Houston gives Valero yet another Tax Break

On Monday, many of us learned for the first time that Valero Energy was seeking yet another tax break, this one for its Houston Refinery in Manchester. Valero has a long history of creative use of tax loopholes. In 2006, Valero brought 150 lawsuits in 42 appraisal districts across Texas, petitioning to lower its property taxes across the state. In just one of these lawsuits, Valero one an $18.5 million judgment against Jefferson County, causing the Port Arthur school district to expend its capital funds, end new teacher hiring, and suspend teacher raises.  In 2011, the company attempted to claw back $92 million in property taxes from Texas schools using a tax exemption for pollution control projects. That attempt was rejected by the Texas Commission on Environmental Quality after strong opposition by Public Citizen, the Texas Organizing Project, and others.

Meanwhile, the company’s stock jumped 200% between 2010 and 2014 and revenue in 2013 totaled more that $138 billion.

In Houston, Valero is planning an expansion of its Houston Refinery, growing the facility from 160,000 barrels per day capacity to 250,000 bbl/day. The company sought yet another tax break from the City of Houston for this project, requesting to be moved outside of the City’s boundaries for tax purposes.

The project would cost some $800 million and has already been permitted, yet somehow the company convinced many on city council that it would not proceed with the expansion without another $17 million in tax breaks over the next 15 years. Valero executives also made the bewildering claim that the facility’s emissions have been reduced some 80% since 1997. In fact, data that Valero itself reported to the EPA indicates that it has never reduced emissions that much over 1997 levels, and that 2013 emissions of 425,997 pounds of air pollutants represented a 47% increase in emissions over 1997 levels. What’s more, EPA lists the Houston Refinery as a “High Priority Violator” in “Significant Violation” of the Clean Air Act and Clean Water Act.

Proving that Houston really is “The City with No Limits,” City Council agreed yesterday that Valero—despite its terrible record of pollution, violations, and tax and permitting shenanigans—was deserving of yet another incentive to do business in Houston. The proposal received six no votes on the sixteen member council: Councilmembers Dwight Boykins (District D), Richard Nguyen (F), Ed Gonzalez (H), Robert Gallegos (District I), Mike Laster (J), and Larry Green (K). Among the yes votes, there was a sense of ambivalence about the proposal, with even Mayor Parker admitting that the city has only “limited environmental controls” over the refinery anyway.

Despite losing the vote, there are some successes in this story. First: we thank those City Council Members who thought better of the proposal and voted “No.” Second, we are grateful for the quick and effective organizing and advocacy efforts by our colleagues with Public Citizen, t.e.j.a.s., and the Texas Organizing Project. We turned a vote that could have been a rubber stamp into a serious conversation about Valero’s practices in Texas. The next time Valero gets up to something in Houston (and I assure you it won’t be long), Council Members will remember this fight and hopefully think twice about giving the company yet another pass.

Finally, the affair also led to a potential opportunity for us at Air Alliance Houston to work with Valero to improve its record of pollution. After Wednesday’s council meeting, I spoke with Valero representatives for some time. They seemed to think that Air Alliance Houston was in the habit of demonizing the energy industry and acting as unreasonable obstructionists. As anyone familiar with Air Alliance Houston knows, this is far from our tactic. We wouldn’t be where we are in Houston today if it were. We support the energy industry that made Houston great, but we aren’t afraid to call out industry bad actors. Valero is most definitely a bad actor.

While the conversation was contentious, Air Alliance Houston has always been willing to talk to members of industry who are serious about improving their record of pollution emissions and public health protections. I don’t know yet if Valero falls into that category—recent evidence suggests that they are not—but I am willing to have the conversation.