It’s no secret about the billions of dollars worth of industrial projects coming to Texas and Louisiana. But it’s something the University of Texas at Austin’s Center for Energy Economics — Bureau of Economic Geology is studying very closely. According to its Senior Energy Advisor Deniese Palmer-Huggins, the center has 123 industrial projects in its database that it’s currently tracking.
“Out of the 123 projects — all downstream projects — these are ones that have been permitted or we feel have the potential to move forward,” Palmer-Huggins said. “We estimate these projects to bring $90.4 billion of industrial investment between 2013-2019.”
As for the location of these projects, 39 percent will be in Louisiana, 30 percent will be located in Texas and 31 percent will be located elsewhere in the U.S. Palmer-Huggins said if you include those projects still in primary phases (under consideration, planning, etc.), there’s a total of 161 industrial projects, bringing the total investment up to $124.5 billion. Thirty-five percent of these considered projects would be located in Louisiana.
“In 2013, Louisiana had more announced projects but as time goes on Texas will start to gain ground,” she said. “I thought Louisiana would keep up with Texas in terms of industrial projects. Places like Mont Belvieu, the ship channels and ports make Texas a little more attractive, but Louisiana also has tax abatements it’s proposing that are very attractive for investment. Obviously, all of these industrial projects aren’t going to get built, which is why you see the race to get approvals and permits.”
Palmer-Huggins recently spoke at Energy Summit™ 2014: The Future of Louisiana Energy, which was presented by the LSU Center for Energy Studies in Baton Rouge, Louisiana.
“With the amount of industrial demand coming in the next two to three years, the real question is: Is $5 or $6 natural gas going to cancel any of these projects?” she asked. “The U.S. economy is doing better thanks to unconventional resource development. But there are infrastructure bottlenecking and environmental regulations that could delay development. You can’t overstate the need for infrastructure when it comes to resource development.”
Palmer-Huggins said the energy landscape is also drastically changing. For example, the U.S. used to import natural gas from Mexico, but the country is undergoing so much industrial development of its own the U.S. is beginning to export natural gas south of the border.
“Everything we knew in the midstream sector from 2007-2008 has been turned on its head,” she said. “You look at graphs and arrows that have typically pointed one way in the midstream have now flipped. The midstream is truly challenged at this point in trying to keep up with everything changing on the energy front.”
For more information, visit www.beg.utexas.edu/energyecon or call (713) 654-5400.
