Political divide widens in South Texas county over $15B Exxon petrochemical plant

Disagreements over the need for jobs versus environmental and health risks are dividing a South Texas community where Exxon Mobil Corp. is looking to build the world’s largest ethane steam cracker plant.

San Patricio County Judge Terry A. Simpson, who’s hoping to secure the deal to lure more jobs to the area, stands on the opposite side of community activists who are fighting to keep their farmland from being converted into what they say is a potentially dangerous petrochemical plant.

“I don’t begrudge them for being against the plant but, like I said, I have to look at the greater good of the county,” Simpson said. “We have to look at what it does for everybody.”

Exxon is buying up about 1,400 acres of farmland just outside Portland city limits to build a multibillion-dollar petrochemical plant in a joint venture with Saudi Arabia Basic Industries Corp., a public company that’s 70 percent owned by the government of Saudi Arabia.

The companies also are looking at a site in Victoria and two in Louisiana, but the San Patricio County location is leading the pack, project leader Robert W. Tully said by phone. They all meet Exxon’s requirements, providing a contiguous site, with a deep water port nearby and a local labor force with experience building and operating similar projects.

“We’re down to four (sites) and certainly the site in San Patricio County is at or near the top of that list,” Tully said.

The new plant would produce 1.8 million metric tons of ethylene a year. An ethane steam cracker uses high heat and pressure to break down or “crack” natural gas to create ethylene and polyethylene, basic building blocks in plastics.

The proposed plant site also is just 2 miles from Gregory-Portland Independent School District’s high school and junior high. That has caused an uproar in nearby Portland, where the City Council voted unanimously Dec. 20 to urge Exxon and SABIC to find another location. Portland officials have little recourse since the project falls just outside city limits.

More than 2,500 people have signed a petition led by a local grass-roots group called Portland Citizens United, demanding that the county and school district withhold tax abatements and other incentives from Exxon and SABIC that would normally come with a project that large.

The entire town of Gregory, its 2,000 residents, much of nearby Portland and the city’s only fire and police stations would be within 3 miles of the plant’s center, raising concerns about possible industrial accidents.

In Louisiana, officials issued a “shelter-in-place” order requiring residents to stay indoors over a 2-mile radius surrounding a Williams Cos. ethylene steam cracker in Geismar, Louisiana, after an explosion there in 2013 killed at least one worker and sent 73 more to the hospital, local reports indicate.

Simpson said the need to create high-paying jobs outweighs the potential risks. Many of the area’s college-bound students don’t return to the largely industrial coastal town after graduation.

“The only reason why they weren’t coming back to the area was because we didn’t have the jobs. That’s what they wanted me to do was create jobs for those people that their children and grandchildren would live here,” Simpson said.

Troy Snody, the director of local grass-roots activists Portland Citizens United, said county leadership has failed residents and described Simpson’s support of the project as “jobs at any cost.”

“All these elected officials that are pro-growth, pro-jobs, they want to reflect the will of the people that voted them into office until the will of the people that voted them into office is different than their will,” Snody said by phone.

The jobs at stake are enough to draw support from Texas Gov. Greg Abbott, according to local leaders who said the governor’s office has told them that the project is a high priority for the state.

It will cost between $10 billion and $15 billion to build, with as many as 6,000 people employed at peak construction and more than 10,000 temporary jobs created over the five-year construction beginning in 2020, according to Exxon’s application with the school and Tully.

About 230 permanent jobs would be created to run the facility paying at least $59,408, according to the application

Simpson said the facility would be assessed at around $12 billion, substantially increasing taxable property when finished. San Patricio’s current property tax base is assessed at $5 billion, according to 2015 valuations by the San Patricio County auditor’s office.

Exxon, SABIC, and Exxon-SABIC have sweetened the pot by each agreeing to pay $100 per student annually directly to the Gregory-Portland ISD over the 10-year abatement period, coming to more than $1.3 million a year, according to school board President Randy Eulenfeld. About 4,500 students are enrolled in the district.

It’s a lot of money, but still puts the school board in a difficult spot, Eulenfeld said.

The higher tax base likely would make the Gregory-Portland ISD a so-called “property wealthy district” under state education finance rules, he said. That could require the district to return millions of dollars of funding to the state to be redistributed to poorer schools, he said.

Eulenfeld thinks that giving the companies some sort of tax abatement would give residents some control over the project. It also actually could slow growth in taxable land values, which might give the district extra time to prepare for the reduced state funding, he said.

Activists are pressuring the school district to reject Exxon’s bid, arguing the location is just too close.

Simpson acknowledged that operating a petrochemical plant comes with risks.

“I can’t guarantee that these people will be 100 percent safe. I can’t do that. It’s not possible,” said Simpson, who lives in the county seat of Sinton and lives a few blocks from a concrete plant that he considers potentially dangerous. “That’s kind of a moron question to ask because we could have a tanker truck driving right in the middle of Portland and have an accident and explode; that would probably do the same amount of damage to Portland that this plant could.”

Project leader Tully said Exxon and SABIC are looking at adding a “buffer zone” of close to a half-mile between the building and edge of the property to help protect the community if there was an accident.

“Everybody has a different opinion on what’s too close, but we look at it from a risk perspective, if our systems fail and something goes wrong we put this buffer zone in so we would not impact the external community, and that’s what we’re trying to do,” Tully said.

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