Exxon CEO seen as the best of many evils for Paris deal

By Jean Chemnick, Benjamin Hulac | 12/12/2016 10:01 AM EST

President-elect Donald Trump’s expected nomination of Exxon Mobil Corp. CEO Rex Tillerson to lead the State Department will have an uncertain effect on continued U.S. involvement in the Paris climate deal.

Rex Tillerson, CEO of Exxon Mobil Corp., is expected to be named President-elect Trump’s secretary of State.

Rex Tillerson, CEO of Exxon Mobil Corp., is expected to be named President-elect Trump’s secretary of State. Photo courtesy of AP Images.

President-elect Donald Trump’s expected nomination of Exxon Mobil Corp. CEO Rex Tillerson to lead the State Department will have an uncertain effect on continued U.S. involvement in the Paris climate deal.

On the one hand, the 64-year-old oilman, who was reported over the weekend to be Trump’s pick for 69th secretary of State, will likely be the only incoming Cabinet member who accepts climate science. He almost certainly will be the only one to have endorsed the landmark climate agreement signed by the United States and nearly 200 nations. That paradox isn’t lost on advocates.

"I think that, ironically, Rex Tillerson would hold the distinction of being the first appointee that Trump has chosen who is not a climate denier," said Shanna Cleveland, senior manager for the Carbon Asset Risk Initiative at Ceres.


If confirmed by the Senate, Tillerson would be thrust into guiding the United States through geopolitical disputes and conflicts in countries where Exxon has a large presence, as well as negotiating international climate accords and other environmental agreements.

Tillerson has spent his entire adult life working for Exxon, which he joined in 1975. For the last decade, he has led the company and protected its business interests in war-torn, benighted and volatile regions worldwide. He has no government expertise, and rumors of his nomination immediately raised questions about his close business and personal ties to Russia and its president, Vladimir Putin.

The choice also triggered swift condemnation from climate activists, who say Exxon knew about the risks of global warming before many scientists and covered up internal studies.

"It is very clear now that Trump is a climate change denier, and that there is no room to put any sense in his head," said Wael Hmaidan, director of the Climate Action Network,which represents hundreds of environmental groups worldwide. "From his appointments so far, it looks like he is only president to benefit his billionaire friends. Trump is a global threat to human security, and it is up to world leaders to stand up against him."

Yet as recently as Nov. 4, the day the Paris Agreement entered force, Exxon Mobil called it "an important step forward by world governments in addressing the serious risk of climate change."

And Tillerson himself said at the Oil & Money conference in London in October that "we share the view that the risks of climate change are real and require serious action," the Financial Times reported.

Who directs the policy?

Analysts said it remains an open question how deeply held the CEO’s climate convictions are — and whether Tillerson’s apparently moderate positions will influence Trump or his burgeoning Cabinet of climate skeptics. Trump’s pick for U.S. EPA administrator, Oklahoma Attorney General Scott Pruitt (R), has dismissed climate science and hinted about targeting climate scientists for legal retribution. Trump’s chief strategist, Steve Bannon, ran a news outlet that regularly decried climate change as a hoax. And as recently as yesterday, Trump himself declared in contravention of established science that "nobody really knows" whether climate change is real.

Harvard University economist Robert Stavins noted that Tillerson’s statements about the Paris Agreement were made when President Obama was in office and former Secretary of State Hillary Clinton seemed likely to succeed him. Now, with Trump headed to the White House, the businessman’s views may have "evolved," Stavins said.

And even if they haven’t, he added, "that doesn’t guarantee by any means that he will be free to pursue those views as policies and actions as secretary of State in the Trump administration."

Throughout the campaign, Trump pledged to "cancel" the Paris Agreement. Yesterday, he told Chris Wallace on "Fox News Sunday" that he is "studying" it.

"I do say this — I don’t want that agreement to put us at a competitive disadvantage with other countries," Trump said. "As you know, there are different times and different time limits on that agreement. I don’t want that to give China or other countries signing agreements an advantage over us."

China pledged to cap emissions and draw 20 percent of its energy from non-fossil-fuel sources by 2030. Republicans have characterized that as allowing the country to "do nothing" for 16 years. Experts say between now and 2030, China’s vow would require it to build renewable infrastructure equal to the entire U.S. power grid.

Trump’s policy positions are often characterized as malleable, but it is unclear who would wield the most influence where international agreements are concerned.

Kevin Book, the managing director of Clearview Energy Partners, said in a recent report on last year’s Iran nuclear deal that he would expect Trump to consider his secretary of State’s advice when deciding whether to withdraw from that deal. But he acknowledged that other Trump national security advisers would also have a say and might countermand the secretary of State’s position.

Book posited that any of the top-tier candidates whose names have been floated for State would be unlikely to "accept a Cabinet post with a tight collar and a short leash," in which foreign policy was run out of the White House.

Yet while Trump has often been characterized as sounding like the last person he spoke to on policy positions, Stavins noted that a secretary of State would be unlikely to have the final word.

"The last person in the room is likely the chief of staff or, in this administration, probably the vice president," he said. "Or, again in this administration, Mr. Bannon."

Bannon, incoming Chief of Staff Reince Priebus and Vice President-elect Mike Pence all oppose the Paris Agreement.

Amy Jaffe, executive director of energy and sustainability at the University of California, Davis, agreed and said Tillerson’s acceptance of the post would signal that he is ready to work to advance Trump’s platform.

"Even though the secretary of State can be influential in Cabinet discussions, in the end, the president sets the policy," she said.

Conditional carbon tax support

Tillerson’s own climate positions are complicated. While acknowledging that humans contribute to warming, he has questioned the extent of expected consequences. He also has said addressing climate change must be balanced against the needs of providing energy — fossil fuel-based — to developing nations (see related story).

Jaffe noted that Tillerson was responsible for reversing Exxon Mobil’s official stance that man-made climate change is not occurring, as articulated under his predecessor, Lee Raymond.

Tillerson has also said that if the United States pursues a carbon reduction policy, it should come in the form of a revenue-neutral carbon tax. That’s not a full-throated endorsement, and it comes with a demand that virtually all EPA carbon authorities be rolled back in exchange. But even conditional support for a carbon levy by a high-ranking U.S. official would show that a policy model that center-right think tanks have been kicking around for years might finally be gaining some limited traction.

"Picking Rex Tillerson shows that President-elect Trump certainly isn’t allergic to people who acknowledge the reality of climate change and call for resolute action to deal with it," said Eli Lehrer, president of the R Street Institute, which supports a revenue-neutral emissions levy.

"Since the overwhelming majority of CO2 emissions and nearly all potential net future increases will be from outside of the United States, indeed, it’s possible to argue that the secretary of State is the most important person involved in determining climate policy," Lehrer said.

But Exxon Mobil also has continued under Tillerson to support scientific and advocacy groups that buoy contrarian views on climate science, and has strenuously opposed elements of President Obama’s Climate Action Plan.

Two state attorneys general, the Securities and Exchange Commission and lawyers behind class-action lawsuits are probing whether Exxon hid the risks of global warming from its investors as far back as the 1970s. And the #ExxonKnew movement is likely to crop up as Tillerson’s confirmation is considered by the Senate (see related story).

"Sending an oil executive as the face of American diplomacy would signal loud and clear the abdication of our global leadership in protecting the planet and its people from the effects of climate change," said Sen. Sheldon Whitehouse (D-R.I.) in a statement to E&E News.

Whitehouse led the charge in suggesting that Exxon could be liable for its past actions to obscure the state of the science on warming.

Meanwhile, conservative opponents of the Paris Agreement said they see nothing to fear from Tillerson’s likely nomination or from the prospect of former U.S. Ambassador to the U.N. John Bolton as his deputy.

"Don’t think that Trump will do anything to fulfill Paris ‘commitments,’ and the [nationally determined contributions] are unenforceable anyway," said Benjamin Zycher, a senior fellow at the American Enterprise Institute. He dismissed Exxon Mobil’s preference for a carbon tax over regulations as "not the choice now before us."

"Don’t know if Trump will formally announce an exit from [the U.N. Framework Convention on Climate Change]," he said. "But it doesn’t really matter."