Methanex’s decision to relocate two methanol plants from Chile to Geismar demonstrates the advantages driving the industrial boom in south Louisiana: easy access to the Mississippi River, natural gas and large plots of land, as well as a major limitation, transportation, said Jessica Kemp, vice president of policy and advocacy at the Center for Planning Excellence.
“If you drive down River Road, you’ll see a dozen similar sites and you’ll notice they all have these great big parking lots for these thousands of workers,” Kemp told attendees at the Connect Boom Without Bust Policy Forum. “You’ll also notice there’s only one way in and one way out.”
About 100 people were on hand for the opening session.
The challenge for the state and southeast Louisiana in particular will be figuring out the best way to accommodate the coming industrial, business and residential growth and the resulting traffic, Kemp said. The goal is to create sustainable growth and avoid the bust that often follows a boom.
The most conservative estimates show $60 billion in major project investment in the state, with $21 billion in the Baton Rouge-to-New Orleans corridor. “We don’t see a lot of what’s coming yet, but right now, it’s like a big cannonball moving through a python,” said Dan Borne, president of the Louisiana Chemical Association.
After going through an oil boom and bust in the late 1970s and early 1980s, Louisiana “is getting a second bite at the apple,” thanks to cheap natural gas and the billions of dollars worth of petrochemical construction projects, said Stephen Waguespack, the head of the Louisiana Association of Business and Industry.
“If we do nothing, we’ll enjoy the next couple of years of growth,” he said. “We’ll grow no matter what we do today. But that will not put us on a cruise control for growth like Georgia and Florida have.”
Those states have consistent economic growth without the wild swings up and down Louisiana has experienced, he said.
Michael Songy, CEO of CSRS, a Baton Rouge engineering firm, said various groups are getting an idea of the size of the impending petrochemical boom and some planning steps are being taken.
“Industry will do something that will have a mutual benefit to themselves and the community,” he said. “The most gleaming example so far has to do with workforce development. That’s a huge issue and efforts are very far along.”
Kemp said there are already 76,000 commuters in the Baton Rouge-to-New Orleans “super region” and that number is expected to increase sharply. The area must figure out a way to get people from metro areas to the rural sites of these plants and accommodate potential workers who lack access to vehicles or reliable transit.
One way to do that is through planning outreach efforts that are more inclusive, including nontraditional sectors, such as social services, and establishing fiscal policies that support sustainable growth, she said.
Kemp said the boom will provide an opportunity to address the serious challenge of “entrenched poverty.” Creating mixed-use, dense developments can help by providing affordable housing and walkable communities that reduce traffic.
Fred Tombar, executive director of the Louisiana Housing Corp., said he would like to see residential developments that generate lasting value rather than “man camps” like the Federal Emergency Management Agency trailer parks that cropped up after Hurricane Katrina.
Anyone who drove past one questioned the long-term value of that spending, Tombar said. He said Louisiana Housing would like to avoid the sins of the past, so to speak.
North Dakota Rep. Vicky Steiner said her state has something of a love-hate relationship with crew camps that have sprung up around the oil drilling boom in the Bakken Shale.
The state loves that the workers are there but hates that they’re temporary residents.
North Dakota wants the oilfield workers to become permanent residents and not treat the state as an outpost where they work for two weeks out of the month, she said.
Steiner said many of the issues with the camps can be prevented by planning and zoning ahead of time.
The oil wells are located in rural counties. One county didn’t have zoning in place and saw haphazard placement of crew camps and RV camps. Another county had zoning regulations and avoided many of those problems.
Steiner said public officials should remember they have the right to demand certain things of the camp developers.
Local governments can require the camps be secure and fenced; that shift changes take place at times that minimize traffic congestion; that workers be bused to the well sites; and that there be no guns, alcohol or girlfriends.
The camps haven’t been the source of many problems, Steiner said.
“Local people don’t feel unsafe because it’s out-of-state guys shooting out-of-state guys,” Steiner said, as audience members chuckled.
Earl Randall III, the New Orleans field office director for HUD, said effective planning on the front end can eliminate the possibility of a bust after the construction ends. Randall formerly was a disaster planning specialist with U.S. Housing and Urban Development department in New Orleans and New York. Disaster recovery tools deal with issues such as housing, economic development, workforce training and transportation — all of which need to be looked at with the current boom.
“These are amendable, which is a good thing about an action plan,” Randall said.
Randall urged Baton Rouge and New Orleans to continue to work together as a super region in dealing with the billions in new construction. That gives the area more clout with federal officials and the state’s congressional delegation. “You need to have all the stakeholders involved and with a seat at the table,” he said.
Conference speakers pointed to a number of infrastructure needs and cooperative efforts, including:
- Looking at the Baton Rouge-to-New Orleans corridor as one super region and not two competing metro areas. A GNO Inc. study shows New Orleans doesn’t compete well in comparison with cities like Atlanta, said Kristin Gisleson Palmer, chairwoman of the Louisiana Super Region Rail Authority. But if the entire region works together — Baton Rouge, New Orleans and the surrounding parishes — it does well.
A light rail passenger line could be a boon to that effort, allowing commuters to live in one metro and work in the other, she said.
- Getting the New Orleans Regional Transit Authority and Jefferson Transit to work together more effectively. The New Orleans Regional Planning Commission is trying to find ways to better coordinate routes, eliminating overlap, and establish day passes so commuters don’t have to pay full fare on both systems, said Jason Sappington, a senior transportation planner.
- Obtaining good, up-to-date transportation data so that transportation models can include the types and numbers of jobs, as well as the impacts on air quality and emissions, Sappington said.
- Finding ways to better manage existing infrastructure. More and more this will become the responsibility of local and state governments, and the emphasis will be on finding low-cost solutions and improving efficiency rather than building new capacity, Sappington said. But local and state governments will still have to raise money for projects, and that will likely involve alternative financing, such as tax-increment financing and public-private partnerships.
Borne said the upcoming governor’s election “should be pitched on infrastructure” and that voters and industry groups should demand that candidates present transportation plans that set up goals and objectives.
- Rededicating taxes. Ascension Parish’s tax structure is outdated and isn’t designed to meet the rapidly expanding parish’s economic needs, President Tommy Martinez said. For example, the road maintenance millage generates $6 million a year, but the actual cost is $9 million.
Restructuring the taxes will require the School Board and Sheriff’s Office to give up tax revenue, which both have been reluctant to do. But it’s a topic that will have to be readdressed, Martinez said.