By Kayla Kitson, Senior Researcher
January 30, 2018
On Monday, ExxonMobil CEO Darren Woods announced via blog post that Exxon would invest $50 billion in the U.S. over the next 5 years, giving partial credit to the new GOP tax law. The The Trump administration and Republicans in Congress will likely claim this as more evidence that their $1.5 trillion tax giveaway is revving up the U.S. economy and creating jobs.
Reading between the lines and a quick dig into Exxon’s financial statements reveals the likelihood that little to none of this investment is a result of the tax cuts.
First, it turns out that $15 billion of the $50 billion investment had previously been announced, as a company spokesperson later clarified, leaving $35 billion in “new” investments.
Digging deeper, the corporation’s financial filings with the Securities and Exchange Commission show that it made more than $50 billion in capital expenditures (including for oil and gas exploration) in the U.S. over the 5-year period from 2012 to 2016 [see Table below]. This suggests that the $50 billion in announced investments are more likely than not just a continuation of the current pace of capital spending—not unlike Apple’s recent announcement about new U.S. investments.
Even Woods’ post treats the tax law changes as an afterthought. He writes: “These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law” and that the investments are “all possible because of the resource base developed by our industry along with sound tax and regulatory policies that create a pro-growth business climate here in the U.S.”
Paying lip service to the GOP tax giveaway by half-heartedly suggesting that its planned investments is somehow related to the tax cuts doesn’t change the fact that we already know who will reap the most benefits: wealthy shareholders, not employees.
For more about other analyses examining whether the tax cuts are a boon for the economy, go here.
ExxonMobil Capital Expenditures 2012 – 2016 (Billions of $)
|Capital & exploration expenditures (U.S.)||6.0||11.0||12.4||11.1||12.2||52.7|
|Capital & exploration expenditures (Total)||19.3||31.1||38.5||42.5||39.8||171.2|