Products derived from oil and natural gas are the backbone of the giant Texas petrochemical industry, mostly concentrated along the Texas Gulf Coast and in the Permian Basin. The need for synthetic rubber and synthetic chemicals for explosives during World War II prompted the development of the highly specialized petrochemical industry in Texas. After 1952 the state's share in the American petrochemical industry increased dramatically, and during the 1960s Texas played an increasingly diversified role in all phases of the petrochemical industry: furnishing and processing oil and gas, producing petrochemicals, and manufacturing commercial commodities. By 1965 200 petrochemical plants in Texas processed such basic petrochemicals as ethylene, propylene, butadiene, benzene, isoprene, and xylenes, which are the building blocks for innumerable chemical products spanning the range of the plastic, rubber, and synthetic fiber industries. By 1967 the Texas Gulf Coast petrochemical complex dominated the American production capacity of several basic petrochemical gasses and liquids, providing 82 percent of the production capacity for butadiene, 66 percent for benzene, 70 percent for ethylene, and 67 percent for styrene. In 1965 Texas supplied more than half of the national production of carbon black, another important raw material derived from natural gas; that year eighteen plants produced 1,173,000,000 pounds of carbon black (valued at $87,500,000) used in tires and rubber products, printing ink, plastics, pigments, fertilizers, and other manufactured products. In all, Texas supplied 40 percent of all basic petrochemicals produced in the United States by 1969. In the 1960s Texas began taking a larger part in the manufacture of plastic, synthetic fiber, and rubber products. Ethylene gas and polyethylene plastic materials (produced by subjecting ethylene to high pressures and heats in the presence of a catalyst) represented an important example of this development. By 1963 twelve Texas plants had an ethylene production capacity of 4.9 billion pounds, more than half of the nation's capacity of 8.9 billion pounds. That same year Texas manufacturers had a 1.6 billion pound production capacity for polyethylene, 80 percent of the national capacity. Still other Texas businesses used polyethylene to manufacture finished plastic commodities. By 1967 the Texas petrochemical industry represented a capital investment approaching $5 billion and employed 45,000 workers. The largest portion of this industry was the world's largest complex of ethylene production facilities along the Texas Gulf Coast, which in 1969 had 15 billion pounds of production capacity.
Although the economic benefits of the chemical and petrochemical industry have been welcomed, the environmental problems have not been applauded. By the late 1970s the chemical industry as a whole produced 3.9 million tons of solid waste, ranking Texas sixth in the nation in annual output of chemical waste. In the early 1980s the Environmental Protection Agency listed fourteen disposal sites in Texas as potential environmental hazards. The problems were not just with disposal of solid waste; petrochemical companies, like Dow, DuPont, and Texaco, were forced to settle a lawsuit in 1984 that charged them with releasing fumes and gases into the atmosphere that caused cancer in plant employees and in residents who lived near plants. Environmental worries are compounded by the real potential for industrial accidents. In 1987 the Marathon Corporation's refinery in Texas City accidentally released a highly toxic gas, causing the evacuation of 3,000 people from the area. In response to environmental concerns, many of the chemical and petrochemical companies have joined the Clean Industries 2000, an organization committed to reducing hazardous waste and environmental pollution. By the 1990s Texas led the nation in the production of chemical products including petrochemicals. Some of the larger companies with plants and offices in Texas in 1995 included DuPont, Monsanto, Union Carbide, Dow, Texaco, Shell Chemical, and Phillips Petroleum. See also CHEMICAL INDUSTRIES.