Paige's Return to Deutschland!

Hallo Berlin! This blog will be a place for friends and family to get very occasional snip-its on Biggs' life in Germany.

Tuesday, January 17, 2017

On the bright side, I have smart friends

I went to my first rally on Sunday since 2005. Hundreds of us gathered in Portland to listen to an Allstar line-up of Oregon politicians talk about the importance of keeping the Affordable Healthcare Act also known as Obamacare. If you ever want an earful, get me started on the disparities of health care in the US. This blog post is going a different direction - but suffice it to say, the ACA solved a lot of problems and while it's not perfect, repeal and run is both unethical and financially irresponsible.

My penultimate rally was part of a campaign called "Expose Exxon". I'm not going to lie, I don't remember the details of why were there. My participation consisted of sitting in the back of a Senate briefing with an oversized T-shirt that said "Expose Exxon". Getting into trouble - 'good trouble' as John Lewis calls it, was the reason I moved to DC in the first place.

Fast forward to today, Exxon is in the news as Rex Tillerson, Exxon's CEO, is President-Elect Trump's nomination for Secretary of State. (Side note - it's painful to write President-Elect but I'm trying to be respectful). From the get-go having a CEO of an oil company as the secretary of state seemed like a bad idea because oil execs are just one place below tobacco execs on my unofficial ranking of people who are extremely socially irresponsible. Furthermore, one of my super smart buddies who knows a thing or two about the oil industry let me in on the dirty dealings of Exxon in Chad. This info from my buddy should move anyone of conscience to pay attention and hopefully act:

" This is a breaking news article about the ousting Petronas and Chevron from Chad (August of 2006). What you need to know is that landlocked Chad discovered an oil field around 2000, and by 2003, three major oil companies had completed construction of a pipeline running through Cameroon that would make the oil producible (by bringing it to a port). The World Bank and the US government helped to broker a deal that would require 85% of oil revenues resulting from production of Chad oil to go toward various forms of humanitarian interests. (Chad, at the time, was somewhere in the top 10 of the world list of impoverished and failed nations.) The US government and World Bank got involved in an effort to thwart the "resource curse". That is, when very poor countries discover valuable resources, the money usually goes to corrupt government and not to the people.

Chevron (30%), Petronas(30%), and Exxon Mobil (40%) were the three oil companies that had rights to drill. By 2004, revenues started coming in. The three companies, World Bank and US gvmt. jointly oversaw the application of revenues for development of public education, health, infrastructure, etc. for more than two years. (Revenues quintupled the GDP of Chad during this time). In August of 2006, everything changed. The dictator in Chad gave Chevron and Petronas 24 hours to vacate the country, and completely withdrew from the agreement with the World Bank (article above). Instead, they brokered a new deal:

In the new deal, Exxon would be only remaining producer of oil (leaving Chad a portion of rights to establish a national oil company). The World Bank wss forced to concede the original agreement, and allow 30% of revenues to go to the general treasury of Chad, which can be spent at the dictator's discretion (this is double the $ from the previous deal). Not mentioned in the above story is that in  the dictator issued a “state of emergency” shortly thereafter in Chad that required all oil revenues to go directly, and totally, into his personal command.

The World Bank officially suspended participation in the pipeline project in 2008, citing that oil profits were no longer going toward any humanitarian efforts, (education, medicine, infrastructure, etc.). While even the World Bank exited participation in 2008, Exxon Mobil is still drilling, producing, and paying Chad to do so today. Chad receives $500 Million dollars from Exxon operations annually.

Exxon’s Chad ops from website:

Rex Tillerson became CEO of Exxon Mobile more than 8 months before the ousting of the other partners and the break from the deal with the World Bank (Jan 1, 2006.)
Since the ousting, the dictator of Chad (currently in his second decade of rule) has spent more than $4 Billion on weapons, and managed to become incredibly, independently wealthy.

This stuff is just the United States government official info on lots of aspects of Chad. They talk about the oil revenues too:

In his confirmation hearings on Tuesday, Tillerson insisted, with regard to operations in Chad, Russia, Iraq, Papa New Guinea, and a handful of other nations that "no laws were broken".
While no “laws” were broken, you’d have to be a completely socially irresponsible company to agree to remain the sole participating party in paying a dictator funds that were previously allocated (85%) for the good of the country. (85% of $500M is $425M...annually) This is just in Chad...

Now consider that Exxon Mobile has 64 million acres to drill in Russia (compared to 14 million acres that they have the leases to drill in the US and 7 million acres in Canada.) The kicker is that they can't currently drill these 64 million acres because the US government precludes it through its classification of Russia, and sanctions that have been in effect for a long time. As Secretary of State, Rex Tillerson is responsible for classifying countries as hostile, in violation of international law, corrupt, etc.

If Rex Tillerson and Donald Trump support lifting sanctions on Russia, then Exxon will gain the ability to drill it's single largest lease holding. (This is the single largest lease holding of the single largest non state-owned oil company in the world).

The majority of the 64 million acres is part of a partnership between Exxon and Russia (Rosneft) to drill in the Arctic (Kara and Black Seas). More info here. Obama just passed legislation to ensure the prevention of arctic drilling. Trump has pledged to try to repeal this legislation in the first 100 days.

The money that will exchange hands in the Arctic operation alone is in likely into the tens of billions of dollars.  That's tens of billions to share between the Vladimir Putin, (because Russian oil is state-owned,) Exxon Mobile, and anyone lucky enough to enjoy official and/or unofficial kickbacks that might occur in various forms (eg, consulting fees, political and business favors, service contracting deals, cash bonuses for other projects, stock grants, etc.)

When you're doing this kind of math... a multi-billion dollar figure, divisible by tens of people, you had better be interested in ethics. Rex Tillerson's approach to deal-making in Chad demonstrates a lack of ethical and moral integrity."

I'd never want to say this before, but can we give Mitt a call? In the mean time, I think we'd all do well to avoid Exxon gas stations and On the Run convenience stores.


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