When most people think of Louisiana, they think of music, laughter, and amazing cuisine. But, if you drive through the state, you’ll see its beautiful wetlands and hometowns interrupted again and again by the imposing and forbidding infrastructure of the petrochemical industry. These massive facilities are often marked by the noxious smell that precedes them or the bright flare from their operations that announce them.

The petrochemical industry has enjoyed Louisiana’s largesse—in the form of tax breaks and incentives—for decades, masquerading the relationship as a mutually beneficial partnership when it is really a predatory exploitation of the state’s land, people, and resources. And now, new research shows that the market for petrochemicals is deteriorating and dragging Louisianans down with it.

Researchers from the Institute for Energy Economics and Financial Analysis (IEEFA) released a paper in November 2024 that reveals the fallacies at the heart of the industry’s relationship with Louisiana and exposes the industry as a foolish investment and callous waste of taxpayer money that could be better spent improving the lives of Louisianans.

Not long ago, Louisiana had one of the strongest, fastest-growing economies in the country. In fact, just two decades ago, Louisiana was a leading state in the nation for economic growth. Concurrently, the oil and gas industry—of which the petrochemical industry is a part—accounted for 33 percent of the state’s GDP. Now, Louisiana is now 49th in the nation for GDP growth. The oil and gas industry, despite huge tax breaks and incentives, accounts for a mere 14 percent of that GDP. Furthermore, Louisiana’s credit rating has tanked. A recent report from Moody’s Ratings made it clear that the most important thing the state can do to improve its rating is to make efforts to bolster its GDP growth. The same report also makes the case that the clean energy transition offers new business opportunities that could do just that.

Even as the Louisiana economy becomes more and more dominated by service-oriented and white-collared jobs, the state continues to pour taxpayer money into the petrochemical industry. By analysing investment information for a representative sample of 30 projects covered by Louisiana’s industrial property tax program, which was established to reduce the property tax on industrial properties, the researchers found that the total state-level tax exemptions added up to more than $6.8 billion. Furthermore, Governor Landry has weakened the program and made it less beneficial for local Louisianans. For example, in 2024, he removed the job creation requirement from eligible projects, even though studies show that precious few of those jobs went to local residents anyway.

And this favored treatment isn’t only from the state government. In an unfortunate twist, Louisiana’s petrochemical facilities have benefited from tax credits and loan incentives under the Inflation Reduction Act. These benefits are allocated for technologies like carbon sequestration, clean hydrogen, and other clean industry financing, which are, on paper, meant to reduce greenhouse gas emissions. However, these are the same high-risk, unproven strategies that the industry often uses to greenwash and deflect from their incredibly carbon-intensive activities. IEEFA report found that several Louisiana projects were gearing up to take advantage of IRA benefits under the auspices of carbon capture and sequestration.

It is clear that the petrochemical industry, and the oil and gas industry as a whole, is a bad bet for the future. IEEFA examined the ethylene and methanol markets—bellwethers for the broader petrochemical industry—and found that they are oversupplied and under threat by the rise of clean energy and shifting geopolitics. For example, in 2022, the United States was the second largest exporter of ethylene, mostly selling to China and Belgium. But China has already cut its ethylene imports by 40 percent since 2018 and that trend is expected to continue.

Furthermore, around the world, concerns are growing about the very real threat of climate change and the role that industries like this one play in exacerbating it. Communities who live close to these facilities—usually low-income areas and communities of color—are sick of having their air, water, and soil poisoned. They’re tired of watching their children develop chronic respiratory illnesses before they’re out of elementary school and sitting at the bedsides of their loved ones stricken with cancer.

And they’re rising up. From Lake Charles to Saint James Parish, Louisianans are onto the petrochemicals lies and their fighting back in public hearings,  on the streets, and in the courtroom. Between their protests and the increasingly visible plastic waste crisis, people around the world are beginning to question the validity of this industry.

No one wants what the petrochemical industry is selling. So why is Louisiana still paying top dollar for it?

When most people think of Louisiana, they think of music, laughter, and amazing cuisine. But, if you drive through the state, you’ll see its beautiful wetlands and hometowns interrupted again and again by the imposing and forbidding infrastructure of the petrochemical industry. These massive facilities are often marked by the noxious smell that precedes them or the bright flare from their operations that announce them.

The petrochemical industry has enjoyed Louisiana’s largesse—in the form of tax breaks and incentives—for decades, masquerading the relationship as a mutually beneficial partnership when it is really a predatory exploitation of the state’s land, people, and resources. And now, new research shows that the market for petrochemicals is deteriorating and dragging Louisianans down with it.

Researchers from the Institute for Energy Economics and Financial Analysis (IEEFA) released a paper in November 2024 that reveals the fallacies at the heart of the industry’s relationship with Louisiana and exposes the industry as a foolish investment and callous waste of taxpayer money that could be better spent improving the lives of Louisianans.

Not long ago, Louisiana had one of the strongest, fastest-growing economies in the country. In fact, just two decades ago, Louisiana was a leading state in the nation for economic growth. Concurrently, the oil and gas industry—of which the petrochemical industry is a part—accounted for 33 percent of the state’s GDP. Now, Louisiana is now 49th in the nation for GDP growth. The oil and gas industry, despite huge tax breaks and incentives, accounts for a mere 14 percent of that GDP. Furthermore, Louisiana’s credit rating has tanked. A recent report from Moody’s Ratings made it clear that the most important thing the state can do to improve its rating is to make efforts to bolster its GDP growth. The same report also makes the case that the clean energy transition offers new business opportunities that could do just that.

Even as the Louisiana economy becomes more and more dominated by service-oriented and white-collared jobs, the state continues to pour taxpayer money into the petrochemical industry. By analysing investment information for a representative sample of 30 projects covered by Louisiana’s industrial property tax program, which was established to reduce the property tax on industrial properties, the researchers found that the total state-level tax exemptions added up to more than $6.8 billion. Furthermore, Governor Landry has weakened the program and made it less beneficial for local Louisianans. For example, in 2024, he removed the job creation requirement from eligible projects, even though studies show that precious few of those jobs went to local residents anyway.

And this favored treatment isn’t only from the state government. In an unfortunate twist, Louisiana’s petrochemical facilities have benefited from tax credits and loan incentives under the Inflation Reduction Act. These benefits are allocated for technologies like carbon sequestration, clean hydrogen, and other clean industry financing, which are, on paper, meant to reduce greenhouse gas emissions. However, these are the same high-risk, unproven strategies that the industry often uses to greenwash and deflect from their incredibly carbon-intensive activities. IEEFA report found that several Louisiana projects were gearing up to take advantage of IRA benefits under the auspices of carbon capture and sequestration.

It is clear that the petrochemical industry, and the oil and gas industry as a whole, is a bad bet for the future. IEEFA examined the ethylene and methanol markets—bellwethers for the broader petrochemical industry—and found that they are oversupplied and under threat by the rise of clean energy and shifting geopolitics. For example, in 2022, the United States was the second largest exporter of ethylene, mostly selling to China and Belgium. But China has already cut its ethylene imports by 40 percent since 2018 and that trend is expected to continue.

Furthermore, around the world, concerns are growing about the very real threat of climate change and the role that industries like this one play in exacerbating it. Communities who live close to these facilities—usually low-income areas and communities of color—are sick of having their air, water, and soil poisoned. They’re tired of watching their children develop chronic respiratory illnesses before they’re out of elementary school and sitting at the bedsides of their loved ones stricken with cancer.

And they’re rising up. From Lake Charles to Saint James Parish, Louisianans are onto the petrochemicals lies and their fighting back in public hearings,  on the streets, and in the courtroom. Between their protests and the increasingly visible plastic waste crisis, people around the world are beginning to question the validity of this industry.

No one wants what the petrochemical industry is selling. So why is Louisiana still paying top dollar for it?