A litany of tumultuous events turned 2020 into a very bipolar year. Few in south Louisiana’s industrial sector escaped the fallout from the COVID-19 pandemic and its resulting market turmoil, or the unprecedented number of hurricanes. To perhaps bring it into focus, the staff of 10/12 Industry Report takes a look back at some of the top stories that shaped this chaotic, and unforgettable, year:
The Pandemic
The COVID-19 pandemic had Louisiana’s industrial community reeling throughout much of the year, forcing it to find answers in a new reality—and that’s in a region that has already battled storms, spills, floods and various other monkey wrenches over the years. Read the full story.
Hurricane Laura
While the Lake Charles area was directly impacted by two hurricanes in 2020, the most significant damage was inflicted by Hurricane Laura in August. Though the damage was largely manageable in the industrial sector, normal operations didn’t resume there until mid to late October. That’s because the plants require “dual source” power, which remained a distant dream for a majority of the region. Read the full story.
LNG Turmoil
It became evident that any LNG investment in Louisiana would remain in limbo until at least 2022, as the uncertainty of COVID-19 and availability of competitively priced natural gas in other parts of the world turned U.S. LNG exports into a risky proposition. Read the full story. In December, the U.S. Department of Energy extended the terms of seven long-term liquefied natural gas export authorizations—including three in Louisiana—through 2050.
Oil Bust
More than half of Louisiana Oil & Gas Association member companies said they would likely file for bankruptcy in 2020 in a May member survey, despite modest rebounds in oil and gas prices since the April 20 market crash. Equally troubling, 23% said they were making significant cuts to their workforce and 77% of operators say they are shutting down production. Read the full story.
ITEP Changes
In February, the Louisiana Board of Commerce and Industry approved a significant change to the state’s Industrial Tax Exemption Program that allowed a manufacturer to appeal to the board when a local government has rejected its request for a tax abatement under ITEP. Read the full story.
Sasol Changes
In November, Sasol shareholders approved a proposed agreement to form a joint venture with chemical company LyondellBasell Industries at its U.S Lake Charles Chemicals Project to pay down debt. LyondellBasell agreed to acquire a 50% stake of Sasol’s base chemicals business for $2 billion and operate the newly formed joint venture. Read the full story.
Formosa Stoppage
FG LA LLC, a member of the Formosa Plastics Group, announced in October that it would delay major construction activities at its Sunshine petrochemicals project in St. James Parish. The widespread impact of the global pandemic played a critical role in the decision. Read the full story.
Lease Sale
In November, the federal government leased more than a half-million acres to companies for offshore oil drilling and production. The leasing event came just ahead of President-elect Joe Biden’s transition into office. Read the full story.
Shell Convent
Also in November, Royal Dutch Shell PLC began the permanent shutdown of its 211,146 barrel-per-day Convent refinery. Shell announced that the refinery, located 57 miles west of New Orleans, was to close after the company failed to find a buyer amid the COVID-19 pandemic. Read the full story.
ExxonMobil Layoffs
ExxonMobil’s corporate headquarters announced plans in October to lay off an unspecified number of employees as low oil prices forced the company to delay major projects. The job cuts were just the latest sign of struggle among U.S. energy producers navigating the industry’s downturn. Read the full story. Ending the year on a positive note, the Baton Rouge plant announced a three-year $240 million modernization project.
Shintech Production
In February, Shintech began ethylene production at its Plaquemines facility. The new 500,000 tons-per-year cracker supplies feedstock for its vinyl chloride (VCM) and polyvinyl chloride (PVC) production and is part of a $1.49 billion investment. Read the full story.
