Why So Much Interest in Exxon’s $1.7 Million Fine?

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By Douglas A. McIntyre Published
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Fines of energy companies continue to be the rage among the news media. Perhaps it is the hangover of the huge bonanza of press coverage following the BP PLC (NYSE: BP) Deepwater Horizon disaster. Or perhaps it is the view of big oil as the world’s greatest polluter. For some reason, the fascination has shifted to a $1.7 million fine that may be levied by the federal government against Exxon Mobil (NYSE: XOM), the world’s largest oil company. The sum likely would not cover the fuel costs of Exxon’s private jet fleet for the year.

The U.S. Department of Transportation (DOT) wants to fine Exxon for flood risks the company should have known about ahead of the spill of 1,500 barrels of crude oil into the Yellowstone River in 2011. This kind of damage to such a pristine river is worthy of note, but it was probably one of the most modest environmental disasters of 2011, particularly compared to dozens of other incidents of environmental trouble caused by major oil companies in the United States or elsewhere around the world. Little has been said about permanent damage to the river, perhaps because there was none.

Exxon has 30 days to appeal the proposed fine. It is hard to see the disadvantages of doing so. DOT on the other hand will need to fight to make sure the fine is imposed. Its position as a protector of the environment is at stake, no matter how small the infraction is, particularly when it involves a huge company.

Somewhere around the country, DOT likely found another company this year that had violated one or more of its regulations, and the proposed fine for that may have been $1 million or more. The event did not make the papers nor get attention on the Internet. DOT needs to leverage its regulatory activity where and when it gets the most benefit. Exxon, by the nature of its size and the general suspicion of big oil companies, neatly fits that bill.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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