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In Louisiana, Activists May Be Winning a Battle Against Environmental Racism

Analysts say the massive petrochemical complex proposed by Formosa Plastics is “financially unviable.”

Chemical plants and factories line the roads and suburbs of the area known as "Cancer Alley," as seen from above on October 15, 2013.

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.

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