PORT NECHES, Texas — Jefferson County is the heart and soul of Texas oil — a land of alligators, Cajun cooking and union loyalists who wear the monicker "redneck" with pride.

It is a place where 100,000 barrels of crude once bubbled to the surface every day, giving birth to oil giants Texaco, Gulf and Mobil, among others. In turn, they spawned myriad asphalt plants, chemical factories and oil refineries that turned the black gold into products for an increasingly industrialized world.

"We're not afraid of refineries here," said County Commissioner Waymon D. Hallmark. "We love refineries. They've been part of our lives since 1901."

In this part of the world, most people don't give a second thought to the petrochemical plants that line the Gulf Coast in an uninterrupted, 200-mile-long crescent called the Golden Triangle — critics call it the Cancer Belt — from Beaumont in southeast Texas to Lake Charles, La.

"Huntsman" is now emblazoned on huge storage tanks at a fair share of those plants, a reference to the Salt Lake City-based chemical giant that now has 40 manufacturing plants around the world.

In Jefferson County alone, Huntsman LLC owns four facilities it bought from Texaco Chemical in 1994, making it one of the county's biggest employers and a primary source of local tax revenue. More than one-third of the Port Neches tax base comes from Huntsman.

But Huntsman inherited a company notorious for its environmental violations and disastrous relationships with unions. And then there was a legal legacy of being sued thousands of times for health and safety problems.

"They (Texaco) were the worst possible corporate member of any community, and particularly this one," said Wayne Reaud, a Beaumont trial attorney and Democratic Party kingpin who has pocketed a small fortune dragging Texaco Chemical into court over the years — at least a thousand times, he says.

"It was a filthy, dirty hellhole of a place," he said, his Texas accent dripping with disdain for what he calls a "bunch of carpetbaggers" from New York.

When Huntsman came to town, Reaud was watching him with a fair share of distrust.

"I thought he (Jon Huntsman Sr.) was going to be a new Mr. Texaco," he said. "I just wasn't interested in sucking up to the new hat. I am a hard sell and talk is cheap."

But he saw from Huntsman an unprecedented financial commitment to cleaning up the plants, both environmentally and in terms of worker safety. And he saw the company give millions back to the community, winning hearts from the factory floor to City Hall. He'd never seen anything like it.

"We have a long history in Beaumont of dealing with wealthy outsiders," he said. "In my lifetime, Huntsman was the only one who ever reached out to the community. The others took the oil and took the money and left."

Once Texaco's worst nightmare, Reaud has become a convert to Huntsman nation. He refers to Jon Huntsman Sr. as an "enlightened industrialist" and a "philosopher king."

"I'll sue Jon Huntsman tomorrow if the plant blows up," he says. "But I know he'd be down here the day after that wanting to do what was right by the families."

A nasty business

The Huntsmans are, by most accounts, nice guys in a nasty business.

Which raises the questions: Have the Huntsmans made the petrochemical industry a kinder, cleaner industry through their company Huntsman LLC? Or have the inherent problems with one of the nation's dirtiest industries soiled the Huntsmans?

The answer, it seems, is a little of both.

On one hand, the company has been praised by state regulators for massive reductions in the amount of toxic pollutants released by the plants and lauded by local officials for a new attitude of openness and cooperation.

On the other, the company has been slapped with more than $9 million in pollution-related sanctions by Texas regulators, and two of its Jefferson County managers were convicted of felonies for illegally allowing the release of pollutants — the first time plant workers have been criminally convicted under the Clean Air Act. (Those convictions were later overturned and a new trial is pending.)

A civil lawsuit by some Jefferson County residents now seeks millions from Huntsman LLC and others for toxic releases blamed for a host of ailments, "from athlete's foot to AIDS," says Reaud, who claims the suit is bogus and hurts the chances of those who are legitimately harmed by chemical releases.

A Deseret Morning News review of hundreds of state and federal documents, all part of the public record, found that Huntsman Chemical has a mixed environmental record. Many of its plants have had no serious regulatory sanctions.

Others, particularly some in Texas, have had repeated problems resulting in fines.

Where does Huntsman rate on the scale of environmental responsibility? "Average," says the Texas Commission on Environmental Quality, which scores all industries in that state under a complex formula mandated by the Texas Legislature.

Peter Huntsman, CEO of the company after his father stepped down three years ago, says some plants are better than others, but he rates the company's overall environmental record as good to excellent, pointing to the $100 million spent annually on environmental improvements at Huntsman facilities. It is a continual process, he said, and most of the problems that have resulted in fines were inherited from previous owners.

Some problems are simply unavoidable, he said, like when a raccoon crawled into an electrical generation substation and shorted out the plant's power source, shutting down the chemical manufacturing process and forcing the company to vent and burn toxic chemicals in a process called "flaring." The company might yet get fined for the recent raccoon-caused release.

"The EPA will say we are one of the most proactive companies out there," he said. "Every fine we have paid we reported the violation ourselves. We are a very transparent company."

Peter Huntsman calls the criminal charges and the related $9 million settlement with Texas "a dark day in the company's history." But he points out that the investigation was initiated at Huntsman's behest after company officials discovered one facility was "operating outside the law." One media account said it was a low-level state regulator who broke ranks with her bosses and blew the whistle.

In the end, Texas regulators boasted it became the most intensively investigated facility in state history. And they praised Huntsman for unprecedented cooperation in the investigation.

"There is no question the managers had been doing those things for years and that Jon inherited an ongoing problem he knew nothing about," Reaud said. "If he had, he would have been indicted. And I know the U.S. attorney looked long and hard (at the Huntsmans) and was convinced they did not know."

The company still stands by its former employees during their legal battles.

And to make sure those problems never happened again, the company hired away the federal prosecutor in the case to consult on environmental compliance issues in the future.

Environmental ethic

Still, the Huntsman corporate ethic toward the environment and public remains obscure. The company's voluminous Web site contains very little about its environmental record, good or bad. It touts a recycling program it helped initiate in national parks in 1990 and two cancer screening programs it initiated in Texas in the late 1990s.

But there is no mention of company plans to reduce pollution, nor of sanctions the company has received from regulators. On the other side of the coin, there is no mention of awards the company has received for environmental improvements. (The company is now developing a separate Web site that will address environmental, public safety and health issues.)

Peter Huntsman insists the company standard is to far exceed state and federal standards, and he is willing to work hand in glove with "responsible" environmental organizations toward that end. The Natural Resource Defense Council spent an entire year at one Huntsman facility at the company's invitation to make recommendations on environmental improvements.

But some Texan activists give Huntsman LLC low marks for its environmental record, usually pointing to the company's legal problems in southeast Texas and the prevailing belief that Huntsman LLC allowed the problems to persist.

"Huntsman is the best example I can give you of the lawlessness of the petrochemical industry in Texas," said LaNell Anderson, chairman of the Texas Bucket Brigade, an environmental group that conducts its own air quality tests in and around Houston. (They believe state and federal regulators cannot be trusted to accurately report dangerous chemicals in the air.)

Anderson, who used to work in the industry, insists the company is adept at exploiting the Texas regulatory system, which allows companies to audit and inspect themselves. And in that regard, they are no different than the rest of the industry.

"Are the companies lying? You bet they are. Does government bless their lies? You bet it does," she said.

Jim Blackburn, a Houston attorney who represents people harmed by chemical releases, has collected air quality data on Huntsman and all the other petrochemical plants in the Jefferson County area. He concluded that Huntsman is better than some, not as good as others. It is his perception that Huntsman is "running with the pack."

"Chemical industries in Texas are not particularly good, and Huntsman fits well within that pack," said Blackburn, who has never sued Huntsman. "They are not uniquely different than the rest, and they are not setting standards, that's for sure."

In response to a Deseret Morning News query, Blackburn examined his data on Huntsman's chemical releases, called "upsets." And he found their record to be much better than he had anticipated.

Neil Carmen, the air quality expert for the Lone Star Chapter of the Sierra Club and a former investigator for the state, believes problems inherited from previous owners haven't improved much under Huntsman's stewardship.

His review of agency reports shows repeated problems around Huntsman facilities. "They (reports) emphasize some of the state's own sampling personnel were getting sick," he said.

Things have been improving, Carmen admitted, but the neighborhoods around the plants are still being exposed to cancer-causing benzene. And Texas regulators are moving much too slowly to enforce the law, he added.

"As much at fault is the very lax regulatory atmosphere in Texas," he said. "People have been able to get away with a lot of things over the years, and it seems to me the mentality of the Huntsman people is just as bad as the Texaco Chemical people."

Peter Huntsman, a lapsed member of the Sierra Club, insists his door is always open. "I would be genuinely interested in knowing what we are doing wrong," he said. "If there is room for improvement, tell us where. If it makes economic sense, we'll do it. Truth is, we are far below the level (of emissions) where it affects the environment."

A dark legacy

Texans by and large are fiercely protective of their petrochemical industry, Huntsman in particular. Environmental organizations are not welcomed in these parts with open arms, and individuals who are harmed by toxic releases tend to turn to lawyers rather than environmental activists for relief.

But there is an ongoing concern in southeast Texas that generations of industrial pollution have left a legacy of sickness and death, prompting some critics to refer to the area as the Cancer Belt.

According to health studies by various Texas institutions, cancer rates are significantly higher in the six counties along the Gulf Coast, where Huntsman is but one among dozens of petrochemical businesses. In one county, brain cancer deaths have increased fivefold since the 1980s.

One University of Texas study found that residents of one area were three to six times more likely to complain of respiratory, nervous system, skin, cardiovascular, urinary and other illnesses than were residents of a nearby area less affected by smog, according to a report in Texas Monthly.

In 2000, the Texas Commission on Environmental Quality sampled air around one Huntsman facility and another non-Huntsman synthetic rubber plant and found 1.3 butadiene, a known carcinogen, at levels nine times the state limit. The source of the chemical was never determined.

Is Huntsman LLC part of the problem?

Environmental watchdogs say yes. So do trial attorneys, who have signed up hundreds of plaintiffs in Jefferson County to sue local petrochemical plants, including Huntsman.

Perhaps Huntsman's biggest headache has been its plants along the Texas Gulf Coast. Last May, the Texas Commission on Environmental Quality slapped the company with $360,000 in "administrative penalties for air, industrial and hazardous waste violations" in 1997, 2000 and 2001, most at a Port Neches plant but some at a nearby Port Arthur plant, according to the commission Web site.

That fine came on the heels of an agreement with the Texas attorney general's office wherein Huntsman agreed to pay the state $9.1 million to settle environmental enforcement actions at the Port Arthur plant. The settlement resulted from the state and federal criminal investigation into violations of the Clean Air Act.

Based on environmental data collected by the company and examined by investigators, the company committed 18 different categories of violations in 1994, 1997, 1998 and 1999, including improper reporting, unauthorized emissions and failure to have permit authorizations, according to the TCEQ.

Most serious, the commission stated, were improper releases of chemicals, the largest involving "the release of up to 100,000 pounds per day of volatile organic compound emissions from a cooling tower." The data also revealed the release of several thousand pounds per day of benzene.

Those problems have all been fixed, Peter Huntsman insists, and plant releases are now far below the federal environmental limits.

"There is not one facility you can point to where our compliance has gotten worse since we bought it," he said. "You don't make money by polluting. For us, it has been a continual investment and will continue to be that way."

The Odessa file

There are literally hundreds of news reports about the Huntsmans and the companies they own, usually about their generous philanthropy or Jon Huntsman Sr.'s remarkable evolution from a dirt-poor farm boy to self-made billionaire.

But in many respects, the company has operated below the media radar screen. There have been few stories about the company's environmental sanctions or public health problems.

That obscurity came to a screeching halt in October 2000 when journalist Gail Sheehy, writing in Vanity Fair, held up Huntsman Chemical as an example of the failed environmental policies of then-presidential-candidate Texas Gov. George W. Bush. It described "flares" at the company's Odessa, Texas, plant that released chemicals at levels hundreds of times higher than normal, the almost 3 million pounds of toxic chemicals the company released in 1998 and a lackadaisical regulatory environment in Texas that ignored the problems.

"In 1998," Sheehy wrote, "Odessa residents living downwind of the newly expanded Huntsman plastics plant were engulfed by black, toxic smoke — so thick they needed to drive with their headlights on in the middle of the day. That eerie flare lasted for two weeks. Houses shook, and terrified residents couldn't sleep or concentrate. Children wheezed and coughed and came down with bloody noses and headaches. The flame climbed a hundred feet in the air and could be seen from 30 miles away at the Midland Country Club."

Local officials in Odessa and nearby Midland cried foul and rallied to Huntsman's defense, claiming Sheehy distorted and greatly exaggerated actual events. Huntsman's take: The events she described did not happen as she described them, and the people she talked to now claim they never said what she quoted them as saying, according to various media accounts of the fallout from the magazine story.

"If what she wrote was true, we would have been run out of town," said Peter Huntsman.

Yes, there were plumes of black smoke from flaring associated with the startup of the expanded plant, but it was nothing like what was described. And the company says it has the air quality monitoring data to back up its side of the story.

TCEQ data indicate the releases were substantial. During one three-day period during the startup at the plant in late 1998 and early 1999, the chemicals burned in the Odessa flare included more than 61,000 pounds of ethylene and almost 33,000 pounds of propylene, along with smaller amounts of benzene and butadiene, both suspected carcinogens.

The flaring resulted in 3,500 complaints to Texas regulators, who told local media at the time the releases were expected during a plant startup.

In January 2000, the plant began massive flaring once again, this time releasing even more of the same chemicals. One regulator told the Odessa American newspaper at the time that exemptions to clean air standards were allowed for unavoidable "upsets" and maintenance.

"Companies are allowed to break their allowable emissions for obvious reasons," said Mike Hagam, a section manager for TCEQ. "Any business that operates will eventually have problems."

Huntsman was later fined $4,500 for the incident — a paltry amount that outraged local activists.

"The fine was ludicrous, it was a slap in the face," Gene Collins, the president of the Odessa NAACP told the Texas Public Employees for Environmental Responsibility. "The fact is they (regulators) totally ignored the complaints from the citizens."

On Dec. 31, 2001, the company paid $140,000 for violations connected with the 1999 startup.

Largely because of the Sheehy article, the Odessa plant, purchased by the Huntsmans in 1997, remains its most infamous acquisition. The irony, Peter Huntsman says, is that the plant, following a $400 million expansion and upgrade, has become perhaps the cleanest facility in the Huntsman portfolio.

Huntsman lost no customers over the negative fallout, and the "We Support Huntsman" signs still dot the local landscape, says company spokesman Don Olsen.

A lawsuit filed by local residents was quietly settled for what sources say was "pocket change," although one media report placed the amount at $1 million.

"It was all political," said Peter Huntsman, who refused to discuss the terms of the settlement.

Reaud has made a career out of suing petrochemical giants over the years. But he says the same people behind the Odessa lawsuit are now behind a similar suit in southeast Texas. And he dismisses the claims as ambulance chasing by individuals with their sights set on deep corporate pockets.

Not that Huntsman doesn't get sued or shouldn't get sued when it does something wrong, he said. Getting sued is an inescapable part of the petrochemical industry.

But the company has a prevailing corporate attitude that it won't be sued, and when it does, it tends to settle quickly and quietly. Mostly, it stays out of court. A review of all civil actions filed by the EPA revealed a long list of petrochemical companies, including most of Huntsman's direct competitors. But Huntsman is not on that list.

"I have never seen the inside of a courtroom," Peter Huntsman says. "How many CEOs in this industry can say that?"


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