Thriving Louisiana looks beyond oil for future growth
Even with energy prices and demand down, the oil industry is rewarding Louisiana handsomely. Yet welcome as oil revenues are here, the state is trying hard to build a broader-based economy before its oil riches run out.Skip to next paragraph
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Largely thanks to oil and natural gas, Louisiana has climbed suddenly from 45 th ranking among the 50 states in per capita income for 1975 to 35th place for 1980.
Massive construction projects under way here indicate the state's determination to keep on climbing. In the northwest, International Paper Company has built a $500 million container-board plant. Along the lower Mississippi River, new coal export terminals are squeezing in beside rapidly expanding petrochemical plants and giant grain elevators.
The most visible sign of change, however, is in this state's largest city, New Orleans. Pile drivers work nonstop, shoring foundations for a $2.5 billion construction boom. New hotels are racing skyward so they can be operating smoothly before the 1984 World's Fair opens here. Demand for office space has transformed the central business district into a gallery of soaring modern architecture. Private and public money is being pumped into new port facilities to maintain New Orleans's standing as the nation's leading port in tonnage handled, second only to Rotterdam in the world. The city also has begun work on a 20-year program to drain and fill enough swampland to create a 12,000-acre industrial park within five miles of downtown New Orleans.
Nearly a decade of rapidly rising oil prices has fueled much of the growth here. With major new onshore oil and gas discoveries and half the world's offshore wells lining its coast, Louisiana has cashed in handsomely. Amoco, Mobil, Chevron, Gulf, Texaco, Exxon, and Shell have set up regional headquarters here in gleaming new buildings. Where the oilmen lead, other major corporations are following.
''If we were able to do that in a decade in which there were price controls and overregulation of the oil and gas industry, in which taxing policies were primarily designed to redistribute income rather than help industry, Louisiana has got to do better in the '80s in which price controls begin to disappear and in which tax policies are intended to help encourage rather than discourage industry,'' says Louisiana State University economist Loren C. Scott, refering to the state's growth.
New Orleans mayor Ernest N. Morial, the city's first black chief executive, is credited with playing a key role in bringing new investment to the state. After a campaign focused on economic issues, this liberal Democrat set up an office of economic development when he took office in 1978.
Mayor Morial says a national recession and drastic cuts in federal funds for cities make today ''a bad time to be a mayor.'' Saddled with an older city's typical problems of decaying water, sewage, and street systems, persistent crime , and poor schools, he says he wants to convince Washington that ''the cornerstone of the American living scene is within the cities.'' He says he hopes the response will be increased federal assistance. He recommends ''an infrastructure bank'' that will lend funds while ''letting the local government determine how that money should be spent.''
But Morial isn't waiting for federal aid, he is pushing plans to diversify the city's economy: The mayor is building up the port, building tourist traffic, and hoping that his new Almonaster Industrial Park will bring another 50,000 jobs to New Orleans.
There is ''very strong state and city leadership for economic development'' in Louisiana, says 1984 World's Fair manager Petr Spurney. He says the fair's focus on trade promotion has already brought New Orleans new links with China and a number of developing nations.
Economist Gordon Saussy, director of the division of business and economic research at the University of New Orleans, gives less credit to Louisiana's planners and politicians. Economic growth was virtually guaranteed, he says, by the state's ''tremendous natural resources.'' New Orleans has the added advantage of its location ''at the buckle of the Sunbelt, on the Mississippi River,'' he notes.
Professor Saussy blames ''risk averse'' leaders for holding back the state. He still sees poor education as a major obstacle to growth. Schools here turn out ''people who are not employable because they can't read, write, or calculate ,'' he says.
Saussy warns that ''if we don't do more to develop our human resources before the petroleum runs out, then we are headed for serious problems.''
Prof. Glen Conrad, director of the University of Southwestern Louisiana's Center for Louisiana Studies, is equally concerned.
''Right now, the oil industry has been keeping the Louisiana economy alive. Without oil, this would be a Gulf Coast Appalachia,'' Dr. Conrad says. ''What concerns me is how fast our alternative means of income are disappearing, how closely tied we are becoming to the oil industry.''
Conrad warns that the state is paying a hidden price for its emphasis on oil. Agriculture and the fishing industry are being neglected, he says, and far too few young people are being educated for good jobs outside the oil industry. ''When the flood of oil money dries up,'' he asks, ''will our people be any better off?''