Tillerson Pick Stokes Concerns Over Energy-Heavy Diplomacy

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By Brian Dabbs

Dec. 13 — Global energy partnerships may eclipse bedrock humanitarian and development policy if oil mogul Rex Tillerson, President-elect Donald Trump’s pick to head the State Department, is confirmed, lawmakers and former Obama administration officials said Dec. 13.

That strategy may jeopardize U.S. national security interest, they said in interviews with Bloomberg BNA. Tillerson is the chief executive of the Exxon Mobil Corp.

A bipartisan group of senators is contesting the nomination, arguing Tillerson’s cozy relationship with Russian President Vladimir Putin necessitates serious scrutiny. Sen. Marco Rubio (R-Fla.) said Dec. 13 he had “serious concerns” with the nomination.

Still, a range of Trump surrogates and supporters, as well as other establishment lawmakers and business associations, applauded the selection.

“Manufacturers are encouraged to see a leader from the manufacturing economy take on the role of America’s chief diplomat, and we are pleased that Rex will bring a business perspective to the State Department,” said Jay Timmons, chief executive officer of the National Association of Manufacturers. The American Petroleum Institute echoed that praise.

Senate Clamor

Tillerson lobbied against and criticized U.S. sanctions on Russia following that country’s 2014 invasion of the Crimean region of Ukraine.

Those sanctions harmed an Exxon deal with Russian state oil company Rosneft to explore and develop Siberian resources, which could have fetched tens of billion of dollars in profit.

“It troubles me greatly that Mr. Tillerson would have reason to advocate for the rolling back of sanctions because that would be in the best interest of his company,” Sen. Chris Coons (D-Del.), a Senate Foreign Relations Committee member, told reporters. “A major multi-national, multi-billion oil and gas company often puts stability, predictability ahead of rights and values.”

The Tillerson nomination will have to first pass through the Foreign Relations Committee. Coons guaranteed at least some opposition.

But the committee’s chairman, Sen. Bob Corker (R-Tenn.), spoke glowingly of the nominee.

“Tillerson is a very impressive individual and has an extraordinary working knowledge of the world,” he said in a statement.

Energy Diplomacy?

During a State Department overhaul in 2011, then-Secretary of State Hillary Clinton created the Bureau of Energy Resources, citing the need to ensure global energy security.

“You can’t talk about our economy or foreign policy without talking about energy,” she said at the time. “With a growing global population and a finite supply of fossil fuels, the need to diversify our supply is urgent.”

The State Department then stressed the importance of promoting alternative energy and good governance.

Agency infrastructure globally, however, could be put to use to advance a more oil-friendly agenda under Tillerson, Jennifer Harris, a Council on Foreign Relations fellow and former high-ranking State Department official, told Bloomberg BNA.

“My concern is this delta between Exxon interests and the interest of United States is not only well documented but known my foreign leaders, and so it’s something that could be exploited,” she said. As an example, she pointed to an Exxon business deal with the Kurdish government in defiance of the Iraqi government.

David Mortlock, an attorney with Willkie Farr & Gallagher LLP and former director for International Economic Affairs at the White House National Security Council under Obama, said energy policy is increasingly critical on the global stage.

“Energy policy is hugely important in both global politics and the global economy, including everything from global sanctions to even where pipelines are laid and energy projects are approved,” he said. “Energy cooperation between the U.S. and Russia is a very good thing, but if becomes the only thing, and the rule of law and invading other countries are no longer important, then we are sacrificing our long-term interest.”

John Coequyt, the Sierra Club’s director of Federal and International Climate Campaigns, said U.S. embassies and consulates across the globe could be directed to focus on energy project development.

Checkered Past

Exxon now readily admits climate change is “clear and the risk warrants action.” The company and Tillerson, in fact, have supported a carbon tax.

“My understanding is that he advocated for a carbon tax and market mechanisms to address climate change,” Coons said. “That’s intriguing. I didn’t expect that from an oil and gas executive.”

At the helm of State, Tillerson would be tasked with engineering U.S. participation in the Paris climate agreement and other climate relationships globally. Exxon has supported the pact. Harris indicated that may be a silver lining to an otherwise-unsavory nomination.

“I think the lesson here is not all major oil producers are created equal on the question of climate change,” she said. “Exxon is one of the better actors, which gives me hope Tillerson could be a good force for preserving the environment.”

New York and Massachusetts attorneys general recently alleged Exxon willfully misled investors, regulators and the public on climate science research for decades.

To contact the reporter on this story: Brian Dabbs in Washington at bdabbs@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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