Louisiana chem plant with safety violations gets $1.8M tax break, no fine

A 2011 chemical mixing plant explosion in Louisiana is once again stirring up controversy as activists and residents say new information about tax incentives given by the state to the company that owned the plant, and a revelation that the plant did not pay a fine after its explosion, prove that the state has an all-too-cozy relationship with the oil and gas industry.

A story published this week by The Daily Advertiser newspaper in Lafayette, Louisiana, revisited the explosion in the rural community of New Iberia. The paper revealed that the then-owners of the plant, Multi-Chem, paid no fine to the Louisiana Department of Environmental Quality (LDEQ), which routinely fines chemical, oil and gas companies for environmental damage caused by accidents.

The plant, which still goes by the name Multi-Chem but is now owned by Halliburton Co., mixes various chemicals for oil and gas industry processes, including the chemicals used in hydraulic fracturing. The Advertiser also revealed that once the plant was owned by Halliburton, it was promised $1.8 million in tax incentives by Louisiana Economic Development (LED) to assist in its expansion and relocation in nearby Vermilion Parish.

Both LDEQ and LED confirmed that the information in The Advertiser was accurate and said the lack of a fine and the tax subsidy were par for the course. But to local activists, the moves show something they say is too common in the state: agencies siding with the oil and gas industry and leaving the public in the dark.

“We did not receive public notice that the plant was moving, that they weren’t being fined or that they received the tax break,” said Marcella Manuel, a local activist who started Citizens Against Multi-Chem. “We discovered everything on our own.”

The Multi-Chem controversy comes as chemical plants nationwide are under increased scrutiny. But LDEQ says that because Multi-Chem immediately contained the 2011 explosion, there was no need for a fine.

“When an event like that happens we make a decision whether or not to issue a penalty, and in this case, they got right on the ball,” said LDEQ spokesman Tim Beckstrom. “There was no off-site impact, and we didn’t identify any areas of concern, so the company was not issued a penalty.”

LDEQ said it did not issue a public hearing notice on the relocation because the plant was considered a  “minor air pollution source.” The agency said it is only required to issue notices for large sources of air pollution.

LED did not respond to questions for this story about the $1.8 million tax break.

But Manuel and others say the plant and the company have a history that warrants more scrutiny from LDEQ and LED.

The 2011 plant explosion initially forced people in a 5-mile radius of the plant to evacuate and released black smoke into the surrounding neighborhoods, with one resident telling The Associated Press he could taste the “bitter ... foul” taste of chemicals after the incident.

After the explosion, the U.S. Occupational Safety and Health Administration fined the company $49,000 for seven different violations, including a lack of safety equipment on the site and a lack of clear protocol for how to handle accidents.

Multi-Chem has also been accused of discharging contaminated water in Louisiana without a permit. The company has been sued several times elsewhere in the United States for various environmental issues, including one case that led to the closure of a Multi-Chem plant in Ventura, California, in 2012.

When reached by phone, a representative for Halliburton, Multi-Chem's parent company, said no one would be available to answer questions about activists' complaints.

Manuel is now suing LDEQ for failing to hold a public hearing on the relocation of the plant.

Elsewhere, a year after a fertilizer factory explosion in West, Texas, killed 15 people, the Environmental Protection Agency is seeking comment on updated safety regulations for chemical plants.

Another agency, the Chemical Safety Board, was tasked by President Barack Obama with reviewing safety across the country after the Texas disaster. That group has come under fire for being ineffective and not issuing recommendations in a timely fashion.

Correction: An earlier version of this article stated that LDEQ uses its own discretion in issuing public notices for this kind of plant. The article has been updated to reflect LDEQ's statement that public notices are not required for minor air pollution source permits.