Intel Outside
By Brendan Doherty
APRIL 27, 1998:
Intel Says it Puts a Lot Into New Mexico's Economy--But What
is it Putting Into Our Environment?
Acetone removes paint from surfaces. Like mineral spirits and
gasoline, it is a solvent capable of unlocking the chemical bonds
that hold varnishes, finishes and plastics together. It is called
a volatile organic compound, and it is flammable. It takes green
nail polish off in a breeze. And, on a not-so-breezy day, acetone
and any number of 50 other solvents, along with 48 acids, are
put into the air over Rio Rancho and Corrales courtesy of the
Intel plant.
Intel is applying for a "minor source" of air emissions
permit. The minor source status would exempt Intel, already exempted
from a number of taxes, from paying levees on its pollutants.
The recent exclusion of acetone from the pollutant calculations
enables Intel, currently permitted to release more than 300 tons
of volatile organic compounds into the air yearly, to calculate
itself putting out closer to 50 to 100 tons yearly. It was an
exclusion that Intel lobbied heavily in Congress to achieve. The
difference in the permit is immense, and the responsibilities
for Intel would significantly decrease. The application is three
and a half years in the making, being written by employees at
the New Mexico state environment department. It is a process that
is coming toward its end.
"The minor source permit is not quite done, but I'll be sure
to let you know when it lands," says Intel spokesperson Terry
McDermott. "This thing has been going on for a long time,
and so it takes a long time for it to be finished."
It is the latest in a string of enormous breaks the chip maker
has been given by the state government. In the world of private-public
partnerships, Intel is playing with the store's money. Intel made
news all across the country when it received a record $8 billion
Industrial Revenue Bond (IRB) from Sandoval County in September
of 1995. It was the largest bond of its kind in the history of
the United States for a company whose revenues last year exceeded
$1.5 billion. Intel received a number of tax breaks in the deal
(see sidebar). To manage such, Intel played states against each
other. Competing for the expansion with IRBs of their own were
Arizona, Oregon and California.
New Mexico was quick to calculate some of the monetary benefits
but didn't bother to figure out how much the added burdens on
schools, city services and utilities would cost. Intel didn't
bother to help the governmental entities struggling with a problem
on a scale they hadn't ever faced before.
"I frankly don't understand present value money calculations,"
said one of the writers of the state's fiscal report, which influenced
the vote. The county overestimated benefits and double-counted
the state income tax that employees paid to the state as yet another
tax benefit, an illegal multimillion dollar mistake. An outside
party pointed out the mistake before any legal action was taken.
Not long after, Manny Aragon, state Senate president pro tem,
admitted that the calculations were faulty and that the state,
counties and cities around the plant would have to pay for utility
hook-ups and a number of secondary infrastructure roads around
the plant due to increased traffic. Illustrating the influence
of Intel contracts and the highly prized Intel salary, Bill Garcia
of the state's Economic Development Division prepped the Intel
deal and then became an Intel employee, lobbying the same agencies
he once worked for.
For a state 47th in the United States in per capita income, New
Mexico did everything but build Intel for itself. Depending on
who's talking, Intel is the state's great hope of jobs and preventer
of social ills, or it's the loathed destroyer of the rural beauty
of the Village of Corrales, the industrial drinker of precious
water and polluter. The semiconductor plant in Rio Rancho is the
world's largest plant of its kind, using 4 million gallons of
water a day, building approximately 3 million chips per year,
employing more than 5,500 people and sub-contracting even more
to fill the volatile and fast-moving world computer market.
"What's happening here is we are subsidizing the most profitable
company in the world," says Eric Schmeeder, economist for
the Southwest Organizing Project (SWOP), an independent watchdog
group that keeps files on Intel's every move. Schmeeder has openly
challenged Intel in several published books that criticize the
company's economic and environmental assertions, point for point.
"Their impacts are costing our government. The growth and
the other costs of those expansions are costing us. They staff
their positions with people the state has paid to train. They
want the best deal, but I think even Intel would have to be embarrassed
that they have a negative impact on our government," Schmeeder
says. "We just can't keep getting our businesses deals like
this and have our communities prosper. The businesses that come
here solely for tax breaks are gone when they dry up." He
cites Intuit and others that have received IRBs in New Mexico
with city or state incentives, only to leave.
"Incentives weren't invented for us," says Intel spokesperson
Richard Draper. "We are also the largest single corporate
taxpayer in the state. We put computers in a Corrales community
center that came from Intel money, and we donated $400,000 to
the N.M. state road 528 upgrade. We are a good neighbor, and we
want to stay."
The plant used the money saved from IRBs to remodel its Fab 11
photographic silicon chip processing units, which need expensive
retooling for new products roughly every 18 months, according
to Intel. It's a very capital intensive process, and products
that are viable today are designed to be entirely obsolete within
10 years. The process, which involves using gold-coated silicon
wafer chips, uses principles of photolithography. The chips are
exposed to light-sensitive acids that chew their way through the
metals creating tiny wires and resistors only a few microns thick,
mere fractions of the size of a human hair. They are filled with
transistors and resistors, and their size makes personal computing,
cell phones and other "flash" memory products possible.
Their process is water-intensive, and the remaining volatile organic
compounds are burned in oxidizers. But the process puts chemicals
out into the air that are causing problems with people in the
immediate vicinity--annoying odor, headaches, rashes and, consequently,
difficulty selling homes. Larger fears persist about the company's
heavy use of the shared water table, fueled by Intel's past record
of contributing pollution to three Superfund waste-dumping sites
in California and another in Arizona.
In Corrales, which is downwind from the Intel plant, many would
consider the chip plant to be anything but minor when it
comes to effluents.
"A minor source permit is ridiculous. It just shows how New
Mexico is a colony for Intel. They treat us like the Third World,"
says Barbara Rockwell, former director of Corrales Residents for
Clean Air and Water (CRCAW), a group that has successfully fought
Intel, forcing them to spend hundreds of thousands of dollars
on new oxidizer scrubbers. Rockwell herself grew tired of the
smells coming from the plant into her garden--and the stonewalling
she was getting from Intel--and chose instead to move to Placitas.
She has not lost her dislike for Intel.
"Acetone is not a benign solvent, and it has substantial
impacts. For them to get that taken off of the list in Washington
shows just how much clout they have there. They have been met
by an understaffed Economic and Environmental Department in the
state, and those people there don't know how to deal with something
as big and powerful as Intel. Most
people don't care if the fumes aren't in their yard, but the water
issue? That's everyone's problem."
Rockwell was one of several people who stepped up and challenged
Intel. She knows people who got rashes, headaches and worsening
health as a result of the solvents and acids being pumped into
the air. Rockwell and others in CRCAW have seen real drops in
the amount of effluents and water discharge, but the problem remains
very real. The years of '94-'96, before the big scrubbers, exposed
people to plenty, giving them a healthy fear of Intel.
"My son has seizures, and he has lost his vision," says
Corrales resident Carol Merrill. "My mother is losing her
memory. I called Mr. Westmoreland of the plant and complained
of the smell, and he said, 'You're smelling the water works in
Rio Rancho.' It turned out that there had been a spill, and they
had evacuated Fab 9. I'm not sure I can attribute their health
problems to Intel, but my son might be a canary in a coal mine--a
barometer as to whether or not Intel is doing their job. The story
is that we are trading health for jobs."
"Periodically, the house would fill up with fumes from Intel,"
says Sue Hettmansperger, another in the CRCAW group. "One
time, I got up at 3 a.m. to find out where they were from. I saw
which way the wind was blowing. I'm northeast of them, only a
mile away. It smelled like solvents. I know what solvents smell
like; I'm an artist. I have a low threshold for this. It smelled
like lacquer thinner. They used large amounts of acetone, and
the smells would wake you up at night, giving you a headache.
They have become better, but long term? This is a farming community.
What if this stuff gets in the farming system? I think you're
going to see higher rates of cancer as a result of that plant."
The distrust of Intel continues. Despite years of hearings with
the community and its leaders, however, there is no evacuation
plan for the plant and no method to warn nearby residents of spills
or accidents.
"You have a company that big, and with that big a stake,
it's hard to get the truth," says Jeff Radford, editor of
the Corrales Comment, a newspaper that has kept its eye
on the community for years. "When people started having problems,
the environment department contended that there was no odor. They
contended there was none, but there was definitely a problem.
Our concern isn't odors, but the things that you don't smell.
Over the years I have come to realize that officials say they
can't smell things. Maybe they're right. Maybe they have become
so inured to the smell; maybe they're right. They have to smell
it all day long every day."
But the plant is no coal-burning smelter. All things considered,
there are many away from the winds near Intel who think of chip-making
as a clean industry. Among them: gubernatorial candidate and former
Albuquerque mayor Martin Chavez, former Rio Rancho mayor Tom Swisstack
and Gov. Gary Johnson (whose firm, Big J Construction, was involved
heavily in the building of Fab 11). All of them are happy for
the economic boom that the jobs have created. Chavez discredits
SWOP and claims that the industry is clean and that Intel has
done everything that they said they would.
"We've done a lot about the complaints we've received,"
says Intel's Richard Draper. "I think with some of these
people, their problem is that we exist."
"I wouldn't be concerned from a health standpoint (with)
living nearby, based on the information that I have," says
Lovelace Respiratory Research Scientist Joe Mauderly. Mauderly
wrote the advisory report to Intel based on the chemicals they
reportedly used in a 1995-96 independent panel. The report evaluated
wind scenarios, worst-case explosions and highly unlikely chemical
combinations and their release on the public in several conditions.
"Some people just freak out when they hear the word 'chemical.'
You could have a 55-gallon drum of acetone open in your yard,
and I don't think you'd smell it. Science has little to say about
headaches and problems from perceived smells. Odor nuisances are
out of the scientific realm. I don't live up there, actually.
I live in the Heights. I think, however, based on the information
that they gave me, I would be more concerned with driving on Montgomery
Boulevard on Friday night than living very near Intel."
Intel's Tax Breaks
Property Tax Breaks: $441 million over 30 years from Sandoval
County
Sales Tax Breaks: $70 million over five years from the
state
Investment State Tax Credit: $55 million over three years,
1995-1998
Employee Training Funds: $2 million over two years from
the state coffers
Corporate Income Tax Breaks: Unknown
Total Tax Breaks: Not counting corporate income tax breaks,
$568 million over 30 years in raw dollars and $289 million over
30 years in dollars discounted to reflect inflation
Sources: 1993 Industrial Revenue Bond,
The Albuquerque Tribune
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