New Orleans among nation's best for exports

By Timothy Boone

tboone@theadvocate.com

New Orleans ranks among the top quarter of the largest U.S. cities for exports, a recent report from the Brookings Institution Metropolitan Policy Program found.

The city was responsible for $14.6 billion in exports during 2012, putting Baton Rouge in 23rd place out of the country’s 100-largest metro areas. New Orleans, which also had $14.6 billion in exports was ranked 22nd. Both areas’ figures are dominated by petrochemicals.

Ryan Donahue, one of the authors of the Brookings report, said the report looks at the value of exports that are produced in a metro area, and are not just shipped out of the area. The U.S. Census Bureau and other federal agencies look at where an export is leaving, not where the product originates.

This approach has led to some distortions. Texas is considered to be the country’s leading exporter, but Donahue said California produces more export products. Texas is ranked No. 1 because it shares a long border with Mexico.

The Brookings study found e xports made up 30.5 percent of all goods and services produced in the Baton Rouge area. No other large U.S. metro had exports account for so much of the gross domestic product.

Jay Hardman, director of the Port of Greater Baton Rouge, said he sees a potential for the Capital Region to increase its exports.

Last week the port dedicated a $150 million expansion and modernization of the grain facility.

The investment by Louis Dreyfus Commodities means the port will go from handling 750,000 metric tons of grain a year to 5 million metric tons. Louis Dreyfus has further improvements planned that will bring the capacity to 6 million metric tons. The majority of the soybeans and grains that will be exported overseas will come from Louisiana farmers.

“We’re going to go from 20 ships a year to 100 ships a year,” Hardman said.

Some of the ships may be coming into Baton Rouge empty or with small amounts of cargo that can be loaded onto other ships, so there will be opportunities for increased activity at the cargo docks. This will also lead to more fuel sales and ancillary business.

“This gets to be a pretty good impact,” Hardman said.

While Baton Rouge may have the biggest share of its local economy come from exports, New Orleans has seen exports grow faster than any other city. From 2009 to 2012, the annualized real output growth rate increased by 6.3 percent annually. During that same period, the annualized real output growth rate in Baton Rouge grew by 5.5 percent a year, the third-fastest rate.

Basic chemicals accounted for the biggest share of exports in Baton Rouge, at $4.7 billion, followed by petroleum products at nearly $4.1 billion. Resins and synthetic rubbers, which accounted for nearly $2.4 billion in 2012, were the only other category locally to top an export value at over $1 billion.

Ample supplies of cheap natural gas and America’s new role as an oil exporter have benefitted Baton Rouge- and New Orleans-area chemical and petrochemical plants.

“The chemical industry is a big exporter driving the increases,” Donahue said. “Baton Rouge and New Orleans are doing extremely well. But there’s a high industry dependency that makes it subject to volatility.”

The lofty export rankings for both cities aren’t surprising. A recent report from the U.S. Foreign-Trade Zones Board to Congress showed that the Marathon Petroleum refinery in Garyville, located in the New Orleans metro area, was the nation’s second-biggest manufacturing facility in terms of exports from a designated Foreign Trade Zone that receives special customs treatment. Exports from the refinery were valued at between $1 billion and $5 billion a year.

Only the BMW manufacturing plant in Spartanburg, S.C., which makes all of the BMW X3 SUVs and X6 sport coupes in the world, ranked higher.

ExxonMobil’s Baton Rouge refinery was ranked 14th in the nation, with a value of exports between $1 billion and $5 billion coming out of a Foreign Trade Zone.

The national average for export composition is 71 percent of revenue coming from goods, 29 percent coming from services, such as royalties on technology developed in a city. But Baton Rouge and New Orleans greatly differ from that ratio.

According to the Brookings report, 88 percent of Baton Rouge’s export revenue comes from goods and 12 percent comes from services, while New Orleans sees 83 percent of its export money come from goods and 17 percent from services.

“Services aren’t a huge factor in either metro area,” Donahue said. “It’s largely overlooked, but it makes up a significant amount nationally.”

Brookings conducted the export report in an effort to get cities thinking about how they could increase exports and any public policy steps they could take to get more local companies to do business overseas. In some cases, that might mean smaller manufacturers trying to play off giant companies like ExxonMobil or Marathon, Donahue said.

The value of U.S. exports is growing at a double-digit pace, thanks to fast growing countries such as China, India and Brazil and the rise of a global middle class. The International Monetary Fund said 85 percent of the world’s gross domestic product growth will come from outside the U.S.

“Getting more firms involved in exporting and helping them get a share of that growth should be a focus of mainstream economic development activity,” Donahue said.

Copyright © 2011, Capital City Press LLC • 7290 Bluebonnet Blvd., Baton Rouge, LA 70810 • All Rights Reserved

A new plan for water traffic emerges

Day of the Dead decoration on the neutral ground by the Healing Center

Saturday, I attended the Anba Dlo Water Symposium: Infinite Blessings, Finite Resources at the Healing Center.

Anba Dlo in Kreyol (apparently the Haitian Creole language) means "from beneath the waters." The event planners stated: "Our city's long held paradigm has been to build walls and pump out every drop of water that falls.

Several presenters shared their perspectives on improved water management. Dr. Denise Reed, Ph.D., research professor at UNO, described a plan to shorten the outlet from the port of New Orleans to the Gulf by creating a canal that would go directly south. The reasons to do this are two-fold. Apparently, ships need to carry even heavier cargo into New Orleans to remain competitive. Thus, the channels have to be 50-feet deep not 45-feet. The 100-mile trip down the Mississippi to the Gulf makes dredging another 5 feet a big task - way bigger than is necessary to deepen ports in Gulfport, Miss., or Miami, which are right on the water. New Orleans loses the trade if it doesn't meet the requirements. That's pretty convincing.

Part two of Reed's argument is that building the shorter route would leave silt across Southeast Louisiana, creating more of a storm barrier than exists now. The areas around Grand Isle are unsustainable because the shelf drops right off the coast to almost a mile. So, getting the Army Corp to dig that channel deeper is a non-starter.

The problem is (always) getting Congress to appropriate the funds. I believe she said $50 million - a drop in the bucket - pardon the pun.

Louisiana is just not a national priority, however. And, as journalist Bob Marshall pointed out earlier that day, the country has Katrina fatigue. Americans are tired of hearing about Louisiana's problems and don't recognize the economic importance that the Mississippi holds to the entire United States.

I've presented the statistics in earlier posts. The Mississippi is the world's sixth largest river. Most of the central United States depends on the port in one way or another for imports and exports. Not to mention the seafood. Everyone should have a reason to care.

Marshall said, tell your friends. Do a grassroots thing. I sincerely doubt that will work, but I am telling you now. Call your representative in Congress.

Understanding New Orleans through Bienville's Dilemma

By Nick Marinello for Tulane's New Wave

After the storm surge of Hurricane Katrina so badly humbled the New Orleans flood-protection system, many wondered how a major city could have been founded on such a precarious site. Those who questioned the prudence of rebuilding in so questionable a site were echoing arguments heard 300 years earlier among French colonials debating where to locate the primary city of Louisiana, suggests geographer Richard Campanella in his new book, Bienville’s Dilemma: A Historic Geography of New Orleans.

According to Campanella, associate director of the Tulane/Xavier Center for Bioenvironmental Research and a research professor with the Department of Earth and Environmental Sciences, Bienville was forced to decide whether New Orleans should be built on the safest site or in the most strategic location. One choice would sacrifice expediency; the other would expose inhabitants to greater risk.

“It was a classic dilemma — a problem involving a difficult or unpleasant choice, which could yield undesirable consequences,” says Campanella.



Such dilemmas regarding people and place continue to challenge us. “In the case of Louisiana today,” says Campanella, “[the question is] should citizens remain in eroding marshes and continue centuries of tradition, or end their way of life and move inland so that aggressive coastal restoration may begin?”

Dilemmas, he says, are as intellectually stimulating and morally challenging as they are distressing.
“Dilemmatic places — cities like New Orleans that are important yet costly, strategic but troubled, triumphant yet tragic — are among the most intriguing locales on Earth.”

In the 68 articles and essays presented in Bienville’s Dilemma, Campanella takesreaders from the Ice Age to the present day, weaving into a historical narrative of New Orleans the threads of geology and topography, sociology and demography, politics and policy, and offering an explanation of how this inevitable city was indeed able to flourish in an improbable location. It commences with a detailed historical timeline of events of geographical significance, from prehistory to post-Katrina.

“The book came together as I contemplated the passage of a natural landscape to an urban cityscape,” says Campanella, who traced the transformation from the formation of the landscape through settlement, urbanization, population, environmental manipulation, devastation and finally restoration. As a geographer with a background in the mapping sciences, Campanella also included dozens of custom-made maps, graphs, computer-generated perspectives and photo montages.

When asked what he hopes readers take away from Bienville’s Dilemma, Campanella says, “On one level, I hope readers enrich their knowledge and understanding of New Orleans through the book’s analytical findings. On a higher level, I hope readers come to share my experience in viewing this city as a metaphor, a prism and a portal through which so many compelling stories about people and place may be studied.”

Next spring, Campanella will teach a colloquium course “Dilemmas of New Orleans” through the Tulane honors program.

Other books by Campanella include Geographies of New Orleans: Urban Fabrics Before the Storm, Time and Place in New Orleans and New Orleans Then and Now.