Manufacturing boom predicted in La. despite uncertainty

Louisiana and the Gulf Coast likely will be the prime beneficiaries of a natural gas–fueled industrial building boom over the next several years, says David Dismukes of LSU’s Center for Energy Studies. However, several variables— such as tax reform, which will be a hot topic at this year’s legislative session—could affect the economics of some of those potential projects, he says. “Everybody’s sitting back waiting and watching,” Dismukes says, when asked about the state-level tax reform conversation. “They will sit down and redo the books on these projects as soon as they get a more concrete idea of how it’s going to change things.” The Jindal administration wants to protect incentives such as exemptions for business utilities and purchases of manufacturing machinery and equipment. However, Dismukes says the state’s Quality Jobs and Enterprise Zone programs could be in play. Changes in federal tax policy and environmental regulations also could make a difference, although Dismukes says the Obama administration has “come around to recognizing the contribution that unconventional development has had, both in crude [oil] as well as in natural gas.” West Virginia, Pennsylvania and Ohio may be prime competitors with Gulf Coast states for greenfield projects, he says. More than $62 billion in manufacturing investments are planned in Louisiana over the next several years—peaking in 2016—resulting in about $20.2 billion in direct spending in the state and nearly $30 billion in increased economic impact, according to a recent Center for Energy Studies report. —David Jacobs