March 23, 2021 (IEEFA) ⎼ A report released today by the Institute for Energy Economics and Financial Analysis (IEEFA) details the financial, legal, social and public opposition risks of Taiwan-based Formosa Plastics Group’s proposed petrochemical complex in St. James Parish, Louisiana.
IEEFA finds that the project will begin operations at a time of market oversupply, lower petrochemical prices, strong competition for market share, restrictive trade policies, environmental regulatory challenges, judicial findings of historic racial discrimination, popular opposition, rising construction costs and a weakened bond rating. The report urges the cancellation of “this ill-advised project, which should be abandoned in light of its weak fundamentals.”
The multibillion-dollar petrochemical project has been criticized for perpetuating environmental racism in Louisiana because it would emit large amounts of toxic air contaminants in a community that already suffers from heavy industrial pollution and whose residents are predominantly Black.
Highlights from IEEFA’s report:
The project “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.
*While the District Court judge had remanded the case back to the state environmental agency to analyze the environmental justice issues, the First Circuit Court of Appeals recently overturned the District Court remand order on March 15 on procedural grounds and sent the case back to the District Court for further proceedings. The First Circuit did not rule on the merits of the issue itself. The plaintiffs are considering their options.
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. https://ieefa.org/
Aswar Rahman ([email protected])
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The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.