New Lake Will Fuel Petrochemical Expansion

Blocked in Louisiana, Formosa Plastics looks to grow around Texas' Lavaca Bay, but it and other industrial plants are waiting for water.

A draft permit issued by the Texas Commission on Environmental Quality authorizes the Lavaca-Navidad River Authority (LNRA) to divert up to 31 billion gallons per year from the Lavaca River. It would go into a reservoir proposed on property Formosa Plastics owns, about two miles east of its massive Point Comfort chemical complex, where the company has quietly pursued permits to expand in recent years since its Louisiana megaproject has been stalled by legal complaints.

Around Lavaca Bay, this mostly rural middle section of the Texas Gulf Coast lacks the great conglomerations of chemical manufacturers that ring the water at Houston and Port Arthur to the north and Corpus Christi to the south. Here, a single actor reins supreme: Formosa Plastics, a $460 billion Taiwanese company, and its 2,500-acre complex on Lavaca Bay, which turns Texas shale gas into the materials for common single-use plastics.

The company has incurred hefty fines and complaints for years over unpermitted discharges into air and water. It currently faces steep opposition over its proposed new chemical complex in Louisiana, which has mired the project in challenges over environmental justice, climate impacts and wetlands destruction.

“Formosa got such hell from people in Louisiana stopping them that they keep it very quiet when they are trying to expand,” said Diane Wilson, a retired Gulf Coast fisherwoman who won a $50 million settlement in 2019 from Formosa over its routine dumping of plastics into Lavaca Bay over decades. “They want water for expansion.”

One is the City of Corpus Christi, 100 miles to the southwest, where a single new plastics plant owned by ExxonMobil and the Saudi Basic Industries Corporation accounts for up to 25 percent of regional water demand (and where a 2018 city ordinance exempts industrial water users from restrictions during drought).

The LNRA currently supplies about 28 billion gallons of water each year from its only reservoir, Lake Texana on the Navidad River, with none left to spare. Its pending water rights permits would add to its portfolio an additional 31 billion gallons per year from the neighboring Lavaca River, to be stored at the 16-billion-gallon reservoir (medium-sized by Texas standards) planned on Formosa property in Jackson County.

For Formosa, the opportunity for growth in Texas comes after legal challenges have stalled its plans for a new, $9.4 billion chemical complex in St. James Parish, Louisiana. The U.S. Army Corps of Engineers revoked that project’s permit to build on wetlands in 2020, and in 2022, a state judge struck down its air pollution permits, citing concerns over environmental justice and climate.

That follows 40 years of steady growth for Formosa at Point Comfort. According to the company’s website, it began operations at the 2,500-acre complex in 1983, then underwent major expansions in 1994, 1998, 2002 and in 2012. In 2016 it applied to add a new polyethylene plant, then in 2020 retroactively doubled the plant’s authorized emissions of volatile organic compounds after it was built.

Formosa also regularly reports violations of its air pollution permits, most recently on Jan. 22, when an emergency shutdown caused the release of 27 chemicals, including benzene at 33 times Formosa’s permitted rate, butadiene at 70 times the permitted rate, and gaseous ethylene at 758 times the permitted rate, according to the company’s report to TCEQ.

In Louisiana, Formosa continues to slowly advance plans for its huge new complex. After the state judge struck down its permits in 2022, Formosa and the state of Louisiana appealed. In January, an appeals court reversed the 2022 decision, re-validating the permits. Opponents of the project have until March to raise the question to the state’s supreme court.