In 2015, Exxon was losing money. Crude oil prices were around 55% lower in January that year than they had been six months before; in the same amount of time, Exxon’s market value dropped 11.7%. After the U.S. imposed sanctions on Russia, the government told Exxon to stop work on a multibillion-dollar project in the Arctic with a Russian state oil company.
A growing number of investors, concerned about the long-term value of a fossil fuel company in the era of climate change, were selling off stock. After a series of articles revealed Exxon’s decades-long cover-up of its own climate-change-confirming research, things got worse. By 2016, the company was facing a class-action lawsuit, and share prices were still dropping.
Things may be different now, at least temporarily. In a recent report, the Center for American Progress estimates that the new administration may earn Exxon at least $1 trillion.
If Rex Tillerson–Exxon’s CEO for the last decade, who has close ties to Vladimir Putin–becomes secretary of state and rolls back the Russian sanctions, Exxon could head back to the Arctic to drill. The value of the project has been (perhaps optimistically) estimated at $500 billion.
Tillerson could also push for the Keystone XL pipeline and other cross-border pipelines, helping Exxon get more value from the tar sands it owns in Canada, worth at least another $277 billion.
Scott Pruitt and Ryan Zinke, Trump’s picks to head, respectively, the Environmental Protection Agency and the Department of the Interior, could also weaken regulations that require oil and gas companies to use cleaner, safer technology. Zinke could choose to sell more drilling rights on federal lands, giving Exxon new opportunities. Pruitt could roll back vehicle efficiency standards; if the resulting increase in demand for oil helps oil prices, the report estimates that Exxon could make another $161 billion.
As an added bonus, Rick Perry, Trump’s nominee for secretary of energy, could also end programs that fund development of new electric cars or alternative fuels, helping eliminate some of Exxon’s cleaner competition.
“At no time in recent U.S. history has one company been at the brink of attaining so much power and influence over U.S. policy, both domestic and foreign,” the report’s authors write.
Still, whatever growth Exxon experiences now is unlikely to last. At a time where we can’t burn the world’s fossil fuel reserves without exceeding the carbon budget, the “carbon bubble” still exists. For Exxon and other American fossil companies, the bubble may just pop a little later.