All Rex Tillerson Cares About Is Energy
But does that mean he's going to gut America’s $50 billion foreign aid budget?
President-elect Donald Trump’s nominee for secretary of state holds a unique view of the soft-power side of American diplomacy and influence in the world. ExxonMobil CEO Rex Tillerson said in his 2012 annual corporate letter that all the good for the world, its hopes and dreams, rests with energy.
“In the coming decades,” Tillerson wrote, “society will continue to face complex challenges related to a growing world population, economic growth, climate change, food security and public health.… We must recognize that none of the challenges we face can be addressed without reliable and affordable access to energy. Energy powers our offices and schools. It runs life-saving medical equipment and operating rooms. It manufactures vaccines and transports medical personnel.”
At the close of 2015, ExxonMobil reported a total income of $16.2 billion, versus a debt of $38.7 billion — a significant reversal of fortunes compared with the corporation’s 2013 income of $32.6 billion and debt of $22.7 billion. But it was a bad year for the oil business, with the price of petroleum plummeting. Despite the indebtedness, ExxonMobil maintained its $11 million a year support of anti-malaria programs, boasting, “Over the past 10 years, we contributed about $2.4 billion to communities around the world,” without detailing who exactly received this generosity and for what purpose.
The most frustrating part of trying to parse Tillerson’s likely impact on America’s foreign assistance efforts is that his life’s work has been in the corporate world, where public relations often guides spending and lip service given by executives to social issues is challenged by little or no accountability. ExxonMobil’s 2015 annual report, for example, acknowledges that: “Society continues to face the dual challenge of expanding energy supplies to support economic growth and improve living standards, while simultaneously addressing the societal and environmental risks posed by rising greenhouse gas emissions and climate change. There is a humanitarian element and moral imperative to our business. More than 1 billion people have no access to electricity and rely on coal and biomass such as wood and animal waste to cook their food. Improved supply of reliable and affordable energy will help lift these people out of poverty, improving their health and welfare.”
But these corporate sentiments, and Tillerson’s speeches as CEO, need not translate into action, so long as the stockholders are satisfied with the company’s general direction and stock yields. And, of course, we now need to put this largesse in perspective: The combined $35 million donated in 2015 for women and health is trivial compared with the more than $50 billion annual U.S. foreign assistance program that Tillerson will now oversee.
America is not a corporation, and its voting population is not a stockholders’ meeting. If confirmed as secretary of state, Tillerson will find his corporate rhetoric about health, welfare, poverty, and greenhouse gases put to the test. And that rhetoric suggests Tillerson and ExxonMobil believe in “maintaining a fundamental respect for human rights” and leading initiatives to “combat malaria, improve education, and advance economic opportunities for women.”
If that’s the case, he’ll have an arsenal of good works at his disposal. As secretary of state, Tillerson will command the world’s largest foreign assistance effort, featuring the Office of the U.S. Global AIDS Coordinator and Health Diplomacy (OGAC), the Office of U.S. Foreign Assistance Resources, the Malaria Initiative, and the Global Health Security Agenda, to name a few. In addition, the independent U.S. Agency for International Development (USAID) formally receives “overall foreign policy guidance from the secretary of state,” which is a very polite way of saying that it will take its budget directly from Congress but its marching orders from Secretary Tillerson, assuming he is confirmed by the Senate.
The combined State Department and USAID foreign assistance budget for fiscal year 2017 of $50.1 billion is roughly three times what ExxonMobil earned last year, but it’s a pittance in the grand $4.15 trillion federal budget. Moreover, $1.4 billion of this money is committed to humanitarian aid in Afghanistan and Pakistan, a subsidy that has strong bipartisan support. And $5.1 billion represents security assistance to key Middle East partners ($3.1 billion of that to Israel, alone) — again, strongly supported by both Democrats and Republicans on Capitol Hill. Because at least half of the top 10 list constitutes strategic partners or locations of active U.S. military engagement, it is highly unlikely that Congress would lower this funding support or that the Trump administration would immediately abandon this development or security backing. That leaves about $34 billion in foreign assistance that might be vulnerable to cuts or significant adjustments in the new administration, the largest portion of which is dedicated to health programs such as OGAC and the Malaria Initiative, women’s reproductive health, child vaccination, safe water, and the like.
Tillerson has never directly commented publicly on the U.S. foreign assistance landscape but has referred to ExxonMobil’s investments and fossil fuel development as superior to climate change efforts. At the annual shareholders’ meeting in 2013, Tillerson asked, “What good is it to save the planet if humanity suffers?” And the two best ways to relieve humanity’s suffering, ExxonMobil believes, are by providing energy and tackling malaria.
In 2016, about 1.3 billion people in the world have no access to electricity, which clearly impedes their ability to do homework in the nighttime darkness, sterilize medical equipment, conduct business of any kind after sunset — or even have hope of building a business to begin with. Cell phones may have revolutionized African communication and banking, but production, transport of goods, advanced education, and farming development cannot be executed with battery-powered Android apps. The World Bank reckons that expanding power grids and energy development in poor countries using current local government and multinational methods of finance and development will never keep pace with population growth, especially in South Asia and sub-Saharan Africa.
President Barack Obama would agree, at least partially, with Tillerson’s premise that without energy, societies cannot develop. That is why in 2013 the White House launched Power Africa, a five-year, $7 billion program aimed at bringing electricity to 60 million new households in African. Because Power Africa emphasizes renewable energy development, it has consistently been under attack from the American Coalition for Clean Coal Electricity and enjoys no support from the petroleum industry. Managed by USAID, Power Africa has more than 100 private sector partners, including such American giants as General Electric, Goldman Sachs, and Citi, but no oil companies have joined the effort. Under Tillerson’s leadership, ExxonMobil has an Africa policy dubbed “Energy for Growth,” which combines oil and gas exploration, extraction, and salesforce employment across the continent with a malaria-control effort that the oil company sponsors through its corporate social responsibility program.
It seems unlikely that Power Africa will survive long under Tillerson, unless it abandons its emphasis on renewable energy sources. In addition to the disdain Power Africa gets from the coal industry, and snub from petroleum companies like ExxonMobil, none of the major power infrastructure companies, such as Halliburton, is on board. Of course, Halliburton was run by Dick Cheney during the 1990s, who went on to serve as vice president in the George W. Bush administration, during which time the privately held company garnered billions of dollars’ worth of military and construction projects, notably in Iraq and the Middle East. It is not unimaginable that Power Africa, should it survive at all, would under Tillerson’s leadership be transformed into an electrification project executed by Halliburton and key oil companies.
Since 2005, the ExxonMobil Foundation, which executes the company’s corporate social responsibility programs, has put malaria control at the top of its foreign-grant making list, under its Africa Health Initiative.
“We established our Africa Health Initiative in 2000 because we strongly believe that improvements in public health can be a basis for broader economic and social gains. Since then, we have dedicated more than $11.5 million to community activities related to the prevention, control, and treatment of malaria in Africa,” said Tillerson in 2005. Since that time, the foundation has awarded grants to nongovernmental organizations (NGOs) and academic researchers, chiefly to tackle distribution of insecticide-soaked bed nets and other tools to prevent children from coming in contact with malaria-transmitting mosquitoes in Africa. Most of the grants have been for less than $300,000. The major recipients have been American NGOs like Population Services International, Malaria No More, and Africare and academic teams at Harvard and Johns Hopkins. And ExxonMobil has supported Friends of the Global Fight Against AIDS, Tuberculosis, and Malaria; a variety of business coalitions against HIV and malaria; and basic research on malaria vaccines.
In 2008, ExxonMobil ran an international TV ad campaign promoting its good deeds in the world, featuring Steven Phillips, medical director of the corporation’s global issues and projects division, talking about malaria. “It’s going to be solved by all of us working together,” Phillips told viewers.
As secretary of state, Tillerson will discover that working with Congress, and shaping the future of foreign assistance, is a lot tougher than making bold malaria promises in TV ads or energy vows at shareholders’ meetings. If he gives foreign assistance much of his attention at all, he’s likely to learn that more than 12 million people are alive today thanks to the President’s Emergency Plan for AIDS Relief (PEPFAR) and its provision of free anti-HIV medicines — and that cutting off those supplies means letting 12 million people perish. He may similarly learn that hundreds of global health efforts worldwide are highly dependent upon U.S. taxpayer support, without serious alternative forms of financing. It’s one thing to put happy, smiling children’s faces in corporate brochures that boast of achievements in malaria control. It’s quite another to wade into a refugee camp or malaria-ravaged village, look at the needy youngsters’ faces, and contemplate cutting them off for the sake of U.S. federal budget balance or to shift their resources in more politically strategic directions.
So, what will Tillerson actually do to foreign assistance, as secretary of state? Can his corporate goodwill translate into a platform for the future of American soft-power engagement in the world?
In the end, Tillerson’s track record suggests that he will foster programs aimed at provision of energy, enhancing women’s basic economic rights, and fighting malaria. Conversely, there is nothing in the public record to suggest that he is personally committed to gutting reproductive health, gay rights, democracy building, solar power, or any other effort promoted for the last eight years by the Obama administration. The pressure is more likely to come from the White House and Congress, pushing budget constrictions and social agendas. The Republican Party’s 2016 platform stipulates ongoing support for PEPFAR but calls for resurrecting the Ronald Reagan-era ban on financial support of NGOs “that provide or promote abortion.” The GOP platform is also critical of the U.N. system and insists that “[f]oreign aid must serve America’s interests first” by promoting U.S. private sector interests and sales of American-made goods, opening markets to U.S. companies, and creating a “competitive global economy.”
Entrepreneurial capitalism, the platform insists, is the only viable solution to poverty, facilitated by faith-based groups that promote strong values. The Brookings Institution recently released a report that echoes GOP sentiments, calling for enhanced roles in foreign assistance for private investors and the U.S. Trade and Development Agency. And in June the House Republican leadership released its national security report, stating, “There is no right to foreign aid.”
There might not be a right, but there’s certainly a need. Take Tillerson’s top development priority heretofore: the provision of electricity to poor countries. In his 2016 annual letter, Bill Gates included a NASA photo of Africa, as seen at night from space. Amid the unelectrified blackness, only a few lights glow, but more than 700 million Africans are immersed in darkness. “I’m always a little stunned when I see photographs like this. It’s been well over a century since Thomas Edison demonstrated how an incandescent light bulb could turn night into day,” Gates wrote. “And yet, there are parts of the world where people are still waiting to enjoy the benefits of his invention. If I could have just one wish to help the poorest people, it would be to find a cheap, clean source of energy to power our world.”
To that end, on Dec. 12, Gates announced the creation of a $1 billion green-energy investment fund, dubbed Breakthrough Energy Ventures, which will focus on basic research and scale-up of renewable energy models for the world. The following day, Gates met with President-elect Trump, pushing the notion of innovation for alternative energy. Afterward, he said in an interview with CNBC, “In the same way President [John F.] Kennedy talked about the space mission and got the country behind that, I think whether it’s education or stopping epidemics … [or] in this energy space, there can be a very upbeat message that [Trump’s] administration [is] going to organize things, get rid of regulatory barriers, and have American leadership through innovation.”
Pay attention, Rex. You’re now in the big leagues of global giving — where it’s not about saving a village but a continent. You just might discover that foreign assistance, stopping climate change, preventing worldwide pandemics, and supporting women’s reproductive rights can all add up to smart, profitable capitalism. And that’s how to keep America great.
Photo Credit: NICHOLAS KAMM/AFP/Getty Images
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