FROM: Jim Harris
TRANSITION WATCH…Gov.-elect Bobby Jindal announced over the holiday that Harold “Hal” Leggett will be his secretary of the Department of Environmental Quality (DEQ). Leggett is currently DEQ’s assistant secretary of environmental compliance. The 50-year-old Leggett has a bachelor of science in Agriculture and a master’s degree in Biology from Southeastern Louisiana University and a doctorate from the University of Southern Mississippi. Leggett, a Covington native, worked at DEQ as an environmental program specialist in the mid-1980s in the days after the agency was created. He left to form his own company, then later worked for a number of firms, including Georgia-Pacific Corp. In 2004, Leggett returned to DEQ when Gov. Kathleen Blanco’s administration sought him out for the assistant secretary’s job.
Gov.-elect Bobby Jindal also announced William Ankner, a former Rhode Island transportation director with experience in New York, New Jersey and with federal programs, will be the next secretary of the Louisiana Department of Transportation and Development (DOTD). Ankner, 60, of Dixon, Mo., has agreed to take one of the highest profile cabinet positions in the new administration, replacing Johnny Bradberry, who also applied for the job. Ankner currently runs a transportation consulting business. He was executive director of the Missouri Transportation Institute from 2004 to 2006. From 1996 to 2003, he was director of the Rhode Island Department of Transportation, where he helped draft federal legislation that increased the state's annual federal financing. He created a program to reduce pothole complaints and helped revamp an intermodal system in Providence.
Prior to that, he was the director of finance, management and budget for the Delaware Department of Transportation. From 1990 to 1993, Ankner served as director of policy, capital programming and authorities for the New Jersey Department of Transportation, managing a $1.5 billion capital program. In the 1980s he was a supervisor of corporate and strategic planning for the Port Authority of New York and New Jersey. He has advised programs for the federal highway department and has served as a panel member for the National Transportation Finance and Revenue Commission.
Gov.-elect Jindal announced Stephen Street as the state’s inspector general. Street is currently a criminal investigator in the state attorney general’s office. His office, by law, is allowed to operate as an independent investigative agency that answers only to the governor. Street has been a criminal division attorney with the Louisiana Department of Justice and chief of the Insurance Fraud Support Unit since 2000. During this time, Street has also worked as a legal advisor to the Louisiana State Police on insurance-fraud investigations. Street previously worked as a private-practice trial lawyer, specializing in criminal cases in state and federal court, from 1993 to 2000. Before that, he served in the East Baton Rouge Public Defender’s Office for four years. He has also served as a criminal-staff lawyer for the Third Circuit Court of Appeal in Lake Charles.
Gov.-elect Jindal named a congressional staffer as his director of coastal affairs. Garret Graves, 35, is a Baton Rouge native who works as a senior adviser for the U.S. Senate Committee on Commerce, Science and Transportation. His bosses include U.S. Sen. David Vitter, a Metairie Republican. He worked in Washington, D.C., for the past 13 years. In his new job, Graves will be responsible for overseeing coastal and hurricane protection policies. Graves will replace Sidney Coffee, Gov. Kathleen Blanco’s coastal affairs director. Coffee is taking a job with America’s Wetland Foundation.
Gov.-elect Jindal announced that Louisiana Department of Economic Development (LED) Assistant Sec. Donald Pierson Jr. will remain in that post. Incoming Economic Development Sec. Stephen Moret kept Pierson because of his on-the-job experience, Jindal said. Pierson has worked for LED since 2005. Before that, he was the executive director of the Greater Bossier Economic Development Foundation.
Barbara Goodson will serve as the Deputy Commissioner of Administration, according to Gov.-elect Jindal. Goodson will be the top aide to Jindal’s designated Commissioner of Administration Angele Davis. Goodson is from Baton Rouge and has been the division’s assistant commissioner of Management and Finance since 2005, overseeing state financial accounting issues, state payroll, and human resources.
The governor-elect also announced Mark Cooper as his selection to lead Louisiana’s emergency preparedness office. Cooper is an LSU graduate currently acting as a deputy chief at the Los Angeles County Fire Department, where he has been since 2003.
CAUCUS LEADERS…The Louisiana Republican Legislative Delegation just before Christmas elected its new leaders. Newly elected Sen. Danny Martiny, R-Kenner, and Rep. Jane Smith, R-Bossier, were elected by incoming legislators as co-chairs. Soon-to-be Speaker of the House Rep. Jim Tucker and term-limited Sen. Tom Schedler had served as co-chairs for the past several years.
The House Democratic Caucus announced its new leaders shortly after the New Year. Rep. Karen St. Germain, D-Pierre Part, was elected chairperson of the group. Rep. Michael Jackson, D-Baton Rouge, will serve as vice chairman.
IT’S SORT OF OFFICIAL…The Associated Press reported last Friday that Gov.-elect Jindal intends to call a special legislative session to spend a $1 billion state surplus — after his first planned special session for ethics law changes. Both special sessions will be held before the regular legislative session begins March 31, but Jindal said he won’t announce the dates for either special session until after he takes office Jan. 14. Jindal repeatedly had talked of his plans to hold the ethics-related special session, but he hadn’t yet confirmed intentions to hold the second special session, though there has been widespread speculation that he was considering one. He said that session would cover spending a more than $1 billion state surplus, but he added that he wanted to talk further about those plans with the Legislature’s leaders.
LEGISLATOR QUITS…State Rep. Mike Powell, R-Shreveport, has resigned on the eve of his second term. Powell said he needs to spend more time with his family. He was the subject of a campaign finance complaint during the fall elections but said he's unaware of action on that complaint, saying the complaint has nothing to do with his resignation. He said he has no plans to run for the U.S. House seat held by Jim McCrery, R-Shreveport. Powell was elected to the state District 6 seat in 2003 and drew no opposition this year. Before that, he served nine years on the Caddo School Board.
At least three candidates, all Republicans, appear ready to qualify for the special election to replace Powell that will be held February 9. Royal Alexander, who lost the state attorney general’s race but carried the House district with 62 percent of the vote, plans to run. Barrow Peacock ran a close third in the state Senate race won by Buddy Shaw. Former Councilman Thomas Carmody is the surprise entrant in the race. Carmody passed on running for mayor and state Senate and was thought to have retired from politics.
CONGRESSIONAL RACES…St. Tammany Parish President Kevin Davis, considered one of the strongest potential candidates for the 1st Congressional District seat that Bobby Jindal is vacating, said this past weekend he will not enter the race. His decision leaves five Republican candidates. Davis' announcement leaves state Rep. Tim Burns of Mandeville, Slidell Mayor Ben Morris and former Gov. Dave Treen of Mandeville -- all Republicans -- as the announced contenders on the north shore of a conservative district split in half by Lake Pontchartrain. On the south shore, state Rep. Steve Scalise of Jefferson and Jefferson Parish Councilman John Young are the two Republicans who have launched their campaigns.
Gilda Reed of Metairie, a psychology instructor at the University of New Orleans, so far is the only Democrat in the race in a district where the Republican primary is expected to decide the ultimate outcome. Republicans have held the seat for three decades. Jindal leaves the U.S. House on Jan. 14, the day he is inaugurated as governor. Jindal’s successor will be chosen in an election cycle that begins March 8 with closed party primaries, Louisiana's first in more than 30 years for congressional balloting. Party runoffs are scheduled for April 5. The general election will be May 3, or April 5 if neither major party needs a runoff.
According to a poll taken by Public Opinion Strategies of 300 likely voters in the Republican primary, Scalise leads the field with 29 percent of the vote, Morris with 16 percent, Young at 14 percent, and Burns with 9 percent.
Meanwhile, Sixth Congressional District Rep. Richard Baker, R-Baton Rouge, said last week he may resign from Congress within a month to take the top job at a national hedge fund association. The Baton Rouge Republican — who, with 21 years seniority, is the dean of the state’s congressional delegation — filed the necessary paperwork Friday with the House clerk’s office to allow him to talk with the Managed Funds Association. A longtime member of the House Financial Services Committee, Baker said late Friday he expects to make a decision about the job before the House returns from its holiday recess on Jan. 15. He will meet with association leaders next week to get the specifics on the post.
A Baker resignation would further cripple Louisiana’s clout in Washington. McCrery announced last month he was leaving the House after 19 years. In 2004, U.S. Sen. John Breaux, D-La., resigned after 28 years and former U.S. Rep. Billy Tauzin, R-Chackbay, stepped down after 24 years. The state’s only other longstanding congressional member is U.S. Rep. William Jefferson, D-New Orleans, who has pleaded innocent to federal public corruption charges and goes on trial next month. If convicted, Jefferson’s absence would wipe out another 20 years of service. The state’s senior member would be U.S. Sen. Mary Landrieu, D-La., who first won election to the Senate 11 years ago. Landrieu is expected to face a tough re-election bid this year. Candidates are already emerging for Baker’s seat. State Rep. Michael Jackson, D-Baton Rouge, said he is strongly considering becoming a candidate. State Rep. Don Cazayoux, D-New Roads, is also looking at the position.
Meanwhile, U.S. Rep. Jim McCrery's, R-Shreveport, decision to retire from Congress at the end of the year has touched off a stampede of interest in his congressional seat. Republicans considering running include Caddo Parish Sheriff Steve Prator, Shreveport businessman Jerry Jones and restaurateur Chester Kelley, who unsuccessfully sought the seat in 2006. In addition, Chris Gorman, an executive with Tango Transport, a trucking company owned by his family, has formed an exploratory committee. Democrats who want the job include former Shreveport Mayor Keith Hightower and former Caddo Parish Police Juror Jim Crowley. The 4th District borders Texas and runs from Beauregard Parish north to Arkansas.
NEW CHIEF OF STAFF…U.S. Rep. Charlie Melancon, D-Napoleonville, recently announced he has a new chief of staff in Joe Bonfiglio. Bonfiglio replaces former staff chief Casey O’Shea, who has taken the job of national field director for the Democratic Congressional Campaign Committee. Bonfiglio previously served as press secretary for U.S. Sen. Herb Kohl, D-Wisconsin.
ETHICS CHARGES…Former state Insurance Commissioner Robert Wooley and four other officials face state ethics charges for going on hunting and fishing trips as the guests of a private insurance consultant. The consultant, Chris Faser III, of Baton Rouge, also was accused of violating the ethics code. All six face fines if found guilty of the allegations by the Louisiana Board of Ethics. The complaints were released last Wednesday. The board filed five charges against Faser.
Wooley designated Faser to represent him on the Louisiana Citizens Property Insurance Corp. and on the board of the Property Insurance Association of Louisiana (PIAL). Citizens is the state-guaranteed insurer of last resort. PIAL is an association of insurance companies that was managed by Citizens.
In addition to Faser and Wooley, the Ethics Board also charged Deputy Insurance Commissioner Chad Brown, Faser, former Insurance Rating Commission members Steven Ruiz, of Mandeville, and Jabari Ragas, of New Orleans, and Kip Wall, former Office of Group Benefits chief executive officer. The ethics investigation and charges came after a Legislative Auditor’s Office audit of Citizens was released in May.
JOB STATS…The Baton Rouge Advocate recently reported on job figures in the state through November. The story provides a mixed message and points out that the difficulty in finding an adequate workforce. See enclosure.
CITGO…An appeals court over the holiday threw out the contempt of court finding and fine against CITGO in connection with the June 2006 oil spill. See enclosure.
MERCURY…The Louisiana Audubon Council wants the Jindal administration to continue and escalate DEQ’s mercury reduction program. The group is calling for elimination of the older-style mercury manometers used to measure the flow of gas through pipelines. See enclosure.
PETROCHEMICAL EXPANSION…The Greater Baton Rouge Business Report carried a story on industry investment upcoming in the Baton Rouge area. See enclosure.
MOVING IN/MOVING OUT… Slightly more people moved into Louisiana than moved out in 2007, reversing a three-year trend, according to a new study. United Van Lines' 31st annual "migration" study tracks where its customers, over the last 12 months, moved from and the most popular destinations. There were 4,496 shipments in Louisiana in 2007, with 2,252 (50.1 percent) being inbound and 2,244 (49.9 percent) being outbound, the study shows.
MORE LATER…
Enclosure #1
The Advocate • Baton Rouge, LA • December 28, 2007
State still in labor crunch
By GARY PERILLOUX
Advocate business writer
Published: Dec 28, 2007 - Page: 1D
On the job front, Louisiana remains a poster child for doing more with less.
Based on November estimates released Thursday by the state Department of Labor, Louisiana has 95,000 fewer people in its labor force — those working or looking for work — than it did two years ago.
Yet Louisiana has 69,000 more people working than it did in November 2005, shortly after the state’s economy hit a post-hurricane bottom.
It’s a consequence of having one of the nation’s tightest job markets, created by an out-migration of residents after the 2005 hurricanes and growing demand in sectors like construction, wholesale and retail trade, and oil and gas exploration.
The labor crunch will continue until Louisiana attracts more former residents and new residents, something that appeared to be happening in U.S. Census Bureau numbers released this week.
For the year ending July 1, the Census Bureau estimated Louisiana had a net migration of 29,000 people into the state.
“There are some more people coming back,” said Patty Lopez, who manages labor market information for the state’s Labor Department. “And I think one of the things that’s helping is some of the money that is letting employers rebuild and letting existing employers diversify and hire additional staff members.”
At the same time that employers are struggling to find workers, the current labor market means more opportunities for employees to find better-paying jobs, Lopez said.
“When you have more competition for workers, people can more easily find a job at a salary range that is competitive,” she said. “And that’s good for our graduates who want to stay in the state.”
Compared with employment two years ago, Baton Rouge, Houma and Lafayette continue to be the biggest beneficiaries of a changed labor market.
Greater New Orleans — though it has picked up 15,000 jobs in the past year — remains about 94,000 below July 2005 employment.
Meanwhile, Baton Rouge has added 26,000 jobs in two years for a 7.5 percent gain. Lafayette, with an additional 12,000 jobs, has experienced a nearly 9 percent increase, and Houma’s gain of nearly 11,000 jobs in two years represents the biggest percentage gain for a metro area at 12.6 percent.
Earlier this week, New Orleans-based GCR & Associates estimated New Orleans had repopulated to about 300,000 people, or two-thirds of its pre-Katrina population.
GCR chief executive Greg Rigamer told The Associated Press that people have been returning to the city recently at the rate of about 3,000 to 4,000 a month.
State labor data, however, show a more modest gain in jobs. In November, New Orleans gained 1,600 jobs, roughly the same monthly rate it has seen in the past year.
Baton Rouge and Lake Charles each gained 700 jobs in November while Shreveport added 600 jobs.
For the year ending in November, the government sector led Louisiana job growth with 12,000 new jobs. But government employment of 365,000 remains about 22,000 below its level three years ago.
State government now employs 120,000, down about 1,500 from November 2004.
And local government jobs — the biggest part of the sector at 214,000 — are down 15,000 from three years ago, Lopez said.
To show how dramatic the shift in Louisiana employment has been in the past three years, construction employment has grown by 22,000 jobs while total government jobs dropped by about the same number.
Natural resources and mining are up about 6,000 jobs — or 14 percent — during the same period.
And nowhere is the change more evident than in the labor force. In November 2005, Louisiana’s post-Katrina seasonally adjusted unemployment rate topped the nation at 11.4 percent. Two years later, the state’s 3.5 percent jobless rate is lower than all but a handful of Mid-western states.
About 71,000 people in Louisiana’s labor force are now unemployed, a far cry from the hurricane-aided figure of 228,000 two years ago.
“Back then the predominant number of people who were unemployed were collecting unemployment,” Lopez said. “That’s why you saw a six-digit number for the number of people that were unemployed.”
Enclosure #2
American Press • Lake Charles, LA • January 4, 2008
Citgo’s contempt ruling tossed out
January 4, 2008
Lake Charles American Press
BY VINCENT LUPO
The 3rd Circuit Court of Appeal has thrown out a contempt of court finding and a $50,000 fine imposed on Citgo in November by Judge Wilford Carter.
Carter imposed the fine and the contempt finding for Citgo’s alleged failure to comply with his order to produce the names of possible witnesses in suits stemming from a major oil spill.
Carter also threatened Citgo with further fines of $10,000 for each additional day the company did not comply with his order and said two company attorneys could be jailed if they didn’t appear Nov. 27 for their own contempt hearing.
That deadline was thrown out, however, when the 3rd Circuit stopped all proceedings until the court had time to consider Citgo’s appeal of Carter’s ruling.
On Thursday, the 3rd Circuit acted on that appeal and threw out Carter’s contempt finding.
The three-judge appeals court panel said Citgo was ordered, on two occasions, to provide “one or more” people of its choice to appear for questioning under oath.
“Citgo designated and provided such persons in compliance with these orders,” the 3rd Circuit said.
The plaintiffs’ notice or renotice of deposition did not demand that any specific people be questioned, and neither were any such people listed or mentioned in the orders of the trial court regarding the notices, the 3rd Circuit said.
Further, no additional notices for deposition of these other people have been made by the plaintiffs and there are, therefore, “no grounds for prospectively holding attorneys Kevin Stockstill, Jeff Bednar or (Citgo) in contempt for failure to so provide such names,” the appeals court said.
The 3rd Circuit, therefore, threw out the contempt citation and fine against Citgo and set aside Carter’s order compelling the specific attorneys to provide their clients’ names.
The list of witnesses is being sought by plaintiffs in lawsuits stemming from a massive oil spill in 2006 that shut down the Calcasieu Ship Channel.
The contempt hearing last November revealed that subpoenas have been issued in connection with a federal grand jury investigation into the spill.
During a prior hearing, Carter denied a protective order sought by Citgo to keep from disclosing the names of witnesses who may have some information about the oil spill.
Citgo said it was trying to protect witnesses who may be subjects of a federal grand jury probe of the incident.
Carter had ordered Citgo to provide the names. According to local attorney Tom Filo, whose law firm represents about 850 plaintiffs in suits against Citgo, the company only provided the names of two people, one of whom had given a deposition in the case.
Carter held the company in contempt and ordered its lawyers to provide by Nov. 20 the names of at least 25 people being sought for questioning by the plaintiffs or face additional fines.
Carter also ordered Citgo to pay $20,000 in plaintiffs’ attorney fees and $1,000 in expert witness fees for an economist who testified in November.
The judge had set a Nov. 27 contempt hearing against Stockstill, an attorney from Lafayette, as well as Houston lawyer Jeff Bednar, two of many lawyers representing Citgo.
The two men were to explain at that time why they did not comply with Carter’s order to identify the witnesses. If the men didn’t comply, Carter had said they would be arrested.
Apparently the reason Citgo hasn’t made the witnesses available up until now is because of a federal criminal investigation into the spill and the likelihood that those witnesses would invoke their Fifth Amendment right against self-incrimination.
The U.S. Department of Justice has reportedly begun an investigation into the June 19, 2006, spill. The department and Citgo have not publicly announced the investigation, but company lawyers have mentioned it in legal filings in a suit related to the oil spill.
In the protective order sought earlier, Citgo attorney Charles N. Harper of Lake Charles argued that Citgo employees can refuse to answer questions that the government could use against them in its investigation.
“The Department of Justice is currently investigating whether any federal laws were violated in connection with the alleged release on June 19, 2006,” Harper’s motion said.
“Citgo and Citgo’s employees may become subjects of that investigation. Citgo employees with knowledge relevant to the alleged release are the most likely subjects of the government’s investigation.
“Citgo’s employees have a right to be represented by separate, conflict-free counsel in that investigation. They also have a right under the Fifth Amendment not to answer any questions, which could be used against them by the government. Such questions would include questions put to them in this civil matter,” Harper’s motion said.
The motion also said 226 lawsuits — with a total of 1,500 plaintiffs — have been filed against Citgo over the oil spill. Three class-action suits, with an undetermined number of plaintiffs, have also been filed, according to Harper’s motion.
Citgo has settled 1,367 claims for a total of $3.75 million, according to the document.
Citgo spokeswoman Shawn Trahan said last year that the company does not comment on ongoing litigation but will “continue to cooperate fully with any and all government agencies regarding the June 19, 2006, event.”
Citgo has said the spill was caused by heavy rains and probably was exacerbated by a series of equipment failures and other problems, including having too much oil stored in a pair of huge wastewater tanks that overflowed.
Citgo’s latest estimates are that 99,000 barrels were released from tanks into surrounding containment areas. Of that, 53,000 barrels escaped the dikes and spilled into the Indian Marais. About 25,000 barrels of that ended up in the Calcasieu River.
Filo said his law firm represents property owners and cleanup workers who may have been exposed to harmful substances.
Enclosure #3
The Advocate • Baton Rouge, LA • January 1, 2008
Groups want anti-mercury efforts increased
By AMY WOLD
Baton Rouge – The Advocate
Published: Jan 1, 2008 - Page: 1A
Louisiana now has some plans in place to reduce the amount of mercury fouling Louisiana’s waterways.
How well those plans work will depend on the administration of Gov.-elect Bobby Jindal, said Barry Kohl, president of the Louisiana Audubon Council.
And the administration’s top priority, he said, should be the elimination of the older-style mercury manometers used to measure the flow of gas through pipelines.
Although the effort to reduce mercury pollution has been slow, Kohl said, he’s encouraged by progress in the past few years.
Many of those improvements were implemented long before the state Department of Environmental Quality released its Mercury Risk Reduction Plan this summer, said Chris Piehler, DEQ primary author of the plan.
When it gets into water, mercury can change into methylmercury and get into the food chain. This compound can accumulate in fish that people eat and cause health problems with human nervous systems and kidneys, especially in children or fetuses.
Because of concerns about mercury contamination, there are currently 41 advisories on 95 water bodies in the state, warning people to limit how much fish they eat from those waters.
DEQ’s mercury-reduction plan is an effort to stop or reverse the trend that has more water bodies in the state listed under advisory every year.
The planning started in 2005 — before the department got neck deep in hurricane-response activities.
In the meantime, two of the state’s biggest industrial sources of mercury pollution — Pioneer in St. Gabriel and PPG Industries in Lake Charles — decided to change the manufacturing processes in their chlor-alkali plants to eliminate the need to use or release mercury to the environment.
In 2004 those two plants released 2,500 pounds of mercury, about 52 percent of the total mercury released in the state that year, according to DEQ.
The next largest sources of mercury are the state’s four coal-fired power plants. Combined, these plants released about 1,600 pounds of mercury in 2004, according to DEQ.
Piehler notes that with the adoption of the 2006 federal Clean Air Mercury Rule, which limits the amount of mercury that can be released from coal-fired power plants, even if more coal plants are built in Louisiana, the amount of mercury released to the environment can’t increase past a certain amount.
Even though there has been some criticism the rule isn’t aggressive enough, Piehler said, the rule should help.
Also helping, he said, is a law the state adopted in 2006 giving DEQ the authority to regulate mercury-containing products and not just industrial mercury.
The Louisiana Mercury Risk Reduction Act means DEQ can now regulate what mercury-containing products can or cannot be sold in the state, he said. In addition, this means that when cars or appliances are recycled, they have to have their mercury switches removed before being processed, he said.
“At one time we thought that might be 400 to 500 pounds of mercury” just in those recycled switches, he said.
Another significant source of possible mercury contamination in the state are the mercury manometers used to measure the flow of gas through pipelines, primarily in north Louisiana, Piehler said.
Currently, the department’s program that helps companies find and clean up legacy and current mercury-containing manometers has been strictly voluntary and company driven, he said. Companies interested in cleaning up sites come to DEQ for help rather than the other way around, but those “volunteers” aren’t coming in much anymore, Piehler said.
As a result, DEQ staff is starting to locate companies that have or still operate the mercury-containing meters and invite them to participate in the voluntary cleanup program.
“We really want to be more aggressive with that,” he said.
Companies have been switching to non-mercury meters for some time because they’re cheaper to operate and easier to maintain, but there are an estimated 20,000 to 50,000 sites in the state where mercury meters are either still used or were used at one time, according to DEQ’s report.
“That should be a top priority issue with this new administration,” Kohl said.
Each of these meters can contain seven pounds of mercury.
DEQ estimates that releases from these meters during the last century could account for as much as 20 tons of mercury in the environment, according to the department’s mercury report.
Enclosure #4
Greater Baton Rouge Business Report • December 31, 2007
Building boom
Greater Baton Rouge Business Report
By Anna Thibodeaux
December 31, 2007
When Dow Chemical announced last month that it was planning a $19 billion global venture, it reaffirmed that growth of the area’s petrochemical industry represents stronger positioning in U.S. and world markets.
For the Capital Region, it represents an economic windfall from new construction and job growth with billions committed to upgrades, expansions and new facilities at a time when the nation is shuddering with economic worries.
Dow Chemical plans to sell 50% interest in five of its global businesses for $9.5 billion to Petrochemical Industries Co., a subsidiary of state-owned Kuwait Petroleum Corp.
The agreement, pending definitive agreements and regulatory approvals expected late this year, would form a U.S.-based joint venture company to make and market polyethylene, polypropylene (both plastics used in food packaging or milk jugs), polycarbonate (thermoplastic used in optical media or lighting), ethylenamines and ethanolamines (both are widely used in treating wood, pharmaceutical processing and coatings).
“We’re creating a petrochemicals company that will be a global leader from its first day of operation, an $11 billion company,” Dow chairman and CEO Andrew Liveris says.
The venture would affect Dow’s plants in Plaquemine and Hahnville. It will employ 5,000 people worldwide with most of its current employees making up that total.
In his 2008-09 forecast, economist Loren Scott highlighted billions of dollars worth of construction projects expected to create more than 14,000 jobs in the region in the next two years.
ExxonMobil, for example, apparently plans to add a refinery to produce lower-sulfur diesel at its Baton Rouge facility, according to Mayor-President Kip Holden’s message in his 2008 annual operating budget. Although the company is not prepared to detail the deal, the investment could exceed $350 million.
“We have counted $45 billion in construction projects in the area, by far a record number for the region,” Scott says. While other parts of the country struggle economically, the Capital Region is experiencing growth in part from its expanding petrochemical industry.
“First of all, this is where our markets are—in the U.S. and Canada,” says area Plant Manager David Wise of Texas-based Shintech, which initiated a $1 billion PVC manufacturing complex in mid-2005 just south of Plaquemine. “But more importantly, Shintech places a high priority on political stability. We’re in a democracy. We know if we build a facility, it will remain in our possession as long as we want it so.”
Appreciation for political stability apparently enabled Shintech, a subsidiary of Japan-based Shin-Etsu Chemical Co., to announce a second $900 million phase for the not-yet-completed PVC complex. When the facility starts up early next year, it will provide 200 full- time jobs with an annual payroll of $7 million. When the second phase is completed by early 2009, total employment will rise to 300 jobs.
“The area offers all the elements we needed—a source of raw materials, good transportation infrastructure, including that wonderful Mississippi River, and an industrial infrastructure such as machine houses,” Wise says. “And quite frankly, one of the big determining factors is we’ve been able to find a good, dedicated work force capable of construction and operating our facilities.”
Shintech anticipates 3% to 5% market increase for PVC, which is driving its plant expansions.
Placid Refining Co. in Port Allen recently increased its upgrade from $200 million to $300 million and is already in full construction mode. More than 100 workers are on site, a figure expected to grow to 250 soon and peak at 1,600.
“No new refineries have been built in over 30 years in this country and prospects do not appear promising for that trend to change,” Refinery Manager Joey Hagmann says. Placid sees ample opportunities in this environment.”
Placid buys domestic crude oil from Louisiana and produces transportation fuels, which are distributed across the Southwest U.S. It also produces military jet fuel for U.S. military defenses. Once completed by 2010, the expansion will create 20 to 25 full-time jobs.
Anticipating continued growth in the vinyl market, PVC manufacturer Formosa Plastics Corp. on Gulf States Road has started its $100 million expansion. Startup is anticipated by early 2009. Construction will create about 300 jobs but no new permanent jobs.
Company spokesman Steve Rice says PVC decking and fencing are also anticipated big markets for Formosa’s resin. Additionally, the company has new polyfins products for the appliance and auto industries, as well as caustic soda, which it also supplies, finding its way into new products and industries.
“Despite offshore jobs, Formosa is very devoted to the U.S. business and we’re putting about a $1 billion capital plan (new plants, expands and core infrastructure upgrades) into our U.S. sites,” Rice says. The local expansion will be finished by late 2008. “We’re here, and we’re putting our stake in the ground. We see it as a long-term market.”
Offering advantages like site materials, transportation, barge traffic and natural gas supply, Rice says Baton Rouge was an easy choice for one of their plants.
Pioneer Chlor Alkali Co.’s new owner, Missouri-based Olin Corp., is proceeding with a $142 million expansion in St. Gabriel, Plant Manager David Gasper says. U.S. and area customers were a driving force in keeping—and expanding—the facility. Until May, Texas-based Pioneer Companies owned the plant.
“We are focused on meeting the growing needs of our customers,” Gasper says. “The St. Gabriel facility provides a great location to provide our customers with quality products. We expect the market for our products in this region to remain strong in the coming years.”
Shaw Group’s Shaw Capital, representing several investors, has lined up capital for an ethanol plant with planned construction at the Port of Greater Baton Rouge, President Dan Shapiro and Vice President Bengt Jarlsjo say. While a contract is not in hand, the project is fully permitted with the U.S. Environmental Protection Agency.
An actual project estimate is not yet available although they say an ethanol plant typically costs $125 million to $150 million. Shapiro says they hope to finalize funding next year, with construction to begin shortly afterward and the plant completed in 18 to 24 months. Expected to employ up to 40 people, the facility will produce a projected 55 million gallons of ethanol a year.
“One or two years ago, we started to look at renewable energy and biofuels projects all over North America,” Jarlsjo says. Attention focused on Louisiana and, ultimately, Baton Rouge because it “is the crossroads of traditional energy and agriculture with the Mississippi River and deep water, and a tremendous amount of petroleum processing here.”
