10/12 Industry Report [Q2 2016] by Baton Rouge Business Report

SECOND QUARTER 2016

INDUSTRYREPORT

Christine George Vice President Air Liquide

WOMEN in industry Long underrepresented in manufacturing, today’s women are changing the face of the workforce at Louisiana plants.

PLUS:

• Outlook: Beyond 2017 • Q&A: LED head Don Pierson • Regulatory update

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

CONTENTS

Publisher: Rolfe McCollister, Jr.

WOMEN in industry Long underrepresented in manufacturing, today’s women are changing the face of the workforce at Louisiana plants.

EDITORIAL Editorial Director: Penny Font Editor: Jerry Martin Director-Online Operations: Brandi Simmons Director of Research: Sierra Crump Contributing Writers: Sam Barnes, Erin Z. Bass, Adrian Hirsch, David Jacobs, Meredith Whitten Contributing Photographers: Lee Celano, Terri Fensel, Cheryl Gerber, Don Kadair, Collin Richie ADVERTISING Special Projects Manager: Jennifer Finley Senior Account Executive: Stacy Kaklis Account Executives: J.C. Applewhite, Angie LaPorte, Michelle Lawrence Marketing Director: Jennifer Guillot Marketing/Special Events Coordinator: Christie Battaglia Advertising Coordinator: Lacie Thibodeaux Community Liaison: Jeanne McCollister McNeil PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Van Vu Graphic Designers: Tammi deGeneres, Melinda Gonzalez, Rachel Parker, Emily Witt

PAGE 30 Cover photo by Tim Mueller, above photo by Lee Celano

LAUNCH

ICYMI Industry briefs

16 18

New products

20 22

The big picture The Asian Vision left Cheniere Energy’s Sabine Pass plant, marking the beginning of the U.S. shale gas export era. Technology Five Louisiana-based oil and gas technology startups to watch now. Events Dredging and the oil and gas downturn led discussion at the Ports Association of Louisiana annual meeting. Design A look at the Alliance Safety Council Gonzales Training Center.

Update CRISIS identifies four priority projects for relieving Capital Region traffic congestion. People G.T. “Butch” Darce, Chairman & CEO of Taylor’s International Services

NEWS The green effect Our update on the latest environmental regulatory pushes includes a Q&A with new DEQ Sec. Chuck Carr Brown. Q&A: Don Pierson The new secretary of Louisiana Economic Development touches on outreach efforts, Certified Sites and the aviation industry.

Beyond 2017 What will the industrial boom look like in the long term? So much hinges on the price of oil … and China. Send in the drones Louisiana-grown LandBros is making a mark in the use of drones for industrial photography, safety, risk control and much more. Where the land meets the river With river frontage for industry dwindling, Ascension Parish eyes ways to maximize what’s left. A new start A condensed PTEC training program in southwest Louisiana helps working adults who already have degrees retrain for industry jobs.

71 72 76

Send your ideas and company news to editor@1012industryreport.com. 6

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

Protect your assets! What today’s manufacturers should know about patent law. Part 2 of 2.

INSIGHT Guest columnists weigh in on the burden of federal regulations, the outlook for oil prices and Louisiana’s workforce development challenge.

CLOSING NOTES Executive moves Company news The boom at a glance Our maps of the megaprojects and medium-sized projects that are driving the industrial boom. My toughest challenge Anne Forte Trappey

ADMINISTRATION Chief Financial Officer: Jonathan Percle Chief Innovation Officer: Curtis Heroman Business Manager: Adam Lagneaux Business Associate: Danielle Daly Office Coordinator: Debbie Lamonica Courier: Jim Wainwright Receptionist: Cathy Brown AUDIENCE DEVELOPMENT Audience Development Coordinators: Kenna Maranto, Brittany Titone A PUBLICATION OF LOUISIANA BUSINESS INC. Chairman: Rolfe H. McCollister, Jr. President and CEO: Julio A. Melara Executive Assistant: Millie Coon SUBSCRIPTIONS/CUSTOMER SERVICE 9029 Jefferson Hwy., Suite 300 Baton Rouge, LA 70809 225-421-8140 • FAX 225-928-5019 1012industryreport.com email: circulation@businessreport.com Volume 1 - Number 2

© Copyright 2016 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published quarterly by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. Telephone (225) 928-1700. POSTMASTER: Send address changes to 1012 Industry Report, 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. 10/12 Industry Report cannot be responsible for the return of unsolicited material— manuscripts or photographs, with or without the inclusion of a stamped, self-addressed return envelope. Information in this publication is gathered from sources considered to be reliable, but the accuracy and completeness of the information cannot be guaranteed. No information expressed here constitutes a solicitation for the purchase or sale of any securities.

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DUCT

IN THIS ISSUE

Women at the helm

PENNY FONT EDITORIAL DIRECTOR

or centuries, industry has been a male-dominated sector. While certainly iconic, the era of Rosie the Riveter—when women represented 65% of the U.S. aircraft industry’s total workforce and were heavily recruited by the munitions industry during World War II—has been but an anomalous blip in history. Even today, as women are projected to account for more than half of the increase in total labor force growth between 2008 and 2018, they remain substantially underrepresented in manufacturing (29%) and construction (9%). So there’s the bad news. The good news? They are increasingly rising to positions of leadership in Louisiana’s process plants. Angela Zeringue manages ExxonMobil’s Baton Rouge Polyolefins Plant. Jennifer Dunphy just took over ExxonMobil Plastics in March. Hyun Brossett will soon ascend to plant manager at Grace in Sulphur. Christine George manages the Air Liquide plant in Geismar. The list goes on. And the numbers show more are stepping into the pipeline. Female enrollment unexpectedly shot up to 21 this spring at the Associated Builders and Contractors-Bayou Chapter’s worker-training program in New Orleans. It had been hovering around two or three for years. The number of young women en8

tering the construction management curriculum at LSU has significantly increased as well—last year, 7.5% of those enrolled were female. That’s the highest percentage since tracking began in 2008. Even more impressive: The current president of the LSU Construction Student Association is a woman—Ameenah Henderson. Our cover story, “Women in industry,” explores how these women are changing the face of the workforce at Louisiana’s plants. Read about their experiences and insights beginning on page 30. WATCHING THE GAUGE All eyes remain on oil prices. When will they rise again? And what will the lasting effects be on Louisiana’s economy? Those are the multibillion-dollar questions. At press time, a glimmer of hope emerged: The American Petroleum Institute on April 27 reported a drawdown of nearly 1.1 million barrels in U.S. crude inventories versus a 2.4 million-barrel build expected by industry analysts. Brent and U.S. crude’s West Texas Intermediate futures finished regular trading that day about 3% higher, with Brent at $46.49 in post-settlement trade. The sudden rally put crude oil prices at their highs for 2016. Several pieces in this issue are devoted to the topic: —$140 billion. $65.3 billion. What a difference low oil prices can make. In a piece called “Beyond 2017: What will the industrial boom look like in the long term?” we take a look at the toll the current oil-price environment has taken on the $140 billion in announced projects since 2012. To date, less than half—$65.3 billion—have broken ground. Is it simply timing and project delays? Or will contracting Asian markets significantly reduce the need for commodity chemicals, eliminating the need for new projects? See what market analysts have to say on page 48. —David Dismukes, executive director of the Center for Energy Studies at LSU, explores the failed

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

Doha meeting, where OPEC, along with Russia, were expected to consummate a deal “capping”—but not reducing—crude oil production at current levels. The hope was the agreement would start a market correction to bring crude oil supply and demand back into balance. But Dismukes posits that the accord would actually have done very little to alleviate the excess supply in world crude oil markets. Read his analysis on page 69. SHUTTLES, DRONES AND GRIDLOCK Industrial plants in the Capital Region are all too familiar with the challenges that accompany severe traffic congestion. An estimated $623 million is lost annually in the area to wasted time, fuel and productivity. That doesn’t even take into account its impact on workforce recruitment and economic expansion. In this issue, we highlight two innovative initiatives designed to alleviate gridlock. —Read about the Capital Region Industry for Sustainable Infrastructure, or CRISIS—now a year old— on page 25. The group performed a cost-benefit analysis on transformational long-term road projects and identified those that would have the most impact. Those recommendations will be incorporated into a comprehensive regional plan for infrastructure. —SEACOR AMH takes to the water in its own strategy for alleviating gridlock. The company has created a new container-on-barge shuttle service from Baton Rouge to the Port of New Orleans, offering manufacturers an option for moving their cargo. U.S. Transportation Secretary Anthony Foxx designated the service an official Marine Highway Project, noting that it can result in reduced air emissions and road maintenance costs, as well as improved safety and resilience. It’s expected to reduce congestion and bridge traffic on Interstate 10. Read about it on page 52. Speaking of moving vehicles, two brothers in Lafayette are credited

with pioneering the commercial use of drones in Louisiana. Last year, their company—LandBros—became the first in the state to receive a Federal Aviation Authority exemption to fly drones for commercial and industrial applications. Today, 53 such exemptions have been awarded in Louisiana—but LandBros got the jump: Its market now stretches from Texas to Mississippi. Read about their work in industrial photography, safety and risk control on page 54. WHAT’S GOVERNMENT UP TO? With every new political administration, the rules of the game change for business and industry. At the state level, lawyers are still trying to sort out the compliance nightmare that is $3.5 billion in new taxes passed during the winter legislative special session. Kean Miller tax attorney Chris Dicharry likens Louisiana’s revised sales tax system to “the progeny of a nutria and a watermelon.” Get the details on page 10. Also on the state front, a West Point graduate and 82nd Airborne Division veteran now heads up Louisiana’s economic development initiatives. In a telling Q&A, newly appointed LED Secretary Don Pierson shares his top priority, his insight into the manufacturing sector and his strategy for ensuring the hugely successful FastStart maintains its edge, beginning on page 46. At the national level, the outcome of the presidential election will weigh heavily in terms of implementing regulations targeting greenhouse gas emissions and other pollutants. The EPA’s Clean Power Plan figures most prominently. Read more on page 40. SHARE YOUR NEWS As always, we want to hear your ideas and news about your company. Send them to editor@1012industryreport.com. If you have other decision-makers in your company who should receive this publication, please call (225) 421-8140.

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through unmatched experience

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WWW.BOHBROS.COM 10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2016

LAUNCH ICYMI

Tax nightmare MORE THAN 100 business leaders and members of the Louisiana Association of Business and Industry gathered in Baton Rouge April 8 for a breakdown of how the more than $3.5 billion in new taxes passed during the winter legislative special session will affect them over the next five years. What they heard wasn’t pretty. “The recent tax changes will be a compliance nightmare only for the few who don’t give up on trying to comply,” said Chris Dicharry, a board certified tax attorney at Kean Miller who was one of three panelists at the LABI-sponsored post-session wrap-up. “Louisiana’s revised sales tax system looks like the progeny of a nutria and a watermelon.” Increases and expansions of state

sales taxes and corporate income and franchise taxes were the primary mechanisms enacted into law. Panelists noted the focus of tax experts and employers alike has now shifted from the Legislature to the administration, as the Department of Revenue attempts to interpret and enforce the complex new laws now on the books in Louisiana— arguably the most complicated and confusing in the entire nation. Lawmakers also repealed the business utilities tax exemption, which means for the remainder of the fiscal year, businesses will be taxed at 5 cents on the dollar. Beginning next year, they’ll be taxed at 2 cents. Experts also pointed out that the limited topics and short timeframe for major decisions in the special

session ultimately led to a temporary approach focused solely on raising new revenue, rather than comprehensive reforms to budgeting or tax policy. While some changes to corporate income and franchise taxes are permanent, the sales tax changes have sunset dates in 2018. “The short-term focus of Louisiana’s recent tax changes has created extreme uncertainty for businesses,” said Ferdinand Hogroian, senior tax and legislative counsel for the Council on State Taxation. “Coupled with extraordinary complexity and bad fiscal policy choices—like taxing in-state purchases of machinery and equipment—these changes also put Louisiana out-of-step with other states and at a competitive disadvantage.”

2016 OIL PRICE MOVEMENTS

The tax on manufacturing, machinery and equipment, or MM&E, is a particularly glaring example. In the 1990s, the Legislature created an exemption on MM&E to stimulate manufacturing in the state. During the special session, lawmakers removed the exemption and imposed a 2% tax for the remainder of the current fiscal year and a 1% tax for the next two years. “That is causing a lot of consternation among people who are getting ready to make very large investments in the state of Louisiana,” Dicharry said. “It’s easy to say, ‘It’s only 1%.’ But when you’re talking about 1% of $2 billion, you’re talking about a heck of a lot of money.” —Stephanie Riegel

See David Dismukes’ analysis of the latest oil price movements, page 69.

$50 $45

$/BBL

$40 $35 $30 $25 $0 JAN 4

JAN 19

FEB 2

FEB 17

MAR 2

MAR 16

MAR 31

APR 14 Source: David Dismukes

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

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Issue Date: Winter Ad proof #2

• Please respond by e-mail or fax with your approval or minor revisions. • AD WILL RUN AS IS unless approval or final revisions are received by the close of business today. • Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

IN SO MANY WORDS Temporary taxes on industrial use and equipment and the removal of exemptions is changing what industry headquarters think as far as their investment capital for the future. The concern is that these temporary things may be long-term or permanent. Scott Guidry of Mike Falgoust & Associates, discussing the industrial real estate market in the Capital Region at the annual Real Estate Trends seminar in April

we are energy

INDUSTRY ON THE WEB • The Port of South Louisiana launched a redesign of the website portsl.com (above). With updated features and enhanced navigability, it is set to provide its audience more relevant and accessible information on the activity within the Port of South Louisiana and the River Region, which includes St. James, St. John and St. Charles parishes. The new website includes enhanced search capabilities, economic development information for potential investors and numerous resources for site selectors, industry, companies, government officials, and the community. • Entergy has developed and launched a freestanding website designed to attract site selectors and companies looking to potentially expand in the four states served by its utilities. The site, goentergy.com, contains detailed regional information, showcases featured sites and provides relevant news and data for key industries in Louisiana. • The Louisiana Workforce Commission, South Louisiana Community College, One Acadiana and other organizations have launched acadianaopportunity.com, a resource to help former oil and gas sector workers find reemployment in other industries. The site includes information about training, available grant funding and the Louisiana Job Connection platform.

w w w . h s i . e n e r g y 1-800-349-7560 technical bolting

10,000

hydrostatic testing •diamond wire cutting

• pipeline services

ﬁeld machining

Louisiana oil and gas jobs lost over the course of the year ending in March

Source: Labor Department

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LAPLACE

• LAKE CHARLES • HOUSTON 10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: ICYMI

WIRED FOR GROWTH ENTERGY OFFICIALS JOINED with business and community leaders and elected officials at the Nelson Power Station in Westlake in March to “cut the wire” on one of the largest single transmission projects in Entergy’s history. The wire-cutting ceremony officially launched construction of Entergy Louisiana LLC’s Lake Charles Transmission Project—a $159 million initiative that will help bring power to one of the fastest growing areas in the nation in terms of privatesector job growth. “Today is a testament to the hard work and dedication of many people and months of preparation and approvals,” said Phillip May, president and CEO of Entergy Louisiana. “These new transmission lines will help wire this region for the future.” The project, which is expected to be completed in early 2018, involves building 25 total miles of high-voltage transmission lines and the facilities needed to support them, including two new substations and expansion of two existing substations. The new lines are being constructed to support and enable economic growth in southwest Louisiana, as well as to enhance reliability for existing and future customers. —Courtesy Entergy

US METRO AREAS WITH HIGHEST LEVELS OF MANUFACTURING PRODUCTIVITY

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Corvallis, OR Durham-Chapel Hill, NC Lake Charles, LA New Orleans-Metairie, LA San Francisco-Oakland-Hayward, CA

NORANDA EYES LAYOFFS

LNG coming out of the U.S. is probably the single most important thing that will transform the future LNG market. It heralds the arrival of a global market.

Corpus Christi, TX Portland-Vancouver-Hillsboro, OR-WA Vallejo-Fairfield, CA

Source: Gamer Economics

Flores leaves FreeportMcMoran ENERGY AND MINING company Freeport-McMoRan parted ways with LSU alum and chief executive of its oil and gas unit Jim Flores, who stepped down in April as the company seeks to restructure its business to cut costs. Flores, a Lafayette native, has endowed the LSU Flores MBA program. According to a biography posted to the E.J. Ourso College of Business website, he was a key figure in establishing LSU’s master’s degree in business administration program as a producer of industry leaders, executives and other business professionals. He founded Ocean Energy in 1992, and in 1996 Flores and his wife, Cherie, made a donation to the business college to endow the MBA program, which was renamed in the couple’s honor. He was named Young Businessperson of the Year by the Baton Rouge Business Report and Junior Achievement that same year. —Daily Report

SAVE THE DATE THE EXPANSION OF the Panama Canal, a $5.3 billion project almost two years behind schedule and plagued by cost overruns and contractor disputes, will open on June 26, Canal Authority Administrator Jorge Quijano said in March. Contractors building the new locks, which will allow bigger ships to pass through the 102-year-old waterway, will complete works on May 31. “The date is very close and there is still a lot of work to do,” Quijano said during the inauguration of a new canal training center. “We can’t lose face.” —Bloomberg

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

—Staff report

Melissa Stark, energy managing director and global LNG lead, Accenture

Baton Rouge, LA Fairbanks, AK

State labor officials say potential layoffs at an alumina plant in Gramercy could hit 444 in May. Tennessee-headquartered Noranda Alumina had first told the Louisiana Workforce Commission that it expected to layoff 113 workers in March. The company later said it was pushing back the possible layoffs until May. The initial report of 113 layoffs was for non-union employees, but a later update put the total at 444, with union jobs included. The company has cited a decrease in orders for its product due to a shutdown of the New Madrid Smelter in Missouri as a major reason for the potential job cuts. The company stressed that it still hopes to avoid layoffs with cost reductions and expansion of its capacity to produce non-metallurgical alumina.

A BIG WIN FOR THE RIVER REGION Gov. John Bel Edwards and Monsanto President and COO Brett Begemann announced the company’s decision to expand its Luling manufacturing site with a $975 million capital investment over the next three years. The investment in its St. Charles Parish operations will enable Monsanto to support the launch of its Roundup Ready Xtend Crop System. When completed in early 2019, the expansion project will create 95 new direct jobs averaging $76,500 per year, plus benefits, and 20 new contractor jobs. Monsanto estimates the project will generate 1,000 construction jobs at peak building activity. During the next decade, Monsanto expects to launch its Roundup Ready Extend Crop System in the U.S., Brazil and other parts of Latin America, meeting growing demand across 250 million acres of farmland in the Americas. The project marks the largest single capital investment in the history of St. Charles Parish. —Staff report

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CF starts cranking

CF INDUSTRIES HOLDINGS INC. announced that the new urea ammonium nitrate (UAN) plant at the company’s Donaldsonville Nitrogen Complex started up in early March 2016 and has achieved consistent, stable operation. This is the second new plant to be commissioned and started up as part of CF’s major capacity expansion projects in North America. It is the largest operating single-train UAN plant in the world. “The finish line for our Donaldsonville capacity expansion project is now in sight,” said Tony Will, president and chief executive officer of CF Industries Holdings Inc. “The new UAN and granular urea plants are running consistently at or above nameplate capacities, and the new ammonia plant is within a few weeks of being mechanically complete.” Once the new ammonia plant is complete, the Donaldsonville complex will be the largest nitrogen facility in the world. —Staff report

30.3%

AVERAGE EFFECTIVE TAX BURDEN of a typical construction company, as compared to the 23.3% average for all U.S. businesses Source: U.S. Department of the Treasury

COURTESY HARVEY GULF

Nitrogen

HARVEY GULF RECORDS LNG FUELING FIRST

NEW ORLEANS-BASED Harvey Gulf has once again shown its commitment to utilizing LNG as a marine fuel with the opening of the first marine LNG fueling terminal in North America. Less than a year after the delivery of the M/V Harvey Energy, America’s first LNG-powered vessel, Harvey Gulf accomplished another first when it completed a successful LNG bunkering of the Energy from the newly constructed LNG terminal facility at its operation base in Port Fourchon. The bunkering included the transfer of 43,000 gallons of LNG in approximately 2.25 hours without incident. The terminal has on-site storage of approximately 270,000 gallons contained in three 90,000 USG-type “C” vacuum insulated tanks. The M/V Harvey Energy and her sister ship, the M/V Harvey Power—both LNG-powered offshore supply vessels—are under charter to Shell and support Shell’s Gulf of Mexico assets. —Courtesy Harvey Gulf

CREATING CHEMISTRY. CREATING CAREERS. WWW.BASF.US/LA

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: ICYMI

-57

SASOL TAPS THE BRAKES SASOL ANNOUNCED IN March that in the “lower-formuch-longer” oil price scenario, it is re-phasing certain projects. A detailed review of the cost and scheduling of the $8.9 billion Lake Charles chemicals project is underway and is likely to be completed by mid-calendar year 2016. Engineering and procurement are at an advanced stage, and site construction, mostly civil related, has begun. The company says that given the uncertain economic environment, it has decided to pace the execution of the Lake Charles project. The South African company pushed back the startup of some units converting ethane into plastics and other products at the plant from 2018 to 2019. Cost control remains Sasol’s primary focus, the company said in a financial release filing.

Drop in planned capital expenditures from 2015 to 2016 for Chesapeake Energy Source: Chesapeake Energy

—Staff report

IN PRODUCTION OIL PRODUCTION HAS started ahead of schedule at Exxon Mobil Corp.‘s Julia oil field, located 265 miles southwest of New Orleans more than 7,000 feet beneath the water’s surface. According to a news release, the first production well is now online, and at press time a second well was to come online soon after. The initial development phase uses subsea tie-backs to the Chevron-operated Jack/St. Malo production facility, which Exxon says reduces the need for additional infrastructure and enhances capital efficiency. “This initial production will provide ExxonMobil with insight into the potential future development of the reservoir,” says Neil Duffin, president of ExxonMobil Development Co. —Staff report

Fluor gets in the training business STUDENTS OF ALL ages now have access to craft training programs at Fluor’s new Gulf Coast Training Center, which opened Feb. 23 in Pasadena, Texas. The center will provide “pre-employment training [in] electrical, instrumentation, millwright and pipefitting disciplines,” says Glenn Gilkey, Fluor executive vice president. Bringing the center from concept to reality—which included determining the center’s scope and location, hiring training staff and enrolling students—took about a year to accomplish. This new facility represents a multimillion-dollar investment for the contractor. Fluor anticipates training about 300 students a year in Pasadena. —ENR Texas & Louisiana

Bringing Great Design to Life

800-626-4431 • DonahueFavret.com

10-12 May 2016.indd 1

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

4/5/2016 10:07:17 AM

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ISC CONSTRUCTORS

I N N OVAT I V E , T U R N - K E Y S O LU T I O N S F O R

ISC Constructors brought home four awards from this year’s EIC program.

ABC announces EIC winners

A C H A N G I N G WO R L D

ASSOCIATED BUILDERS and Contractors announced in March the recipients of the 26th annual Excellence in Construction awards. A total of 105 projects collectively worth $2.8 billion were honored at the Excellence in Construction Awards in Fort Lauderdale, Florida. HERE ARE THE WINNING INDUSTRIAL PROJECTS AND CONTRACTORS FROM THE 10/12 CORRIDOR:

CF Industries – Capacity Expansion Project, Donaldsonville (Cajun Constructors), Eagle Award BASF-DNT GSH Project, Geismar (EXCEL Contractors), Pyramid Award New Buildings, Methanex Corp., Geismar (Group Contractors), Eagle Award Baytown Lubes Expansion Project, Baytown, Texas (Performance Contractors), Eagle Award Methanex Geismar 1 and Geismar 2 Relocation Project – Site Prep and Civil Construction Services, Geismar (Cajun Constructors), Pyramid Award Marathon Garyville Refinery Support Buildings, Garyville (Regal Construction), Eagle Award Motiva Flare Vapor Recovery Project, Norco (ISC Constructors), Pyramid Award Evonik Power Play Project, Theodore, Alabama (ISC Constructors), Eagle Award Shell BOOST Project, Robert (Triad Electric & Controls), Pyramid Award BASF Solitaire Project, Geismar (MMR Constructors), Eagle Award West Yard Coal Conveyor Controls Package, Darrow (Triad Electric & Controls), Pyramid Award

CORRECTION

225-677-8890 • bengalindustries.com

In “Big cargo” (Q1, pages 50-53) the amount of infrastructure investment planned by the Port of South Louisiana for the next five years should have been stated as $66 million, not $6 million. 10/12 Industry Report regrets the error.

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: NEW PRODUCTS

TURF-SCAPE, INC. is a locally owned Baton Rouge business specializing in industrial and commercial grounds maintenance since 1985. • SAFETY TRAINING and AWARENESS classes are held several times during the year (OSHA Certified) • DRUG FREE EMPLOYEES - Employees are tested randomly throughout the year • TWO MILLION DOLLAR Liability Insurance Policy with an additional two million dollar umbrella coverage • Required WORKMAN COMPENSATION Policy • Trucks are RADIO DISPATCHED and equipped with professional lawn maintenance equipment • TRAINED EMPLOYEES-Several classes each year are given on the proper use and maintenance of equipment and cutting procedures • Crew Foreman CHECK IN WITH MANAGERS on each visit • LANDSCAPE SERVICES PROVIDED - Installation of new flower beds, reworking outgrown beds and adding annuals (Flowering plants) to brighten up the focal points of your property

o Wth s ? u C ass the Gr

Turf Scape Industrial Maintenance Baton Rouge / New Orleans

225-752-8873 w w w. t u r f - s c a p e . c o m

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

‘Simple and precise’ Trimble releases new displays for monitoring crane sensors.

alifornia-based Trimble has announced the availability of the Trimble MBR Series Displays for quick, handheld or cab-mounted wireless monitoring of crane sensors. The MBR Series Displays can monitor load, wind speed, wind gust, A2B, boom angle, trim angle, list angle, rope payout, rope speed and/or pressure for many crane and lifting applications. The MBR Series Displays are “efficient, simple and precise,” said Olivier Desrochers, crane operator at Grues Laurier, a Quebec-based crane rental and construction company. The MBR Series includes a handheld, battery-powered version (MBR100) and a cab-mounted, vehicle-powered version (MBR105). Both display models can monitor one analog and one digital sensor simultaneously. The battery-powered MBR100 operates with four ‘AA’ cell batteries; the MBR105 operates with a 9-30 volt power connection. Unlike other portable displays, the MBR100 has a long battery life— up to 90 operational hours using alkaline batteries or 125 operational hours using lithium batteries. “The compact size and long battery life from standard off-theshelf ‘AA’ batteries alone are a great solution, but the MBR100 takes it even further by simplifying the sensor ID programming and taring a load, making this a perfect product for load testing applications with the flexibility to check and monitor standard sensor data,” said Adam Hyla, branch manager Offshore & HALO Smart Crane at Hoist & Crane Service Group Inc., a national provider of lifting equipment inspections, preventative maintenance and repairs based in Louisiana. The MBR100 is portable and lightweight (0.95 pounds or 430 grams), allowing free mobility on the

jobsite while providing comfortable, in-hand monitoring of Trimble’s wireless crane sensors. With a wide line-of-sight wireless communication range of 4,260 feet, the MBR Series Displays can monitor sensors using “Listening Mode” without modifying the current RF network hierarchy. Users can set limits for alarms and view the peak load during use when programmed with a load sensor. “The MBR Display Series has been designed to be utilized by a range of customers,” said Dawn Cirkl, business area director for Trimble’s Lifting Solutions Division. “Whether it’s an OEM wanting to test a machine’s design, a crane supervisor wanting to monitor a load, or an inspector certifying a crane during its annual inspection, the MBR Display Series offers a wide variety of applications.” The MBR Series Displays are compatible with Trimble’s Lifting Solutions wireless sensors and transmitters.

—Staff report

TRIMBLE

Who ts u C ? the s s a r G

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LAUNCH: TRADE

The Cuban connection

By SAM BARNES

Engage Cuba’s Louisiana Council says industry to gain from embargo removal.

eeking to tap into shifting public opinion and changing politics, a Washington, D.C.-based group recently announced the creation of a Louisiana Council expressly dedicated to promoting the removal of trade barriers with Cuba. Engage Cuba’s Louisiana State Council, unveiled Feb. 25 at the Old Governor’s Mansion in Baton Rouge, is comprised of leaders from across Louisiana’s agricultural, manufacturing and business communities, and is the third such council in the U.S. While Engage Cuba President James Williams says Louisiana’s agricultural industry would benefit the most, initially, from lifting the embargo—Cuba is the largest consumer of rice per capita in the Western Hemisphere—manufacturing and other industries would profit in the long term.

Williams addressed a small gathering during the council’s launch event, along with Benjy Rayburn, Louisiana’s assistant commissioner of agriculture, and Joe Accardo Jr., executive director of the Ports Association of Louisiana. “Cuba is currently trying to develop its energy industry because they’ve been so reliant on Venezuelan crude,” Williams said. “This is definitely an area where Louisiana can meet a need. We’re also beginning to see more interest in light manufacturing and biotechnology.” He added that a new Economic

Development Zone in Mariel, Cuba’s closest seaport to the U.S., has the greatest potential for industrial and manufacturing development by U.S. companies. The port was recently dredged to 60 feet deep to support the supersized, New Panamax shipping vessels. “Mariel already has 10 projects that have been given the green light, but they’re not U.S. investors,” Williams said. Accardo said Louisiana’s port directors are excited about the potential for importers and exporters. “Many years ago, before the embargo, the Port of New Orleans was the biggest exporter/importer with Cuba,” Accardo adds. “Even today, some rice is transported to Cuba through the Port of Lake Charles, but there are restrictions that limit what can be done.” The inability of U.S. companies to offer credit is the primary obstacle. “We’re not allowed to offer private

credit of any kind, so it has to be cash on delivery, and no trade is done that way in the world,” Williams said. “So even though we are a natural exporter to Cuba, they get their rice from Vietnam and Brazil because they can get 180- or 365-day terms. It’s just that simple.” Ultimately, Engage Cuba and the Louisiana Council would like to see the full repeal of economic sanctions to allow for full-scale U.S. investment and development. While President Barack Obama has taken steps to ease sanctions, only Congress has the power to completely remove the embargo. “Louisiana is important from a congressional standpoint,” Williams said. “We are working with Sen. Bill Cassidy to try to raise awareness. Also, U.S. representatives Charles Boustany (R-3rd District) and Ralph Abraham (R-5th District) have been strong supporters of this.”

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: THE BIG PICTURE

MILESTONE CHENIERE ENERGY

FIRST EXPORT

This photo shows the LNG carrier Asia Vision departing Cheniere Energy’s Sabine Pass liquefaction plant Feb. 24 with the facility’s first shipment of liquefied natural gas, marking the start of U.S. shale gas exports. This was also the first export of LNG from the lower 48 states ever. This first “commissioning cargo” to leave the Cameron Parish site was produced from its first liquefaction train; an additional five trains are in various stages of construction and development.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

HISTORIC EVENT “This historic event opens a new chapter for the country in energy trade and is a significant milestone for Cheniere as we prepare Train 1 for commercial operations,” said Neal Shear, chairman of the board and interim chief executive officer of Cheniere Partners. “This accomplishment would not have been possible without many years of hard work by our employees, our construction partner, Bechtel, other contractors and thousands of workers at the Sabine Pass site.”

THE ASIA VISION According to the classification society American Bureau of Shipping, the Asia Vision was built by Samsung Heavy Industries and delivered in 2014. The ship can carry 160,000 cubic meters of LNG in four Mark III LNG containment tanks from GTT. The vessel also carries the ABS Enviro+ notation, which denotes adherence to advanced standards for environmental protection. The Asia Vision is owned by the energy giant Chevron.

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ON THE SEA BRAZIL BOUND Brazil’s Petrobras received the Asia Vision shipment, which equaled about 96 million cubic meters of natural gas, at its regasification terminal in All Saints’ Bay, Bahia, the Brazilian giant said in a statement. Following regasification at the terminal in Bahia, the fuel will be pumped into Petrobras’ network of gas pipelines to supply Brazil’s domestic market, mainly for use in thermal power plants.

PASSAGE TO INDIA While the first Sabine Pass shipment was bound for Brazil, Gail India Ltd. bought the second shipment from the plant, making it the first Asian importer of U.S. shale gas, Bloomberg reported. The cargo left March 15 on board the LNG tanker Clean Ocean and was expected to be received at the Dabhol import terminal on India’s west coast by mid-April. Gail India is the country’s largest supplier of natural gas.

AND MORE

MORE TO COME The third cargo from Sabine Pass was set to go to Brazil on the GasLog Salem later in March. On April 15, the Creole Spirit departed Sabine Pass bound for Portugal, according to Bloomberg, making it the sixth tanker hauling gas from the the terminal in six weeks. Cheniere planned to ship as many as eight cargoes of LNG from its Sabine Pass project by May, the Houston-based company said in a February notice to the Federal Energy Regulatory Commission.

Each liquefaction train at Sabine Pass is expected to have a nominal production capacity of approximately 4.5 million tonnes per annum (mtpa) of LNG. A subsidiary of Cheniere Partners has entered into six third-party LNG sale and purchase agreements (SPAs) that in the aggregate equate to approximately 19.75 mtpa of LNG and commence with the date of first commercial delivery of Trains 1 through 5.

Sources: Cheniere Energy, HHP Insight, Bloomberg, LNGWorldNews 1012industryreport.com

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: TECHNOLOGY

Shake it up

Top 5 Louisiana oil and gas tech startups to watch in 2016. By BLAIR BROUSSARD

ith the 8th annual New Orleans Entrepreneur Week (NOEW) March 11-18, all eyes turned to Louisiana. As the fastest growing entrepreneurial ecosystem in the U.S., more than 10,000 attendees came to the Big Easy to hear world-renowned keynote speakers and attend dozens of panel and educational sessions. Specifically, many attendees— from VCs to public sector representatives—came to NOEW with an eye on a key slice of Louisiana’s ecosystem—oil and gas. With prices of crude oil the lowest they’ve

been in 13 years, the Gulf Coast’s economy is feeling the pain—and it’s beginning to affect other industries. In fact, Jolie’s Bistro in Lafayette, a nationally acclaimed restaurant named for world-renowned artist George Rodrigue’s 1974 Jolie Blonde painting (and one of my personal faves), recently closed its doors, citing the direct hit the local economy has taken because of the oil industry downturn. In addition, the entire community of Morgan City is taking a huge hit, with even a school considering closing its doors because of the crisis. So now, Louisiana must find other ways to sustain our economy so we don’t face a repeat of the 1980s

oil glut. We’ve thankfully diversified since then with key industries such as agribusiness and software development—proving that tough economic times encourage entrepreneurialism. In fact, some of the world’s most successful businesses, such as Disney, McDonald’s, Microsoft and Google, were all founded in tough economic times. And what better industry for the fastest growing entrepreneurial hub to begin disrupting than the one that has not changed its ways in almost 200 years? The lack of disruption, combined with abundant uncertainty, has spurred oil and gas giants such as Shell, Halliburton and Chevron to

begin investing in private tech companies. Clearly, innovation is top of mind during this downturn. In fact, The second annual Energy Innovation and Entrepreneurship Summit took place at NOEW, focusing on the status of venture investing at major petroleum companies. There are a few companies that have already answered the call to help the oil and gas industry increase efficiencies, safety and productivity—ultimately, positively affecting the bottom line. Below, I’d like to introduce you to five Louisiana-based oil and gas technology startups to watch now.

3RD DIMENSION MEDIA

It’s an exciting time for the Louisiana entrepreneurial ecosystem as these companies will concurrently create more efficiencies for an industry so desperately in need of a shake-up, and help the Silicon Bayou become acclaimed as the leading entrepreneurial hub for the oil and gas industry.

3RD DIMENSION MEDIA

Another 2015-2016 member of the Idea Village EnergyX accelerator, this Lafayette-based startup provides 3-D animation for O&G industry tradeshows, interactive safety trainings and marketing materials. The animations often provide the viewer with an easy-to-understand visualization to very complex industry hardware, technology and processes. 3rdmedia.us

CLEARGISTIX

Both on- and offshore oil and gas service companies can use this SaaS solution to eliminate inefficient, manual and often paper-based activity recording. The New Orleans-based technology company provides a platform that allows for the efficient and accurate capture of field and vessel activities, and provides real-time revenue, personnel and other information. cleargistix.com

LOUISIANA TECHNICAL INSTRUMENTS

A 2015-2016 member of the Idea Village EnergyX accelerator, this New Orleans-based tech company provides pipeline operators, refineries, power plants, paper mills and offshore platforms with a solution to help meet emissions standards through a technology that reduces “methane bleed.” louisianatechnicalinstruments.com

SPOTTER BY ENVOC

This tablet app for iPad and Android allows companies to create and manage their own inspection questionnaires or forms for users in the field. Created by Envoc, a Baton Rouge-based software and design firm, Spotter was created to replace the inefficient pen and paper in order to make audits and inspections more accurate than ever before. envoc.com

MARITANT

A New Orleans-based startup servicing the shipbuilding space, an $11 billion industry in Louisiana alone, Maritant connects engineers, shipbuilders and vessel operators with preferred vendor equipment data, helping to reduce research time through a trusted source. maritant.com Blair Broussard is vice president of the award-winning tech PR firm, AR|PR. Originally published on SiliconBayouNews.com.

20 10/12 INDUSTRY REPORT • SECOND QUARTER 2016

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LAUNCH: EVENTS

Ports Association of Louisiana annual meeting Dredging, oil and gas downturn lead conference concerns.

PORT OF SOUTH LOUISIANA

n March, the Ports Association of Louisiana held its 33rd annual conference in Charenton. Hosted by the Abbeville Harbor & Terminal District; the Port of Iberia District; the Greater Krotz Springs Port Commission; the Morgan City Harbor and Terminal District; and the West St. Mary Port, Harbor, and Terminal District, this year’s LA Ports are Bridges to the World conference was marked by discussions on dredging of Louisiana’s waterways, the condition of the state’s transportation infrastructure, and the status of the oil and gas industry. As of late, high water and depth restrictions have brought to the forefront the significance of maintaining proper depth of Louisiana waterways, particularly that of the Mississippi River, for the economic health of not only the state, but also that of the nation. According to economic estimates, the Mississippi River and its tributaries have over a $200 billion annual impact on the U.S. economy. As Sean Duffy of Big River Coalition stressed early on during the conference, it all starts with funding from the federal government. “We have ourselves a 10,000pound gorilla and not enough bananas,” he said. Congressman Charles Boustany, who spoke during Friday morning’s session, stated that securing federal funding for dredging is his top priority. Ports are an economic engine: 25% of Louisiana’s economy depends on exports; that is, $47.7 billion is contributed from foreign trade. “This issue is critical to Louisiana’s federally maintained ports, and to not dredge these waterways impacts regional and national commerce, affects Louisiana job growth, and reduces our economic competitiveness,” said Boustany. A healthy infrastructure in Louisiana is imperative,

U.S. Congressman Charles Boustany (second from right) with, from left, Linda Prudhomme, Port of South Louisiana director of business development; Paul Aucoin, Port of South Louisiana executive director; and Joe Accardo, Ports Association of Louisiana executive director.

especially when five Louisiana ports rank within the largest 11 tonnage ports in the United States. As noted by economist James Richardson, one in five jobs in Louisiana are attributable to trade-related industries. The speaker’s panel on Thursday included Louisiana Economic Development’s newly appointed Secretary Don Pierson and Louisiana Department of Transportation and Development Secretary Shawn Wilson. Pierson spoke about the influx of foreign investment ($60 billion) in Louisiana and LED’s commitment to continuing to grow the state’s economy by offering tools to businesses, such as project management, incentives, and domestic and international economic development programs. Wilson, in turn, spoke of the challenges of preserving transportation infrastructure, including roads and bridges, up to standards, while faced with increased maintenance costs

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

and low state revenue. However, he noted that funding within the Port Construction and Development Priority Program, which is used by Louisiana ports to establish landside facilities and infrastructure, has increased from $20 billion to $40 billion. Louisiana had entered into the 15th consecutive month of low crude oil prices, said Don Briggs, president of the Louisiana Oil and Gas Association, The demand for oil cannot keep up with the surplus worldwide (2.6 billion barrels per day), lowering prices and causing mass layoffs. Thus far, 10,000 jobs have been lost in Louisiana. In turn, health care, education, and the transportation system have been negatively impacted. The state of Louisiana is grappling with a $1.9 billion deficit as it moves into 2017. In his presentation, Emile Dumesnil, president and CEO of Dynamic Energy Services Interna-

tional, noted that from the looks of it, this downturn in oil prices is going to get worse before it gets better, unless some members from the Organization of Petroleum Exporting Countries reduce production, thereby giving prices a chance to rebound. This doesn’t seem to be likely. [See the analysis by David Dismukes on page 69.] Iran’s stored oil, for instance, is at an all-time high, and Iran is set to add 1 million barrels per day into the saturated oil market for a projected global total of 3.2 billion barrels per day by 2017. Dumesnil believes a rebound may be in site in 2018. Other topics discussed during the conference were cybersecurity, by Capt. David McClellan, commander MSU Morgan City, and coastal protection and restoration, by Johnny Bradberry, executive assistant to the governor for coastal activities.

—Courtesy Port of South Louisiana

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PHOTOGRAPHY BY TIM MUELLER

LAUNCH: DESIGN

Center of excellence

n need of a new space to train the growing industrial workforce in Ascension Parish, the Alliance Safety Council opened the doors to its spacious Gonzales training center early in 2014. Located in the Edenborne traditional neighborhood development near Interstate 10 and La. 44, the 11,000-square-

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foot facility contains a computer lab, classrooms and multipurpose training spaces designed to handle a high volume of workforce development and safety classes. Remson Haley Herpin won a 2015 Rose Award for the design from the American Institute of Architects Baton Rouge chapter. AIA noted the building’s spacious lobby, the interior detailing

that matches the company’s corporate headquarters in Baton Rouge, and the “expressive” wood and metal plates that wrap around the building’s exterior. In addition to offering the Alliance increased capacity for Basic Orientation Plus courses, the facility serves as home to classes for the Mid-South OSHA Training Institute Education Center.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

THE ALL-NEW METRIS

GIVES YOUR BUSINESS ENDLESS POSSABILITIES. Starting at only $28,950.*

Introducing the 2016 Metris—the new mid-size commercial van from Mercedes-Benz. The passenger model seats up to eight people, while the front, second, and third-row airbags ensure that every occupant is protected. The cargo model offers 186 cubic feet of storage space and an impressive 2,502-lb payload. Both are equipped with advanced safety features like ATTENTION ASSIST®1 and Crosswind Assist2 for industry-leading protectability. From customizeability to garageability to affordability, Metris gives your business endless possabilities. Visit MBVans.com

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

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LAUNCH: UPDATE

Unlocking gridlock

BY SAM BARNES

CRISIS group identifies four priority projects for relieving Capital Region traffic congestion.

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STOCK FILE PHOTO

collaborative effort among industry groups is tackling a big and seemingly eternal problem in the Baton Rouge metro area—heavy traffic congestion. Now a year old, Capital Region Industry for Sustainable Infrastructure, or CRISIS, has identified four major construction programs as the best long-term solutions, from a cost-benefit standpoint, for easing traffic flow and lowering the estimated $623 million lost annually in the area to wasted time, fuel and productivity. Scott Kirkpatrick, executive director of CRISIS, and Jaime Setze, director of the Capital Region Planning Commission, presented their findings during the Greater Baton Rouge Industry Alliance’s Contractor Safety Excellence Awards on March 15 at L’auberge Casino. Initially, CRISIS invited elected officials and engineers from a five-parish region to participate in a roundtable discussion to identify long-term projects that would be “transformational” for the region. “We got a list of 30 to 40 projects,” Kirkpatrick says. “We narrowed it down to 19, then took those projects and performed a cost-benefit analysis.” The analysis found that the most cost-efficient projects either enhance Mississippi River crossings in the area or improve commuting times to Ascension Parish. More specifically, the group proposed a new Mississippi River bridge south of Baton Rouge at a cost of up to $1.6 billion; the widening of I-10 through Baton Rouge for $350 million; enhancements to I-10 or Airline Highway along the Ascension commuter route for up to $180 million; and construction of a north bypass or inner loop (via the Baton Rouge Urban Renewal and Mobility Plan) to channel through traffic to the U.S. 190 bridge for up to $780 million. Key metrics in the analysis included a project’s projected reduction impact in regional Vehicle Hours of Travel (VHT), along with “best

available” cost estimates done in conjunction with DOTD, to derive ratios of “ congestion relief for the cost” for comparison. Projects were also compared based upon groupings among four different categories, such as whether they were a new Mississippi River crossing, large regional project, small regional project, or addressed the region’s “urban core.” “A big part of this endeavor is taking these plans and turning them into reality, so we’re actively engaged at the Legislature and local level, talking about innovative funding opportunities and how we can use revenues in the best manner,” Kirkpatrick says. CRISIS has suggested that tolls could be used to pay for a portion of project costs. Kirkpatrick doesn’t think the

state’s current budget woes will be a hindrance to getting state support. Still, he concedes that little can be done without legislative backing. “We want the Legislature to advance these projects through the process, and obviously the revenue is a key factor in determining what we can do and when we can do it,” he adds. Not simply focusing on long-term answers, CRISIS is working with CRPC to develop a compelling plan that also incorporates short- and mid-term solutions. CRPC’s Setze says his group will incorporate the CRISIS findings into a comprehensive regional plan. “We want an all-encompassing plan that’s multimodal and speaks to short-, medium- and long-term needs,” Setze adds. “Projects within the plan will span anywhere from five to 25

years out.” He says the plan will be finalized by July 2017, when it will be vetted by the public. Before CRISIS, industry leaders were making minimal headway in advancing solutions for ongoing traffic woes. “The Baton Rouge Area Chamber, GBRIA, and the Center for Planning and Excellence were all pursuing separate transportation initiatives,” Kirkpatrick says. Ultimately, the founding members of CRISIS hope to use the projects as a catalyst for economic stimulus. For years, industrial owners along the river corridor have cited traffic congestion as a barrier to workforce recruitment and economic expansion. The complete report on the CRISIS analysis can be viewed at trafficcrisis.com.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LAUNCH: PROJECTS

Lift and roll

Three massive boilers have been moved into place at Sasol’s construction site in Westlake.

MAMMOET

ith a deft combination of raw power and complex maneuvering, the first major pieces of equipment have been moved into place at Sasol’s Westlake construction site, where the South African company is building an $8.9 billion ethane cracker and derivatives facility. As heavy lifting and transport specialist Mammoet reports, three large boilers built in Altamira, Mexico, were successfully transported to the project site in Westlake, Louisiana. Here’s what the move, conducted by Mammoet, looked like: In December 2015, the first of the three boilers was loaded out onto an ocean-going deck barge in Altamira. A larger barge than required only to carry the boiler was used because it had enough buoyancy to receive the

1,000-plus tonnes of weight of the boiler coming from the tall dock. The boiler was then sea fastened and brought to the Port of Beaumont in Texas, where it was transloaded to a smaller inland barge that could deal with further restrictions on the route

to the final offloading site. After reaching Westlake in January, the boiler was offloaded from the barge and transported 3.2 miles on 48 axle lines of self-propelled modular transporters (SPMT) at an average speed of 3.4 mph to the Sasol

site. This part of the journey (shown at left) required the strengthening and widening of 2.5 miles of public roadway and the temporary removal of traffic signals along the route. Once the SPMT trailers were removed, 48 axle lines of self propelled Goldhofer trailers were brought in to set down the boiler at the final installation height. The transfer was needed because the route between dock and plant was too narrow for the Goldhofers. In mid-January the ocean-going deck barge went back to Altamira to load out the remaining two boilers. Once safely shipped to Westlake, both boilers followed the same route as the first boiler on 96 axle lines of SPMT to the Sasol site and followed the same installation process as boiler No. 1. A video about the move is available on Sasol’s YouTube channel.

—Staff report

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Connect With Future Customers! COVERING INDUSTRY IN LOUISIANA 10/12 Industry Report covers the latest developments in the corridor as the industrial growth continues in 2016 and beyond. We will take a close look at the people and the projects making all the news in industry and construction.

To reserve your space email jfinley@businessreport.com or call us at 225.928.1700

Next Issue: August 2016 A publication of

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10/12 INDUSTRY REPORT â&#x20AC;˘ SECOND QUARTER 2016

LAUNCH: INDUSTRY FOCUS

Talking collaboration

By SAM BARNES

New chemical industry group convenes in Gonzales to discuss federal funding and workforce needs.

SAM BARNES

A GREAT START: Matt Erskine, deputy assistant secretary of commerce and COO of the U.S. Economic Development Administration called the group “inspiring.”

Contractors – Bayou Chapter in New Orleans. “I started welding when I was in the 11th grade, which is when I was introduced to ABC – Bayou Chapter,” Dragg said. “At the end of my 12th grade year, I was allowed to participate in a program sponsored by Shell and Turner to continue to go to the ABC school over the summer, for free.” Since entering the workforce in September 2014, Dragg’s hourly pay rate has doubled due to continued workforce training. He eventually graduated as Outstanding Student of the Year from ABC. Attending the meeting as guests were Matt Erskine, deputy assistant secretary of commerce and COO of EDA, and Christopher Masingill, Delta Regional Authority chairman. “It’s exciting to see this level of collaboration around the IMCP community here,” Erskine said. “When we began this effort in 2012 in order to support manufacturing across the country, I’m not sure we

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

expected the level of response that we got. The other inspiring thing is how you all have created this community among yourselves; how you’ve already created this closeknit group.” Other goals of the local IMCP group include building stronger supplier networks, fostering research and innovation, infrastruc-

ture and site development, trade and investment, and operational improvement and capital access. The IMCP also encourages communities to develop comprehensive economic development strategies that will strengthen their competitive edge for attracting global manufacturer and supply chain investments.

SAM BARNES

newly designated consortium of local, state and federal leaders met in Gonzales in April to discuss federal funding needs for Louisiana’s chemical industry, particularly as they relate to skilled labor training. The Louisiana Chemical Manufacturing Initiative is one of 24 designated manufacturing consortiums participating in the U.S. Economic Development Administration’s Investing in Manufacturing Communities Partnership. Through the IMCP program, the EDA coordinates federal aid to support development plans and synchronizes grant programs across multiple departments and agencies. Jonathan Shi, an LSU professor and director of LCMI, says the local group represents Louisiana’s chemical corridor from New Orleans to Lake Charles and is comprised of experts in sustainability, workforce development and small business development. A primary focus of the local consortium is to attract federal dollars for workforce training. “We plan to help our partners compete for federal funding opportunities,” Shi says. “We’re currently paying our own way when it comes to training, but we hope, through our efforts, to be able to bring in federal dollars.” Additionally, the group hopes to strategically align new investments in higher education with workforce needs and emerging growth sectors in the state economy. The Louisiana Department of Education is working with high schools to implement programs to provide credit for training relevant-to-high-need areas in chemical manufacturing. To highlight the need for training, Turner Industries employee Robert Dragg, currently working at Shell Chemical in Geismar, spoke to the group about his own personal success story, made possible by his participation in the craft training program at Associated Builders and

HOW IT WORKS: Welder Robert Dragg told attendees his own story of craft training at ABC – Bayou Chapter.

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LAUNCH: PEOPLE

Executive Profile: G.T. “Butch” Darce I started in the hardware business as a truck driver and quickly moved into sales. Since I was very successful selling a variety of oilfield-related goods, a friend of mine, Jean Hudelot, who was in the catering business, offered me a job as a salesman with the company for which he worked, and he taught me the trade. I eventually moved on to a global catering company learning the international side of the business. After 15 years of traveling the world selling catering to rigs, remote camps and mining projects, I got off a plane in Lafayette one night and said to myself, “I can do this better and be more personable than these large companies in this business.” I sat down with my wife, Dot, and asked her if she would help me achieve this dream. She agreed to help me realize my objective, and here we are 20 years later with a successful global business. What are your responsibilities at Taylors International Services?

Develop and implement strategies that will ensure the continued growth and success of the company. What is your secret to leadership and advancing in your field?

Inventive thinking outside the box utilizing unconventional solutions, ensuring everyone carries the same message about the company with clear identification, and being true to our ideals. What is your favorite part about what you do?

Seeing employees (team members) excel and advance at what they do best. 1012industryreport.com

NAME

G.T. “Butch” Darce POSITION

Chairman & CEO COMPANY

Taylors International Services, Lafayette AGE

66 HOMETOWN

Morgan City EDUCATION

Basic oilfield short courses, international sales short courses, international law short courses What are your day-to-day responsibilities like?

Guidance, discussions, planning on the next phase of the company. What is one thing about your job people don’t expect or don’t know and hear about?

That I’m a good listener for our employees, as well as our customers. What are some of the biggest challenges that come with working in your industry?

Keeping quality employees and staying competitive while providing good value to our customers. What do you see for the future of your industry?

Our business has seen many ups and down along with the other service industries. After diversifying into other markets several years ago, we have a bright future ahead. What are your next goals both professionally and personally?

Professionally: To train someone who can take the reins and lead the company into the future. Personally: To spend more quality time with family and friends.

TERRI FENSEL

Where did your career start, and how did you get to where you are today?

What is your most satisfying professional accomplishment?

Even with the ups and downs, it has all been satisfying. What is a great piece of advice you have personally received?

My grandfather told me when you give your word, keep it. I use it every day both in my professional and personal pursuits. What is your favorite way to spend your time?

With family and friends. What is an item on your “bucket list”?

A lot more fishing and traveling with my wonderful bride, Dot. If you could have any job other than your own, what would it be?

I don’t think I would want a different job; I love the one I have. What do you do to unwind?

Sit on the patio with a nice drink and listen to some Jimmy Buffett. What is your go-to spot in Lafayette?

Rhythms on the River and Downtown Alive!.

— Erin Z. Bass

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

STEPPING UP: Christine George, Air Liquide vice president for the Mississippi River Pipeline System, at Air Liquide’s facility in Geismar.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

1012industryreport.com

TIM MUELLER

COVER STORY

WOMEN in industry Long underrepresented in manufacturing, today’s women are changing the face of the workforce at Louisiana plants. BY SAM BARNES

verything seemed to be going according to plan for Lauren Cordell, a Sulphur High School valedictorian and Louisiana Tech University graduate. She had met many of her academic objectives, and she would soon begin earning her graduate degree in applied behavior analysis at McNeese State University. But for Cordell, something wasn’t quite right. She was beginning to have doubts about her chosen career path, so she took a break from her studies to earn money by working a shutdown at a local process plant. After all, she had some knowledge of the plant environment, as her father had worked at a refinery for years. She was blown away by the experience. “I just really liked being out there,” Cordell says. “I liked it so much I considered switching to engineering, because that was originally what I thought I wanted to do, but I was getting to the point in my life where I really needed to settle down into a career and that would mean a lot more school.” Instead, Cordell chose to begin process technology training at SOWELA Technical Community College in Lake Charles, and after graduation last year was snatched up by Grace’s refining catalyst plant in Sulphur as a first-year operator. Cordell says she’s having the time of her life. “I have always liked working outside, working with my hands,” she says. “I like the troubleshooting and the problem solving aspects of it. I like being able to move around and be outside and enjoy the day.” As an entry level operator, Cordell is a loader/unloader, assisting with trucks and railcars bringing in raw materials and hauling shipments of catalyst.

1012industryreport.com

OVERCOMING THE PERCENTAGES Of the growing number of women in Louisiana industry like Cordell—from first-year operators to engineers to plant managers— most don’t feel like they’re breaking down any barriers. Instead, they attribute the challenges they face in these traditionally male-dominated jobs to personality differences, or a lack of experience, rather than gender bias. That mindset is likely the reason they’ve excelled in their respective positions—by simply refusing to believe that they are at a disadvantage. While it might be true that most women are not consciously discriminated against at plant sites, findings by the American Association of University Women assert that unconscious bias exists, and it severely limits women’s progress in engineering and scientific fields (“Breaking Through Barriers for Women and Girls,” 2009). Furthermore, women in nontraditional fields can find themselves in a “double bind”—viewed as less competent than their male peers and, when clearly competent, considered less likable. These perceptions might subsequently create barriers to entry for women. According to the U.S. Bureau of Labor Statistics, while women accounted for more than half of the U.S. work force in several sectors in 2014, they continue to be substantially underrepresented in construction (9%) and manufacturing (29%), as well as other nontraditional jobs. When broken down by specific industry, BLS statistics show that women comprised 21.6% of the labor force at refineries and 24.7% at chemical plants, nationwide, in 2014. On an encouraging note, the proportion of women across all 10/12 INDUSTRY REPORT • SECOND QUARTER 2016

COVER STORY

LEE CELANO

TIME OF HER LIFE: Louisiana Tech grad Lauren Cordell works among trucks and railcars at Grace in Sulphur.

markets with a college degree more than tripled from 1970 to 2014, increasing from 11.2% to 40%. Whatever the causes, women who chose to enter nontraditional fields increasingly are rising to positions of leadership at Louisiana’s process plants. While the women we spoke to all possess a common affinity for STEM subjects (science, technology, engineering and math), none admit to having had any additional obstacles to overcome as women. At ExxonMobil Plastics in Baton Rouge, Jennifer Dunphy took over 32

as plant manager in March, and says her ascension to upper management was fueled by a strong skillset in math and science. “I am fortunate that I had a father who was a chemical engineer, as well as aunts and uncles in engineering, so I had a good perspective of what engineering was about,” Dunphy says. Dunphy credits a strong female role model as being a significant influence in her early days. “In college, I was going to be a doctor because I thought I was going to save the world,” she says. “I realized

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

that was not for me after my freshman year, and decided to pursue an internship in engineering because I already knew a lot about it. I spent one summer at a chemical company (Dow Chemical) working in operations, and I had a female supervisor who really influenced me to say, ‘OK. This is what I really want to do.’” In her new role, Dunphy feels it’s now her turn to be an encourager to women entering the workforce. As such, she serves as a mentor through ExxonMobil’s Infinity Group, a resource group that connects women

within the company. “I’ll put together a panel discussion or speaker to enable young women who are new to the industry to ask questions about my career, about work-life balance, as well as how we’ve managed to have a career and raise a family, and so forth.” Outreach is another part of the group’s efforts, including sponsoring events such as “Introduce a Girl to Engineering Day” and ExxonMobil site tours. Thinking back on the struggles and challenges encountered 1012industryreport.com

ion

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soon-to-be plant manager at Grace in Sulphur, was having to learn a second language and new way of life—not her gender. Along with her moved to the The ratessister, of Brossett science and degrees in allU.S. fields; The rates of science and from South Korea as a teenager in Women earn a majority engineering (S&E) coursetaking 50% ofwith bachelor’s the 1980s to live her aunt and engineering (S&E) coursetaking ofuncle. bachelor’s for women shift atdegrees the degrees in S&E.1in for psychology, women shift at the biological sciences, “The language barrier was the undergraduate level and gender 1 undergraduate level and gender bigger social challenge—I’m not going and sciences. disparities begin to emerge. to sugarcoat it,”to Brossett says. “You disparities begin emerge. 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Arlington, VA. ied by subject: you to learn as fastminority as you can and Underrepresented ied by subject: males try to do the very best job you women make up 16% of can. the 2 That’s how thingsGirls haveCollaborative been for me.” sus by a 36%). grant from the National Science Foundation, GSE/EXT: National ales than population, but only earn: 81% 19% 82% 18% 81% Brossett says she’ s always had 19% the Capacity a Diverse Workforce, Grant No. HRD-1103073. ales than of STEM Practitioners to Develop 81% 19% 82% 18% 81% 19% advanced an intense love for math. “I always in • 3% of bachelor’s degrees advanced ogy Women earn majority wanted to knowa how things worked,” engineering ogy Women earn asuch majority 2 she adds. “It was a good feeling us 39%).2 of bachelor’s degrees in us 39%). of bachelor’s degrees in when I understood. Once, my olderin mes more likely to • 5% of bachelor’s degrees psychology, biological sciences, sister and I spent time taking apart psychology, biological 1 n engineering computer sciences sciences, and our social TV just tosciences. see what was 1inside.” ok physics and social sciences. 2 rsus 1%). the TV didn’t in ok physics • 7% ofUnfortunately, bachelor’s degrees ates than work after re-assembly. “At the time, 2 Underrepresented minority ates than physical sciences ales Underrepresented minority I didn’t really think much of but women make up 16% ofit,the ales that I’m older and look back, us 36%).22throughout her career, Dunphy womennow make up of the 16% but my only earn: us 36%). refuses to view her gender as apopulation, I’m thinking parents could have deterpopulation, but only earn: 1 ge Options. (2013). Where National Science Board. (2014). Science and Engineering been really mad.” rent or limitation. • 3% of bachelor’s degrees in at are their Career Interests? Indicators 2014. Arlington VA: National Science Foundation “I’ll be honest—I don’t focus •on 3% of bachelor’s degrees in (NSB 14-01). SEIZING OPPORTUNITY gender,” she adds. “I’ve been fortu-engineering engineering 2 012). Science and Engineering National ScienceChristine Foundation, National for Science George, a viceCenter president nate at ExxonMobil. I’ve worked on mes more likely to •Engineering 5% of Statistics. bachelor’s degrees in A: National Science (2015). Women, Minorities, and mes moreteams likely to I was the onlyand • 5% of bachelor’s degrees with Air Liquide whose oversight in inwhere female, Persons with Disabilitiessciences in Science and Engineering: 2015. engineering computer cludes the Geismar plant, attributes but I’ve also worked on teams that engineering computer sciences Special Report NSF 15-311. Arlington, VA. sus 1%).22 were completely run by women. herbachelor’s progress to an ability to take in • 7% of degrees sus 1%). • 7% of bachelor’s degrees advantage of opportunities, ratherin I really think a diverse workforce, 2 physical sciences by a grant from the National Science Foundation, GSE/EXT: National Girls 2 Collaborative than a well-thought-out plan. whether that diversity is gender, perphysical sciences he Capacity of STEM Practitioners to Develop a Diverse Workforce, Grant No. HRD-1103073. “In my career, there were times sonality style or whatever, can bring when opportunities just came,” more productivity to a team. That’s ge Options. (2013). National Science Board.says. (2014). Science and Engineering George “At other times, though, where Where I try to focus; not11 so much on geare Options. (2013). Interests? Where National Science Board. (2014). Science and Engineering at their Career Indicators 2014. 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sciences (58%) and Female scientists life sciences (48%) Female National Science Board. (2014).scientists Science and Engineering and engineers and relatively low Foundation Indicators 2014. Arlington National Science and VA: engineers (NSB 14-01). are concentrated shares in computer are concentrated inand different National Science Foundation, National Center for Science mathematical in different and Engineering Statistics. (2015). Women, Minorities, and occupations thanand 2015. sciences (25%), Persons with Disabilities in Science and Engineering: occupations than 1 with relatively Special Report NSF men, 15-311. Arlington, VA. engineering (13%). men, with relatively high shares of high shares of women in the social www.ngcproject.org women in the social sciences (58%) and sciences (58%) and Minority women life sciences (48%) life sciences (48%) comprise fewer and relatively low and relatively low 1 in 10 sharesthan in computer shares in computer employed and mathematical and mathematical scientists sciences (25%),and and sciences (25%), and 2 1 engineers. engineering (13%). engineering (13%).1

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COVER STORY do—an example of that was moving to Air Liquide. It was something I wanted to do, and it took a little bit of effort, but in the end I persevered.” George earned her chemical engineering degree in her native France, selecting a school that had an exchange program with the U.S. This enabled her to complete her master’s degree in engineering at the University of Houston. “Working in Houston and being exposed to the large petrochemical basin influenced me to pursue a career in that field,” she adds. “It would just fascinate me when I would go to those sites and tour them, and I guess that’s probably when my interest grew.” Early in her education, George didn’t feel intimidated as a woman in a male-dominated world, since her school in France had “a reasonable ratio of women to men.” This changed when she began her practical training at a French steel mill her second year. “That’s the first time I really felt like the only girl in town,” she says. “It was really interesting. People would say, ‘Are you lost?’ or ‘What are you doing here?’” George stops short of saying her gender presented her with any undue obstacles or burdens, even as she rose through the ranks at Air Liquide and became plant manager. “I don’t know that I can say that my challenges were because I am a woman,” she adds. “Instead, taking on a new role was challenging because it was a significant stretch for me, professionally.” George credits Air Liquide for pursuing a diversified workforce, “and obviously one of the dimensions of diversity is women in the workplace.” In her years with the company, she has noticed an important shift in the female-male dynamics in the workplace, especially as women have begun to take more leadership roles. “I think the opportunities are becoming more numerous [for women], and I think there’s a more conscious effort to do that,” she says.

TIM MUELLER

ROLE MODEL: Jennifer Dunphy took over as plant manager at ExxonMobil Plastics in Baton Rouge in March.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

CHANGING PERCEPTIONS The AAUW study cited above found that negative stereotypes regarding women’s abilities—particularly in the areas of engineering, 1012industryreport.com

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

COVER STORY

LEE CELANO

GRACE PLANT MANAGER BROSSETT: “When your job changes, or you go from one position to another, they don’t give you three months to learn the job. It’s up to you to learn as fast as you can and try to do the very best job you can.”

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

1012industryreport.com

math and science—persist despite considerable gains. In Louisiana, organizations such as the Louisiana STEM Initiative and the Louisiana STEM Girls Collaborative seek to eliminate unconscious bias by raising awareness among middle school and high school students. By doing so, they hope to increase the numbers of females entering these fields. Lou Papai, director of the Louisiana STEM Girls Collaborative and senior director of education at Sci-Port Discovery Center in Shreveport, says his group has made significant strides toward that objective. “One of the main purposes of the collaborative is to find ways to connect people across the state and leverage resources,” Papai says. “We know that there are numerous entities all over the state that do phenomenal things to help girls get into STEM disciplines— libraries, schools, universities. But the problem has been that we don’t know each other. Our purpose is to connect resources across Louisiana.” As such, the collaborative fosters networking and the sharing of information and resources by awarding mini-grants to girl-serving programs and providing an online, searchable database. “We also provide current, relevant research statistics and information for anyone wanting to reach girls in different populations and in different areas,” Papai adds. The collaborative maintains a leadership team comprised of industry, professional societies, K-12 and universities, for the purpose of taking a statewide approach to boosting gender equity. The ultimate goal is to increase the numbers of students, overall, going into STEM fields. “We’re hurting for a STEM-educated workforce,” Papai says. THE ECONOMIC DRAW Growth in the numbers of females at Louisiana process plants is not limited to engineering or management. The allure of high wages and readily available training have recently begun to attract more females into entry-level positions. For Meagan Hayes, first-year processor at Sasol in Lake Charles, the choice to apply for a job there was simple. The single mother saw it 1012industryreport.com

as an opportunity to provide a better standard of living for her 11-yearold daughter. Hayes is currently part of a 200-person team writing operating procedures in preparation for the plant’s startup. The Lake Charles native graduated from Washington-Marion Magnet High School in 2004, then from McNeese State University in 2010 with a bachelor’s degree in applied and natural sciences. “After graduation, I worked full time at a local bank for a few years and had reached a point where I couldn’t advance any further,” Hayes says. “I learned about the Sasol expansion in the news, and decided to go back to school.” Hayes pursued training in process technology at SOWELA Technical Community College, graduating in 2012 with a 3.6 GPA. “I finished in just two semesters because several of my credits transferred from McNeese.” “I attribute my success to my daughter,” Hayes adds. “She is involved in a lot of clubs, and she’s pretty good at softball. I need to be able to afford those things comfortably, so I knew I needed to do better for both myself and her.” Grace’s Cordell also says that money was a big motivation for her career change. “I knew that I wanted something where I would make good money and be able to support myself,” she adds. Despite friends and family warning her that she might be treated differently as a woman in her new job, Cordell hasn’t noticed any of that. “I was expecting that kind of an attitude, and when I got here it really hasn’t been that way,” she says. “You kind of go in with that mindset and then you see that it’s not true.” “I think it’s all just normal stuff,” she adds. “You have to learn the position, and you have to prove that you can do the job. With the men it’s kind of understood that they can do the job, and that they can handle the labor and the physical aspects. So, as a woman you have to show them you can do it.” FEMALE ENROLLMENT UP Demand for skilled labor training is also growing among women. At Associated Builders and Contractors – Bayou Chapter’s worker training program in New Orleans, female

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

COVER STORY

LEE CELANO

PROCESS TECH: Single mother Meagan Hayes is part of a 200-person team writing operating procedures in preparation for startup at the new Sasol operation in Westlake.

enrollment unexpectedly shot up to 21 students this spring, after hovering around an unimpressive two or three per semester for years. While that still comprises a small percentage of those to graduate this May, Claire Obgartel, ABC’s vice president of workforce development, says it represents the highest number of females to ever enroll in the program. “I’m not really sure what the driving force is behind it,” Obgartel says. “It just kind of happened, and it’s crossing over multiple crafts. We have students being trained in electrical, pipefitting, welding and scaffolding.” Most of the students are sponsored by industrial contractors such as Brock Services, Turner Industries and Pala Group. “These students see people doing other things and they want to make a change,” Obgartel adds. “One of our female electrical students does electrical drawings for Dow, and she wanted to learn more about the electrical trade to improve her skillset.” David Alexander, director of

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TIM MUELLER

training at ABC – Pelican ChapBerryman says there is an undeter in Baton Rouge, says women niable trend toward more females in comprise a small percentage of the the program. “Something else we’ve approximately 3,400 students who noticed … the girls get hired faster enter training at facilities in Baton than the boys,” he adds. “They’re just Rouge and Lake Charles. Still, better at multitasking. They get into the high-wage environment has scheduling, estimating, contracts, attracted some females to pursue accounting, and so on.” craft training. “We do have females He feels the increasing numbers in our evening programs,” Alexancan be attributed to changing perder says. ceptions, fueled by outreach efforts Encouraging statistics can also and career fairs. be found at LSU, where there has For what gender boundaries been a perceptible surge in female there are, whether conscious or enrollment in nontraditional unconscious, they’re best addressed curricula, particularly construction at a young age, says Papai of the management. Louisiana STEM Girls CollaboraCharles Berryman, chairman of tive. His group has made breaking LSU’s Construction Management down barriers at the middle school Department, has noticed a sizeable and high school levels its primary increase in the number of females goal. entering the construction man“You’re seeing more young womagement curriculum just this year. en in middle school and high school “About 7.5% of last year’s enrollshowing an interest in STEM cament were females, the highest reers, and they test better in science percentage since we began keeping and math than the boys,” Papai says. track in 2008,” Berryman says. In “But, in the past, when they went fact, theDate: currentMay president of LSU’ s to college they didn’t go into those Issue Ad proof #1 • Please respond byStudent e-mail or fax with your approval or minor revisions. Construction Association, fields. We’re beginning to see that • AD WILL RUN AS IS unless approval or final revisions Ameenah Henderson, is a woman. slowly change.” are received by the close of business today.

INSTRUMENT OF CHANGE: Level 4 instrument and electrical instructor Jay Lockwood works with student Jennifer Clark on a small-scale process control loop. Clark, 42, is studying instrumentation at Associated Builders and Contractors – Pelican Chapter in Baton Rouge to advance her career.

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NEWS REGULATORY ISSUES

The green effect

BY SAM BARNES

EPA’s Clean Power Plan leads regulatory push that has some in industry concerned.

he country’s evolving regulatory environment, and how the installation of a new president in 2017 will impact it, have become growing concerns for Louisiana industry. Many fear that pending and yet-unknown regulations targeting greenhouse gas emissions and other pollutants could increase the cost of doing business. The EPA’s Clean Power Plan figures most prominently. In essence, the plan calls for electrical generators to cut CO2 emissions by 30% by 2030. While it is typical for the EPA to regulate a pollution source,

COLLIN RICHIE

THE LCA’S BOWSER: “We’ve agreed to listen and to take a look at [the Clean Power Act] and run it through our process internally with our membership to see exactly what it will do to us.”

the Clean Power Plan goes a step further, mandating that electrical generators increase their emphasis on energy efficiency and renewable energy. At present, however, the plan is in limbo. Twenty-nine states—including Louisiana—sued the EPA following the plan’s promulgation, prompting the U.S. Supreme Court to issue a stay pending a judicial review. “The challenge to EPA was that they don’t have the authority to tell us how to use our resources,” Department of Environmental Quality Sec. Chuck Carr Brown says. “The states [in the suit] contend the EPA’s

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

authority is limited to controlling what comes out of that stack or piece of equipment.” Despite the stay, DEQ is taking measures to ensure compliance with established deadlines, even as Louisiana remains a participant in the suit. The first deadline falls in September, when states were originally required to submit a preliminary plan to meet the new standard. Louisiana’s change from a Republican to Democratic governor earlier this year prompted DEQ to revisit its involvement in the lawsuit. “We agreed that we would not necessarily remove ourselves from the suit, but

would also continue down a parallel course developing those rules,” Brown says. “We can still do what we need to do to meet the deadline in September by conducting some outreach meetings, collecting information, etc.” Greg Bowser, executive vice president of the Louisiana Chemical Association, sees the Clean Power Plan as “problematic” for industry. “It will end up driving up energy costs, we believe, so that’s going to be a problem for our industry,” Bowser says. “We’ve agreed to listen and to take a look at it and run it through our process internally with our 1012industryreport.com

1012industryreport.com

10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2016

NEWS: REGULATORY ISSUES

SO2 ATTAINMENT ANOTHER HOT BUTTON Stricter guidelines governing another chemical compound in the EPA’s crosshairs—sulfur dioxide (SO2)—could significantly impact Calcasieu Parish, which is currently considered a non-attainment area. Sulfur dioxide, a “criteria pollutant” that impacts the respiratory system, is produced from the burning of coal or oil, as well as the smelting of aluminum, copper, zinc, lead or iron. On March 10, EPA found that 11 states—including Louisiana—failed

anode and industrial-grade calcined petroleum coke annually. “There’s a coalition working to address this,” Brown says. “Everybody’s talking about the best way to address this. It’s a process.” SHIFTING PUBLIC OPINION AND THE WHITE HOUSE LCA’s Bowser says the impact of other environmental “hot topics” is largely dependent upon the outcome of the presidential election. “The fracking issue is still out there,” Bowser says. “Fracking has

al air quality monitoring, saying it would be an unnecessary burden of questionable value. “If you send the data to DEQ, they says it’s going to cost them an unbelievable amount of money just to process it,” he adds. “The other problem is that the monitor doesn’t accurately tell you where a substance came from. It could be a car just passing by … it could be almost anything.” Despite outcries over what they feel is over-reaching by the EPA, some industrial owners have

to submit a State Implementation Plan required under the Clean Air Act for 16 areas designated as non-attainment in regards to SO2 emissions. “We’re working with the EPA right now and I’ve gotten some agreement that they’re going to help us with that designation,” Brown says. “You have to have three years of data to prove that you’re in compliance. While Calcasieu has the data, the EPA is not accepting their validation process.” Additionally, DEQ’s State Implementation Plan is under EPA review. Calcasieu is not alone in SO2 emissions. In Baton Rouge, one of the biggest emitters of sulfur dioxide is Oxbow Corp., a coal calcining unit that produces 700,000 short tons of

helped our industry because it creates an abundance of natural gas, which is a huge feed stock for what we do, and it’s driven natural gas costs down. While the science is there that it’s safe and can be done in a responsible manner, environmental groups are strictly opposed to fracking of any kind.” Furthermore, Democratic candidates running for president have promised to either eliminate or severely limit fracking activity if elected. “If that happens, natural gas won’t be as readily available, therefore the supply goes down and price goes up,” Bowser adds. “That would have a huge impact on what we do.” LCA also opposes a push by environmental groups for addition-

assumed leadership roles on the environmental front. In doing so, they seek to change public opinion characterizing them as out of touch with environmental concerns. Andrew Liveris, CEO of Dow, was one of several CEOs signing an open letter released before the September 2015 United Nations Conference on Climate Change in Paris that called for world leaders to pursue a low-carbon, sustainable future while keeping the rise in global temperature to under 2 degrees Celsius. Additionally, in its 2015 sustainability goals, Dow pledged to maintain greenhouse gas emissions below 2006 levels and to use 400 MW of clean energy by 2025.

STOCK FILE PHOTO

membership to see exactly what it will do to us.” Sen. Bill Cassidy, speaking at a Feb. 18 Industrial Contractors Council breakfast in Baton Rouge, says the Clean Power Plan would ultimately hurt the state’s working-class families. “A lot of these regulations have a tendency to increase our regulatory environment; therefore, a company wanting to make an investment decides to invest in China, India or Mexico, and not in Louisiana,” Cassidy says. “There’s a war right now over whether our nation’s top priority should be to decrease greenhouse gases or create working-class jobs. The Keystone Pipeline is a great example. It would have created 40,000 construction jobs, but it also would have increased greenhouse gases, so the administration killed it.” While some states would be minimally affected by the Clean Power Plan, industrialized Louisiana would be significantly impacted, Cassidy says. “Those states with the least carbon emissions have been de-industrialized,” he adds. “Those with the highest, including Louisiana, are industrial states. This is a great state to be in if you’re working class. That is at risk of being lost at this inflection point.” DEQ’s Brown paints a less dire picture, saying that electrical rates might not be severely impacted. On the contrary, he says natural gas suppliers could prosper since most electrical plants would be forced to convert to the fuel—which Louisiana has in abundance. “You’ve got the electrical cooperatives saying it’s going to double or triple the rates,” Brown says. “But on the other end, I’ve got the energy folks, who have done some modeling, saying they can reach these limits by doing certain things.” “Whatever we end up doing it’s going to be right for Louisiana,” he adds. “I’m going to fight all the forces that be if I have to, and we’re going to make an informed decision about how we’re going to move forward.” Brown expects a court decision by July. If the Clean Power Plan stands, the timeline for implementation would likely be adjusted. In the meantime, DEQ is hosting meetings with stakeholders to prepare for its possible implementation.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: REGULATORY ISSUES

Q&A: Chuck Carr Brown New DEQ secretary urges industry to be pro-active, considers fee increases.

COLLIN RICHIE

VOICE OF EXPERIENCE: Brown served as assistant secretary for environmental services at DEQ from 2004-2008.

10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2016

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iewing his appointment as a homecoming of sorts, Dr. Chuck Carr Brown took over as secretary of the Louisiana Department of Environmental Quality on Jan. 11. Brown is not new to DEQ, having served as assistant secretary for environmental services there from 2004-2008. Most recently, he was president and CEO of Brown and Associates, a Baton Rouge environmental services, governmental relations and issues management firm. Brown holds a bachelor’s degree in chemistry from the University of Southern Mississippi, as well as a master’s in public administration and a doctorate in public policy/ environmental policy, both from Southern University. To dig deeper into his plan for DEQ and its potential impacts on industry, 10/12 Industry Report sat down with Brown to discuss his goals and how they mesh with the needs and wants of industry: Q. How would you describe your philosophy as it relates to your new role as DEQ secretary? A. I firmly believe in environmental education. I have this philosophy I call EEAT (Environmental Education, Access and Trust). It begins with environmental education, followed by access to the decision-maker, and then ultimately you trust the decision that I make, because even if I have to tell you no, at least you’ve had the opportunity to state your case. I often tell plant managers to get out from behind your desk, go outside your fence line, get to know the community, create a citizen advisory panel, and then find out what you can do to enhance their quality of life. Is that fence line monitoring? Is that health screening? Is that job training? You have a responsibility to be a good corporate neighbor.

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Q. What will your department do, specifically, to enhance environmental education? A. I’m creating an advisory panel at DEQ. We’ll meet at least once a quarter. There’s no specific agenda as of yet, just a goal of education, because that’s critical. I have five folks who have already committed … one LSU professor, a couple of folks from industry, etc. I’m going to convene the group after the legislative session. The goal will be for them to tell us [DEQ] how we can do things better. This includes things such as whether or not they’re getting correct information from us, or enough information from us, how our public participation process is working, etc. We want [the public] to give us input and we want to open the lines of communications. As a result, we want them to understand what’s happening, so that they don’t see a plant with smoke coming out of a stack and say, “Oh, they’re poisoning me.” We want to tell them what’s coming out of that stack. We’re utilizing social media as well, publicizing community outreach events or other important announcements. We’re also creating a YouTube channel where we’re going to have about five minutes of me just talking without anything clouding the issue … giving them real facts. Q. Switching topics, do you feel the current state budget woes will impact how DEQ operates? If so, how? A. LDEQ has not had a fee increase since 2003. We’ve gotten very good support from industry to look at our fee structure, and to recommend certain fee increases. As an important part of that, we were assured by this administration that we would be able to keep any funds that we generated. This is critical, because funding for our operation is generated through fees and some grants through the EPA. We’re totally self-sufficient.

As a whole, industry, the regulated community, is doing a pretty good job. Can we always do better? Yes, but for the most part I’ve seen that everyone is willing to go the extra mile. We’re going to go to the Legislature and ask for about a 10% across the board increase (HB 900). In addition, we have certain tasks that we perform for industry that we don’t get paid for. We’re trying to come in line with what some of the other surrounding states are doing. We’re well below what Texas is doing. Q. Has industry been supportive of the idea? A. We’ve had a very good reception. That includes the oil and gas folks, Louisiana Chemical Association, the Louisiana Solid Waste Association, the Louisiana Municipal Association, etc. Nobody wants to talk about an increase, but we’ve gotten great support and we’re going to give them a service for whatever they [the Legislature] give us. Q. What happens if the increase is not approved? A. Without it, we’ll run out of money in two years. It’s not a money grab, believe me. We have an environmental trust fund, and the way we’ve stayed afloat the last eight years is by borrowing from that trust fund. Q. Even with the fee increases, are there any cuts expected at DEQ? A. At this point, we consider ourselves part of the family. Even though we don’t get general fund money, we’re still part of the family. When they ask other departments to take drastic cuts, they’re going to ask us to take a cut also. Even though we’re not forced to, we’ll take some statutory cuts. It’s not a pretty picture. Q. Regarding the current regulatory environment in

Louisiana, would you say that industry is generally in compliance with DEQ and Environmental Protection Agency regulations? A. An environmental regulatory agency is faced with a lot of challenges. One is that the rules are constantly changing. I always try to look at ways I can help industry comply with these rules and how can we make them better when they’re promulgated. As a whole, industry, the regulated community, is doing a pretty good job. Can we always do better? Yes, but for the most part I’ve seen that everyone is willing to go the extra mile. Q. In conclusion, what advice would you give Louisiana’s industrial community? A. I would like to tell industry to be pro-active. Go back and look at your processes. Go back and look at your operations. There’s some things that you can always do better. The money you spend now will pay off dividends in the long run. I’m also telling them not to base your business plan’s success on less-stringent oversight. We are going to enforce our rules and regulations. On the other hand, we’re always going to help you comply, especially when you show us that you’re willing. We’re going to go the extra mile. That’s one of the things that I continually tell the employees, that we make our decisions based on science. We are going to be an organization that exceeds expectations. I’m letting industry know that. One thing I want everyone to know … that any federal regulation that impacts us, we’re going to fight to make sure it’s right for Louisiana.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: ECONOMIC DEVELOPMENT

Q&A: Don Pierson A conversation with the new secretary of Louisiana Economic Development.

ov. John Bel Edwards’ new economic development chief, Don Pierson, credits his military background for fueling a deep belief in teamwork, planning and organization. Pierson is a graduate of the United States Military Academy at West Point and served in the 82nd Airborne Division for five years before embarking on a career in economic development that has spanned nearly three decades. Edwards’ three predecessors, Govs. Mike Foster, Kathleen Blanco and Bobby Jindal, each tapped Pierson for various positions in economic development. Most recently, he served under Jindal as assistant LED secretary. Leading the charge for business

DON KADAIR

THE LONG VIEW: Pierson addresses the Statewide Economic Development Summit April 18 in Baton Rouge.

recruitment and retention has its challenges in a state facing a $600 million budget shortfall in the next fiscal year, but Pierson says he is bullish about Louisiana, taking the long view and pointing to the state’s resources and assets, and its strength in sectors like chemical production, agriculture and timber products, aerospace, and technology. We sat down with him in April to get a read on his priorities and his outlook. Q. What has been your top priority so far? A. To retain and grow the tremendous opportunities that have been afforded to us, and that calls for a lot of planning, teamwork and execution. The department has been very successful, but for projects that

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

have been announced, those are just starting points, not finished points. It’s at this point in time that we put the workforce together, and it’s when engineering commences and when permitting processes get underway. So we have a great deal of important business to accomplish in order to fully realize the significant number of announcements and projects we have underway. Q. You have said supporting small businesses is one of your main objectives as secretary. What is LED doing to accomplish this? A. We have 11 small business development centers with free counseling that are strategically positioned throughout the state, often on fouryear campuses. Even if you’re operat-

ing a successful small business, you can go to these centers and learn about putting together a business plan for a bank so you can, for example, grow additional market lines, a new location or new marketing to enhance your business. It’s important that small businesses are staying competitive. There’s no standing still in today’s economy, and Louisiana’s small businesses represent 80% of our jobs. Q. How do Louisiana’s current fiscal challenges impact your job as the state’s top economic developer? A. It’s an important endeavor right now to right-size our budget and to make sure that education, health care and transportation infrastruc1012industryreport.com

ture needs are met. That backdrop makes economic development a bit more challenging in the short term, but most investments take the long view, and Louisiana is rich in assets, including our transportation infrastructure, deep water ports, highway and rail, natural gas and labor supply. We are well-positioned to attract a diverse array of business, and we’re particularly well-positioned as one anticipates the growth of the global economy as we become more reliant on moving products to developing nations. The long-term potential we have remains extraordinary. Q. What about the downturn in oil commodity pricing? A. Certainly, oil commodity pricing has been tough and is impacting our situation, but the silver lining is that we have available labor resources, and that can be important when trying to effect a project win. We have layoffs in the oil and gas sector in Lafayette and in the HoumaThibodaux area, while in Lake Charles, we have $97 billion in announced projects, with $33 billion in projects under contract. Large projects also related to industrial construction are going on between Baton Rouge and New Orleans, including Shell’s major expansion and Monsanto’s billion-dollar project in Luling. The idea would be to transition some oil and gas workers into industrial construction. Q. Manufacturing has been a bedrock sector for Louisiana. What are the current conditions for manufacturing? A. The low price of oil is of great benefit to chemical production facilities because it represents a low feedstock and energy cost to run their facilities, so for those entities engaged in gas-to-liquids, liquefied natural gas, chemical production, fertilizers, plastics—they all have a favorable business environment and that’s why we’re seeing those plants run at record capacities and expanding into new markets. That side of manufacturing is going well. In other sectors, oil commodity pricing is still causing significant challenges, and you’re seeing that in areas like steel, oil and gas, and other 1012industryreport.com

types of fabrication. So it’s a mixed market and one that we anticipate will change over time, as business cycles do. We’re very confident that oil and gas will be robust again in the not-too-distant future, but for the time being there are significant struggles in that sector. Q. In recent years, Louisiana has improved its ranking in site selection, in its ability to attract national and international investment. What will it take to continue to attract new companies and sectors, and to convince resident companies to remain in Louisiana and expand? A. One of the ways we do it is at the community level, trying to make sure our communities are well-prepared to compete for, and win, industrial and commercial opportunities. We conduct a nine-month leadership course where we deploy modules that help them focus on workforce development, site industrial development and other areas, so that, over time, they’re able to be better prepared [to compete.] We also have a Certified Sites Program, where we take identified properties that are a great potential location for industry and do the necessary survey work and Phase One environmental review. And we ensure that the site is properly served by the utilities required by industry. If any of these areas don’t measure up, the community has the opportunity to do the forward planning to remedy the situation so we’re able to package the site as shovel-ready. It’s like a Good Housekeeping “seal of approval.” We now have more than 65 of those sites registered across the state in 27 different parishes. Q. A lot of attention is given to new wins, but how do you retain existing companies? A. While we are aggressive in recruiting new businesses to our state, we’re also proud of our efforts to build on our existing business and industrial assets. In partnership with regional economic development organizations, we conduct 60 to 800 business visits annually. We start at

the top with major economic driver companies to make sure we’re in close communication with them. These discussions are collected in a database so we can see trends, document concerns and make recommendations for improvement that help us keep pace on competitiveness. There are two other really important outcomes as well, including getting ahead of disaster management and business disruption issues because we’re in touch with these companies. And we can often discover in these conversations if a business or [offsite headquarters] is contemplating expansion. When that happens, we can immediately go to work to build the case that Louisiana is the most robust opportunity for that expansion. Q. What has to be in place to convince them? A. It’s not something that just happens—it happens because of a number of factors, including low cost of business, utilities, logistics and deploying a skilled workforce efficiently and effectively to help the business accomplish the expansion. And that brings me to LED FastStart, which has been recognized as the No. 1 workforce program in the nation for the last six years. Q. FastStart has clearly been a big factor in site selection. How will it continue to keep its edge? A. We will work hard to maintain FastStart’s status, and we’re well aware that other states are going to be doing more in workforce training. But we believe we can outpace our competition because we’ve gained a lot of intellectual property about how to build even stronger relationships with educational institutions, both K-12 and higher education. We’ve found that we can lower the walls of silos and have more focused conversations about matching education with jobs. Those engagements will help us optimize the number of our graduates in Louisiana we’re moving into high-paying jobs. Q. There have been a number of recent announcements. Tell us about those and what’s on the horizon. A. Some of our recent announce-

ments, including Shell’s $717 million expansion in Geismar, speak to our traditional strengths, but we’re also pleased to see success occurring in the forward-looking sectors of our economy like digital media with IBM and CenturyLink forging an important partnership in Monroe and with CSRA in cybersecurity and with other types of computer applications. We have the software company, CGI, in Lafayette, IBM in Baton Rouge and GE Capital in New Orleans. These are only the major names you hear about. There is a much larger array of smaller digital companies in those markets and in other markets in our state that are also meeting with success. In addition to technology and software production, we’re seeing success in aerospace and aviation, and anticipate that’s another rich field for us. We see it in Continental Express Jet’s recent announcement of expansion in Shreveport. In Lafayette, you have Bell Helicopter, which announced last year its assembly of the 505 Jet Ranger. At Chennault in Lake Charles we have AAR, one of the leading maintenance repair operators in the world, and across the runway, Northrop Grumman is executing contracts for the U.S. Air Force. England Airpark is a new megasite designation. The aviation sector is on the grow in Baton Rouge, and right outside New Orleans at the Michoux Assembly Facility, NASA is constructing the Orion space capsule. Q. So the strategy is to balance both continued growth in legacy sectors and push for growth in a variety of new sectors where recently we seem to be gaining traction? A. Our challenge is to continue to manage those diverse elements in the economy, and to seek to position Louisiana workers to take advantage of the opportunities today in their communities, or in nearby communities. We want to do that in a way that, over time, we measure success by a greater number of people working in Louisiana than ever before, and those at work receiving higher wages than ever before.

—Interview by Maggie Heyn Richardson

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: OUTLOOK

Beyond 2017

By SAM BARNES

What will the industrial boom look like in the long term? So much hinges on the price of oil … and China.

FILE PHOTO

n paper, the sheer volume of announced industrial work in Louisiana is unprecedented—pegged by economists at as much as $140 billion since 2012. [See the “Project by project” maps on pages 76-81.] In reality, the number of projects to break ground could be somewhat lower, should market conditions maintain their current trajectory. “This is an expansion like none we’ve seen before and I’ve been watching this state for years,” says economist Loren Scott of Loren C. Scott & Associates. “In the past, if we had $5 billion in industrial announcements, we would’ve thought that was a good year. It’s something that we’ve never seen before. It’s an amazing number.” However, of the $140 billion in projects, less than half—$65.3 billion—have broken ground, and some industrial contractors grumble that the work may never materialize as a downturn in oil and a strong dollar negatively impact the bottom lines of many industrial companies. This is particularly evident in Baton Rouge, where the work appears to have crested. Scott says it’s a matter of timing and project delays. “Some of the projects are working through the permitting and financing stages, and in some cases you’re seeing actual delays,” he adds. In the New Orleans MSA (Metropolitan Statistical Area, stretching from St. James to Plaquemines parishes), only $3 billion of its $24.6 billion in announced projects is currently underway. And in Lake Charles, about half of its $93 billion in announced projects has broken ground. In the current oil-price environment, the New Orleans and Lake Charles MSAs stand to lose the most, since the majority of their projects are in the design stage. In particular, St. James Parish could suffer the greatest impact—a majority of the announced projects in the

ECONOMIST SCOTT: “The question is what’s the price of natural gas going to be in Europe and Asia. That’s the key.”

New Orleans MSA are concentrated there. WHERE DO WE GO FROM HERE? Beyond 2017, industry experts say the crystal ball gets hazier, with the impossible-to-predict price of oil and the Asian economies playing critical roles in determining the course of future industrial development. One thing is clear: It would be overly optimistic to expect all current announced work to materialize or to expect that a similar surge in announced work will occur again anytime soon. Until recently, natural gas prices—a key input for capital decisions—had been a major catalyst for expansion. While natural gas traded at about $2 per million BTUs in the U.S., it had not dropped significantly in Europe and Asia, where natural gas is more closely tied to the price of oil. “This was to our advantage when

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

the price of oil was over $100 a barrel, and these countries were having to pay $15 for their natural gas,” Scott says. “In that environment, there’s no way they could possibly compete with us.” It’s a different story today, as significantly lower oil prices have made overseas gas prices more competitive. David Dismukes, executive director of the Center for Energy Studies, says the demand side of the equation will be equally important in coming years. Most eyes will be focused on Asia, where the market is expected to contract over the next few years, thereby lowering the need for commodity chemicals. “I think in 2017 and beyond we’ll continue to see opportunities, but the size and scope of that is going to be a function, almost entirely, of what’s going on with the global economy,” Dismukes says. “Growth is the challenge, and that works against everybody, not just Louisiana.”

He points to concerns that the Asian markets are undergoing long-term structural changes, and that China, specifically, is seeking to re-orient itself from a market focused on rapid growth to one more consumer driven. “If that’s the case, then you’re not going to see 8% to 12% growth anymore,” Dismukes adds. “You’re looking more at 4% to 7% growth a year. That changes your dynamics. That’s going to push out the window for new commodity chemical capacity until 2020.” As an unfortunate result, the need for new projects won’t be there. Scott contends that natural gas prices will be the most significant predictor of future investment and growth in industry. “You’re not going to have to worry about the price of natural gas here—because we are awash in it,” Scott says. “We have more natural gas than we know what to do with. The question is what’s the price of natural gas going to be 1012industryreport.com

ENVIRONMENTAL REGULATION Apart from unknowable factors such as a worldwide recession or depression that would “clearly cause a reduction in the demand for chemicals,” Scott points to a tightening of air quality standards as having a potentially negative impact on industrial competitiveness. This would be largely influenced by who occupies the White House in 2017. A Hillary Clinton or Bernie Sanders win, Scott says, would undoubtedly lead to heightened standards that could dampen expectations and competitiveness. In particular, the EPA’s Clean Power Plan would increase the cost of power and negatively impact the industrial market’s bottom line should it come to pass. “If power plants are required to shift to natural gas, wind or solar power, the impact is going to be a significant rise in utility rates,” Scott says. “[Industrial plants] are huge users of electricity. If the Clean Power Plan is fully implemented, industrial utility rates could go up 48% in Louisiana.” Subsequently, an increase in rates would prompt owners to look to invest in other countries. Greg Bowser, executive vice 1012industryreport.com

president of the Louisiana Chemical Association, says the Clean Power Plan, as it stands, could be problematic for the industry, although LCA has not taken an official stand on the issue. “It will drive up energy costs, we believe, and so that’s going to be a problem for our industry,” Bowser says. “We’ve agreed to listen, to take a look at it and run it through our process internally with our membership to see exactly what it will do to us.” STATE BUDGET Another worry is that the state’s current budget crisis will ultimately

the golden egg.” On the plus side, economists say Louisiana’s 10-year tax exemption, Quality Jobs Program and Certified Sites Program (at Louisiana Economic Development) are necessary programs that provide competitive advantages over neighboring Texas. “The fact that we’ve got $143 billion worth of announcements indicates that we’re doing a good job of staying competitive with them,” Scott adds. Other obvious advantages are low-cost natural gas, the Mississippi River and a well-developed system of ports. Still, Dismukes says, “It’s not like we’ve got it hands down and we can

we need to change some things in our tax structure, but we can’t be so out of whack with our neighboring states that it leads to a slowdown in investment.” Bowser fears the current administration is looking at short-term fixes while not considering the potential long-term damage. “We’re not saying you don’t need to do some things; we think you do,” he adds. “But we can’t do things that have long-term negative impacts on our economy. Especially right now, when our oil and gas industry is already suffering from low oil prices. The last thing we want to do is start putting obstacles in the way.”

ON THE HORIZON: The price of oil is critical to the question that looms over the outlook: How many of the LNG projects will actually go vertical? Pictured: Cheniere Energy’s Sabine Pass LNG plant under construction.

CHENIERE ENERGY

in Europe and Asia. That’s the key.” In fact, the impact of natural gas prices on industrial development should increase for years to come. Speaking at LSU’s Center for Energy Studies in March, BP economist Mark Finley predicted natural gas would be the fastest growing fossil fuel through 2035, spurred by strong supply growth—particularly of U.S. shale gas and liquefied natural gas (LNG)—and by environmental policies. He added that while natural gas dependency will increase, overall energy consumption won’t match overall GDP growth due to improvements in technology. “While world GDP is expected to more than double, unprecedented gains in energy efficiency will mean that the energy required to fuel the higher level of activity will grow by only about a third,” he adds. BP’s Energy Outlook 2035 offers 20-year projections on a worldwide scale, based on “most likely” assumptions for energy demand.

make Louisiana’s primary competitor—Texas—more attractive for future investment. “We need to understand that the decision about where to locate a plant is largely a matter of math,” Scott says. “You sit down and you figure out your internal rate of return, and if you come along and say that you’re going to solve the budget crisis by levying a sales tax on electricity then that becomes part of the equation.” While resolving the current budget crisis is a priority, Scott says the state could “kill the goose that laid

dictate terms to industry. People can move. They might want to get closer to other sources of gas and other basins like in Ohio and Eagle Ford in Texas. I don’t think people are going to pick up plants and leave, but when they start making marginal decisions about continued expansion, these are some things to consider.” LCA’s Bowser says it’s a certainty that an unfavorable tax policy in Louisiana would lead to a shift of industry to Texas and other regions, if measures are taken that make the state less competitive from a tax standpoint. “I understand that

OUTLOOK: BATON ROUGE AND NEW ORLEANS In Baton Rouge, Scott predicts a noticeable drop in new industrial announcements and construction in 2017 and beyond, given current known variables. Additionally, many significant projects will be completed this year or the next. “The drop in construction employment will be somewhat offset by new permanent jobs created by the plants, but it takes more people to build plants than it does to operate them,” Scott says. “So you’re going to see a little downward pressure on

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: OUTLOOK the Baton Rouge MSA’s employment.” Conversely, the potential in New Orleans is for good, solid growth beyond 2017 “if the potentials become actuals.” These projects will lead to a bump in construction employment, particularly in St. James Parish. The work in New Orleans will come at a fortunate time for Baton Rouge-headquartered construction firms who can make the short drive down I-10 for work. “Performance, Cajun, Turner and others are heavily involved in construction all along the 10/12 corridor,” Scott says. “The folks at these companies are still doing pretty well, but they’re also nervous because there’s so much potential out there that has not yet gone vertical.” OUTLOOK: LAKE CHARLES AND THE LNG MARKET At a minimum, construction employment should remain stable in the Lake Charles MSA, if not grow slightly, should projects—par-

ticularly in the LNG sector—pull the trigger and go vertical. “A huge part of [southwest Louisiana’s] numbers are the LNG export terminals,” Scott says. “There are at least seven projects announced in the area, and two of them have gone vertical—Cheniere Energy and Sempra Energy.” The remaining projects—totaling about $50 billion—are still in design or have been delayed. “The problem is that because the price of oil has dropped down to $40, we no longer have a competitive advantage in selling natural gas,” Scott says. “For the most part, they don’t have these 20-year contracts [as they did before]. Therefore, there are billions of dollars in capital investment that are going to depend upon the price of oil getting back up again, and back up pretty quick, for these folks to be able to pull the trigger.” Consequently, because of Lake Charles’ high concentration of LNG export facilities, predicting future employment numbers there is more difficult.

GDP, ENERGY AND EMISSIONS (GLOBAL) INDEX: 1990 = 100 500

400

GDP

300

ENERGY

200

CO2 100 1990

2005

2020

2035

The BP Energy Outlook 2035 predicts a marked widening in the gap between GDP and energy consumption, while changes in the fuel mix—with the shares of gas and renewables increasing— also lead to a divergence between energy consumption and emissions.

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: LOGISTICS

Aquatic highway A new container-on-barge shuttle service between the Port of New Orleans and Baton Rouge provides the booming chemical industry with another option to move its products. By JENNIFER GIBSON SCHECTER

next two years. “The Port of New Orleans is poised to meet the growing needs of the shippers upriver, and we are thrilled to work with SEACOR AMH to offer this new service,” says Gary LaGrange, president and CEO of the Port of New Orleans. “Shippers have many options and any increased service we can offer will help their bottom line. In addition to our rail and trucking partners, the container-on-barge service will provide shippers with another option to efficiently move their cargo.” Brian Wyly, director of global logistics for Ascend Materials, which manufactures chemicals, fibers and plastics, says his company is investigating the operation and economics of container-on-barge. “We do foresee some potential benefits. We could possibly have barge operations closer to our plant, thereby reducing over-the-road miles, as well as payload gains from being able to load containers heavier and not having to secure heavy weight truck permits through multiple states.” There are substantial benefits to shippers by choosing the new shuttle service, says Teubner. “The primary benefit to shippers is increasing the efficiency of their logistics chain,” Teubner says. “We provide them an option that eliminates the congestion that can occur on both ends of the supply chain in the surface transportation system. Container-on-barge improves port throughput, reduces dwell time and helps the environment by reducing emissions. It also offers an additional overweight corridor for transportation.” Teubner also points out the production schedules of the STOCK FILE PHOTO

s the chemical industry continues to boom in Louisiana and the Gulf South region, SEACOR AMH has created a new container-on-barge shuttle service from Baton Rouge to export those products via the Port of New Orleans. The company planned to bring the container-on-barge shuttle service to the Lower Mississippi River Waterway this spring. The initial service will operate with one tug boat and up to six barges at once, the maximum number that can be moved at once through the Port Allen lock near Baton Rouge. SEACOR AMH already has facilities in the New Orleans area and has opened a terminal along the Port Allen Canal. Plans include the installation of intermodal equipment such as chassis, trucking and container handling equipment at Port Allen to move empties and spreaders. SEACOR AMH (doing business as SCF AMH) is well-positioned in marine transportation and brings its experience on the Tenn-Tom Waterway to Louisiana. It is part of SEACOR Holding Inc.’s Inland River Services group, which includes SCF Marine Inc. The group owns and operates modern river transportation equipment; owns covered and open hopper barges, tank barges, inland river towboats and smaller harbor boats; provides ancillary services along the U.S. Inland River Waterways; and operates marine equipment on the Parana-Paraguay and the Magdalena river systems in South America. “When we learned of the increasing volume coming out of Baton Rouge from the chemical sector

we decided a shuttle service would be complementary to our ongoing services on the Mississippi River,” says Richard Teubner, Vice President of SEACOR AMH. “We developed the terminal operations and contractual agreements with port operations in New Orleans and Baton Rouge to get the customers interested.”

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

The customer interest was indeed there, as chemical companies expect to double and even triple shipping volume. There are 88 refineries located within a 100-mile radius of New Orleans and, according to Louisiana Economic Development, more than $6.4 billion in improvements at refineries and petrochemical plants in Louisiana are planned over the

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STOCK FILE PHOTO

CONNECTED: In April the new shuttle service won designation as a Marine Highway Project.

manufacturers. “The majority of these refineries have a 24-hour per day/7-day per week operation and they can load and receive containers all day long. But they can’t deliver a container or pick up an empty 24/7 directly to the ports. Our facility in Baton Rouge will be able to better accommodate their production schedules,” says Teubner. The United States Maritime Administration (MARAD) has been supportive of the new shuttle service. A “project designation” was applied for, which was jointly sponsored by the Port of New Orleans and the Port of Greater Baton Rouge on behalf of SEACOR AMH. In April, U.S. Transportation Secretary Anthony Foxx designated the new service as an official Marine Highway Project. A Marine Highway Project is a planned service, or expansion of an existing service, on a designated Marine Highway Route, that provides new modal choices to shippers of cargo, reduces transportation costs and provides public benefits including reduced air emissions, reduced road maintenance costs and improved safety and resiliency. In this case the designated Marine Highway Route is the Mississippi River, previously designated as the M-55, which will serve as the primary route for the Baton RougeNew Orleans Shuttle project. The proposed container-on-barge service operating between the ports of Greater Baton Rouge and New 1012industryreport.com

Orleans will reduce congestion and bridge traffic on Interstate 10, the project designation announcement noted. The designation means the project is part of MARAD’s America’s Marine Highway System. The Port of New Orleans is connected to 14,500 of the 29,000 nautical miles that make up America’s Marine Highway. As the implementation of the shuttle service is being prepared, new opportunities have already been identified. Early growth potential is anticipated for possible service additions east/west, and in longer north/south long-haul routes of empty and full containers. The Port of New Orleans is ready for surges in petrochemical-related cargo, according to Robert Landry, chief commercial officer for the port. The port has invested over $100 million in capital improvement projects since 2012, and has a master plan to expand the Napoleon Avenue Container Terminal to 1.5 million TEU capacity by 2020. Expansion of the Mississippi River Intermodal Terminal and Yard to increase efficiency and volume throughput is expected to be completed this spring. Landry added the port is also aggressively working to secure more ocean carriers and services to meet the increases expected from the chemicals boom. A version of this article was originally published in Port Record, Winter 2016. Reprinted with permission.

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: COMPANY PROFILE

Send in the drones

By MEREDITH WHITTEN

Louisiana-grown LandBros is making a mark in the use of drones for industrial photography, safety and risk control.

BRIAN BAIAMONTE

ne day last Unmanned Vehicle Systems fall, Danny International, the FAA has Landry was granted 3,136 exemptions flying to to U.S. companies since the San Marcos, agency began issuing exempTexas, for a project LandBros tions in September 2014. Aerial—the aerial drone Most of these exemptions company he founded with his are for aerial photography. brother, Kevin Landry—was Real estate, aerial inspection, doing for Epic Piping. Midaerial survey, construction flight, Landry looked down and infrastructure are other at the vast landscape below, popular applications for a sight he has experienced FAA exemptions. In Louisimany times before. This time ana, 53 section 333 exempwas different, though. The tions have been awarded, open space took on a new according to AUVSI. meaning. Forty-four of these exemp“We were in a small tions are for aerial photogmanned aircraft flying out for raphy, though only a few are a day’s work. I knew that we currently being used in the were opening so many doors Capital Region, according to for our business and where Landry. we could go,” Danny Landry As LandBros has grown, says. “That project helped us the equipment, technology realize that we aren’t bounded and services the company by a particular geographical offers have evolved beyond area. We could still provide just high-resolution aerial great cost-efficiencies, but we photography as well. Landweren’t restricted in where we Bros also provides services could work.” including site surveying, LandBros has been mapping, 3-D modeling, inexpanding its horizons ever ventory management, safety since the Landry brothers esinspections, insurance and tablished the company, which natural disaster documentauses drones—or unmanned tion, business development aircraft systems (UAS)—to videos, and 4k video. Landoffer higher-quality aerial Bros specializes in industrial photographs, improve effifacility maintenance and ciency among clients’ operaindustrial construction. tions and reduce workplace “We’re not just taking risks. At that time, in 2014, photos,” Landry says. “We’re UP AND AWAY: Brothers Danny and Kevin Landry founded LandBros in 2014. Their work has increasingly crossed into the the company’s projects were providing efficiencies, creatindustrial sector. based primarily in Baton ing safety and reducing costs Rouge and New Orleans. Less than Orleans to Baton Rouge, with the MORE THAN PHOTOS throughout the client’s site.” two years later, however, Landnew office located at Perkins Road LandBros has pioneered the comIndeed, many clients have fully Bros’ clients stretch from Texas to and Essen Lane. Prompted by the mercial use of drones in Louisiana. integrated LandBros into their Mississippi and extend throughout increasing demand for the company’s In 2015, the company became the operations as an on-site operator, Louisiana. services, the new location enables first Louisiana-based business to he says. “These clients want to have LandBros has worked at construcLandBros to be closer to clients, receive an exemption specifically for a safe environment and also create tion sites for southwest Louisiana Landry says. commercial and industrial applicost-efficiencies. They realize that megaprojects such as Sasol, Cam“We moved to Baton Rouge for cations—known as a section 333 our services can reduce risk at their eron LNG and G2X. Clients have a strategic location,” he says. “We exemption—to fly drones under 55 facilities.” included the likes of CB&I and were increasingly driving through pounds from the Federal Aviation One example of how LandBros Turner Industries. Baton Rouge to get to our clients, so Authority, which regulates aircraft has improved efficiency and reduced Earlier this year, the company it made sense in terms of travel time operation in the national airspace. workplace risk is the company’s moved its headquarters from New and costs.” According to the Association for work for the aggregates industry.

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INDUSTRY MEETS AVIATION Planes—traditionally used in aerial photography—legally are limited in how low they can fly, meaning that photos are taken from an altitude of at least 1,000 feet. LandBros’ drones, however, fly only up to 400 feet. This, in turn, has had a significant impact on the products and services that commercial and industrial construction clients receive. One result is better quality images for LandBros’ clients. “It’s a different product than traditional aerial photography,” Landry says. “We get higher detail. The pixel-to-inch ratio is higher because we’re closer to the object.” The use of video has multiple applications, as well, such as a fly-through of a barge in the Mississippi River that a company can use as a marketing tool. Additionally, scheduling requirements typically mean planes can shoot photos or videos about once a month. Drones, however, can be used more often, an attractive selling point in many industries. “Now we can take photos weekly, so our clients can document their job site change weekly. That’s important because some jobs move quickly.” LandBros team members bring a combination of aviation experience, as well as more than 10 years in industrial construction. This hybrid experience gives LandBros an edge, as the team understands their clients’ industrial culture from the inside out. “You need to have more than just the technical background (for operating drones); you have to understand industrial safety culture, as well,” Landry says. “We have a reputation in the industry as being the guys who are most conservative in terms of safety and operations 1012industryreport.com

because we have that safety culture engrained in us. In a wild, wild West industry, we stand out for that.” Indeed, “safety first in all operations” is LandBros’ mantra, and the LandBros team is proudest of the company’s focus on safety. “Just because you have an FAA exemption doesn’t mean you operate safely,” Landry says. “The exemption is just the surface of what it takes to operate legally and provide services. It’s essential to have a UAS vendor that is competent and has a record of operating safely.” Each job takes a minimum of two people—one to fly the drone and one to visually observe, plus a

law specifies that you can’t cause unwanted surveillance on a person or property.” AT THE FOREFRONT In addition to the emphasis on safety and privacy, LandBros also prides itself for being a leader in the commercial UAS industry and for continuing to stay at the forefront of the rapidly changing industry. “We’re constantly investing to stay ahead of the curve,” Landry says. “For example, building a decent 3-D model is something you can do with your iPhone. But, if you want to create an accurate 3-D model, you must invest in the best technology.

STOCK FILE PHOTO

“With our capabilities, we can calculate how much material is in a stockpile, which is important for inventory management and tracking potentially millions of dollars in material loss,” Landry says. “Also, at a petrochemical facility, instead of a person climbing up on a stack or flare, we can safely inspect the problem area. This reduces risk and provides efficiency,” he says. Other recent applications include assessing the impact of recent flooding for Entergy.

FAST AND FLEXIBLE: “We can take photos weekly, so our clients can document their job site change weekly.”

potential third to operate the camera when necessary. “One person’s eyes are always on the drone, the other is flying. Qualified pilots and safety redundancies further increase safety on the site,” he says. The nature of LandBros’ work is highly sensitive and, thus, confidentiality and privacy are critical to the company’s clients. “All of the data we collect is maintained as proprietary information,” Landry says. “Nondisclosure agreements are common for us and almost always required.” The company also must take heed of state privacy laws. “We have written permission for all job sites we photograph,” he adds. “Louisiana

This industry changes daily, so we are continually investing in our equipment.” UAS increasingly are used as a standard part of business operations by a broad range of industries, including businesses across the Gulf South. As the use of UAS for commercial applications, such as aerial photography, has increased, clients’ and potential clients’ understanding of the technology and application of commercial drone use has increased. Landry says misperceptions about drone use are also dissipating. “It seems like we’re seeing more positive things,” he says. “People are starting to understand it is a positive technology when operated correctly.”

As the business has grown, LandBros’ client base has naturally trended toward large corporations, as “they really value the level of our safety culture and we’re able to meet their needs of proprietary data protection,” Landry says. LandBros continues to work with small businesses, as well, however. The FAA regulates commercial drone use because of safety concerns, and the FAA exemption requires businesses to adhere to specific safety guidelines, such as conducting preflight inspections and making sure that all parts of the drone are in working order, all motors are properly serviced, drones do not fly within five miles of an airport, and drone operators are approved to be in an industrial plant environment. “One of our clients is a helicopter facility, which seems ironic. You may ask, why can’t you just use the helicopter?” Landry says. “The helicopter has a different purpose. Just to take the helicopter off the ground is expensive and to use it to take the kind of photography we’re doing would be unsafe.” Helicopters are not allowed to fly as low as UAS can, so the photos you can take from helicopters are a less effective product, Landry says. If helicopters were permitted to fly at such a low altitude, the risks would include distraction, high wind turbulence for ground personnel and higher risk on the jobsite because of the size of the aircraft. Still, drone use in commercial business remains an emerging industry with evolving technology, so client knowledge varies. In many instances, the LandBros team spends some time educating potential clients about the benefits of drone-based aerial data collection. “They may not understand the technology and how it can help them, how it can save lives, reduce risk and reduce costs,” Landry says. “Yet, even if they know the technology and the services we provide, they still want an experienced and qualified drone operator.” When they founded the company, the Landrys were motivated to work with UAS by a passion for the technology and a strong entrepreneurial spirit. It’s precisely this entrepreneurial perspective that is causing the technology to rapidly evolve and

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

LANDBROS

NEWS: COMPANY PROFILE

Issue Date: 10/12 Industry Ad proof #3

• Please respond by e-mail or fax with your approval or minor revisions. • Ad will run as is unless approval or final revisions

EYE THE SKY: a higher areIN received by theDrones close of offer business today.pixel-to-inch ratio than traditional aerial photographery because they can fly closer to the object.

• Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS

the use of drones for commercial activity to take off around the country. “That’s congruent with how this industry is,” Landry says. “Everything moves very fast. As soon as you stand still, you’re going to get passed.” Building relationships and the trust that comes with that is critical to LandBros, Landry says. “You can’t just buy a drone off Amazon and jump into the industrial world,” he says. “We want to drive this business and be an industry leader in Louisiana. This area is rich with opportunity and being locally based matters. We’re from this area—we’ve driven past these facilities and properties our whole lives.” “We’ll continue to grow at a healthy rate by building long-term partnerships,” Landry says. “We’re working in an accelerated market. The future is very bright for the industry side and how they can use the technology to improve their operations. To be a part of it is an exciting opportunity. The future looks very good for us, too.”

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

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INNOVATION

ABOVE AND BEYOND

I enjoy the experiences, the travel and the specialized work I get to do here at Westgate. But it’s our progress, looking forward to new technology, tools and processes that make me excited about our company and the future of our industry. We continue to learn and grow, which make us ready for what our clients need next.

We go above and beyond to deliver on-time and safe jobs. And while we learn something new every day, it is our commitment to our safety practices and our customers’ needs that make us proud to be a part of the Westgate team. Our processes work for our teams and our clients.

TION OF S A N D I N N O VAT A F E U D IO N O AN

TIM

YEA

R S A V E R A G E estg a r su p er v isors have worked for W

MORE THAN JUST EMPLOYEES “We are more than just employees here at Westgate. We have the opportunity to learn and grow as part of a family. Our attitudes about and contributions to this team matter. We show up every day, committed to our company and clients. That’s why the sky is the limit for Westgate. We make our own opportunities for success.” – BRANDON WHITE, 15 year Westgate team member with 17 years in the industry

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– CODY T YREE, 9 year Westgate team member with 10 years in the indu stry

– RYAN MOHR, 20 year Westgate team member with 22 years in the industry

QUALITY Westgatellc.com (225) 749-2635 1355 Beaulieu Lane Port Allen, LA. 70767

“Westgate is a company focused on quality. From the way we are each treated as individuals, to how we are given the ability to do what’s best for each job, quality is the most important thing. This commitment includes making sure the job and our team are safe. We feel appreciated so we can take care of our customers.” – MIKE L ANGUIRAND, 12 year Westgate team member with 12 years in the industry

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: SITE SELECTION

Where the land meets the river With river frontage for industry dwindling, Ascension Parish eyes ways to maximize what’s left. By SAM BARNES

DON KADAIR

or generations, Mark Noel’s family has owned 1,000 acres of riverfront property in the tiny community of Modeste, Louisiana, hugging the west bank of the Mississippi River. For most of that time, the land was used to grow sugarcane and little else. That all began to change a few years ago, when a Russian fertilizer plant owner approached Noel about the possibility of buying the land for industrial development. Although the deal eventually fell through, he and his family hatched an idea that would become much bigger than the sugarcane that grows there. They began to view the property, along with about 16,000 in additional acreage surrounding it, as the best option for a new Ascension Parish industrial park. Since that time, Noel has become a major proponent of what is now referred to as the West Bank Industrial Overlay, and he is enthusiastic about its potential for attracting new industry to Ascension Parish. “Development here could do for south Louisiana what Disney World did for Florida,” Noel, president of L.J. Noel Inc., says. Of course, Noel’s family stands to profit significantly if the proposed industrial park comes to fruition, especially since his property borders about 3,500 feet of the river and is centrally located in the development. Recent feasibility studies sponsored by Louisiana Economic Development have determined that Noel’s land is also the best location for a new megadock that would support many of the park tenants. On the east side of the river, land is scarce. Industrial owners purchased large swaths of it over the years to secure their spots on the riverfront and create buffer zones around their plants. The dwindling river frontage has been a concern for years, prompting state and parish officials to look for ways to maximize the use of the remaining

PARK DREAMS: Property owner Mark Noel is an enthusiastic supporter of the West Bank Industrial Overlay, but he can’t wait forever.

available land or convince landowners to more efficiently use existing property. DEVELOPMENT READY Leading the charge on several fronts is Mike Eades, Ascension

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Economic Development Corp.’s president/CEO. Eades, along with a “working team” that includes the Baton Rouge Area Chamber, Louisiana Economic Development, and a consulting engineer and planner, have solidified Noel’s vision into

the 17,000-acre West Bank Overlay development, consisting of 275 individually owned parcels of land. Eades says development of the park is progressing. “We completed the signing of the MOUs (memorandums of understanding) with the 1012industryreport.com

larger, existing land owners about this time last year,” he adds. “As such, they’ve agreed to give us access to the property for due diligence purposes, to allow us to market the property to prospects and developers and to pursue the adoption of an Industrial Overlay district.” In turn, the owners’ property values would presumably increase as infrastructure is developed. Eades would like to have the land certified through Louisiana Economic Development’s Certified Sites program, which qualifies industrial sites based on zoning restrictions, title work, environmental studies, soil analysis and surveys. The sites certified through the program are 180-day development ready and have substantial due diligence studies performed. However, Larry Henson, director of business intelligence at LED, feels the full certification of the West Bank Overlay acreage would be cost prohibitive. “The largest site we’ve certified has been just over 1,000 acres,” he adds. “I’m not sure that LED will get to a point of certifying the entire site. It would be entirely too expensive.” Instead, Henson hopes that enough information can be derived from recent feasibility studies to entice a private developer with deep pockets, who would coordinate the entire endeavor. “That’s one reason we went ahead with the rail and dock feasibility study—to see how the rail and docks would lay out in relation to the parcels of land and who owned them.” 1012industryreport.com

LED funded 75% of the due diligence studies through its Economic Development Site Readiness program. In addition to overseeing the Certified Sites program, Henson supports business developments such as the one in Ascension. Over the years, Ascension Parish has had more land certified by LED than any other parish, with nine of 65 sites statewide residing there. At the West Bank Overlay site, Henson says the preliminary “due diligence” has been completed. “We’ve performed a rail and dock feasibility study, so we know it has the potential for development,” he adds. “We’ve shown that deep water docks can be built there and that Union Pacific is interested in serving the site with rail.” Eades feels the demand side of the equation is also there. “There’s obviously a demand for river access by certain process-oriented owners,” he adds. “Demand has been well demonstrated.” Still, if state and local groups hope to entice a developer, they’ll need to move fast. While Noel realizes the development of an industrial park would be a boon for the parish, he would sell his property outright should an opportunity come along. “I’ve made that very clear to the people at LED and AEDC,” Noel says. “We have to look out for our shareholders, our family. We have to make decisions that will benefit them, and I can’t just sit back and say, well, this would be for the good of the parish [if I wait].”

dating,” Henson says. “It’s usually on a short time frame, and it’s got to be completely beneficial to both sides. The existing plant likes to find someone who could buy some of their product or somebody that makes something that they need to go into their process. Then they talk about sharing services such as steam, security, cogeneration, etc. What makes it difficult is that it’s got to be a near-perfect match.” At most, LED and local agencies have 10 days to make a match work, which Henson says is not adequate time. Still, some co-location proposals are successful. Lion Copolymer in Geismar has been aggressive in its co-location efforts, making tracts of land available with amenities already in place. In one such arrangement, REG Geismar (formerly Dynamic Fuels) operates a renewable diesel bio refinery on Lion property. Among other things, “they share Lion’s security gate, so they don’t have to duplicate having that security guard,” Eades says. Additionally, Stepan Chemical—manufacturer of specialty and intermediate chemicals—recently announced that it plans to co-locate at an undetermined site in the parish to create its new $60 million to $70 million chemical production facility. The facility is expected to create an additional 98 new indirect jobs, for a total of more than 130 new jobs. Another 65 construction jobs would be created by the project.

DON KADAIR

EADES: “There’s obviously a demand for river access by certain process-oriented owners.”

MAXIMIZING SPACE Eades would like shared services—such as the planned docks and rails at the West Bank Overlay site—to play an increasingly meaningful role in Ascension Parish. On the east side of the river, industrial owners typically have separate docks, water intakes, treatment facilities and rail yards. “That’s not a very efficient use of space,” Eades says. “We’ve envisioned the creation of a superdock for some time, but this [the west bank site] added fuel to the fire.” A recent AEDC study found that Geismar, the town at the center of Ascension Parish’s industrial development, averages a dismal 0.4 jobs per acre, a number he hopes to increase at the West Bank Overlay project. Another AEDC initiative aimed at maximizing the use of available space is “co-location,” where existing plants offer land and shared services to new plant owners as part of a mutually beneficial arrangement. These new plants often, but not always, produce raw chemicals or represent the next step in production for their host plant. This can be appealing to a plant owner, who could potentially avoid transporting hazardous materials by truck, ship or rail. “It’s an attractive proposal if you can sell that chemical to somebody that’s sitting next door to you rather than transport to another location,” Eades says. Despite its benefits, LED’s Henson says co-location can be a difficult proposition. “It’s like speed

HENSON: “[Co-location is] like speed dating. It’s usually on a short time frame, and it’s got to be completely beneficial to both sides.”

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NEWS: WORKFORCE

A new start

By DAVID JACOBS

A condensed PTEC training program in southwest Louisiana helps working adults who already have degrees retrain for industry jobs.

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LEE CELANO

ryan “Beau” Batulis of Lake Charles was 31 years old and ready for a change. He was project manager for a cleaning company that worked for L’auberge Casino Resort, overseeing three shifts and 185 employees. He was working six or seven days a week, including weekends and holidays, 12 or more hours a day. One day he was talking with a friend who mentioned that he had been painting his house. Batulis asked how he was able to afford his new home. “He said, ‘I’m an operator in a plant,’ ” Batulis recalls. “I said, ‘OK, what does that mean?’ ” The friend explained a little about his job, and mentioned a new program being launched at SOWELA Technical Community College. Called PTEC Fast Track, it allows college graduates like Batulis to earn an associate degree in process technology in only four months instead of the usual two years. Batulis applied and was accepted, and fortunately had $6,000 in savings for tuition. For much of his time in the program, he was in class for 40 hours a week while still working full time at his old job. Some nights, he would get off work, take a shower and go right to school, often studying or catching a nap in his car in the parking lot. When Axiall came to campus to recruit, the company representative mentioned that many of the plant’s employees were leaving for Sasol, Batulis says. To him, that sounded like an opportunity at Axiall. While Sasol’s existing Lake Charles Chemical Complex has seven manufacturing units on approximately 400 acres, the company is also constructing an $8.9 billion petrochemical complex nearby. Meanwhile, Axiall operates two manufacturing plants in Lake Charles and announced plans earlier this year to build a $1.9 billion ethane cracker nearby in a joint venture with Lotte Chemical. >>

CHANGING TRACKS: Beau Batulis of Lake Charles started his career shift at 31.

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LEE CELANO

NEWS: WORKFORCE

BACK TO SCHOOL: David Lafargue, SOWELA’s dean of industrial technology, created an accelerated PTEC curriculum for those who didn’t need to repeat general education requirements.

Batulis landed an internship with Axiall, and after graduating in late 2014, he went to work at Axiall North on a permanent basis. Now 33, married and the father of twin baby girls, he plans to build a career in the industry. PEOPLE WITH DRIVE Jennifer Ozment, operations superintendent with Axiall in Lake Charles, says her company has hired several Fast Track graduates and has been “quite impressed” with them. “They tend to be very driven individuals because finishing the 62

program in that short period of time takes quite a bit of focus and mental capability,” she says. “It is a great opportunity for someone to apply themselves and get into the workforce where they can make an impact in a short time.” David Lafargue, SOWELA’s dean of industrial technology, says his advisory board wanted him to produce more graduates. He had noticed that quite a few PTEC students already had a degree in another field, which got him thinking about ways to create an accelerated PTEC curriculum for those who didn’t need to repeat

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general education requirements. Based on the needs of industry, Lafargue created a scoring rubric to determine which applicants were best able to succeed. Relevant work experience is a plus, but not a requirement. Students basically are in class for 40 hours a week, and they earn a total of 40 credit hours. The program is divided into four quarters with three or four classes per quarter. Each day is separated into thirds, each with a different instructor, which is intended to make it less monotonous for the students than

listening to one instructor all day long. That approach also makes it possible for students who have a “life emergency” and miss a day or two to realistically catch up, Lafargue says. The program is now on its fourth cohort of 20 to 25 students. While the program isn’t designed to teach the social skills needed to be a team player in a plant environment, Lafargue says, the students do tend to become friendly with each other and help each other learn. He compares the Fast Track approach to the immersion programs sometimes used to teach foreign 1012industryreport.com

SOWELA’S PTEC FAST TRACK PROGRAM AT A GLANCE: • Classes are held for 16 weeks, 7:30 a.m. to 4:30 p.m., Monday through Friday. • Cost is $6,169, not including textbooks. • Applicants must hold an associate degree or higher. • Minimum GPA of 2.7 from most recent or highest degree. • Applicants must have completed or be enrolled in the remaining general education courses required for the degree in the semester prior to entering the program. • Military and/or industrial experience, or at least demonstrated mechanical aptitude, is preferred but not required.

languages, and says at least one other college is considering a “hybrid” version in which certain portions of the curriculum are compressed. Fast Track isn’t right for everyone, and not every graduate has succeeded in the workplace, but Lafargue says the feedback from his industry partners mostly has been positive. Currently, 78 students have enrolled in the Fast Track program (including spring 2016) with 71 of the 78 on track to fully graduate from the program with their Associate of Applied Science degree by May 2016. The remaining six students that completed the Fast Track program coursework are expected to complete their AAS this summer. “This means that we anticipate 77 of the 78 students to have successfully completed the program and earned their degree by summer 2016,” Lafargue says. “With any program, whatever the student puts into it is whatever they’re going to get out of it,” he says. “It’s a good opportunity for some people who I know for sure wouldn’t have had the opportunity [otherwise].” CAREER CHANGER Michelle Jardell of Lake Charles was a math teacher looking for a new career. “There are so many changes in education, and it was getting very frustrating,” she says. And as a divorced 1012industryreport.com

mom, she wanted to make more money to send her son to college. Her neighbor told her about a friend, a former chiropractor, who graduated from a PTEC program and landed a good job in Texas. She applied to Fast Track in the summer of 2014 and enrolled in January 2015, she says. “The amount of work and the time frame that you had to [complete the program] was very challenging,” Jardell says. She had never before set foot in a plant, so the hands-on mechanical parts of the curriculum were particularly hard for her. “When you don’t know something, you don’t know what to ask,” she says. But while working as part of a team running the school’s mock plant equipment, she was able to learn from her fellow students as well as the instructors. Jardell graduated in April 2015 but wasn’t able to find a job until August, when she was hired as a pump house operator at the Phillips 66 refinery in Westlake. She says she was the only woman hired among 14 people. It’s a tough and sometimes dangerous job, Jardell says, and she was intimidated at first. But she says she’s grown to love it, and she doesn’t mind getting dirty. “It’s very different from anything I’ve ever done,” she says. “But it is the best-paying job I’ve ever had.”

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NEWS: INTELLECTUAL PROPERTY

Protect your assets!

Part 2 of 2.

What today’s manufacturers should know about patent law.

ccording to the National Association of Manufacturers, intellectual property can comprise up to 80% of the value of a company’s knowledge portfolio, and theft of these resources costs U.S. businesses roughly $250 billion a year. Does

your company have an adequate intellectual property strategy? Are its policies up to date with rapidly changing patent laws? These are questions worth asking for any manufacturer whose activity involves innovation, research and development, new products or processes, or the use of products, processes

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

or technologies created by other entities. We asked the intellectual property experts at four Louisiana law offices to give us a primer on today’s IP environment for manufacturers. In this series, you’ll find information on some threats you may not have considered and some best practices you may want to im-

plement. You can find Part 1 of the series at 1012industryreport.com. Note: The information provided in this article is for informational purposes only. Before you make any decision that may have legal implications, you should consult with a qualified legal professional for specific legal advice tailored to your situation. 1012industryreport.com

What advice do you have for manufacturers for implementing or updating their intellectual property strategies in 2016?

WARNER DELAUNE Baker Donelson

DELAUNE: All indications are that key technology advances in 2016 will come from robotics and artificial intelligence (AI), virtual reality, and building internet-based communications into just about everything. Biotech and pharmaceuticals will continue making great strides in health care, especially in high-resolution medical imaging, molecular treatment protocols and immunotherapy. If businesses are in these fields, the competition will be very high, meaning that many patent applications will be filed and prosecuted for slight variations in designs and processes, which can make the patent system much more difficult and complex to maneuver. That can include disputes between inventors and companies within

the patent office itself, such as inter partes reviews, post grant reviews and reexaminations. Companies reliant on software will have to seriously consider whether it’s worth the effort to file patent applications on inventions embodied primarily in software, because recent case law and patent office guidelines have substantially narrowed the scope of how (if at all) software can be protected under patent laws. Companies who are in energy, construction, automotive, aerospace and similar industries will not see anything different in 2016 than in the past eight-10 years in terms of patent practice, so the advice of “file early and often” remains the best advice. Specifically, establishing early filing dates by submitting frequent

provisional patent applications as inventions are developed and improved will provide a more robust basis for any later nonprovisional U.S. applications and international counterpart applications. For companies with larger patent portfolios across a wide range of technologies, it would be prudent to review which of those assets are actually producing revenue or some concrete defensive value. Patent assets which are not significantly contributing to the business may still be monetized through sale or license to other companies, resulting in a more manageable and less expensive portfolio, particularly in industries that are affected by recession or low prices of oil and natural gas.

What is new or most important in today’s patent law that manufacturers should be aware of? DELAUNE: Although not a new concept, clients in the manufacturing sector (less so in the software, internet or chemical sectors) deal with equipment and systems that are primarily physical in structure and function. In other words, the nature of those devices and processes makes it relatively easy for competitors to see, learn and copy their features. Contrast this with chemicals, where trade secret protection of a formula may be difficult to determine or reverse engineer, or software code that can be encrypted to avoid duplication. For inventions in the manufacturing world, it’s harder for companies to rely upon practical methods (such as secrets, encryption and security measures) to prevent competitors from “stealing the idea,” so the most valuable form of protection will often be legal protection through utility and design patents. That being the case, it is critical for manufacturers to pursue patent claims which are broad and which are fully supported by the text of the specification and the drawings. Most companies in manufacturing have fully embraced computer-aided 1012industryreport.com

design (CAD) and parametric solid modeling tools, such as Autodesk Inventor and similar software. In many cases, those part and assembly models can not only provide the basis for manufacturing parts and equipment, but they are often ideal for patent drawings. Patent attorneys and patent draftsmen who are familiar with the operation of solid modeling tools can manipulate, isolate and section those models to create impressive illustrations for the patent process, and which accurately reflect the latest iteration of designs. Therefore, using the models for patent illustrations is an excellent way of making sure that all salient features are described and claimed in the patent application. This is particularly important in the context of enforcement of patent claims against infringers, where precise language and drawings can mean the difference between winning and losing a patent infringement case or having the patent claims declared invalid. >> 10/12 INDUSTRY REPORT • SECOND QUARTER 2016

NEWS: INTELLECTUAL PROPERTY As patent laws are federal, those laws apply equally to Louisiana inventors and companies as in all other states. However, there are some recent interesting statistics regarding patents in the energy field, and particularly oil and gas, which are worth noting. The patent office maintains annual statistics on patents issued across various technologies. Specifically, each year, the patent office prepares the Patent Counts by Class by Year Report, which includes the number of patents granted in each of the over 400 top-level U.S. patent classes. With respect to the oil and gas industry, the two classes which best reflect activity in the energy sector are Class 166 (Wells) and Class 507 (Earth Boring, Well Treating and Oil Field Chemistry). According to the most recent report, patent grants in Class 166 from 2009-2014 show a general growth trend, while patent grants in Class 507 during the same period do not suggest any clear trend, partly because of the relatively low numbers compared to Class 166. [See chart above.]

PATENT CLASS TRENDS (OIL & GAS-RELATED)

2009

2010

2011 2012

2013 2014

Class 166

693

1069

862

1074

1197 1423

Class 507

118

181

200

142

140

However, bearing in mind that grants typically lag behind filing dates by about two to three years, there appears to be much greater activity after the end of the 2008 recession. Given the current downward spiral of oil prices (below $35 as of this comment), one would expect to see a corresponding decrease in patent activity for 2015-2016 and beyond, barring some other global event(s) which may avert that trend. Historically, low oil and gas prices and a more challenging economy have motivated businesses in the oil/gas and manufacturing sectors to innovate. Whether that means finding more efficient methods to extract hydrocarbons or developing more cost-effective equipment used

154

at various points in the production process, creativity can result in greater profit margins. In addition, a slowdown in field activity sometimes brings with it an increase in research activity as researchers have more time to devote to R&D. Therefore, even with a possible downturn in patent activity across the competitive landscape over the next few years, clients in the oil/gas and manufacturing sectors would be wise to consider opportunities for expansion of their patent portfolios to protect such innovations in a less active market. Warner Delaune, a mechanical engineer and registered patent attorney at Baker Donelson, has prosecuted patent

applications across a wide range of technologies, including manufacturing and construction equipment, medical and biomechanical devices, firearms and sporting goods, oil and gas exploration and production, and coastal erosion mitigation systems.

UPDATE As IndustryWeek reports, the U.S. Senate on April 6 took a huge step toward protecting manufacturing products and processes from the current onslaught of intellectual property (IP) theft by passing the Defend Trade Secrets Act. Calling the vote “a step toward updating our laws and helping manufacturers prevent IP theft aggressively and efficiently,” the National Association of Manufacturers urged the House to take swift action to get the legislation to the president’s desk.

What advice do you have for manufacturers for implementing or updating their intellectual property strategies in 2016?

BEN MERONEY Jones Walker

MERONEY: First and foremost, every company needs to understand the structure of its IP strategy, and how that structure supports the goals of the business. Is the company active in the patent space to protect its research and innovation efforts or are the company’s efforts more closely aligned with trade secret protection? Does the company intend to license its technology or is its IP policy established to keep the competition at bay? To evaluate a manufacturer’s IP strategy, the manufacturer should understand the makeup of its IP “portfolio” and the portfolio’s relationship and value to the manufacturer’s core business, as well as their competitors’ IP portfolios and the impediments of such to the manufacturer’s business. From this perspective, the manufacturer can align and update its strategy

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

with evolving business goals or pivot to modify the strategy as needed. For instance, if the manufacturer is considering expanding into new product lines, or launching a new brand, how does the expansion map onto its IP portfolio or that of its competitors? Is the expansion or potential risk exposure significant enough to expend resources to further develop the IP portfolio? The second factor to consider is whether the manufacturer’s IP strategy is manageable. That is, does the manufacturer have the internal management structures in place to execute and manage the strategy. Someone in the company must “own” implementation efforts. For instance, are there procedures in place to harvest new innovations and evaluate what IP protection, if any, is suitable? Is the IP portfolio reviewed

periodically to evaluate continued maintenance of the existing IP assets? Are company IP policies, such as trade secret policies, disclosure policies or invention ownership policies, reviewed and updated? It is necessary to have a point person in charge of managing the policy and the IP budget. At the end of the day, a manufacturer‘s goal is to have an IP strategy that aligns with its business strategy and that provides competitive value to the manufacturer. Every manufacturer is different, and IP strategies will vary. But in today’s marketplace, a manufacturer’s IP can represent critical corporate assets. To protect and grow these assets, an effective and manageable IP strategy is required.

1012industryreport.com

What is new or most important in today’s patent law that manufacturers should be aware of MERONEY: Over the past five years, patent law has garnered significant attention from the U.S. Congress and the courts. This attention comes about from an increased awareness of the competitive value that patents provide to U.S. companies and to the overall economic health of the United States. For instance, very significant changes to U.S. patent law were implemented with the America Invents Act (AIA) in 2011-2013, and Congress continues to tinker with the patent system (such as through legislation to address perceived abuses by patent “trolls”). The AIA was a major reworking of the U.S. patent system, moving the U.S. from a first-to-invent system to a first–to-file system. The first–to–file system established new rules for establishing invention “novelty” that will take years to unfold, as the courts have had very limited opportunity to review and interpret

the new legal regime. One consequence of the AIA is the enhanced ability of a party to challenge patents in administrative procedures before the Patent Office. Many companies, when accused of patent infringement, are using these administrative procedures to help control and contain patent litigation costs. While the number of patent infringement cases filed each year has remained fairly stable, the number of administrative patent challenges has seen explosive growth. Recent U.S. courts’ decisions on patent matters unrelated to the AIA have also resulted in major changes in U.S. patent law. For instance, recent Supreme Court decisions have made it more difficult to obtain (or enforce)

patent protection for software-based inventions and business methods. For manufacturers, software innovations are now of questionable patent value, driving software protection to the trade secret and copyright domains. Another recent court decision that could have significant impact on manufacturers is Akamai vs. Limelight. In this case, the federal Circuit Court of Appeals laid out the rules for holding one actor liable for infringement of a process patent due to the combined actions of several actors. The court found that when two or more actors form a joint enterprise, all can be charged with the acts of the others, ren-

dering each liable for the steps performed by the collective enterprise. For instance, when a manufacturer outsources part of a manufacturing process, the manufacturer may be liable to a patent holder when the combined activities of both manufacturer and the outsourced vendor infringe a method patent. This case is recent (2015), so the full impact of the decision will be seen in future court decisions. The patent legal landscape continues to evolve, and manufacturers need to monitor this evolution to align their business practices with the law. Ben Meroney is a technology lawyer at Jones Walker. He assists clients in protecting and enforcing innovations, trademarks and trade secrets, and advises clients on cloud, privacy and cybersecurity issues. He is a registered patent attorney.

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INSIGHT Ready for a new story

STEPHEN WAGUESPACK

nd the hits just keep on coming. Employers in Louisiana have felt the pinch over the last year of an economy in recession, billions of dollars in more state taxes and a host of new mandates proposed that will make it even harder to compete. Sagging oil prices saddle our producers and service companies with more debt than income and this year’s ramp up in Obamacare penalties will put many small to mid-size businesses in an audit trap thanks to a cumbersome maze of new reporting requirements. The Louisiana economy needs some relief; but according to a few recent headlines, help does not appear to be on the way. A new report released this week by the Mercatus Center at George Mason University analyzed the impact of federal regulations on all 50 states. Louisiana ranked first as the state most negatively affected by the regulatory onslaught coming out of Washington, D.C. In fact, the report said that the impact on Louisiana’s economy is 74% greater than the national average, primarily due to the activist EPA agenda to crack down on domestic energy production and manufacturing jobs. The report states that the industries most targeted for environmental regulation include industries 68

most critical to the Louisiana economy, including, “utilities; chemical products manufacturing; motor vehicles, boats and trailers, and parts manufacturing; forestry, fishing, and related activities; and petroleum and coal products manufacturing.” The Louisiana chemical manufacturing industry, which is subject to 10 times the regulations as the average industry, is cited as the second largest industry in the state and three times greater than the national average for other states. In fact, the report states the EPA specifically targets the industry, noting the agency has issued 29,293 industry-relevant restrictions, roughly half of the total federal restrictions on the industry.

a speech at the annual meeting of the Public Affairs Research Council that more state tax increases are likely to come in June during a second special session to be called by the governor. Ironically, the keynote speaker at the meeting was Scott Hodge, the president of the Washington-based Tax Foundation. In his remarks, Hodge discussed the numerous problems with the federal tax code and reminded the group that Louisiana now ranks last in state sales tax code competitiveness due to last month’s special session. The governor is pushing the second special session because the $26.5 billion FY 2016-17 proposed budget—which is $1.5 billion larger

“The report states the EPA specifically targets the [chemical] industry, noting the agency has issued 29,293 industry-relevant restrictions, roughly half of the total federal restrictions on the industry.” Additionally, the federal government heavily regulates employers in the retail trade, energy production and construction sectors. As an example, the report states that the Louisiana oil and gas industry “is about four times more important to the state’s private-sector product than it is to the nation’s private-sector product. It is also subject to a substantial number of industry-relevant restrictions, totaling 14,896.” This report has statistically shown what we already knew: Washington, D.C., regulators continue to target the industries most critical to the Louisiana economy. On the heels of this headline, we also were informed April 15 during

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

than last year’s budget—has a shortfall of roughly $750 million, despite the more than $3.5 billion in new taxes raised over the next five years in the recently concluded special session. While there is rampant speculation that these new taxes will generate more revenue than the current projections show, there are some who want to push forward in June with new tax proposals before those numbers even come in. Thus far, the administration has proposed that the two primary available options to solve this remaining deficit are to put the majority of cuts on TOPS and hospital provider agreements or to raise new taxes. Other stakeholders and policy-

makers continue to seek a more comprehensive and balanced approach that first understands how much new tax revenue will actually be generated by last month’s special session and then invests those available dollars in priorities while demanding more efficiencies and budget reforms. Those competing political visions will continue to play out in the Capitol and headlines for the next several months. Meanwhile on the economic competitiveness battlefield, another relevant headline was delivered when Mississippi announced this week (April 11-15) it was cutting over $400 million in taxes over the next 12 years. This package includes phasing out the corporate franchise tax (which Louisiana expanded just last month), as well as cutting income and self-employment taxes. So, to sum up this week’s headlines … federal regulations hit Louisiana harder than any other state … a national tax expert delivered a speech critical of our new taxes … public officials are stressing that more tax increases are coming in June … Mississippi is choosing to cut taxes and become more competitive than its neighbor to the west. These were some relevant, albeit unfortunate, headlines this week. Just another week of stories with more bad news when the Louisiana economy can least afford it. While these stories are becoming all too familiar, they do not accurately reflect the work ethic, loyalty, quality and dedication of Louisiana’s employers and employees. It’s long past time for a shot in the arm, rather than another punch to the gut. I am not sure how next week’s headlines will read, but hopefully, we will soon start seeing a new Louisiana economic story being told. Stephen Waguespack is the president of the Louisiana Association of Business and Industry. 1012industryreport.com

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INSIGHT

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Are oil prices bouncing back?

DAVID DISMUKES

here are some that anticipate (and hope) that crude oil markets are starting to rebound from the abysmal price deflation seen over the past 18 months. This optimism, however, is not supported by the fundamentals. Since March, crude oil prices have increased by 4.5% (see the chart on page 10), driven in large part by the expectation that OPEC, along with Russia, would consummate a deal “capping,” but not reducing, crude oil production at current levels. Markets have been anticipating that this agreement, which was supposed to have been executed in Doha on April 16, would start a market correction that will bring crude oil supply and demand back into balance. Yet the Doha meeting failed to generate an accord and may have incented one producer (Saudi Arabia) to start doubling down on its current level of production in hopes of maintaining market share at the expense of its obstinate Persian Gulf nemesis, Iran. Regardless, what markets failed to appreciate, or have wishfully ignored, is that even if the agreements had been successful (or materialize in some future agreement) they would have done (will do) very little to alleviate the excess supply in world crude oil markets for a variety of reasons. First, most OPEC producers are already producing at relatively high or near record levels. Saudi Arabia, for instance, is already producing

1012industryreport.com

over 10 million barrels per day (MMBbls/d). More importantly, Iran, free from the shackles of sanctions, has proven quiet capable of exceeding most analysts’ expectations of its near-term production capabilities. Iran is now producing as much as 3.1 MMBbls/d and will continue increasing production until it reaches its pre-sanctions production level of 4.0 MMBbls/d. Second, non-OPEC crude oil production, while down, continues to be resilient and defy conventional wisdom. Russia, which has indicated a willingness to collaborate with OPEC, is currently producing at post-Soviet era highs of around 10 MMBbls/d. Third, even if the OPEC-based production “caps” were to hold, which itself was a big assumption, those caps would have done nothing to reduce the record levels of crude oil supplies that are in various forms of storage around the globe. The U.S. DOE reports U.S. crude oil storage at a record 80-year high. Thus, these OPEC-initiated production caps would have done little to reduce the copious amounts of crude oil being stockpiled in storage tanks, tankers, rail cars and other forms of storage around the world. Lastly, and most importantly, any meaningful crude oil price rally will likely sow the seeds of its own destruction since U.S. producers have aggressively restructured their operating costs to levels that are 40% to 50% of their pre-crash level. This effectively re-calibrates the breakeven price for many U.S. producers to levels that are a fraction of earlier-observed levels. Thus, any price rebound that starts to encroach $50 per barrel will likely stimulate additional production, particularly from unconventional wells that have been drilled but not completed and can be brought into production quickly. The resulting production increase will lower prices once again. David E. Dismukes is the executive director of the Center for Energy Studies at LSU.

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Our structural workforce gap

CURT EYSINK

espite years of attention, a large share of Louisiana’s population continues to live in poverty at the same time that business and industry is struggling to find enough qualified people to fill jobs that pay well. Filling those jobs would help grow their businesses, our economy and the tax base. On the one hand, our state budget can’t keep pace with the cost of supporting all of the people who cannot support themselves, as evidenced by the cuts in the administration’s current budget proposal. On the other hand, business and industry and many other taxpayers believe they are being squeezed too hard already to support those and other services, like education, roads and locking up convicts. You can argue that a structural deficit with the budget and less-thanthoughtful tax policy are to blame. They certainly contribute, but the root cause is even more fundamental. Louisiana has a structural deficit in workforce development. Louisiana has produced people with limited employability and earnings potential in alarmingly high numbers for decades thanks to abysmal dropout rates. And Louisiana was decades late to the game of aligning education and training to the workforce needs of business and industry, particularly in postsecondary education. That has left us with too many people who can’t get a decent job and employers who can’t find enough qualified people to fill their good jobs.

The solution sounds simple enough. Step 1: Improve high school graduation rates. Step 2: Move people from government assistance to good jobs on private payrolls. We’ve been making good progress on Step 1 for the past few years, but not enough on Step 2. And it’s Step 2 that would provide the best return and the most budget relief, particularly in the short term. Moving people from poverty to paying taxes would increase government revenue without the government squeezing harder. Everybody wins. If only it were that simple. Transforming any of the 1.1 million or so adults in Louisiana who lack either a high school diploma or a postsecondary credential costs money, and all of it is spoken for. The state spends more than $4.5 billion of general fund or equivalent dollars on public education, from kindergarten through doctorates and professional degrees. However, the state spends just 3% of that on community and technical colleges, which supply the people with the skills and credentials needed for 55% of what Louisiana Workforce Commission data says are the good jobs that need to be filled each year. It is a fact that short-term training aligned to workforce needs is the only viable, quick pathway to good jobs for adults who today are undereducated and underskilled. And advancing those folks from poverty to paying taxes has to be part of the state’s strategy to avoid being in the same budget mess again next year and every year thereafter. Finding the money is what makes it hard. But what do those poor people and their families cost the state today? How can we afford not to do it? Curt Eysink is executive director for workforce solutions at the Louisiana Community and Technical College System. He served as executive director of the Louisiana Workforce Commission from 2009 to January 2016. 1012industryreport.com

CLOSING NOTES EXECUTIVE MOVES

ROUSSE

CHIASSON

SHAMROCK ENERGY SOLUTIONS Shamrock Energy Solutions announced that Daryl Rousse has joined its executive team as chief operating officer. He will be based in Shamrock’s Houma office and will be responsible for all day-to-day company operations. Rousse will work closely with the accounting team and will also oversee the human resources and HSE departments. He will report directly to Jeff Trahan. Rousse has over 26 years of experience in the industry. Throughout his career, he has worked at Shell Pipeline as the Gulf of Mexico operations manager, has held the position of COO at Odyssey Pipeline Co., and has served as president of Ursa Pipeline Co. GREATER LAFOURCHE PORT COMMISSION Chett Chiasson, executive director of the Greater Lafourche Port Commission, has been appointed by Gov. John Bel Edwards to the Governor’s Advisory Commission on Coastal Protection, Restoration and Conservation. Chiasson, who is the port director of Port Fourchon, will serve as a representative of ports and related industries through February 2020. BATON ROUGE AREA CHAMBER Stephanie Chavis Guillory has been named governmental affairs and special projects manager for the Baton Rouge Area Chamber. She joined BRAC in February just prior to the beginning of the special legislative session. In the role of manager of governmental affairs and special projects, Guillory is responsible for managing special projects in regional economic competitiveness and quality of life, as well as BRAC’s governmental relations and advocacy efforts, with 1012industryreport.com

GUILLORY

EUSTIS

a focus on advancing national, state, regional and local government issues critical to economic development in the Capital Region. Previously, Guillory served as legislative liaison for the Department of Revenue. EUSTIS ENGINEERING Eustis Engineering Services celebrates 70 years in the geotechnical engineering business in 2016 and has announced several executive changes. Named as president is John (Randy) Eustis, the son of founder J. Bres Eustis. Additionally, former President William Gwyn was named chairman of the board of directors, Gwendolyn Sanders was appointed executive vice president, and Operations Manager Larry Rome was named a vice president. Formed in Vicksburg, Mississippi, the company’s headquarters is in Metairie, with locations in Baton Rouge, Lafayette, Lake Charles and Gulfport, Mississippi. Eustis Engineering is the third oldest continually operating geotechnical firm in the United States and has been involved in many important projects across the Gulf Coast, including high-rise office buildings in downtown New Orleans, the Superdome, industrial complexes, LNG terminals, power plants, interstate highways and bridges, port and airport terminals, flood protection systems, and coastal restoration. STONE BRIDGE Stone Bridge Energy Partners announced that three energy industry veterans, John Hopper, Tim Sullivan and Ashok Gupta, have joined the firm to help support development of its rapidly expanding pipeline of downstream and nontraditional midstream energy infrastructure projects. John Hopper, partner and executive

GWYN

SANDERS

vice president of commercial structuring, has 39 years of experience in the midstream and upstream energy industries as a company founder and entrepreneur, CEO, senior executive, general counsel and private practice attorney. Tim Sullivan, partner and executive vice president, projects and business development, is an energy professional with 30 years’ experience in commodities, marketing, trading, hedging, project finance, fixed income, power generation, renewable energy, natural gas production, natural gas pipelines, derivatives, financial modeling, structured finance, asset management, contract negotiation and acquisitions. Previously, Sullivan was a co-founder and chief commercial officer for Quantum Utility Generation. Ashok Gupta, partner and executive vice president, finance, brings broad-based experience in development and acquisition/ divestiture of energy infrastructure projects worldwide. Prior to joining Stone Bridge, Gupta was senior vice president of project and international finance at Mizuho Corporate Bank. ENTERGY Entergy Corp. announced that David Borde, director of the company’s utility finance business partners, has been named vice president of investor relations effective March 2016. Borde replaces Paula Waters, who moved into the position of vice president, utility sales and development services, in the utility business. Waters will report to Theo Bunting, group president of utility operations. Borde will serve as the primary interface with Wall Street analysts and investors, responsible for preparing financial disclosures, presentations and press releases to assist investors in

WEST

VINCI

their assessments of Entergy’s future prospects. After more than 33 years in the utility business, Theodore H. Bunting Jr., group president of utility operations, has announced his intent to retire in the second quarter of 2017. With the announcement of Bunting’s retirement and as part of the company’s executive succession planning process, Roderick West, currently executive vice president and chief administrative officer, will move into a role working directly with Bunting. This move will facilitate an orderly transfer of knowledge and support business continuity as part of the company’s succession planning for the utility’s leadership role. West will maintain his current title as executive vice president and continue to serve as a member of Entergy’s Office of the Chief Executive. Donald Vinci, currently senior vice president of human resources and chief diversity officer, is being promoted to executive vice president, shared services and human resources. Vinci will continue to serve as the company’s chief diversity officer. A retired captain in the Naval Reserves, Vinci has served in a broad range of leadership roles in addition to human resources, including positions in both the utility and nuclear organizations. Marcus V. Brown, currently executive vice president and general counsel, will assume additional responsibility for federal policy, regulatory and governmental affairs, and corporate communications. Submit items for Executive Moves by emailing a press release and a high-resolution headshot to editor@1012industryreport.com. Executive Moves is limited to senior management and board positions only.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

CLOSING NOTES: COMPANY NEWS

PORT OF NEW ORLEANS

PROUD DAY: The board of commissioners of the Port of New Orleans joined elected officials and industry partners to dedicate the port’s new $25 million Mississippi River Intermodal Terminal.

ATC BROADENS SERVICES THROUGH ACQUISITIONS ATC Group Services, a leading full-service environmental consulting and industrial hygiene firm headquartered in Lafayette, announced two key acquisitions in April. ATC acquired Sage Environmental Consulting, a recognized leader in environmental engineering and technical consulting services focused primarily on providing air quality, due diligence and emission reduction credit consulting. ATC is owned by a group of investors led by Bernhard Capital Partners, an operationally focused private equity firm

dedicated to investing across the energy services spectrum. Terms of the transaction were not disclosed. Headquartered in Austin, Texas, and founded in 1998, Sage has more than 200 employees across 24 offices strategically located throughout the United States. The company provides regulatory compliance, permitting and remediation assis72

tance, as well as a range of environmental programs, including air quality, water quality, hazardous and solid waste, hazardous materials and petroleum storage activities. Sage, which has been included five times on the Inc. 5000 list of the fastest-growing private companies in the United States, will be renamed Sage ATC Environmental Consulting. Chairman Steve Probst will continue in his current role, and Sage will remain headquartered in Texas. In addition, ATC acquired Dexter Field Services, a leading provider of leak detection and repair (LDAR), monitoring and other specialized technical environmental services to a wide range of industrial companies. Terms of the transaction were not disclosed. Founded in 2005 with headquarters in Austin, Texas, Dexter has more than 150 employees providing a range of LDAR and monitoring services to clients across the country, including environmental monitoring and analysis of piping components, cooling towers, wastewater drain systems, groundwater wells, storage tanks and other process-related equipment. Dexter will be renamed Dexter ATC Field Services and will continue to be led by CEO Brett Kriley.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

PORT NOLA DEDICATES NEW TERMINAL The board of commissioners of the Port of New Orleans joined a host of elected officials and industry partners in April to dedicate the port’s new $25 million Mississippi River Intermodal Terminal. The terminal, made possible by a $16.7 million federal transportation TIGER grant, has a capacity of moving 160,000 20-foot-equivalent units (TEUs) per year by rail. The new rail yard features four tracks with 1,550 feet of working pad for each track, in addition to a runaround track. Two new rubber-tired gantry cranes built by Konecranes are part of the project scope, further increasing cargo handling and efficiency. A new marshalling yard of 18-inch concrete paving will provide an additional 64,000 TEUs of capacity in the Napoleon Avenue Container Terminal. In addition, the new terminal design will make five more acres available for the planned expansion of the Napoleon Avenue Container Terminal. The facility will create an estimated 100 new permanent maritime jobs. SOIL ANALYSIS SOFTWARE RELEASED An LSU AgCenter soil scientist

has released Chem_Transport, a software package that can help users study how chemicals and other properties move through soils. Magdi Selim, a professor in the AgCenter School of Plant, Environmental and Soil Sciences, developed the program, which includes models of chemicals, nutrients and heavy metals. “This is a user-friendly software package of several models that describe the transport and sorption of chemicals in soils,” Selim said. “The models are nonlinear and kinetic, and represent recent advances in the understanding of transport characteristics of chemicals in soils and geological media.” The software includes models for a variety of substances that are used in field, laboratory and greenhouse settings. Models are available for chemicals, such as pesticides, industrial chemicals, military explosives and radionuclides; nutrients, such as nitrogen, phosphorus, potassium, boron, zinc, copper and molybdenum; and heavy metals, such as arsenic, lead, cobalt, cadmium and trace elements. DYNAMIC SAFETY AWARD Dynamic Energy Services International has received the “Award of Honor” from the National Safety Council South Louisiana Chapter as a result of its safety performance for having the lowest OSHA Total Recordable Incident Rate within its category. BROWN & ROOT IS BRAC ‘PROJECT OF YEAR’ The Baton Rouge Area Chamber announced award recipients honored at its monthly lunch program in April. “It’s important to BRAC to recognize individuals and companies who contribute so meaningfully to the regional economy through service to the business community,” said Adam Knapp, president and CEO. Award recipients included: D. Jensen Holliday Award, Tom Yura, senior vice president and general manager of BASF and 2015 chairman of BRAC’s Education and Workforce Council; Community Champion Award, Coletta Barrett, vice president of mission at Our Lady of the Lake Regional Medical Center; Project of the Year, Brown & Root. In July 2015, Brown & Root announced that it would 1012industryreport.com

ISC WINS ABC AWARDS ISC Constructors traveled to Ft. Lauderdale, Florida, for the 26th Annual Excellence in Construction Awards ceremony, where it collected four prestigious national awards from Associated Builders and Contractors. ISC received an Excellence in Construction Eagle award, an Excellence in Construction Pyramid award and a National Safety Excellence award. In addition, ISC associate Derek Ray earned a bronze medal in the Instrumentation Fitting category of the National Craft Championships. For a complete list of EIC winners in our area, see page 10. SAUDI REFINING, SHELL DIVIDE MOTIVA ASSETS Saudi Arabian Oil Co., through its wholly owned Saudi Refining Inc. subsidiary, and Royal Dutch Shell, through its U.S. downstream affiliate, announced in March they have signed a nonbinding Letter of Intent to divide the assets of Motiva Enterprises. The Motiva joint venture was formed in 1998 and has operated as a 50/50 refining and marketing joint venture between the parties since 2002. In the proposed division of assets, SRI will retain the Motiva name, assume sole ownership of the Port Arthur, Texas refinery, retain 26 distribution terminals, and have an exclusive license to use the Shell brand for gasoline and diesel sales in Texas, and in the majority of the Mississippi Valley, Southeast and Mid-Atlantic markets. Shell will assume sole ownership of the Norco refinery (where Shell operates a chemicals plant), the Convent refinery, nine distribution terminals, and Shell-branded markets in Florida, Louisiana and the Northeastern region. BAKER HUGHES GOES GOLD Baker Hughes announced it is the first service company to enroll in the new Regional Operational Integrity Program™ for the petroleum and natural gas industry and to receive Gold Recognition for its 1012industryreport.com

Gulf of Mexico Center of Excellence from the Wollam Petroleum Advisory Group. Baker Hughes and WPAG, an oil and gas consulting firm, helped develop and pilot the new program that was implemented in late 2015. ROIP incorporates API Q2 standards and extends that specification’s purpose of driving consistency, risk mitigation and service quality in upstream operations beyond the facility to the regional level. API Q2 was developed in 2010 to ensure that service providers implement quality controls at the facility level, based on identifying, assessing and managing risk. The controls encompassed by the program include risk assessment and management; contingency planning; service design, quality plans and performance validation; identification and qualification of mission-critical suppliers; and change management based on risk factors. ROIP comprises six steps based on these controls that a company must complete before receiving recognition for a region as Platinum, Gold, Silver or Bronze. G2X ANNOUNCES PROJECT CONTRACTS G2X Energy, a developer of advanced natural gas to methanol projects, along with its strategic partner the Proman Group, has entered into license and engineering contracts with Johnson Matthey for their previously announced worldscale methanol production facility in Lake Charles. Johnson Matthey will supply the technology license, basic

engineering, catalyst and technical services for the project. In addition, G2X entered into an engineering services contract with Toyo Engineering Corp. for the detailed engineering needs on the project. Toyo will provide basic engineering for offsite and utility facilities and detailed engineering of the complete methanol facility. “Toyo is a world leader in engineering and engineering support services and we are extremely pleased to have them as part of our team on the construction of our Big Lake Fuels Plant,” stated Tim Vail, president and CEO of G2X Energy. Once complete, the G2X facility, known as Big Lake Fuels Methanol Plant, will produce 1.4 million metric tons of commercial grade methanol per year.

The Coast Guard took delivery on March 5 in Key West, Florida, and is scheduled to commission the vessel in Puerto Rico during May. DYNAMIC ADDS GULF CONTRACT Dynamic Energy Services International, a leading fabrication and service provider to the global oil, gas and energy industries, announced that its specialty craft division, Dynamic Construction Services, has been awarded a key contract to provide maintenance blasting and painting services for a major oil and gas operator’s offshore Gulf of Mexico assets. The scope of work will include conventional blasting and painting, UHP (ultra-high pressure) water blasting, and spot abatement to facilities and hull. The scope of work is expected to keep several crews busy for 18 months. “This award is another step forward in expanding our Deepwater Gulf of Mexico facility maintenance services,” said Matt Oubre, president of DCS. “This award is a great win for DCS and further validates DCS’s Coatings Division as a leading blasting and painting service provider in the deepwater Gulf of Mexico.” Dynamic Energy Services is headquartered in New Orleans.

BOLLINGER DELIVERS COAST GUARD CUTTER Bollinger Shipyards has delivered the USCGC Donald Horsley, the 17th Fast Response Cutter (FRC) to the United States Coast Guard. “We are very pleased to announce the delivery of the latest FRC built by Bollinger Shipyards to the 7th Coast Guard District in Puerto Rico,” said President & CEO Ben Bordelon. “We are looking forward to honoring and celebrating the heroic acts of Donald Horsley at the vessel’s commissioning.” The 154foot patrol craft is the 17th vessel in the Coast Guard’s Sentinel-class FRC program. To build the FRC, Bollinger used a proven, in-service parent craft design based on the Damen Stan Patrol Boat 4708.

BOLLINGER SHIPYARDS

establish its corporate headquarters in Baton Rouge and relocate 25 executives to its Corporate Boulevard location, with additional executives to follow in 2016.

LQT ADDS FIVE GULF PROJECTS LQT Industries, a full-service provider of high-quality accommodation facilities, design-build construction services and support services to the oil and gas industry, has been awarded projects from five exploration and production companies in the Gulf of Mexico, the company announced in February. LQT’s scope of work includes on-site assessments, work scope development, material procurement, project management, and the provision of skilled labor to clean and repair HVAC systems and refurbish/ upgrade the interior and exterior of living quarters of the fixed platforms and drill ships. The projects are scheduled to be completed in the second quarter 2016. LQT’s Refurbishment Division, headquartered in Abbeville, specializes in full facility upgrades, asset maintenance and 24/7 customer support for oil and gas operations.

NEW CUTTER: A sister ship of the USCGC Donald Horsley operating in the Gulf of Mexico.

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

CLOSING NOTES: COMPANY NEWS

AIR PRODUCTS BEGINS TEXAS FACILITY Air Products, a leading global hydrogen provider, held a groundbreaking ceremony in February at Covestro’s Baytown, Texas, facility where Air Products will invest $350 million-$400 million to build, own and operate a world-scale steam methane reformer (SMR). The SMR will produce hydrogen and carbon monoxide (CO) to be supplied to Covestro and other customers linked to Air Products’ Gulf Coast Hydrogen and CO pipeline networks. The plant, which will start up in 2018, is already completely sold out. Covestro’s primary products at its Baytown site include toluene diisocyanate (TDI) and methylene diphenylene isocyanates (MDI), in addition to coatings and adhesives, inorganic basic chemicals, polycarbonates, and polyurethanes. Covestro supplies high-value polymers and solutions for key sectors such as transportation, construction, electronics, furniture, sports equip74

ment and textiles. The ability for the new plant to connect to Air Products’ existing Gulf Coast Pipeline, the world’s largest hydrogen plant and pipeline network system, helps ensure product reliability. Air Products officially dedicated its GCP in 2012. The 600-mile pipeline span stretches from the Houston Ship Channel in Texas to New Orleans and supplies customers with over 1.4 billion feet of hydrogen per day from over 22 hydrogen production facilities. HARVEY GULF WINS INTERNATIONAL AWARD In London, Harvey Gulf International Marine has been named Shipowner of the Year by the Offshore Support Journal, recognizing Rhoman Hardy, Shell Geismar Site general manager, second from right, joins other officials in groundbreaking for expansion project. that Harvey, “above all other companies, has shown excellence in the operation of its ship(s) and has, in Shreveport at a former General will serve new and existing customin the past year, demonstrated an Motors production facility. ers in support of petrochemical and exemplary record of achievement in LNG terminal expansion projects. the management of one or more of GEISMAR EXPANSION The Port Of Lake Charles Board business development and growth, BREAKS GROUND of Commissioners awarded Gulf of safety, quality, efficiency and enThe Shell Geismar chemical manStream Marine with its stevedoring vironmental sustainability.” Harvey ufacturing facility held its formal license earlier this year. “It takes very Gulf also announced it has signed groundbreaking ceremony for the specific expertise to handle project, five-year charters for two more of site’s recently announced alpha oleheavy lift and general cargos, and its LNG-powered offshore supply fins expansion project on February Gulf Stream Marine continues to vessels. The charters will com16. In addition to Shell representagrow because we are constantly mence upon delivery of the Harvey tives and customers, the event was improving how we operate,” said Freedom and Harvey America, attended by state and local officials, CEO Kevin Bourbonnais. “Our the fourth and fifth of Harvey’s six including U.S. Congressman Garrett unrivaled capabilities, which include LNG-powered vessels. Founded in Graves, Louisiana Economic Develmore than 600 pieces of equipment, 1955, New Orleans-based Haropment Secretary Donald Pierson, technology and proprietary terminal vey Gulf International Marine is Ascension Parish President Kenny operations provide us with the flexa marine transportation company Matassa, Ascension Parish Sheriff ibility, breadth and depth to deploy that specializes in providing offshore Jeff Wiley and Gonzales Mayor and scale quickly in the Port of Lake supply and multipurpose support Barney Arceneaux. Scheduled for Charles and elsewhere.” Gulf Stream vessels for deepwater operations in completion in 2018, the 425 kiloMarine has existing operations in the Gulf of Mexico. ton-per-year AO-4 unit will expand the Texas deep-water ports of Housthe Geismar site’s already considerton, Brownsville, Corpus Christi, ELIO IS ON THE GO able alpha olefins production capaPoint Comfort and Freeport. Elio Motors Inc., the startup bility, and make Geismar the world’s vehicle manufacturer planning to largest AO production site. Alpha SHELL SIGNS LNG CONTRACT launch a three-wheeled vehicle olefins are used to produce houseVenture Global LNG announced that promises up to 84 mpg with a hold detergents, plastics, synthetic that its subsidiary, Venture Global targeted base price of $6,800, anlubricants, and drilling fluids. Calcasieu Pass LLC, has entered nounced its shares are now trading into a sales and purchase agreement on the OTCQX market under the GULF STREAM ENTERS with Shell NA LNG LLC, under stock symbol ELIO. “This is a proud LOUISIANA MARKET which Shell has agreed to purchase day for Elio Motors and an importGulf Stream Marine, the largone million tonnes per annum ant step forward in our development est private stevedore and marine (MTPA) of liquefied natural gas and mission to bring low-cost, highterminal operator on the Texas Gulf from Venture Global Calcasieu ly fuel-efficient transportation to the Coast, announced its expansion Pass’s LNG export facility under market,” said Paul Elio, founder and into Louisiana. Gulf Stream Marine development in Cameron Parish. CEO of Elio Motors. Elio Motors expects to begin operations in Lake The agreement has a term of 20 plans to manufacture the vehicle Charles immediately. The company years commencing on the commer-

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

SHELL GEISMAR

NCCER ELECTS NEW CHAIR NCCER has elected Ed Cassady, senior vice president and chief financial officer of Robins & Morton in Birmingham, Alabama, as its 2016 board of trustees’ chairman. Cassady will succeed Jerry Rispone, president and CEO for ISC Constructors of Baton Rouge, who remains a member of the executive committee. Board members with 10/12 corridor connections include: Chip Reid, CEO of Current Builders, will serve as the 2016 vice chairman. David Donnelly, senior vice president of construction, CB&I; Andy Dupuy, president and CEO, Brown & Root; Jim Hanna, vice president of human resources, construction, fabrication and craft services, Fluor; Stephen Toups, senior vice president and CIO, Turner Industries; LeAnn Wilson, executive director, Association for Career and Technical Education; Boyd Worsham, vice president of construction support, The Haskell Company. NCCER is a not-for-profit 501(c)(3) education foundation created by the construction industry to develop a standardized curriculum with portable credentials and to help address the skilled construction workforce shortage.

1012industryreport.com

CHANGES AT SOUTH LAFOURCHE AIRPORT The Greater Lafourche Port Commission announced that it is now both owner and operator of the South Lafourche Airport’s fixed base operator, which will now be known as GAO FBO. FBO services had previously been bid out to outside

vendors since 2007. The airport’s call letters are GAO, identifying its location in Galliano. Airport Manager Richard Osborne believes that GLPC is up to the task. “This new challenge of running the FBO ourselves gives us an opportunity to market the airport more competitively within both the aviation and business communities,” said Osborne. “As FBO owner and operator, we can offer lower fuel prices and enhanced customer service, all with the backing of a port commission known for its strong, steadfast leadership.” As the fastest-growing airport in the state of Louisiana, the South Lafourche Airport is constantly expanding its customer base and upgrading its facilities and infrastructure. As a result, GAO’s flight operations have increased from 550 in 2001 to over 20,000 in 2015. There are also several airport upgrades in the works, including a new terminal building, hangars, runway strengthening, and a connector road linking the airport and industrial park to La. 3235, enhancing its connection to Port Fourchon.

CYCLE CONSTRUCTION

cial operation date of the Venture Global Calcasieu Pass facility, with a Shell option to extend the term. According to the terms, Shell will purchase LNG on a free on board basis (FOB) for a purchase price indexed to the monthly Henry Hub price plus a facility fee indexed to inflation. Venture Global LNG is developing both the 10 MTPA Venture Global Calcasieu Pass facility on an approximately 1,000-acre site located at the intersection of the Calcasieu Ship Channel and the Gulf of Mexico and the 20 MTPA Venture Global Plaquemines LNG facility in Plaquemines Parish on an approximately 630-acre site at river mile marker 55 on the Mississippi River.

Issue Date: 10/12 Ad proof #2

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10/12 INDUSTRY REPORT • SECOND QUARTER 2016

CLAIBORNE

CLOSING NOTES: THE BOOM AT A GLANCE BOSSIER

Project by project

CADDO

WEBSTER

($250MM and up)

BIENVILLE

Louisiana industrial projects announced or proposed since 2009 with projected capital investment of $250 million or more. Second line shows projected capital investment and direct new jobs. List is representative, not complete; project statuses change frequently. (LNG = liquefied natural gas export project) 1 Sabine Pass LNG (Cheniere Energy) $20B | 400 jobs 2 Sasol Ltd. $19.1B-$22.1B | 1,253 jobs 3 G2 LNG $11B | 250 jobs 4 Sempra Energy/ Cameron LNG $10B | 190 jobs 5 Formosa (St. James Parish) $9.4B | 1,200 jobs 6 Lake Charles LNG (aka Trunkline LNG; BG Group and Energy Transfer Partners) $9B | 250 jobs

7 Southern California Telephone & Energy (Monkey Island LNG) $9B | 200 jobs

23 BioNitrogen Louisiana Holdings, LLC $1.25B | 250 jobs

8 Delfin LNG $7B | 400 jobs

24 AM Agrigen Industries $1.2B | 150 jobs

9 Venture Global LNG (Calcasieu) $4.25B | 100 jobs

25 Castleton Commodities International $1.2B | 50 jobs

10 Magnolia LNG $3.7B | 50 jobs

26 Dow Chemical $1.06B | 71 jobs

11 Nucor Steel Up to $3.4B | 1,250 jobs

27 Cornerstone Chemical Co./ Dyno Nobel $1.025B | 65 jobs

12 Axiall/Lotte Chemical $3B | 250 jobs 13 Lake Charles Clean Energy (Leucadia Corp.) $2.5B | 215 jobs 14 Revolution Aluminum (formerly American Specialty Alloys) $2.4B | 1,450 jobs

28 Monsanto $1B | 95 jobs 29 Entergy Little Gypsy $1B | 15-20 jobs 30 Benteler AG $975M | 675 jobs 31 Monsanto $975M | 100 jobs

10/12 INDUSTRY REPORT • SECOND QUARTER 2016

RED RIVER

DESOTO

32 Lake Charles Cogeneration, LLC $820M | 210 jobs NATCHITOCHES

33 Petroplex $800M | Not available

SABINE

34 Shell Chemical $717M | 20 jobs 35 Valero Refining – New Orleans, LLC $700M | 24 jobs 36 Louisiana LNG Energy, LLC $646.6M | 44 jobs

VERNON

37 Pin Oak Terminals $600M | 70 jobs 38 Methanex Corp., Methanex 1 $570M | 35 jobs 39 Methanex Corp., Methanex 2 $570M | 120 jobs

BEAUREGARD

40 Honeywell International $500M | 80 jobs 41 Shintech Louisiana, LLC $500M | 5 jobs CALCASIEU

56 2 6 12 13 51 10 22 32 17

4 CAMERON

3 1

RED = PROJECT KILLED BLUE = NEW PROJECT ADDED SINCE LAST EDITION

1012industryreport.com

UNION

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN