Ascension officials react to Shell pulling plant plug

Two words, “Early days,” were the refrain from a lead Shell Oil official during a late October interview at an open house unveiling a then proposed $12.5 billion gas-to-liquids plant in Ascension Parish.

From questions about the timing of plant construction to the parameters of Shell’s planned public outreach effort, Michael Cathey, project lead for Shell Gulf Coast GTL, couched his answers often with that term, “Early days.”

“It’s still early days, as I said. We want the full spectrum of input from the constituencies here in the area,” Cathey said, then describing the nascent public outreach effort.

But Shell’s announcement Thursday that the project was off, just a month and a half after that open house at Lamar-Dixon Expo Center, caught many parish and other local government officials and business leaders off guard.

Some said they were surprised the project, which would have added 740 new direct jobs to the region and a small city of construction workers to Ascension Parish, was canceled, thinking it had a very strong chance of coming.

But several others said the timing of the decision also surprised them, right after the public rollout kicked off in September with a joint announcement by Gov. Bobby Jindal and Shell about the plant’s possibility.

“I don’t think that anyone was expecting it, especially like this soon,” said Sherrie Despino, Ascension Chamber of Commerce president and chief executive officer.

Some parish officials described hearing news about Shell on cellphone alerts or snippets on the television news.

Parish President Tommy Martinez got a call from Shell, he said. Though he said he did wonder about the cancellation of a planned grand opening of Shell’s new office on La. 44 near Pelican Point, he said Thursday’s announcement shocked him.

Despino said Shell officials spoke to her group’s members less than a month ago during a luncheon gathering, saying the project was moving along and company officials were pleased with it at that point.

“But they stressed to us several times, it all depended on corporate, and if they thought it was worth their money to invest here. Although they kept doing their preliminary work, it all depended on what the big boys said,” Despino said.

Shell said Thursday that the plant “is not a viable option for Shell in North America” due to the cost of the project, which had risen to $20 billion, and uncertainty about the long-term prices of oil and gas.

Kimberly Windon, a Shell spokeswoman, said one key factor is uncertainty about the expected difference in prices between oil and natural gas. As one of its products, the Shell plant would have been making diesel from natural gas. That diesel would have to compete against diesel refined from oil.

Marlin Wilson, regional manager at the Emerson Process Management facility in the Gonzales area, said the announcement does not change his company’s plans to build a new consolidated facility in Gonzales with a new training center.

The company refurbishes valves and does other work for the plants in the parish’s chemical corridor.

“Had they moved forward, we might have added an additional facility,” he said.

Wilson pointed out that the industrial activity and housing construction in the parish is commanding available construction workers, so the Shell project would have been stacked on top of the existing demand, a factor that could be reflected in the labor price.

“It’s not like an empty place out in the desert that they are doing this,” he said.

Windon declined to break down costs for the plant.

Kyle Plotkin, spokesman for Jindal, said the Governor’s Office announced the possibility of the plant in September for several reasons, including that Shell would soon be seeking an air permit from the state Department of Environmental Quality and a U.S. Army Corps of Engineers permit, moves that create public documents and demand public input.

He said Shell also was seeking approval for its incentive package and argued the transparency was needed to plan for such a project.

Ascension is the focus of billions in announced industrial development besides Shell, but Shell kicked parish efforts into overgear to plan for a wave of new residents and workers looking for temporary housing.

In October, parish officials declared a six-month moratorium on new RV parks to give themselves time to close a loophole in zoning rules and better plan where temporary workers would end up.

The Shell plant would have brought 10,000 contractors alone. The Parish Council closed the loophole last month but had not gotten far with the longer term planning.

Some on the council and the School Board said Shell’s announcement means they would not have to grapple with so much growth so quickly and can be allowed now to grow more cautiously.

Ascension Parish School Board President Troy Gautreau said the project would have been a double-edged sword, providing more revenue but also more students.

“This is something we are already grappling with now, and this project would have exponentially increased this issue,” he said.

“It would have been overwhelming,” Parish Councilwoman Teri Casso said. “Frankly, I have a fraction of relief, as well as disappointment.”