PERRYMAN GROUP

Transcription

1 Economic and fiscal benefits of ExxonMobil s current and proposed Gulf Coast operations and investments March 2017 THE PERRYMAN GROUP info@perrymangroup.com

2 i Contents Summary of Study Results... 1 Introduction... 4 Current ExxonMobil Operations in the Gulf Coast Region... 5 Benefits of Current ExxonMobil Gulf Coast Operations... 7 Baton Rouge Area Operations... 9 Baytown Operations Beaumont Area Operations Golden Pass Liquefied Natural Gas Terminal Operations Proposed ExxonMobil Gulf Coast Investments Economic Benefits of Construction Fiscal Benefits of Construction Economic Benefits of Ongoing Operations of Expanded Facilities Fiscal Benefits of Ongoing Expanded Operations Current and Expanded ExxonMobil Gulf Coast Operations Conclusion Appendix A: About The Perryman Group Appendix B: Methods Used Appendix C: Detailed Results for Impact of Current ExxonMobil Gulf Coast Operations The Annual Impact of All Current Gulf Coast Operations The Annual Impact of the Current Baton Rouge Operations... 42

3 ii The Annual Impact of the Current Baytown Operations The Annual Impact of the Current Beaumont Operations The Annual Impact of the Current Golden Pass LNG Terminal Operations Appendix D: Detailed Results for the Impact of Construction Associated with Proposed ExxonMobil Gulf Coast Investments 50 The Impact of All Construction Associated with Proposed Gulf Coast Investments The Impact of Construction at the Baton Rouge Facilities Port Allen Aviation Lubricants Plant Sulphur Expansion Project The Impact of Construction Projects at the Baton Rouge Facilities The Impact of Construction at the Baytown Facilities Baytown North American Growth Project (Large Ethylene Plant) Baytown Lubes Expansion Project Baytown Polyalphaolefins Plant The Impact of Construction Projects at the Baytown Facilities The Impact of Construction at the Beaumont Facilities Expanded Crude Unit A Selective Catalytic Naphtha Hydrofining (SCANfiner) Project Expanded Polyethylene Facility (Third Production Line) Crude Unit C (BLADE) Expansion The Impact of Construction Projects at the Beaumont Facilities The Impact of New Construction Project at an Unspecified Gulf Coast Location Gulf Coast Growth Ventures Ethane Cracker and Derivative Project The Impact of Construction of the Golden Pass Liquefied Natural Gas (LNG) Terminal Appendix E: Detailed Results of the Impact of Expanded Operations from the Proposed Gulf Coast Investments... 80

4 iii The Annual Impact of Expanded Operations from the Proposed Gulf Coast Investments The Annual Impact of Expanded Operations at the Baton Rouge Facilities Port Allen Aviation Lubricants Plant Sulphur Expansion Project The Impact of Expanded Operations at the Baton Rouge Facilities The Annual Impact of Expanded Operations at the Baytown Facilities 88 Baytown North American Growth Project (Large Ethylene Plant) Baytown Lubes Expansion Project Baytown Polyalphaolefins Plant The Impact of Expanded Operations at the Baytown Facilities The Annual Impact of Expanded Operations at the Beaumont Facilities Expanded Crude Unit A Selective Catalytic Naphtha Hydrofining (SCANfiner) Project Expanded Polyethylene Facility (Third Production Line) Crude Unit C (BLADE) Expansion The Impact of Expanded Operations at the Beaumont Facilities The Annual Impact of Expanded Operations at an Unspecified Gulf Location Gulf Coast Growth Ventures Ethane Cracker and Derivative Project The Annual Impact of Operations at the Golden Pass Liquefied Natural Gas (LNG) Terminal Appendix F: Detailed Results for the Impact of Current and Potential Expanded ExxonMobil Gulf Coast Operations at Maturity Endnotes

5 1 Summary of Study Results ExxonMobil s operations in the Texas and Louisiana Gulf Coast area are a major source of economic activity. The Perryman Group quantified the economic and fiscal benefits of ExxonMobil s current operations, proposed investments during both the construction phase and once in operation, and total ongoing operations (from current operations and the expanded facilities) once the new projects are fully operational. Current Operations: The Perryman Group estimates that total economic benefits multiplier effects) associated with ExxonMobil s current Gulf Coast refining, petrochemical, and related facilities (in Baton Rouge, Baytown, Beaumont, and the Golden Pass LNG terminal) include $ billion in gross product each year and some 116,191 jobs in Gulf Coast areas where operations are located, $ billion in gross product and 135,597 jobs in Texas and Louisiana (inclusive of gains in the Gulf Coast areas), $558.8 million per year in tax receipts to Texas and Louisiana, with $261.7 million per year to local government entities. Proposed Investments: ExxonMobil is considering investments to expand the capacity and capabilities of its facilities in Gulf Coast areas. These projects would involve substantial capital investments and ongoing incremental employment, generating substantial economic benefits during both the construction and operations phases. For Louisiana and Texas, the total economic benefits multiplier effects) of ExxonMobil s proposed Gulf Coast investments include $ billion in gross product and 282,189 person-years of employment during construction and $1.654 billion in gross product each year and 12,150 permanent jobs (at mature operational levels). These impacts are concentrated in the local areas with operations, as noted in the following table.

6 2 Potential Economic Benefits of Proposed ExxonMobil Gulf Coast Investments Baton Rouge: (Baton Rouge MSA: Aviation Lubricants and Sulphur Expansion Projects) Baytown: (Houston-The Woodlands-Sugar Land MSA: Large Ethylene Plant, Lubes Expansion Project, Polyalphaolefins Plant.) Beaumont: (Beaumont-Port Arthur MSA: Expanded Crude Unit A, Selective Catalytic Naptha Hydrofining (SCANfiner) Project, Expanded Polyethylene Facility, Crude Unit C (BLADE) Expansion Golden Pass LNG (Beaumont-Port Arthur and Lake Charles MSAs) New Project at Unspecified Location (Representative MSA: Ethane Cracker) TOTAL: (Gulf Coast Areas) During Construction (Person-Years) Additional Jobs Once Operational (Permanent Jobs) Additional Gross Product During Once Construction Operational (Billions) (Billions/Year) 4, $0.364 $ ,997 2,036 $5.622 $ , $2.006 $ ,356 3,112 $5.359 $ ,917 4,195 $8.784 $ ,363 10,343 $ $1.343 Note: The Perryman Group s US Multi-Regional Impact Assessment System was utilized to quantify the total economic benefits multiplier effects) of potential expansion projects in ExxonMobil s proposed Gulf Coast investments. Because jobs during the construction phase are transitory in nature, they are measured in person-years; ongoing operational jobs continue and are thus measured as permanent jobs. Operations results measured at mature operations levels. Gains for affected states would include not only effects within these Metropolitan Statistical Areas (MSAs) but also spillover to other parts of the state and are hence larger. May not sum to total due to rounding. See the full report and accompanying Appendices for additional information regarding methods and assumptions used. Source: The Perryman Group Ongoing Operations (from Current Operations and Expanded Facilities): Once these expansions are completed and projects reach mature levels of operations, the total economic benefits of ExxonMobil s operations in Gulf Coast areas current operations) will reach an estimated $ billion in gross product and 126,534 jobs in Gulf Coast areas and $ billion in gross product and 147,747 jobs in Louisiana and Texas. It should be noted the ExxonMobil has additional operations in the region, including its corporate headquarters in Dallas, a large corporate campus near Houston, and oil and gas drilling and production activity, but these operations are not included in the scope of this study.

7 3 Fiscal Benefits: Economic activity also leads to increased taxes for State and local governments. In addition to taxes paid by firms directly, taxes are generated through business activity. The Perryman Group quantified the indirect tax effects generated as a result of ExxonMobil s current and potential expanded operations. The total fiscal benefits of current operations include an estimated $558.8 million per year to Texas and Louisiana, with $261.7 million per year to local government entities. The increase in economic activity during the construction process will lead to estimated total fiscal benefits to Louisiana and Texas of an estimated $1,016.1 million, with $477.9 million to local areas. incremental tax revenue to Texas and Louisiana each year once ExxonMobil s expansion projects reach mature operations levels includes an estimated $56.5 million each year, with $24.2 million to local governments in those states. The total combined fiscal benefits of current and potential expanded ExxonMobil operations include an estimated $615.3 million per year to Texas and Louisiana, with $286.5 million per year to local government entities. Once the expanded facilities are fully operational, the firm s refining, petrochemical, and related operations will be supporting nearly 147,750 jobs in Texas and Louisiana multiplier effects) and about $900 million in annual tax receipts to those states and various local governments within them.

8 4 Introduction ExxonMobil is a significant source of jobs and opportunities in communities along the Texas and Louisiana Gulf Coast. Three of ExxonMobil s five US refineries are located along the Gulf Coast in Baton Rouge, Louisiana; Baytown, Texas; and Beaumont, Texas. These areas are also home to other ExxonMobil facilities of various types. The Perryman Group (TPG) was asked to quantify the current economic and fiscal benefits of ExxonMobil s refining and related operations along the Gulf Coast, the potential impacts of the company s proposed Gulf Coast investments, the overall total ongoing effects of these facilities once the proposed Gulf Coast investments are complete current operations as well as the expansion). This report presents the results of TPG s analysis.

9 5 Current ExxonMobil Operations in the Gulf Coast Region The Perryman Group measured the economic and fiscal benefits of current ExxonMobil operations along the Gulf Coast in the Baton Rouge, Baytown, and Beaumont areas. Specifically, the following results were quantified: The Annual Impact of Operations of All Current ExxonMobil Gulf Coast Refining and Chemical Facilities on Business Activity in Gulf Coast Areas and Texas and Louisiana The Annual Impact of Operation of All Current ExxonMobil Baton Rouge Facilities on the Baton Rouge Metropolitan Statistical Area and Louisiana The Annual Impact of Operations of All Current ExxonMobil Baytown Facilities on Business Activity in the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area and Texas The Annual Impact of Operations of All Current Beaumont Operations on Business Activity in the Beaumont-Port Arthur Metropolitan Statistical Area and Texas The Annual Impact of All Current ExxonMobil Golden Pass Liquefied Natural Gas Terminal Operations on Business Activity in the Beaumont- Port Arthur and Lake Charles Metropolitan Statistical Areas and Texas and Louisiana The Perryman Group measured the impact on business activity for affected metropolitan statistical areas, the overall region, and the relevant states. The state results include those within the immediate areas, as well as spillover to other parts of the states. It would thus be inappropriate to add effects in Baton Rouge, for example, to those in Louisiana (because the Louisiana results already include effects within Baton Rouge). The analysis is focused on the refining, petrochemical and related operations in these locations. ExxonMobil s other activities within the region its corporate headquarters in Dallas, a large corporate campus in Spring, and extensive oil and gas drilling and production activity) are not included in the scope of this study.

10 6 Methodology Any economic stimulus, whether positive or negative, generates multiplier effects throughout the economy. In this instance, ExxonMobil facilities are important sources of jobs; they also generate economic activity across a spectrum of industries through operational spending. These effects ripple through not only the local economy, but also the regional and state economies, leading to additional gains. Potential expansions of ExxonMobil facilities would lead to further increases in business activity, both during construction and once they are in operation. Note that the multiplier effects for these facilities are relatively high as a result of (1) the high value-added nature of the relevant sectors, meaning that the value of the inputs they utilize is greatly enhanced by the processing at the facilities; (2) the level of integration of the Gulf Coast area to support and capture the spillover effects of refining and petrochemical activity and the fact that the density of the petrochemical and refining operations in the area makes the Gulf Coast near self-sufficient in providing local inputs for these processes; and (3) the wage levels which lead to substantial local consumer spending. Estimates of the direct and spillover effects are presented in the report, with additional information provided in the Appendices. With regard to the value added properties, the annual output per worker across all industries in the area is about $133,100 (in constant 2016 dollars) as compared to $2,059,300 in refining and $746,400 in chemicals. ExxonMobil provided information regarding current employment levels, as well as construction cost estimates and expected direct employment levels for the proposed expansion projects. The associated multiplier effects were measured using The Perryman Group s input-output assessment model (the US Multi-Regional Impact Assessment System), which is described in further detail in the Appendices to this report. The system has been consistently maintained and updated since it was developed by the firm about 35 years ago, and has been used in hundreds of analyses for clients ranging from major corporations to government agencies. It uses a variety of data (from surveys, industry information, and other sources) to describe the various goods and services (known as resources or inputs) required to produce another good/service. This process allows for estimation of the total economic impact multiplier effects) of current and proposed future facilities. The models used in the current analysis reflect the specific industrial composition and characteristics of the geographic areas analyzed. In particular, the systems incorporate a highly detailed consideration of both the supply chain (indirect) and payroll (induced) effects through multiple rounds of transactions, thus providing a relatively complete picture of the full extent of the spillover (multiplier) effects. The model is also linked to a system for quantifying the tax effects associated with the gains business activity such as increases in retail sales taxes and property taxes. Note that results for fiscal benefits do not include the effects of any abatements. These total economic effects are quantified for key measures of business activity: expenditures (or total spending) measure the dollars changing hands as a result of the economic stimulus. Gross product (or output) is production of goods and services that will come about in each area as a result of the activity. This measure is parallel to the gross domestic product numbers commonly reported by various media outlets and is a subset of total expenditures. Personal income is dollars that end up in the hands of people in the area; the vast majority of this aggregate derives from the earnings of employees, but payments such as interest and rents are also included. Job gains are expressed as person-years of employment for transitory construction effects and permanent jobs for ongoing operational effects. Note that person-years are spread over the construction period and may reflect varying numbers of workers actually on site. For instance, 3,000 person-years could be 1,000 people working for three years or 6,000 different people working for a half year each. Summary results are reported in the body of this report, with other measures and industry-level detail in the Appendices. Monetary values were quantified on a constant (2016) dollar basis. See the Appendices to this report for additional information regarding the methods and assumptions used in this analysis.

11 7 Benefits of Current ExxonMobil Gulf Coast Operations The Perryman Group estimates that the total current economic benefits multiplier effects) associated with ExxonMobil s current Gulf Coast refining and chemical facilities (in Baton Rouge, Baytown, and Beaumont) include $ billion in gross product each year and some 116,191 jobs in the Gulf Coast areas, as well as $ billion in gross product and 135,597 jobs in Texas and Louisiana. (The Texas and Louisiana impacts are inclusive of the Gulf Coast areas.) These economic benefits represent 2.7% of overall gross product in the Gulf Coast areas and 3.2% of employment. The total fiscal benefits include an estimated $558.8 million per year to Texas and Louisiana, with $261.7 million per year to local government entities. The Annual Economic Benefits of Current ExxonMobil Operations for Gulf Coast Areas (Dollar Amounts in Billions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $ $ Gross Product $ $ Personal Income $8.877 $ (Permanent Jobs) 116, ,597 Note: Louisiana and Texas results include effects within the Gulf Coast Areas (the Baton Rouge, Houston-The Woodlands-Sugar Land, and Beaumont-Port Arthur Metropolitan Statistical Areas as defined below) as well as spillover to other parts of the states. (Baton Rouge MSA-- Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge, and West Feliciana Parishes. Houston-The Woodlands- Sugar Land MSA-- Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties. Beaumont-Port Arthur MSA-- Hardin, Jefferson, Newton, and Orange Counties.) Source: The Perryman Group These economic benefits are not limited to energy-related businesses, but are realized across all major industry groups in Texas and Louisiana, as shown in the graphics below.

12 8 Economic Benefits of Current ExxonMobil Operations in the Gulf Coast Region: Allocation of Gross Product by Industry Business Services 4.6% Other Services Health Services 3.0% 2.1% Agriculture 0.7% Mining 13.3% FIRE* 7.8% Construction 4.3% 8.0% Wholesale Trade 6.4% Information 1.9% 8.8% 3.3% 35.6% *FIRE is Finance, Insurance, and Real Estate Economic Benefits of Current ExxonMobil Operations in the Gulf Coast Region: Allocation of by Industry Other Services 9.3% Agriculture 1.1% Mining 4.8% Health Services 4.2% Construction 7.2% Business Services 6.5% FIRE* 4.1% 21.8% 21.2% 4.4% Wholesale Trade 6.0% *FIRE is Finance, Insurance, and Real Estate Information 1.1% 8.3%

13 9 Baton Rouge Area Operations Operations in the Baton Rouge area include the Baton Rouge Refinery, Chemical Plant, Resin Finishing Plant, Polyolefins Plant, Plastics Plant as well as the Anchorage Chemical Terminal and Lubricants Plant located in Port Allen. In total, ExxonMobil is the largest manufacturing employer in Louisiana with about 5,500 employees and contractors across its seven facilities. The annual payroll totals close to $500 million, and the local operations pay over $100 million in state and local taxes each year. ExxonMobil has reinvested an average of $1 billion locally in operational improvements over the past three years. 1 The Perryman Group s analysis reveals the current economic benefits multiplier effects) of operations of ExxonMobil facilities in Baton Rouge total $4.820 billion in gross product each year as well as 35,469 jobs in the Baton Rouge Metropolitan Statistical Area. These benefits represent 9.4% of overall Baton Rouge MSA gross product and 8.4% of employment. For Louisiana, the Baton Rouge facilities generate $5.922 billion in gross product and 41,292 jobs. (The Louisiana results are inclusive of the Baton Rouge MSA results.) This economic activity leads to substantial tax receipts to Louisiana of an estimated $171.8 million per year, with $80.0 million per year to local government entities. The Annual Economic Benefits of Current ExxonMobil Operations in Baton Rouge (Dollar Amounts in Billions of 2016 Dollars) Baton Rouge MSA Louisiana $ $ Gross Product $4.820 $5.922 Personal Income $2.646 $3.228 (Permanent Jobs) 35,469 41,292 Note: Louisiana results include effects within the Baton Rouge Metropolitan Statistical Area (MSA-- Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge, and West Feliciana Parishes) as well as spillover to other parts of the state. Source: The Perryman Group

14 10 Baytown Operations The Baytown Refinery is located about 25 miles outside of Houston, along the Houston Ship Channel. 2 The refinery consists of four manufacturing sites and a global technology center on a site of approximately 3,400 acres. 3 These sites employ over 7,000 workers, and the refinery has a potential capacity of 584,000 barrels of crude oil per day. 4 The current economic benefits multiplier effects) stemming from operations of ExxonMobil facilities in Baytown include an estimated $7.544 billion in gross product each year and more than 50,892 jobs in the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area as well as $8.188 billion in gross product and 57,969 jobs in Texas. (The Texas impacts include the Houston- The Woodlands-Sugar Land MSA impacts.) This activity represents 1.4% of gross product in the Houston-The Woodlands-Sugar Land MSA and 1.6% of employment. In addition, substantial tax receipts are generated, including an estimated $238.0 million per year to the State and $102.7 million per year to local government entities across Texas. The Annual Economic Benefits of Current ExxonMobil Operations in Baytown (Dollar Amounts in Billions of 2016 Dollars) Houston-The Woodlands-Sugar Land MSA Texas $ $ Gross Product $7.544 $8.188 Personal Income $4.104 $4.468 (Permanent Jobs) 50,892 57,969 Note: Texas results include effects within the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA-- Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties) as well as spillover to other parts of the state. Source: The Perryman Group

15 11 Beaumont Area Operations In 1903, ExxonMobil built the Beaumont Refinery on 2,400 acres of land off the Neches River near downtown Beaumont. 5 Each day, the Beaumont refinery processes 365,000 barrels of crude oil. 6 Nearly three billion gallons of gasoline are produced by the refinery every year. 7 The company also has a Chemical Plant at this location which generates building-block chemicals such as ethylene and propylene. 8 Additional ExxonMobil facilities in the Beaumont area include the ExxonMobil Lubricant Plant and the Beaumont Polyethylene Plant. 9 The Perryman Group estimates that current economic benefits multiplier effects) associated with operations of ExxonMobil facilities in Beaumont include $3.609 billion in gross product each year and 28,698 jobs in the Beaumont-Port Arthur Metropolitan Statistical Area. The Beaumont facilities generate $4.949 billion in gross product for Texas as well as 35,021 jobs. (Again, the results for Texas include the impacts for the Beaumont-Port Arthur MSA.) This activity represents an estimated 13.8% of total Beaumont-Port Arthur MSA gross product and 16.4% of employment. This economic activity leads to substantial tax receipts to Texas of an estimated $144.9 million per year, with $67.7 million per year to local government entities. The Annual Economic Benefits of Current ExxonMobil Operations in Beaumont (Dollar Amounts in Billions of 2016 Dollars) Beaumont-Port Arthur MSA Texas $ $ Gross Product $3.609 $4.949 Personal Income $2.047 $2.701 (Permanent Jobs) 28,698 35,021 Note: Texas results include effects within the Beaumont-Port Arthur Metropolitan Statistical Area (MSA-- Hardin, Jefferson, Newton, and Orange Counties) as well as spillover to other parts of the state. Source: The Perryman Group

16 12 Golden Pass Liquefied Natural Gas Terminal Operations The Perryman Group estimates that current economic benefits multiplier effects) associated with operations of ExxonMobil s Golden Pass Liquefied Natural Gas Terminal include $ million in gross product each year and 1,132 jobs in the Beaumont-Port Arthur and Lake Charles Metropolitan Statistical Areas. The Golden Pass facility generates $ million in gross product for Texas and Louisiana as well as 1,314 jobs (again, the state results include the impacts for the MSAs.) In addition, substantial tax receipts are generated, including an estimated $6.2 million per year to Texas and Louisiana and $3.7 per year to local government entities across the states. The Annual Economic Benefits of Current ExxonMobil Operations at the Golden Pass Liquefied Natural Gas Terminal (Dollar Amounts in Billions of 2016 Dollars) Beaumont-Port Arthur and Lake Charles MSAs Texas and Louisiana $0.814 $0.881 Gross Product $0.143 $0.167 Personal Income $0.081 $0.095 (Permanent Jobs) 1,132 1,314 Note: Texas and Louisiana results include effects within the Beaumont-Port Arthur and Lake Charles Metropolitan Statistical Areas (MSAs-- Hardin, Jefferson, Newton, and Orange Counties and Calcasieu and Cameron Parishes) as well as spillover to other parts of the state. Source: The Perryman Group

17 13 Proposed ExxonMobil Gulf Coast Investments ExxonMobil is considering several enhancements and expansions at its refining, petrochemical, and related facilities along the Texas and Louisiana Gulf Coast. These proposed investments will lead to substantial capital investments and ongoing economic stimulus. The Perryman Group measured the economic benefits of these projects (1) during the construction and development phase and (2) at maturity when fully operational. Results are provided for The Impact of Projects at Baton Rouge Facilities on the Baton Rouge MSA and Louisiana o Port Allen Aviation Lubricants Plants o Sulphur Expansion Project o The Impact of Construction Projects at the Baton Rouge Facilities The Impact of Projects at Baytown Facilities on the Houston-The Woodlands-Sugar Land MSA and Texas including o Baytown North American Growth Project (Large Ethylene Plant) o Baytown Lubes Expansion Project o Baytown Polyalphaolefins Plant o The Impact of Construction Projects at the Baytown Facility The Impact of Projects at Beaumont Facilities on the Beaumont-Port Arthur MSA and Texas o Expanded Crude Unit A o Selective Catalytic Naptha Hydrofining (SCANfiner) Project o Expanded Polyethylene Facility (Third Production Line) o Crude Unit C (BLADE) Expansion o The Impact of Construction Projects at the Beaumont Facility The Impact of the Golden Pass Liquefied Natural Gas (LNG) Terminal on Relevant MSAs as well as Louisiana and Texas The Impact of a New Project at an Unspecified Gulf Coast Location on Relevant MSAs and States o Gulf Coast Ventures Ethane Cracker and Derivative Project The total of these potential components of ExxonMobil s Gulf Coast investments are also presented.

18 14 Economic Benefits of Construction ExxonMobil s proposed Gulf Coast investments involve significant capital investments that will generate billions in spending when multiplier effects are considered. Although transitory, the construction process will also involve tens of thousands of person-years of employment. The Perryman Group estimates that the total economic benefits of construction associated with proposed ExxonMobil investments include $ billion in gross product and 282,189 person-years of employment in Texas and Louisiana, with effects concentrated in areas proximate to the projects. The Economic Benefits of Construction Projects Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Billions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 254, ,189 Note: Louisiana and Texas results include effects within the Gulf Coast Areas (the Baton Rouge, Houston-The Woodlands-Sugar Land, and Beaumont-Port Arthur Metropolitan Statistical Areas as previously defined) as well as spillover to other parts of the states. Source: The Perryman Group Although benefits are concentrated in construction industries, all major industrial sectors benefit from this activity when multiplier effects are considered. Allocations of economic effects are depicted in the following graphs, with additional detail in the Appendices.

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20 16 The Economic Benefits of Construction Projects at ExxonMobil s Baton Rouge Facilities (Dollar Amounts in Millions of 2016 Dollars) Port Allen Aviation Lubricants Plant Baton Rouge MSA Louisiana $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 1,797 1,956 Sulphur Expansion Project TOTAL $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 2,325 2,531 $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 4,122 4,488 Note: Louisiana results include effects within the Baton Rouge Metropolitan Statistical Area (MSA-- Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge, and West Feliciana Parishes) as well as spillover to other parts of the state. May not sum to total due to rounding. Source: The Perryman Group

21 17 The Economic Benefits of Construction Projects at ExxonMobil s Baytown Facilities (Dollar Amounts in Millions of 2016 Dollars) Houston-The Woodlands-Sugar Land MSA Texas Baytown North American Growth Project (Large Ethylene Plant) $11, $12, Gross Product $5, $5, Personal Income $3, $4, (Person-Years) 59,473 66,077 Baytown Lubes Expansion Project $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 1,432 1,591 Baytown Polyalphaolefins Plant TOTAL $ $ Gross Product $ $ Personal Income $ $ (Person-Years) 2,093 2,325 $11, $13, Gross Product $5, $6, Personal Income $4, $4, (Person-Years) 62,997 69,993 Note: Texas results include effects within the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA-- Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties) as well as spillover to other parts of the state. May not sum to total due to rounding. Source: The Perryman Group

22 18 The Economic Benefits of Construction Projects at ExxonMobil s Beaumont Facilities (Dollar Amounts in Millions of 2016 Dollars) Expanded Crude Unit A Beaumont-Port Arthur MSA Texas $ $ Gross Product $ $ Personal Income $ $ (Person-Years) Selective Catalytic Naptha Hydrofining (SCANfiner) Project $ $$ Gross Product $ $ Personal Income $ $ (Person-Years) 3,730 4,160 Expanded Polyethylene Facility (Third Production Line) $1, $2, Gross Product $ $1, Personal Income $ $ (Person-Years) 10,751 11,992 Crude Unit C (BLADE) Expansion TOTAL $1, $1, Gross Product $ $ Personal Income $ $ (Person-Years) 8,776 9,789 $4, $5, Gross Product $2, $2, Personal Income $1, $1, (Person-Years) 23,971 26,737 Note: Texas results include effects within the Beaumont-Port Arthur Metropolitan Statistical Area (MSA-- Hardin, Jefferson, Newton, and Orange Counties) as well as spillover to other parts of the state. May not sum to total due to rounding. Source: The Perryman Group

23 19 Economic Benefits of Construction of ExxonMobil s Golden Pass Liquefied Natural Gas (LNG) Project (Dollar Amounts in Billions of 2016 Dollars) Beaumont-Port Arthur and Lake Charles MSAs Louisiana and Texas $ $ Gross Product $5.359 $6.076 Personal Income $3.746 $4.178 (Person-Years) 62,356 69,435 Note: Louisiana and Texas results include effects within the Beaumont-Port Arthur and Lake Charles (Calcasieu and Cameron Parishes) Metropolitan Statistical Areas as well as spillover to other parts of the states. Source: The Perryman Group Economic Benefits of Construction of an Ethane Cracker and Derivative Project at an Unspecified Location Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Billions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $ $ Gross Product $8.784 $9.937 Personal Income $6.333 $7.006 (Person-Years) 100, ,537 Note: Louisiana and Texas results include effects within the Gulf Coast Areas (the Baton Rouge, Houston-The Woodlands-Sugar Land, and Beaumont-Port Arthur Metropolitan Statistical Areas as previously defined) as well as spillover to other parts of the states. The impact analysis coefficients are derived as a representative weighted average of those for Texas and Louisiana and for Beaumont-Port Arthur, Houston-The Woodlands-Sugar Land, and Baton Rouge Metropolitan Statistical Areas. Source: The Perryman Group

24 20 Fiscal Benefits of Construction The increase in economic activity during the construction process will lead to significant gains in tax receipts to Texas and Louisiana and local areas within those states. The Perryman Group estimates that total fiscal benefits to the states include $1,016.1 million, with $477.9 million to local political subdivisions. Results by facility location are presented in the table below.

25 21 Fiscal Benefits of Construction Projects Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Millions of 2016 Dollars) Projects at Baton Rouge Facilities State (Louisiana) Local Port Allen Aviation Lubricants $6.2 $3.1 Projects at Baytown Facilities Projects at Beaumont Facilities Sulphur Expansion $8.1 $4.1 TOTAL $14.3 $7.2 State (Texas) Local North American Growth $211.6 $106.2 Lubes Expansion Project $5.1 $2.6 Polyalphaolefins Plant $7.4 $3.7 TOTAL $224.2 $112.5 State (Texas) Local Expanded Crude Unit A $2.4 $1.3 Selective Catalytic Naptha Hydrofining (SCANfiner) $13.3 $6.7 Expanded Polyethylene Facility $38.4 $19.3 Crude Unit C (BLADE) Expansion $31.4 $15.7 Golden Pass LNG TOTAL $85.6 $43.0 States (Louisiana and Texas) Local $335.5 $136.0 Gulf Coast Ventures Ethane Cracker and Derivative Project (Unspecified Location) OVERALL TOTAL Note: May not sum to total due to rounding. Source: The Perryman Group State (Louisiana and/or Texas) States (Louisiana and Texas) Local $356.5 $179.1 Local $1,016.1 $477.9

26 22 Economic Benefits of Ongoing Operations of Expanded Facilities Expanded ExxonMobil facilities will involve incremental employment on an ongoing basis. The Perryman Group estimates that the total incremental business activity (at maturity) associated with expanded operations comprising ExxonMobil s proposed Gulf Coast investments includes $1.654 billion in gross product each year and 12,150 permanent jobs in Texas and Louisiana (when multiplier effects are considered). Effects are concentrated in areas proximate to the projects, but spillover benefits occur in other parts of the states. The Ongoing Economic Benefits at Maturity of Projects Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Billions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $5.931 $6.984 Gross Product $1.343 $1.654 Personal Income $0.754 $0.912 (Permanent Jobs) 10,343 12,150 Note: Louisiana and Texas results include effects within the Gulf Coast Areas (the Baton Rouge, Houston-The Woodlands-Sugar Land, and Beaumont-Port Arthur Metropolitan Statistical Areas as previously defined) as well as spillover to other parts of the states. Source: The Perryman Group Results by facility location are presented in the tables below, with additional detail in the Appendices.

27 23 The Ongoing Economic Benefits (at Maturity) of Expanded Operations at ExxonMobil s Baton Rouge Facilities (Dollar Amounts in Millions of 2016 Dollars) Port Allen Aviation Lubricants Plant Baton Rouge MSA Louisiana $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) Sulphur Expansion Project TOTAL $ $ Gross Product $7.243 $ Personal Income $4.292 $5.952 (Permanent Jobs) $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) Note: Louisiana results include effects within the Baton Rouge Metropolitan Statistical Area (MSA-- Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge, and West Feliciana Parishes) as well as spillover to other parts of the state. The Sulphur expansion project does not generate direct employment, but does generate certain spinoff effects from increased production. May not sum to total due to rounding. Source: The Perryman Group

28 24 The Ongoing Economic Benefits (at Maturity) of Expanded Operations at ExxonMobil s Baytown Facilities (Dollar Amounts in Millions of 2016 Dollars) Houston-The Woodlands-Sugar Land MSA Texas Baytown North American Growth Project (Large Ethylene Plant) $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) 1,895 2,161 Baytown Lubes Expansion Project $ $ Gross Product $ $ Personal Income $8.303 $9.285 (Permanent Jobs) Baytown Polyalphaolefins Plant TOTAL $9.852 $ Gross Product $3.559 $4.141 Personal Income $2.104 $2.431 (Permanent Jobs) $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) 2,036 2,325 Note: Texas results include effects within the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA-- Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties) as well as spillover to other parts of the state. The direct employment for the Baytown Lubes expansion project is estimated based on comparable operations. The Baytown polyalphaolefins plant expansion does not generate direct employment, but does generate certain spinoff effects from increased production. May not sum to total due to rounding. Source: The Perryman Group

29 25 The Ongoing Economic Benefits of Expanded Operations at ExxonMobil s Beaumont Facilities (Dollar Amounts in Millions of 2016 Dollars) Expanded Crude Unit A Beaumont-Port Arthur MSA Texas $9.497 $ Gross Product $3.472 $5.855 Personal Income $2.169 $3.303 (Permanent Jobs) Selective Catalytic Naptha Hydrofining (SCANfiner) Project $ $ Gross Product $4.886 $7.269 Personal Income $2.833 $3.967 (Permanent Jobs) Expanded Polyethylene Facility (Third Production Line) $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) Crude Unit C (BLADE) Expansion TOTAL $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) $ $ Gross Product $ $ Personal Income $ $ (Permanent Jobs) Note: Texas results include effects within the Beaumont-Port Arthur Metropolitan Statistical Area (MSA-- Hardin, Jefferson, Newton, and Orange Counties) as well as spillover to other parts of the state. The expanded crude unit A does not generate direct employment, but does generate certain spinoff effects from increased production. May not sum to total due to rounding. Source: The Perryman Group

30 26 The Ongoing Economic Benefits of ExxonMobil s Golden Pass Liquefied Natural Gas (LNG) Project (Dollar Amounts in Millions of 2016 Dollars) Beaumont-Port Arthur and Lake Charles MSAs Louisiana and Texas $1, $1,968,000 Gross Product $ $ Personal Income $ $ (Permanent Jobs) 3,112 3,636 Note: Louisiana and Texas results include effects within the Beaumont-Port Arthur (previously defined) and Lake Charles (Calcasieu and Cameron Parishes) Metropolitan Statistical Areas as well as spillover to other parts of the states. Direct employment at the facility was estimated based on employment patterns at other LNG facilities (with appropriate adjustments for the level of anticipated production). Source: The Perryman Group The Ongoing Economic Benefits of Operations of an Ethane Cracker and Derivative Project at an Unspecified Location Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Millions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $2, $3, Gross Product $ $ Personal Income $ $ (Permanent Jobs) 4,195 4,988 Note: The impact analysis coefficients are derived as a representative weighted average of those for Texas and Louisiana and for Beaumont-Port Arthur, Houston-The Woodlands-Sugar Land, and Baton Rouge Metropolitan Statistical Areas. Source: The Perryman Group

31 27 Fiscal Benefits of Ongoing Expanded Operations Expanded operations also generate significant incremental tax receipts to states and local governments. The Perryman Group estimates that the total incremental tax revenue to Texas and Louisiana each year once ExxonMobil s expansion projects reach maturity will be $56.5 million, with $24.2 million to local governments in those states. Results by facility location are presented in the table below.

32 28 Annual Fiscal Benefits (at Maturity) of Expanded Operations Associated with ExxonMobil s Proposed Gulf Coast Investments (Dollar Amounts in Millions of 2016 Dollars) Projects at Baton Rouge Facilities State (Louisiana) Local Port Allen Aviation Lubricants $1.3 $0.6 Projects at Baytown Facilities Projects at Beaumont Facilities Sulphur Expansion $0.4 $0.2 TOTAL $1.7 $0.8 State (Texas) Local North American Growth $7.7 $3.9 Lubes Expansion Project $0.5 $0.2 Polyalphaolefins Plant $0.2 $0.1 TOTAL $8.3 $4.2 State (Texas) Local Expanded Crude Unit A $0.2 $0.1 Selective Catalytic Naptha Hydrofining (SCANfiner) $0.2 $0.1 Expanded Polyethylene Facility $0.5 $0.3 Crude Unit C (BLADE) Expansion $2.3 $1.0 Golden Pass LNG TOTAL $3.2 $1.5 States (Louisiana and Texas) Local $21.2 $7.8 Gulf Coast Ventures Ethane Cracker and Derivative Project (Unspecified Location) OVERALL TOTAL Note: May not sum to total due to rounding. Source: The Perryman Group State (Louisiana or Texas) States (Louisiana and Texas) Local $22.0 $9.9 Local $56.5 $24.2

33 29 Current and Expanded ExxonMobil Gulf Coast Operations In order to provide an estimate of the ongoing total economic benefits once the proposed Gulf Coast investment projects reach mature operational levels, The Perryman Group summed (1) total current operations and (2) total expanded operations from the proposed projects as described in the preceding sections. Once the projects comprising ExxonMobil s proposed Gulf Coast investments are completed and reach mature levels of operations, the total economic benefits of ExxonMobil s operations in the region current operations) will reach an estimated $ billion in gross product and 126,534 jobs in Gulf Coast areas and $ billion in gross product and 147,747 jobs in Louisiana and Texas. This activity represents an estimated 2.88% of overall gross product and 3.39% of employment in Gulf Coast areas. The total combined fiscal benefits of current and potential expanded ExxonMobil operations include an estimated $615.2 million per year to Texas and Louisiana, with $ million per year to local governmental entities. Note that this analysis is limited to the refining and chemical operations. The overall impact of ExxonMobil is substantially higher and includes its corporate headquarters in Dallas, a large corporate campus near Houston, and oil and gas drilling and production activity in the region. The Annual Ongoing Economic Benefits of Current ExxonMobil Gulf Coast Operations and Projects Associated with Proposed ExxonMobil Investments at Maturity (Dollar Amounts in Billions of 2016 Dollars) Gulf Coast Areas Louisiana and Texas $ $ Gross Product $ $ Personal Income $9.631 $ (Permanent Jobs) 126, ,747 Note: Louisiana and Texas results include effects within the Gulf Coast Areas (the Baton Rouge, Lake Charles, Houston-The Woodlands-Sugar Land, and Beaumont-Port Arthur Metropolitan Statistical Areas as previously defined) as well as spillover to other parts of the states. Source: The Perryman Group

34 30 The distribution of these effects by industrial sector for gross product and employment are illustrated in the graphics below.

35 31 Assessment of Multiplier Effects As noted, the total economic benefits described above include multiplier effects. Direct effects: The initial process of building the facilities (for a construction impact) or direct employment and production (for an ongoing impact) is known as the direct effect. In this case, they are the investments by ExxonMobil in construction and development (for construction impacts) and direct employment at the facilities (for current and planned future operational impacts). Indirect effects: The production of any good or service requires purchases of various amounts of other goods and services. Each of these suppliers must, in turn, purchase additional inputs. This process continues through multiple rounds of production, thus generating subsequent increments to business activity. These transactions in the output chain constitute the indirect effect. Induced effects: Some portion of payroll dollars received by employees at each stage of the production cycle are spent locally on food, clothing, health care services, utilities, housing, recreation, and other items. The Perryman Group s model accounts for leakages such as savings and spending outside of the local area. In addition, initial outlays by area residents generate further secondary activity as local providers acquire inputs to meet this consumer demand. These consumer spending impacts are known as the induced effect. See Appendix B for further detail regarding these effects and the methods used by The Perryman Group to estimate them.

36 32 Leakage to Other Parts of the US Economy The estimated leakage to other parts of the US economy from current operations, construction of proposed Gulf Coast facilities, and mature operations associated with proposed Gulf Coast investments are noted in the table below. Estimated Leakage to Other Parts of the US Economy from ExxonMobil s Current Operations and Construction and Operations at Maturity Associated with ExxonMobil s Proposed Gulf Coast Investments Gross Product Personal Income Current Operations Construction Associated with the Proposed Gulf Coast Investments Operations at Maturity Associated with the Proposed Gulf Coast Investments Combined Current Operations and Operations at Maturity Associated with the Proposed Gulf Coast Investments Source: The Perryman Group 35.79% 32.44% 30.68% 27.27% 44.24% 41.29% 39.22% 39.33% 22.63% 26.40% 25.04% 22.84% 35.99% 32.57% 30.77% 27.24%

37 33 Conclusion ExxonMobil has been an important source of opportunities for the Texas and Louisiana Gulf Coast area for well over a century. The Perryman Group estimates that current operations of ExxonMobil refining, petrochemical, and related facilities in Baton Rouge, Baytown, Beaumont, and the Golden Pass LNG terminal generate $ billion in gross product each year and provide some 116,191 jobs in Gulf Coast areas (when multiplier effects are considered). With additional spillover benefits to other parts of the states, total benefits rise to $ billion in gross product and 135,597 jobs in Texas and Louisiana. With the proposed Gulf Coast investments, ExxonMobil is enhancing and expanding its Gulf Coast facilities to increase efficiency and capacity and expand operations. The Perryman Group estimates that the total economic benefits of ExxonMobil s proposed construction projects include $ billion in gross product and 282,189 person-years of employment in Texas and Louisiana, with effects concentrated in areas proximate to the projects. The total incremental employment (at maturity) associated with expanded operations comprising the proposed Gulf Coast investments include $1.654 billion in gross product each year and 12,150 permanent jobs in Texas and Louisiana (when multiplier effects are considered). In addition to the taxes paid by ExxonMobil associated with the company s facilities, the economic activity they generate leads to incremental tax receipts. The Perryman Group estimates that the current fiscal benefits stemming from ExxonMobil operations in Gulf Coast areas include $558.8 million to Texas and Louisiana and $261.7 million to local governments (in addition to taxes paid directly by the company). With the proposed Gulf Coast investments added to current operations, annual tax receipts could be expected to rise to a combined $615.3 million per year to Louisiana and Texas and $286.5 million per year to local governments.

38 34 Appendix A: About The Perryman Group The Perryman Group (TPG) is an economic research and analysis firm based in Waco, Texas. The firm has more than 30 years of experience in assessing the economic impact of corporate expansions, regulatory changes, real estate developments, public policy initiatives, and myriad other factors affecting business activity. TPG has conducted hundreds of impact analyses for local areas, regions, and states throughout the United States. Impact studies have been performed for hundreds of clients including many of the largest corporations in the world, governmental entities at all levels, educational institutions, major health care systems, utilities, and economic development organizations. Dr. M. Ray Perryman, founder and President of the firm, developed the US Multi-Regional Impact Assessment System (used in this study) in the early 1980s and has consistently maintained, expanded, and updated it since that time. The model has been used in hundreds of diverse applications and has an excellent reputation for reliability. A major study developed using the relevant model was recently published in The Journal of Medical Economics. In addition to producing a regular forecast for the area for decades, TPG has conducted numerous major studies for projects in the Beaumont area and Southeast Texas Region. The firm has conducted numerous investigations related to the oil and gas, refining, and chemicals industries, including a prior analysis of the Beaumont Refinery. These analyses have included, among others, forecasts, impact assessments, regulatory and environmental issues, and legislative and policy initiatives. Information has been prepared for the Interstate Oil Compact Commission, the US Department of Energy, the US Department of the Interior the Texas Railroad Commission, and numerous legislative committees regarding energy policy. Impact studies have also been completed for numerous refining, petrochemical, and LNG facilities throughout the US, Canada, and South America. TPG also has extensive experience in economic development and site selection. The Perryman Group s experience in economic development and related work includes assessments for dozens of communities across the state and nation the Texas, Our Texas analysis which provided regional evaluations for the entire state). The Perryman Group has analyzed the economic development aspects of a broad range of corporate locations, infrastructure projects, and regulatory changes, and has extensive experience in site selection and the corporate location decision process. In