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Tillerson heads to State Department

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Rex Tillerson, ExxonMobil 

ENVIRONMENTAL WARRIORS FUME

ExxonMobil, if measured as a country, would rank 30th in gross domestic product.

Rex Tillerson is in charge of all-things Exxon. That makes the Eagle Scout son of Patty Sue and Bobby Joe Tillerson of Wichita Falls, Texas operating a company on par with Chile or Pakistan, whose GDPs range between $240-265 billion.

To compare, Exxon’s revenue last year was $246 billion.

 

Tillerson, retiring from Exxon due to its mandatory retirement age of 65, is also President-elect Donald Trump’s probable Secretary of State. If confirmed by the Senate, he’ll become America’s 69th top diplomat.

Let the environmentalists’ chest beating begin.

“This is unfathomable. We can’t let Trump put the world’s biggest oil company in charge of our international climate policy,” said May Boeve, executive director of 350.org, which has been active in such causes as stopping the Dakota Access Pipeline.”Exxon is still the leading funder of climate denial and is pursuing a business plan that will destroy our future.”

Not finished, she swung for the fences: “Tillerson deserves a federal investigation, not public office.” She also said Tillerson is a friend of Russia President Vladimir Putin, because that might be a bad thing, she inferred.

The talking points for the opposition have been set, complete with an #ExxonKnew hashtag. The Left will turn the confirmation hearings into an indictment of Exxon.

WHO DOES TILLERSON THINK HE IS?

Tillerson, who has never held elected office before, is no mild-mannered John Kerry. He’s not a “reset-button” Hillary Clinton.

As a CEO, Tillerson is a hired hand, albeit a well-heeled, jet-setting, pro-resource development hired hand who knows his way around the geopolitical dynamics of the most treacherous parts of the world — energy producing states.

Trump might have gone with a safer pick, such as Ambassador John Bolton or Gov. Mitt Romney. But Bolton and Romney were not the tone for Trump, who is out to freshen the blood in the swamp, if not drain it entirely.

Tillerson, on the other hand, has worked in the private sector in Yemen, a country so trigger-happy that, although it’s the poorest nation in the Middle East, it started a war with Saudi Arabia, Jordan, Egypt, Morocco and Sudan.

Among a lifetime of other accomplishments, Tillerson forged major deals with Russia, deals that neither BP nor Shell could manage.

Alone among the majors, he did not allow Exxon to be bullied by Putin nor have its Russian investments diluted or confiscated, as happened with BP. His success in Russia has been a marvel to his competitors.

A guy like Tillerson, who rose through the ranks, has a particular white-knuckle gravitas that a guy like President-elect Donald Trump definitely “gets.” They both wear the same brand of cufflinks, if you will, although their backgrounds are as different as a New York night and a Texas day.

If leaders around the world don’t fear Tillerson, they at least respect him. They’ll return his call.

 

As for Tillerson’s view on global climate change, he’s been encouraging policymakers to focus on lifting people out of poverty before robbing them of their energy, without saying the two are mutually exclusive goals.

In response to last December’s Paris Climate Agreement, to which President Obama made the United States a signatory, Exxon calmly stated the obvious: “As policymakers develop mechanisms to meet the Paris goals, ExxonMobil encourages them to focus on reducing emissions at the lowest cost to society, keeping in mind that access to affordable and reliable energy is critical to economic growth and improved standards of living worldwide.” Hardly the words of an extremist.

TILLERSON AND PUTIN

Tillerson’s ties to Russian President Vladimir Putin will provide fodder for the bruising Senate hearings ahead.

How close is the relationship? Do they golf? Shoot skeet together? No, they just cut deals that have created massive energy projects in Arctic Russia, at a scale that makes Alaska’s Point Thomson look like a Lego set.

One thing is obvious: Tillerson and Putin’s mannerisms toward each other is more at-ease than the Obama-Putin relationship, which is a study in hostile body language. They just seem to click better.

In 2013, Putin awarded Tillerson Russia’s Order of Friendship, a bauble given to Russian and foreign nationals for their work in “strengthening peace, friendship, cooperation and understanding between nations, for fruitful work on the convergence and mutual enrichment of cultures of nations and peoples,” and some additional complimentary blah-blah-blah.

Jean Chrétien, former prime minister of Canada, was a previous recipient of the medal.

Lest we forget, there’s another well-known American diplomat who has close ties with Putin: Secretary of State Henry Kissinger, who earlier this year spoke with concern about the U.S.-Russia relationship:

I do not need to tell you that our relations today are much worse than they were a decade ago. Indeed, they are probably the worst they have been since before the end of the Cold War. Mutual trust has been dissipated on both sides. Confrontation has replaced cooperation. – Henry Kissinger

 

In a speech at the Gorchakov Foundation for Public Diplomacy in Moscow, Kissinger relayed that during the Cold War he viewed the relationship between the United States and the Soviet Union as strictly adversarial, but times have changed.

Russia, he said, is an essential element of the global equilibrium, and should not be viewed primarily as a threat to the United States. Kissinger called for a more durable prospect:

“I have spent the greater part of the past seventy years engaged in one way or another in U.S.-Russian relations. I have been at decision centers when alert levels have been raised, and at joint celebrations of diplomatic achievement.

“I am here to argue for the possibility of a dialogue that seeks to merge our futures rather than elaborate our conflicts. This requires respect by both sides of the vital values and interest of the other. These goals cannot be completed in what remains of the current administration. But neither should their pursuits be postponed for American domestic politics. It will only come with a willingness in both Washington and Moscow, in the White House and the Kremlin, to move beyond the grievances and sense of victimization to confront the larger challenges that face both of our countries in the years ahead.

Exxon has lived those words, moving past the grievances and forging a big stake in Russian oil and gas plays.

EXXON AND ALASKA

Over the past two years, Exxon has weathered the crash in oil and gas prices better than most companies, due to its “vertically-integrated business model.” It hasn’t laid off workers. It still offers a pension to employees. It’s a smartly run energy business.

So smart that it’s the Alaska Permanent Fund Corporation’s 16th largest holding. Alaskans, through APFC, own $74 million in Exxon Mobil shares.

But there are tensions. Contrast Tillerson’s ability to work with Putin, or Kissinger’s sage assessment of Russia, with Alaska’s Gov. Bill Walker’s rash approach to the world’s largest oil and gas investor.

Indeed, Walker has seethed against Exxon for much of his adult life. He has established a cottage industry in filing lawsuits against the company.

To a hammer, everything looks like a nail. Walker has taken the hammer approach.

Tillerson, on the other hand, has been circumspect, famously saying last year that Alaska is “its own worst enemy” because of its shifting tax policies and mercurial leadership.

It was sage advice that Alaska lawmakers needed to hear.

People in the energy sector might agree with Tillerson’s assessment of Alaska. But Gov. Walker doubled down. On Oct. 14, Walker sent a nastygram to Jim Flood, ExxonMobil Development Company’s Arctic vice president, in which he argued against several points Exxon had made in a written AK-LNG project update earlier in the month.

Walker got to his point quickly:

“While some of your statements are accurate, it is necessary to point out areas in the letter that are inconsistent with your prior statements. You say you were ‘directed’ to progressing handover to a State-led Alaska LNG project. I would note that it was ExxonMobil that presented the proposal to transition the project to the State.”

The governor scolded:

“I have been highly complimentary of ExxonMobil while in the market. I would ask ExxonMobil to do the same about the Alaska Project. Please do not take steps to thwart Alaska’s ability to monetize our gas.”

These are skirmishes the governor has engaged in for years with Exxon, but it’s doubtful that Tillerson spends a lot of time thinking about Gov. Walker and his demands. As with many energy companies, Exxon has projects going on simultaneously around the world and, when things get unstable in one region, the company simply focuses elsewhere, as the company has now done to Alaska’s detriment.

It didn’t have to be that way. Gov. Frank Murkowski negotiated with Exxon for four years over the continental gasline option. Although frustrated, Murkowski never hurt the Exxon-Alaska relationship. It was a business deal. He never took a cheap shot. The two could have gone quail hunting together the next day, in fact. They could have smacked some balls at Augusta National.

Walker, on the other hand, seems to revel in the antagonism, making it personal and not realizing that if Putin can’t push around Tillerson and Exxon, then an Alaska governor can’t either.

Where does all this leave Alaskans and their relationship with one of the most important business partners and the largest oil and gas investor in the world?

 

Hoping Walker will hit the reset button with Exxon? Hoping that the governor stops chasing off investment? Hoping he has a change of heart and becomes pro-business?

Maybe simply hoping that the first Alaska governor to pick a fight with an incoming secretary of State does not create yet more troubles for a state that needs friends in powerful places.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

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