Industry executive sees chemical expansion continuing

by bill lodge  blodge@theadvocate.com

Low natural gas prices have fueled rapid growth in Louisiana’s chemical production over the past six years and now points to large-scale expansion of that industry.

Dan Borné, longtime president of the Louisiana Chemical Association, told hundreds of Rotary Club members Wednesday that he hopes no potential roadblocks inhibit that massive expansion.

“We’re still on the precipice of a tremendous renaissance in the Louisiana chemical industry,” Borné said. He said the state’s chemical companies shipped $58.2 billion in products in 2010. That annual number increased to $67.5 billion in 2012.

Borné added he never again wants to see a period like 1999-2009, an era during which 10,000 chemical industry jobs and 500 companies were lost in Louisiana — “a long decade, a winter of discontent.”

Those days are gone, Borné said, because of low natural gas prices that have since sparked $20 billion in chemical industry growth in Louisiana. He said low-cost natural gas also enabled plans for $40 billion in additional ongoing or future chemical plant construction in the state. On Wednesday, Shintech added to the list, announcing a $1.4 billion expansion in Iberville Parish.

“We use natural gas like a bakery shop uses flour,” Borné emphasized. “That’s our daily bread.”

As for potential roadblocks, Borné said industries in Louisiana need good roads, bridges, port facilities and other infrastructure. He said the next governor and Legislature must make progress on regional infrastructure development.

A vibrant, competent workforce is necessary to build and operate manufacturing facilities, Borné said, adding that he is optimistic about the next generation of workers.

Louisiana has complied with the Environmental Protection Agency’s current ozone standard, but EPA officials now are considering an even tougher standard, Borné noted.

“That’s something we’re going to watch very carefully,” he said.

The price of 1 million British thermal units of natural gas should be seven times cheaper than the price of a barrel of crude oil for chemical companies to continue flourishing in Louisiana, Borné said.

In early 2014, oil was 25 times more expensive than natural gas, Borné noted. Today, he said, that ratio is 23 to 1. The current price of oil is about $59 per barrel, he said. The current price of natural gas is about $2.50 per million Btu.

So, thus far, the lower cost of oil is not threatening Louisiana’s chemical industry.

Borné said, however, it’s sometimes hard to predict what impacts increased oil and gas production in other countries could have on the chemical industry in this state.

So, when he visits Europe and runs across protesters against shale oil and gas drilling on that continent, Borne said he joins that group in the streets.

“No more shale!” he said he screams. “Shale, no!”

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