April 15, 2024

With demand for fossil fuels expected to decline as the world shifts to electric vehicles and renewable energy, Big Oil is in the midst of an enormous pivot to plastics production. And taxpayers help them.

Petrochemical companies such as Shell and Exxon Mobil have received nearly $9 billion in state and local tax breaks since 2012 to build or expand 50 plastics manufacturing facilities, according to a report released today by the Environmental Integrity Project, or EIP. Much of that activity took place along the Gulf Coast of Texas and Louisiana, often alongside marginalized communities. What’s more, 84 percent of the operations emitted more air pollution than allowed during the past three years, despite their promises to protect public health and the environment, the nonprofit found.

“Taxpayer subsidies help fund dangerous and often illegal air pollution in communities of color,” Alexandra Shaykevich, EIP’s research manager and a co-author of the report, told Grist. She said the manufacturers should be held responsible for their environmental impact and those public funds should be redirected to beneficial projects such as improving public schools. “If a company breaks the law,” she added, “it shouldn’t get taxpayer money.”

EIP investigated 50 of the country’s 108 plastics plants and focused only on those that were built or had their production capacity expanded since 2012. These facilities make the basic building blocks of all plastics – substances derived from fossil fuels such as ethylene and propylene – which can be combined with other chemicals to create common polymers: polyethylene, for example, which is used in shampoo bottles and milk jugs, or polyvinyl chloride, which used in pipes and window frames.

The demand for these substances is expected to rise in the coming years. The world produced 460 million metric tons plastic in 2023, and the Organization for Economic Cooperation and Development expects that number to reach more than 1.2 billion tons by mid-century if current growth trends continue. Recycling is unlikely keep up – to date, less than 10 percent goods made with plastic have been turned into new products; the rest was dumped in landfills, scattered in the environment or burned.

Railroad track with petrochemical plant in background
A plastics manufacturing complex along the railroad tracks near Groves, Texas.
Joseph Winters / Grist

So why subsidize making more? In many cases, local and state officials offer tax breaks with the idea that new or expanded manufacturing will promote economic development. For example, a Louisiana program highlighted by EIP exempted manufacturers from 80 to 100 percent of all local taxes for 10 years and favored industrial applicants who promised to create or retain jobs. Since 2013, the program has subsidized a Dow petrochemical facility in Iberville Parish, Louisiana, with at least $230 million in tax breaks. A program in Texas gave property tax rebates to petrochemical companies if they employed at least 10 people in rural areas or 25 in other areas.

It’s not clear whether the communities have seen any economic benefits — analyzes from environmental groups suggest that new jobs haven’t materialized, or that it’s come at a huge cost to local taxpayers through funds from schools, parks, roads and other infrastructure. to suck According to the nonprofit Together Louisiana, for example, each job created by the state’s industrial tax exemption program has cost the public more than half a million dollars. Another report, published last year by the nonprofit Ohio River Valley Institute, found that a Shell-owned plastics plant in Beaver County virtually no impact on job growth and poverty reduction.

“The truth of the matter is that we do not benefit from these industries. They don’t hire local people. And they don’t pay taxes,” Roishetta Ozane, a southwest Louisiana resident, told EIP.

What is clear, however, is that inviting new and larger petrochemical facilities into an area has significant health and environmental consequences.

As part of their routine operations, the plastic plants EIP analyzed release tens of millions of pounds of ozone-producing nitrogen oxide, respiratory irritants called volatile organic compounds, and carcinogens such as benzene and vinyl chloride each year. That’s just the beginning, as facilities often fail to report emissions from equipment failures, chronic leaks and accidents—all of which are alarmingly common.

Indeed, EIP found evidence of more than 1,200 collapses, fires, explosions and other accidents over the past five years at 94 percent of the facilities it analyzed. These events frequently released more air pollution than allowed by the facilities’ permits — and lax reporting requirements often kept nearby communities from finding out until days or weeks later.

Petrochemical plant with white tower
A plastics manufacturing facility near Port Arthur, Texas.
Robin Caiola / Beyond Plastics

Rather than heavily fining these facilities, EIP found that regulators often treated them leniently — either by issuing warning letters or by granting higher pollution permits. State environmental agencies have raised those limits since 2012 for one-third of the 50 plants EIP analyzed.

“It’s outrageous, and I’ve been doing this work for 25 years,” said Anne Rolfes, director of the nonprofit Louisiana Bucket Brigade. “There’s this well-worn path to petrochemicals in our state, and we’re so deep in those ruts that our elected officials aren’t even trying to steer us out of it.”

As EIP notes, the plastic plants in question are often next to schools, playgrounds, athletic fields, homes and other public places. They tend to be localized close to marginalized communities with underfunded schools and services. Of the nearly 600,000 people who live within three miles of the plastic plants analyzed by EIP, more than two-thirds are people of color. Many of these people, such as those in the industrialized corridor of southwest Louisiana known as Cancer Alley, have much higher risks of cancer and other diseases than the national average.

The EIP report contains several examples of plastic plants failing to fulfill their promises to be “a positive influence” and to “meet or exceed all environmental regulations”, as the chemical company Indorama put it in a 2016. brochure. Between 2016 and 2022, state and local regulators approved at least $73 million in tax breaks for Indorama to restart a plastics plant in southwest Louisiana. Once up and running, the plant violated its state pollution permit and failed to hire the workers it had promised. Several accidents released tens of thousands of pounds worth of hazardous emissions and injuries to two employees. The state environment agency has sent Indorama 13 warning letters.

Indorama declined to comment, as did 14 of the 17 other companies contacted by Grist. The others — Exxon Mobil, Chevron Phillips Chemical and Westlake Corporation — declined to comment on EIP’s findings, but said they strive to protect public health and the environment.

Sign read "Port Neches Little League Major Field" in foreground with petrochemical complex in background
A baseball diamond sits next to a petrochemical facility in Port Neches, Texas.
Joseph Winters / Grist

The Louisiana Department of Environmental Quality also did not respond to a request for comment. The Texas Commission on Environmental Quality said it would not comment because it had not yet reviewed the report. A spokesman for Louisiana’s economic development agency said that “double counting of some financial data” from its industrial tax exemption program by EIP “suggests a lack of academic rigor and discredits the entire analysis.” The agency did not elaborate on what data it believes was double-counted.

To mitigate pollution from plastic facilities, EIP calls for stricter air emission standards and better enforcement of the federal Clean Air Act. Rather than telling communities about “emissions events” after they happen, Shaykevich said, pollution data should be shared publicly in real time. “Being notified two weeks after an incident does very little to help people,” she told Grist.

Some of these reforms may be coming. The federal Environmental Protection Agency is considering it rules which will reduce hazardous air pollution from chemical plants, including ethylene oxide, benzene, 1,3-butadiene and vinyl chloride. Under the proposal, industrial facilities would have to monitor concentrations of these pollutants “at the fence,” meaning at their property lines, and the EPA would make the monitoring data available online. Contamination levels above a certain threshold will require facility operators to fix the problem.

The EPA is expected to finalize the rules later this year. EIP estimates that they will affect about half of the facilities studied in its report.

EIP also calls for a dramatic reduction in public funding for plastics manufacturers. While some plastic items – such as medical devices or contact lenses – are clearly useful, the organization says that subsidies to produce them should be linked to environmental performance. “If companies cannot comply with their permits,” “they should be forced to reimburse taxpayers,” Shaykevich told reporters during a press conference Thursday.

Other types of plastic production, she added, are not worth the trouble they cause. Non-essential, single-use items including bags, bottles, cutlery and packaging make up some 40 percent of plastic production and is virtually impossible to recycle. “We don’t think it’s OK to provide taxpayer support for single-use plastics,” Shaykevich told Grist. Such things, like the money they subsidize, are too often just thrown away.

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