TORONTO: The Donald Trump era has begun. And with this, after staying in the background for more than six decades now, Big Oil is finally out of shadows — ready to play a more overt role in Washington.

With the selection of Rex Tillerson, the former Exxon CEO, as Secretary of State, the political influence of the energy sector over Washington has reached a high point, particularly because ‘it strikes the president-elect and other observers as a sensible, mainstream selection,’ Brian Black writes in ‘The Conversation.’

Big Oil has always been a state within a state. Richard Morningstar says that when he was the US ambassador to the Republic of Azerbaijan from 2012 to 2014, “the State Department people and the Exxon people were like two ships passing in the night,” even though both camps were deepening their engagement on energy issues in Russia and the surrounding area.

The level of influence, Big Oil, traditionally enjoyed in Washington could well be gauged from what Lee Raymond, Tillerson’s predecessor at ExxonMobil, told journalist Steve Coll: “Presidents come and go; Exxon doesn’t come and go.”

As the 20th century closed, Coll in his book, ‘The Private Empire’ described Exxon’s approach to the global issues as follows: “The Corporation’s lobbyists bent and shaped American foreign policy, as well as economic, climate, chemical and environmental regulation. Exxon maintained all-weather alliances with sympathetic American politicians while calling as little attention to its influence as possible.”

Big Oil has been playing an increasingly important role in formulating US policies — at least since the 50s — but from behind the scene. Senior executives of oil corporations were known to be involved informally in US elections, particularly as donors or lobbyists to candidates more friendly to the industry than others since at least the 50s.

Black in his write-up underlines that in the modern era of heightened environmental awareness, Republican administrations typically created policies that benefited the oil companies. It was, for instance, the Reagan administration that sought to undermine the new environmental regulations of the 1970s, particularly with Anne Gorsuch as head of the Environmental Protection Agency and James Watt as Secretary of the Interior. It was Watt who allowed extensive energy development on federal lands under his jurisdiction.

Through the 1980s, energy resources on federal lands were opened to development, and environmental regulations were curbed to be more “friendly” to corporate interests, Black hence underlines. The tenor and role of oil in government changed more substantially when George H. W. Bush and George W. Bush — both former oil executives — were in office. They prioritised an agenda that, while not confrontational, grew from incredibly close consultation with the energy industry that they knew so well.

Former Halliburton executive, Dick Cheney personified the proximity of these energy interests to power during this era. And now, Tillerson’s appointment brings to fore the connection between Big Oil and Washington in full public glare.

Interestingly, the change in fortune comes at a significantly important juncture, at a time of growing national awareness of the importance of energy, both as a source of wealth from the expansion of domestic drilling in the US and as a contributor to climate change from burning fuels.

Black hence points out that while the George W Bush Republican administration internally pressured government agencies to subdue scientific findings that supported climate change, the Obama administration used regulations and government science to pursue an agenda of mitigating climate change and adaptively planning for a different future. In this approach, climate change was listed by the Department of State as a matter of national security. While Obama worked with over 100 nations to craft the Paris Agreement in 2015, ExxonMobil under Tillerson faced criticism and lawsuits, being accused of concealing the science that substantiated climate change. Tillerson’s appointment, along with other cabinet appointees, now suggests a major reversal on the nation’s serious treatment of the issue of climate change.

Other variables are coming into play too. With the induction of two Ts — Trump and Tillerson — the Russians are much more confident. At the just concluded World Economic Forum in Davos, Russians were reported to be full of optimism. Coupled with growing US shale output, a close rapport between Moscow and Washington could add to the pressures on the energy sector.

Good, old friend, Fatih Birol thus has a point when he says oil prices will be much more volatile in 2017.

Published in Dawn, January 22nd, 2017