hat Southwest Louisiana is vitally important to
If local officials and business leaders have their way, the five-parish region tucked along the
While various conventional energy firms are in the process of expanding their operations in the Lake Charles area, so too are a host of alternative and other non-fossil-fuel companies.
From Shaw Modular Solutions' new plant for manufacturing nuclear power plant components at the
"The energy industry forms the foundation of our region's economy," says George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance. "Our new mantra is that we will have energy enough for the nation."
Judging from the recent influx of large capital investments into the local economy, Swift and his cohorts would appear to be ahead of schedule.
When the dust settles on the scores of construction projects in Allen, Beauregard,
"We supply a lot of the nation's energy needs from right here in
First announced two years ago as part of a joint venture with Westinghouse, Shaw Modular Solutions is a $100-million investment that retains the corporate headquarters in
The state-of-the-art, 410,000-sq.-ft. (38,089-sq.-m.) facility will assemble structural, piping, equipment and other modules for new nuclear power plants using the Westinghouse AP1000 technology — considered the safest and most economical commercial nuclear power technology in the world. The plant sits on 300 acres (122 hectares) at the port.
An economic impact analysis performed by Louisiana State University estimates that the Shaw project will result in $17.8 billion in new sales, $4.5 billion in new earnings and 9,205 direct and indirect Louisiana jobs over 15 years. A $7-billion company, Shaw Group employs 27,000 people worldwide.
Closing the Clean-Energy Gap
On Jan. 8, the promise of the new Shaw plant was enough to attract a new investor — the federal government. The U.S. Department of Energy and Internal Revenue Service awarded Shaw a $10.8-million federal tax credit, part of the stimulus money coming from the American Recovery and Reinvestment Act of 2009.
President Obama delivered the news himself, prompting a welcoming response from Shaw's chief executive. "As President Obama stated during his announcement, these projects must help close the clean-energy gap that has grown between the
The plant began limited production in late 2009 and is on pace to reach full production early this year, according to Jack Martin, senior vice president of Shaw Modular Solutions. "We currently have approximately 100 workers, with the possibility for up to 700 to 1,400 workers within a couple of years," he tells Site Selection.
Martin cites the deepwater port and access to multiple modes of transportation as being "critical" factors in Shaw's site selection. He also credits the support Shaw received from state and local agencies.
"Gov. Bobby Jindal, Louisiana Economic Development Secretary Stephen Moret,
Martin adds that Shaw is important not just for the region, but for the entire country. "A project like this is allowing the revival of the commercial nuclear industry in the
Secretary Moret says Shaw paves the way for
Signs of Recovery Abound
The expansions of Shaw and other energy firms in
At year-end 2009,
Signs of recovery abound in the form of high-capital, job-creating investments:
″ The U.S. Air Force awarded a $3.8-billion contract for KC-10 Contractor Logistics Service to Northrop Grumman — an award that is expected to create at least 300 new jobs at the company's operation at Chennault International Airport in Lake Charles.
″ Cameron LNG, a subsidiary of Sempra Energy, opened as a new liquefied natural gas terminal in Hackberry. The plant has 1.5 billion cubic feet per day of initial capacity, with room for expansion. The $900-million project creates 60 jobs at an average annual wage of $63,000 plus benefits.
″ Cheniere Energy Inc. announced a $220-million expansion of its LNG operations in Cameron Parish. Cheniere already operates the Sabine Pass LNG Terminal on the
″ Trunkline LNG recently completed expansion work on an additional LNG storage tank at the
″ Zagis USA LLC announced plans to build two cotton-spinning mills in
″ British Petroleum announced Feb. 1 that it would award Verenium $2.5 million to fund the company's cellulosic ethanol operation in
″ PL Olefins LLC, which operates the Sulphur Mines Salt Dome in Calcasieu Parish, will expand its plant with a $105-million investment in the city of
Large Projects Anchor at Port
The energy industry's dominance in
The CITGO refinery in
The ConocoPhillips refinery in
More than 53,000 workers in
Petroleum, in all sorts of fuels and other refined and manufactured products, accounts for 85 percent of the region's exports, according to Mike Dees, general counsel and head of real estate for the
"The petroleum industry has felt the recessionary effects as the generation of plastics and some other things has gone down somewhat," says
As a result, activity still bustles at the 11th largest seaport in
Property tax abatements and Gulf Opportunity Zone Bonds make the port an attractive location for capital-intensive projects like Shaw and Lake Charles Cogeneration. "This area still qualifies for more than $1 billion in GO Zone allocations in tax-exempt financing,"
Pinnacle Entertainment likes its port location so much that it has decided to expand its flagship casino hotel. Larry Lepinski, senior vice president and general manager of the L'Auberge du Lac Casino Resort in
"The project includes an extension of our existing hotel building, a 3,000-seat multipurpose venue for entertainment, and many other amenities," Lepinski says. "We are anticipating that another 1,000 jobs will be created on site, and that doesn't count the construction jobs."
L'Auberge is already the largest private employer in the five-parish region, providing paychecks to 2,400 workers at the resort.
Lepinski says his company is expanding because "we have faith that the economy in our region is bouncing back, and we want to be ready with this project when we start seeing a more normalized economy."
Pinnacle's largest resort at more than 1 million sq. ft. (92,900 sq. m.), L'Auberge attracted an average of 400,000 visitors a month over the last six months, says Lepinski. "On some occasions, we were seeing over 25,000 people a day."
Despite the economic slowdown, Lepinski says, "our head counts in 2009 were very close to what we had in 2008. The economy has been challenging, but we have not lost the qualities that make L'Auberge a hit with our customers. We have not compromised our values at all."
Aerospace Expansions Land at Chennault
Energy and entertainment companies are not alone in finding growth opportunities in
Northrop Grumman and Aeroframe Services LLC recently announced major expansions at Chennault. While Northrop Grumman is gearing up to service the KC-10 wide-body aircraft, Aeroframe plans to add 300 jobs.
"We are expanding our facilities at Chennault to include three new hangars to support KC-10 CLS," Joseph Stein, deputy director of Contractor Logistics Service Programs & Sites Support for Northrop Grumman Technical Services, tells Site Selection. "We are adding about 475,000 sq. ft. [44,128 sq. m.] of hangar, administrative and storage space. Upon completion, we will have 870,000 sq. ft. [80,823 sq. m.] on site."
The $10-million capital investment will grow Northrop Grumman's Chennault-based work force from 264 today to 464 by the end of the year, notes Stein. "The work force here is highly skilled for the aerospace industry," he adds. "We just hired 115 people who are coming on board to support the new airplane work. During a job fair in December, we had 800 people show up from around the area. Over 25 percent of those applicants were prime candidates that we could have hired on the spot."
Stein says that the support of state and local economic developers "enabled us to bring the KC-10 to
Northrop Grumman chooses to do business in
On Feb. 5, Aeroframe added to the job influx by announcing its own expansion at Chennault. The largest Airbus maintenance, repair and overhaul company in the
The expansion brings the company's total Chennault work force to 550 and its annual payroll to more than $30 million. FedEx is the firm's primary customer.
"We fully expect this ramp-up to be widespread and sustained for many years. But the competition to service these aircraft will be fierce and on a global scale," said Aeroframe President and CEO Roger Porter. "The good news is that the state of
Louisiana Gov. Bobby Jindal added, "I'm thrilled to announce this exciting expansion of one of
Region Backs 'Fourchon West'
With job-hiring projects like these and others cropping up throughout
"This part of our state has had a very constructive and proactive recovery effort. New building standards enacted here will help protect the region from future storms," Moret says. "The region has so much going for it."
And the biggest prize of all may be yet to come, he adds: design and construction of a new deepwater port. While the plans are preliminary, momentum is definitely building to give Southwest Louisiana a deepwater alternative to Port Fourchon south of
"This has the potential to become Fourchon West for the state of
One of the idea's biggest backers is Lynn Hohensee, director of the
"There are only two places in the state where you can drive to the Gulf in your car. One is at Port Fourchon. The other is here at the mouth of the
Ernie Broussard, director of planning and development for Cameron Parish, agrees. "This has the potential to create 5,000 direct jobs and $200 million in investment and another 13,000 indirect jobs," he says of the potential new port. "We would see seven times that amount in total economic impact, according to our base plan. We see a five-to-seven-year window for this project."
With or without the new port, Moret says "the outlook is very good for a well-diversified economy in
This editorial profile was published under the auspices of the Southwest Louisiana Economic Development Alliance. For more information, contact George Swift, president and CEO of the