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U.S. Energy Policy…Brought to You by ExxonMobil

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Every time oil and gas prices jump, as they have in the past year, a great cry goes up: If only America had an energy policy.

Well, we do have an "energy policy," it's just being directed by ExxonMobil (XOM), not Washington, D.C., according to Steve Coll, president of the New America Foundation and author of Private Empire: ExxonMobil and American Power.

"They're closer to a consistent source of energy policy than the federal government in part because of their scale," Coll says, noting the company's roughly $450 billion in annual revenue dwarfs the annual budget of the Department of Energy, which was $27 billion in fiscal 2011.

Because of their consistent long-term strategy, Exxon has been able to "achieve their objectives much more successfully than presidents who come and go declaring they're going to end our dependency on foreign oil," he says.

To get a sense of where Exxon is going, the company earlier this year announced plans to spend $185 billion on oil and gas exploration over the next 5 years. In 2010, they spent around $30 billion to buy XTO Energy, making a major bet on the continued development of U.S. shale gas via hydraulic fracturing, commonly known as fracking.

Concern about the environment impact of fracking and the potential for new regulations limiting the practice is "the most importantly political dilemma they're facing," Coll says.

Should Mitt Romney take the White House and/or Republicans gain further control of Congress, Exxon won't have much to worry about it. But if Obama wins reelection or other issues with fracking arise -- Coll notes other drillers aren't as safety conscious as Exxon has been since the 1989 Valdez disaster -- Exxon will face big political and regulatory challenges.

That's especially true given Exxon is the face of 'big oil' and decidedly partisan in its corporate giving.

While other major multinationals hedge their bets in U.S. politics, Coll notes ExxonMobil's PAC gives about 90% of its donations to Republicans vs. a more even split between the two major parties at companies like Wal-Mart (WMT) and Dow Chemical (DOW).

"I wonder given the breadth of concerns that have arisen over fracking whether that's really a wise and sustainable strategy for them," he says. "They're going to have to build trust at the local level around this country as these techniques go forward."

Exxon CEO Rex Tillerson is already facing criticism for overpaying for XTO -- natural gas prices have swooned in recent years -- and Coll clearly believes the company is at risk for its fracking strategy.

More broadly, he believes the company's culture -- featuring "a system of secrecy, nondisclosure agreements and internal security" on par with the world's intelligence agencies -- need to evolve.

Exxon "functions as a corporate state within the American state, constructing its own foreign, economic and human rights policies," he writes.

Having said all that (and more in his book), Coll rejects the idea that Exxon is an 'Evil Empire', noting the company is a "price taker, not a price maker" in the global energy market.

"Are they a force for good or evil?," he asks rhetorically. "They're a force."

And a very powerful one at that.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com

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