Exxon’s Low Carbon Cuts Mesh With Trump’s Energy Priorities

The Trump White House made news this week with the publication of a revised National Security Strategy plan which elevates oil, natural gas, coal, and nuclear as key drivers of U.S. national security. A section titled “Energy Dominance” says a renewed focus on America’s abundance of those key traditional forms of energy “will
produce well-paying jobs in the United States, reduce costs for
American consumers and businesses, fuel reindustrialization, and help
maintain our advantage in cutting-edge technologies such as AI.”

Trump’s Energy Focused Security Strategy

“Expanding our net energy exports will also deepen relationships with
allies while curtailing the influence of adversaries, protect our ability
to defend our shores, and—when and where necessary—enables us to
project power,” the section continues, adding, “We reject the disastrous ‘climate change’ and ‘Net Zero’ ideologies that have so greatly harmed Europe, threaten the
United States, and subsidize our adversaries.”

The message is clear: The Biden era of tailoring government policies to efforts to hamstring fossil fuels and nuclear in favor of heavy subsidization of intermittent alternatives and electric vehicles is over. For the next three years, at least, federal energy and climate policy will focus on boosting energy resources which America possesses in unrivaled abundance. It’s an affirmation of the direction pursued by President Donald Trump and his key energy appointees throughout 2025.

Energy security has always been inextricably tied to national security, but the link has never been more vital than today amid the Russia/Ukraine war, myriad geopolitical tensions, and the global competition to win the AI race. America’s stature as the largest producer of oil and the most prolific producer and exporter of natural gas gives it a leadership position rivaled by no other country. Add in the fact that the U.S. also possesses by far the largest reserves of coal, and Trump’s aspiration for American energy dominance comes clearly into focus.

ExxonMobil Hears Trump’s Energy Message

Just days after the release of the Trump strategy document, the nation’s largest oil and gas company, ExxonMobil, released a new five-year corporate plan which cuts planned investments in its Low Carbon Solutions business unit by 1/3rd, reallocating billions of dollars in capital to its core oil and gas business projects. The plan and its supporting slide presentation include heavy emphasis on the company’s array of carbon capture and storage (CCS) projects but make little or no mention of previously announced plans for a hydrogen/ammonia export hub at its Baytown Refinery or plans to drill for lithium in the Smackover play in southern Arkansas.

“By 2030, we now expect $25 billion in earnings growth and $35 billion in cash flow growth vs. 2024 on the same constant price and margin basis,” ExxonMobil CEO Darren Woods said in the press release. “We expect to do it with no increase in capital, while generating a return on capital employed of more than 17%. We’re also beating our 2030 emission-reduction plans across the portfolio. We’ve already achieved our plans for reducing GHG and flaring intensity and expect to reach our planned 2030 methane intensity reductions next year.”

So, billions in enhanced cash flow and earnings growth from the same overall planned capital budget achieved by reallocating much of it away from less profitable low carbon ventures to more profitable core oil and gas projects. It’s a textbook example of a corporate management team carrying out its fiduciary duty to maximize returns to investors. It seems inevitable that Exxon’s peer companies like Chevron, ConocoPhillips, and even British rivals BP and Shell will soon follow suit.

The Rapidly Evolving Energy Space

ExxonMobil’s plan places heavy emphasis on what it calls its three “advantaged assets:” Its leading position in the prolific Permian Basin, its massive oil development in the Stabroek field offshore Guyana, and its rapidly expanding LNG investments. Buy 2030, the company expects production from those three asset groups to exceed 3.7 million barrels of oil equivalent per day, accounting for roughly 65% of its total volumes.

It all makes perfect sense in a world where the ESG investment fad has faded among the big banks and private equity investors, freeing more capital to help meet what even the International Energy Agency now says is a pressing need for hundreds of billions of additional investments in oil and gas exploration and development globally. Almost no one now expects global crude demand to peak by 2030 with only a few holding out hopes for that to happen by 2040.

Even fewer still entertain the thought of natural gas demand reaching a peak in the coming decades. That has recently become especially clear as gas generation has raced ahead of competitors to become the fuel of choice to meet the skyrocketing power generation needs of the AI datacenter industry in the U.S. and around the world.

Although the countries of Europe have continued to find excuses for failing to wean themselves off of Russian natural gas even as the war in Ukraine approaches its four-year anniversary, their appetite for American LNG keeps expanding. It is near-impossible to obtain permits to build new coal-fired power plants in the United States, but domestic coal consumption has begun to rise again in 2025 due to delays in planned retirements as regional power grids struggle to satisfy expanding power demands.

Where oil and gas are concerned, no domestic company is better positioned than ExxonMobil to help meet the explosive demand growth. Its natural gas production in the Permian Basin and other parts of the country also have positioned it to work with AI developers to provide the gas power generation they seek. That aspect of the business gained new attention this week from reports that Exxon, Google, and NextEra would all be a part of the enormous Stargate datacenter facility being developed near Abilene, Texas.

The Energy Road Ahead

There is no doubt that all of these developments and more have been influenced by the Trump-driven sea change in federal energy and climate policies. But it is key to point out that they are also reflective of rapidly evolving market factors.

As one example, the ESG investing trend began to fall from favor well before last November’s elections. In June 2023, one of ESG’s major proponents, BlackRock CEO Larry Fink, made news by telling an interviewer the term had already become so unpopular that he would no longer use it in internal and external communications.

It was also in 2023, during the CERAWeek conference held in Houston that March, that an array of company CEOs delivered speeches pledging to de-emphasize green investments and ESG reporting so they could reallocate capital back to their core business activities.

Thus, while it has always been true that energy policy impacts energy markets, the reverse is also true: Developments in the markets generally drive the direction of energy policy. Thus, what we see happening in Washington, DC during this second Trump presidency is both an example of a new President flexing his political muscle and of the government adjusting its policy priorities to reflect the shifting demands of the markets.

ExxonMobil is a first mover in the race to adjust its own plans to reflect these rapidly shifting dynamics in the energy space. We can expect many more companies to quickly leap into this fast-moving stream.