June 2016 feature

The 10 Best Observer Stories of 2016: ‘Company Town’

How big business turned a Gulf Coast beach town into an industrial zone.


Editor’s Note: Many environmental stories rely on familiar tropes, the scrappy locals standing up to the big, bad polluter. The unlikely bedfellows of environmentalists and, say, ranchers. The technical, scientific debate about how harmful a pollutant is to human health. While this story has many of those elements, it’s really more about how a large corporation can use its money and power to bend a community to its will. Quintana, Texas, went from being a beach town to a company town in the matter of a few years; Naveena Sadasivam’s story shows how Freeport LNG used carrots and sticks as well as divide-and-conquer tactics to build a $14 billion LNG plant on the Texas Gulf coast.—Forrest Wilder

Company Town
By Naveena Sadasivam
Published on May 31

When Freeport LNG began constructing a natural gas import facility on the northern end of Quintana in 2005, the shale gas boom was still years off. At the time, natural gas was expensive, and a plant bringing cheap liquefied natural gas from Europe and supplying it to customers in Texas was an economically attractive proposition. Drawn by the easy access to the Gulf, millions of dollars in subsidies and low taxes, Quintana was an ideal location for a natural gas importer.

For a while, everything was rosy. The plant was almost a mile away from the nearest home, largely out of sight and out of mind. In spring 2008, a 909- foot tanker carrying the company’s first shipment docked at its berth. In the next few years, however, natural gas prices plummeted. The country was awash in cheap natural gas. Business dried up, and the billion-dollar plant sat mostly idle.

That’s when Freeport LNG considered a new plan. What if, instead of importing natural gas and selling it to customers in the United States, it reversed its operations, liquefying the cheap natural gas produced in Texas and selling it to customers in Europe and Asia, where prices were higher?

Read the full story.

Read more of the Observer‘s Best of 2016.