Tillerson brings oil, global ties to position
WASHINGTON — The Texas oil industry is poised to put one of its own into the highest echelon of U.S. government with Exxon Mobil CEO Rex Tillerson rising to the top of President-elect Donald Trump’s list to be next secretary of state.
The ascension of the 64-year-old Tillerson comes at a critical time for the oil and gas sector, as it is beleaguered by calls from governments worldwide to radically cut carbon emissions to combat climate change. It also puts Tillerson in one of the most powerful positions on the world stage, giving the industry a visibility it has not enjoyed since Dick Cheney, the former Halliburton CEO, served as vice president to former President George
W. Bush.
Tillerson, a native of Wichita Falls who lives outside Dallas, met with Trump again Saturday for two hours at Trump Tower. He is the favored pick by top advisers Stephen K. Bannon and Trump’s son-in-law, Jared Kushner, according to multiple news reports Saturday.
Sources warned, however, that Trump, famous during his presidential campaign for relying on gut instinct and not the advice of his close circle of family and advisers, could go in another direction. Other names still in the running reportedly include former presidential candidate Mitt Romney and Sen. Bob Corker, R-Tenn., chairman of the Senate Foreign Relations Committee.
An Exxon spokesman declined to comment Saturday. Rising to the top
As the head of one of the world’s most powerful companies — its foreign affairs division is sometimes compared to the State Department itself — Tillerson would enter the office with relationships already long established with many heads of state, including Russian President Vladimir Putin.
At a time when relations have been particularly fraught over the war in Syria and Russia’s activities in Ukraine in 2014, Tillerson is a seasoned hand in Russia who ran Exxon Mobil’s operations there in the 1990s and more recently signed a historic deal with state-owned Rosneft to drill in the Russian Arctic.
His close ties with Putin, however, are already raising eyebrows. U.S. Sen. John McCain, for instance, said Saturday that it’s “a matter of concern.”
Tillerson rose steadily through the ranks after joining Exxon in 1975 shortly after graduating from the University of Texas. Before age 40, he was named a general manager, overseeing oil and gas operations across a large swath of Texas, Oklahoma, Arkansas and Kansas. Then it was on to Yemen and Russia, before eventually rising to a short list of potential successors to LeeRaymondasCEO.
He is “the essential Exxon product,” said Joseph Pratt, a history professor at the University of Houston who wrote a recent book on the Irving-based company. “Exxon is a meritocracy that really tests you, the whole way up.”
Renowned within the company for his discipline and even temper — traits he is said to ascribe to training with the Boys Scouts of America — Tillerson beat out his competition and became CEOin 2006.
As news spread of Tillerson’s likely posting to the Trump administration Saturday, it drew cheers within Texas oil circles from Houston to Midland.
John Christmann, CEO of Houston-based Apache Corp., said Tillerson “will offer a fresh perspective to the position.”
Jeanne Phillips, spokeswoman for Dallas oil billionaire Ray L. Hunt, pointed to “Rex’s experience around the world” and said he would be an “excellent choice for secretary of state.”
Steven Pruett, president of Elevation Resources in Midland, said he was a “big fan” of Tillerson and applauded his likely appointment. “It’s very exciting for Texas,” Pruett said.
Over the past decade Tillerson has shown himself to be a less combative leader than predecessors like Raymond. When oil prices rose to record levels in 2008 — driving up Exxon profits and anger from motorists — Tillerson went on NBC’s “Today” show to explain the vagaries of the international oil markets.
On climate change, a minefield for oil CEOs the past decade, Tillerson has acknowledged scientific findings that humankind is causing the earth’s temperature to rise. Andwhile calling for a tax on carbon emissions at-large, he has also questioned the social impact of a large-scale pull back from fossil fuels.
Earlier this year the U.S. Securities and Exchange Commission requested the records of Exxon and its auditor to examine whether the company had properly warned investors of the threat carbon regulation posed to its business.
“The conflicts of interest with this secretary of state pick abound,” Ken Kimmell, president of the Union of Concerned Scientists, said in an email. “You wouldn’t hire the CEOofatobacco company to serve as surgeon general. So whywould you pick the leader of an oil and gas corporation to spearhead a position tasked with national security and global climate action?” ‘He’s got the skills’
Tillerson would add to a Trump Cabinet thick with executives from business and finance. The real estate mogul turned politician has already announced former Goldman Sachs executive Steven Mnuchin as his treasury secretary and Andy Puzder, head of the restaurant group that includes chains such as Carl’s Jr. and Hardee’s, as his labor secretary.
Considering the size of Exxon’s global operation and the far-reaching scope of the secretary of state’s office, Tillerson is expected to get tough questioning by the Senate if he is the nominee.
Like other corporate leaders to make late career moves into government, ethics experts say Tillerson would likely be advised to sell off any holdings that pose a potential conflict of interest, including Exxon shares valued at $145 million, according to a filing with the SECin April.
More immediately, Tillerson would suddenly be thrust into a spotlight very different from his current role as CEO, in which he is judged by the strength of Exxon’s quarterly earnings reports. His media availability is largely limited to Exxon’s once-a-year annual meeting.
“He’s got the skills you’d want to see in a secretary of state,” said Jim Krane, an energy fellow at Rice University’s Baker Institute of Public Policy. “But he’s a businessman first and foremost, and that’s not the same as being a diplomat.” james.osborne@chron.com twitter.com/@osborneja david.hunn@chron.com twitter.com/davidhunn