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Permalink Reply by Steve P on February 15, 2021 at 14:18

I have mixed views on the “environmental justice” concept.  I have one personal experience with it - back in the 80’s, a company was formed (Louisiana Energy Services) whose business was to take lightly enriched uranium and refine it into civilian nuclear grade uranium for fuel rods.  After a good deal of work, they selected a site in Claiborne Parish, outside of Homer.  The construction of the plant would have created a few hundred high-paying jobs, and once operations started, it would have created just less than 100 permanent jobs, paying in the $80K range.  this was in the late 1980’s.  For most residents within a 50 mile range, this was a god-send.  For those of you aren’t old enough, the late 80’s were really, really tough on Louisiana due to the flood of oil from the middle east that put much US domestic drilling out of business.  

However, an environmental group from Tulane Law School launched a campaign against the plant.  The basis, environmental justice.  Claiborne Parish has a large minority population (true) and the nuclear plant would have been a big polluter (false) and the assertion was that the site was selected due to the cheap land due to the presence of all of the minorities.  Actually, the land was no cheaper there than anywhere else in North Louisiana, and the % of minorities there wasn’t so different than anywhere else in N La., so, basically, the company ended up finding another location outside of Louisiana for their plant.

Who was the winner in that battle?  While the placement of landfills, prisons, etc. could and should consider environmental justice, the end result is frequently the loss of economic opportunity for the folks who need it most.

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Permalink Reply by Skip Peel - Mineral Consultant on February 15, 2021 at 14:34

Thanks, Steve.  The winner?  Is in the eye of the beholder.  The reason I chose this article to post is to highlight the fact that environmental justice concerns will be part of the review process for future policies and individual project reviews.  Just as the investment community writ large including major international banks now have a different set of criteria that informs their investment decisions, now so does the federal government.  Like it or loath it, it is the new reality.  One that every investor and stake holder must take into account.  It appears that many major corporations, including most recently major auto manufacturers - US and foreign and super major oil companies, are coming out with corporate statements that support and pledge to prioritize Environment, Social & corporate Governance (ESG).  Any active manager of investments, personal or corporate, will need to pay heed.  The 1980's were a long time ago...and the current realities are much different.  So are the stakes.

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Permalink Reply by Chad Ellis on February 15, 2021 at 16:07

This could be a very slippery slope.  Whose idea of environmental justice is correct?  I'm afraid of what may happen here if we continue to add arbitrary and political burdens to investment.  While it is true that a large portion of the Western business/political class are comfortable with the latest political trends, their competitors in China/India/Mexico/ect. are not.  They will readily take over the role that we relinquish.  Without the same environmental concerns.  As Steve addressed, is it better for an impoverished community to have the opportunity to work their way up in a well designed and operated plant, or to remain in poverty whilst that same plant helps a community in Whooville under less stringent regulations? 

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Permalink Reply by Skip Peel - Mineral Consultant on February 15, 2021 at 16:15

And the advantage to taking over a collapsing role is?  And, how many in the impoverished communities actually have a meaningful job in those plants?  If those "plants" were successful in pulling communities out of poverty, I think it would have been evident by now.

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Permalink Reply by Chad Ellis on February 16, 2021 at 4:04

By collapsing, do you mean driven out?  Yes, true market forces cause certain industry’s to become obsolete.  A good example is horse drawn buggies.  However, having politics drive business only destroys it in the politicians sphere.  If the demand is there, the supply will move to an accommodating sphere.  An example of this dynamic is West Shreveport.  Those razed and abandoned factories are not relics of an obsolete product, they are a testament to the mobility of business.  Ask the ex Gould Battery, GM, or GE employee if those plants provided a meaningful living?  Ask the Tax Assessor if it helped the community?  Ask Monterey, Mexico if they mind having the plants there now?

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2021 at 4:30

Chad, those Shreveport manufacturers whose business models collapsed were certainly good jobs but that fails as to my example.  The Homer/Claiborne Parish example you posited is a much closer parallel to the Lower Mississippi River Industrial Corridor plants where the majority of citizens do not work in the plants yet live daily with the problems they create.  Most of those employed in those Shreveport plants lived in the immediate neighborhood.  A Claiborne Parish plant would pull employees from a wide area while few in the immediate vicinity would qualify for the better paying jobs.

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Permalink Reply by Steve P on February 16, 2021 at 7:48

so, the Claiborne Parish is my example, and I disagree with your analysis.  Jobs begat jobs.  Loss of jobs leads to more loss of jobs.  New plants pay property taxes, which contribute to local schools and other programs. And they ultimately either prop up or expand the local economy.

Your example of chemical plants in South Louisiana is a good example of "jobs at a huge cost", but the problem there is that those plants are either old, or inadequately regulated.  Environmental Justice prevents the jobs from ever being created in some locations due to the presence of minorities or poverty.  I agree that we shouldn't place "dirty" operations in a location because it's in a "bad" neighborhood and the residents lack the resources to fight it.

But, back to my example of the uranium fuel rod plant, that was killed based upon, not actual data or examples of such plants being "dirty," but because the legal clinic was opposed to nuclear power.  That was an "elitist" answer to a problem that likely no one in Claiborne Parish cared about at all.

And, in my view, that's the bottom line problem with much of environmental justice - It's "elite" people hundreds or thousands of miles away stepping in and deciding what's best for those "poor ignorant locals" who can't be trusted to make their own decisions.

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2021 at 9:03

I think that blaming elites for everything has gone about as far as it will go with the majority of Americans.  Locals, however you may choose to describe them, should have a say and their welfare should be taken into consideration. 

With many manufacturing processes already automated, the number of jobs per facility has dropped, and will continue to do so, as the remaining jobs require higher technical expertise/education.  When projects brag about how much their new jobs will pay, they seldom define what skills/educational attainment are required to fill them.  When jobs in north LA get above the $50K/year range with decent benefits, the likelihood that a local will get one goes down.  And, yes, even a small number of jobs can benefit some community businesses that sell staples but the overall economic impact is almost always less than promised.

There are many areas of support that those rural communities need and have not gotten.  Start with educational opportunities and lack of broadband service and go right on down the list to crumbling infrastructure, that the increase in tax revenue will not change,  and out migration of younger generations.  We as a country have failed to invest in those communities and a new plant here and there will make little difference.

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Permalink Reply by Steve P on February 16, 2021 at 9:14

I rarely blame anything on "elites" but, in this case, IMO, the shoe fits.

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2021 at 9:26

But.....Steve, you are an elite.  Happy Mardi Gras!

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Permalink Reply by Steve P on February 16, 2021 at 10:50

Nope.  "Thank God I'm a Country Boy!"  :)

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