Our nation’s political leadership routinely calls on companies across the country to invest in America.
Turns out some companies are already doing a pretty good job of it, spurring economic growth and supporting job creation along the way – particularly in the U.S. energy industry. And the only thing keeping our industry from investing even further, ironically, are policies championed by many of the same politicians currently urging America’s corporate leaders to do more.
The strong economic performance of the U.S. oil and gas industry is highlighted in a new study from a Washington think tank saluting the companies it hails as “Investment Heroes” that are helping the U.S. recover from the 2008-2011 recession.
The report issued last week by the Progressive Policy Institute (PPI) examined the domestic portfolios of non-financial companies to identify capital investment that generates growth, raises productivity, increases wages and boosts employment. The report ranked the top 25 such companies, recognizing their efforts to invest in America’s future.
This sort of beneficial investment “can span the gamut from new office buildings to improved production lines to faster communications equipment to deeper natural gas wells.”
The report noted that most of the domestic capital expenditures by energy companies consisted of exploration and production costs associated with new sources of oil and gas, like from offshore or from shale rock.
Given the strictures placed on access to resources by government policies – about 85 percent of the country’s offshore areas are closed to energy development, for instance, while a moratorium prohibits drilling for shale gas in resource-rich New York state – one wonders how much more significant our industry’s economic contribution would be if policymakers took sensible steps to open closed areas to development.
ExxonMobil and the industry have continued to seek opportunities to develop oil and natural gas in the U.S. over the past decade. Some politicians demand that companies invest more in America and talk about jobs being outsourced – but these same politicians seemingly fail to see the employment opportunities and economic contributions that are directly tied to expanded oil and gas development in this country.
A Wood Mackenzie analysis released last year fills in what they’re missing. That study suggested that opening up federal lands kept off-limits by Washington could create 530,000 new jobs in direct and indirect industry employment by 2025, not to mention generate $150 billion in additional government revenue.
In noting ExxonMobil’s particular economic contribution, the authors of the PPI study called out a statistic that demonstrates the depth of ExxonMobil’s commitment to U.S. energy production and development: “Of Exxon’s $4.5 billion increase in [global] investment over 2010, almost all ($3.9 billion) was domestic.” That brings ExxonMobil’s total domestic capital investment in 2011 to $11.7 billion, behind only AT&T and Verizon.
The PPI report isn’t just a celebration of domestic investment. It also offers several key takeaways to encourage future capital spending by American businesses to generate greater economic activity down the road:
- “First, sustainable economic growth, job creation, and rising real wages require domestic business investment.”
- “Second, politicians and policymakers must do their part to encourage more investment success stories.”
- “Finally, we need to consider carefully whether there are any investment roadblocks that could be alleviated by targeted government action.” The report makes clear this goes for state and local governments as well.
Wise words of advice to help make the U.S. an even better place for companies like ExxonMobil to invest and create jobs.