US President Donald Trump opened his presidency with controversial remarks about “taking control” of Iraq’s oil. He also moved to immediately roll back climate change initiatives. We explore how the fossil fuel industry views the Trump presidency.
Barely a day after his inauguration, US President Donald Trump took the stage in Langley, Virginia. Referring to himself in the third person, he told the CIA staff, “There’s nobody that feels stronger about the intelligence community and the CIA than Donald Trump – there’s nobody, nobody.”
It turned out Trump also felt strongly about US history – and more specifically, the times in which, he said, the US was “always winning things.” Lamenting how the US doesn’t “win” anymore, Trump made a comment about Iraqi oil that many found shocking, “I always used to say, keep the oil.” It marked a more overtly interventionist stance than Trump took during his campaign, suggesting his presidency is unlikely to mark the rollback of US intervention abroad that many voters appear to have been hoping for.
“If we kept the oil,” he said, “you probably wouldn’t have ISIS because that’s where they made their money in the first place.” He added, to the laughter of the baffled audience, “Maybe we’ll have another chance.”
With this, Trump added another oddity to the collection of off-the-cuff remarks he’s notorious for making. But how is the fossil fuel industry reacting to the early days of the Trump presidency?
“I don’t think anyone knows what Trump will do,” Guntekin Koksal says, “including Trump himself,” with an amused smile in his voice. Koksal is the upbeat 86-year-old chairman and owner of Pet Holding, a Turkish company that works in the oil and gas sector.
His relaxed approach comes despite the fact that Koksal’s 43-year-old company is very active in Northern Iraq in a region called Chia Surkh, where it has an oil field. They’re currently working on buying an oil field in Kirkuk.
Winds of Change
It has been less than a month since Donald Trump became the 45th president of the US, but already dramatic changes are afoot. The most recent controversy he stirred centres on an executive order he issued, banning citizens from seven Muslim-majority countries from entering the US, even if they have valid visas or residence permits (green cards).
One of the quieter changes Trump has made is to the White House website, which no longer has a climate change section, alarming environmental protectionists. The move is being interpreted as a wave to the oil and gas industry, as is the section titled “An America First Energy Plan,” which outlines the new administration’s priorities — putting, you guessed it, America first. Or more precisely, American oil first. The plan has been criticised by activists who say the plan “leaves America behind.”
“President Trump is committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests,” the statement reads. “At the same time, we will work with our Gulf allies to develop a positive energy relationship as part of our anti-terrorism strategy.”
Another clear sign of the expanded influence fossil fuel insiders can expect to have under the Trump administration is the confirmation of former ExxonMobil CEO Rex Tillerson as secretary of state; although Tillerson is seen by some as one of the least ideological Trump appointments.
Brushing it off
Anywhere else, those are fighting words. But the experts shrug it off. Tsvetana Paraskova, an analyst at the US-based Divergente LLC consulting firm argues that, in the short term, the US won’t be able to procure enough oil from non-OPEC sources to sustain itself.
She writes that even if the goal were possible, it won’t be an easy task. She also suggests the two biggest crude oil exporters to the US: Saudi Arabia and Venezuela, may harbour “at least a bit of undisclosed fear” that Trump may follow through.
If that’s the case, Saudi Arabia’s oil minister is doing a great job hiding it. Khalid al Falih calmly states that his country is not a hostile nation. As for being the embodiment of the OPEC cartel? He says “people are recognising OPEC is a force for good.”
Environmentalists would beg to differ, but Falih is presumably not talking about them. He says he looks forward to working with the new energy secretary Rick Perry, and praises Tillerson, the new secretary of state, as “one of the highest qualified executives I’ve ever dealt with.”
Ertugrul Tuncer also views Tillerson’s appointment as a reassuring sign, from the industry’s perspective.
“As you know Trump’s secretary of state is the former CEO of ExxonMobil,” Tuncer says, in a discussion about the future of the US oil industry under Trump. Currently, a board member at Aytemiz fuel oil and petroleum distribution company, Tuncer has worked in the oil industry for half-a-century, including a 33-year stint at Mobil Oil Turkey. He is frank and unhesitant, “So I don’t think Trump will make any decisions that will negatively affect oil companies, to be honest.”
While Trump’s “An America First Energy Plan” has instilled fear in the hearts of environmentalists and those opposed to aggressive military intervention abroad, the oil industry has remained remarkably silent on the matter.
Tuncer says the upward trend on the price of Brent crude, extracted from the North Sea and recently suffering from all-time lows, will encourage new investments. He says that while US shale gas has a higher cost, with higher crude prices he predicts its production might also increase, as foreseen by the Trump administration.
Scepticism from Iraqi PM
“What about Trump threatening to take Iraq’s oil?” During his CIA speech, Trump has alarmingly reminded the crowd of the expression: “To the victor belong the spoils.” Tuncer dismisses the practicality of such an unabashedly neocolonialist notion. “There can be no such thing as the US taking Iraqi oil,” he tells me. “Iraqi oil belongs to the people of Iraq anyway.”
Koksal is of a similar mind. “Declaring ‘I’ll take Iraq’s oil’ won’t make it so,” he chuckles. “I don’t think it will be more than a desire, in my opinion.”
Most importantly, the Iraqi administration seems to think nothing of it. While stressing that Iraq’s oil is “the property of Iraqis,” Iraqi Prime Minister Haider al Abadi responded calmly. “It wasn’t clear what [Trump] meant,” he said on January 24. “Did he mean in 2003 or to prevent the terrorists from seizing Iraq’s oil?”
Without going into details, Abadi suggested the message he had received from the new president was rather different, “I’ve got assurances from President Trump that the assistance to Iraq will continue and that it will also increase.”
Tuncer says that a lot of countries, namely Russia, the US, the UK and France, have designs on the Middle East, geographically a very strategic region. He says Turkey, located in the Middle East, “wants to continue being one of the countries who has a say there.” I ask him whether the US invasion of Iraq was tied to oil. “That’s probably not the only reason,” he muses. “Iraq’s oil power was also an important reason.”
The exact details might so far be vague, but what is certain is that the already powerful oil and gas industry is set to have even greater influence over US domestic and foreign policy under the Trump administration. Yet he is already meeting fierce resistance on many other fronts, and his energy policy could trigger much wider discontent – even within the industry.