Dixie Transforming

In May 2007, the town of Convent, Louisiana received bad news.  After months of making plans, drafting agreements, and putting together incentive packages, it found out it would not be the chosen home for a new ThyssenKrupp steel manufacturing plant. Instead, the German metals conglomerate chose a site in Calvert, Alabama, 225 miles to the northeast.  For the short term, it seemed Convent’s landscape would remain limited to the familiar vocabulary of sugar cane fields, petrochemical plants, refineries, and grain elevators.

The scraped landscape along Alabama's Tombigbee River - new home to ThyssenKrupp steel.

SketchUp rendering of Alabama steel mill. Photo credits: http://www.thyssenkruppnewusplant.com/careers.aspx

Convent and the Parish of St. James were hard struck by the announcement.  So much effort, consensus building, money, and man hours had gone into making the case that Convent was an ideal place for this kind of industrial investment.  Now, not only were officials and citizens out time and money it took to make their ill-fated application, they had nothing to show for it – the most important being jobs – ThyssenKrupp pledged the creation of 2,700 high paying jobs once the facility was operational, and thousands upon thousands of construction-related jobs.

For St. James Parish, population 20,000 in the 2000 U.S. Census, ThyssenKrupp’s presence promised big change.  The plant would have made Convent a regional job center for Louisiana, bringing a bigger tax base, improved services, and expanded economic opportunity to a struggling area of the state.  It suggested new thinking about St. James’ economic landscape – an exchange of agricultural jobs for higher-paying manufacturing jobs serving ever-expanding global markets.  Each new ThyssenKrupp job was expected to pay $50-60K per year, an astounding jump from the $35,277 median household income for St. James Parish.

In the three years since the rejection, Convent and St. James Parish have stayed focused on marketing the area’s potential to other investors.  News announced this week by Republican Governor Jindal and Nucor Steel, an American steel manufacturer, describes plans for another steel manufacturing facility, with jobs paying on average $75K per year plus benefits.  Nucor’s plant hits additional efficiency targets using production techniques that create less greenhouse emissions than the proposed ThyssenKrupp complex.  The phased project could ultimately bring 1,250 jobs to St. James Parish (500 jobs in the first phase).

Proposed site for Nucor's newest American steel plant in St. James Parish.

What kind of incentives did Louisiana have to offer to ultimately get Nucor’s bid?  The state approved $600 million in tax exempt bonds that will cover the capital costs of building the first phase of the project.  Additional payments and incentives depend on the company’s ability to meet state-mandated minimum targets for payroll and investment.  The website steelguru.com states: “one of the surprising aspects of the deal is that Nucor, rather than the state, will pay for a river port terminal upgrade. Also, the state is not guaranteeing major infrastructure improvements for roads and site preparation.”

Reader do note the significance of these remarks about incentive packages.  From previous experiences courting investment, states have learned it makes little fiscal sense to sell the state out in the short term for a project whose promise depends on decades of sustained growth.  Although the desire to create jobs cannot be overstated, states should know better than to get in over their heads in these tenuous times.  Sustainable economic development – the kind of growth that does not compromise the potential of future generations — requires a proportionate balance of risks, benefits, and costs among and between participants.

For the few readers who may be wondering, I haven’t ignored what has been happening down in Louisiana.  You know, the oil spill stuff?  Thousands of jobs lost?  Seafood industries soon to be obliterated?  Wildlife suffocating under brown muck?  The future of Louisiana teetering on the brink of disaster?  Sigh.  Yeah.  I’ve simply been stewing for the last several weeks, trying to figure out a way to get this entry down.

I left Louisiana for Oregon on April 18, 2010, just a couple days before the epic blow out at the BP undersea rig Deepwater Horizon.  Had I anticipated this scoop, I probably would still be down in the bayous today trying to cover the story of the year (a story that happens to address my research thesis for this fellowship trip pretty darn well!).

Earlier in the spring I’d driven along coastal Louisiana hopeful to see some of these fabled rigs out in distance.  For me, a researcher of the South’s economic-fueled landscapes, the opportunity to capture the image of these floating virtual cityscapes was extremely alluring.  Sadly, from the vantage point I chose at Cypremort State Park, I couldn’t see them at all.  I was warned I would need to move further east to see anything – words of advice from an Army Corps of Engineers watchman I met at one of the Old River Control facilities. So I left the South in late April with only a faint idea of what the oil and gas industry means in a physical sense – the closest I got to an actual rig was in Morgan City, Louisiana where a retired (outdated) rig named “Mr. Charlie” is open to curious visitors like myself.  The rig functions as a museum and public outreach facility.

Morgan City's oil rig museum - modern rigs are exponentially larger than this old relic.

Oil and gas extraction is huge business in Louisiana and the South in general.  The diagram below describes the presence of offshore oil and gas rigs along Louisiana’s coast:

Over 3500 oil and gas rigs are in the Gulf of Mexico. Deepwater Horizon is just one of these.

As an avid radio listener, I’ve gotten downright depressed listening to the seemingly endless interviews and feature stories about forlorn shrimpers, oyster guys, and fisherman of lower Louisiana.  These people are some of the most dedicated, self-reliant, and earnest workers I’ve ever read or heard about.  They are not modern people – they are old-fashioned in terms of their global footprint and worldly ambitions.  But they sure know how to work a shrimp boat, which makes them a rare breed in today’s workforce.

One of the most remarkable things about  Louisiana’s coastal fishing communities is how tied to the landscape their members find themselves for their everyday existence.  That close relationship with the land is what makes the situation so much sadder.  With the inevitable arrival of oil into the marshes of coastal Louisiana, shrimp breeding and fishing grounds will be decimated and likely closed by government officials.  Considering forty percent (40%) of the U.S.’s seafood is harvested off the coast of Louisiana, it goes without saying that more than just shrimpers and fisherman will be put out by this oil spill.  As consumers, we will probably have a hard time finding seafood at an affordable price in the coming months and years.

The intertwined relationship these fishing communities have with the oil and gas economy is not unrecognized.  Some of the best paying jobs are on oil rigs and most these communities have members who depend on them for their livelihood.  Many shrimpers work rigs on the off season.  This fact may explain the even-keeled nature of the public’s comments on how BP is handling the capping operations and pending clean up.  Restrictions on future oil drilling is just as much a threat to the communities of coastal Louisiana as is the oil slick arriving in nearby marshes.

As for me, I’m hoping Louisiana’s bad luck changes course real quick.  I would be downright happy if I didn’t hear any news out of the state for a long time save for Super Bowl victories and everyday indecencies on Bourbon Street.