OIL AND GAS

Giveaways created a poverty sinkhole. Then the virus hit

Fourth in the "Toxic Zones" series.

SHREVEPORT, La. — Deloris Dee Lynch has help at home from her daughter, and she does enough online shopping to get by day to day. Lynch rarely leaves her house.

Coronavirus infections have been spiking for weeks in Louisiana's northernmost big city, as they have across the South and West, from Florida to Arizona.

At 61, Lynch is afraid that her respiratory disease and other health problems leave her vulnerable as the Southeast shatters daily records for new cases.

"I just know people have been dying," she says of her neighbors in western Shreveport.

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The COVID-19 mortality rate in Louisiana was on a downward slope for most of May and June. But the state's case numbers are approaching new highs, and the daily death toll is ticking up again.

Lynch has lived in Shreveport's Mooretown neighborhood for almost four decades. Since April, it's been a hot spot for the virus along with an area to the northeast, Queensborough. Many of the residents of the mostly Black neighborhoods are impoverished, and their homes encircle an oil refinery.

Pipes and rail cars cut across the Calumet refinery grounds a short walk from Lynch's front door. The 240 acres of flares and storage tanks are a hub for moving gasoline, diesel and jet fuel into the Louisiana, Texas and Arkansas markets.

The century-old industrial site is a constant for everyone here. For years, Lynch has blamed its pollution for the breathing problems that cause her to rely on an oxygen tank.

Louisiana saw a staggering growth rate of novel coronavirus cases starting in the spring. It stood out on the U.S. map, even as rocketing case numbers and dire hospital bed and equipment shortages in New York consumed national attention. By the end of March, Shreveport, the state's third-largest city after New Orleans and Baton Rouge, would be nearly shut down by the pandemic.

The stakes have always been high for Black people in western Shreveport, some of the poorest ZIP codes in the state. As the virus took hold, Earl Benjamin-Robinson, the tall, bespectacled, deputy director of the state Office of Community Partnerships & Health Equity, mentally flagged the news that people with conditions like diabetes and hypertension were having a harder time battling COVID-19. He feared that Black people were at greater risk of dying.

More than 4,300 cases of the virus have been reported in boot-shaped Caddo Parish, which includes Shreveport. Nearly 250 people have died from the disease. While just under half of the parish's population is Black, its share of deaths is about 68%.

"We can continue to dance around what is happening and how we got to that point," said Benjamin-Robinson, whose office in the Louisiana Department of Health opened in 2019. "Or we can have real conversations about why we continue to see these patterns."

People living in Mooretown and Queensborough today have struggled with decades of economic hardship and the lasting effects of job scarcity. They live in two of the most segregated parts of the city, according to the Opportunity Atlas project at Harvard University, which maps social mobility.

The Investigative Reporting Workshop at American University examined 2017 census data for the areas closest to the Calumet refinery. Poverty rates were nearly double the average for the rest of Caddo Parish. The workshop's analysis of data from the Centers for Disease Control and Prevention showed residents had elevated levels of chronic lung disease, asthma, heart disease, kidney disease, stroke and high blood pressure.

At its core, the virus's effect on western Shreveport is the story of race, poverty and disease in America. But in this declining city, where some of the ugliest episodes of Jim Crow-era violence and redlining played out, local organizers and health experts say the coronavirus also tells another story: a pattern of sustained community disinvestment.

Generations of families in the neighborhoods live under the same roofs or close by, sharing limited incomes as the country lurches from one recession to the next.

'Weigh it out'

The owner of the refinery on the edge of Mooretown, Calumet Specialty Products Partners LP, based in Indiana, has been expanding its footprint in Louisiana since 2001. Often, the company sought a local property tax exemption from the state.

For more than 80 years, Louisiana lawmakers have kept in place a prized economic incentive: 10-year local property tax exemptions for manufacturers that come to Louisiana or expand their facilities in the energy-rich state.

Critics of the tax abatement today say it's a rubber-stamp program that has siphoned billions of dollars from public schools, police departments and municipal services. They say that's contributed to disinvestment in the neighborhoods close to the Calumet refinery and in places like the urban core of East Baton Rouge Parish, where Exxon Mobil Corp. runs a refinery with the capacity to process 500,000 barrels of oil a day.

Louisiana created the Industrial Tax Exemption Program, or ITEP, in 1936, near the end of the Great Depression. States were competing for manufacturing jobs. Notorious for cronyism and machine politics, Louisiana empowered a state board to exempt factories, oil refineries and petrochemical plants from paying local property taxes.

Efforts to reform the popular tax break, by giving local governments more say in the matter, gathered steam in 2016. Newly elected Gov. John Bel Edwards (D) signed an order that shifted power back to local officials who rely on property tax revenue. He noted that localities stood to forfeit $1.4 billion a year from property tax giveaways the state had already approved.

Under Edwards' order, parish commissions, city councils, school boards and sheriff's offices could reject a company's request for new or renewed tax breaks.

The sheriff of Caddo Parish was the first local official to take advantage of the reform.

Steve Prator, a Republican who's been sheriff for two decades, told the New Orleans Times-Picayune in 2018 that he didn't "begrudge" the companies for pursuing the ITEP exemption. He doesn't like taxes, either. But, he said, "You have to weigh it out."

"Are the jobs that are created worth what public bodies are giving up in the way of paying for their services?" Prator said.

It was a watershed moment in Louisiana.

Areas around the nation's oil refineries mirror America's stubborn racial divisions and its deepening wealth gap.

In the mostly low-income, Black or Hispanic neighborhoods right outside many of the refineries, the circumstances are often far worse than other areas of the county or region. Wage stagnation over decades, poverty rates that top 30%, lower educational achievement and high rates of chronic illnesses stand out in the data.

For Black Americans in the Grays Ferry neighborhood of South Philadelphia, the refinery across the interstate was a colossus. While it was a source of good-paying union jobs, explosive fires and chemical releases were also part of the story. Last year, the refinery's powerful financial backers moved it into bankruptcy, eliminating more than 1,000 jobs.

In Artesia, N.M., the refinery is woven into the fabric of the small, mostly Latino town. But state regulators allowed toxic leaks, including high levels of cancer-causing benzene, to continue for more than a decade. Near a refinery in Bakersfield, Calif., in communities of low-wage agricultural workers, residents complain that elected officials aren't responsive to their calls for closer monitoring of air emissions.

There's an inherent risk in living close to a refinery. But in many cases, including in Shreveport, the long tail of the Great Recession of 2008-2009 cemented threats to people's health and well-being. Local revitalization efforts stalled. Income gaps tied to race and ethnicity got wider. At refineries, environmental regulators tilted toward inaction or lagging enforcement.

Areas circling the Calumet refinery have had negative job growth for long stretches during the past two decades, according to the Harvard analysis. Median incomes were around $20,000 between 2012 and 2016, when poverty rates were 37% in Mooretown and 50% in Queensborough. There are a high number of single-parent households, an indicator of multigenerational poverty.

The racial divide

The David Raines Community Health Centers, based in Shreveport, serve roughly 17,000 low-income patients in Caddo Parish and other areas of northern Louisiana. Willie White, its CEO, says socioeconomic conditions shaped the coronavirus' impact.

"If there are higher rates or incidences of coronavirus, it's indicative of what is already occurring," he said.

Louisiana started releasing COVID-19 data by race in early April, and it was among the first states to acknowledge the racial disparity. At the federal level, lawmakers and physicians wanted the Trump administration to release racial data on testing and hospitalizations, which they said could help shape a national response. Their concern was that areas with large Black populations and fewer resources were disproportionately affected by the disease.

The CDC soon published partial data showing Black Americans across several states accounted for about one-third of severe cases. That was far higher than the Black share of the population and the percentage being tested overall.

On June 15, the CDC provided a national picture. It examined the demographics and underlying health conditions for 1.3 million coronavirus cases reported through the end of May. Looking at 600,000 patients who identified their race, 33% were Hispanic (despite being 18% of the total population) and 22% were Black (despite being 13% of the population).

The disease was especially deadly for people with underlying health problems. The CDC found people died 12 times as often if they had underlying conditions such as diabetes, heart disease or chronic lung disease.

Public health activism in Mooretown and Queensborough, near Calumet, has come in fits and starts. Velma White, 70, has been the face of it for decades.

She had a young family when she moved to a quiet, tree-lined street here in the 1980s. Her husband had a job with the railroads. They looked ahead to a modest life on what was still considered the western edge of town. White says she didn't know "A to Z about the environment" or the health and safety risks of living near a refinery. The refinery was much smaller back then.

It was too late when White first learned of the risks, she says. "Renal failure?" she recounted from her kitchen table, shaking her head. Her daughter, Luberta Daughtry, was 17 when kidney problems emerged. She had plans to join the military. As years went on, she said, other children who grew up in the house would get sick.

The ever-expanding field of study around COVID-19 has reinforced some of what worries White: that long-term exposure to air pollution cuts along racial lines. According to early findings by Harvard University's T.H. Chan School of Public Health, a small increase in exposure to fine particulate matter increases the risk of death from the disease.

Overall, oil refineries and other major sources are emitting fewer pounds of toxic air pollutants than in 1990, when Clean Air Act revisions were signed into law. But regulatory efforts to enforce standards and cut refinery emissions have been uneven across the country for 30 years. Leaps in progress have largely been the result of federal consent decrees with individual refinery operators.

There were still gaps. EPA only recently started requiring refineries to collect fence-line data on benzene emissions, a cancer-causing chemical.

Brian Salvatore, a Louisiana State University, Shreveport, chemistry professor, said Calumet might not be among the worst violators of air quality standards in a state packed with large refineries and petrochemical plants. But he noted Calumet's proximity to people.

"The fences go right up to the plant," Salvatore said late last year. "Usually when people talk about fence lines, that doesn't mean someone's backyard."

In 2013, EPA imposed a $326,000 fine on Calumet and required it to install 32 additional monitors to detect sulfur dioxide and hydrogen sulfide releases. The agency cited Clean Air Act violations and problems tied to past explosions. Since 2017, Calumet's been cited by regulators for "high priority violations" tied to nitrogen dioxide emissions, which can affect the lungs.

In November, Calumet released more than 300 pounds of hydrogen sulfide, a flammable and poisonous gas, in under an hour, according to the Louisiana Department of Environmental Quality. State records show a continuous pattern of nonemergency reports from local residents with complaints about acrid smells.

Calumet spokeswoman Media Oakes noted that regulated operations at Calumet that remove sulfur from products also emit odors. "We have heavily invested in control measures to prevent and control emissions from these processes and will continuously improve toward our goal of zero community impact," she said.

White's kitchen is stacked with cardboard boxes, files containing studies, clippings and correspondence about the Calumet refinery. She's been an organizer here for years, leading the Bucket Brigade in Shreveport, a community organization that tests the air around the refinery.

White speaks slowly. She pauses to fill her lungs before starting a sentence.

"Honey, I was blind," she said. "I'm just like a child when I first started this. I prayed to God, and he led me."

'Little Shreveport shakes up the world'

In Louisiana, money flowing through the oil and gas industry stands in sharp contrast to money spent on public programs targeting multigenerational poverty near the state's energy hubs.

Louisiana lawmakers have held on to the state's program of local property tax exemptions for big industry. They point to it as one reason why energy companies like Calumet continue to build out their operations. Further, they argue the companies contribute to public coffers in other ways, through other forms of taxation and by generating well-paid jobs.

Reform advocates say budget shortfalls in the Deep South have sliced away at social safety nets and contributed to underfunded public school systems. And that's in part because of the loss of property tax revenue that flows directly to local bodies that fund public services. It's only in recent years, they point out, when companies accepting ITEP exemptions felt any pressure to show job creation.

The Exxon refinery in East Baton Rouge, for instance, shed 1,900 jobs over two decades while receiving property tax breaks worth nearly $700 million, according to an investigation by The Advocate in Baton Rouge.

Last year, the school board in East Baton Rouge Parish rejected two requests from Exxon for tax breaks for work at its refinery there and a polyolefins plant. Teachers celebrated the vote as a win for public education.

But the rare loss of tax benefits for Exxon sparked a backlash. Since then, chambers of commerce have ratcheted up pressure in the state capital to rein in local control. After winning a second term as governor, Edwards this February backed a new state appeals process. Companies can now go back to the state board and make the case that locals got it wrong.

In practice, the unraveling of ITEP — which diverted an estimated $13 billion from local governments between 2006 and 2016 — was partly spurred by the Caddo Parish sheriff's rejection of an ITEP application in 2018.

"Little Shreveport shakes up the world," said Broderick Bagert, an organizer with faith-based Together Baton Rouge, who lobbied for the tax reform. "In some ways, this is the eternal fight. Is there a social contract here or are we just the place where you take your stuff?"

Bagert, who is white, said he is wary of stories that focus on Louisiana's poverty rather than the effort to eradicate it. "It's a very familiar story: 'Oh, ain't it awful?'" he said. "When really, in fact, one of the most significant and successful pushbacks against the domination of industry is happening right now."

Still, putting a dollar figure on how much money Caddo Parish and other parishes can recover is complicated. The ITEP reform doesn't allow local governments to reverse what's already been exempted. In theory, property tax revenue will increase as exemptions sunset. But by how much depends on property values and the state of the economy in the future.

As of March, almost half of the total value of Calumet's Mooretown plant — the land, crude oil on hand and equipment — remained exempt from taxes, according to the parish assessor's office.

Since the ITEP reform and Caddo Parish's 2018 decision to say "no" to new tax exemptions, parish revenue has stayed constant or even declined. Economic stagnation has flattened or cut away at potential growth in the northwestern corner of the state. Legacy oil and gas fields in the region produce less oil every year, according to parish budget documents.

When Calumet bought the Shreveport refinery from Pennzoil-Quaker State Co. in 2001, it had been on a buying spree. It was taking advantage of a larger oil industry sell-off of refinery assets and specialized oil products.

It bought the Shreveport facility at a discount, then sunk money into capital improvements. In 2007, Calumet expanded the refinery's capacity to 60,000 barrels a day, yielding roughly $70 million in property tax abatements, according to Good Jobs First, a Washington-based tax watchdog.

By using state data — because the Caddo Parish assessor's office hadn't kept count — an analysis by The Times of Shreveport found that lost revenue from Calumet property had totaled $144 million from 2001 to 2017.

Oakes, the Calumet spokeswoman, said the maker of fuel and lubricating oils and waxes invested $195 million in capital improvements in northern Louisiana. She said the refinery created 60 new jobs between 2015 and 2018.

"We apply for available tax exemptions like ITEP, if we qualify, when reinvesting in our business," Oakes said, "which in turn helps our employees maintain good jobs in the area."

The buyout story

James Duncan, 65, leaned against his front door jam on Clarke Boulevard in late February. The street cuts east and west along the Calumet refinery's southern border. His supper cooked in the kitchen behind him.

Duncan looked down the street at his neighbor's homes. One neighbor claimed Calumet had tried to purchase his house for $7,000. "What the hell you going to do with $7,000?" Duncan said.

The buyout story is one you hear in the neighborhoods outside of Calumet. Calumet says it hasn't gone around trying to buy up properties but acknowledged it's torn down some abandoned ones.

The streets in Mooretown and Queensborough are a checkerboard of low-slung houses. Some are for moderate-income families. Others are broken shells. Concrete steps climb to overgrown lots where torn-down homes used to be.

The highest points skyward are the silver spires of Calumet. As the refinery here grew over the past two decades, the value of people's homes tanked.

An explosion at the refinery in 2000 accelerated the exodus of moderate-income households nearby. Then the economic crash eight years later put the brakes on job growth, and the city never fully recovered. More than 1,000 auto industry jobs disappeared when General Motors Co. closed its 3-million-square-foot plant here in 2012.

Last month, the global glassware maker Libbey Inc. filed for bankruptcy. Its large Shreveport facility sits across the street from Calumet. The glass factory there had once been the biggest employer in the city.

Over the decades, Shreveport has tried to bring in new tax dollars by expanding its borders west. Early on, housing policy and city planners anchored racial segregation to older, established neighborhoods. Lenders and federal agencies in the 1930s drew up redlining maps that drove investors away from Black and poorer white areas on the west side of Shreveport. The Home Owners Loan Corp., an agency created by the New Deal to refinance homes, used yellow and red colors on a map to describe "declining" or "hazardous" residential neighborhoods.

Areas north of the Calumet site — owned then by the Spartan Oil Refining Co. — were in yellow and red. The one exception was Queensborough, which at the time was populated mostly by white and middle- to upper-income households.

The city's leadership tried enticing people to neglected parts of Shreveport and its outer boroughs starting in the 1950s, when it annexed largely Black areas just outside city limits. The roads got paved. Lights and sewers were put in. Through the mid-1980s, waves of investment were directed at the inner city. But crime, poor housing stock, a wobbly manufacturing base and an exodus to the city's periphery eroded those efforts.

Regional planners in 2010 described a "vicious circle" of "low demand" and low public and private investment. Fewer households, cheap land elsewhere, continued blight and perceptions about crime were seen as "substantial barriers to change." Planners discouraged the use of public money to make improvements to areas closest to Calumet.

"These can be difficult choices, as all residential areas have a history," said the report, "but a long-term approach of transformation, while providing better housing and neighborhood conditions elsewhere, will be more beneficial for the city."

'They got out'

Theron Jackson is the pastor of Mooretown's Morning Star Missionary Baptist Church on Jewella Avenue, the main thoroughfare adjacent to Calumet. He says he's familiar with the steady hollowing out of neighborhoods like the ones around Calumet.

Jackson grew up poor in Lake Charles, La., which today is a major oil and petrochemical hub near the Calcasieu Ship Channel in southwest Louisiana. The pastor says he's no stranger to the conditions on the streets near his church or the economic gulfs and racist policies that keep poor people poor.

"When there's not great mobility, you go where there is access to housing," Jackson said of the people living around the Calumet refinery. "It is the desperate class who ends up occupying those places."

The neighborhoods are increasingly isolated.

Last July, a member of the City Council, James Green, proposed a resolution declaring a "state of emergency" in Mooretown and Queensborough. It invited outside law enforcement agencies to help tamp down crime.

The resolution fanned rumors that the National Guard would be called in.

Lyndon Johnson, a Caddo Parish commissioner and a safety manager at Calumet, blames big, systemic problems for what he views as a sharp economic and social decline of western Shreveport. It's the cycling in and out of renters in Mooretown and Queensborough, he says, and the erosion of well-paying jobs in the area.

Johnson — named after the 36th president of the United States, who signed the Civil Rights Act of 1964 and waged an "unconditional war" on poverty — has a long history in the neighborhood. His mother worked at Calumet before him. His father worked at Libbey Glass across the street. Those jobs paid Johnson's way through college. "We didn't suffer for anything," he said.

Sitting in the 24-hour Whataburger dining room in early February, Johnson pointed to how much the petrochemical industry has brought to Louisiana.

The bullet points: Chemical companies are the biggest producers of direct jobs in Louisiana. The industry generates nearly $80 billion. Weekly wages in the chemical industry are 52% higher than manufacturing.

But Lynch, the grandmother who lives near Calumet, views the refinery's encroachment and the company's efforts to boost production capacity differently. "Those that could get out, they got out," she said.

Now, she's contemplating selling her house and getting out, too, even if it means becoming a renter and leaving Shreveport.

"They are not letting up," she said of the refinery. "They are just going on, going forward."

The "Toxic Zones" series explores life in the communities around America's oil refineries. This story is a collaboration between E&E News and the Investigative Reporting Workshop at American University. Click here for stories one, two and three.

Twitter: @hroxanerEmail: hrichards@eenews.net

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