Formosa Plastics' plans for a massive $9.4 billion resin complex in Louisiana got a boost Jan. 19 when a state appeals court ruled that key permits could move ahead, overturning a lower court ruling that had blocked them.
The decision favoring the Sunshine Project in St. James Parish still requires a federal permit that local groups are contesting.
However, the decision does potentially clear some state hurdles for the project that will make polyethylene, polypropylene and ethylene glycol.
The case stems from a 2020 lawsuit filed by a coalition of environmental groups that had challenged the Louisiana Department of Environmental Quality's initial decision to grant 14 permits for the project next to what they said are predominantly Black communities.
A state district court judge had agreed with the environmental groups, halting the permits and ruling in September 2022. The lower court ruled that DEQ had been "arbitrary and capricious" in ignoring pollution concerns.
But the Louisiana Court of Appeal for the First Circuit overturned the lower court in a Jan. 19 decision, saying that the DEQ was within its discretion in how it balanced environmental, economic and social impacts.
"Although the substantive results and outcome of this balancing process may not be the plaintiffs' … preferred outcome, we find that DEQ reasonably exercised its discretion to determine the substantive results of this balancing process," the court said. "DEQ reasonably and within its vast discretion determined that any adverse environmental impacts were avoided and/or minimized as much as possible consistent with the public welfare."
Formosa said it welcomed the appellate court ruling in backing DEQ's 2020 permits.
"We strongly agree with the First Circuit's ruling," Formosa said. "We believe the permits issued ... are sound and the agency properly performed its duty to protect the environment in the issuance of those air permits."
"After a thorough analysis of FG's permit application, the LDEQ found the proposed project met all state and federal standards designed to protect the health and safety of FG employees, the St. James community and the environment with an added margin of safety," the company said. "FG has been, and will continue to be, transparent in providing information on the Sunshine Project, and intends to construct and operate it to meet all state and federal standards."
The environmental groups, however, said in a statement that they would continue to try to block the project.
"We are extremely disappointed with this court's decision. It allows LDEQ to continue its practice of green-lighting petrochemical plants, one after another, without stopping to assess the total impacts of cancer-causing pollutants on the communities nearby," said Corinne Van Dalen, senior attorney with Earthjustice, which represented local groups including Rise St. James and the Louisiana Bucket Brigade. "The fight is far from over."
The head of Rise St. James, Sharon Lavigne, had been in Washington Jan. 12, speaking at a rally in front of the White House and meeting with officials in President Joe Biden's administration to urge them to deny a key federal permit from the U.S. Army Corps of Engineers.
"Once again the state of Louisiana is putting polluters before people," Lavigne said. "We have a right to clean and healthy air, and we will keep fighting to make sure our communities are not sacrifice zones for industry."
Environmental groups said completing an environmental impact statement for the Army Corps permit could be a years-long process.
Earthjustice said the Formosa complex of 10 chemical plants over 2,400 acres would double or triple cancer-causing pollutants that residents are exposed to and would emit up to 13.6 million tons of greenhouse gases, the equivalent to annual emissions from 3 million gas-powered automobiles.
The lower court judge in Louisiana, Trudy White, had ruled in 2022 that Formosa's air modeling showed that the project would violate federal laws for particulate matter and nitrogen dioxide pollution and that the communities around the plant have more cancer-causing chemicals than 99 percent of industrial areas in the United States.
But the appellate court, in its 54-page decision, said LDEQ "is entitled to considerable deference in its conclusion that the social and economic benefits outweigh the environmental impact costs, and we cannot say that its analysis or conclusion in this regard was arbitrary and capricious or otherwise characterized by an abuse of discretion."
The appellate court pointed to DEQ findings that pollution levels went down in nearby communities, noting "dramatic declines in actual emissions of criteria pollutants and toxic air pollutants, as well as declines in permitted emissions of criteria pollutants."
The court said DEQ also looked at environmental justice implications.
"DEQ specifically conducted an environmental justice analysis, and in doing so, found that the permits did not allow for air quality impacts that could adversely affect human health and the environment and that those living in the vicinity of the proposed Formosa complex would not be adversely impacted," the court said. "There is ample documentation in the administrative record to support DEQ's conclusion."