Trump, Putin, and ExxonMobil team up to destroy the planet

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Pick of Exxon CEO for Secretary of State clarifies why Putin wanted Trump elected: a $500 billion oil deal killed by sanctions.

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The aligning interests between Russian President Vladimir Putin, Russia’s choice for U.S. president (Donald Trump), and Big Oil represents the gravest threat to humanity (and democracy) since the rise of the Axis powers in the 1930s.

That’s because while Trump may not be able to destroy global climate action and the landmark 2105 Paris climate deal all by himself — as he pledged to do during the campaign — he probably could do that with help from Russia and the trillion-dollar oil industry.

So much is explained by Trump’s Secretary of State choice. Media reports now say it will be Rex Tillerson, CEO of oil giant ExxonMobil, which had made a $500 billion oil deal with Putin that got blocked by sanctions.

Stalling the biggest oil deal ever did not just “put Exxon at risk,” as the Wall Street Journal reported in 2014. MSNBC’s Rachel Maddow explained last week this deal was so big it was “expected to change the historical trajectory of Russia.”

This deal could explain why Putin appears to have interfered in U.S. elections in favor of a Trump victory. Recently, “the C.I.A. altered its formal assessment of Russia’s activities to conclude that the government of President Vladimir V. Putin was not just trying to undermine the election,” as the New York Times reported Saturday, “but had also acted to give one candidate an advantage.”

You can certainly make a plausible case, as many have, that Putin had enough motivation to interfere simply to undermine the legitimacy of U.S. elections.

rsz_1auw_uc1pyxzcvb9inzlaaaOn the other hand, it was always a little puzzling that Putin seemed to so admire a guy who had pledged to fully open the on-shore and off-shore spigots of U.S. domestic oil (and gas) drilling. After all, the end result of those policies would inevitably be a lower price for oil and gas, which compose the single biggest source of revenue for Russia. That’s why we saw headlines from January like, “Oil Price Collapse Pushing Russia’s Economy To The Edge” and from October like, “Why U.S. Oil Production Trumps Any Russian-OPEC Deal.”

But for Putin and the kleptocrats who benefit from his rule, little matters more than enriching coffers right now. It is no coincidence that just last week, Putin revealed Russia had sold a 19.5 percent stake in the Kremlin-controlled oil giant Rosnet for $11.3 billion to Qatar and others, “confounding expectations that the Kremlin’s standoff with the West would scare off major investors,” as Fortune reported in a must-read piece that connects major pieces of this puzzle.

“Just a few weeks ago, most industry watchers had written off the chances of a foreign investor being found for Rosneft,” Fortune reports. But this deal, the biggest oil deal of 2016, “pointed to a possible reassessment by foreign investors of the risks of dealing with Russia, at a time when the election of Donald Trump as U.S. president has heightened expectations of a thaw between Moscow and Washington.”

And how does Putin benefit? That $11.3 billion goes to the Kremlin, not Rosneft. No wonder “Russian officials were jubilant that Rosneft had pulled off a deal which will deliver a large chunk of the cash they need to fill gaps in the state budget caused by an economic slowdown and sanctions” (per Reuters).

Kleptocracy — and apparently meddling with a foreign an election — looks like it pays very well.

And if the sanctions are lifted — something a new Secretary of State could help make happen — it would pay off big time for Exxon. As Bloomberg explained in an October piece, “Exxon Faces Collateral Damage From a New Cold War,” the company’s “project queue for 2018 onward is weighted to resources challenged by low prices or higher costs, such as LNG and oil sands.”

Credit: Fortune
Credit: Fortune
Imagine, however, if the oil giant is freed to produce and sell oil on the staggering 63.7 million acres of Russian land it leases, which is over 5 timesthe amount of land it leases in this country. Happy days are here again, for Exxon.

One final point: Some have argued “the Paris treaty will survive and thrive during the Trump era.” Certainly, if the rest of the world unites to meet their commitments to continually ratchet down carbon pollution, that’s possible.

But Putin has never liked the Paris agreement, because it would mean a large fraction of Russia’s fossil fuel reserves would remain in the ground, rather than bubbling up to provide vast revenue for the Kremlin. No surprise, then, that Putin’s greenhouse gas target “is one of the weakest put forward by any government, anywhere,” as Climate Action Tracker explains. It “lies significantly above emissions that would result from current policies.”

“What’s holding Russia back from ratifying Paris climate agreement?” asked one op-ed from late September. Russia’s news agency TASS explained“Russia will not fast-track ratification.” Could it possibly have been that Putin has been waiting to see the results of our election—results of which Russia was able to influence, according to the majority of U.S. intelligence reports?

As of December 12, the U.N. reports Russia still hasn’t ratified the deal. If the new President of the second largest emitter keeps his pledge to exit Paris, then the fifth largest emitter will have a great excuse to opt out, too.

Now imagine how much havoc Putin, Trump, and a new oily Secretary of State could wreak on future negotiations by coercing other countries not to keep making new pledges to ratchet down their emissions, which is the cornerstone of Paris’s strategy to avoid catastrophic climate change.

Lee Raymond, Tillerson’s predecessor at Exxon, once explained: “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” Why should our new Secretary of State feel any differently?

Source: ThinkProgress. Reproduced with permission. 

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  1. john 3 years ago

    With the level of factual reporting in the USA this will not be well known and will be discounted by the usual Post Truth fact free reports that pass as news.
    As to the Paris Agreement it will be interesting to see how the pledges pan out.
    I expect the countries that have a moral backbone to carry out their promises those of the jelly kind will give lip service and dispute the findings they have failed.
    As to the USA, if there is another financial crisis, expect a lot of pain world wide.
    Who knows what will happen, as the Present Elect has decided he does not need weekly security briefings because he is “smart”, no doubt the new Secretary of State will have a free hand to do as he pleases.
    Hardly a good state of affairs frankly.

  2. disqus_gF5uXVTUbL 3 years ago

    This “thaw between Moscow and Washington” is an extremely interesting development challenging divisions in the free market between economies that have been historically perceived as diametrically opposed. It’s an interesting marriage, even though Trump “had pledged to fully open the on-shore and off-shore spigots of U.S. domestic oil (and gas) drilling” and the U.S. is often said to be broke. Will this be a fruitful marriage or will this be a case of strange bedfellows? One wonders how the U.S. will have enough money to continue to consume oil and how cost effective the project can produce oil to compete with renewable energy. This project appears to put renewable energy to the test, to outperform fossil fuel based upon an economic benchmark, as opposed to commitments to social justice and environmental values. Mining has traditionally been the territory of big business and the environment has traditionally been the territory of community based organisations. Another interesting development, is the environment and renewable energy transitioning into the territory of big business. Is renewable energy big enough?
    On an aside, in terms of the emergent “global meta-program” of authors pointing to democracy being undermined, I can see this is happening, although what appears more in the foreground is undermining the ocean for financial gain. I guess that’s a solid motivation to undermine democracy, although both countries are kind of democratic. It seems Moscow has infiltrated it’s version of democracy into the U.S. To be fair, in Australia is our big business, media and democracy really so different?

  3. Richard 3 years ago

    This is the last role of the dice politically for big oil. It won’t work. With all the propaganda they can muster they are only hanging on by a thread in Australia. The world has moved on. Trump will implode. The US will swing back to the Dems big time.

    Unfortunately big oil will then resort to starting wars to keep the whole thing going. That’s my big worry.

    • disqus_gF5uXVTUbL 3 years ago

      You’re not taking into account the genuine polarity evident in voters. It’s kind of a class conflict, with an educated middle class voting for the Dems and despising those Clinton labeled the “deplorables”, while Trump rallies the “deplorables”. The same happens in Australia with the Greens lashing out at One Nation, while One Nation is working out who took all the jobs and money. Trump and Hanson voters suspect government is responsible and they are right, the wealth has been proven to be shifting further into the small top tier of society who are attempting to steer public policy to further leverage their wealth. In Australia the top 1% own 15% of the wealth, the top 10% own 50% of the wealth and the top 10% are pulling away from the middle classes, who own the other 50% of the wealth, with the bottom 40% of the population having no wealth or debt. This is trickle down economics. So then, we see Trump and Hanson voters are legitimately pissed.

      • Richard 3 years ago

        No, regardless of politics fossil is cooked anyway.
        Even the energy market regulator in Australia recognizes this. They are predicting coal power to fall from 75% today to 35%
        In 2035 and will primarily be replaced by renewable. And they are very conservative in their predictions.
        They also predict that solar/wind plus battery will be cheaper for small scale than grid by 2020 and large scale by 2030.
        The fact is the cost of renewables plus battery is sinking like a stone. The risk of stranded assets will prevent new fossil power from being built.
        The same goes for Nuclear, it’s just too expensive now.
        How quickly it has changed. The same thing will happen to fossil fuels in transport. The end will come quickly over the next ten fifteen years. Nothing Putin Trump or big oil can do except blow the joint up.
        I wouldn’t put it past them. Big oil and the military are joined at the hip.

        • disqus_gF5uXVTUbL 3 years ago

          If your maths and tech research are correct, then even without “political will” leading, households and commercial/industrial premises will load defect between 2020-2030 – at least those people who are convinced they will get the return on investment you’re saying will be economic. Without “political will” this may leave the grid/s in a bit of a shambles with poor people suffering.

          • Richard 3 years ago

            Yes you are right. That is what is happening in Australia right now.
            Our conservative leaders, addicted to fossil fuel revenue are blinded by the reality, like rabbits in headlights. They seem totally paralyzed to the point of denial. They can’t believe that any power source could ever be cheaper than coal. It’s too much for them.
            Without a plan, the poor will suffer because the remaining fossil plants are facing a death spiral.
            It’s a total shambles at the moment.

          • disqus_gF5uXVTUbL 3 years ago

            This possibility is why I’m so interested in readying the grid with storage ASAP, rather than waiting for high levels of renewables. It will take time and experience to build a knowledge base for integrated system design, rather than simply adding RE and storage in different places on a NEM.

        • disqus_gF5uXVTUbL 3 years ago

          Are you sure you haven’t got a bit of conspiracy theory running with your fears about world leaders? If renewables turn out better than fossil, why does that lead to the jump in logic that somebody would be unhappy and act up?

          • Richard 3 years ago

            You are very naive. The US has been happy to use military to protect Oil before, they blow people up with impunity.
            The economic and politcal/strategic influence of the fossil fuel industry is too great. The whole world order is at stake.
            They aren’t going to slip silently into the night because some other energy system is cheaper and better.
            I may be being paranoid, but I have observed the way the world works for too long. They are not going to care two hoots if they have to bring the house down to maintain the status quo.
            The teaming up of Trump and Putin sends chills down my spine.

          • disqus_gF5uXVTUbL 3 years ago

            The U.S. military has been getting into renewables. It’s a strategic way to avoid long supply chains and is an opportunity to make the U.S. energy independent. Trump has been running the idea of having an open mind about climate change and I would guess he will try to eat every pie open to him. Such a person would not have a strong motivation to side with renewables though could move to a more measured technology agnostic policy stance. Backing oil doesn’t exclude harvesting sun and wind. Trump is a business man and I reckon will make pragmatic decisions. What we appear to be seeing is a working relationship around oil and additionally, renewables take the heat off tensions around local scarcity. It looks to me like the free market will do what it will do.

          • Richard 3 years ago

            I’m hoping you are right. Maybe Trump will turn out to be good for the world. We will just have to wait and see.

          • disqus_gF5uXVTUbL 3 years ago

            I agree, it’s a moment by moment unfolding of the drama with the world watching and Trump wanting to win – make America great again. No one knows what will happen and when I watch Trump speak, I’m certain he often doesn’t know whats appearing next either. I’m sure he has some preconceived ideas though looks like he’s working it out along the way.

      • Richard 3 years ago

        I agree that there is a lot of pissed voters(including me). The former working class battlers have been left in the dust. Unions have been weakened. Labor movements across borders and illegal workers circumventing the rules
        and under cutting wages. Public service wages and conditions forever going up.
        while private contractors wages stagnate.
        Multinational coorporations and high wealth individuals paying no tax by using tax havens.
        I doubt Trump will fix all this stuff, but he might do something instead of nothing.

        • disqus_gF5uXVTUbL 3 years ago

          I put it all down to the failure of trickle down economics.

          • Richard 3 years ago

            Trickle down economics- it’s a great three word slogan!

  4. George Darroch 3 years ago

    Russia is also one of the few countries in the world to benefit substantially from more warmth in the atmosphere.

    Their interests are not our interests, or those of almost anyone else.

    • disqus_gF5uXVTUbL 3 years ago

      They still need a functional ecosystem. They still need long term cost effective energy generation.

  5. Rob G 3 years ago

    This is troubling, but as Abbott has proven with attacks on renewables, uncertainty is a great weapon. In this case it really counts. Trump may be impeached soon into his presidency and that would cause investment wobbles. Already we have seen many of the large oil giants postpone and trash drilling plans – that is only going to get worse as electric vehicles take hold. Let also understand that Russia’s coal markets are collapsing as Europe adopts more renewables (they are looking to replace the lost income).

    America will see first hand what happens when vested powers are running things. Imagine Gina Rhinehart being made special advisor for mining. The outcomes could see an absolute opposite situation in 4 years. Think Bush was replace by Obama… Trudeau replaced Harper. Trumps successor in 2019 could be very interesting.

    • Richard 3 years ago

      Sanders has already put his hand up, I think. With Clinton dead, buried and cremated(sorry just had to borrow an Abbotism). He might have a clean run.

  6. Ian 3 years ago

    It looks like Exxon’s oil fields are remote off shore arctic with no nearby shipping infrastructure or markets. I doubt they will ever be profitable in a world of $50 oil. It’s looking increasingly like new oil drilling technology is going to free up a lot of oil from old fields that can be extracted for a profit at $50, putting a permanent ceiling on oil. A ceiling that is only apt to start falling precipitously in about a decade as EVs start to become a significant part of the world’s automobile fleet.

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