It’s widely rumored* that President-elect Donald Trump will nominate the CEO of ExxonMobil, Rex Tillerson, for Secretary of State. ExxonMobil is one of the largest companies in the world and could profit handsomely from a lifting of sanctions on Russia.
In 2011, ExxonMobil and Rosneft, Russia’s largest oil company and one that is majority state-owned, signed a landmark deal on cooperation involving numerous projects in both Russia and North America. This included oil exploration in the Kara Sea in the Russian Arctic offshore. Despite finding oil, ExxonMobil was forced to pull out by sanctions in 2014. With $150 million worth of ExxonMobil shares, Tillerson also has a personal financial stake in re-opening his company’s operations in Russia, which have all been put on hold except for its ongoing activities on Sakhalin Island.
The Texas native is coming under serious scrutiny from both the left and the right. Leading Democrats like Senator Robert Menendez (D-New Jersey) expressed, “With Tillerson as our secretary of state the Trump administration would be guaranteeing Russia has a willing accomplice in the president’s cabinet guiding our nation’s foreign policy.” Senator John McCain (R-Arizona) is deeply concerned about Tillerson’s ties to Russia.
Beyond fears of the Russian Bear, ExxonMobil has also been rebuked for its alleged cover-up of climate change as early as the 1980s, which a Los Angeles Times investigation revealed last year. And among some conservatives, Rex Tillerson is being lambasted for his professed belief that climate change is real.
Tillerson and Arctic drilling
Tillerson is convinced that Arctic drilling is necessary and that companies like ExxonMobil, which has decades of experience in the north, are prepared to undertake it. In an address to an international gathering of energy and policy leaders last year, Tillerson said, “We need governments to recognize that our advanced technologies and techniques have been thoroughly proven in some of the most delicate ecosystems and harshest conditions on Earth…The political challenge will be to act on the collaborative and science-based findings of the study and open the U.S. Arctic to field-proven technologies and cutting-edge techniques.”
He also views Arctic oil and gas development in a calculative manner. In an interview with the Associated Press last year, he argued, “The size of the resource prize has to be large to support the risked capital that has to be put in place. The Arctic is one of the few places left where we believe those opportunities exist.”
When asked by the same interviewer why not just leave the Arctic alone, he responded, “Because eventually we are going to need it. It’s back to that insatiable appetite that the world has for energy.” This overlooks the fact that oil and gas companies could shift towards creating a need for green energy rather than feeding the fossil fuel beast.
Reactions from across the Arctic
If Tillerson is nominated and confirmed by the Senate as Secretary of State, reactions within the Arctic will likely diverge significantly from one place to the next. Here are a few snapshots.
Russia: Between subdued and “sensational” feelings
In 2011, ExxonMobil and Rosneft, Russia’s largest oil company and one that is majority state-owned, signed a landmark deal on cooperation in oil exploration in both Russia and North America. In Russia, the multibillion dollar agreement prioritized developing oil fields in the Arctic and Black Sea. Igor Sechin, Rosneft’s head, hyperbolically called the deal “more ambitious than man’s first walk in space or sending a man to the moon.” Demonstrating the significance of the deal to Russia’s top brass, Putin personally attended the signing ceremony. The following year, he granted Tillerson the Order of Friendship, one of the highest honors a foreigner can receive from Russia.
Given all of ExxonMobil’s positive business dealings with Russia, the Kremlin would undoubtedly welcome Tillerson’s appointment. Be that as it may, the Kremlin has remained notably tight-lipped. Although the CIA alleges that Russia may have interfered in the presidential elections via cyberhacking, officials in the federal government are remaining relatively neutral, at least publicly.
Dmitry Peskov, a spokesman for Russia’s president, cooly suggested, “He fulfills his responsibilities in a highly professional manner.” One journalist warned in an article in Economy Today that if the Kremlin directly endorsed Tillerson, then all of the Senate Democrats and several other Republicans who harbor negative views towards Russia, namely John McCain, migiht not approve his nomination.
Others voices in Russia have been more forthcoming in their praise for Trump’s pick. Russian Senator Alexei Pushkov tweeted:
Выбор Тиллерсона – сенсация. Это бизнесмен, по определению прагматик, да еще и с большим опытом работы с Россией. Трамп продолжает удивлять.
— Алексей Пушков (@Alexey_Pushkov) December 10, 2016
[Trans: The choice of Tillerson – a sensation. He is a businessman, by definition a pragmatic, with lots of experience in working with Russia. Trump continues to amaze.]
Alaska: Bad blood and deep distrust
Many Alaskans still deeply distrust ExxonMobil after the devastating oil spill by one of the company’s tankers in Prince William Sound in 1989. The incident led 31,000 Alaskans to sue the multinational oil corporation for damages.
State politicians have feuded with ExxonMobil over the years, too. Former Governor Sarah Palin, who played hardball with oil and gas companies, once brazenly cancelled a meeting with Rex Tillerson when he came to the state capital to discuss a proposed gas pipeline. She decided to spend the day reading to kindergarteners instead. Emails released by the State of Alaska reveal how her top appointee to at the state’s Natural Resources Department remarked about the situation, “What a great choice it was versus meeting with Exxon!”
A few other gems from the public email troves reveal the distaste Alaskan officials under Palin held for Tillerson, whom they pejoratively referred to as “TRex”:
The cold feelings between Alaska and ExxonMobil are mutual. Tillerson called Alaska “its own worst enemy” when it comes to getting things done. Speaking of the same liquefied natural gas pipeline and export terminal that Palin feuded with him about, he argued, “We’ve had two good chances in the last 10 years to get it done, and as soon as you had an election that ended it.”
Just this past October, Governor Bill Walker criticized ExxonMobil in a letter to company vice president Jim Flood, asking, “Please do not take steps to thwart Alaska’s ability to monetize our gas.” Thus, Tillerson might not have many friends to call upon in Alaska were he to become Secretary of State.
Greenland: Pro-oil, pro-Trump?
The only thing to note for the moment is the perhaps somewhat surprising support for Trump coming from Greenland. At the Arctic Circle Forum in Quebec City today, Greenland Foreign Minister Vittus Qujaukitsoq expressed his support for a pro-oil Trump administration. Greenland has permitted companies to explore for oil in its offshore for years, but there have been no commerical discoveries.
Last but not least, on the day after Trump’s election, I wrote a post that included a photograph of Secretary of State John Kerry at an Arctic Council ministerial meeting. The caption read, “Secretary of State John Kerry at an Arctic Council meeting. This probably won’t be repeated under Trump.”
Now, I have to wonder which is more concerning: the thought of no U.S. secretary of state being sent at all to the ministerial, or the thought of an oil and gas tycoon representing the U.S. at a forum whose mission is first and foremost to committed to improving the well-being of Arctic peoples and the environment.
*As of Monday night, it is now being reported that Trump will announce Tillerson’s nomination tomorrow morning.