BATON ROUGE, La. (AP) - Louisiana's petrochemical industry is in a renaissance as natural gas prices remain low and because of major new discoveries including the Haynesville shale deposit in northwest Louisiana.
Dan BornÃ©, president of the Louisiana Chemical Association and the Louisiana Chemical Industry Alliance, tells The Advocate (http://bit.ly/S1D55X) the industry was in perilous times five years ago.
The price of natural gas, a fuel and feedstock for the chemical industry, was high. Many chemical plants along the Mississippi River and Interstate 10 corridor from Baton Rouge to New Orleans had cut back their operations.
Employment in the industry fell from 34,000 in 1999 to 24,000 a decade later.
"We were really in a pickle," BornÃ© said. "We weren't really sure where we were gonna end up."
But BornÃ© credited "the magic of the marketplace" in the form of falling gas prices and the Haynesville Shale for bringing back the good times.
Louisiana's industry is at its strongest when the price of oil per barrel is seven times the price of natural gas per million British thermal units, he said.
Today, gas is roughly $3 per MMBTUs, while oil is about $90 per barrel - about a 30-to-1 ratio.
"That makes Louisiana incredibly competitive," he said.
BornÃ© said there is a lot of activity in the chemical industry, which has added 1,000 jobs a year for the last three years. He said Methanex is going to dismantle a methanol plant in Chile and move it to Geismar and is considering another facility in Geismar.
He said Cornerstone Chemical is doing a $30 million feasibility study on building an $800 million ammonia plant in Jefferson Parish.
But BornÃ© warned that competition remains stiff from China, Malaysia and other Asian nations.