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02 08, 2012 by Houma Courier
Expansion of a crude terminal in St. James Parish will increase the region’s oil-storage capacity by 3 million barrels and create about 300 direct and indirect jobs, Gov. Bobby Jindal said Tuesday.
The $365 million project, on the west bank of the Mississippi River about 10 miles west of Vacherie, is expected to be complete in 2016, officials said. It will increase NuStar Energy’s storage capacity from 8 million to 11 million barrels. The San Antonio, Texas-based company owns 8,417 miles of pipeline and 89 terminal and storage facilities nationwide.
The expansion will create 32 new jobs at the terminal with an average annual salary of $98,000 a year, Jindal said during a news conference. But the project will have a statewide impact, creating an estimated 269 indirect jobs in southeast Louisiana.
Jane Arnette, executive director of the South Central Industrial Association, predicted the investment would trickle down from the river parishes to employees in coastal Louisiana.
“It’s only an hour away. It could mean increased job opportunities for people along this area,” she said. “Certainly that could mean employment opportunities and referral jobs for support services. Many people from this area work along the river.”
The 269 indirect jobs were calculated using a formula from the U.S. Bureau of Labor Statistics, which ranks crude-oil-refining facilities as creating 8.4 indirect jobs for every one hire, said Stephen Moret, Louisiana’s economic-development secretary.
“Economic-driver projects like this bring new jobs and economic wealth that would not be here otherwise,” Moret said.
The increased storage could benefit the regional oilfield, he said.
“One of the advantages that storage facilities offer is companies are able to respond to changes in pricing by holding onto their product,” he said.
To help build the terminal, NuStar used state tax breaks for business expansion, including one that will provide a 5 percent refundable tax credit worth $3 million over five years.
Jan Moller, director of the Louisiana Budget Project, said he is critical of these corporate tax credits, especially as the administration struggles to close a $895 million state budget gap.
“The question always comes down to are we getting our money’s worth with these tax breaks and who needs the money more —— a Fortune 500 company or the people who need the services $3 million will buy?” he said. “It’s a good thing when companies invest and bring jobs to the area, but there’s a cost to that as well. We’ve found corporations make these decisions to relocate or expand based on a lot of factors, and taxes are usually way down on the list. I strongly suspect it had much more to do with the company seeing economic opportunity in St. James Parish because the price of oil is around $100 a barrel.”
NuStar’s CEO Curt Anastasio said in a statement that the tax breaks are “just one example of how Louisiana and St. James Parish have helped NuStar’s investments become a reality.”
Moret added that economic development has been the administration’s top priority.
“Projects like this are going to generate tax revenues far in excess of the tax credits they are receiving,” he said.
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