Gulf Coast economies benefiting as chemicals rebound, trade group says

Chemical manufacturing in the United States is increasingly fueling well-paying jobs and growth in plant and pipeline construction, trends the industry would be wise to embrace and protect, the head of a Louisiana trade group said Tuesday.

Dan Borne, president of the Louisiana Chemical Association, gave attendees to the International Liquid Terminals Association Operating Conference & Trade Show a history lesson about what he described as an American revolution of chemical production.

“We have investment and reinvestment coming,” Borne said during the conference at the George R. Brown Convention Center in downtown Houston.

Rebound: Chemical industry surging on U.S. gas

Borne spoke mostly about the impact the chemical industry has on the economy in his state, but he also noted the impact in Texas and other Gulf Coast states.

In 2010, the total value of chemical shipments form Louisiana firms totaled $58.2 billion, ranking it No. 3 among the 50 states, virtually tied with No. 2 California. Texas was No. 1, at $157.1 billion, or 17.7 percent of the value of all U.S. shipments, Borne said.

Those numbers have translated into high employment among people looking to get into the industry. Borne said “if you can turn a crank and run a computer,” and you have the right training, you have a pretty good shot to get a job in the chemical industry.

And the jobs pay well, he said. The average weekly wage is $1,761 in Louisiana’s chemical manufacturing sector.

All the more reason for the industry to protect the advantages it has, Borne said.

Report: Abundant natural gas will keep price low

There has been a reversal in recent years in U.S. natural gas prices. Now that they are low, chemical manufacturers that use the resource to heat and power their plants and as feedstock to create products like paints and detergents have a significant cost advantage.

“Natural gas is like the flour that a baker uses,” Borne said.

The shale gas revolution of recent years could make for exciting times for the chemical industry.

“Deposits of shale gas here, there and everywhere,” Borne said. “They are finding more of it every day, everywhere in the country and the world.”

Because of that growth, competition has increased in the industry. Borne cited the impact of the Marcellus shale in the Northeast.

“The Pennsylvanians know they are sitting on a gold mine,” he said.

The Louisiana Chemical Association represents chemical manufacturers, vendors and suppliers in Louisiana.

 

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