Exxon’s Chief as Secretary of State Puts Climate Diplomacy in Oil Magnate’s Hands

With Rex Tillerson as Donald Trump's reported choice to head the State Department, Exxon's history with Russia, as well as climate denial, become national issues.

Credit: Renoit Tessier/REUTERS

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Donald Trump’s nomination of Rex Tillerson as secretary of state puts the chief executive of ExxonMobil in charge of United States climate diplomacy. That’s despite his leadership of one of the world’s biggest greenhouse gas polluters, a global corporation that has staved off urgent action against the climate crisis for decades.

News of Tillerson’s likely selection provoked despair and defiance among climate campaigners and their allies in Congress. Meanwhile Trump himself, on a day when he said incorrectly on Fox News that “nobody knows” if global warming is real, coyly praised Tillerson on Twitter but attached a big “if” to the rumored nomination.

Opposition senators said this may be their biggest chance, although it’s still  a long shot, to defeat a Trump nominee. Sen. Edward J. Markey (D-Mass.), a member of the Foreign Relations Committee and past co-sponsor of climate legislation, said, “We cannot allow oil to replace diplomacy as the currency of the State Department.”

The fundamental question about Tillerson is whether, after 10 years running Exxon, he could subordinate the company’s interests to those of the United States. This even caused a few Republicans, including John McCain, to grumble.

Writing for the New Yorker, Steve Coll, dean of the Columbia Journalism School and author of a book on Exxon, summed up the situation: “The goal of ExxonMobil’s independent foreign policy has been to promote a world that is good for oil and gas production.”

Red Flags

Tillerson’s dealings with Russia, in particular, raise doubts. Critics say they smack of profiteering and Putinism.

In 2011, Tillerson achieved a landmark deal to drill in the offshore Arctic with Rosneft, a Russian oil company run by a Putin crony dating to their KGB days. Rosneft brought vast reserves to the table, and ExxonMobil its Yankee know-how. Rosneft also got stakes in Exxon projects in the North America. A grateful Putin recognized the Texan with Russia’s Order of Friendship, but the deal hit a roadblock in 2014 when the U.S. and the European Union imposed sanctions against Russia’s energy business, in response to the Russian invasion of Ukraine. Exxon unsuccessfully lobbied against the sanctions and estimated in 2015 that it lost as much as $1 billion.

Trump has pledged to end the sanctions; a resurgence of drilling there would be great for Exxon, but would not help wean the world from fossil fuels.

On broader climate issues, Tillerson could be defended as a moderating counterweight to more extreme voices in the Trump administration, from Vice President Mike Pence on down. Trump’s cabinet selections are rife with those who dispute the severity of the climate crisis, mankind’s role in causing it, and the need for urgency enshrined in the new Paris agreement, which Trump has denounced.

Despite Exxon’s mottled record on climate policy and its history of supporting those who reject mainstream science and diplomatic solutions, Tillerson has affirmed that climate risks are worth taking seriously. He has said that Paris was a good start and that a price on carbon, increasingly embraced by other major economies, might make sense for the United States. But at shareholder meetings and in other venues, Tillerson has waffled. “As to our advocacy around a carbon tax—I would not support putting a carbon tax in place today,” he said in 2013.

A Matter of Priorities

Tillerson brings many unknowns to a job held over the years by luminaries like Thomas Jefferson and George Marshall, not to mention Henry Kissinger and Hillary Clinton. But much is perfectly plain.

Clearly, he would speed approval of a revived Keystone XL pipeline and others connecting the tar sands of Canada, where Exxon’s holdings are enormous. Decisions whether such cross-border projects are in the national interest are delegated to the Secretary of State. Tillerson said President Obama’s delay-and-deny approach had put politics first.

“Prior to the election, I never would have thought I would say something positive about the notion of the CEO of ExxonMobil being nominated to be secretary of state,” said Robert Stavins, director of the environmental economics program at Harvard University’s Kennedy School of Government, who broke this fall from a long record of nonpartisanship to oppose Trump. “But given the list of Mr. Trump’s final candidates—including some truly frightening prospects such as Rudy Giuliani and John Bolton—Rex Tillerson looks to me to be relatively promising, including in regard to international climate change policy.” (Bolton, a neo-conservative hawk, is rumored to become Tillerson’s deputy.)

But Stavins cautioned that Tillerson’s and Exxon’s statements were no guarantee that he’d tip the balance toward climate protection in the Trump administration.

Rafe Pomerance, who was deputy assistant secretary of state for environment and development in President Bill Clinton’s administration, agreed.

“He knows the issue,” said Pomerance, who heads Arctic 21, a nonprofit coalition. “He’s probably been briefed on it a million times.

“What could happen is that he could stand up for his own position, and make something happen [to address climate], because there is nobody else in the cabinet who has his stature on this issue.”

Or he could find himself boxed in by White House appointments of denialists in other positions at State and throughout the government. As Trump would say, “nobody knows.”

Climate advocates, such as May Boeve, executive director of 350.org, believe they know what’s in store.

“An oil baron as Secretary of State would do enormous damage,” she declared. “Tillerson could deeply disrupt international efforts towards climate action, take retribution against countries that defy the oil industry, and help write more international trade deals that put profit ahead of people and planet. Rex Tillerson made millions off of Exxon’s strategy of denial and doubt, and would have every incentive to continue the deception while Secretary of State.”

With Democrats promising to lean hard on the issue, Tillerson is likely to face core climate questions:

  • Does Tillerson accept the mandate of Paris to control warming well below 2 degrees and strive for no more than 1.5 degrees Celsius above pre-industrial levels?
  • Does he accept the peer-reviewed consensus of the United Nations’ science apparatus that this means achieving zero emissions of greenhouse gases from energy in coming decades?
  • And how does he view the peer-reviewed conclusions of so many analysts that this means leaving most of today’s known carbon reserves in the ground?

Tillerson = Exxon?

Some of Exxon’s staunchest critics think Tillerson confirmation hearings should probe beyond Tillerson’s views on climate change to include Exxon’s climate record. That includes areas like those being explored by the attorneys general of New York and Massachusetts. The two have issued subpoenas over whether the company fraudulently misled the public and its shareholders over the risks of climate change even as its own scientists increasingly recognized them. Exxon has been fighting back hard in court, with some success and with support from Republicans in Congress.

Exxon’s record of resistance to shareholder resolutions demanding more disclosure of climate risks, too, is a matter of international concern, just as a panel advising the G-20 nations is about to release strong recommendations. It’s an issue that many influential diplomats and financiers say could undermine global stability.

Under Tillerson, Exxon has fought every climate-related resolution proposed by shareholders last year, from urging “moral responsibility” or disclosure of lobbying expenses or naming an environmental expert to the board.

A few years ago, it responded to shareholder pressure to provide a carbon risk assessment, but produced a report filled with sanguine conclusions.

“Tillerson and Exxon have given such inconsistent signals,” said Shanna Cleveland, a director at Ceres, a nonprofit pushing for risk disclosure.

“This is an opportunity for him to show that the statements he has made recognizing the reality of climate change are true, or whether it has just been posturing.”

Another sore spot is the company’s longtime support for the institutions of climate denial. At the start of the Bush-Cheney administration, Exxon and other lobbyists, together with denialist groups, pushed hard to undermine the scientific consensus  as part of the successful industry effort to ditch the Kyoto Protocol and stave off forceful climate action. Those groups are again being embraced by the Trump camp.

A World Stage Awaits

Other international climate issues will fall squarely on the diplomatic corps to help resolve, including questions about UN decisions on aviation’s greenhouse gas emissions and similar talks on cargo ships. What about President Obama’s agreement with Canada and Mexico to slash the whole continent’s power sector emissions? What would his agenda be as chair of the Arctic Council meeting in Alaska this spring? And what stance will the Trump administration take at the important G-20 meeting in Germany next summer, where climate change—including phasing out fossil fuel subsidies—is on the agenda?

“The Secretary of State is going to deal with climate change, whether he or she likes it or not,” said Todd Stern, who as the State Department’s climate ambassador in the Obama administration was chief negotiator of the Paris accord.  “The only question is whether it will be as someone having to confront countries that are very upset that the United States, which played such a key role in the negotiations, is now backing off of its commitments. Or will it be in a more positive way, looking at what progress can be made going forward?”

Whether or not Trump follows through on his pledge to abandon the Paris agreement, his secretary of state will be dealing with nations that have made curbing carbon emissions part of their foreign policy.

One of Trump’s transition team members for the State Department is Steven Groves, a research fellow at the conservative think tank, the Heritage Foundation. Groves has written that the United States should exit not only the Paris agreement, but the underlying UN Framework Convention on Climate Change, negotiated under George H.W. Bush and unanimously ratified by the Senate in 1992.

Even after the U.S. withdrew from the Kyoto agreement under President George W. Bush in 2001, the State Department continued to participate in the climate talks under the framework convention, which are known as Conferences of the Parties, or COPs.

George David Banks, of the pro-business American Council for Capital Formation, said that “even if you disagree about climate science, you are still looking for sweet spots where you can agree—for example, on pollution reduction.” Banks, one of President George W. Bush’s envoys to the European Union, restarted a climate dialogue after the president abandoned Kyoto.

Exxon’s Footprint

Despite Exxon’s occasional moderating tone, it did not join with its peers in a letter committing to a global carbon price and supporting the 2 degree warming limit while Paris was still under negotiation. Its voice, like its carbon footprint, has been distinctive. And in recent years it has been Tillerson’s and it has been consistent.

Exxon frequently boasts of its investments in energy conservation and support for independent researchers. Its carefully honed theme, which Tillerson can be expected to adopt, is that the world’s emerging nations and poor people need plentiful, cheap energy. That means fossil fuels are the way to go as policymakers develop lower-cost climate solutions.

That runs counter to the World Bank and others who say avoiding climate risks is the route to sustainable development.

But it is a popular theme with the climate-denial camp and  fits right in to Trump’s overarching energy agenda: an anti-regulatory, drill-baby-drill, America-first exploitation of fossil fuel resources.

While Trump has vowed to slash climate funding, including international aid for poor nations called for in Paris, it is not really about the piddling sums. (Of the State Department’s $50 billion budget, for instance, just $1 billion or so was earmarked for climate programs by Obama.)

Instead, as Trump transition spokesman Jason Miller put it as the rumor of his choice of Tillerson spread, Trump was looking for a secretary of state he was “able to clearly connect with…someone who is very good at making deals, and someone who is going to represent us proudly.”

ICN reporters Neela Banerjee and David Hasemyer contributed reporting.