Exxon Mobil is spending $20 billion through 2022 to expand its chemicals and fuel-making capacity in Texas and Louisiana to transform U.S. shale oil and natural gas into products for growing consumer markets in Asia.
After decades of siting new plants to make plastics, industrial chemicals and motor fuels close to feedstock sources and end markets in the Middle East and East Asia, the shale boom is spurring Exxon to steer construction dollars back to its home country, Chief Executive Officer Darren Woods said in remarks prepared for the CERAWeek energy conference in Houston on Monday.
The plans answer a call by President Donald Trump for American companies to boost the number of U.S.-based jobs at a time when Trump is pushing for lesser regulation for the energy industry. The 11 new chemical, refining and LNG projects on the Gulf Coast will create 45,000 jobs, many of which will pay an average of $100,000 a year, Woods said.
“These projects are export machines, generating products that high-growth nations need to support larger populations with higher standards of living,” Woods said in his remarks. “Those overseas markets are the motivation behind our investments. The supply is here; the demand is there. We want to keep connecting those dots.”
The investments began in 2013 and will continue at least through 2022, Woods said in only his second public appearance since January, when he succeeded Rex Tillerson, who left the CEO’s job to become Trump’s secretary of state.
The announcement followed last week’s disclosure that Exxon is shifting half its worldwide drilling budget to U.S. shale fields next year.
Woods, 52, an Exxon lifer, inherited a company hobbled by the biggest reserves reduction in its modern history and the loss of the platinum credit rating it held for 85 years as a 2 1/2-year collapse in crude markets destroyed cash flow. The expansion program, dubbed “Growing the Gulf” by Exxon, hews close to Woods’ pedigree as a quintessential downstream executive, or one who focused on refineries and chemicals for most of his career.
Woods’ comments at CERAWeek may presage major themes up for debate at the oil industry’s biggest annual conference. He was preceded at the conclave earlier Monday by Russian Energy Minister Alexander Novak; luminaries yet to appear during the week-long conference include Saudi Oil Minister Khalid Al-Falih, OPEC Secretary General Mohammad Barkindo, and the CEOs of Royal Dutch Shell Plc, Chevron Corp., Total SA and BP Plc.
Woods, an electrical engineer by training who initially joined Exxon as an analyst, also touted the Irving, Texas-based company’s research and investments in carbon capture, biofuels and other ventures meant to address climate change.
He also panned government subsidies, trade restrictions and other market interventions intended to prop up green energy sources: “They are more expensive and lead to poor investment decisions, focused on the limitations imposed, not true innovation.”
The tone of Woods address was in marked contrast to the bleak pronouncements that dominated recent CERAWeek gatherings as crude prices were in retreat and the industry retrenched, firing hundreds of thousands of workers and canceling billions of dollars in investments.
“The world’s energy industry, represented here today, is the engine of the world’s economy,” Woods said. “As we look forward, our opportunity is to grow.”