The Environmental and Regulatory Scrutiny Elon Musk’s Companies Have Faced — ProPublica

Before and after the 2024 election, Elon Musk made it clear he disliked environmental regulations and considered them a barrier to innovation, especially given the quick timelines his companies prefer to operate on.

The billionaire spent more than $250 million to help elect President Donald Trump and, in the first months of Trump’s second term, Musk led the Department of Government Efficiency, making cuts to the federal bureaucracy and regulatory staff, including environmental agencies, before a dramatic falling out with the president.

Musk-controlled companies have also developed influence in Texas, a state already known for a lighter touch on environmental regulation. In addition to his lobbyists’ successful track record in the Texas Legislature, Gov. Greg Abbott cited Musk as inspiration for the state creating its own DOGE-style office.

A new investigation from ProPublica, the Texas Newsroom, the Houston Chronicle and the Texas Tribune has found Musk and a Houston-area member of Congress have pushed Texas and local officials to hire Musk’s Boring Co. for a $760 million flood control project in the city.

Reporters Lauren McGaughy and Yilun Cheng found that Rep. Wesley Hunt helped pitch Boring’s involvement even though the company builds tunnels narrower than the ones extensively studied by flood control experts for the project. An engineering expert warned that the volume of the tunnels the company is proposing may not be sufficient during a flood emergency. Another said that the proposed tunnels, which would be built at shallow depths, could interfere with existing utility lines and bridge foundations.

Boring has described its project in pitches to lawmakers as an “innovative and cost-effective solution.” But experts and some local officials question whether Boring should be awarded the contract. One Democratic county commissioner told the newsrooms that Musk shouldn’t be involved in the Houston project, arguing he has shown “blatant disregard for democratic institutions and environmental protections.”

Hunt, Musk and representatives from Boring did not respond to the newsrooms’ request for comment before publication of the Aug. 28 story. After publication, Hunt and Musk defended the project on X, the social media platform that Musk owns. Musk claimed that the tunnels would cost less than alternatives and that additional tunnels could increase flow, but he provided no further details.

Officials in Houston haven’t decided on a contractor for the tunneling project yet, and it remains to be seen which environmental regulations will come into play.

In the past, Boring has found ways to navigate around environmental rules. A Boring tunnel project in Las Vegas has skirted environmental, building and labor regulations, a previous ProPublica and City Cast Las Vegas investigation found.

Other Musk-owned companies have faced similar criticism. Over the past year, environmental groups have also raised concerns about an xAI supercomputing facility in Memphis, Tennessee. Musk did not respond to ProPublica’s request for comment.

Adam Kron, a senior attorney at the environmental advocacy group Earthjustice, said any company ignoring or avoiding regulations entirely reminds him of the fracking boom in the early 2010s, when companies moved quickly to drill, poisoning some local communities’ groundwater in the process. “There is a gold rush mentality of getting out there [first] and paying the fine later, once you can prove it,” Kron said. “When you have that kind of culture, you do see more of the notorious attempts to not seek the correct permits or not comply with the standards.”

Here’s what to know about Boring and other Musk-affiliated companies’ history of bumping up against environmental regulations.

Boring Co.

In Las Vegas, a previous ProPublica investigation found Boring was able to skirt building, environmental and labor regulations by structuring a transportation project as a completely private venture and leaning on its local connections.

Boring is constructing a planned 68-mile tunnel system beneath Las Vegas where Teslas ferry passengers underneath the city’s urban core. The project avoided lengthy reviews by building its first section near the convention center under the auspices of the tourism authority. Since then, Boring has received county approval for dozens of more miles of tunnels under obscure holding company names.

Since Boring’s Las Vegas project began, it has been cited or fined for wastewater violations. It also paid retroactive fees for permits after being caught tunneling without them, reporters Daniel Rothberg and Dayvid Figler found. Workers for the company have filed complaints with the state Occupational Safety and Health Administration about “ankle-deep” water in the tunnels, muck spills and severe chemical burns. Nevada OSHA fined the company more than $112,000, after an investigation in 2023, but Boring has disputed the regulator’s allegations and contested the violations.

Boring had already been hit with multiple violations over its management of industrial wastewater at its headquarters in Bastrop, Texas, by the Texas Commission on Environmental Quality. The company, while generally denying the allegations, was eventually fined more than $9,000 and required to make changes at the site, according to a TCEQ spokesperson. In 2023, the company applied for a permit to dump more than 100,000 gallons per day of industrial wastewater from Boring and SpaceX into a nearby river, but it was met with local resistance. A year later, Boring agreed to transfer wastewater to a new city treatment plant, expected to open in early 2026.

Boring did not respond to ProPublica’s request for comment.

xAI

In June 2024, the Memphis Chamber of Commerce announced xAI, Musk’s artificial intelligence company, was setting up a data center at a former manufacturing site in the southern part of the city. That came as a surprise to some members of the City Council, one of whom told NPR she first heard about it on the local evening news.

Within a few months, Musk said the data center, dubbed Colossus, was online. The facility primarily powers the company’s chatbot and generative image maker, Grok, which is integrated into X.

The electricity needed for the computing power was double what the local utility could immediately provide, so xAI used methane gas generators to bring the data center online, burning fossil fuels without a permit or pollution control technologies for nearly a year.

“It’s an actual gas plant in the middle of a neighborhood, and you don’t need any permitting?” Democratic state Rep. Justin Pearson, who lives 3 miles from the data center, told CNN in May. “Something has failed drastically and significantly with our system of checks and balances.”

In January, amid wider community push back, xAI applied for a permit for 15 generators on site. Opponents have aerial imagery they say shows more than 30 generators appearing to be operational on site as late as April. Company officials have said they wouldn’t install pollution controls on any of the turbines until the permit was approved, which happened in early July.

The company maintained permits weren’t necessary to start because of an exemption for generators on site for less than a year, a rationale Shelby County’s Health Department agreed with. Wendi C. Thomas recently reported for ProPublica and MLK50: Justice Through Journalism on how the city’s Chamber of Commerce went to unusual lengths to promote xAI. Memphis’ mayor has backed and defended the project, saying the city will address pollution concerns with “independent environmental consultants” and “community benefit policies.” Tennessee’s governor has touted the opportunities the facility will bring to the city. The EPA was beginning to look into whether the exemption applied to xAI in October of last year; new EPA head Lee Zeldin recently met with the company.

Community members packed an April hearing on the permits, and state representatives for the area have questioned the mayor’s trust in xAI, especially as the company plans to set up a second data center in Memphis.

Environmental advocates have said that xAI needed permits because of the size of the generators and the scope of the pollution. In early April, the Southern Environmental Law Center estimated the turbines could produce, in a year, between 1,200 and 2,000 tons of nitrogen oxides, a smog-forming pollution associated with poor respiratory health in nearby areas, as well as the carcinogen formaldehyde.

The company’s generators are only a few miles from a historically Black neighborhood already considered a toxic air pollution hot spot because of more than a dozen polluting facilities nearby, including a steel plant, a refinery and power plant. The county has seen consistently low air quality and the highest rate of ER admission for asthma attacks in Tennessee. ProPublica’s air toxics map showed a cancer risk hot spot four times the national average nearby before xAI moved in.

Regulations and permitting are in place because unchecked pollution can have wide-ranging impacts on a nearby community, regardless of industry, said Jennifer Duggan, executive director at the Environmental Integrity Project, a watchdog nonprofit. “The environmental laws on the books are designed to protect public health and our natural resources. If there is no enforcement, when there are violations of those laws, then there is no protection from industrial pollution for those communities.”

While the impact to a community depends on the industry in question, as well as length and seriousness of the pollution, Duggan said, it can mean increased risk of premature mortality, higher health care costs, lost school days, lost productivity for workers, birth defects and even psychological trauma.

Permits generally require facilities to operate safely and install pollution controls, Duggan said. If those controls are not installed — or turned off — “then you’ve got more pollution in the air than the law allows,” which puts people at risk.

The company did not respond to ProPublica’s request for comment.

SpaceX

While SpaceX regularly launches its Falcon rockets to deliver satellites and astronauts into orbit, Musk’s ultimate goal for the company is much further afield. Starship, SpaceX’s giant combined reusable rocket and launch vehicle, is supposed to eventually help deliver humans and cargo to Mars, and it’s currently part of NASA’s effort to return astronauts to the moon.

But the program has already run into issues here on Earth, including violations of clean water regulations during launch tests and a cross-border investigation into falling debris.

Starship’s launch pad is along the Texas coastline, less than 5 miles from the Mexico border, surrounded by a state park and a national wildlife refuge established to protect the biodiversity of the lower Rio Grande River. Among the animals in this refuge are fragile shorebird populations. When asked about Starship tests in 2018, Musk said at the Texas site “we’ve got a lot of land with nobody around, and so if it blows up, it’s cool,” a comment that angered the residents of a nearby village.

The first Starship launch vaporized part of the launch site and threw debris as far as 6 miles. Then the EPA and Texas Commission on Environmental Quality said Starship launches in 2023 and 2024 violated the Clean Water Act for discharging untreated industrial wastewater. SpaceX applied for a wastewater permit in July 2024 and later said it “fundamentally” disagreed with the allegations from regulators but settled for about $150,000 to “focus our energy on completing the missions.” In February of this year, state regulators granted SpaceX a permit.

Starship’s fast-moving schedule has suffered setbacks this year, with explosions during three launches or tests so far. Mexico has threatened to sue over debris and potential environmental contamination crossing over the border. SpaceX said in response there were “no hazards to the surrounding area.”

But the Federal Aviation Administration recently approved SpaceX for up to 25 Starship launches a year, and the Trump administration has signed an executive order announcing attempts to “eliminate or expedite” environmental review of rocket launches by the FAA, ProPublica’s Heather Vogell and Topher Sanders reported.

SpaceX did not respond to ProPublica’s request for comment.

Tesla

While the popularity of electric vehicles like Tesla in California has led to a notable decline in carbon pollution from cars there, the company’s factory in the state has been repeatedly admonished for releasing toxic air pollution and other toxic chemicals into the surrounding community. Tesla’s Bay Area facility has received more air quality warnings in the past five years than all other companies in California, save one: a Chevron refinery, according to reporting by The Wall Street Journal.

By 2022, the company had been fined by both the local air quality district over health concerns and the EPA for breaking federal air quality laws. In June 2024, the district ordered Tesla to correct ongoing violations of toxic air pollution coming from the factory’s paint shops, allegations the company denied. The company is currently in the process of implementing an abatement plan, according to a spokesperson for the Bay Area Air District.

Separately, dozens of California counties sued Tesla in 2024 over claims of illegally dumping hazardous waste produced at its facility and local service centers. The company settled the lawsuit for $1.5 million, not admitting to wrongdoing but agreeing to five years of mandatory training and independent waste audits.

Musk had already moved Tesla’s headquarters to Texas in 2021, in part over complaints about California regulatory culture. But, as the Journal reported in November 2024, Texas regulators have also cited the company for actions at Tesla’s giant Gigafactory just outside of Austin, including for dumping untreated wastewater, releasing pollution in excess of its permit and then not reporting it.

A former Texas employee sent a whistleblower memo to the EPA in 2024 accusing the company of asking staff to lie to government regulators, the Journal reported, including creating an “elaborate ruse” during an inspection to make sure a troubled furnace passed an emissions test. Both the EPA and Texas environmental regulators opened a “preliminary inquiry” related to the memo in November 2024, according to the Journal. The EPA did not respond to ProPublica’s question about the status of the inquiry and pointed us to the TCEQ. A TCEQ spokesperson said it could not comment “to support the integrity of all criminal investigations conducted by TCEQ.”

Tesla did not respond to the Journal’s request for comment. But a day after the story was published, Musk reposted an X user who mentioned the Journal story, adding the message: “Legacy media is a sewage pipe of lies.”

Tesla did not respond to ProPublica’s request for comment.

The people affected by environmental violations are not just the nearby community, Duggan said, but the workers at polluting facilities as well. “They are really on the front line in certain industries,” she said.