Exxon's U.S. investment not quite as Trump touted

In touting a $50 billion investment in the U.S. by ExxonMobil (XOM), President Donald Trump in his State of the Union address cast the oil company's announcement as one of many positive results of recently enacted tax legislation. While the assertion regarding Exxon's five-year spending plan is true, it's less impressive than it may initially appear.

"Since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses -- many of them thousands and thousands of dollars per worker. And it's getting more every month, every week," Mr. Trump said in his speech, noting that "ExxonMobil announced a $50 billion investment in the United States, just a little while ago."

Mr. Trump is correct in saying that Exxon recently committed to invest at least $50 billion in the U.S. over the next five years. In a post this week on the energy company's corporate blog, CEO Darren Woods said that will "create thousands of jobs, strengthen the U.S. economy and enhance energy security." 

What the president glossed over is that Exxon's planned expenditures, while a significant investment by one of the biggest companies in the world, actually marks a decline in its U.S. spending over the previous five years. Citing Exxon's financial filings, the Institute on Taxation and Economic Policy says Exxon spent about $58 billion on capital and exploration in the U.S. from 2011 through 2015.

The non-partisan think tank, which works on tax policy issues, also takes issue with Mr. Trump's suggestion that tax cuts enacted by Congress in December are a driver for Exxon's expenditures, finding the price of oil to be a more likely factor.

The company's spending fell in 2016, as crude prices declined, ITEP noted, adding: "No one attributed Exxon's declining capital spending of 2016 to any feature of our tax system because the more plausible explanation was oil prices."