A steel business in northeast Houston is facing felony charges after investigators found improperly stored hazardous materials leaking into surrounding soil and storm drains, raising concerns about environmental enforcement in Houston’s industrial corridors and the oversight of abandoned industrial sites.
The company, located on McCarty Street near a Houston Independent School District maintenance facility, has not been in operation since 2023, according to court filings. The charges stem from a complaint filed last August by a resident who reported seeing “leaking thick black oil onto the grass, soil, and migrating into nearby storm drains,” as reported by ABC13 Houston.
A district employee told investigators that when it rains, oil overflows from the steel business property onto HISD property. The proximity to a school district facility adds urgency to the environmental concerns, as runoff from the site could potentially affect areas where children and school staff are present. Investigators tested the fluids and determined they were coming from two old transformers on the site—equipment that contains various petroleum products and chemicals that can be harmful to human health and the environment.
Tracy Hester, a professor at the University of Houston Law Center who specializes in environmental issues, told ABC13 that the leaked chemicals pose multiple risks. “There are lots of concerns. First of all, petroleum, even though we’re used to seeing a lot down here in Texas, is a contaminant that kills plants, kills fish, and causes surface contamination. If it gets into water supplies, it can be difficult to get out. And probably most problematically, if it gets in high enough concentrations with vapors that it poses an explosion risk as well,” Hester said.
The case highlights ongoing challenges with environmental oversight in Houston’s industrial areas, particularly in neighborhoods adjacent to schools and residential properties. The McCarty Street corridor in northeast Houston has long been home to metal recycling, steel processing, and chemical storage operations, some of which have faced regulatory scrutiny over the years. The area represents a common challenge for Houston and other industrial cities: what happens to environmental oversight when a business ceases operations but leaves hazardous materials behind?
Prosecutors said a person affiliated with the business claimed to be unaware of the leaks but admitted the transformers were likely the source. Court documents state that he was coordinating cleanup efforts with HISD but did not fully follow through on those commitments—a pattern that environmental regulators say is all too common when businesses lack the financial resources or incentive to properly remediate contaminated sites.
The potential penalties are substantial. Hester explained that under Texas environmental law, penalties can reach up to $100,000 per violation. “Keep in mind, one violation doesn’t mean just the entire situation at that facility. It could mean every individual spill of each chemical that should have had a permit,” Hester told ABC13. The cumulative penalties could therefore be significantly higher than the $100,000 baseline, depending on how prosecutors choose to structure the charges.
The case also underscores the role of citizen complaints in environmental enforcement. The initial investigation was triggered by a community member who observed the leaking oil and reported it to authorities—a pathway that environmental advocates say is critical in a city with Houston’s industrial footprint, where regulatory agencies may not have the resources to monitor every site proactively. Without the citizen complaint, the leaks might have continued undetected for months or years, potentially causing more extensive contamination.
The incident also raises questions about the regulation of transformers and other industrial equipment that contains hazardous materials. Polychlorinated biphenyls (PCBs), which were commonly used in older transformers, are known to cause cancer and other health problems. While PCBs have been banned in new equipment since the 1970s, older transformers containing these chemicals remain in use or in storage at industrial sites across the country. Proper disposal of such equipment is regulated under federal law, but enforcement at abandoned or non-operational sites can be challenging.
ABC13 reached out to the individual identified in court documents as working for the business, but he declined to comment on the matter. The City of Houston has not yet publicly detailed what cleanup steps, if any, have been taken at the site since the charges were filed.
For northeast Houston residents, the case is a reminder of the environmental risks that accompany the city’s industrial legacy. As Houston continues to grow and redevelop, the tension between industrial land uses and neighboring communities remains an ongoing challenge for city planners, regulators, and residents alike. The outcome of this case could set a precedent for how similar situations are handled in the future, particularly as more industrial sites reach the end of their operational lifespans and the question of cleanup responsibility becomes increasingly pressing.
Environmental advocates are calling for more proactive monitoring of abandoned industrial sites, increased funding for environmental enforcement, and stronger requirements for companies to remediate contaminated properties before ceasing operations. Whether those calls will translate into policy changes remains to be seen, but the McCarty Street case has brought the issue into public view in a way that few other cases have managed.
