Plant’s location is official
Lured by the promise of tax breaks and cheap shale gas, Exxon Mobil has officially settled on a spot just outside two small South Texas towns to build a giant petrochemical plant.
The U.S. oil company and its Saudi partner announced Wednesday that the 1,400-acre plot in San Patricio County, about a mile away from local schools, will become home to the world’s largest ethane cracker, a facility that converts ethane, a component of natural gas, into ethylene, the basic building block of most plastics.
For residents of Portland and Gregory, just north of Corpus
Christi, steamy industrial facilities near the coastline are a familiar sight. But some never thought they’d see the oil industry expand so close to homes and schools, north of a highway that divides the region between its economic engines at the ports and everyday life.
“There are homes just across the street,” said Adair Apple, who started a group called Portland Citizens United last year to oppose the development.
Exxon Mobil and its joint venture partner, SABIC, the Saudi Basic Industries Corp., examined dozens of sites across the Gulf Coast before it chose San Patricio County, where it would have easy access to port facilities, railways, housing and pipelines that carry abundant shale gas from fields in places like Karnes County about 90 miles north.
It’s also a spot from which Exxon Mobil wants to ship the plastics needed for grocery store packaging to emerging markets in Asia and Latin America, where the Irving-based company expects plastics demand to grow as populations and middle-class incomes rise over the coming decade.
“People are moving to cities and buying food in grocery stores,” said Rob Tully, Exxon Mobil’s project executive. In China, India and Latin America, “you’re going to see tremendous growth.”
Another factor in Exxon Mobil’s decision: The local GregoryPortland School Board voted to approve $460 million in property tax breaks over 15 years.
It’s a tradeoff officials believe will bring economic growth to the region. Exxon Mobil estimates that building the facilities will require 6,000 temporary jobs for construction and create 600 permanent jobs at the plant.
“It’s a huge deal, on steroids,” said Foster Edwards, executive director of the San Patricio Economic Development Corp. “We’ve already been contacted by other companies looking at our area. The economic impact is going to be enormous.”
For Exxon Mobil, the next step is applying for air and wastewater permits from the Texas Commission on Environmental Quality. Tully said Exxon Mobil planned to submit these permits on Wednesday, though he said it could take as long as two years before the permits are approved. The companies expect to make their final investment decision on the $10 billion project around this time next year, Tully added.
Once up and running, the ethane cracker would produce 1.9 million tons of ethylene. The companies believe that would make it the largest facility of its kind in the world. The plant is part of an Exxon Mobil initiative to unleash $20 billion for new projects across the Gulf Coast over the next decade.
Still, local activists plan to continue to oppose the plant’s construction. Portland Citizens United expects to form coalitions with other environmental groups across the country and request a public meeting with the Texas Commission on Environmental Quality, which could lead to a more official public hearing and ultimately to a contested case hearing before the environmental that could delay construction of the plant up to a year.
“It’s too close to the schools,” Jason Mutschler, who joined the Portland group in October. “We’re going to continue this fight until there’s benzene coming out of the flares.”