In one of his first major speeches since taking the reins from Rex Tillerson—who is now Trump’s Secretary of State—new Exxon Mobil CEO Darren Woods told a conference on Monday it would invest $20 billion in local refining and natural gas export facilities out to 2022.
The president responded glowingly: “This is a true American success story,” he said in a statement praising the oil company’s initiative.
Woods had told a conference in Houston the projects would create 45,000 jobs in U.S. Gulf Coast region, seemingly aligning with Trump’s campaign pledge to revive the local manufacturing industry.
Many of the related projects, however, had already been announced and it’s unclear how much of the $20 billion represents new spending. For example, Exxon had announced in 2014 that it would expand two chemical plants in Texas for an undisclosed sum.
Exxon is also a major shareholder in the $10 billion Golden Pass liquefied natural gas project, which would chill some of America’s vast shale gas resource and place it on tankers bound for fast-growing Asian economies. A final investment decision on the project has yet to be made and may ultimately depend on a rise in persistently low oil and natural gas prices.
Regardless of how much of the heralded investments are new, Woods also made it clear the developments are underpinned by another powerful motivating factor: the rise of America’s shale gas sector.
New drilling techniques that can extract oil and gas by blasting rocks apart with a combination of water, sand and chemicals have made the U.S. one of the world’s biggest energy producers, offering it scope to become a major exporter of energy. “The United States is a leading producer of oil and natural gas, which is incentivizing U.S. manufacturing to invest and grow,” Woods said.
The CEOs of Intel and GM have also recently pledged big investments in U.S. manufacturing capabilities. But, like Exxon, it was unclear how much, if any, weren’t already on the drawing board.
Woods’ focus on what the oil industry calls downstream operations, the refineries and other facilities that manufacture products from crude, comes as Exxon’s so-called upstream operations—oil exploration and production—suffer from a fall in reserves. Woods was the head of Exxon’s downstream business before taking over from Tillerson, so it’s not surprising that he’s touting that division’s ability to drive profits in the future.
And if further evidence was needed that the investments weren’t all about Trump, Woods made it clear the company is still a strong believer in free trade with other countries. “The real drive to innovate comes from competition in a free market,” Woods said. “It comes from all of us striving to out-perform one another to find a cleaner, cheaper, smarter way to meet society’s needs.”