Shell's Convent facility. The cranes pictured were of construction of a Praxair facility being built on the Convent refinery's site in St. James Parish.

One of the big stories in Louisiana’s huge petrochemical industry last year was the mothballing of Shell’s Convent refinery, a loss of some 700 jobs and St. James Parish’s biggest taxpayer.

But as big as that loss was, it was coming for a while, even before the pandemic hammered demand for oil and gas products in 2020. So when experts pulled together by The Advocate and The Times-Picayune talked about the post-pandemic future of this big industry, it was the theme of competitiveness. Increasingly, individual plants within our petrochemical complex must compete within the Gulf Coast region, and within their own companies, for new investments for modernization or expansions.

It’s an issue that’s been growing for a while. A stand-alone refinery is less profitable than an integrated facility with a chemical production component, like Shell’s continuing big employment base at Norco.

In other words, trends before the pandemic became more pointed because of the dramatic impact of reduced travel and other effects on consumption of fuel and petrochemical products in general.

There may be a path toward growth late this year or early next. Still, “we have to be more competitive” in Louisiana, said Greg Bowser of the Louisiana Chemical Association, because “other states are going to be very very competitive” for the big plants that provide thousands of construction jobs as well as continuing employment.

Drilling is down, a particular concern in Acadiana and the bayou region of Houma, noted David Dismukes of the LSU Center for Energy Studies. America produced 13 million barrels of oil per day before the pandemic and is now down to 11 million.

That also means fewer jobs in Louisiana’s productive oilfield services companies.

For the future of the petrochemical sector, in particular, experts like Phillip May of Entergy and Don Pierson of Louisiana Economic Development said workforce training remains a long-term issue even as big employers struggle through to a new and hopefully much-improved normal.

Louisiana has many challenges in common with other states now because of the pandemic’s economic and social impacts. But because of our high level of employment and business impact of the petrochemical industry, the growth plans for the future ought to be considered carefully now.

The Legislature has seen a quickie fix of tax breaks thrown at various segments of the energy industry, and most of these are as half-baked as the rest of Louisiana’s old and inefficient tax code. We need an approach that stresses competitiveness across the board, including education and transportation.

As the Economic Outlook panelists said, competitive pressures are only going to increase.

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