OIL REVIVAL: DONALD TRUMP’S ENERGY PROMISES
- Written by Victor Lupu
The outcome of US elections in November 2016 was a surprise for many analysts and the echoes have not ceased ever since, with information pouring on various issues, especially on Russia’s involvement during the campaign. Until January 20, 2017, when Donald Trump is to take over as president, the analysts and commentators will most certainly continue to dissect the information and the speculations about how the Donald Trump administration’s policy would look like and what expectations lie ahead.
In regard to the energy policy, things look rather flat and some have summarized the expectations in one demand: “Drill!” As Donald Trump claimed during the campaign, it is expected the relaunch of the oil and gas exploitation activity so that the US gains energy independence and becomes even more competitive on the world markets.
The nomination of ExxonMobil CEO, Rex Tillerson, as Secretary of State has stirred speculations and discontent in various circles, at the same time was welcomed with optimism in other camps. Tillerson, 64, is a personal acquaintance of Russian President Vladimir Putin. In 2013, Putin awarded him the Russian Order of Friendship, thus the future Secretary of State being the American with most interactions with the Russian President, besides Henry Kissinger. President-elect Trump recommended Tillerson for his tenacity and the profound awareness of geo-policy. But many analysts would bet on Tillerson’s role in the next administration – he would be responsible for normalizing the relations with Russia after the annexation of Crimea and the disputes regarding the war in Syria.
Many of his supporters say Tillerson could well be a conservative with small ‘c’ but he is definitely a moderniser with a capital ‘M’ for those closest to him.
Controversies about his nomination arose from his lack of governing experience, despite his huge knowledge in terms of oil explorations and operations in more than 50 countries. He is well known for Exxon’s involvement in Russian exploitations. In 2011 Rosneft and Exxon signed an agreement for explorations and drilling in Siberia and the Arctic region amounting to approximately USD 3.2 billion, nevertheless the agreement might trigger operations of some USD 500 billion, analysts say. A less known fact is that Tillerson became a director of the oil company’s Russian subsidiary, Exxon Neftegas, in 1998. Exxon explained recently that Tillerson was no longer a director after becoming the company’s CEO in 2006. After 2006, he took ExxonMobil’s expansion to emerging exploration markets – begun by his predecessor Lee Raymond – to yet greater heights, from West Africa to East Asia, Arctic to Australia.
His position regarding the environment and climate change is also controversial; however, it seems he has softened his stance lately: “We believe that addressing the risk of climate change is a global issue,” he said. Tillerson future position is also controversial due to the fact that he is an Exxon shareholder, which could generate conflicts of interest when taking over the office as secretary of state – his decisions are able to influence the shares’ trading. Other voices point to the fact that a possible lifting of sanctions against Russia might lead to an increased value of trading for Exxon shares.
Tillerson’s opinions regarding the US foreign policy are not well known, but he is acknowledged as a free trade supporter. As said, things are to move in relation to Russia. Disputes with China are to be tackled, Middle East will be in the focus, including the Syria file and the nuclear agreement with Iran. As Donald Trump said he would amend the agreement with Iran concluded in 2015, Rex Tillerson is to manage the file in this direction.
But the Trump administration’s energy policy is not Tillerson’s monopoly. The nomination of other politicians in key positions will also be decisive. We are talking about Scott Pruitt at the helm of the Environment Protection Agency (EPA), Rick Perry to lead the Department of Energy and Ryan Zinke at the Department of Interior, of which the first two could prove essential. As commentators say, their publicly expressed positions show they all are supporters of drilling for oil and gas ‘on a global scale’.
In the US, Pruitt will likely change regulations in order to boost fossil fuel production and use. He is attorney general of Oklahoma and a sceptic of climate science. Scott Pruitt said it himself: “The American people are tired of seeing billions of dollars drained from our economy due to unnecessary EPA regulations, and I intend to run this agency in a way that fosters both responsible protection of the environment and freedom for American businesses.” Together with other state attorneys, he has sued EPA twice. Is there anything more to say about what it is expected from him when taking over the agency?
As for Rick Perry at the Department of Energy, one source says that he, as governor, campaigned to let the fossil fuel giant Energy Transfer Partners run a pipeline through one of the ecologically fragile regions of Texas, despite the fact that local people had almost unanimously opposed. Nevertheless, former Perry advisers say his priorities as Energy secretary would include encouraging domestic energy production, promoting renewable sources and streamlining government bureaucracy.
Drawing a line, what would the Trump administration energy policy look like? Analysts say that energy was one of the issues on which Donald Trump has been consistent since the ‘80s.
He believes energy is an area where the US has to act tough to produce resources, intimidate its allies, take on its enemies, and enjoy the good life that oil provides. So, energy independence will be at the top. Trump said during the campaign: “Imagine a world in which our foes and the oil cartels can no longer use energy as a weapon,” anticipating an aggressive foreign policy toward oil producers abroad.
On the domestic plane, most certainly he would change the EPA regulations, including the auto fuel efficiency, according to CNN. On the other hand, Trump has promised to lay down the most roads since the creation of the federal highway system during President Dwight Eisenhower.
Conclusion? As President-elect Donald Trump put it indirectly, oil, lots of it, will make America great again.