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Oil and gas giant ExxonMobil stands to gain nearly $1 trillion from Trump administration policies, according to a new report from the left-leaning Center for American Progress.
The report, titled “How Exxon Won the 2016 Election,” details how the energy and environmental policies of Trump’s Cabinet picks could benefit Exxon, the eighth-largest company in the world and the largest of the world’s six Big Oil companies.
The CEO of Exxon and Trump’s pick for secretary of state, Rex Tillerson, will be grilled in a Senate confirmation hearing Wednesday about the potential conflicts of interests he faces as a result of his company’s extensive global operations. The company produces oil and gas in 22 countries, and Tillerson owns company shares worth $180 million, according to the report.
Tillerson has promised to sever ties with Exxon if he is confirmed by the Senate, in exchange for a payout that matches the value of his shares. But he is also likely to face questions about his personal ties to Russia and its president, Vladimir Putin, whom the US intelligence community said last week ordered an “influence campaign” aimed at diminishing Democratic nominee Hillary Clinton during the presidential election.
Tillerson, whose relationship with the Kremlin dates back to the early 1990s, has struck several major deals with the Russian state-run corporation Rosneft and received the prestigious Order of Friendship award from Putin in 2013.
In 2014, Exxon was on the brink of signing a lucrative deal with Rosneft to drill for oil in the Russian Arctic when the US leveled sanctions against Russia for annexing Crimea and invading eastern Ukraine. The Obama administration sanctioned Russia again late last month for its meddling in the presidential election.
Tillerson’s close relationship with Russia and Putin, however, has led to speculation that as secretary of state, he could push for sanctions on Russia to be lifted — allowing Exxon’s Arctic agreement with Rosneft, reported to be worth $500 billion, to proceed.
Exxon, meanwhile, still has its eye on the deal. The head of the company’s operations in Russia, Glenn Waller, said last April that the company will return to its joint project with Rosneft once sanctions against Moscow are lifted.
Exxon would also benefit from the likely reversal of the Obama administration’s executive order requiring a presidential permit to construct cross-border pipelines. The construction of additional pipelines — supported by Canadian Prime Minister Justin Trudeau — would facilitate the mining and transportation of Canadian tar sands, which make up more than one-third of Exxon’s global liquid reserves. The reserves are worth roughly $277 billion at current oil prices, the CAP report estimated.
Trump’s pick to lead the Environmental Protection Agency, Scott Pruitt, has sued the agency multiple times to prevent rules that would curb air and water pollution from taking effect.
Pruitt has opposed the EPA’s Clean Air and Clean Power acts, arguing that energy regulation should be left to individual states. Exxon, like any oil company, would likely benefit from the relaxation or elimination of anti-pollution laws that have often required companies to invest in research and technology to make their operations safer and more efficient.
Trump’s pick to lead the Department of Energy (DOE), former Texas Gov. Rick Perry, has received more than $5 million in contributions from the oil and gas industry, the CAP report said, including $40,000 directly from Exxon. Perry said during a 2011 run for president that he wanted to eliminate the DOE — which, among many other things, regulates fracking and offshore drilling.
Between Tillerson, Pruitt, and Perry, Trump’s proposed Cabinet seems broadly committed to sustaining the fossil fuel industry, eliminating federally mandated environmental protections, and deprioritizing the development of renewable energy. Those policies, the CAP report suggested, will increase oil demand and drive up oil prices, which are “the single largest determining factor in Exxon’s profitability each year.”
Exxon may yield influence over the Justice Department, too, which will be led by Alabama Sen. Jeff Sessions if he is confirmed by the Senate. As attorney general, Sessions would be able to put a definitive end to calls for Exxon to be investigated for allegedly knowing about the dangers of climate change as early as the 19 70s, but failing to disclose them to the public.
Under Tillerson, the company became more accepting of evolving climate change science. But such an investigation could end up setting the company back anywhere from $84 billion to $246 billion in settlement costs or fines.
In 2016, Sessions and four other Republican senators wrote a letter to Attorney General Loretta Lynch asking her to “immediately cease” the investigation into Exxon, which they said confirmed that the government was trying “to silence debate on climate change.”
It is unclear how much Exxon’s lobbying influence would have been quelled by a Clinton administration, however. The Clinton Global Initiative has received between $1 million and $5 million from the oil company, according to its website. And as The Daily Beast noted in May, Ursula Burns, a member of the company’s board of directors, gave the Clinton campaign the maximum contribution of $5,400.
Justin Sullivan / Getty
Justin Sullivan / Getty