Local LNG projects may be impacted by President Trump’s tariff battle with China. As companies look at the bid packages coming in to start some of the coastal LNG projects any cost increases for any reason could cause them to take a closer look at the bottom line. Steel is a major cost item in the building of these projects and if the tariff tiff causes a significant price increase it could be a reason for concern. The LNG business along the Texas and Louisiana Gulf Coast will have a tremendous economical impact in Texas and the United States.
In a recent report, conducted by ICF Inc., using the most current U.S. Energy Information Administration (EIA) data based on three cases in their 2018 Annual Energy Outlook (AEO) released in Feb. 2018. The three cases include the Reference Case, the High Oil & Gas Case, and the High Oil Price Case. Key findings from the new ICF study include the direct, indirect, and induced value added from 2013 to 2050 for the three AEO cases:
"U.S. LNG exports are driving the transformation of the international gas trade to an increasingly well-connected global market," said LNG Allies President & CEO Fred H. Hutchison. He added, "This updated report shows LNG exports also provide important economic benefits to the United States, by stimulating job creation, increased economic activity, and tax revenues."
As I stated in last month’s article any change in tax laws, whether its State, Federal, County or City causes a ripple effect through any planned new facilities or expansion of existing facilities. Although most of the companies in the area are well funded we are talking billions of dollars. That is a significant investment for any group. Many area companies have added partners in an effort to secure the cash needed for these expansions or new projects.
I understand the need to insure we are being treated fairly by our trade partners and I’m hoping the President is simply rattling tariff sabers to get a better trade deal for us. I would hate to see some of our locally based LNG companies delay their projects because the cost of construction escalated beyond what they are willing to invest.
To educate state elected officials the Beaumont, Orange and Port Arthur Chambers hosted 40 elected legislative officials and members of their staff for a tour of the Neches. The purpose was to spotlight the economic importance of our ship channel to Texas and the United States. We are hoping the three-day event will cause our state officials to help get the necessary funding to deepen the ship channel. Funds for this event were provided by local industries and interested agencies involved with our shipping industry. The trip included a reception at the Port of Beaumont and the Orange Airport. Those participating were also treated to a boat ride from the Port of Beaumont to the Port of Sabine Pass, a trip to Sea Rim Park and various sessions covering the economy of our area.
To continue our relationships with our elected state officials plans for Golden Triangle Days in Austin are already underway. We have secured a block of rooms, several meeting sites and transportation while in Austin. The dates for the 2019 event are February 11and 12. These two days are a change from previous years. The event will be arriving on Monday, events on Tuesday and return home on Wednesday. We will have more on this event in the coming months.
If you want to be part of a business organization that is making a difference in our community, call Paige Snyder at 409-963-1107 extension 3.
Greater Port Arthur Chamber of Commerce Awarded 5-Star Accreditation
by U.S. Chamber of Commerce
Good news! The Greater Port Arthur Chamber of Commerce is pleased to announce that after a comprehensive self-review, the U.S. Chamber of Commerce has awarded us with 5-Star Accreditation. This prestigious honor puts us among the top 1% of chambers nationwide. In Texas there are fifteen 5-Star chambers and out of 7000 chambers of commerce in the United States there are 113 with the 5-Star Accreditation.
It is the responsibility of every chamber executive to, always, strive to make their chamber better. To do that you must have a measuring device and a map to your destination. The U.S. Chamber Accreditation provides exactly those items. This program makes you self-evaluate every aspect of the chamber. In the past year this effort has led to the creation of the Hispanic Business Council, the Contractors Business Development Group as well as a Membership Committee that is growing the chamber through new sales and retention. The process has taught our staff and volunteers how to research, plan and execute an aggressive and valuable chamber program.
This past year, the staff, board, and volunteers of Greater Port Arthur Chamber of Commerce spent countless hours completing the Accreditation process. Our task: demonstrate competency in 9 core areas ranging from finance to facilities. The result of our hard-work is evidenced by this impressive rating. But in truth, we should all be extraordinarily proud of this milestone achievement. It was a true team effort.
The only national program recognizing chambers for their effective organizational procedures and community involvement, Accreditation allows us to renew, improve, and promote sound business practices, policies, and procedures.
Local chambers are rated Accredited, 3-Stars, 4-Stars, or 5-Stars. State chambers are recognized as either Accredited State Chamber or Accredited State Chamber with Distinction. The final determination is made by the Accrediting Board, a committee of U.S. Chamber board members and chamber executives from across the country.
For details, please contact Bill McCoy, President/CEO at (409) 963-1107 or www.portarthurtexas.com and click on the -Star Accreditation logo.
A Dangerous Message
Recently there has been discussion by Mayor Derrick Freeman about the creation of a Municipal Development District to generate sales tax revenue from petrochemical companies located in Port Arthur’s extra territorial jurisdiction. I understand his desire to find additional funding for repairing our infrastructure.
The problem is, any new tax would send a message to corporations that are considering expanding existing facilities or building new facilities our city is no long business friendly. Industry currently contributes approximately 30 million dollars through property taxes and agreements to our city directly. They generate the remainder of the city budget, indirectly, through jobs and incentives for all retail in Port Arthur.
It is a common thought, tax businesses instead of citizens, because businesses do not vote. Port Arthur is falling into that trap. Government tends to think that industry has no alternative but to accept this continued pressure and pay up. Industry does have options. For years they moved their operations and money off-shore and overseas. They also began to automate and streamline, thereby eliminating jobs. They can cancel expansions and new projects. Industries are corporations, owned by stockholders and governed by boards. If these stockholders do not see a fair return on their investments they can vote to delay or cancel spending on expansions and projects. With the latest federal tax cuts and reduction of regulations, industry is beginning to reinvest in the United States. Port Arthur needs to send the same message, lower taxes and less regulations instead of raising taxes and writing complex and, sometimes, unattainable, rules to qualify for tax breaks.
Currently in Port Arthur there are three new projects in the planning, totaling approximately 35 billion dollars. There are two expansions that could total 3 billion dollars. What does our new policy of increasing taxes say to their directors?
I suggest to our city council they come up with a message that makes those directors feel comfortable in investing in our city. I also suggest the council communicate with the business community on ways to better use the money we have. Our city has spent several hundred thousand dollars on plans to revitalize our city. The adage, “build it and they will come” is only true if what you build is accessible by good roads and doesn’t flood every time there is a heavy dew. I suggest we rebuild our deteriorated infrastructure and then “build it.” If we improve our infrastructure, private investors might just build it for us.
Speaking of infrastructure, on February 13, I was excited to attend a meeting with TXDOT to view plans for the redesign of the intersection of Highways 73 and 69. This old cloverleaf has served us well but with increasing traffic and speeds it has become dangerous. The new plans will have to go through extensive review, meetings with stakeholders and public hearings before it moves forward. Couple that with the high expense, I may never see it completed, but I can say I saw the plans. This project was included in the Chamber’s Transportation Plan, submitted to the City and TXDOT. last year. It is exciting to see them place the project on their agenda.
Infrastructure is important to private investors, but a trained workforce is also important. Golden Pass LNG is, once again, stepping up in the effort to train and hire local citizens at their future project. The proposed Golden Pass Products LNG export project is expected to create thousands of construction jobs and hundreds of permanent jobs. It would also generate economic gains in retail, construction, manufacturing, business services and transportation. Golden Pass is committed to helping local residents and businesses be part of the growth.
To address the employment issue, Golden Pass has created a set of programs – THE OPPORTUNITY ROADMAP – to do just that. The program connects local residents with opportunities to advance their skills, careers and potentially gain employment with Golden Pass or its contractors, improve the skill sets and employability of the available local workforce pool. Golden Pass is also committed to hiring locally and creating benefits for the local community. To make this happen Golden Pass is sponsoring four, two-hour sessions. These will be held in April, May, June and August. The exact dates and locations will be available soon. One session was held in early March.
The opportunities continue in Port Arthur, Texas and the Greater Port Arthur Chamber is there to help you take advantage of them. If you wish to join the team call Paige Snyder at 409-963-1107.
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