Louisiana

Local economy starts ‘long road back’

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New report by well-known Louisiana economist predicts slow recovery after four-year oil bust.

A new forecast from a well-known Louisiana economist presents one of the most optimistic forecasts for Houma-Thibodaux’s economy since an offshore oil bust began four years ago.

Loren Scott’s annual economic forecast, which he delivered Wednesday to members of the South Louisiana Economic Council and other local business officials, does not predict a return to boom times anytime soon. Instead, it describes the area’s oil-based economy as beginning a slow climb from the bottom of the latest downfall.

“After much bloodletting, the corner appears to have been turned,” the report says. “Fabricators and shipbuilders are making a reasonably successful shift to non-extraction-related-customers. An oil price of $80 a barrel by 2020 is expected to start a serious revival in the Gulf by 2020.”

Scott projects the metro area, comprised of Terrebonne and Lafourche parishes, will gain 700 jobs, 0.8 percent, next year. It will add another 2,100 jobs, 2.4 percent, in 2020, driven largely by gains in oil and gas.

A rebound has already begun, the report suggests, defying his prediction last year that the area would lose another 1,800 jobs in 2018. Instead, he now predicts the local economy will end the year with a net gain of 200 jobs.

“The numbers obviously do not show great growth,” the report says, “but at least they are up.”

‘LONG ROAD BACK’

Houma has a “long road back” to anything akin to the vibrant economy it enjoyed before a global crude glut caused oil prices to plummet and local jobs to vanish, the report suggests.

The area has lost roughly 16,000 jobs -- about one of every six -- since mid-2014 as low crude prices sparked layoffs and work slowdowns throughout the oil industry.

“This is more than 2 1/2 times worse than what U.S. employment declined during the Great Recession over 2008-09,” Scott says in the report.

Here, according to the report, is how some local companies have dealt with the downturn:

Edison Chouest, a Galliano-based company that builds and operates oilfield supply boats, cut the number of workers at its LaShip yard in Houma in half to 500. One hundred of the company’s 250 boats are are docked, and its mariners are working about half the time they did before the collapse. Employment at Chouest’s North American Shipyard in Larose has declined from about 500 to 200. Its North American maintenance facility at Port Fourchon remains open with about 300 workers.

Chett Morrison, a Houma-based fabrication company, cut its workforce from 515 to 320.

Baker-Hughes closed its 50-person oil services office in Houma.

Hercules Offshore, which operated a fleet of oilfield service boats, declared bankruptcy, closed its Houma yard and laid off 50 people there.

National Oilwell Varco, which builds oilfield equipment, closed its Houma facility at a cost of 80 jobs.

CCHI Aviation closed its Galliano base, laying off 74 pilots, mechanics and support staff.

Offshore Specialty Fabricators began layoffs in May 2016 that cost 67 jobs.

“The bloodbath was obviously not confined to the direct oil and exploration companies but also to tangentially connected companies,” the report says.

KEY TO A COMEBACK

Scott cites several developments as evidence the local economy has hit bottom and is on the path toward slow improvement. The area has posted several months of year-to-year job gains, truck traffic to and from the Gulf oilfield hub of Port Fourchon is picking up, and service companies along the Louisiana coast are planning for growth through 2020. Gulf oil lease sales, though far below historic highs, are on the rise. And many companies are beginning to diversify the kinds of work they do to become less reliant on the oil industry’s boom-or-bust cycles.

But the key to any comeback is the same thing it has been for decades: the price of crude oil.

It’s notoriously difficult to predict long-term crude prices because so many variables affect them -- political and regulatory decisions, production activity by major suppliers like the U.S. and OPEC, economic conditions or unrest in far-flung parts of the world, and global supply and demand. As a result, analysts’ and predictions vary significantly.

Scott predicts oil will rise from an average $65 a barrel this year to $80 a barrel by 2020. Whether that happens will have major implications not just for Houma-Thibodaux but for all of Louisiana.

“Because Louisiana is the country’s second-largest producer of crude oil, if offshore crude is counted in the number, movements in oil prices can often dramatically impact the state, as Louisiana has learned with a vengeance since late 2014,” Scott says in the report. “The huge decline in oil prices from late 2014 through much of 2017 hammered Louisiana’s oil patch so hard that it sent the state into a 28-month recession and a loss of 23,300 jobs (-1.2 percent). Louisiana desperately needs oil prices to both rise and stay high for an extended period for a drilling recovery in the Gulf of Mexico and a revival of the state’s oil-centered metropolitan areas.”

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.

Houma shipbuilder lands two major contracts

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A Houma shipbuilder has landed two new contracts as it works to rebound from a four-year offshore oil bust.

Gulf Island Fabrication will build a 245-guest riverboat for the American Steamboat Company, officials said Friday. The new paddle-wheeler, called the American Countess, will be built using the existing hull of the Kanesville Queen, a former gambling boat built in 1995. It’s expected to sail the Mississippi River starting sometime next year.

Gulf Island officials said they will report revenue and man-hours associated with the project in the company’s public financial statements for the quarter ending Sept. 30.

“We continue to break sales records and incredible demand remains for more capacity on the river with each of our boats continuing to sail full,” American Queen Steamboat Company Chairman John Waggoner said in a news release. “We look forward to collaborating with Gulf Island’s team of skilled workers and craftsmen to deliver a riverboat that will once again exceed expectations of our guests and continue raising the bar on domestic river cruising.”

The latest contract follows Gulf Island’s announcement late last month that it has finalized a deal to build a second 3300-horsepower towboat for an unnamed customer. Delivery of the second vessel is estimated two months after delivery of the first.

“We are pleased to be awarded this option for the second newbuild towboat,” Kirk Meche, Gulf Island president and CEO, said in a news release. “This work will be performed at our shipyard in Houma. ... This is yet another indication of confidence from our customers as it relates to our ability to perform and provide quality vessels.”

Gulf Island, based in Houston, is a leading fabricator of oilfield structures, including offshore platforms and ships. It also builds structures for the petrochemical and alternative energy industries. Its Houma fabrication and shipbuilding operations in Houma employ about 600 workers.

Like many oilfield service companies, Gulf Island’s business has been impacted by a four-year offshore oil bust that has stripped an estimated 16,000 jobs from the Houma-Thibodaux economy.

Meche cited some improvements in an Aug. 9 report on the company’s second-quarter financial results. The company reported net income of $500,000 on revenue of $54 million for the three months ended June 30. That compares to a net loss of $10.9 million on revenue of $45.9 million for the same period in 2017. And it’s up from the first quarter of this year, when the company posted a net loss of $5.3 million.

He cited strong performance from Gulf Island’s services division in Houma, as well as income from the sale of a fabrication yard in Ingleside, Texas, for part of the gain.

On June 6, the company landed a contract to build a second marine research vessel for Oregon State University for $67.6 million. And in March, it received a $63.6 million contract to build the first in a new class of Navy salvage, towing and rescue ships. Both projects are being built in Houma.

The company’s reported a backlog of work totaling $347.6 million as of Aug. 8, including projects through 2022.

“As of today,” Meche said in the report, “our backlog is the largest it has been in four years.”

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.

Houma company to build new tugboat

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A Houma-based shipyard said it’s joining forces with a New Orleans company to build the most powerful ship-assisting tugboat on the Mississippi River.

Main Iron Works announced last week it’s partnering with the New Orleans-based Bisso Towboat Inc. to build its 12th tugboat.

Bisso Towboat Inc. awarded the contract earlier this summer to Main Iron Works with plans to build a new 100-foot, 6,008-horsepower, Tier 4-compliant ASD tractor tug.

Tier 4 is a set of emissions requirements established by the Environmental Protection Agency to reduce emissions.

Construction of the vessel will begin later in the season with a projected completion date of fall 2019, the company said.

Scott Slatten, Bisso’s president, said the new tugboat will have a similar structure to the recently built vessel, the Liz Healy.

“It will be very similar structurally and from a profile to our last new build, Liz Healy, as the vast majority of the changes will be in the engine room for the SCR system and larger Z-drives and a larger bow winch and bow staple to accommodate the increased horsepower/bollard pull,” Slatten said. “Beyond that, we were able to pretty much use our existing design with some minor changes in tankage and hull and the above.”

Main Iron Works owner Arlen “Benny” Cenac Jr. said the new tugboat will be first of its kind for the company.

“We are proud to partner with Bisso as they build the most powerful ship-assist tug on the Mississippi River,” Cenac said. “This is an opportunity we are privileged to be a part of. It’s our 12th build for them and we look forward to many more. This is our first Tier 4 boat, and it’s always such a pleasure to work with Bisso, a longtime customer of Main Iron Works.”

Founded in 1947, Main Iron Works specializes in the building, repair and repowering of marine vessels and barges.

--Staff Writer Dan Copp can be reached at 857-2202 or at dan.copp@houmatoday.com. Follow him on Twitter@DanVCopp.

New marine research center coming to Houma

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A partnership of local education organizations is developing a new marine research campus in Houma.

This new campus, on Dickson Road, the result of a partnership among Fletcher Community College, the South Louisiana Community College and the Louisiana Universities Marine Consortium, or LUMCON, based in Cocodrie.

LUMCON’s goal is to increase society’s awareness of the environmental, economic and cultural value of Louisiana’s coastal and marine environments through research and education programs. LUMCON Executive Director Craig McClain said the campus is available for all who want to collaborate with others.

“The idea of the campus is collaborative,” said McClain. “There will be a lot of focus on work-force development and retraining. There will be a lot on learning technology and innovation. It’s a big, collaborative space. We’re looking for partners among many agencies to come put representation on this campus in Houma.”

The Houma Main Campus will permit LUMCON to stimulate, coordinate and facilitate scientific research among marine science programs. McClain said he hopes to begin construction sometime in 2019.

“We are confident that any research vessels requiring fuel and maintenance as they sail along the Gulf Intracoastal Waterway and in the Gulf of Mexico would find not only the skill sets needed locally, but hospitality, as is deeply rooted in our Southern Louisiana culture,” said Terrebonne Economic Development Authority CEO Matthew Rookard.

The current vessels maintenance building and machine shop at the Cocodrie facility are at ground level, making them vulnerable to flooding. It also lacks space for moving and maintaining the scientific equipment.

The new site will also offer a sheltered base of operations and retreat from flooding. LUMCON’s Cocodrie facility is outside the Morganza-to-the-Gulf Levee System. The facility was closed for several days due to flooding from Tropical Storm Cindy, Hurricane Harvey and other storms. The Houma campus and dock would allow for continued operations during storms.

In total, the new facility would save LUMCON $8 million in productivity over the next 20 years by avoiding operational shut down due to high water, McClain said.

“We continue to have meetings to build a campus plan,” McClain said. “We’re really excited about this campus because it will bring a lot of new entities to the region and the state, as well as make a significant impact on the unemployment in the region.”

An economic impact analysis for the campus conducted by LSU estimated the new campus would lead to over $125 million in earnings and more than $470 million in economic output over the next 20 years.

Construction and operations of the campus would generate 337 new jobs, at construction’s peak, and the facility will employ 70 workers upon completion. The construction will cost an estimated $58.8 million dollars.

“There’s a process where this has to be approved by the Legislature, and then the money is secured for the budget. We’re waiting on finalization of that before we begin the process,” said McClain.

-- Staff Writer Scott McLendon can be reached at 857-2204 or smclendon@houmatoday.com

ENTERGY -- Operation: Storm Ready

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The 2018 hurricane season begins June 1 and before it begins, we want our customers
to know that while we are hoping for the best, we are prepared for the worst.

• Safety is a core value at Entergy and remains top priority for our workers and customers.
• In the first three days following a storm, we work on:
- Assessing damage to deploy the right number of personnel with the right material.
- Restoring minimally damaged power plants and large transmission lines.
- Repairing substations and distribution lines that serve critical customers, like hospitals, police, water, drainage and communication networks.
• As the restoration continues, we work on: 
- Restoring areas with large numbers of customer outages, including businesses and neighborhoods.
- Restoring individual services, often the most time-consuming.
• Throughout, we supply the logistical needs of the restoration workforce, like food and shelter, for the duration.
Power plants, the primary sources of power production, are restored.
Large transmission lines are repaired and restored, delivering power to cities, towns and major industrial facilities.
Substations are brought online, and power is restored to emergency services, life-support facilities, police and communications networks.
Power is restored to areas with the largest numbers of customers, including businesses and neighborhoods.
Bucket trucks are safe to use when winds fall below 30 mph.
Individual services, often the most time-consuming repairs, are restored.
Year-Round Planning
• We plan restoration reports months before the first sign of foul weather.
• We follow a detailed, rehearsed plan that has worked well for us.
• We monitor weather threats 24/7, 365 days a year.
• We prioritize critical sites with local officials before the storm.
• We conduct annual storm exercises and review lessons learned following every event.
Restoration Time
• Weather forecasts, models and knowledge help us predict an estimated number and duration of outages.
• We strive to give an estimate of how long it will take to restore a majority of our customers 48-72 hours before landfall.
• Restoration estimates are revised as more concrete information about the storm becomes available.

 

 

 

LED'S STEP GRANT OFFERS TRAVEL EXPENSE REIMBURSEMENTS FOR OFFSHORE EUROPE - SEPTEMBER 5-8, 2017 - ABERDEEN, U.K.

About Offshore Europe 2017

Offshore Europe features over 56,000 attendees and offers Louisiana companies an opportunity to engage directly with international market leaders and innovative technology companies. As Europe’s leading energy and petroleum event, the conference attracts global audiences of engineers, technical specialists and industry leaders. The 2017 conference will be held at the Aberdeen Exhibition and Conference Center and is organized by the Society of Petroleum Engineers. 

STEP Grant Opportunity

LED’s STEP Grant will offer travel expense reimbursements of up to 75 percent for new-to-export companies and up to 50 percent for market-expansion companies, for total assistance of up to $2,500 per company for attending Offshore Europe.

Learn more about utilizing the STEP Grant for Offshore Europe by clicking here or by calling

Sheba Person-Whitley - Senior International Trade Manager
International Commerce Division - Louisiana Economic Development
T     225.342.2537
C     225.772.2981
Sheba.Person@la.gov

617 North Third Street
Baton Rouge, Louisiana

Louisiana ranked fifth-best road trip state

While tourism being one of the biggest industries in Louisiana is no surprise to anyone in the Bayou State, the state being named one of the top road trip state in the nation was a pleasant surprise for local tourism groups.

According to an annual report by wallethub.com, Louisiana is the fifth-best state for tourists to take road trips. The 50 states were ranked based on a number of factors divided into three overall categories: cost, safety and activities.

What are the Safest Cities in Each State? Schriever, Bayou Blue, Bayou Cane and Gray all ranked as one of the safest!

LendEDU recently released a report that highlighted the safest cities in Louisiana and Schriever, Bayou Blue, Bayou Cane and Gray all ranked as one of the safest.

Using licensed data, each city’s crime index was rated against the state and national average crime index.

The full report and a more detailed methodology can be found here: https://lendedu.com/blog/safest-cities-state/

 

 

How does Louisiana rate among the other 50 states on property taxes?

Where Does Your State Stand?

Louisiana is #38

Effective Tax Rate: 0.71%

Average Home Value: $183,591

Average Property Tax: $1,302

Highest Average Metro Property Tax: New Orleans, $1,864

Total Single-Family Homes: 1,303,899

Total Property Taxes: $1,698,204,632

American homeowners paid property taxes totaling nearly $278 billion in 2016, according to a new report from ATTOM Data Solutions, the nation's largest property database. That means that each of the country's 84 million single-family homeowners paid an average of $3,296 in property taxes, which amounts to an average 1.15% effective tax rate.