A state board unanimously approved economic incentives Friday for ExxonMobil’s proposed $410 million Baton Rouge refinery modernization and for a $308 million solar farm planned by Ecoplexus in East Feliciana Parish.
With state Board of Commerce and Industry approval, the city-parish Metro Council, East Baton Rouge Parish School Board and Sheriff’s Office are expected in coming weeks to vote on the ExxonMobil tax abatement.
ExxonMobil, which faced criticism from tax break opposition and environmental groups during Friday's meeting, proposes spending more than $410 million on its project. The company says it includes environmental emissions reductions at the refinery, which processes 500,000 barrels of crude oil each day.
Only $230.5 million of the expenditure is eligible for the state's Industrial Tax Exemption program, which would provide an 80% property tax abatement worth $27 million to the company over 10 years. The project will support more than 2,000 construction jobs, but is not expected to create any new permanent jobs, which also drew criticism. The modernization, though, will protect existing jobs by making the refinery competitive for getting funding for future projects, the company has said.
Ecoplexus will pursue incentives approval from taxing bodies in East Feliciana Parish. The solar farm, which would create one permanent job, but support 486 construction jobs, would receive $17.5 million in property tax abatement over 10 years. The site is undeveloped so it doesn't yield significant property taxes for the parish at this time.
Mayor-President Sharon Weston Broome spoke in favor of ExxonMobil's project during the Commerce and Industry Board meeting.
“These types of investments are critical to increasing our economic competitiveness in Baton Rouge. This project would lay the foundation to make us competitive for future investments,” Broome said.
ExxonMobil expects to make a final investment decision in March. It would begin construction in June, continuing until 2023.
ExxonMobil has faced local opposition to two economic incentive applications two years ago and withdrew applications from consideration after criticism that the work was already completed in 2017.
The East Baton Rouge Parish School Board rejected two ExxonMobil tax breaks in January 2019 worth $2.9 million over a 10-year period. Soon after, ExxonMobil dropped its request for tax breaks from Baton Rouge Metro Council worth $9.2 million over 10 years.
Together Louisiana, a faith-based community organization, questioned whether the new $230.5 million investment goes beyond just being routine maintenance work at the site, based on the capital expense proposed. The community organization, which has opposed economic incentives for many industrial projects, also was critical of the lack of new jobs tied to the project.
"The question for any project should be: 'Is this routine or is this competitive?'" said Broderick Bagert, organizer with Together Louisiana. "Like any other manufacturing facility, it puts in capital every year. That shouldn't be incentivized."
The company and the state's economic development agency refuted the claims it was only annual maintenance.
"This major investment is on top of what we spend on base year to year; this is not our routine spend," said Gloria Moncada, manager for the ExxonMobil Baton Rouge Refinery.
"We believe that this is a competitive situation with Texas. This is not their annual maintenance budget," said Don Pierson, a Board of Commerce and Industry member and head of the Louisiana Economic Development department.
An environmental group from New Orleans opposed giving up potential property tax dollars for a project in the fossil fuel industry.
"The kind of particulate matter that Exxon emits has a very serious impact on health of literally thousands of citizens," said Peter Digre, leader of the Climate Reality New Orleans chapter. "We have this huge opportunity cost from taking money from badly needed public health education infrastructure, law enforcement and much more. Basically, we are investing in an industry that's losing its market capitalization."
Some of the overall investment includes new environmental processing technology at the ExxonMobil refinery that will reduce its volatile organic compound emissions by about 10%, according to the company's state application.
ExxonMobil also was criticized for shedding jobs over the past decade at its refinery and chemical plant. LED plans to audit the company, which has promised not to lay off workers and to replace those who relocate or retire in the coming years.
Board member Jan Moller asked whether the ExxonMobil and Ecoplexus projects would move forward if their projects do not get a tax incentive. Both companies said the fate of their projects depend on the tax incentives. Board chairman Jerald Jones recused himself from the discussion and vote about ExxonMobil due to a conflict of interest.
Since electricity is a commodity, the prices are on average relatively low, which means the incentive makes a difference for the solar farm project, said Allen Brisch, senior director of project development at California-based Ecoplexus.
"We would be put at a substantial disadvantage without the ITEP tax incentive and would not be able to go forward without it," he said. "Solar projects don't require much maintenance once they are in operation," Brisch said of the single job being created after construction.
Ecoplexus is bidding on a contract to sell its power to Entergy when the project is completed.
ExxonMobil's proposed modernization of its Baton Rouge refinery would have an economic impact of at least $277 million spent with businesses i…
After about two years of planning, ExxonMobil proposes investing several hundred million dollars in its Baton Rouge refinery to make the site …
Federal subsidies for fossil fuels are expected to be pulled back while more investment goes toward clean energy and water, with a hefty porti…
Over the next three years, there could be enough solar-generated electricity in Louisiana to power 60,000 homes in a state rich with oil and g…