While leaders of the state’s chemical industry remain optimistic about the future of the state’s industrial expansion boom, three factors could negatively impact it: Infrastructure problems, tougher environmental regulations and economic issues.
“We’re strong and growing,” said Louisiana Chemical Association President Dan Borné during his address today to the Rotary Club of Baton Rouge. “But there are three impediments that could create what I call ‘potholes’ for all this prosperity.”
Infrastructure issues pose a threat because not only are the state’s roads substandard in many places, but so are bridges and rail terminals. The entire “intermodal theory of moving things along” needs to be addressed in order to accommodate the petrochemical companies expected to expand or develop new facilities here, Borné said.
Proposed tougher ozone standards are also a concern. The Environmental Protection Agency is considering lowering ozone emission standards, which, if adopted, would bring Baton Rouge and most of Louisiana out of compliance, he said.
“We’ve spent billions (as an industry) improving our emissions standards over the past 30 years,” Borné said. “This would bring us out of compliance and make it more difficult to expand.”
Economic issues could also hamper the state’s industrial growth, which has been fueled by abundant, inexpensive natural gas. Oil prices are one concern, though Borné says as long as the ratio between oil and natural gas prices remains great enough to make natural gas the feedstock of choice, he’s not terribly worried about lower oil prices, which are hovering around $60 per barrel.
What could have a negative effect is the continued strength of the dollar against the Euro, which makes domestic exports for products like natural gas more expensive and, therefore, less competitive in European markets. Also, if Europe decides to venture into the shale extraction industry, U.S. markets could be negatively affected.
Still, Borné is upbeat.
“Unless the price of oil totally collapses for a long period of time, I’m still very bullish about the expansion,” he said.
—Stephanie Riegel
