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Planned Plastics Plant in Louisiana’s ‘Cancer Alley’ Fails to Pass Economic Muster

April 1, 2021
Reading time: 3 minutes

Secl/Wikimedia Commons

Secl/Wikimedia Commons

 

Yet another behemoth plastics complex planned for Louisiana’s infamous “Cancer Alley” is running into headwinds as a new report declares it economically unviable and suggests it be abandoned.

Adding to its woes: revoked air and water permits, and President Joe Biden’s stated commitment to environmental justice.

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There are more than 150 petrochemical plants currently poisoning air and water along a 140-kilometre stretch of the Mississippi River from New Orleans to Baton Rouge, with 12 of them crammed into the majority Black and low-income community of St. James Parish. There are no economic grounds for yet another one, writes Inside Climate News, citing new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).

In its 46-page report, IEEFA pans the prospects of the Taiwan-owned, nearly 100-hectare Formosa Plastics Group plant, citing a global glut of the petrochemicals it would be producing (in particular ethylene, a key plastic building block), as well as a long-term decline in demand for virgin plastics—a market force that would effectively eliminate the facility’s raison d’être.

IEEFA attributes the decline to a combination of increased recycling, the proliferation of single-use plastic bans, and advances in plastic production technology. 

It also flagged the Formosa project’s recently-downgraded credit rating from AA to AA-minus, in part driven by a whopping 24% rise in estimated construction costs, which have spiked from US$9.4 to $12 billion.

Speaking with Inside Climate, IEFFA director of financial analysis Tom Sanzillo cast Formosa’s poor economic prospects as part of a larger climate of economic stress for the industry, citing both the ongoing delays of the $5.7-billion, Thai-managed PTTGC America ethane cracker plant as it struggles to secure investors, and the poor prospects for Shell’s soon-to-be-finished plant near Pittsburgh.  

The Formosa facility (the company calls it “The Sunshine Project”) has also been getting serious pushback from environmental and environmental justice groups.  

“After a lawsuit filed by the Center for Biological Diversity, RISE St. James, Louisiana Bucket Brigade, and Healthy Gulf, the U.S. Army Corps of Engineers agreed last November to suspend a Clean Water Act permit it had issued to the company,” writes Inside Climate. Around the same time, a Louisiana district court judge “ordered the project’s air permit back to state environmental regulators for further analysis, ruling that its environmental justice analysis was inaccurate.”

And last week, Representatives Raúl M. Grijalva (D-Arizona), chair of the U.S. House Natural Resources Committee, and A. Donald McEachin (D-Virginia), co-authors of a groundbreaking environmental justice bill currently before Congress, explicitly called out the plant in a letter urging Biden to follow through on his pledge to be an environmental justice defender.

Providing devastating support to such a claim, writes Inside Climate, was a 2019 ProPublica analysis, which found that the proposed complex “could more than triple the level of cancer-causing chemicals that the residents of St. James are exposed to.”

Sharon Lavigne, an environmental justice advocate with RISE St. James, told Inside Climate the headway is giving her hope. 

“I feel like with all the people we have behind us, trying to fight this plant, I think the Biden administration is going to listen to us,” she said.

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in Asia, Climate & Society, Climate Impacts & Adaptation, Community Climate Finance, Demand & Distribution, Health & Safety, International Agencies & Studies, Jurisdictions, Legal & Regulatory, Petrochemicals & Plastics, United States

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