In case you missed it, ExxonMobil announced that thanks to the federal tax reform package passed in Congress in December the company will be turning loose some $50 billion in capital investments in its domestic facilities in coming years.
That’s $50 billion, with a “B.”
But how much of that money will be spent in Louisiana, where ExxonMobil has five different facilities?
None of it. Not a penny. At least not as of right now.
Exxon’s CEO says the oil company will invest more than $50 billion over the next five years to expand its business in the U.S.
Chairman and CEO Darren Woods said Monday that the investments are possible because of the company’s strength and helped by the recent law that cut taxes on corporations.
“The recent changes to the U.S. corporate tax rate coupled with smarter regulation create an environment for future capital investments and will further enhance ExxonMobil’s competitiveness around the world. We’re actively evaluating the impact of the lower tax rate on the economics of several other projects currently in the planning stages to further expand our facilities along the Gulf Coast,” Stephanie Cargile, Public and Government Affairs Manager of ExxonMobil told WBRZ.
Exxon plans to increase oil production in Texas and New Mexico and build new manufacturing plants.
“Baton Rouge capital project investments in 2017 totaled approximately $340 million and included projects at all five of our local facilities. We are experiencing a window of increased capital investment opportunity. With the low cost of natural gas in the US and the growing demand for plastics and polymers across the world, we are investing more in new projects along the Gulf Coast, which includes Louisiana,” Cargile says.
And then, the boom was lowered.
“Hopefully we will be able to bring some of this increased investment to Baton Rouge. We looked to invest where there is a good business environment, predictable tax and regulatory structure, strong transportation infrastructure, and a qualified workforce. We want Louisiana to be a strong competitor for future investment that Exxon Mobil may be considering.”
Got that? ExxonMobil looked to invest where is a…
- good business environment
- predictable tax and regulatory structure
- strong transportation infrastructure, and
- a qualified workforce
And ExxonMobil decided not to put a dime of that $50 billion in Louisiana, after spending $340 million in upgrades and turnarounds in its Louisiana facilities last year (the decisions behind that $340 million having been made previously).
That’s a pretty stark message for the company to send to the state’s leadership, and to the mayor-president of Baton Rouge – a city in which ExxonMobil is the largest employer. Namely, this…
Your economic climate sucks because you’re taxing business in a punitive fashion, your fiscal house isn’t in order and you’ve let trial lawyers run riot on legitimate commerce, including sending a cabal of bloodsuckers out after the oil and gas industry to file 42 nuisance lawsuits based on a crackpot legal theory the federal courts have already dismissed out of hand, your roads and bridges are in abysmal condition and that infrastructure isn’t suitable for expansion of our activities in your state in comparison to what we can do in Texas, and your public schools are pathetic and the kids your high schools turn out are unemployable. As such, you’re not a viable receptacle for large-scale investments we’re making, and if that doesn’t change you’ll miss out on more than just this $50 billion.
That’s ExxonMobil’s verdict on John Bel Edwards’ and Sharon Weston Broome’s leadership, whether anybody at ExxonMobil would be willing to put so fine a point on it or not.
Let’s remember that ExxonMobil is directly in the crosshairs of Together Baton Rouge, the Alinskyite leftist organization worming its way into the churches of the capitol area and pushing, among other things, an elimination of the state’s Industrial Tax Exemption Program – without which ExxonMobil would likely have already discontinued some of its Louisiana operations. The thinking behind Together Baton Rouge, at whose events Edwards and Broome have both descended upon in pursuit of votes and political support, which implies their allegiance to TBR’s agenda, is that ExxonMobil can be soaked with impunity at both the state and local levels because they’ll never shut down operations here.
That thinking, like virtually everything else which comes from Together Baton Rouge, is wrong. Dead wrong. ExxonMobil has $50 billion to spend in just one tranche of capital investment dollars. If they wanted to close down their Baton Rouge operation and move the whole thing to Texas they could easily swing it – and let’s not forget ExxonMobil’s refinery in Beaumont is slated to be upgraded to process as much as 800,000 barrels of oil a day by 2020. At some point they might expand that facility so much they won’t even need a Baton Rouge refinery.
If Louisiana continues to be that uncompetitive with Texas as a place to do business, that is.
This company is warning Edwards and Broome their actions in throwing in with the Together Baton Rouges of the world have consequences, and that they’re more than willing to respond to the leadership decisions Edwards and Broome make. Bad leadership has already cost the state a piece of the $50 billion in investment ExxonMobil will be making in competing states, and that price is merely a down payment on what’s coming if the state doesn’t change course.