Who Better for Energy Czar than Exxon Exec?

Originally posted: May 5, 2006

ken bode crop.jpgNot often do I pick up The New York Times and find a photo of an old boyhood friend on the front page. Under the headline, “For Leading Exxon to Its Riches, $144,573 a Day,” was a picture of Lee Raymond, formerly of Watertown, S.D., a fellow I used to pal around with and sometimes compete against on rival high school debate teams. I don’t follow the careers of many oil executives, but I have watched this one.

Lee was chairman of Exxon for 13 years, and the announcement of his lush retirement package could not have come at a more unfortunate time. World oil prices, the cost of gasoline and oil company profits all are spiking upward. Add to that the growing discontent about excessive executive pay, especially when company profits are falling. In 1980, CEOs made 42 times the average worker’s pay; today it has risen to 531 times.

But hold on a moment. Lee Raymond is not grabbing a golden parachute from a failing company. Since 1992, when he took over as CEO, Exxon’s profits rose from $4.8 billion to $36.13 billion and shareholders enjoyed an average annual profit of 13 percent. On his initiative, Exxon absorbed Mobil and grew into the largest, most profitable corporation in America. Raymond is being pilloried for being the best in his business at a time when oil companies are held in low public esteem.

Look more closely at what the CEO of Exxon deals with. He heads a company of 86,000 employees that does business in 200 countries and territories.

Exxon pumps more oil than many OPEC countries, including Kuwait. His job requires an intricate knowledge of the world oil markets and an ability to look into the future. Raymond has said he expects global Gas Money Clip Art.gifdemand to rise 50 percent in the next 25 years, which can only drive prices higher. He must plan that far ahead in a marketplace where two-thirds of the world’s proven reserves lie under the shifting political sands of the Middle East.

Exxon has kept Raymond on for an extra year specifically to deal with high-level government contracts between oil companies and heads of state. Not always the most diplomatic, he once irritated Vladimir Putin when he tried to acquire a defunct Russian oil firm without permission from the government. It takes a certain amount of brass to try to snatch an oil company from right under the nose of the president of Russia.

President Bush has a very large problem on his hands. A recent survey reported in Foreign Affairs magazine shows that concerns about energy independence now rival the Iraqi war as our most important foreign policy problem. Ninety percent of Americans view our reliance on foreign oil as a risk to security, and 85 percent think the government could do something if it tried. Bush recently laid out three goals: to reduce imports of Middle East oil by 75 percent; to develop new technologies and alternate sources of energy; and to produce more gas, oil and renewable energy.

The public seems ready to tackle the job. Now, Bush needs to find an energy czar wise enough to figure out how to get it done. It happens that the man who knows more about energy than anyone in the world is now available. Lee Raymond clearly could afford to come to Washington as a “dollar-a-year man” the way many did for President Franklin D. Roosevelt during World War II. His job? Put together a master plan to expand alternative energy sources and reduce American dependence on foreign oil.

In other words, apply the knowledge and savvy he acquired in 43 years working for Exxon to figure out how our country can best solve its energy problems.

For Raymond to run a Manhattan Project on America’s energy future would be an act of good citizenship and patriotism. It would mean setting aside the priorities of the oil companies, absolutely. Public service often requires that. New job, new goals, new rules. When he accepted an appointment from President Richard Nixon, Daniel Patrick Moynihan said, “When a president asks you to do something, it’s very, very hard to say no.”

Lee Raymond has been kicked around in the press for being too good at what he does. Let’s give him a new and more important venue in which to do it.

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