On Tuesday, ExxonMobil announced it would invest a whopping $10 billion in America’s infrastructure as it develops the Golden Pass liquefied natural gas (LNG) facility in Sabine Pass. According to Exxon Mobil, “Construction will begin in the first quarter of 2019 and the facility is expected to start up in 2024.”
Darren Woods, chairman and chief executive officer of Exxon Mobil Corporation, stated, “Golden Pass will provide an increased, reliable, long-term supply of liquefied natural gas to global gas markets, stimulate local growth and create thousands of jobs. The extensive experience of ExxonMobil and Qatar Petroleum provides the expertise, resources and financial strength needed to construct and operate an integrated liquefaction and export facility in the United States.”
The statement from Exxon Mobil read:
The $10+ billion liquefaction project will have capacity to produce around 16 million tons of LNG per year. It is expected to create about 9,000 jobs over the five-year construction period and more than 200 permanent jobs during operations. Preliminary estimates by an independent study indicate the project could generate up to $31 billion in U.S. economic gains and more than $4.6 billion in direct federal, state and local tax revenues over the life of the project.
Last January, Woods acknowledged that the tax reform law passed by President Trump and the GOP Congress had stimulated Exxon Mobil’s investment. He said, “At ExxonMobil, we plan to invest more than $50 billion over the next five years to expand our business in the United States. These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law.”
Exxon Mobil plans to invest over $50 billion over the next five years on the Growing the Gulf initiative, which is expected to create roughly 45,000 jobs.
The National Association of Manufacturers (NAM) commented, “At a time when America’s existing energy infrastructure in the Gulf Coast is already under strain from increased production, the importance of these kinds of investments can’t be understated. The project will also uniquely position U.S. manufacturers to compete around the world, provide a reliable, long-term supply of LNG, cement the United States as a global leader in energy production, and take the U.S. a step closer to energy independence.”
The effect the tax cuts had on corporations was explained in March 2018 by GT Reilly & Co:
For tax years beginning January 1, 2018 or later, the corporate tax rate has been simplified to a flat corporate tax rate of 21%. This removes the former tiered corporate tax rate structure approach of 15% to 34% for corporations with up to $335,000 in revenue, and 34% to 35% above $335,000. Corporations with non-calendar fiscal years will have a blended tax rate for the first year. For example, companies with a March 31 year end will have nine months at the old rate and three months at the new 21% rate … Prior to the TCJA, the corporate alternative minimum tax (AMT) was at a 20% rate, but corporations were exempt if they had average annual revenue under $7.5 million. Beginning in 2018, the new law repeals the corporate AMT. For corporations that paid the corporate AMT in earlier years, an AMT credit was allowed under prior law. The new law allows corporations to fully use their AMT credit carryovers, and the credit may be refundable.