Unprecedented Growth on the SWLA Horizon
2/25/2013 9:03:00 AM
"There’s no doubt that our region is in the beginning phase of a huge economic boom,” said George Swift, CEO and president of the Southwest Louisiana Economic Development Alliance.

The area has had big projects on the books, but Sasol’s December announcement of an integrated gas-to-liquids and ethane cracker complex made an already bright forecast look even better. In addition,last month, the Houston-based G2X Energy Inc.said it plans to construct a natural gas-to-gasoline facility on land here that is owned by the Port of Lake Charles. The next day, Magnolia LNG announced plans for a $2.2 billion export facility at the Port.

There were already some major expansions planned by Cheniere Energy and Sempra’s Cameron LNG to develop export terminals at their facilities.The Leucadia project would produce methanol from coke secured from the nearby refineries, and the Lake Charles Port is in the process of building its greenfield grain elevator. These are in addition to numerous other ventures companies across the region, including a new casino for the area.

The employment numbers that come with these undertakings are somewhat staggering. Sasol alone is expected to add 1,253 direct jobs paying an average annual salary of almost $88,000, and an additional 5,886 new, indirect jobs. Even before the Sasol announcement, the area was expected to gain over 5,000 jobs in 2013 and 2014, according to the Louisiana Economic Outlook produced by the Division of Economic Development at LSU.

That job outlook includes 1,500 permanent jobs that are expected to come with the opening of anew Lake Charles casino in mid-2014. The casino,originally a Dan Lee/Creative Casinos venture,was bought by Ameristar Casinos, but Pinnacle Entertainment has announced its intention to purchase Ameristar in December, and Ameristar has agreed to the acquisition. No date has been set by the Louisiana Gaming Control Board for a vote to approve the riverboat gambling license transfer from Ameristar to Pinnacle, and Pinnacle must obtain approvals for license transfers in other states where Ameristar operates its casinos.Ameristar is still in control of the project until the acquisition is completed, and construction is ongoing. The project means some 1,500 jobs during the construction phase.

According to R. B. Smith, vice president of workforce development for the Alliance, the potential from the industrial projects for the area can be likened to the development of the Calcasieu Ship Channel in the 1920s and the development of the petrochemical industry in the 1940s.

"There will be thousands of construction jobs and permanent jobs,” he said, indicating that the projects will impact businesses of all sizes, including retailers, restaurants, insurance, and car dealerships."Everyone will benefit. And we will have to prepare to take advantage of this immediate prosperity.”

The remarkable growth probabilities in the local economy can mean important things for individual communities. "We want to end up with quality communities throughout the region,” Smith said, "where people will want to live, where young people will want to stay. It’s about quality of life, not just jobs. It’s vital that we keep our young people here.

"Every day I talk to someone who bemoans the fact that their children or grandchildren don’t live here,” Smith continued. "These projects will bring thousands of well-paying jobs that local folks can benefit from.”

The work will mean a vast number of new jobs in Calcasieu Parish and in the surrounding areas,according to Smith, and there will be increased opportunities for the creation of new businesses."We’ve got a wide range of career opportunities here,” Smith said. Initially, there will be jobs in trades and crafts, such as welding, ironworkers and electricians. There will be additional support jobs in area of office work, human resources, accounting,and information technology. As the projects are finalized, companies will need operators, workers in process technology, and engineers. A new casinowill mean additional jobs in hospitality and culinary arts.

"Health care is still the largest employer in the region, and we will need more health care professionals,” he said. "We want to develop a cultural climate to help artists and chefs. Likewise,we want to expand our agricultural and forestry reach. It just runs the gamut of awaiting jobs.”

In recent years, Southwest Louisiana’s diversity has played a large part in its ability to have a fairly stable economy when other parts of the country were struggling. While the U.S. economy was weak,Louisiana was leading the nation in numbers such as job gains, and Southwest Louisiana was leading the state. The area’s natural resources, oil and gas industry, the port, the transportation network (rails,interstate, intercoastal waterway and aviation) all played a role in that, Swift said.

The success rate of existing industry has also been important. Sasol has a productive work force and great management, therefore the company chose to expand here, Swift said.Swift credited the Port of Lake Charles for its efforts in attracting industrial improvements to the area. They have the property, the ship channel, the means to assist companies, "but mainly they have the desire,” he said.

In addition, he said Calcasieu Parish and the surrounding areas are coming together as a region to work toward better opportunities for their communities, and it’s paying off. By the last quarter of 2013, much of the construction work will get under way, and it will really escalate in 2014and 2015. "We have finally learned that working together is better than trying to go it alone.”

Dr. Michael Kurth, professor of economics at McNeese State University, said the area won’t see much effect from the industrial expansions for the next year to a year and a half. "Southwest Louisiana experienced a huge economic boom in the late 1970s and from what I can tell, this is going to be bigger than that,” he said.

He expects the economic boom will peak in about three years, but will last about five years, or longer,depending on how business and civic leaders manage the growth. "When you build facilities, other industries will feed off of them,” he said. "High paying technical and professional jobs will be available for workers who get the right training.”

In addition to the Sasol project, there are about half a dozen major projects from Houston to Baton Rouge, Kurth said. Hydrofracking, an emerging method of retrieving oil and gas that once was locked in shale deposits, has been an important development for the chemical/petrochemical industries.

"The natural gas price is down to half of what it used to be, and we use a lot of it in these industries,”Kurth said. "The Gulf Coast is the cheapest place in the world to manufacture chemicals.”

With new oil and natural gas fields opening up near Haynesville, Louisiana, and the Bakken field that is spanning Montana, North Dakota, and western Canada, that oil and gas will be more accessible to the industries here. "The Bakken field has a huge amount of oil – virtually a sea of oil,” Kurth said. "But we have to be able to get that oil to our refineries.”

Environmental groups have delayed efforts to move crude from Alberta, Canada, to the Gulf Coast though the Keystone XL pipeline.

Like Swift, Kurth said major highways, the ocean port, Chennault, and rail are important for industrial development, but "pipelines are a huge transportation component and as far as industry goes, the most critical,” he added.

The petrochemical industry has a big spillover effect, and engineering companies, maintenance companies, and other businesses will spring up to support jobs at the plants. "We will see population growth, growth in school enrollment, and increased traffic,” he said. "We will have tremendous infrastructure needs on the other end of this,” he said. "Local government really has to be on its toes.We have to recognize that with these jobs comes a permanent increase in population. We have to build new schools, build new roads. We will have to anticipate growth, and not just respond.”
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