Case 6:12-cv-00799-JRG Document 26-13 Filed 02/11/13 Page 1 of 5 PageID #: 1223
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`Exhibit I
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`Case 6:12-cv-00799-JRG Document 26-13 Filed 02/11/13 Page 2 of 5 PageID #: 1224
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`7/15/12 NYT A23
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`Page 1
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`7/15/12 N.Y. Times A23
`2012 WLNR 14734462
`Loaded Date: 07/15/2012
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`New York Times (NY)
`Copyright 2012 The New York Times Company
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`July 15, 2012
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`Section: A
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`Boom Promises 20,000 New Jobs but Shortages Too
`KATE GALBRAITH
`kgalbraith@texastribune.org
`
`FREEPORT, Tex. -- The largest chemical complex in the Western Hemisphere resembles a city of pipes and
`stacks. And Dow Chemical, its owner, is spending more than $4 billion to make it even larger.
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`''In terms of dollars, this is the biggest expansion since we built the place,'' said Earl Shipp, vice president for
`Dow's Texas operations, who works out of the vast Freeport facility that dates to 1940.
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`More Texas chemical plants -- a dozen, at least -- are also moving forward with new projects. The hydraulic
`fracturing technology that sparked a drilling frenzy around Texas and the nation has proved a boon for the petro-
`chemical industry, which is converting cheap and abundant natural gas into resins and polymers that go into
`items like synthetic clothing and cellphones. Experts say this represents the largest petrochemical expansion in
`Texas since the days of cheap oil in the 1980s.
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`But the growth comes amid concerns about future shortages of water and electric power statewide, as well as
`worries about the industry's impact on air pollution in the Houston area.
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`Although the cheap natural gas presents an ''enormous opportunity'' for the petrochemical industry, ''we want to
`be sure that as all of this activity takes off, it's not creating a lot of bads'' like water scarcity or air pollution, said
`Kenneth B. Medlock III, the deputy director of the Energy Forum at Rice University's James A. Baker III Insti-
`tute for Public Policy. (Rice University is a corporate sponsor of The Texas Tribune.)
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`Texas already includes the country's largest concentration of petrochemical plants, with more than 200 manufac-
`turing facilities, according to the Texas Chemical Council. The industry started in the decades after Texas' first
`big oil discovery in 1901, and growth accelerated during World War II, when the Allies sought synthetic rubber
`and material for explosives.
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`© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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`Case 6:12-cv-00799-JRG Document 26-13 Filed 02/11/13 Page 3 of 5 PageID #: 1225
`7/15/12 NYT A23
`Page 2
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`Modern plants use mostly natural gas, rather than oil, to make the chemicals. Whereas power plants run on
`methane, a component of natural gas, chemical plants use other, hotter-burning components -- ethane, propane
`and butane.
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`The Texas Commission on Environmental Quality says that eight petrochemical plant operators have applied for
`air permits within the past 16 months. These include big names like Exxon Mobil (which plans expanded facilit-
`ies at Baytown and Mont Belvieu), Chevron and Occidental.
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`A few plants, including Exxon, have filed for two permits. Some plants are not even on the list; they may not
`need new air permits or may not have yet filed for them. (Dow, which is not on the list, is completing the applic-
`ations for its recently announced facility in Freeport that will convert ethane to ethylene, a product whose ulti-
`mate uses include plastic bags and medical tubing.)
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`Not all the facilities planned may be fully built, said Hector Rivero, the president of the Texas Chemical Coun-
`cil. Conditions can change. For example, chemical companies are watching the fiscal turmoil in Europe, a major
`manufacturing hub, Mr. Rivero said. Dramatically tighter regulation of hydraulic fracturing, or a surge in natur-
`al-gas vehicles that drives up demand and prices for the fuel, could also affect petrochemical operations.
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`Nonetheless, it is a remarkable turnaround for an industry that was in the doldrums just four years ago, as natur-
`al gas prices soared to $13 per million British thermal units and China strengthened its manufacturing advant-
`age. Gas prices are now less than $3. That allows Texas to compete because natural gas and energy account for
`more than half of a plant's operating cost, according to Mr. Rivero.
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`''The mood is much better. You see a lot of smiling faces out there,'' said Chris Witte, the site manager for anoth-
`er expanding Freeport plant that is adjacent to Dow's and owned by BASF. The chemical industry, he added, has
`fought hard not to ''go the way of the steel industry.''
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`Texas is also fighting to stay ahead of a competitor state along the gulf. ''People may say, 'Well, Texas is getting
`the big ones,' '' said Dan Borne, president of the Louisiana Chemical Association. ''Well, I can tell you this much
`-- we're getting some substantial ones, too.''
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`Often, the plants can take advantage of local incentives to expand, like tax abatements. Some plant operators
`have applied to the Texas Enterprise Fund, which provides money for job-creating projects. Dow, for example,
`received a $1 million grant from the fund in April, and Kuraray America, a chemical company expanding in
`Harris County, is getting nearly that much.
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`Mr. Rivero estimates that the expansions already announced total $15 billion in investment and will create about
`20,000 jobs. Most will be in construction, but about a quarter will be permanent, he said. Dow anticipates 4,500
`construction jobs in the coming years, with 300 permanent jobs resulting from the expansion. In Brazoria
`County, which includes Freeport, unemployment stands at 7 percent, and residents are hoping to benefit.
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`© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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`''They're excited -- 'Oh my gosh I'm going to have a job,' '' said Mayor Norma Garcia of Freeport.
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`Chemical companies say they are eager to ensure that enough skilled workers are available to fuel the boom --
`like pipe fitters, welders and electricians. Mr. Witte of BASF said that about 40 percent of workers at his plant
`were eligible to retire over the next five years.
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`''We were looking at a significant concern from a personnel standpoint anyways,'' he said. BASF has provided
`money to a program to train skilled workers at Brazosport College in Lake Jackson.
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`But the expansions come at a time when Texas is facing critical questions about the availability of water and
`power. The crippling drought, which has abated but not ended, forced a Formosa Plastics facility along the coast
`in Point Comfort to temporarily adjust to receiving as much as 20 percent less water from a nearby lake as its
`level receded. Chemical plants need vast amounts of water for cooling and cleaning.
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`Mr. Shipp of Dow said that intensive new conservation efforts resulted in water-use cutbacks of 10 percent last
`year at existing facilities, and that the savings should ensure there is enough water for the expansion. During the
`drought, Dow also began using cleaned-up wastewater from a nearby operation.
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`''We may not want to drink it, but we can certainly wash a rail car out with it,'' Mr. Shipp said.
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`Dow's new facilities will also be less water-intensive than those using earlier technologies, but the company also
`bought land last year to build another reservoir.
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`As for power, even a brief blackout can cause potentially critical disruptions at chemical plants. The Texas elec-
`tric grid has recently come under scrutiny for not having enough power reserves to accommodate a growing pop-
`ulation, especially during hot summers in the future (although abundant natural gas has created cheap power,
`which helps the plants).
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`Many chemical plants generate electricity themselves. Dow produces enough to operate independent of the grid,
`but some plants do not.
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`''I don't know that anyone is immune to the questions of reliability,'' said James LeBas, a fiscal consultant to in-
`dustry groups.
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`Environmentalists, for their part, are worried about air pollution. Matthew Tejada, executive director of Air Alli-
`ance Houston, said the major concern was ozone levels, which were high in Texas last year.
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`In the Houston area, Mr. Tejada said in an e-mail, ''the next several years could be the worst for ozone in terms
`of adding new sources of ozone precursors since regulations began in the 1970s.''
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`© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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`

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`Case 6:12-cv-00799-JRG Document 26-13 Filed 02/11/13 Page 5 of 5 PageID #: 1227
`7/15/12 NYT A23
`Page 4
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`PHOTO: Construction at a Dow Chemical plant, across the Brazos River from a Freeport golf course, is part of
`major industry expansion. (PHOTOGRAPH BY MICHAEL STRAVATO FOR THE TEXAS TRIBUNE)
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`---- INDEX REFERENCES ---
`
`COMPANY: DOW CHEMICAL CO (THE); KURARAY AMERICA INC; CHEVRON CORP; EXXONMOBIL
`CORP; BASF SE
`
`NEWS SUBJECT: (Major Corporations (1MA93))
`
`(Construction (1CO11); Pollution (1PO10); Chemicals (1CH04); Commercial Construction
`INDUSTRY:
`(1CO15); Manufacturing (1MA74); Environmental Problems (1EN46); Utilities Environmental Issues (1UT10);
`Energy & Fuel (1EN13); Energy Plant Construction (1EN34); Utilities Technology (1UT40); Utilities (1UT12))
`
`REGION: (USA (1US73); Americas (1AM92); U.S. Southwest Region (1SO89); Texas (1TE14); North America
`(1NO39))
`
`Language: EN
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`OTHER INDEXING: (TEXAS TRIBUNE (THE)) (Hector Rivero; MICHAEL STRAVATO; Earl Shipp; Chris
`Witte; Kenneth Medlock III; Dan Borne; Norma Garcia; Matthew Tejada; James LeBas)
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`EDITION: National Edition
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`Word Count: 1259
`7/15/12 NYT A23
`END OF DOCUMENT
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`© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.