Shell, mulling a new Louisiana plant, turns to a community go-between

(This article is published in "The Louisiana Weekly" in the Nov. 4, 2013 edition.)

Shell might build a natural gas-to-liquids or GTL plant in Louisiana, and as a community link has engaged a Loyola University New Orleans professor, who advised the company pro bono when it moved African American neighbors away from the Norco, La. refinery in 2002. Residents of Assumption Parish, where the new Shell plant would be, have plenty on their minds--including accidents along the lower Mississippi River's petrochemical corridor, toxic emissions and growing traffic jams.

In September, Governor Bobby Jindal promised tax incentives for the possible, $12.5 billion-or-more project, and said it would add jobs to the thousands already created by Shell in Louisiana. The plant would occupy current cane fields near Sorrento, 50 miles north of New Orleans and 23 miles south of Baton Rouge, on land next to the Convent oil refinery. Convent is owned by Motiva Enterprises, a joint venture between Shell and Saudi Aramco. Motiva also operates the Norco oil refinery.

Shell Chemicals, part of Royal Dutch Shell in the Netherlands, runs a Geismar, La. plant, and Shell Exploration & Production drills for crude in the Gulf. Shell has offices on Poydras St. in New Orleans and contributes to coastal restoration projects.

"Our role--Loyola's Center for Environmental Communication, me, our students and staff--is to be a third party and insure that the company hears and understands concerns of the community at large," Robert Thomas, director of that Loyola center, said last week. "Our seven meetings with Shell so far, including the company's open houses, started two weeks ago."

In September, Shell established a Gulf Coast GTL office in Gonzales, La. near Sorrento. Employees held open houses in Gonzales on Oct. 22 and 24, with another in St. James on Oct. 23, to discuss the plant publicly.

"Our mission is to make sure we gather every concern, hear every conversation, notice every nuance as the community thinks about the possibility of this plant," Thomas said. "Our job is to respect those concerns and make recommendations from an independent, third-party vantage." Companies seldom hire a go-between with their neighbors. "But the U.S. Environmental Protection Agency likes to see companies reach out, and Shell has its own social performance policies," he said.

Loyola as a Jesuit institution is concerned about social justice and critical thinking. "We're bringing into the relationship our students from communications, along with one student in environmental studies and one in chemistry," Thomas said. They're attending the community forums, he said. Thomas and Loyola's environmental communication center have an open-ended, year-to-year contract with Shell on the Sorrento project. But he didn't provide a dollar value, saying it isn't public information.

"Twenty years ago, I was asked to lead a common-sense initiative between people who worked at the Norco Motiva plant and those who lived nearby," he said. "We assessed what kind of job the plant was doing communicating about its operations." Buyouts of neighbors, fed up with toxic emissions, odors and accidents, followed that effort.

In late 2007 and early 2008, Thomas chaired the Environmental Group of newly-elected Governor Jindal's Economic Growth Transition Advisory Council.

"In the next step in the Sorrento area, our team will schedule twenty meetings or so, called 'community conversations,'" Thomas said. "They will be interchanges, each on a different topic, including discussions and follow-up. It won't just be people walking into a big room, theater-style." One meeting should be held this month, with another in December.

Area residents are sophisticated about living in an industrial corridor, Thomas said. "It's early in the process, but they're asking lots of questions with a range of emotions. We're hearing positive comments and seeing enthusiasm, but also hearing some skepticism. People within the petrochemical corridor are deeply concerned about safety."

Workers and residents have reasons to be uneasy. On June 13, an explosion at the Williams Olefins chemical plant in Geismar, nine miles from Sorrento, left two employees dead and 77 people injured. In 2009, a fire at the same plant caused property damage but no fatalities. At Motiva's Convent refinery, a fire on Aug. 21 of this year damaged equipment, forcing a distillation unit to shut for awhile. And 25 years ago, an explosion at the Norco refinery killed six people and ripped roofs off nearby homes.

But Thomas said questions so far have focused mainly on jobs, business opportunities, road congestion and expected water runoff from the plant. "Some of the older residents know they're not qualified for jobs at the plant and are asking what their grandchildren would need to work there," he said. The area's job market is booming, and pay for the plant's projected 740 direct jobs should be particularly high at an average $100,000 a year.

As for roads, "we're hearing from people leaving their homes at 7:30 in the morning that traffic is already backed up at that hour," Thomas said. "Congestion needs to be addressed." Reasons for snarls include sprawl around Baton Rouge and the number of riverside plants. Downriver from the Motiva refinery in Convent is a Marathon refinery in Garyville.

Plans are to widen Highways 70 and 22 in the area, and Shell expects to contribute to those costs, though it will be reimbursed if the gas plant is built, Jill Sweeney, spokeswoman for the company's Gulf Coast GTL office, said last week.

Shell plans to take several years to decide whether to construct the Sorrento plant, Sweeney said. Louisiana has offered the company incentives, including a $112 million, performance-based grant to reimburse its costs for roads, land acquisition and other infrastructure. Shell is eligible for the state's Industrial Tax Exemption Program, along with a 12-percent payroll rebate for GTL plant jobs, and services from a state workforce-training program.

If it's built, the Sorrento plant would use natural gas originating from Louisiana and pipelined in from other states, Sweeney said. It would be Shell's third gas-to-liquid facility, with one in Qatar and another in Malaysia.

Fifteen years ago, the company's Malaysia GTL plant was endangered when forest-fire particles accumulated, causing an explosion that shut the plant for two years. A dozen workers suffered minor injuries.

Meanwhile, low natural gas prices and optimism about diesel fuel demand are driving today's interest in GTL facilities. GTL plants convert gas into cleaner-burning diesel and jet fuels, waxes and building blocks for lubricants, plastics and detergents. In southwest Louisiana, South Africa-based Sasol hopes to construct a multi-billion-dollar GTL plant in Lake Charles and should finalize its decision within two years.

In Assumption Parish, "we have a great deal of additional work to do before deciding whether or not to build the Gulf Coast GTL project," Sweeney of Shell said. "We're seeking input from our prospective neighbors and other interested parties, and we'll share regular updates on milestones and key decisions." Royal Dutch Shell, the parent of the potential project, is the world's second-biggest oil company after Exxon Mobil, and has a financial cushion to take time deciding. end