Wednesday, December 14, 2016

More on Rex Tillerson

Happy holidays everyone! Does everyone else have that cold that's going around? I sure do! That's why my blog today is going to be just baaaaarely cogent.

One of our readers pointed me in the direction of this Democracy Now excerpt discussing Tillerson, his involvement in Russia, and what ExxonMobil gets out of his appointment as Secretary of State (assuming it comes to pass).  Joe Romm says the following (emphases added mine):

Sure. Well, Rosneft is the state oil company for Russia, and, under Putin, it has been acquiring more and more power and control over the oil industry. And it is now, you know, I believe, the world’s largest oil entity in the world. ExxonMobil is the world’s largest, you know, privately held oil company in the world. And, you know, we’re entering a period where it’s harder and harder to find oil. And as I write in Climate Progress, you know, ExxonMobil’s prospects for finding easy-to-find oil in this market were pretty dim, until this deal was struck between Tillerson and Putin, basically. And this deal would have created a $500 billion joint effort, you know, the biggest oil deal ever. It’s, you know, $500 billion. We’re talking half a trillion dollars. It’s a staggering amount of money. It was a deal that was perhaps going to ensure the future of a stream of oil for Exxon for decades to come, even, of course, as the world needs to get off of oil. For Putin, you know, this is critical revenue and critical outside investment, because, particularly now, in this era of low oil prices, that seriously hurts Putin. So this was considered to be a game changer. Rachel Maddow said, you know, this was a deal that was considered it might change the historical trajectory of Russia. Now, you know, Putin then invaded Crimea and interfered with Ukraine. As a result, the United States and most other civilized countries put in place sanctions. Those sanctions, in 2014, killed this deal.

And, you know, as I write in the piece, the question of—the intelligence community now says that Russia interfered in the election on behalf of Putin, that through leaks, through hacking private email accounts and releasing them—drip, drip, drip—and also we have reason to believe they’re one of the major promoters, disseminators of fake news. So, you know, one can understand the motivation. You know, some people said, "Hey, Putin has enough motivation just to, you know, cast doubt on the U.S. election." But $500 billion, that is a very big motivation to mess up the U.S. election. So, this—

The NY Times has a piece more or less corroborating the Democracy Now piece above, as well as another nice piece on Tillerson, understandably, putting ExxonMobil's interests ahead of the interests of the United States.  Look, I know it's multiple paragraphs, but just read this:

Western sanctions were first enacted on Russia in March 2014 in response to the Russian annexation of Crimea. Then the United States and its allies, including the Netherlands, implicated Russia in the shooting down of Malaysia Airlines Flight 17 over eastern Ukraine that July. All on board were killed, including 193 Dutch people heading to Asia for vacations and work, flying for a just few moments over a war zone.

That prompted tighter sanctions. A month later, Russian tanks entered eastern Ukraine, turning the tide against the forces of the American-backed Ukrainian central government. Today, about 300 American soldiers rotate through Ukraine as trainers.

After the Russian incursion in 2014, the United States prohibited the transfer of advanced offshore and shale oil technology to Russia. The American government announced on Sept. 12 that year that Exxon was to halt all offshore drilling assistance to Rosneft, the Russian state oil company, by Sept. 26.

But Exxon Mobil’s high-tech rig was already drilling in the Kara Sea, in an unfinished $700 million project that had yet to find oil. It would be worthless if not completed.

Russian executives then told Exxon Mobil that Russia’s security services would fly in a Russian crew — in essence seize the rig — if Exxon Mobil complied with the American law and left without completing the well, according to an oil company executive who had visited the rig in the Arctic.
Exxon relayed the threat to the American government, and the Treasury Department capitulated, granting an extension that stretched the window to work until Oct. 10. In a statement in 2014, the Russian state oil company denied conveying such a threat to Mr. Tillerson’s company.

With the extension in hand, Exxon Mobil discovered a major field with about 750 million barrels of new oil for Russia a few weeks later. Igor I. Sechin, the chief executive of the Russian state oil company, called the newly discovered oil field Pobeda — Russian for victory.

It is one of the Arctic developments that Exxon Mobil has rights to work on should the sanctions be lifted.

Who knows what Tillerson will do as Secretary of State.  No man is wholly slave to their past.  Still, we should all have valid concerns that the Trump administration will team up with a decaying oil state (Russia) to appease the interests of ExxonMobil rather than the strategic interests of the United States of America, and this at a time when the world is awash in oil.

Tillerson has received endorsements from such Republican luminaries as former Secretaries of State James Baker III and Condoleeza Rica and former Secretary of Defense Robert Gates under both W. Bush and Obama.  All three have financial ties to ExxonMobil.  Fancy that!

Anyways... if you'd like to read more about the world of oil, I can't recommend the highly entertaining Oil by Tom Bower enough, which sadly only goes up to 2010.  (I am perplexed by those three star reviews - I give this book two thumbs up.  It's brisk reading, highly informative, and gossipy as hell).  And, of course, if you're serious about learning about the oil industry, you must at some point read the large-but-worth-it The Prize by Daniel Yergin.  Yergin is an industry insider, but rest assured, fellow enemies of "the man," the book is still worth your time.  It is an excellent read, taking you from the the discovery of oil at Titusville, PA in 1859 up through the first Gulf War.  It's an indispensable book, although at 900+ pp. it might be a bit long for some folks.  (Honestly you'll likely walk away from reading The Prize a bit more sympathetic than you used to be to the oil industry - but not sympathetic enough to necessarily want Rex Tillerson as Secretary of State, or Russia as America's new Best Bud.)

I have another book I want to review for all of you, but it deserves a post of its own, so I'll save it for tomorrow.  For now, be well, and if anyone is imposing sanctions on you this holiday season, I hope they are lifted so that you can complete a half-trillion dollar oil deal of your own.


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