High natural gas prices punish Louisiana chemical industry in 2003

Louisiana lost about 1,000 chemical plant jobs this year and industry observers are afraid those high-paying positions are gone for good.

The high price of natural gas helped destroy demand over the past year leading to chemical companies shutting down, said Tia Edwards spokeswoman of

The chemical industry uses natural gas as a fuel and as feed stock for raw material, which is made into an array of products. The industry employs 30,000 people in Louisiana and another 200,000 vendors and suppliers depend on the industry, Edwards said. Louisiana constitutes about one-third of the country's chemical production with about $24 billion in domestic business and $6.5 billion in foreign exports annually, Edwards said.

Rep. Billy Tauzin, R-Chackbay, said finding new natural gas sources is an issue for the chemical industry and for Louisiana's economic development. Tauzin is chairman of the House Energy and Commerce Committee and co-chairman of the House Speaker's Task Force for Affordable Natural Gas. He met with chemical company employees this summer to search for solutions.

Louisiana is the highest natural gas consumer in the United States because we use it on our plants, Tauzin said. If the state loses plant jobs, fertilizer and other chemically made products will cost more, which will increase Louisiana's dependence on other countries, he said.

The solution will most likely be found through a combination of lifting moratoria on public lands and other areas, using alternate fuels and creating liquefied natural gas importing facilities, Tauzin said.

The energy bill, which has been held up in the U.S. Senate, could help. Other solutions - such as state-created incentives for shallow- water drilling, must come from state government.

Loren C. Scott, president of Baton Rouge-based economic firm Loren C. Scott & Associates, expects chemical company job loss to continue for the next two years at least.

They're being hammered by high natural gas prices, and because natural gas is so much cheaper in other countries, they're now being hit by prices and new foreign competition, Scott said. You've got two blades of the scissors cutting this industry down pretty sharply right now.

For every job lost in a chemical plant another 4.6 jobs are lost in that parish, Scott said. The average chemical manufacturing salary is about $49,000 in Louisiana, according to the state Department of Labor.

Layoffs are not distributed evenly - New Orleans, Baton Rouge, Lake Charles and the area between New Orleans and Baton Rouge are being hit the hardest, Scott said.