ExxonMobil CEO Rex Tillerson—who has close personal and company ties to Russia and President Vladimir Putin—is President-elect Donald Trump's top pick to become the next secretary of state, with the decision likely coming next week according to NBC News.
The news comes amid reports that Congressional members and senior U.S. Central Intelligence Agency (CIA) officials say they have intelligence showing Russia attempted to tip the balance of the November U.S. presidential election in favor of Trump by hacking into email systems and giving those emails to Wikileaks. And President Barack Obama has called for a complete investigation on the matter before he leaves the White House on Jan. 20.
Though the evidence presented to the U.S. public so far lacks smoking gun documentation, many are alarmed that a geopolitical adversary may have interfered with the U.S. electoral process. Trump, though—who has signaled a potential sea change in the U.S.-Russia geopolitical relationship—is not among them, as indicated in his choice of Tillerson for top U.S. diplomat.
"If the goal is to drain the swamp in DC, Tillerson might not be your man; Exxon's business plan continues to require raising the level of the ocean to the point where Foggy Bottom will be well underwater," said 350.org founder Bill McKibben in a press release. "But this is certainly a good way to make clear exactly who'll be running the government in a Trump administration—just cut out the middleman and hand it directly to the fossil fuel industry."
Exxon Says It's "Not a U.S. Company"
Exxon, the top U.S. producer of oil and gas and a well-documented funder of climate science denial, actually leases more land in Russia than it does in the U.S.
"Exxon boosted its Russian holdings to 63.7 million acres in 2014 from 11.4 million at the end of 2013, according to data from U.S. regulatory filings," reported Bloomberg in March 2014. "That dwarfs the 14.6 million acres of rights Exxon holds in the U.S., which until last year was its largest exploration prospect."
Exxon, though headquartered in Irving, Texas near Dallas, is a sprawling "private empire" with assets spread across the globe. When asked about building more U.S. refineries to protect the U.S. economy and consumers from fuel shortages, former CEO and chairman Lee Raymond put Exxon's view of itself and its loyalty to the U.S. bluntly.
"I'm not a U.S. company, and I don't make decisions based on what's good for the U.S," Raymond is quoted as saying in the 2012 book Private Empire: ExxonMobil and American Power by Steve Coll.
In June, Tillerson attended the St. Petersburg International Economic Forum after taking a two-year hiatus from attending the event, which is the top business meeting held annually in Russia. Igor Sechin, CEO of Russian state oil company Rosneft and currently the subject of U.S. sanctions, served as the keynote speaker.
Offshore Drilling, Fracking, LNG
Exxon and Rosneft have maintained close business relations, so much so that Putin gave the Order of Friendship Award to Tillerson in 2013. In terms of business ties, what has that "friendship" entailed?
The two oil companies had intended to tap into Russia's bounty of over 191 billion acres of offshore Arctic oil as part of their joint venture. (However, that was before the U.S. sanctioned Russia for its incursion in Crimea, which has temporarily halted the drilling plans.) The two companies also co-run the Arctic Research and Design Center for Continental Shelf Development in Russia, in which Exxon maintains a 33.33 percent stake.
Since 1996, Exxon has also taken part in the Sakhalin Consortium, which centers around pumping oil offshore from Russia's Sakhalin Island. Exxon and Rosneft also co-own acreage in Texas' Permian Basin shale patch, and until recently dropping the joint venture, they co-owned 20 offshore drilling plots in the Gulf of Mexico.
Beyond the Gulf, Exxon maintains a joint venture with Rosneft to do offshore drilling in Alaska's Point Thompson in the state's North Slope territory.
In Russia, Exxon also co-owns a stake in the proposed Sakhalin liquefied natural gas (LNG) facility in Sakhalin, which would see that gas exported to the global market. However, the plant opening was delayed when sanctions hit, pushing it back at least two years according to an April 2015 announcement.
Exxon also has a joint venture with Rosneft in the Bazhenov Shale basin in Siberia, into which Exxon poured $300 million. Exxon owns a 49 percent stake and Rosneft 51 percent in that venture, which is to explore hydraulic fracturing or fracking possibilities in the field. If exploration bears fruit, Rosneft would hold a 66.67 percent interest in drilling the field while ExxonMobil would maintain a 33.33 percent stake.
"This agreement combines the strengths of our two companies," Tillerson said when the two companies announced the deal in June 2012. "ExxonMobil has technology leadership in tight oil and unconventional reserves development and Rosneft brings direct knowledge and experience of Western Siberia's geology and conventional production."
If drilling proves technologically feasible, Bazhenov could become the most prolific shale field in the world.
Lobbying Against Russian Sanctions
As soon as sanctions are lifted in Russia, which Trump has said he would do, Exxon has said it will return to the Russian Arctic.
BuzzFeed has reported that a bill is now making its way through Congress which would make it much more difficult for the next president to reverse those sanctions, which were put in place through a series of executive orders. Exxon is very interested in the fate of that bill.
As Buzzfeed reported:
"We have not lobbied on the bill," Alan Jeffers, spokesperson for ExxonMobil, told BuzzFeed News. "Our activities on the bill constitute monitoring of congressional activities."
That was this summer before Congress was again in session. Yet the bill's language has already been changed in a way that would make Exxon's dealings in Russia much easier, as it essentially exempts the exective order sanctioning Rosneft and other Russian energy companies.
With Tillerson heading the State Department, this kind of international energy policy may become much more common.
Though made in large part of plastic, glass, ceramics, gold and copper, they also contain critical resources. The gallium used for LEDs and the camera flash, the tantalum in capacitors and indium that powers the display were all pulled from the ground — at a price for nature and people.
"Mining raw materials is always problematic, both with regard to human rights and ecology," said Melanie Müller, raw materials expert of the German think tank SWP. "Their production process is pretty toxic."
The gallium and indium in many phones comes from China or South Korea, the tantalum from the Democratic Republic of Congo or Rwanda. All in, such materials comprise less than ten grams of a phone's weight. But these grams finance an international mining industry that causes radioactive earth dumps, poisoned groundwater and Indigenous population displacement.
Environmental Damage: 'Nature Has Been Overexploited'
The problem is that modern technologies don't work without what are known as critical raw materials. Collectively, solar panels, drones, 3D printers and smartphone contain as many as 30 of these different elements sourced from around the globe. A prime example is lithium from Chile, which is essential in the manufacture of batteries for electric vehicles.
"No one, not even within the industry, would deny that mining lithium causes enormous environmental damage," Müller explained, in reference to the artificial lakes companies create when flushing the metal out of underground brine reservoirs. "The process uses vast amounts of water, so you end up with these huge flooded areas where the lithium settles."
This means of extraction results in the destruction and contamination of the natural water system. Unique plants and animals lose access to groundwater and watering holes. There have also been reports of freshwater becoming salinated due to extensive acidic waste water during lithium mining.
But lithium is not the only raw material that causes damage. Securing just one ton of rare earth elements produces 2,000 tons of toxic waste, and has devastated large regions of China, said Günther Hilpert, head of the Asia Research Division of the German think tank SWP.
He says companies there have adopted a process of spraying acid over the mining areas in order to separate the rare earths from other ores, and that mined areas are often abandoned after excavation.
"They are no longer viable for agricultural use," Hilpert said. "Nature has been overexploited."
China is not the only country with low environmental mining standards and poor resource governance. In Madagascar, for example, a thriving illegal gem and metal mining sector has been linked to rainforest depletion and destruction of natural lemur habitats.
States like Madagascar, Rwanda and the DRC score poorly on the Environmental Performance Index that ranks 180 countries for their effort on factors including conservation, air quality, waste management and emissions. Environmentalists are therefore particularly concerned that these countries are mining highly toxic materials like beryllium, tantalum and cobalt.
But it is not only nature that suffers from the extraction of high-demand critical raw materials.
"It is a dirty, toxic, partly radioactive industry," Hilpert said. "China, for example, has never really cared about human rights when it comes to achieving production targets."
Dirty, Toxic, Radioactive: Working in the Mining Sector
One of the most extreme examples is Baotou, a Chinese city in Inner Mongolia, where rare earth mining poisoned surrounding farms and nearby villages, causing thousands of people to leave the area.
In 2012, The Guardian described a toxic lake created in conjunction with rare earth mining as "a murky expanse of water, in which no fish or algae can survive. The shore is coated with a black crust, so thick you can walk on it. Into this huge, 10 sq km tailings pond nearby factories discharge water loaded with chemicals used to process the 17 most sought after minerals in the world."
Local residents reported health issues including aching legs, diabetes, osteoporosis and chest problems, The Guardian wrote.
South Africa has also been held up for turning a blind eye to the health impacts of mining.
"The platinum sector in South Africa has been criticized for performing very poorly on human rights — even within the raw materials sector," Müller said.
In 2012, security forces killed 34 miners who had been protesting poor working conditions and low wages at a mine owned by the British company Lonmin. What became known as the "Marikana massacre" triggered several spontaneous strikes across the country's mining sector.
Müller says miners can still face exposure to acid drainage — a frequent byproduct of platinum mining — that can cause chemical burns and severe lung damage. Though this can be prevented by a careful waste system.
Some progress was made in 2016 when the South African government announced plans to make mining companies pay $800 million (€679 million) for recycling acid mine water. But they didn't all comply. In 2020, activists sued Australian-owned mining company Mintails and the government to cover the cost of environmental cleanup.
Another massive issue around mining is water consumption. Since the extraction of critical raw materials is very water intensive, drought prone countries such as South Africa, have witnessed an increase in conflicts over supply.
For years, industry, government and the South African public debated – without a clear agreement – whether companies should get privileged access to water and how much the population may suffer from shortages.
Mining in Brazil: Replacing Nature, People, Land Rights
Beyond the direct health and environmental impact of mining toxic substances, quarrying critical raw materials destroys livelihoods, as developments in Brazil demonstrate.
"Brazil is the major worldwide niobium producer and reserves in [the state of] Minas Gerais would last more than 200 years [at the current rate of demand]," said Juliana Siqueira-Gay, environmental engineer and Ph.D. student at the University of São Paulo.
While the overall number of niobium mining requests is stagnating, the share of claims for Indigenous land has skyrocketed from 3 to 36 percent within one year. If granted, 23 percent of the Amazon forest and the homeland of 222 Indigenous groups could fall victim to deforestation in the name of mining, a study by Siqueira-Gay finds.
In early 2020, Brazilian President Jair Bolsonaro signed a bill which would allow corporations to develop areas populated by Indigenous communities in the future. The law has not yet entered into force, but "this policy could have long-lasting negative effects on Brazil's socio-biodiversity," said Siqueira-Gay.
One example are the niobium reserves in Seis Lagos, in Brazil's northeast, which could be quarried to build electrolytic capacitors for smartphones.
"They overlap the Balaio Indigenous land and it would cause major impacts in Indigenous communities by clearing forests responsible for providing food, raw materials and regulating the local climate," Siqueira-Gay explained.
She says scientific good practice guidelines offer a blueprint for sustainable mining that adheres to human rights and protects forests. Quarries in South America — and especially Brazil — funded by multilaterial banks like the International Finance Corporation of the World Bank Group have to follow these guidelines, Siqueira-Gay said.
They force companies to develop sustainable water supply, minimize acid exposure and re-vegetate mined surfaces. "First, negative impacts must be avoided, then minimized and at last compensated — not the other way around."
Reposted with permission from DW.