Flooding from Hurricane Harvey inundated Houston's oil refineriesThe oil industry wants taxpayers to pay for projects to protect its facilities along the Texas Gulf Coast from climate change-driven storms. Photo credit: Scott Olson/Getty Images

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By Seamus McGraw

It’s a rare proposal indeed that sparks criticism from both the Sierra Club and the libertarian and fiscally conservative Cato Institute. But the plan to use nearly $4 billion of federal taxpayer dollars to shore up coastal defenses along Texas’s Gulf Coast has done just that.

That plan, a small-scale version of the long-discussed Ike Dike, would protect three areas along the coast against rising sea levels and devastating climate change-fueled storms, specifically to shield oil and gas terminals, refineries and petrochemical facilities—the same industries that have overwhelmingly contributed to climate change. What galls critics is that the industries being protected have been asked to put up nothing.

At the same time, voters in Harris County, which includes the city of Houston, last week voted to shoulder $2.5 billion worth of bond debt. Some will be used to match federal spending on flood control and mitigation projects, roughly a quarter-billion will be used to mount the largest buyout of flood vulnerable homes in American history, and some will be used to lure federal funds for a not-yet finalized menu of projects.

The vote came one year after Hurricane Harvey inundated the area with 60 inches of rain, the largest rain total from any tropical storm in U.S. history. The disaster also highlighted the vulnerability of the oil industry facilities along the coast. Though Harvey caused $125 billion in damage, making it the second-most destructive storm in U.S. history behind Katrina, had it brought a larger storm surge, it could have been exponentially more damaging. Galveston Bay and the Houston Ship Channel are home to 40 percent of the country’s oil refining capacity.

“A lot of people have pointed out the irony of conservative Texas, and especially people like Sen. Ted Cruz who claim to be fiscal conservatives, supporting big-government Washington spending to help their state,” said Chris Edwards, an economist at the Cato Institute. “There’s the hypocrisy of that. If the purpose of it is to protect private industry, private industry should pay for it. It’s their assets.”

Dr. Kenneth W. Kramer, water resources chair for the state chapter of the Sierra Club agrees.  “It is sort of ironic…that we’re talking about a potential infrastructure project to deal with what is in part an impact from climate change, and it benefits industries that are contributing mightily to climate change from their fossil fuel production and use.”

Advocates of the coastal construction proposal—among them many of the state’s Republican leaders and the Texas Land Commissioner’s office—contend that the projects protecting the industries along the Gulf are squarely within the federal government’s wheelhouse. It is seen as the first step toward the construction of the so-called Ike Dike, a 60-mile “coastal spine” of barriers and levees and seawalls that could eventually protect much of Texas’s vulnerable and heavily industrialized coastline. That ambitious proposal has been in limbo for years. The state insists it can’t afford to build it and so far, the federal government has been unwilling to foot more than a small fraction of the bill.

Its proponents argue that a devastating storm surge damaging or destroying those facilities would be an economic and national security nightmare. Even the 5- to 7-foot storm surge recorded during Harvey was enough to temporarily scuttle about 25 percent of the region’s refining capacity, they note. And though its supporters are loathe to use the phrase climate change to explain it in a state dominated by Republican leadership, they warn that mightier storms and more direct hits are likely in the future.

Those visions of economic catastrophe are coupled with the environmental devastation that a direct hit on the facilities would likely unleash. “If any of those (facilities) get inundated by hurricane surge it will be…a national, economic disaster and a horrible ecological disaster of international proportions,” said Jim Blackburn, an environmental lawyer and co-director of the Severe Storm Prediction, Education and Evacuation from Disasters (SSPEED) Center at Rice University.  

Indeed, many who have called the plan a backhanded bailout of the petroleum industry to protect it from the consequences of its own business also acknowledge there is a pressing public need to limit the havoc future storms wreak on the coastal industrial infrastructure. But they fret that this is another example of Texas—and the nation—sleep-walking into a dangerous future, engineering a solution without really examining the long-term costs and benefits.

“It’s just unfortunately a reflection of the fact that we continue to focus a lot more on the short term rather than the long term,” said Kramer of the Sierra Club. “And long term, our best interests are having more responsible coastal management, keeping…important industries as much out of the danger zone as possible and trying to move to a situation where we don’t have to be put into these sort of Hobson’s choices.”

There are also serious questions to be raised, said Blackburn, about whether the proposals will protect the area from more and more severe climate-driven storms. “The question of…what is a reasonable storm to anticipate has really not been adequately addressed,” said Blackburn, whose SSPEED Center has long advocated a more robust series of bulwarks along the coast. “You may ultimately need a couple of these structures around Galveston or the Port Arthur area. You’re putting 17 feet of surge protection up and we’ve got projections that easily exceed 25 feet in the Galveston Bay area.”

But absent any bottom-line cost to the industries, and with federal taxpayers picking up the tab, there is little incentive for the industries to look beyond the typical horizon of their five-year business plans.

Contrast that with the willingness of Harris County voters, who overwhelmingly voted to saddle themselves with $2.5 billion in debt in the hopes of leveraging up to $7.5 billion more in federal funding to mitigate future river and bayou flooding, shore up federally maintained dams and buy out the owners of some 3,000 flood-prone homes.

While even $10 billion is unlikely to fully brace the embattled region against the threats of climate-related flooding, it has at least triggered a rigorous review process in which more than 230 proposals will compete for dollars, said Dr. Matthew Berg, a water resources scientist and chief executive of the consulting firm Simfero. That competition is likely to encourage more detailed assessments of future threats than might be expected otherwise. And that is markedly different than the approach being taken, at least with regard to the $3.9 billion projects, along the industrialized coast.

“It is very interesting that in terms of the large-scale coastal protection it’s generally industry banging the drums, whereas the riverine flooding it definitely has been more the public side beating that particular drum,” Berg said. “There are two decidedly different trajectories that these responses are going on.”