Donald Trump’s thumping re-election threatens to upend the business of an industry he’s sworn to protect: Big Oil.
Should his incoming administration follow through on plans to once again pull the United States out of the landmark 2015 Paris climate agreement—as a way to loosen regulations on fossil fuel companies—it could actually end up hurting companies like Exxon Mobil, according to the oil giant’s CEO, per a Wall Street Journal interview published Tuesday.
Two years after Obama first helped pave the way for the Paris Accords, which seek to limit global warming to 1.5 degrees Celsius, Trump led the country out of the agreement. Upon assuming office, Biden reversed this decision on Day One, going on to spur record investment in clean technology. If Trump once again pulls the U.S. out of Paris, it will have marked the fourth straight administration with diametrically opposed energy and climate policies.
“I don’t think the stops and starts are the right thing for businesses,” Exxon Mobil CEO Darren Woods told the Journal. “It is extremely inefficient. It creates a lot of uncertainty.
The Exxon Mobil boss was in Azerbaijan to attend COP29 in Baku, the second straight time that a city rich from exploiting its fossil fuel deposits played host to the United Nations climate conference after Abu Dhabi last year.
“Drill, baby, drill”
Trump has promised to “drill, baby, drill”, but this constant backtracking on agreed policy has made it difficult for companies with long term investment horizons that can end up stuck with stranded assets—such as oil companies. Woods said it was unhelpful for businesses “to have the pendulum swing back and forth as administrations change”.
He assured Exxon would not deviate from its strategy, which includes investments in controversial carbon capture technology, just because of Trump’s election. But he did not deny that adjustments may need to be made should government policy change materially.
Exxon Mobil has a unique and at times uncomfortable relationship with Trump: Woods got his job as CEO after predecessor Rex Tillerson was picked to serve as the incoming president’s secretary of state. Tillerson spent only 13 months as secretary of state before being pushed out by Trump.
Fortune reached out to the Trump campaign for comment but has yet to receive a response.
Elon Musk could prevent pendulum from swinging once more
One possible impediment to another pendulum swing is Trump benefactor Elon Musk, who could potentially use his newfound influence to urge Trump not to follow through on leaving the Paris Accords.
In 2017, the Tesla CEO withdrew from all presidential advisory councils after Trump announced his administration’s decision to pull out of Paris earlier that same day, with Musk blasting “climate change is real”.
But Musk at the time still needed his Tesla investors to believe the company would grow to be larger than Toyota and Volkswagen combined, delivering 20 million cars a year to mainly environmentally conscious consumers.
That sales goal has since been quietly ditched, and after Nvidia replaced Tesla as the hot stock to own, Musk has been busy rebranding his automaker as an AI and robotics company. (While Tesla shares have soared since Trump’s election victory, its $1 trillion market cap is still only one third of Nvidia’s.)
Trump: rising sea levels just creates ‘more oceanfront property’
The Tesla CEO, who now considers himself part of a “Dark MAGA” movement, has since gradually backtracked on his earlier strong support for climate policies.
In August, while campaigning for Trump, Musk trivialized the issue of climate change and argued there was no need at all for society to make hard choices since things would naturally work out on their own more or less. Accelerating the transition to clean energy was no longer urgent when viewed against the greater priority of reinstalling Trump in the Oval Office.
“We still have quite a bit of time, we don’t need to rush,” Musk said, “If, I don’t know, 50 to 100 years from now we’re mostly sustainable, I think that’ll probably be okay.”
Meanwhile, Trump, a climate change skeptic, argued rising sea levels was a good thing, since it meant “more oceanfront property”. Trump did not address the destruction of existing oceanfront real estate by rising sea levels.
Environmental activist and 350.org founder Bill McKibben blasted it as the “dumbest climate conversation of all time”.
Right now, Floridians hammered by the twin hurricanes Helene and Milton are struggling to find insurance for their homes, with many turning to the financially troubled nonprofit Citizens Property Insurance Corp. as a last resort.
Nov. 12, 2024: This story has been updated to reflect Tesla’s $1 trillion market capitalization.
