Exxon Is Quietly Planning New $8.6 Billion Plastics Plant for Texas’s Gulf Coast

Diane Wilson had heard rumors for months that Exxon might be coming to Point Comfort, Texas, which sits on the Gulf Coast south of Galveston. She recalls whispers about the global behemoth hiring local electricians and negotiating railroad access. Two days before Christmas, the first confirmation quietly arrived: an application for tax subsidies to build an $8.6 billion plastics manufacturing plant.

Wilson found the news particularly alarming. She has spent years fighting to clean up pollution from another petrochemical plant and won a $50 million settlement against its owners, Formosa, in 2019. Exxon would build its proposed facility across from that factory and discharge waste into the same waterways Wilson has spent decades fighting to protect.

“We have been cleaning the piss out of [Cox Creek], and this is the very place where Exxon is going to try to put its plastics plant,” Wilson, who lives in nearby Seadrift, said of the facility’s potential location. “You see this nightmare of another plant, trying to do the very same thing.”

Exxon’s proposal calls for a steam cracker, a facility that uses oil and natural gas to make ethylene and propylene — the chemical building blocks of plastic. Factories like this produce and sell plastic pellets, called nurdles, to other manufacturers who turn them into intermediary or final goods, like bottles and packaging. Besides ethylene and propylene, steam crackers produce climate pollution and hazardous chemicals like ammonia, benzene, toluene, and methanol.

“It looks like a big facility,” Alexandra Shaykevich, research manager for the Environmental Integrity Project, which tracks fossil fuel development, said of the plan Exxon has dubbed the Coastal Plain Project. But she said that because much of the application was redacted and the company hasn’t made a public announcement, few details are available. “We’re going to be looking at this one closely.”

Beyond the Formosa plant, Point Comfort is home to a nitrile factory, a plastics facility, and a Superfund site. Several other industrial sites dot the coast around Galveston. Many of them sit alongside communities, and previous analyses have shown that steam crackers in particular are disproportionately sited near marginalized groups. According to an environmental justice mapping tool from the U.S. Environmental Protection Agency, more than half of Point Comfort residents are people of color, more than half have less than a high school diploma, and more than half of households speak limited English.

“They talk about a sacrifice zone — this is the real deal,” said Wilson.

Exxon filed for tax subsidies from the Calhoun County Independent School District under the state’s Jobs, Energy, Technology and Innovation, or JETI, Act, which uses tax incentives to lure businesses to the state. Lawmakers passed that law in 2023 to replace an earlier tax-break program that critics said undermined school finances and amounted to “corporate welfare.”

Exxon wrote in its application that it plans to apply for more abatements from the county, groundwater conservation district, and port authority. In return, it argued, the facility would create 300 jobs during its first five years in operation. Construction would begin next year and, once it’s operating at full capacity in 2032, Exxon says the operation will raise the state’s economic output by $3.6 billion a year.

“These tax incentives have become one of the early battles in these facilities,” said Robin Schneider, executive director Texas Campaign for the Environment, an advocacy organization. She estimates that Exxon could get about $250 million in local tax breaks over a 10-year period — almost $1 million per job.

“Why is this massively profitable business getting this money from taxpayers?” she asked. Exxon brought in $33.7 billion last year, on record-high production, and distributed more money to shareholders than ever before.

School district officials did not respond to requests for comment and, in an email, County Judge (the title given to county administrators in Texas) Vern Lyssy did not answer specific questions, only repeated the language used in Exxon’s statement. A county commissioner, Joel Behrens, expressed support for Exxon and the economic development it could bring, comparing the opportunity to his positive experiences with Formosa. “If they were to pick this area to come to, they’d probably be just as good a neighbor as Formosa,” he said. “They’ve helped the county out when the county needed help.”

Exxon did not respond to questions about the pollution a new steam cracker might create. Company spokesperson Lauren Kight said the application for tax subsidies in Calhoun County does not mean Exxon has committed to building there. The company indicated in its JETI filing that its focus was on “the U.S. Gulf Coast” but that it is still considering other locations, including abroad. “The Gulf Coast presents tremendous advantages,” said Kight, but it’s “very early in our evaluation process.”

The proposal comes at a time of booming growth for the plastics industry, and for the pollution that it inevitably creates. The world produces about 57 million metric tons of plastic pollution every year, according to a study published in September in the journal Nature. World leaders have spent the past two and a half years negotiating a United Nations treaty to “end plastic pollution,” and at least 69 countries say they want to do that by limiting how much is created in the first place.

Plants like the one Exxon is planning are “the absolute opposite direction we should be going,” said Judith Enck, a former Environmental Protection Agency official and president of the nonprofit Beyond Plastics. She worries that this facility, like others, would spew pollution for decades. “Once these things are built, it’s hard to get them to stop operating.”

Setting aside the environmental argument, financial analysts say it’s imprudent to invest in more plastic production. All three credit rating agencies have issued warnings over expanding fossil fuel and plastics infrastructure, including one from Standard & Poor’s in 2021 that cited oversupply of petrochemicals, protests from local residents, and “surging global pressure to reduce carbon emissions as well as chemical and plastic pollution worldwide.”

Abhishek Sinha, an energy finance analyst for the nonprofit Institute for Energy Economics and Financial Analysis, said that while the Trump administration may be ushering in a period of lax regulation for polluting industries, the petrochemical sector is in “structural decline” — as shown by the poor returns Shell’s chemicals division and Formosa Plastics recently reported.

“I think it’s going to be the same story that’s being told again and again,” Sinha said, referring to Exxon’s proposed steam cracker. “This is not going to be a positive value-add project for them; it’s going to be detrimental to the equity holders in the long run.”

Kight did not directly address these concerns but said that Exxon would “continue to evaluate the market conditions before we make a decision.”

For Wilson, Exxon’s proposal feels like déjà vu. More than three decades ago, the Taiwanese petrochemical conglomerate Formosa proposed its plant, just miles from the Gulf of Mexico, where Wilson’s family had been shrimpers for generations. Her fight against the company started with hunger strikes to protest its permits and eventually became a lawsuit over the exact outcomes she had feared.

Wilson and former plant workers joined environmental activists to collect tens of thousands of nurdles from Lavaca Bay and nearby waterways like Cox Creek, and alleged that Formosa had illegally dumped them along with other pollutants. Her $50 million settlement is the largest award in a citizen suit against an industrial polluter in the history of the federal Clean Water Act.

The settlement funded dozens of projects, including cleaning up waterways, and provided $20 million for a fishing cooperative aimed at helping rebuild that battered industry. But Wilson worries another mega-factory coming to the area would undermine that work.

“Where Exxon is going to put their bloody plant is smack-dab in front of [what will be] one of the largest oyster farms in Texas,” said Wilson, who is not convinced that any plastics factory can operate without polluting. She noted that Formosa has already violated its settlement agreement nearly 800 times, racking up over $25 million in fines. “Exxon is going to be exactly like Formosa.”

Wilson considers the fact that Exxon could still decide not to build in Calhoun County an opportunity to resist, and plans to fight the company at every step of the process.

“A lot of people over the years have asked me what my one regret is, and I always say: ‘I didn’t try hard enough to stop Formosa,’” reflected Wilson. This time, she said, “I will do everything I can, for as long as I live, to stop that plant from coming in.”

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