When organizers set<\/u> out to overturn Texas\u2019s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas \u2014 with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenged it for the first time.<\/p>\n
At the beginning of last week, as Texas\u2019s\u00a0biennial legislative session approached its end, the aims of organizers remained modest. \u201cWe thought it would be a victory if the two-year reauthorization passed so we could organize in interim,\u201d said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program.<\/p>\n
At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. \u201cThe bill never came up,\u201d Greco told The Intercept. Organizers\u00a0stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize.<\/p>\n
The lapse in authorization coincided with three other groundbreaking blows to oil and gas corporations. A Dutch court\u00a0ruled<\/a> that Shell Oil is liable for its climate impacts and must reduce its greenhouse gas emissions. Exxon Mobil shareholders booted<\/a> out two members of the corporation\u2019s board of directors for its failures on the climate crisis. And Chevron shareholders voted to force the company to cut<\/a> its emissions.<\/p>\n With all four developments coming on the same day, the failure to reauthorize the subsidies in Texas fell under the radar. Taken together, the moves demonstrate changing opinions about climate change and fossil fuel companies; one analyst referred to the news about Shell, Exxon, and Chevron as \u201cthe start of a new era for Big Oil<\/a>.\u201d Between the court decisions, shareholder activism, and the unwillingness of Texas legislators to continue unpopular handouts to oil companies, the public may no longer be willing to go along with business as usual for fossil fuel firms.<\/p>\n \u201cPeople aren\u2019t persuaded by the dogma anymore that tax breaks create jobs. Too many people see that the emperor doesn\u2019t have clothes anymore,\u201d said Greg LeRoy, executive director of Good Jobs First, which tracks corporate subsidies. \u201cThese extractive industries have been extractive of the tax base too. People realize it\u2019s too corrosive.\u201d<\/p>\n The Texas Chapter 313 defeat is the second recent win against multibillion-dollar oil and gas industry subsidies in fossil fuel states. Last fall, organizers in Louisiana beat back a ballot initiative designed to counteract dramatic reforms to the state\u2019s industry giveaway program. In a state that leans heavily Republican, people voted down the constitutional amendment by a landslide.<\/p>\n Broderick Bagert, who helped organize the Louisiana effort, sees what happened in Texas as part of a turning of the tides in a region where industry has long ruled. \u201cIn a lot of cases, it\u2019s not that these battles have been lost \u2014 they just haven\u2019t been fought,\u201d he said. \u201cWhat you\u2019re seeing for the first time is the battles being fought.\u201d<\/p>\n He said the politics of the problem are simple: \u201cIt stinks to have the most powerful and wealthy institutions in our country and in our world get special deals that ordinary people don\u2019t get. As soon as it\u2019s crafted in that kind of way, suddenly politics that seemed impossible to resist crumble and change right before your eyes.\u201d<\/p>\n Bagert noted that Louisiana and Texas are two of a handful of states whose industries will decide what our climate future will look like. \u201cThe question of these subsidies is being tied more and more with the question of whether these changes in energy production that we need to save the planet are going to be made in time to save the planet,\u201d he said. \u201cIt all boils down to the price of energy. Once industries have to bear the full cost of their production, including emissions and taxes and all the other things that have been subsidized, then it\u2019s no longer advantageous, and that\u2019s when things start happening.\u201d<\/p>\n Texas\u2019s Chapter 313 program allowed corporations building new facilities to apply to local school boards for a property tax waiver. The school boards hardly ever said no \u2014 likely because the local school district didn\u2019t stand to lose money. Instead, the property tax money that was waived would have gone into a state fund, which should have especially benefitted overstretched urban school districts. An analysis<\/a> by Central Texas Interfaith found these urban districts to be the biggest losers: Houston and Dallas school districts have each lost more than $20 million annually from the tax exemptions.<\/p>\n Oil, gas, and petrochemical industries unambiguously won big. Two liquid natural gas companies, Corpus Christi Liquefaction, a subsidiary of Cheniere, and Freeport LNG topped the list with more than $55 million each in subsidies annually.<\/p>\n The subsidy program was designed to attract businesses that would not otherwise make their homes in Texas. In deciding approval for waivers, one prerequisite was that the subsidies be a determining factor in whether a company would build in-state. However, an analysis by the Houston Chronicle<\/a> showed numerous examples of companies, such as the pipeline giant Energy Transfer, announcing a project before even applying for the waiver. And many of the subsidy recipients were doing Texas-specific projects \u2014 outgrowths of the state\u2019s fracking boom in thethe Eagle Ford and Permian shale formations, using Gulf Coast export facilities \u2014 so they were unlikely to situate ventures elsewhere if subsidies did not come through.<\/p>\n\u201cThese extractive industries have been extractive of the tax base too. People realize it\u2019s too corrosive.\u201d<\/blockquote>\n
How Texas Subsidies Crumbled<\/h3>\n