Exxon CEO Comes Out Against Fracking Project Because It Will Affect His Property Values

BY REBECCA LEBER/Think Progress

As ExxonMobil’s CEO, it’s Rex Tillerson’s job to promote the hydraulic fracturing enabling the recent oil and gas boom, and fight regulatory oversight. The oil company is the biggest natural gas producer in the U.S., relying on the controversial drilling technology to extract it.

The exception is when Tillerson’s $5 million property value might be harmed. Tillerson has joined a lawsuit that cites fracking’s consequences in order to block the construction of a 160-foot water tower next to his and his wife’s Texas home.

The Wall Street Journal reports the tower would supply water to a nearby fracking site, and the plaintiffs argue the project would cause too much noise and traffic from hauling the water from the tower to the drilling site. The water tower, owned by Cross Timbers Water Supply Corporation, “will sell water to oil and gas explorers for fracing [sic] shale formations leading to traffic with heavy trucks on FM 407, creating a noise nuisance and traffic hazards,” the suit says.

Though Tillerson’s name is on the lawsuit, a lawyer representing him said his concern is about the devaluation of his property, not fracking specifically.

When he is acting as Exxon CEO, not a homeowner, Tillerson has lashed out at fracking critics and proponents of regulation. “This type of dysfunctional regulation is holding back the American economic recovery, growth, and global competitiveness,” he said in 2012. Natural gas production “is an old technology just being applied, integrated with some new technologies,” he said in another interview. “So the risks are very manageable.”

In shale regions, less wealthy residents have protested fracking development for impacts more consequential than noise, including water contamination and cancer risk. Exxon’s oil and gas operations and the resulting spills not only sinks property values, but the spills haveleveled homes and destroyed regions.

Exxon, which pays Tillerson a total $40.3 million, is staying out of the legal tangle. A spokesperson told the WSJ it “has no involvement in the legal matter.”

Koch And Exxon Pay To Write State Legislation Repealing Climate Change Laws

By Stephen Lacey/Think Progress

According to tax records and other materials acquired by Bloomberg News, Koch Industries, Exxon Mobil, and numerous other corporations paid tens of thousands of dollars to write legislation for lawmakers that would repeal carbon pollution reduction programs in various states around the U.S.

These companies working to dismantle environmental programs are members of the conservative American Legislative Exchange Council, or ALEC, which allows private-sector parties to “pay-to-play” – charging thousands of dollars to sit at the table with legislators and craft bills.

According to Bloomberg News, Exxon Mobil donated $39,000 to ALEC last year and the Koch Charitable Foundation donated $75,858 in 2009, the final year in which tax documents were available. Both companies, along with BP, the American Petroleum Institute and the American Coalition for Clean Coal Energy helped draft legislation that has been introduced in Oregon, New Hampshire, Washington State and New Mexico designed to take those states out of regional cap and trade programs:

The eight-paragraph resolution, which was introduced in March, said “there has been no credible economic analysis of the costs associated with carbon reduction mandates” and “a tremendous amount of economic growth would be sacrificed for a reduction in carbon emissions that would have no appreciable impact on global concentrations of carbon dioxide.”

The model resolution was adopted by ALEC’s Natural Resources task force in April 2010, according to minutes from the meeting obtained by Bloomberg.

The group drafting and endorsing it included 13 legislators from states including Texas, Kansas and Indiana and 21 private sector members representing companies such as Exxon Mobil, Koch Industries and BP Plc (BP/), and trade groups including American Electric Power, the American Petroleum Institute and the American Coalition for Clean Coal Energy.

In April, Think Progress Green reported on a bill in New Hampshire written partially by ALEC that would take the state out of the Northeastern cap and trade program called RGGI. The text was eventually removed due to pressure, and earlier this month New Hampshire GovernorJohn Lynch vetoed another piece of legislation that would have taken NH out of RGGI.

There are five climate change-related “model laws” on the ALEC website and a couple dozen on energy, water and forestry. The pieces of legislation can only be accessed by people who have paid to be a part of the organization. ALEC has also written a model bill that would pull state agencies from potential EPA greenhouse gas regulations.

ALEC has been crafting legislation since the 1990’s. The organization retains about 2,000 state politicians as members and 300 companies and political advocacy groups as members. ALEC claims to be a bi-partisan group; however, Bloomberg points out that 97 percent of corporate donations among ALEC members to lawmakers went to Republicans.

Corporations are “paying for an opportunity to connect directly with legislators,” said Jeremy Kalin, a former Democratic Minnesota state representative. “It’s an end-run around transparency and disclosure laws. Corporate interests that would otherwise be required to register as lobbyists are writing legislation behind closed doors.”

The fact that ALEC is influencing state-level legislation through a “pay-to-play” model isn’t exactly earth-shattering news. But this latest revelation does show the direct role that corporate interests opposed to climate-mitigation efforts are playing in the political process.

ExxonMobil Finds A Home At Fox News

by Jocelyn Fong

Download Fox News' brand new iPad app and you'll notice something curious: there's an ExxonMobil advertisement on nearly every page, sometimes filling the whole screen. Click on it and you can watch a video of a smiling ExxonMobil geologist touting the natural gas boom. As the tech news website Mashable reported, this is because "Exxon is the exclusive launch partner for Fox News' iPad app":

"We decided we wanted to work with one sponsor," [Fox News' Jeremy] Steinberg said, explaining that there are always question marks surrounding a launch, so Fox News wanted a partner comfortable with that. He said Exxon, which is in the midst of a new branding campaign, thought the app was a perfect platform for broadcasting its message.

It makes sense that one of the biggest funders of interest groups that obfuscate the threat posed by global warming would team up with the news outlet that has done more than any other to promote misinformation about climate science.

The partnership further undermines ExxonMobil's 2008 pledge to stop funding groups "whose positions on climate change could divert attention" from the need to develop secure, clean energy. As an internal email revealed last year, it has been the policy of Fox News to question even the basic fact that the planet has warmed in recent decades.

Climate change is not the only issue on which ExxonMobil might find Fox News' coverage agreeable. Last month in the midst of both soaring profits for big oil and attempts by Congressional Democrats to roll back oil companies' tax breaks, ExxonMobil's spin could be heard on Fox News.

With the notable exception of Bill O'Reilly, many on Fox eagerly passed along talking points first outlined by ExxonMobil vice president of public affairs Ken Cohen in a series of blog posts designed to preempt any backlash against Exxon's massive first quarter earnings report.

"WE INCURRED A TOTAL U.S. TAX EXPENSE OF ALMOST $59 BILLION"

In an April 27 post, Cohen wrote: "Last year, our total taxes and duties to the U.S. government topped $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period." (Cohen repeated these figures in posts on April 28 and May 2.)

Cohen also provided the following graphic to underscore that Exxon has paid billions in taxes to the U.S. Treasury, as you'd expect the most profitable company in America to do:

Two days later, Fox Business anchor Lori Rothman appeared on Fox News' Happening Now to discuss Exxon's earnings report. During the segment, she aired ExxonMobil's graphic and stated:

ROTHMAN: Ken Cohen actually made a point to say yeah, ExxonMobil, we're a huge taxpayer in this company. They provided us with this graphic as part of their conference call. Pays more taxes than virtually any other publicly traded company in the United States. Look at that: 59 billion to the United States over the past five years, compared to earnings of over $41 billion from U.S. operation.

That night Lou Dobbs appeared on The O'Reilly Factor and said of ExxonMobil: "They pay $59 billion over the past five years. Their net profits from U.S. operations, $41 billion" (accessed via Nexis).

And on May 10 Ben Ferguson, radio host and frequent Fox guest, said on Fox News' America Live that Obama "should stop making these oil companies into evil companies.  I mean, look at the profits the other day of Exxon. They posted $11 billion in profits. They paid $10 billion of those dollars in profits went to taxes." He later added: "we're getting $10 billion out of $11 billion in profit from Exxon."

So what's wrong with Fox News reporting a company's tax bill? Well, nothing, if the numbers are accurate. But the reality is that ExxonMobil's claim to have paid $59 billion in U.S. taxes over the past five years, including $9.8 billion last year, is highly misleading.

Exxon inflates these numbers by including the money they collect from consumers for state and federal gasoline taxes. You pay the tax, but Exxon counts those dollars as part of its own tax burden. 

According to the Washington Post, ExxonMobil officials said that of the $9.8 billion in U.S. taxes they say they paid in 2010, $6.2 billion was gas taxes paid by drivers. CNN noted that Exxon used the same fuzzy math for the figures it gave for its U.S. tax bill the first quarter of 2011.

Not only that, but the company has been overstating its tax bill by counting gasoline tax payments for a while, as Robert McIntyre showed in 2006. But rather than letting viewers in on how these figures were calculated, Fox News simply repeated the disingenuous claim that Exxon's tax payments eclipse its earnings.

Fox News personalities also withheld important information from their viewers about ExxonMobil's tax rate. On the May 19 edition of Fox & Friends Eric Bolling argued that expanding oil drilling in the U.S. is good for tax revenue, adding: "Exxon pays 45 percent tax rate. Conoco, 42 percent. The oil companies are the highest taxed on the planet." Martha MacCallum used the same talking point while hosting the May 12 edition of America Live:

MACCALLUM: Lots of anger on display on Capitol Hill today over record profits for oil companies and the subsidies that they get from taxpayers. But we dug a little bit deeper into this story and the numbers. And we found that the three largest oil companies, ExxonMobil, Conoco Phillips and Chevron, pay at least 40 percent tax on their profits.  So their tax rate is 40 percent.

Bolling and MacCallum suggested that Exxon pays over 40 percent of its revenue in taxes to the United States. But that's not the case. The vast majority of Exxon's earnings come from outside the United States, and the figures provided by Bolling and MacCallum probably refer to the company's worldwide tax rate.

According to CNNMoney, ExxonMobil "does business in some of the mostly highly taxed countries in the world. Want to extract petroleum in Nigeria? Be prepared to fork over up to 85% of your profit in tax payments." BusinessWeek reported that "Russia and Libya charge companies up to 90% of the revenues they collect for extracting oil."

Those figures are bound to skew Exxon's reports on its overall tax rate and don't tell us anything about the tax breaks it gets from American taxpayers, or about how much expanded drilling would help the deficit.

As for what the company contributes to the U.S. Treasury, CNN reported on May 4: "Exxon's average effective U.S. income tax rate over the last six years is about 29%, according to the firm's security filings and an interview with a top Exxon tax lawyer."

"WE EARNED ABOUT 7 CENTS PER GALLON"

In an April 27 post, Exxon's Ken Cohen wrote: "For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That's not a typo. Two cents." The next day, Cohen added:

During the first three months of this year, for every gallon of gasoline and other products we refined and sold in the United States, we earned about 7 cents. Compare that to the 40 to 60 cents per gallon that went from gasoline consumers to the government (state and federal) in gasoline taxes.

Cohen repeated the claim that "we earned about 7 cents" per gallon in an April 30 post.

On May 12, when five oil executives appeared before the Senate Finance Committee to defend their tax breaks, Fox News correspondent Doug McKelway delivered a report during America's Newsroomwhich included Cohen's talking point:

MCKELWAY: Oil companies admit that they are making record profits these days when oil is spiking towards $4 a gallon but they say it's not their responsibility. They're not doing it. It's a reflection of supply and demand, increasing thirst for oil worldwide and also because of the commodities market. They say they're not responsible.

HEATHER NAUERT (host): All right, hey Doug, by the way, what do they pay in taxes? A lot of folks are asking that question.

MCKELWAY: An interesting statement came out from ExxonMobil earlier this week in regard to what they pay in taxes. I'll read it to you verbatim, Heather.  It says for every gallon of gasoline and other products we refine and sold in the United States, we earned about 7 cents per gallon. That's what Exxon says. Compare that, they say, to the 40 to 60 cents per gallon that went to government, federal and state governments that they received in taxes from every gallon of gasoline. So the difference is clear. The oil companies maintain it is the state and federal government which is addicted to oil.

NAUERT: That's an interesting one. The government's the one making money off of it. Not the companies.

Later that day radio host Jason Lewis appeared on Fox News' America Live and said: "Exxon Mobil made two cents a gallon in the first quarter. Government with an 18.4 cents a gallon tax and state taxes makes anywhere from 40 to 70 cents a gallon. Who's gouging whom?" Host Martha MacCallum replied, "Very interesting."

Radio host Ben Ferguson made a similar claim during his May 10 appearance on Fox's America Live, saying that "their average on a gallon of gas right now is 0.3 cents per dollar you spend they're making cash off it. So about 3 cents on every gallon. They're not killing it."

However, there's good reason to question ExxonMobil's cents per gallon figures. When asked in 2008 why the Energy Information Administration doesn't calculate the average profit earned on a gallon of gas, EIA economist Neal Davis said that trying to determine such a figure would be "heroic at best" and "sadly misinformed ... at worst."

Amy Jaffe, director of the Energy Forum at Rice University's Baker Institute, said via email that "ExxonMobil makes profits in every aspect of their business, from producing oil from the wellhead to manufacturing gasoline." Jaffe added: "I don't know if they mean that they only make 7 cents at the retail pump. Or they only make 7 cents at the rack. Or they only make 7 cents at the refinery processing manufacturing operation. Or they only make 7 cents on all three together."

On May 27 FactCheck.org examined ExxonMobil's claim and concluded that "the 7-cents-per-gallon figure grossly underestimates the industry's earnings. It includes only earnings from the sale of gasoline and not earnings on producing and selling crude oil. There are no independent figures on how much oil companies earn on a gallon of gasoline." From the post:

We called ExxonMobil and asked how Cohen arrived at his figure. Spokeswoman Kristen Hellmer said it was determined by dividing ExxonMobil's "downstream earnings ($694 million) by the number of gallons of gasoline and other products refined and sold during the quarter in the U.S. (9,355 million gallons). The result is 7.4 cents per gallon." Downstream earnings are what the company earns from refining crude oil into gasoline and other petroleum products and then selling it. But that ignores "upstream earnings," which is how much Exxon earns in producing and selling crude oil. And the cost of oil exceeded $100 a barrel in the first quarter of 2011.

Oil industry analyst [Tom] Kloza called the 7-cents-per-gallon figure "disingenuous," because it ignores high earnings from oil production. "Bringing crude oil to market has been incredibly profitable," Kloza said. "It is disingenuous to say in the downstream we are making only this much."

ExxonMobil reported that its upstream earnings were $8.7 billion in the first quarter -- up $2.9 billion, or 49 percent, compared with a year ago. As of August 2010, it was the third largest oil refiner in the U.S.

Fox News is a network that can often be counted on not to scrutinize misleading statistics and talking points when doing so would contradict its broader political aims. Which means that on energy and environmental policy, Fox News and ExxonMobil are natural allies.

Exxon Makes $30.5 Billion, So GOP Votes Unanimously To Give Them Tax Breaks

By Brad Johnson

Exxon Mobil is by far the most profitable company in the new Fortune 500 list, riding “high oil prices to a staggering $30 billion in income” in 2010. Exxon made over $10 billion more than fellow oil giant Chevron, the third most profitable company (AT&T edged out Chevron for the number two spot). ConocoPhillips’ $11.4 billion in profits put it in the 16th spot, giving the three oil giants a combined $60.9 billion in profits in 2010.

Today, the Republicans in the House of Representatives celebrated this massive redistribution of wealth from American families to oil executives. With the support of 7 oil-patch Democrats, 234 Republicans voted to block a bill to eliminate a $1.8 billion annual subsidy that treats oil drilling as “domestic manufacturing”:

House Republicans rejected an effort by Democrats Thursday to use a procedural maneuver to force a vote on a bill to repeal a key oil industry tax break.

As they did in March, House Republicans voted unanimously to defend these wasteful, unaffordable and unfair oil subsidies, even though several members told their constituents they want to end them.

Asked If Untaxed Corporations Like Exxon Are Taxed Too Much, Tea Party Leaders Say Yes

By Lee Fang

This morning at the National Press Club, leaders from the Tea Party Patriots, an umbrella group that helps coordinate Tea Party chapters around the country, held a press conference to celebrate the results of the election last night. During the press conference, Tea Party Patriots officers Mark Meckler and Jenny Beth Martin announced a “40 year plan” to shift America’s educational system, fiscal priorities, culture, and values.

ThinkProgress attended the presser and asked the Tea Party leaders about some of their top priorities, namely taxes and repealing President Obama’s reforms. Presented with the fact that some of the most profitable American corporations in the world, like ExxonMobil and Bank of America, paid essentially zero corporate income taxes in 2009, we asked Meckler if he believed corporations are indeed “taxed enough already?” Meckler responded that he still believed in a tax-cutting agenda, and suggested that corporations even deserve a tax holiday. Similarly, we asked Martin about Rep. Eric Cantor’s (R-VA) pledge last night to defund the historic financial regulatory reform passed by President Obama to shore up Wall Street. She said she had “no idea” what to think about that, and said her 280,000 strong membership had never substantially commented to her about Obama’s Wall Street reforms:

TP: I know they say the “tea” stands for “taxed enough already.” Last year in 2009, ExxonMobil paid nothing in corporate income taxes. Some of the most profitable corporations like Bank of America also paid nothing, Googled paid I believe 2%. Do you believe those are appropriate tax rates?

MECKLER: You know I can’t address tax rates, but what I can tell you is that the American people will respond to things like that. [...] We’ve been suggesting a corporate tax holiday to allow these companies to come in and create jobs. [...]

TP: Last night, Congressman Eric Cantor — possibly incoming Majority Leader — said that one of the first things Republicans should do with their new Tea Party-backed majority is to defund financial regulatory reform. What do you think about that?

MARTIN: I have no idea. [...] I can’t speak personally about how I feel about it. My job is to reflect the grassroots. [...]

TP: Have you heard a lot of feedback about Wall Street reform? How do your members feel about that?

MARTIN: We’ve had a little bit of feedback on that, we haven’t had a lot. We’re bringing in policy experts to come in to talk to them about various positions. I have heard, and have had people ask about having someone come in and talk about Wall Street reform. I believe that’s one of the things we’re going to add to our list of topics.

Watch it:

The “Tea Party” leaders’ lack of concrete ideas on financial reform, and their defense of untaxed international corporations, might seem to violate the ideals of the actual Boston Tea Party, which was a protest against the East India Trading company and its use of the British government to retain a monopolistic, undemocratic control over the American colonies.

However, considering the true political drivers of the Tea Party Patriots, their support of the wealthy elite makes perfect sense. For instance, the Tea Party Patriots listserv, which helped orchestrate many of the anti-health reform protests last year, is managed by staffers from FreedomWorks — the corporate front group run by longtime business lobbyist Dick Armey. Many of the talking points and speakers used by the Tea Party Patriots are provided by corporate front groups like Americans for Prosperity, a front for oil and hedge fund billionaires David and Charles Koch. Free training seminars and online tutorials for grassroots organizing were provided to the Tea Party Patriots by the Leadership Institute, which is funded by the Koch family as well as by other corporate interests, like the DeVos family of the pyramid-scheme company Amway. A mysterious donor even granted Tea Party Patriots with an additional $1 million for increased election-season outreach.

In fact, much of the Tea Party Patriot’s press conference was eclipsed by an announcement by Colin Hanna, leader of the front group “Let Freedom Ring” (funded by John Templeton Jr., an heir to a large Wall Street fortune). Hanna announced that his group had secretly worked with the Tea Party Patriots to place an unprecedented number of “poll watchers” in key precincts around the country to guard against voter fraud (view the handout here).

Glenn Beck Brings ExxonMobil-Linked Religious Front Group To Tell Christians Not To Believe In Climate Change

By Lee Fang In June, ThinkProgress published an exclusive investigation into the Cornwall Alliance — a corporate front designed to deceive evangelicals into doubting the science underpinning climate change. Today, Fox News hate-talker Glenn Beck brought on a representative from the group to tout Cornwall’s new DVD, “Resisting the Green Dragon,” which claims the climate change movement is a “false religion,” and a nefarious conspiracy to empower eugenicists and create a “global government.” The DVD, which Cornwall is distributing to evangelical churches around the country, seems to be designed perfectly for Beck’s world view, and unsurprisingly, the Cornwall guest and Beck exchanged bizarre conspiracy theories. Watch it: The Cornwall Alliance appears to be a creation of a group called the James Partnership, a nonprofit run by Chris Rogers and Peter Stein, according to documents filed with the Virginia State Corporation Commission. Rogers, who heads a media and public relations firm called CDR Communications, collaborates with longtime oil front group operative David Rothbard, the founder and President of the Committee for a Constructive Tomorrow (CFACT) and Jacques Villarreal, a lower level staffer at CFACT, for his James Partnership group. In the past, Rogers’ firm has worked for the Bush administration and for the secretive conservative planning group, the Council for National Policy. According to public records, the following entities are all registered to the same address, 9302-C Old Keene Mill Road Burke, VA 22015, an office park in suburban Virginia: – Rogers’ consulting firm, CDR Communications – Rogers’ nonprofit hub, the James Partnership – The Cornwall Alliance – The new “Resisting the Green Dragon” website In late 2005, evangelical leaders like Rick Warren joined a drive to back a major initiative to fight global warming, saying “millions of people could die in this century because of climate change, most of them our poorest global neighbors.” To counter this historic shift in the evangelical community, a group called the “Interfaith Stewardship Alliance” (ISA) was launched to oppose action on carbon emissions and to deny the existence of climate change. One of the men guiding this group was Paul Driessen, a consultant for ExxonMobil, the mining industry, and for CFACT. For “stream lining” reasons, ISA relaunched as the Cornwall Alliance in 2006. With the new name came a redesigned website, highly produced web videos, and an organized network of churches to distribute climate change denying propaganda to hundreds of pastors around the country. The branding for the Cornwall Alliance is derived from the “Cornwall Declaration,” a 1999 document pushing back against the creation-care movement in the evangelical community. The Declaration “stressed a free-market environmental stewardship and emphasized that individuals and private organizations should be trusted to care for their own property without government intervention.” CFACT President Rothbard has been hailed as the “driving force” behind the Cornwall Declaration public relations effort. CFACT is a gimmicky right-wing organization that does everything it can to try to discredit the science underpinning climate change. For instance, staffers from the group traveled to the Copenhagen conference on climate change to stage silly press conferences with Rush Limbaugh’s former producer and stunts aimed at mocking Greenpeace. Chris Rogers and David RothbardBut who is the “driving force” behind CFACT? According to disclosures, CFACT is funded by at least $542,000 from ExxonMobil, $60,500 from Chevron, and $1,280,000 from Scaife family foundations, which are rooted in wealth from Gulf Oil and steel interests. CFACT and the Cornwall Alliance, according to disclosures filed with the Washington State Secretary of State’s office, share a common fundraising firm, ClearWord Communications Group. ClearWord has helped raise millions of dollars not only for CFACT and Cornwall, but also for infamous polluter front groups like FreedomWorks, the Institute for Energy Research, and the Competitive Enterprise Institute. Last year, Cornwall produced a video with former Sen. George Allen (R-VA) attacking clean energy legislation as part of a campaign by the ExxonMobil-funded “American Energy Freedom Center.” In a call to the Cornwall Alliance’s media office, spokesman Quena Gonzalez said Cornwall has no relationship to CFACT and said CFACT President Rothbard has no official capacity with his group. Gonzalez said that in “several years of working” at Cornwall, he had never heard any questions about working with CFACT, and instructed ThinkProgress to contact Calvin Beisner, the national representative for Cornwall. Beisner is a board member of CFACT. Rothbard had a central role in sparking the founding of Cornwall and is currently a partner with Chris Rogers, the man who runs Cornwall and CDR Communications. Nevertheless, under his capacity as CFACT President, Rothbard’s anti-Greenpeace publicity stunts are reported regularly on the Cornwall blog as breaking news, without any acknowledgement of Rothbard’s relationship with Cornwall. Gonzalez also said he had never heard of CDR Communications. But according to his own LinkedIn profile, Gonzalez works for CDR Communications as the “Director for Religion and the Environment” at the firm. ThinkProgress contacted Chris Rogers on Monday, who contradicted Gonzalez and said his firm CDR Communications provides “support” for Cornwall but did not clarify. It appears that Cornwall attempts to carefully hide its backers. Not only did Gonzalez refuse to provide much information, but Cornwall’s website is registered with a special service to hide the identity of the person or group who purchased the domain address.

Exxon CEO: As an industry, ‘we are not well equipped’ to handle oil disasters.

By Brad Johnson

ExxonMobil CEO Rex Tillerson told Congress we must do everything possible to prevent offshore drilling disasters, because once they occur, there is not any way to stop the damage. By admitting the unavoidable risk of catastrophe, Tillerson exploded the myths — promoted by the oil industry and right-wing supporters — that offshore drilling is “environmentally safe,” and that the industry can handle these disasters when they occur. Tillerson made the shocking admission that the industry is “not well equipped to prevent any and all damage” under questioning from Rep. Bart Stupak (D-MI), the chair of the oversight subcommittee of the House Energy and Commerce Committee, during a hearing that featured top executives from the five largest private oil companies:

There will be impacts as we are seeing. We have never represented anything different than that. That’s why the emphasis is always on preventing these things from occurring because when they happen we are not well equipped to deal with them. And that’s just a fact of the enormity of what we’re dealing with.

Watch it:

The only fail-safe way to prevent oil drilling disasters, in fact, is to stop drilling for oil — in other words, “The only winning move is not to play.” This is yet another reason this nation needs an energy policy that puts a cap on oil pollution and ends our toxic addiction.

Transcript (watch the full Stupak-Tillerson exchange on YouTube):

STUPAK: So if you can’t handle 40,000 [barrels of oil a day], how are you going handle 166,000 per day?

TILLERSON: The answer to that is is when these things happen, we are not well equipped to deal with them.

STUPAK: So when these happen, we can’t handle them?

TILLERSON: There will be impacts as we are seeing. We have never represented anything different than that. That’s why the emphasis is always on preventing these things from occurring because when they happen we are not well equipped to deal with them. And that’s just a fact of the enormity of what we’re dealing with.

STUPAK: We call upon the same resources. No matter which one of the oil companies before us had the blow-out, the resources are not enough to prevent what we are seeing day after day on the gulf. Not only the loss of 11 people, but we — we are on day what? 56 or 57 of oil washing on shore. There is no way to stop it until we cap the well? Correct?

TILLERSON: Right.

STUPAK: But it could be Exxon tomorrow or Chevron tomorrow?

TILLERSON: Not if we follow our practices and procedures it won’t be.

STUPAK: But if it does we can’t handle the spill. This worst case scenario is pie in the sky and oil in our waters.

TILLERSON: The MMS and Coast Guard require us to calculate using their methods and that’s why it’s in there. I think that’s all that matters is the point is we have to take every step to prevent these things from happening. When they happen, it is a fact that we are not well equipped to prevent any and all damage. Damage will occur.

STUPAK: We satisfy the application but in reality we can’t respond to a worst case scenario.

TILLERSON: Response is underway. It is having some effect. But there is nothing to guarantee you will not have an impact.

Update In his first Oval Office speech, President Barack Obama noted that "no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk":

One of the lessons we've learned from this spill is that we need better regulations better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk. . . . The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.

We cannot consign our children to this future. The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny.

Watch it: