar, which is trying to open up to the u.s. right now, these are countries that are very dependent on the chinese. but i don't know that they would necessarily call themselves allies. and again, think about what that means when china becomes the world's largest

economy. it is a very different system of interrelations between sovereign states. >> rose: let me go to europe for a second. >> sure. >> rose: where do you think we are in terms of handling, or are where are they in terms of handling that criesment and how fragile is spain today? >> well, we are not going to handle the crisis. and you know, sgooitner is more than happy to get on planes but he's clearly not going to provide the support. >> rose: he does to the come with cash in hand. >> he does not come checks to write and neither does the join ease or anyone else. now i think if you went to chancellor merkel today and you and i have discussed this in past years. if you went today and asked her, is she impressed, surprised with the level of austerity and commitment that she has gotten from most of the peripheral governments, leave aside the greeks who are small and have their own unique arrangements. i think she would say yes. i think german leadership together with the european core and european institutions like the european central bank have

together really moved towards more effective governance of fiscal policy, of the periphery. and you particularly see that in italy. but i also think that now that the european crisis is no longer as urgent as it was six months ago, 12 months ago, the ability of the germans-- . >> rose: what makes you say it is no longer as urgent as it was six monthsogue. >> the feeling of pressure on the germans to now that they've provided so much liquidity through the ecb, now that you have done the initial bailouts and you've expanded with some support from the inf, the ability. european corps to continue to lend, you're no longer feeling that level pressure from the markets that you did six months ago. people said six months ago people were concerned that the your eurozone was going to praguement. i did not believe testimony but people sitting around your table did, right. >> rose: right. >> that really is not the risk that we have today. and you see that. >> rose: the eurozone

survives and the euro survives and there will be no splitting of the southern half. >> that's right. i mean multinational corporations are starting to invest again in europe precisely because they see that. but the converse of that, the other side of that coin is that you have got the german opposition now saying you know what, we're not going to stick with merkel on this austerity the way we did. you have got aland in france who may not win that election saying the same thing. a breakdown in the dutch government, the italians doing a fantastic job but no way is he as convinced that austerity is the way to go. >> rose: when you lock at the political dynamics, is it an individual rejection of particular people, whether it was berlusconi for all kinds of reasons in italy, whether it is in france because there was a kind of dislike of sarkozy from the right and left. or does it suggest that the political wisdom or the political opinion is basically becoming more

state central and more leftist. >> i think that there's a large anti-incumbency sentiment right now across europe. because you've gone through this he more losely difficult, painful broad recession. >> and if are you in pain you want to blame somebody. >> unemployment levels in europe right now across-the-board are at record highs. you want to blame someone. obama has this problem. look how powerful incumbency is in the u.s. and obama is barely a favorite at this point. >> rose: if it is a referendum on president obama's economic policies, he loses. >> i think that if it's mostly a referendum on obama's economic policy, he loses, i do. and i think that that's true simply because we are in fairly unique economic times. this is the worst recession that we've gone through since the great depression. added to that we're recovering. the country is recovering but a lot of the people an. and that's because-- it's to the because of obama. it because of globalization but will take the hit for that i mean you don't get to choose when you get to run. you don't get to choose,

sort of, what kind of a system you are going to be in in four years done the road. reality is those jobs aren't coming back. he's got to deal with that. and people will punish him for that if that is what we focus this election on. >> rose: when you look at the economy in terms of its recovery, what stands in the way of the recovery? >> well, oil prices. >> rose: europe won in oil prices within europe one, and oil prices. >> rose: the long-term. >> the long-term recovery we stand in the way of recovery. america stands in the way of recovery. not investing in our own long-term. see, what concerns me about what i call the g-zero world is that it's not, it doesn't create urgency for the united statesment it doesn't compel us to action. and if we decide that we don't want to bomb iran or press them to change their nuclear issue, that's a problem for us, that's a much bigger problem forchina over the long-term. if we leave afghanistan, obama goes and signs that agreement.

it's a much bigger problem for pakistan and india than it is for the united states. we're to the going to be force odd to fix our deficit in that environment as quickly as we should. we're to the going to be forced to deal with infrastructure, critical infrastructure in the u.s. that is failing. >> rose: what could force us to fix it. does not the sense that if we don't do something about debt, we will be a-- we will be greece. >> well, i guess that's my point. is in a g-zero world were things are much more volatile and risky, you will have what we like to call a safe haven curse. the curse of being the safe haven, the united states is going to be seen for the next few years as still a place that's safe. and so the chinese will complain about american policy, but again don't watch what they say. watch what they do. they going to pile money into u.s. treasuries. equities, look at the equities now in the u.s. at the levels that they hit, highest since we've seen in the financial crisis. people are making money in the united states betting on those equities.

that is not the environment that forces you to deal with the deficit. and yet we need to deal with the deficit. >> rose: but isn't it essential? >> well, when you say it's essential that implies that it must change and you could have said that two years ago and yet we're not doing it. i think one thing that we're really good at -- >> but each time we don't do something about it gets closer to a point in which we may find ourselves unable to do something about it. >> i think we fool ourselves. >> we fool ourselves, you're right but we fool ourselves into saying that we can't that we won't tolerate the things that we say are intolerable. but what we say is intolerable, freakley we get into that situation, we find out we can tolerate it, this is a boiling frog problem. this is not a suddenly jumping in. you got the frogment he's in the water. you turned it up but you turned it up slowly. he ain't jumping up. we need someone to turn that water up a little faster on us, right, now. that is the problem. >> rose: is that what happens with the frog. >> frogs get boiled. i don't want to be that frog. >> rose: but only if it is not too hot. >> only if you turn it up a

little bit at a time. >> rose: before they have the capacity. >> dead frog. >> i never understood that, now i understand it. so how do things get decided if a g zero world. without becomes winners and losers and why? >> well, first of all, winners and losers in the g-one environment with the united states leading globalization, awe line yourself to that and everyone focuses on growth. in a g-0 environment, you want options. you want to be able to adapt. you want to play the u.s. but you want to play other countries too. countries that can adapt what i call pivot states are the winners in this environment. right? mexico is with the united states, for good or for bad, right. tourism, remittances, trade, drugs, it's all us. if we decide that we don't want to build a keystone xl pipeline to canada, i know 1.3 billion chinese that would love to have a bridge for energy that comes from our northern neighbor. right. canada has options.

and there are a lot of countries around the world that are in a canadian type situation. turkey is in that kind of an environment. they pivot well, ukraine doesn't, they're stuck with russia. taiwan is stuck with mainland china. >> rose: so you want the ability to pivot. >> you desperately do. >> rose: you want two bidders. >> you absolutely -- dush want to play the field in this environment you want more than two bidders. >> rose: canada is a good place because they have all the energy. turkey is in a good place. who else is in a pivotal place. >> i would say almost all of subsaharan africa, they don't get just get crabbed by china. everyone wants a piece and not just because of commodity. it's also because 50% urbanization. they are developing better governance, they are getting educated, women are getting educated, more sustainable demographic. >> rose: what you have here is no country can veto. >> uh-huh. >> rose: countries. >> yeah. >> rose: countries can veto. >> countries can block. >> rose: they can block but they can't necessarily build the kind of winning coalition. >> yeah. that's where we are. you know, you look at what's

happened around syria. and you know, the russians and the chinese are saying we don't want to support any action that would really resolve this environment. >> rose: but why do they say that? >> well, the russians believe, i think it's mostly about shall ka. the russian view is if they have leverage on anything, they should be paid for that leverage. and if we're not willing to give them anything, well this is for everyone's good. >> rose: any leverage meaning the fact that we still are influential country. >> yeah. >> rose: and we'll show you because we will support syria. >> yeah. and of course they have military bases on the ground. >> rose: that's right. and of course we have had a relationship, when you give a lot of money and provide a lot and pay for it and we are anticipate happy about that. >> yeah. >> and i think when you asked before who makes decisions in this environment. >> rose: yeah. >> what happens, in the middle east especially, the g-zero in the middle east is really problematic because no one externally makes decisions. which moans decisions get made by local players, but who are the local players in the middle east there are three that matter. saudi a raineas, there is iran, and there's turkey.

there would be egypt but they're distracted. those three countries -- >> those three countries have completely different preferences. the saudi's support largely sunni, arab, monarchyes and militaries, the status quo. the iranians support largely disenfranchised shi'a populations. and the turks support largely secularized urban middle classes. so if you are i sag the rest of the world is going to leave the middle east to their own devices and these three countries are going to pursue their own interests, that doesn't create integration. that tears the middle east apart. you get economic proxy fighting, and military proxy fighting. and it should not surprise anyone in a g-zero middle east today f i look across the whole region, the only states that i see right now on a defineably positive tra jeck other is tunesia. >> rose: because they got the politics right. >> they got the politics right. they've got a lot of money coming in, they are a small country, they have part technocrats that are involved in the ministries

now. but we're not going to make our middle east bet on tunesia as much as i like the tunesias. >> rose: we haven't said much about latin america where there is a big emerging nation there, brazil, and chile. >> uh-huh. >> rose: what about them? >> i think that latin america is quite fortunate in that first of all they are relatively isolated from the big geo political tensions of this shifting map. >> rose: they are shipping goods to china like crazy. >> and not just china, although brazil and chile, their largest trade partner as of right now is china, of course. but the brazilians, it's funny. you talk to-- she has a much more balanced view on the united states and china than lula used to. >> rose: she was more pro u.s. >> at the beginning she was much more of a fan of we are down troden, we're you will emerging markets, we want to be part of the bricks, having said that, rouse ef concerned with issues worried about the chinese coming in and buying up all of their land for soybean

production. she, and she sees china as a country that you need to be very cautious about. and you want to maintain good relations with the u.s. good relations with the chinesement actually very sustainable for brazil. >> what's the role of giant multinational corporations. the epitome of globalization, likes exxon, mobile. >> big multinational corporations did incredibly well in the u.s.-lead global system. what they want is one global market, access to one consumer pool, access to on set-- one currency. that's the way they are efficient. there was a uniquely efficient environment for big multinational corporations. the g-zero is more problematic for multinational corporations because the market becomes more fragmented. >> every nation for itself is the name of it this book, winners and losers in a g-zero world say subtitle. listen to the people who endorsed this, larry summers,

global political economy, has no sharper or pres cents analyst than ian bremmer, larry summers said that, fareed zakaria. mutar kat. >> norell rubini, dominique barton, sir martin sirel, the list goes on who are endorsing this book. thank you for tacking time to see us. >> thank soches for having me. always a pleasure. >> rose: back in a moment, stay with us. >> steve coll is here. the president of the new america foundation. he is also a two find petroleumitieser price winning author, also a staff writer for "the new yorker" magazine. for 20 years he was a foreign correspondent and senior editor-- editor at the "washington post". in his new book private empire, exxon mobile and american power, he investigates the world's most profitable corporation which in many ways operates as its own sovereign nation. a case he makes am i'm pleased to have steve coll

back at this table. welcome. >> thank you, charlie. >> rose: here is the question, i read the title of your book, the most recent bin laden, before that ghost wars, grand trunk road, eagle on the street. then the taking of getty oil then the deal of the century. is there a common denominating here in mr. coll curiosity. >> big institutions that are closed and important, some of them governmental, some private. i used to be a business investigative reporter when i was a young journalist starting out. and spent some time on wall street in the old ivan boseky era. and then went abroad. i think this book to me lives in the world of sort of america after 9/11. i was out doing ghost wars to try to report on the ant sedence of the attack as they were locate in the american covert policy in pakistan, and bin ladens which is modernization in saudi arabia, and when i finished that project up and you had me on, we were

talking about it a few years ago, i was thinking, it's time to update the question of how oil figures in america's place in the world. spending a lot of time in saudi arabia maybe will do that to you. and so i went out to try to update the prize. this great dan yerg bergen, which val about the era of discovery and expansion in the oil economy. >> rose: how big oil became big oil. >> exactly. and what seemed to me relevant was that big oil was still out there but the world was a world now constraints. a world of limits and risk. and so i wanted to go tell a story about that. >> rose: how did you settle on exxonmobile. >> well, so i actually started out with a wider aperture when i did my research. i didn't choose them immediately but i got about six or eight months into the project and i thought i needed a story to tell. i needed a company. and once i came to that conclusion. >> rose: you need aid character, that became exxonmobile. >> precisely. and once i thought that i needed a corporation to focus on, they were really the only logical choice. so they sort of chose me is the way i would think of it.

>> rose: are they a country unto themselves? >> i think they are. they're not the only multinational about which you would say that but they are large. and they are business model is distinctive from say google or apple or wal-mart or other very powerful multinationals. that i think are probably best seen as sovereign. >> rose: how is it distinctive. >> they go out in the world, they drill holes and sit on top of the holes for 40 years at a time to reap the value of them. and that puts them on terra firma in the world. in a very interesting way. and it involves them in politics in a variety of countries in a very interesting way. and then there is a second factor. their access to oil & gas is much more constrained now than it was just a generation ago. of course in the 1960s and '70s they owned large chunks of a ramco and saudi arabia, they owned part of the iranian oil company and the iraqi oil company. and they never really worried about finding enough oil & gas to pump out and sell. well, resource nationalism,

nationalization drives in the middle east in the 1970s, the the idea began there and spread all around the world that countries that are capable of owning their own oil ought to do so and ought not to allow companies likes exxon mob toil have a piece of it so the result of this is that they've been driven into weaker states, into higher risk environments. so about a quarter of their liquides production over the last ten years, oil & gas liquides is from west africa. they're in places that they wouldn't otherwise want to be like chad or eck qa torial new guinea. >> rose: and they're in the oceans. >> they're in the oceans and that is the other important point is in order to find oil & gas that they can own and that they uniquely can produce to create value for proud countries that wouldn't otherwise let them in, they have to go into high risk geological environments. and so one of the tensions in this company's world is that they are a very orthodox conservative, rule-bound culture, highly disciplined, focused on disciplined operations,

disciplined financement but the world that they have to work in is one of rising risk. so this risk management equation, i found fascinating both in a political setting in places like africa, but also as a business proposition. >> rose: which means that they have to do two things. you obviously state this very well and eloquently. number one, they have to know the science of drilling. >> yup. >> rose: you got to stay ahead of the game to find oil because it is more difficult to find t costs more to find it. >> yeah. >> rose: on the other hand, because you don't o own it, you now have to be involved in the art of politics. >> right. >> rose: and they do that pretty well. >> they have a mixed reputation, i think, among their peers. it's a world of partnerships now and what's attractive about them is their performance. they're seen in their industry as the best performers. so if you and i were the codictators of an oil-rich country and we were shopping for a company to develop our oil, i would welcome exxonmobile to present their power point because i think their record shows that they would deliver the project on

time and on budget and they would cut us the checks they said they would cut us. and we would get more cash, potentially by partnering with them then we would with other companies. certainly more than we would with chinese or russian companies. but after they left the pitch meeting, gasprom or the chinese companies might come in and they might offer something exxonmobile kobts offer. maybe their record of actually drilling and delivering isn't so great but they are offering soft loans and arm sales. >> rose: they come as a government. >> they come as a government. and that's another constraint that exxonmobile wrestles with. they are competing against government. >> rose: what is the culture like inside? >> it's unusual. it's an insurance lar culture. i think it is comparable more to the marine cops than some of other businesses that dot its top of the american sort of corporate landscape. >> rose: meaning they are disciplined. >> and it is also a place where you stay for life. i think if you looked at the top 100 shareholder-owned corporations in the united states and then you looked

at the top 30 or 40 positions in those companies, typically would you find a fair number of people at the top who had come in laterally from someplace else. maybe from a competitive company in the same industry. maybe from another industry. brought with them fresh ideas and outside perspective, a reforming attitude. and exxonmobile, people are recruited out of undergraduate and graduate school. there is a kind of upper out threshold, about six or seven years in, and then those who rise to leadership do so as a cohort. it's like the marine corps in the sense that if you want to be a marine corps general, having a successful career at ibm and moving laterally in is not an optionment are you going to come up from the bottom. that is the soph their culture. it has its advantages and also has its disadvantages. >> rose: but in terms of i mean the close nit community s it a community that looks with certain skepticism to outsiders, is it a culture that is now transparent. >> i think all those things are true. i think they have a kbafk

strategic problem which is that they are not especially well liked at least in the country where they have their headquarters, the united states. and you know, sometimes i sort of thought that their strategic posture was a defensive krouchl. but one that was also very focused on success. >> finish this question. because you say exxon largest, biggest oil company, already people have a mental image of what that means in certain negatives to go with it. >> right. >> rose: so what did you find when you went in search of that image. >> that is exactly what i was trying to do, to understand what it's like to manage the problem of being disliked. >> rose: right. >> if you are a very large corporation. and so one of the things that i discovered was that of course these are all smart people and they think about this in a sophisticated way. and they ask themselves, for example, okay, how can we fix this problem. and one way to do it would be to look into history for a golden age popularities where you commod el a strategy. >> they do that actually there isn't one, okay. all the way back to the standard oil breakup in

1911. and then another way to think about the problem which is i think where they have often come out is they ask themselves why does it matter. why does it matter whether we are disliked. and to some extent it sort of is reassuring to tell yourself after you ask that question, aht doesn't much. and i bond wler that's correct, locking ahead. because the world that they are competing in is tougher and tough ter. and they need great tall en. and you look at young people today coming up in the sciences or engineering. you look at the diversity of the world's talent. are they really going to be able to recrout and retain the very best and the brightest if their culture is closed. and if their rep takes is such that when a young scientist goes home for thanksgiving dinger and tells his cousins where he works, there is a sort of sucking in of breath, you know. you know what i mean. whereas if you go home and say i work for apple, and everyone is like oh, tell us about what it is like. there is this, also, the

notion that that they as a company want to maximize their profits. and that therefore they want to in a sense rather than look and find alternative source of energy and develop them and spend money on them, that they really want to maintain the dominance of fossil fuel. >> well, you did, in 2005 i think, the best interview that's ever been done with the dominant chief executive of exxonmobile's recent era a guy named lee raymond, as you may know am and you did a fantastic two hour sper view which was the foundation of my early reporting am and lee raymond i think said toy and also in a couple of other settings that he wanted to go to the corporate headquarters of exxonmobile and find a granite plaque and emblazon on it the words "crude oil", to remind everybody what business they were in. and i think there's still a kind of corporate culture of purism. and they take a pride in it

in comparison, say, for example to bp's strat go during the sort of tony blair era. remember when bp rebranded it accept just bp, no reference to petroleum. and they had a picture of a sun with green sort of trim on it and the exxonmobile. >> rose: to the deriggs of some of their competitors wnd and most emphatically exxonmobile, which did point out that bp's revenues were still 98 or so percent derived from oil. but its question is you are an oil & gas peirce, granted. is this a viable strategy for the next 50 or 70 years. and they spent a fair amount of time analyzing that. i think they've come to one conclusion that does mark a partial change of direction, some of it has been forced upon them. some of it they have chosen which is they are pushing toward gas. >> right. >> rose: . >> much more than before. and partly that's because of the explosion of opportunity on shore in the continental united states with unconventional gas,

so-called. and what's attractive to them about that, given how hard it is to own oil & gas in some of of the world because of resource nationalism as we were talking about earlier, in the united states, property rights are sacrosanct. everybody can own whatever they can buy. so if you can beat the regulatory impediments, at least the question of nationalism does not a rise. you can actually own what you can find and produce. >> he argued that they tried, that think made a serious effort to drill not alternative energy equation. >> yeah, he lived through it he actually shut that division down, i think, in the 80s. >> finally decided that there was no there there at this time. >> right. >> because it has to do with on the one hand, knowledge. and on the other hand price point comparisons. >> that's right. and exxon mobile has long had the view and i think still has the view that there is no sense, especially at their scale, where the numbers are so huge, there is no sense investing in energy systems that require a government

subsidy to be competitive. they essentially have again this independent sovereignty but a strategy that is intended to outlast government policy over a 30 or 40 year period. and if you really want to make these long-term large scale investments, you really can't do that on the basis of short term political decisions about whether to subsidize solar or whether to subsidize wind it almost doesn't even matter about the ideaological elements t is a strict actual problem, first of all. second of all, they look at the energy system, and they ask especially of their side s this new, whatever it is, batteries or wind or solar, can itological scale up to serve the great majority. >> and i think so far they haven't found anything that they believe in enough to invest. >> the criticism that comes certainly in the political world is that so they are making all this money. you know, what are they doing, and they get raped over-- raked over the coals

when they appear before congress people, because congress people are appealing back home saying look, i took on big oil for you and oil prices are up here and they are making tons of money, and what are they doing with it. what are they saying to that? >> well, the politics of this is at the pump. and they have a funny business. i came to appreciate it. their customer goes to their store in effect, the exxon gas station, and they take out the pump and put it in their car and they look at price is 20% higher than it was three months ago. and they associate that change with this brand, exxon. who is responsible. you jerks, you didn't even tell me this was coming. now no retailer currently tries to have a relationship with customers in which their systemically punished by prices, you know, but the truth is it is an involuntary problem. i mean exxon mobile doesn't control glob will a oil prices. >> unrest in the middle east or nigeria wants that affects supply and demand.

>> exactly. but there is also in an interesting way, gas pump metrics, maybe the most powerful metrics that we can, everybody can identify with that. >> that's right. >> and in fact there's a very interesting moment in the narrative that involves lee raymond in 2005, described a board meeting in japan where he basically says to the board, because of this problem, we can't control the pricesment and by the way, we don't make a lot of money at the pump it is not the most profitable part of the oil industry by far, it's really at the well head that you make your money. and we're unpopular because our brands is splats erred over all these gas-- we're the only company in the world that puts our brand and a price people don't like all over streets, all over mark. why don't we just get out of the business. why don't we just become like dupont or some other very large industrial enterprise that nobody ever thinks about when they get up in the morning it is not as crazy a question as it sounds. they have, in fact, been exiting some of the retail business, but i assume because they have toll realize its value. >> rose: to get out of it,

what would they get into? >> well, they would just allow other people to sell at the last points of the chain. >> rose: i see, be out of the retail end which is identified with the consumer. >> but the problem is that in order to exit that business they have told radioize value for their shareholders, they have to el is the name to somebody. so the name exist, he they get the worst of both worlds. >> rose: it is the reverse of what apple did. apple made products, other people could sell, and decided the retail business, they could control and therefore by their sense of design and understanding of the process, could maximize a profits at that end more so than having somebody else buy it at wholesale for them. >> and the gas station business in the united states, i came across a trial involving a big gasoline spill from an exxon station in baltimore and through its transcripts of that trial got a real portrait of what it is like to own gas station in america today am you don't want to do it i mean it's a low margin, high risk business. and there are always kinds of spills that you can't necessarily control that

will you pay for. >> rose: the argue comes up if there are is an oil spill, wouldn't have happened if it were safer, wouldn't have happened if they searched for oil in places they couldn't endanger the ecosystem. >> we were talking about before, it is a fact of life in the global oil industry that if are you a private corporation like exxon mobile, your opportunities increasingly lie in high-risk areas, frontier technology issues involving deep water, ago tk and over difficult climate conditions. and so it's sort of, exxon mobile prides itself and has a record to just few some of this pride that in their peer group they are very disciplined operators. their record is a lot better now than it was at the time of the exxon valdez and yet they have accidents. their pipelines burst, their spill os kur, maybe their systems are stronger so they could contain them at a certainly level. but the reality is that this is sort of like aviation in

the 19 30ss. you know, we figured out what airplane kos do by having a bunch of craves. >> private empire is an interesting tight el. and appropriate tight el. exxon mobile and american power. how are they different than you thought you might discover. where were your conceptions changed or affirmed. >> i sort of assumed that it couldn't be through that they were just an instrument of the bush administration or aligned in some way. but i didn't quite know what the alter-- alter difficult hypothesis would be when i started. so i was intrigued to discover ot extent of their independent attitude about foreign affairs and global affairs. and i came to understand that they're self-conscious about their sovereign teen like a lot of self-multi nationals but maybe more so than the great ma joferment and in relation to the united states government, whethered clinton administration, the bush administration, the obama administration, they are probably better understood more like france. they are sometimes aligned with the united states. they are sometimes o posed.

mostly they are just trying to stay out of the way and do their own thing. >> poor france, everyone is always saying -- like france. >> not a compliment, i guess. but they're structural. they are not an instrument of the american government. win other point, every industrialized -- >> this is lee raymond who i consider a friend. we got to know each other after this had many conversations, much tougher than what you will see here. he is a very interesting man and a very bright man, would you agree with that, wouldn't you. >> yes, absolutely. >> rose: and here he is in conversation with me talking about what he does, investing in oil. >> the point i would make is that we operate in a lot of countries around the world and have for a long time, that wouldn't necessarily meet the definition of democracy the way you design it. that's the nature of this business. we don't, you know, we don't choose, we don't choose the government's in the places where we operate. and we often --

>> some of your critics probably think you do. >> yeah, well, we don't. we see governments come and go. as you would expect type of thing in that con fix-- context i do think russia under the right, what i would call commercial terms is a good place to invest, the answer is yes, 's investing there now. we have a very, we had-- we have the largest project in russia that we are managing off-- talkland island is there other opportunities in russia, yes, is yukos a largest energy company in russia -- >> and the chaerm is in jail. >> and the chaerm is in jail, yeah. but not because of-- not because of how he ran the company. >> rose: were they happy that there was conversations between mr. cataqorski and exxon mobile? >> that's a tough question to answer. and i'm not sure i know the answer to that, frankly. but on the other hand,

people there, certainly were aware of the fact that we had had conversations with yukos and we've talked to other people too. >> rose: there, that is lee raymond. go ahead. >> well, two things we see governments come and g that's so fundamental. because it's an indication of how they view their political position which is more durable than the average dictator in west africa or a term limited united states president. so the first thing and this yukos story is fascinating won the basis of this which by far the best record of what had actually happened as exxon mobile saw it i did more reportsing, and there is an amazing series of conversations that raymond had with putin about his proposal to buy the largest oil company in russia at that time. he meets with puttin at the new york stock exchange one-on-one and his purpose is basically to say look,

i'm negotiating with this guy, but i want to own a majority of his company. and i want you to understand. i want to you give me permission to own a majority of a russian company. if you want to own a minority share that's fine but i will be in charge. putsin says to him guess 25 mean if i want to do something with this largest oil company in russia i have to come talk to you. and raymond says yeah, that's not so bad. it's like that in a lot of places in the world. >> rose: but raymond would define that as having to do with what i am dwoing the business. >> by, yeah, but in the context, he is vladimir putin. so-- . >> rose: a lot of people come talk to me about what they can do. >> he's a head of state. >> rose: so how different is rex tillerson than lee raymond. >> different. he, i think came to power at the corporation the a a time when the board and tillerson himself and he said as much, and others felt that they should make a better effort to communicate in a softer

way, perhaps, than lee raymond had done. lee raymond was enormously successful as an executive and he left behind a record of financial accomplishment that is pretty much unpatch matched in his peer group. and yet he was very direct as we saw in that tape and otherwise. and so tillerson has tried to change the sort of tone of the corporation to some extent. he hasn't really, he didn't make loft strategic depar turs. he ran the company that lee raymond left him until 2010 when he made one distinctive bet to start to define his ownera which was he bought the largest unconventional gas company in the united states, xto, 2010. and now he is starting off in that direction, i think. >> you start with exxon valdez am tell me how you decide on a start point and an end point for a book. once you decide who your principal character is. >> right, so that was the corporation, and the two chief executives, the two kings, who hit sovereign

rn-- and i tart started out thinking i would begin with the merger with be moil where exxonmobile becomes the largest oil corporation owned in the world not by a government. and i would sort of researching along those lines and then in 2010 when deepwater horizon happened, i thought well maybe i should go back and take the valdez spill a little more seriously. and one argument for doing that the reason i ultimately did it was that the valdez within exxon mobile was such a trauma that it lead to a real campaign of reform that lee raymond led. he used the cries toys remake the company and to instill these global idiot proof automated systems t would make it kind of a missery to work there, in my opinion but they are very affect any the sense of instilling uniformses universal discipline. >> how did you choose the ending. >> i wanted roughly to come forward to the deepwater horizon spill even though it wasn't exxon mobile. there was this delicious moment that i, in the

research where the former chairman of bp john browne published a memoir in britain about six weeks before the deepwater horizon. it wasn't published in the united states i think for a reason. but in it, he recalls that when the exxon valdez pill happened, he happened to be in alaska visiting bp properties. he heard about it and he ordered a helicopter to fly over prince william sound and see the terrible damage. and he's recalling this moment in the memoir, all these years later, but without the foreknowledge that the deepwater horizon is about to destroy bp's reputation. and he says i flew over and i saw the black slick spread on the sea and i thought about off the whales and all of the wildlife that would be damaged. and i thought to myself, there is now one corporation in the world that will be the most hated. and that's exxonmobile. and so you see the world turns. and so one of should be careful about such-- but especially in a high-risk

business like oil drilling. >> do you know what you will write next. >> i do. i am going to write a secretary of ghost wars, american-afghanistan from 9/11 to the present-day or whenever the present-day. >> this bock again is private empire, exxon empire, steve coll, thank you for joining us, see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

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