Exxon Steps Back From Texas Gulf Coast Plastics Plant

In August a judge struck down the local school board’s decision to negotiate tax breaks for Exxon, following an environmentalist’s lawsuit.

Exxon Mobil will postpone its plans for a large new plastics production plant on the Gulf Coast of Texas, according to the company. Construction was initially planned to begin next year on the $10 billion facility in rural Calhoun County.

“Based on current market conditions, we are going to slow the pace of our development for the Coastal Plain Venture,” Exxon said in an emailed statement. “We’re confident in our growth strategy, and we remain interested in a potential project along the US Gulf Coast and in other regions around the world.” 

Six weeks prior, a county district court judge invalidated the local school board’s decision to negotiate a tax break agreement with Exxon, following a lawsuit from Diane Wilson, 77, and her group, San Antonio Bay Estuarine Waterkeeper.

On Aug. 19 the judge ordered the school board to redo its public hearing on Exxon’s tax break after Wilson alleged the district provided inadequate notice of the meeting in “a deliberate attempt to avoid public opposition.” Wilson, an internationally known environmental advocate, promised to bring a large audience for the repeat hearing. 

“I think it definitely played into it,” Wilson said of Exxon’s pause. “I think if everybody had just rolled over for them, if they got exactly what they wanted and there wasn’t a big fight, there would be no delay.”

Exxon, which reported nearly $34 billion in profits in 2024, was seeking a 50 percent reduction in its property taxes to the rural Calhoun County Independent School District for 10 years, beginning in 2031, when the project would come online.

The world-scale plastics plant was planned to produce up to 3 million tons per year of polyethylene pellets for export, primarily to Asia, according to Exxon’s December 2024 tax abatement application.

John Titas, president of the Victoria Economic Development Corporation in nearby Victoria, said he didn’t think Exxon’s decision was related to the tax break fight.  

“I think they’ve been very thankful for the support they received in the community,” he said. “It’s economics. To justify an investment of that magnitude, you’ve got to make sure the market will provide a return.”

In Exxon’s latest statement, first reported last week by Independent Commodity Intelligence Services, an industry news service, the company maintained the possibility of resuming the project in the future. “We’re maintaining good relationships with community leaders and contractors, so we are ready to reevaluate the project’s status when market conditions improve,” it said.

Exxon didn’t specify which market conditions would need to change. Most projections forecast strong growth in plastics demand over coming years. 

The economic intelligence firm Precedence Research expects markets for polyethylene, which the Exxon plant would produce, to grow 64 percent between 2024 and 2034, according to a June 2025 assessment. Another firm, Expert Market Research, expects overall plastics markets to grow 51 percent in that time. According to the Plastics Industry Association, “The global plastics industry continues to accelerate, backed by strong demand.”

Wilson said the project’s delay marked the best news she’d heard since 2019, when she found out that her lawsuit against another nearby petrochemical giant, Formosa Plastics, would end with a settlement worth more than $100 million in penalty payouts, facility upgrades and cleanup projects. 

A retired shrimper and mother of five, Wilson learned her tactics of resistance over decades of radical activism in defense of Texas’ coastal bays, where four generations of her family have fished for a living. In 2023 she received the Goldman Environmental Prize, the leading global award for environmental activism. 

As soon as she heard about the new Exxon project, in December 2024, she said she leapt into action, involving herself in the various public processes she’s come to know about, including the school district tax break agreements. 

“How a community reacts is extremely important and it’s extremely important that you do it in the beginning,” she said. “Move fast and don’t let up.”

Cover photo:  A view of Formosa Plastics’ Point Comfort complex, near the site of Exxon’s planned plant on the Gulf Coast of Texas. Credit: Dylan Baddour/Inside Climate News