Only a few years ago, oil and gas development on land was played out, a thing of the past.
Now, with a revolution in drilling processes, there is a resurgence of onshore energy production, to the point that ingenuity and capitalism have turned around the economic fortunes of Louisiana’s petrochemical manufacturers.
“We’re still on the precipice of a tremendous renaissance in the Louisiana chemical industry,” says Dan Borné, longtime president of the Louisiana Chemical Association.
Borné reported to the Rotary Club of Baton Rouge on the enormous impact that low natural gas prices have had on the industry, which uses natural gas as a feedstock. Louisiana’s chemical companies shipped $58.2 billion in products in 2010. That annual number increased to $67.5 billion in 2012.
An estimated $40 billion in additional development, expansions or entirely new industries, such as exporters of liquified natural gas to Japan or Europe, are on the horizon.
If the Baton Rouge area is the epicenter of the energy enterprises, they are providing employment up and down the Mississippi River from the capital to metropolitan New Orleans, and in the Lake Charles area along the Calcasieu River.
We commend Borné for his unmistakable nudge at the unreliable Louisiana Legislature on the issue of meeting the transportation needs of this industrial boom.
He said the next governor and Legislature taking office in January must make progress on regional infrastructure development. Roads, bridges, rail — all are the kinds of investments that should be made now but have suffered because of several years of chronic budget deficits.
The oil and gas industries’ generous tax breaks have contributed to those state budget problems, unquestionably; some adjustments there are inevitable to provide the large amounts of taxpayer cash needed for improvements to transportation networks.
Louisiana’s challenges go beyond that, as the industries themselves might struggle if a new and higher standard for air quality is imposed by Washington. That’s an issue where the industry is on the defensive, as national laws focus on health first and are less forgiving on economic impacts.
We hope that energy and ingenuity will allow existing and new industries to operate more cleanly. We need the good jobs that Louisiana’s chemical manufacturers provide for the long haul, even as oil and natural gas prices fluctuate over time.