Powerhouse of the South: Louisiana’s Dynamic Energy Industry

Louisiana’s existing assets offer tremendous opportunities for companies manufacturing products or delivering services to the energy industry. More than 90 percent of waterborne U.S. oil rigs are located in waters off Louisiana's coast, and according to the Energy Information Administration the state is No. 2 in crude oil and No. 3 natural gas production in the nation (when including offshore production).

Louisiana’s established agriculture industry offers diverse alternatives to emerging clean technology companies. At the same time, skilled manufacturing talent and low company costs are benefiting manufacturers of components and designers of software critical to the efficient generation, transmission and distribution of energy. Recognizing the state’s compelling advantages, companies such as Halliburton, Sasol and Newpark Resources are establishing or expanding operations in Louisiana.

Powering Louisiana’s Energy Workforce

As a legacy producer and service provider to the energy industry, Louisiana offers tremendous intellectual capital that can be leveraged to manufacture critical components, develop technology or optimize service operations critical to all energy industries.

New investors in the state can be sure of Louisiana’s continued workforce growth because the state is making strategic investments in higher education to meet the future needs of industries. Research centers and universities throughout the state fuel innovation and provide skilled workers for energy companies. A number of Louisiana universities graduate new chemical engineers each semester, including the Louisiana State University (LSU) and University of Louisiana at Lafayette (UL Lafayette). Additionally, LSU, Louisiana Tech, Southern University, Tulane University and UL Lafayette all have specific programs and research strengths related to the energy industry.

LSU is the only university in North America where future petroleum engineers can get hands-on training in well control by working at a full-scale research and training facility. The Petroleum Engineering Research & Technology Transfer Laboratory — also commonly referred to as the Well Facility — is an industrial-scale facility with full-scale equipment and instrumentation related to borehole technology.

LED FastStart Delivers Customized Workforce Solutions

LED FastStart®, the nation’s No. 1 state workforce development program, creates customized workforce recruitment, screening and training solutions. FastStart works with eligible new and expanding Louisiana-based operations to ensure that companies have a highly qualified, trained workforce from day one — all at no cost to the company. FastStart has designed and delivered customized workforce solutions for a wide variety of Fortune 500 companies across multiple industry sectors. In particular, the team has managed hundreds of workforce programs in multiple states for leading companies like Danos, Halliburton, Curole Marine Contractors and many others.

"With Lafayette's strong workforce and economy, access to major transportation zones and the LED FastStart® program to help hire and train our employees, this is a great place to grow our business."

Marc Edwards
Senior Vice President, Halliburton

Custom Incentives for Businesses in Energy

Louisiana’s highly competitive incentives are offering both new and existing energy operations significant advantages.

• Louisiana offers the Industrial Tax Exemption Program, which provides property tax abatement for up to ten years on a manufacturer’s new investment and annual capitalized addition.
• The Quality Jobs program provides up to a 6 percent cash rebate of annual gross payroll for new, direct jobs for up to 10 years. It could also provide a state sales/use rebate on capital expenditures or a 1.5 percent project facility expense rebate for qualified expenses.
• In addition, the Digital Interactive Media and Software Development Incentive — the nation’s strongest, most comprehensive incentive for software development — provides a unique advantage to the aerospace industry. The incentive is applicable to customer-facing software, including aerospace-specific applications like navigation, communications, radar, defense and other embedded systems. Eligible projects receive a 25 percent refundable tax credit for payroll expenditures and an 18 percent refundable tax credit for qualified production expenditures. If the amount of tax credits exceeds the business’ state income and franchise tax liabilities, the business receives the balance as a refund.

Louisiana values business investment, and when a company moves or expands its energy industry operations here, it can count on innovative solutions to meet the project’s specific needs. For competitive projects that involve substantial new-job creation, major investment and the majority of sales to out-of-state customers, Louisiana is agile and flexible — customizing incentives and workforce solutions, aligning state and local resources, connecting a company with valuable assets, and coordinating permitting and startup activities to ensure that operations proceed smoothly and on schedule.

A Business Climate Supercharged for Success

At the core of Louisiana’s competitive advantages is the strength of its business climate. In recent years, the state has enacted reforms to create an atmosphere that Forbes magazine calls “America’s new frontier for business opportunity.” Louisiana now ranks in the Top 10 states for business climate in the U.S., according to Area Development, Development Counsellors International and Site Selection.

Louisiana’s low-tax environment offers significant operational cost savings for the energy Industry. According to a 50-state analysis by the Tax Foundation and KPMG: Location Matters: The State Tax Costs of Doing Business, Louisiana's tax burden ranks among the top 10 lowest in the nation for new facilities, relocations, and facility expansions for a variety of firm types, including:

• labor-intensive manufacturing
• capital-intensive manufacturing
• research and development facilities
• corporate headquarters

A location in Louisiana can reduce company costs because of the state’s low industrial electricity rates — 2017 rates averaged approximately 22 percent below the national average.

Louisiana’s industrial natural gas rates are also highly competitive, with the state’s 2017 rates averaging the lowest in the South and approximately 10 percent below the national average.

Expedited Permitting Reduces Start-up Time

Louisiana understands that a company’s ability to ramp up quickly and efficiently is a significant factor in its location decision. To maximize time and efficiency for companies, the state has created an expedited environmental permit-processing program, which enables Louisiana to issue permits more quickly and efficiently than almost any other state in the country.

“We feel that the expedited permit process has significantly shortened permit-processing time, helping GP turn projects around often much faster than GP mills in neighboring states.”

Keith Wahoske Vice President — Port Hudson Operations (2008-2014)

Location Advantages for Energy Suppliers

More than 1,000 Louisiana engineering, service and fabrication companies support the state’s energy industry. The state’s superior transportation infrastructure and proximity to abundant natural resources make doing business in Louisiana an optimal choice for energy industry operations.

Superior Logistics Offer Unrivaled Access

Louisiana is well situated for both inbound and outbound logistics. The state is home to:

• Six interstate highways
• Six Class 1 railroads
• Six deep water ports
• Seven primary airports

Louisiana is one of only two states in the country where all six of North America’s class one railroads converge.

View how Louisiana’s development-ready certified sites intersect with inbound and outbound logistics, view demographic information and more in the Site Selection Center.