Energy industry analysts have declared that the massive petrochemical complex proposed by Formosa Plastics in Louisiana’s St. James Parish is “financially unviable” due to market conditions, legal and regulatory uncertainty, and a groundswell of political opposition and accusations of environmental racism that are gaining international attention. Activists are eyeing a rare victory for environmental justice in the industrial corridor along the Mississippi River known as “Cancer Alley” for its concentration of polluters. However, the fight is not over yet.
The Institute for Energy Economics and Financial Analysis (IEEFA), a cleaner energy think tank funded by mainstream foundations, urged Formosa in a report this week to abandon its proposal to build a multibillion-dollar petrochemical complex in Cancer Alley. The complex would manufacture chemicals to make plastic products such as throwaway bottles and AstroTurf on the outskirts of Welcome, Louisiana, a small and majority-Black community where local activists have received international recognition for their campaign against the project.
Residents near the proposed site already live with more toxic air pollution than 99 percent of the United States, and if Formosa builds the sprawling petrochemical complex, cancer-causing emissions could double in St. James Parish and triple near Welcome.
The proposed complex “would cause Formosa to make the wrong products, at the wrong time, at the wrong price, in the wrong place, and with the wrong financial calculus,” said Tom Sanzillo, IEEFA director of financial analysis and co-author of the report, in a statement.
Formosa was lured to Louisiana by lucrative tax breaks and pro-industry politicians as the petrochemical industry rushed to build new plastics manufacturing plants and soak up a glut of fossil fuels created by the fracking boom. However, the company faces rising costs and stiff opposition from residents who have organized protests and worked with environmental groups to challenge Formosa’s permits in court.
Activists have drawn international attention to Cancer Alley, where industry has a long history of polluting and displacing low-income and Black communities. Sharon Lavigne, a Welcome resident and co-founder of RISE St. James, a faith-based environmental justice group opposing Formosa, has testified before Congress and most recently the United Nations. Burial sites have been found on the former plantation grounds Formosa bought to build the complex, and members of community believe their ancestors were buried there after working the plantation fields as slaves. Lavigne says the community wants a memorial erected to their ancestors, not a massive petrochemical plant nearby.
Last week, Democratic lawmakers in the House urged the Biden administration to revoke key permits for the Formosa project, and President Biden recently mentioned Cancer Alley by name when issuing executive orders on climate change and pollution. At the United Nations, a panel of experts recently declared that environmental racism in Cancer Alley must come to an end.
“Formosa is goliath, RISE St. James is David,” Lavigne said on Facebook Live after testifying before a UN environmental justice panel on Thursday. “David is going to win this fight.”
Meanwhile, the market for Formosa’s products looks much smaller than it did when the company first arrived in St. James a few years ago, according to IEEFA. The petrochemical industry is rapidly expanding its capacity to manufacture plastics from fossil fuels, especially in China, which could diminish demand for exports from the U.S. Globally, economies may not recover fast enough from the COVID-19 pandemic to create enough demand for the basic chemicals to make plastics that would be manufactured by Formosa in Louisiana. Long-term demand for “virgin plastics” is also expected to drop as recycling and bans on single-use plastics become more widespread.
The cost of building the complex is also growing, putting a dent in any future profits for Formosa. The estimated cost of construction has jumped by about 24 percent from $9.7 billion to $12 billion and could rise even higher with prices for raw materials like copper and steel, according to the report. Meanwhile, IEEFA estimates the complex’s annual revenues would be roughly $2.5 billion, about 20 percent lower than predicted by the company’s consultants in 2018.
Formosa says construction of the project — dubbed the Sunshine Project for its proximity to the Sunshine Bridge — has been delayed by the COVID-19 pandemic, which has made it difficult for the company to evaluate construction costs before moving forward. The legal challenges have also contributed to the delay, according to a statement emailed to Truthout by FG LA, the division of Formosa Plastics operating in Louisiana.
Thanks to activists’ efforts, key permits for the project are held up in court, creating further uncertainty around the project. Last year, a state judge ordered state regulators back to the drawing board and the Army Corps of Engineers suspended a crucial permit after environmental attorneys argued the agencies failed to fully consider how pollution from the complex would impact an already overburdened majority-Black community. Meanwhile, the Biden administration is coming under increasing pressure to address environmental racism and curb production of throwaway plastics that choke oceans and pile up in landfills and communities.
Formosa is on the rocks in St. James Parish, but the company has not pulled out yet. The company says it has “deferred major construction” until after the pandemic subsides or when vaccines become readily available. At this time last year, RISE St. James reported that the company had begun construction in violation of Louisiana’s COVID stay-at-home order, and construction quickly came to a halt, according to Lavigne. Despite the poor financial outlook published by IEEFA, a Formosa spokeswoman told Truthout that the company remains “committed to the project and continues to monitor all relevant factors closely.”
“We are watching them, every which way, and we will not allow them to come into St. James and destroy our lives and upset our way of living and pollute us even more,” Lavigne said.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.