Louisiana Chemical Association Louisiana Chemical Industry Alliance

The Overall Goal of the Eight Point Plan:
To achieve a competitive business environment that promotes chemical industry retention and growth.

      Introduction: Getting to Know Us

1. Make Louisiana Competitive: It’s All About Energy
   
   

2. Make Louisiana Competitive: Government’s Role

3. Make Louisiana Competitive: Level the Taxation Playing Field

4. Make Louisiana Competitive: Workforce Development

5. Make Louisiana Competitive: Grow Research and Development Partnerships

6. Make Louisiana Competitive: Improve Critical Infrastructure

7. Make Louisiana Competitive: Lead the Way in Health, Safety, Security and Environment

8. Make Louisiana Competitive: Reduce Hidden Costs

Introduction

The Louisiana Chemical Association, founded in 1959, is a statewide group consisting of 64 chemical manufacturers.

The Louisiana Chemical Industry Alliance (LCIA), founded in 1989, is an organization consisting of these same chemical companies and 500 suppliers, contractors and vendors.

LCA  plants directly employ over 24,000 Louisiana citizens, and LCIA members employ tens of thousands more.  The impact on Louisiana's economy is unquestioned.  The industry is the state's largest single employer in the manufacturing sector and contributes hundreds of millions of dollars to state and local coffers.

The people and plants of the industry are essential to Louisiana's economic growth and development and to the services that government provides to our state's citizens.  The overall goal of the Eight Point Plan si to achieve a competitive business environment in Louisiana that promotes chemical industry retention and growth. 

1. Make Louisiana Competitive: It's All About Energy

Develop energy policies that help Louisiana companies remain competitive in a global market

Select their energy providers
 Allow large energy users to select their energy providers to promote competitive pricing and cost efficiency.

Permit power wheeling
 Permit access to the electrical grid for power wheeling between and among industrials. Companies should be allowed to wheel (or share electrical power) with an affiliate company site that may not be geographically located on the same site. Power wheeling promotes energy efficiency.

Retire inefficient power generation
 Retire inefficient power generation and allow chemical companies and large industrial users to utilize independent power producers that employ more modern, efficient and environmentally friendly power generation.

Insure a robust distribution system
 Insure a robust distribution system by improving, modernizing and expanding the power grid for more efficient and cost effective transmission of power.

Map natural gas supplier network
 Map the natural gas supplier network and the value chain to identify most efficient use of resources during times of shortages.

Expand onshore and offshore access
 Support Offshore State Options Act, provide state tax incentives and streamline regulations to encourage more drilling onshore Louisiana and in state water bottoms. Expand drilling access to domestic and offshore energy resources.

Make Louisiana a leader in LNG
Support and promote the creation of LNG terminals and fast track their approvals and construction.

2. Make Louisiana Competitive: Government's Role

Governmental integrity is key to Louisiana’s continued economic growth.

Emphasize integrity in state/local government
 Louisiana should emphasize integrity in state/local government. In a globally competitive environment, companies look for governments that support business growth, have reasonable, predictable regulatory controls and place top priority on governmental ethics. Post hurricane reconstruction must be “Clean as a Hound’s Tooth.”

Moderate state/local spending
 Responsible businesses want to do their fair share to support community needs, but governments need to exercise discipline to not create costs that make businesses non-competitive in the global marketplace. Adjust state budget spending to recognize new revenue realities caused by Katrina and Rita.

Pump LED funding to retain/grow industry
 Increase funding at the Louisiana Department of Economic Development (LED) for market studies in chemical manufacturing. Marketing dollars should be allocated proportionate to an industry’s size and future potential for the state.

Fast track the permitting process
 Government regulations should provide a rigorous framework for protecting the state's citizens and its resources. However, permitting processes should also be competitive with best practices around the world: appropriately protective, well defined, predictable and efficient. Joint DEQ/DED/Industry efforts are underway to produce legislative, regulatory and systems improvements that will streamline Louisiana's permitting processes.

Enlist state/locals to proactively support the business success of the Louisiana chemical industry
 Louisiana's chemical industry directly employs over 23,000 people and indirectly is responsible for over 200,000 jobs statewide. Therefore, the reputation and financial strength of this industry is not just an industry concern but should be important to the state as a whole. In order to protect the long term business success of this valuable state resource, state and local government should proactively support the business success of the industry. Examples of this kind of support might include supportive testimony for tax incentives and permit hearings in which businesses have met regulatory requirements, active support in debunking the "Cancer Alley" myth, and identifying and promoting industry environmental progress and improvements in the quality of the environment.

3. Make Louisiana Competitive: Level the Taxation Playing Field

Taxes inhibit business from investing in the state and growing the economy. Tax credits encourage businesses to expand and grow, which means more jobs and more tax dollars generated. It is crucial that Louisiana have a tax policy that encourages companies to locate here. Louisiana should improve the business climate for all companies, and not just for those in one particular industry.

Put an end to all refinery and oil and gas processing tax proposals
The very mention of such taxes sends the message that the state is anti-business and has a chilling effect on future investment in Louisiana, not only in the petrochemical manufacturing sector but in other sectors as well.

Protect the Ten Year Industrial Tax Exemption
Protect the Ten Year Industrial Tax Exemption by providing a long-term, secure plan to ensure its preservation. Bills being introduced to eliminate or compromise this incentive discourage potential investments and expansions.

Protect Enterprise Zone (EZ) Program
Protect Enterprise Zone (EZ) Program, a jobs incentive program which provides Louisiana income and franchise tax credits to a business hiring a minimum number of net new employees. This Louisiana Economic Development Department program creates tax credits and sales/use tax rebates for businesses meeting the job creation requirements.

Reduce property tax burden on business
Develop fair and equitable property tax assessments and a broad based taxation system. Offer additional property tax abatement for investment in emission control equipment.

Insure state conformity with federal programs
State laws should track federal policies that provide tax and other types of relief in hurricane impacted areas.

4. Make Louisiana Competitive: Workforce Development

A successful workforce system must be fully aligned with state and regional economic development priorities. Louisiana employers and future employers want a system that can consistently meet their needs for a current and prospective trained workforce.

Engage K-12 pipeline
 Increase the focus at K-12 on the skills required to prepare for careers and jobs in Louisiana. Increase the amount of, and access to, information to middle and high school students and teachers on career options in process technology, maintenance, construction and other technical fields. Closely align the skills taught in our schools and the skills needed by our industries.

Encourage vocational education ( PTEC, MTEC, ITEC, Construction) and increase training for these high demand occupations
 Support and expand industry-based certifications that serve as a blueprint for the knowledge and skills required by Louisiana employers.

 Provide “rapid delivery” workforce training and funds necessary to put Louisiana people to work in the rebuilding effort. Secure pre-employment and non-credit training resources. Currently, such resources are not available to business and industry throughout the state.

Fund master plan for higher education
 Reshape the state’s higher education system to recognize jobs available in refining, petrochemical, pulp and paper, construction and plant maintenance industries.

 Align the Louisiana Community and Technical College System (LCTCS) curriculum with labor market needs and high demand occupations in the state. Tie community and technical college funding to those institutions meeting industry’s need for high demand occupations. Provide funding to the right institution and eliminate inefficiencies. Get money where it's needed.

Impact commissions on high school redesign and workforce development
 Encourage the development of a state secondary education and workforce system that is employer friendly, yields results, and demands accountability. Recommend solutions that attack the challenges and build consensus for systemic change.

5. Make Louisiana Competitive: Grow Research and Development Partnerships

Louisiana has a well-established university system that extends to all corners of the state. The State and the chemical industry must improve collaboration to utilize resources to create a globally competitive business environment.

Establish a chemical manufacturing think tank
 Establish a Louisiana Center for Strategic Petrochemical Development. Create a “Think Tank” dedicated to strategic thinking on the transformations triggered by technology and globalization. Collect ideas, protect them from short-term pressure, make them grow into projects with high social and monetary added value, and make sure they are realized.

Leverage university resources
 Develop an “ideas lab” for infrastructure, energy usage and distribution, access to raw materials, shared resources and zoning development. Using the ideas that emerge from the “ideas lab”, formulate a “master plan” for Louisiana that attracts more businesses to a state where the business environment is conducive to industry growth.

Coordinate research and development
 Develop chemical industry focused research and development programs at universities and create a mechanism/program to offer its resources to petrochemical companies. Through this program, companies could work closely with the university R&D personnel to fully advance ideas or products in a mutually beneficial manner. To encourage this cooperation, R&D credits should be extended to university/business partnerships.

6. Make Louisiana Competitive: Improve Critical Infrastructure

Infrastructure is the lifeline of a strong economy. To keep that lifeline strong, we must fix infrastructure problems that raise industry’s cost of doing business. Louisiana has the natural attributes of excellent logistics, and these must be fully developed and leveraged.

Reform the rail system
Many Louisiana chemical facilities are subject to unrestrained railroad monopoly power, either at the plant in Louisiana, at the facilities of customers, or at points in between. The resulting high transportation rates and unsatisfactory service is putting these facilities at a competitive disadvantage in a fiercely competitive global market. Here are some remedies: Correct distribution bottlenecks; invest in state-of-the-art automated rail switching yards; identify and fix regional inequities in rail rates that make the Gulf Coast non-competitive. Support legislation that encourages rail competition and requires railroads to charge reasonable rates, easing the burden on “captive” rail customers.

Add a Mississippi River rail crossing. Companies who must move product across the Mississippi River are at a disadvantage due to bottlenecks and switching issues that result from a lack of crossings. There are currently no river crossings for rail between New Orleans and Baton Rouge, making it difficult for companies in the industrial corridor to ensure on time delivery for their shipments.

Monitor the pilot fee process
Recently enacted reform legislation is a step in the right direction to ensure that river pilot rates are competitive with competing ports.

Build fully integrated industrial sites (“mega sites”)
Emulate successful programs from Europe, the Middle East and Asia by including integrated networks of product pipelines, utilities, support services and infrastructure. This should begin with a collaborative effort of engineering schools across the state to formulate a 30-year vision of what the chemical industry should look like in Louisiana and design a “site of the future” that will make Louisiana the leader in the world in petrochemical manufacturing.

Fix the roads
Complete the I-49 extension and build additional lanes border to border; consider light rail; a Baton Rouge loop; and privatize DOTD. Ensure that the state allocates appropriate matching funds for federal match programs. Business and industry rely heavily on roads and highways to get their products to market; therefore, all projects must be planned and funded efficiently.

Build levees that work throughout Louisiana
The Louisiana levee system was severely tested and damaged in several areas of south Louisiana, not only in New Orleans. The state levee system must be repaired to a high level of confidence so that the rebuilding effort can be successful.

7. Make Louisiana Competitive: Lead the Way in Health, Safety, Security & Environment

LCA member companies care about how we achieve our results. We are committed to excellence in safety, health, security and environmental performance, and to earning our "license to operate." Here are a few facts about how LCA member companies conduct their business.

The chemical industry is safe . . . especially compared to other business sectors
 Nationally, chemical companies average four injuries and illnesses a year for every 100 full-time workers. That's lower than the auto and home supply business at 6.4, agriculture, fishing and forestry at 7.3 and hospitals at 8.8. Louisiana is even better. In Louisiana, chemical companies average 2.1 injuries and illnesses a year for every 100 full-time workers. That's lower than transportation and public utilities with an injury and illness rate of 4.2, retail trade at 5.2 and the service industry at 4.4. And we are committed to continuous improvement in these matters.

 Leading the way as role models, LCA sponsors the Serious About Fostering Excellence (SAFE) Awards each year to showcase and promote chemical plants with outstanding safety, health and environmental performance. This awards program captures best practices that other chemical companies can emulate.

Security at chemical plants must be improved …and it has!
 We recognize our responsibility to help protect ourselves. Since 9/11, actions we’ve taken to bolster our security range from the heightened awareness of our own employees to the implementation of sophisticated technologies designed to detect and deter any threats to our plant operations, people, products, or property. Chemical plants have also established valuable relationships with other state and federal authorities to improve mutual understanding and awareness and to foster more rapid communications between government authorities and industry.

 These initiatives, and many other security upgrades, are in place because we recognize and accept our responsibilities regarding the safe and secure operation of our businesses. The essential benefit of these initiatives is improved chemical plant security.
Security depends on industry and government partnerships. This means we and all other key assets need to stay connected to homeland defense, public safety and security organizations so that timely, accurate and specific information can be shared and acted upon (if necessary) between the public and private sectors. Especially since 9/11.

Chemical companies have a proven track record of reducing emissions
 Since 1988, LCA members have reduced air, land and water releases of Toxic Releases Inventory (TRI) chemicals by 89.6 percent or 612.1 million pounds. Air releases decreased 85.5 million pounds or 76.6 percent. Water releases decreased 152.1 million pounds or 90 percent, and on-site land disposal, including underground injection, decreased 374.5 million pounds or 90.7 percent. That's a total of 612.1 million pounds, or an overall decrease of nearly 90 percent.

Seek reasonable and consistent environmental rules and policies
 It is essential that state environmental laws and regulations be fair, reasonable and consistent with corresponding federal requirements. Since Louisiana manufacturers must compete internationally as well as with facilities in other states, they must not be unfairly penalized by arbitrary or more stringent regulations than required by the federal government.

Environmental compliance is preferred over monetary penalties
 The state should encourage compliance rather than imposing stiff monetary penalties when enforcing environmental requirements. Louisiana should encourage use of beneficial environmental projects in lieu of monetary penalties when violations occur so that the state and its citizens will achieve a greater environmental benefit.

There is no Cancer Alley

 According to LSU, cancer incidence rates (incidence deals with getting cancer) in Louisiana vary considerably by cancer site (location of the cancer in the body) and by race and gender when compared with national rates. For three out of four groups – white females, black females, and black males—cancer incidence rates in Mississippi River parishes are lower than in the U.S. as a whole. In only one race and gender category, white men who live in this area, the incidence rate for all sites combined is higher than for white males nationwide.

8. Make Louisiana Competitive: Reduce Hidden Costs

Rising health care expenses and unreasonable lawsuits create some of the “hidden” costs that hurt the competitiveness of the Louisiana business community.

Quantify the impact of health care costs on all of us
 We all want a healthier and more productive population in Louisiana, yet no matter how much money we put into the system, Louisiana is consistently rated as an “unhealthy” state. All of us are affected as health care costs continue to rise, resulting in significant increases in employee benefit costs. Louisiana’s image as an unhealthy state hinders our ability to compete for expansions and to bring in highly skilled employees as needed. And, an unhealthy population is often blamed on the chemical industry’s presence in Louisiana although study after study disproves this accusation.

Support science-based health care studies
 Support science-based health care studies and promote the information about lifestyle. Address the high cost of health care in Louisiana by working to reduce frivolous medical lawsuits. Work to provide better health care to the poor by putting less money into buildings and more money into patient care, particularly in the areas of screening, early detection and preventive medicine.

Lower legal defense expenses
 Make sure people know the harm Tulane Environmental Law Clinic (TELC) has caused. Publicize the effect that lawsuits which are brought by clients represented by TELC have on the economy.

 Continue efforts to prevent lawsuit abuse and to enact class action lawsuit reform. Examine tort reforms in competing states (i.e. Texas) to assure Louisiana has a competitive business climate.

Support amicus briefs
 Amicus Briefs provide the court with broader insight into how a particular case may impact other institutions and companies in addition to the specific litigants involved.

Enact federal asbestos reform
 Asbestos reform should ensure that injured parties are compensated and receive medical treatment/assistance as needed while removing frivolous claims from the litigation process.