Environmental report on plastics industry highlights emissions from Coastal Bend plants

The Environmental Integrity Project, an anti-pollution nonprofit, released a report last week on the plastics industry, noting how the industry has benefited from government subsidies while violating air pollution control permits.

Highlighted in the report is Gulf Coast Growth Ventures, noted as having the highest 2021 benzene emissions among U.S. plastics plants included in the report.

The report looks specifically at plants built or expanded in the U.S. since 2012 that manufacture chemical ingredients for plastic products.

According to the report, 64% of 50 plastics plants received taxpayer subsidies worth nearly $9 billion, while 84% of plants violated air pollution control permits at least once in the past three years.

Gulf Coast Growth Ventures, a joint project of ExxonMobil and the Saudi Arabian government located in Gregory in San Patricio County, manufactures ethylene and polyethylene, which is used to make packaging materials.

By 2031, Gulf Coast Growth Ventures will have shaved $249 million off its local property tax bills. But, in less than two years, the plant had 63 environmental violations, releasing half a million pounds of air pollutants, according to the Environmental Integrity Project report.

How do companies get tax subsidies?

In Texas, companies can apply for a property tax limitation.

Until recently, the state of Texas tasked local school districts with approving 10-year property value limitations through the Chapter 313 of the tax code, which allowed school districts to approve abatements for school property taxes. In return, the state made up any lost local school tax revenues and districts could also negotiate additional payments from companies receiving these beneficial tax agreements.

Chapter 313 expired at the end of 2022, but any agreements approved before 2023 will remain in effect. In some cases, agreements approved just weeks or days before Chapter 313 expired guarantee future tax benefits that aren’t slated to begin for years.

The Texas Legislature also approved a replacement program in 2023, Chapter 403. This new program excludes renewable energy projects and electric energy storage facilities, focusing instead on manufacturing, critical infrastructure and natural resource projects.

It also limits the tax break to half a project’s market value for most projects and 25% of market value in certain low-income census tracts. But the new program allows for a 100% abatement during the construction phase of a project, while Chapter 313 taxed projects at their full value until complete.

But one of the most significant changes in the new program is it ends supplemental payments to school districts. Previously, school districts that approved an agreement could negotiate and collect extra funds from companies of up to $100 per student per year for the full 10-year abatement period, as well as three additional years after the tax incentives end.

Critics of Chapter 313 claimed these payments incentivized school districts to approve agreements. That financial incentive no longer exists for new agreements.

In 2017, Gregory-Portland ISD approved three agreements for the Gulf Coast Ventures project. The company will continue to receive tax benefits through 2032 worth $249 million.

But Gregory-Portland ISD would not have been able to keep those additional tax proceeds.

Under Texas’ recapture policy, commonly known as “Robin Hood,” any tax revenues in addition to the amount the state has determined Gregory-Portland ISD needs to educate its students would have been recaptured by the state to fill in funding gaps in schools where local tax revenues aren’t enough to educate students.

Because of this, Gregory-Portland ISD did not face negative financial impacts when it approved a Chapter 313 agreement with Gulf Coast Growth Ventures. In fact, Chapter 313 agreements have represented a significant financial boon to the district, which for years has outpaced other local districts in staff raises, boasting the highest-paid teachers in the region.

The district has approved 16 Chapter 313 agreements, including eight with Corpus Christi Liquefaction.

Between 2016-17 and 2022-23, Gregory-Portland ISD received $77.5 million in revenue protection and supplemental payments. According to the district’s website, these funds have contributed to teacher salaries, instructional materials and facility improvements.

The district’s agreements with Gulf Coast Growth Ventures only went into effect last year. It will receive millions in supplemental payments from the company through 2034-35.

"Tax abatement programs spur new jobs, investments and long-term additional tax revenue, and the abatement program our GCGV project qualified for did just that for the Coastal Bend," according to a statement on behalf of Gulf Coast Growth Ventures shared by public and government affairs advisor Callie Walker.

Environmental impact of the plastics industry in the Coastal Bend

The Environmental Integrity Project report examines the environmental impact of plastics plants that have received tax subsidies, highlighting Gulf Coast Growth Ventures.

Gulf Coast Growth Ventures started operations in late 2021.

Through agreements with Gregory-Portland ISD, Gulf Coast Growth Ventures and Cheniere Energy sponsored the establishment of three air-monitoring stations in the Gregory-Portland area The stations recorded consistent air quality between 2020 and 2022.

Gulf Coast Growth Ventures also boasted of its financial contributions to the Coastal Bend community in its 2022 Community Report, including contributions to a new municipal complex for the city of Gregory, the Texas State Aquarium Wildlife Rescue Center, University of Texas Marine Science Institute and the Harte Research Institute, a fire safety trailer for the San Patricio County community, the United Way of the Coastal Bend, the city of Portland’s renovation of Indian Point Park and the Corpus Christi Symphony Orchestra.

The company’s 2023 sustainability report also mentions that the plant will be powered by solar energy starting in the second half of 2024. The company report also states the plant reduced operational waste and flaring in 2023, emitting less than 50% of permitted criteria emissions quantities.

"Our focus is on reducing emissions because being a good neighbor is our priority," according to the Gulf Coast Growth Ventures statement. "GCGV has donated more than $20 million to the community, including local enrichment projects, environmental preservation, STEM programs, city infrastructure and air monitoring, which have shown no change in air quality since 2019."

But the Environmental Integrity Project report highlights environmental concerns.

According to the report, Gulf Coast Growth Ventures was the highest emitter of benzene among the plastics facilities studied in 2021.

According to the Environmental Integrity Project report, the Gulf Coast Growth Ventures facility experienced 10 unpermitted emissions incidents between December 2021 and April 2023 due to equipment failures, emergency flaring and unplanned shutdowns.

This includes an emissions event in 2022. The Caller-Times reported at the time that flaring was visible from 20 miles away during the two-day event.

The plant’s environmental violations include failure to comply with limits for pollutants such as nitrogen oxide and carbon monoxide, failure to properly sample and analyze discharges of storm-water and fairly to properly operate and monitor flares, according to the Environmental Integrity Project report.

The Occidental/Mexichem plant in Ingleside also received subsidies from Ingleside ISD. It had emissions events between 2018 and June 2023. In 2021, it emitted 2,506 pounds of chlorine, according the report.

In Corpus Christi, the Corpus Christi Polymers plant is expected to be completed by 2025. A LyondellBasell plant expansion is also proposed.

Another Coastal Bend plant, LyondellBasell’s Equistar plant, emitted 22,614 pounds of emissions according to the 2021 Texas emissions inventory, though this does not include an additional 1,626 pounds emitted during startups, shutdowns or upset emission events.

Calallen ISD has approved two tax abatement agreements with Equistar Chemicals.

LyondellBasell was also ordered to pay a $3.4 million civil penalty in 2021 due to Clean Air Act violations, including at its Corpus Christi facility. According to the Environmental Protection Agency, flares at LyondellBasell plants in Channelview, Corpus Christi and La Porte, Texas and Clinton, Iowa resulted in excess emissions of pollutants including volatile organic compounds, hazardous air pollutants like benzene and climate-change causing greenhouse gases.

Other industries

The report from the Environmental Integrity Project focused specifically on the plastics industry, but the Coastal Bend has also seen growth in other industries.

A 2022 study by the Coastal Alliance to Protect Our Environment of tax abatement agreements in Nueces and San Patricio counties estimated that schools, cities and counties have forgone over $2 billion in tax payments from industrial entities.

At the same time, state and national government environmental regulators have face criticism for failing to enforce pollution limits.

A 2023 EPA report found that 25 refineries that submitted benzene monitoring data to the EPA exceeded benzene pollution limits at least once between January 2018 and September 2021. Included in that list were five Corpus Christi refineries, including CITGO Corpus Christi Refinery East Plant, Flint Hills Resources Corpus Christi LLC East Refinery and Flint Hills Resources Corpus Christi LLC West Refinery, Valero Corpus Christi East and Calero Corpus Christi West.

A January article by the Texas Tribune and Inside Climate News found that the Texas Commission on Environmental Quality repeatedly characterized major pollution sources as minor, including at Enbridge Energy’s Ingleside Energy Center and Flint Hills’ Ingleside Terminal.

What actions does the report call for?

The Environmental Integrity Project report points to a national pattern, with large plastics companies benefiting from government tax subsidies while failing to meet environmental regulations.

The report identifies several policy recommendations, including that state and federal regulators should deny permits that make the ingredients for single-use, disposable plastics and that Clean Air Act permits that are issued should impose strict, legally required pollution limits based on an accurate accounting of emissions.

The report also calls for better monitoring through fence-line monitoring systems and accountability through meaningful enforcement actions. Another recommended action is public access to pollution data through easy to use public, online databases.

Finally, the report calls for local entities to reject subsidies and tax exemptions for plants that expose communities to air pollution or are prone to accidents, especially if they violate environmental permits.

“We don’t need taxpayer support for private companies that essentially manufacture pollution: single-use plastics that end up as litter, and toxic air pollution that disproportionately hurts communities of color,” EIP research manager and report author Alexandra Shaykevich said in a news release. “The plastics industry deserves penalties and more oversight – not more government handouts – for the environmental harm it is causing.”

Correction: In an earlier version of this article the following sentence dropped the word "million" from the sentence: By 2031, Gulf Coast Growth Ventures will have shaved $249 million off its local property tax bills. B

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This article originally appeared on Corpus Christi Caller Times: Environmental report looks at tax breaks and air emissions