Much of the Gulf region remains flooded, people are still being rescued, and the full magnitude of the damage is not yet known. But soon the center of attention will be the rebuilding effort and how to pay for it.
Texas Governor Greg Abbott is talking about the need for a federal aid package well in excess of $100 billion. Whatever the amount turns out to be, the critical issue will be how the money is distributed.
It’s already clear that the petrochemical facilities clustered in southeastern Texas have been hard hit by the flooding, and there will no doubt be calls to use both federal and state financial resources to help repair these plants.
While there should be no hesitation about using public funds to help the people of the Gulf rebuild their lives, we shouldn’t automatically do the same for the petro giants.
The first reason is that these companies can well afford to rebuild on their own dime. ExxonMobil, which owns the giant refinery in Baytown, earned more than $130 billion in profits during the past five years. The Motiva refinery in Port Arthur, another massive facility, is owned by Aramco, which in turn is owned by the fabulously wealthy government of Saudi Arabia.
Second, taxpayers made enormous financial contributions to the construction and operation of these facilities. As shown in Subsidy Tracker, the Motiva refinery was awarded a $257 million state and local subsidy package in 2006 to help underwrite its expansion. Earlier this year, Exxon and SABIC, another Saudi company, were granted a $460 million package to jointly build a petrochemical plant near Corpus Christi.