Chapter 6. ECONOMIC DEVELOPMENT  

Introduction  

In short, St. Mary Parish wants to create real opportunities for growth and revitalization. The aim is to create self-sustaining, long-term economic development in an effort to offset cyclical unemployment and occasional economic malaise. The Parish wants to move towards economic self sufficiency and diversity through innovative and comprehensive strategic plans developed and implemented by alliances among its private, public and nonprofit organizations and leaders.

St. Mary Parish has embarked on a campaign to change its business climate, arrest long-term losses across its core industries and stabilize an economy that traditionally has ebbed and flowed in accordance with market forces well beyond local control. Business climate indicates how state, regional and local policies, relationships and local communities support business development. Ultimately a good business climate allows businesses to conduct their affairs with minimal interference while accessing quality high inputs and customers at low costs. While no business climate is perfect for every kind of company, certain attributes of the regional or local economy allow investors to find fewer risks and higher returns when compared to other places.

Key factors used to quantify business climate include: 

• Business and income tax levels;

• Workforce availability;

• Energy costs;

• Market size;

• Quality of services;

• Cost of living;

• Quality of life;

• Environmental regulation;

• Permitting, licensing and various reporting regulations;

• Real estate costs and availability;

• Infrastructure availability;

• Access to financing and capital; and,

• Availability of incentives.

Obviously businesses relocate or expand in places with business climates favorable to their industry. States and localities targeting specific sectors fine-tune their regulations, policies and other site location factors to create a business climate favorable to a specific industry or group of industries: the clusters they deem desirable and able to succeed. Key trends include: 

• The pervasive need for an available skilled workforce has spurred workforce development initiatives, with a particular emphasis on training in new technologies and cutting edge manufacturing skills.

• Deregulation of utilities has allowed businesses to purchase lower cost energy.

• Localities now offer incentives, such as tax breaks, to businesses that are expanding locally not just those that are relocating to the area for the first time.

• Income tax is kept as low as possible because many skilled workers demand high net pay and prefer working and living where they have maximum purchasing power.

• Local governments create one-stop centers to streamline the process for obtaining business permits when beginning or expanding operations.

• Public and private sector investment initiatives in telecommunications infrastructure ensure that high speed, high bandwidth communications are available for business.

• Localities focus resources on improving arts, culture and other the quality of life factors to attract and retain skilled workers that businesses seek.

• Improving access to affordable housing (and mortgages) to attract and retain key workers who may other wise be priced out of the local housing market in a growing economy.

This chapter explores these aspects of economic development.

Business Attraction and Recruitment

Business attraction and recruitment was once the foundation of economic development despite the high cost of marketing associated with this approach. However, attracting new businesses into a region can quickly increase the tax base, add jobs and diversify the local economy. Business attraction receives a lot of press, particularly when high stakes competitions for car plants and other investments requiring extensive incentives dominate the news. Other targets of attraction efforts include advanced manufacturers, high technology firms, retail and service sector employers, corporate headquarters, sports teams and entertainment venues.

Trends in Business Attraction and Recruitment (Note: aspects of economic development addressed elsewhere in this chapter are indicated with bold italicized text.)

• Site selection is the process by which businesses seeking to invest a large amount of resources seek out a new location for their facilities.

• Financial incentives almost always influence the site selection process for medium and large sized businesses.

• Communities trying to focus their recruitment dollars use cluster analysis to target their marketing and recruitment efforts towards specific kinds of businesses.

• Workforce development incentives have become an important business attraction tool.

• Quality of life attracts businesses and workers because a business wants most of its workers to move with it.

• Successful campaigns involve prominent politicians and business figures as well as economic development practitioners.

Site Selection: What do companies want?

The criteria businesses use to choose a site vary across industries and from company to company depending on their geographic and economic needs. Some require location near a major seaport, while others need proximity to raw materials; or the specialized expertise associated with a nearby university. Information and knowledge processing firms require only telecommunications equipment and airport access to function.

While the criteria differ, they all relate to corporate expectations that locating in a given community will enhance profitability based on perceived performance relative to: costs, time and community attitude.

Costs include initial start-up costs and long-term operating costs. Initial start-up costs include, but are not limited to, the land, construction of a building and employee training. These costs can vary greatly from state-to-state and even between neighboring jurisdictions.

Long-term costs are associated with ongoing operations, e.g., local wage rates, state and local taxes and fees, proximity to the market and ancillary transportation costs and the costs related to complying with annual regulations promulgated by both the state and local government.

Time concerns the number of weeks, months or years necessary to bring the facility to operational level. Time or, more specifically, accurately predicted length of time to start-up, has become one of the most important criteria in the site selection process. Delay costs companies in terms of lost sales, competitive edge from being first to market, opportunities, and interest.

If the company is purchasing an existing facility, it can shorten the time to production significantly and predict the land/building costs accurately. Consequently, communities with existing structures available hold a competitive advantage over other areas. If the company must build a new facility, the time necessary to design, attain government approvals and permits and build the structure becomes one of the most important elements in the community selection process.

Each step, zoning approval, site plan approval, building design, building permits and the time to build relative to inspections, is affected by local and state government. Some jurisdictions streamline the process to gain a competitive advantage over those that delay the necessary permits through a lengthy, complex process.

Community attitude is also a factor in the decision-making process. Companies choose communities that want them and work to solve whatever hurdles present barriers to making the location decision. An active existing industry program demonstrates the community support for employers. Some areas have community teams established for this purpose. However, some areas do not and the relationship between the local government and the productive sector can be adversarial.

Many prospects will want to meet with local employers to gain insights into what it's like to do business and to discuss the community attitude. Particularly, they are interested in how local government practices affect operational costs, for example, propensity to raise taxes without providing concomitant services value or affection for burdensome regulations. Of principal concern to the company is the history of the community or state regarding then addition of operational costs to the business community. The company will look at the long-term propensity of the local and state government to increase taxes and/or promulgate regulations that add a direct cost to the operation. They also consider the extent to which the cost of basic services gets shifted from the government's revenue needs for basic services from the residential community to the non-voting business community.

Some communities have a history of placing a disproportionate share of the revenue burden on the business community. If a local government needs more money to support its water system, some have levied water surcharges upon manufacturers or commercial establishments instead of raising rates upon the residents. Similar charges are sometimes levied for solid waste and sanitary sewage disposal. Other areas have levied special taxes specific to the corporate community. (The City of Detroit has a municipal corporate income tax, for example.)

These activities project an attitude by the community toward contributory businesses. Companies will seek those areas that truly want the company to locate in the area as shown by its historical treatment of the existing companies in the area.

Incentives

Communities, regions, states and even nations compete to attract and retain businesses that are moving or expanding. Incentives are tools used to influence business decisions about where new investment will take place. Economic development incentives can be either financial or non-financial, such as tax exemptions and credits or workforce training and public infrastructure improvements. The kind of incentives offered depends both on the extent of community resources and the types of businesses they want to maintain locally. Analyzing the cost and benefits of providing the incentives in terms of both dollars and social returns can prevent poor allocation of scarce resources.

The role of incentives in economic development has and continues to be controversial. When businesses choose between two or more sites/communities, they weigh several factors of the business climate important to their industry. Incentives are often part of this equation but rarely play decisive role until the last few sites are being compared. Competing communities may try to bargain with the business and to out-bid one another: smokestack chasing. Many communities now use clawbacks, recissions and performance-based incentives in order to assure the public that their investment will be returned in terms of jobs and wages.

The variety of incentives continues to grow as more state and local governments create and customize incentives to be comparable or competitive with each other. Some examples include: 

• Incentives used to lure businesses include tax abatements addressing numerous revenue sources ranging from property taxes to employee head taxes.

• Performance-based incentives require businesses to deliver promised jobs and payroll to the public, but economic development practitioners are also expected to analyze whether or not businesses can deliver promised returns on incentives offered. Recipients of economic development incentives often have to guarantee job quality standards ranging from wage and health insurance to full-time hours rules.

• Tax Increment Financing (TIF) is used by forty-six states for site-specific economic development.

• State incentives are increasingly used for venture, research and associated facilities involving the resources of their university systems.

• Many economic development organizations use workforce and infrastructure development incentives more than tax-based incentives for economic development.

Despite occasional calls for reform, the use of incentives programs continues as a matter of course.

Workforce Development

Workforce development and/or training encompass all community efforts to train individuals for specific jobs or industries. Training may cover everything from soft skills (work ethic, attitude, getting to work on time) to basic skills (literacy, numeracy) to specific job skills (carpentry or web site development). Community workforce efforts may also include job placement assistance, resume writing, interview skills and retention services such as legal advice and child care, that help people stay in a job once placed there.

The goal of workforce training programs is to improve the quality and skill sets of individuals, to place them in jobs and help businesses find an employee base in line with their needs. A good workforce training program, therefore, serves two customers: individuals and businesses.

Trends in Workforce Development

• By 2010 the number of workers age 45 to 54 will grow more than 30 percent. By 2020 almost 20 percent of the U.S. population will be over 65 years old.

• Former welfare recipients, mature workers, the disabled, dislocated workers and other low-income individuals provide new talent to the labor pool.

• Developing advanced manufacturing skills training meets needs for skilled workers in regions with high-tech industries.

• Formalized business clusters can delineate shared skill needs and standards to alleviate concerns over talent poaching and to develop joint workforce training curricula.

• Public initiatives also try to help small businesses gain access to previously unaffordable training.

• Business partnerships pool and leverage a range of financial, physical, human and intellectual resources and provide a collective voice for workforce development funding.

• Businesses' employee retention efforts focus on accommodating differing needs and lifestyles of workers.

• Cities are establishing programs to retain local university graduates who posses needed skills for high tech firms or to attract graduates to move back home.

• TIF funds may be used for job training and related educational programs in some communities.

• Integrating the curricula of community colleges and vocational schools provides an educational path for students seeking specialized technical skills.

• Firms seeking new locations are interested in data that shows the level of unionization and employee/ management relationships.

A good workforce program balances the needs of its dual customer base: individuals and businesses. Individuals need training that supports their aspirations and businesses need employees that serve their needs. An effective program will identify ways to support both customers. Business involvement in programs, therefore, is critical. In terms of measuring success, placement rates are only one part of the picture. The real test for training programs is how long individuals stay on the job.

Quantitative measures

• Number of individuals trained;

• Number of individuals placed;

• Retention rates (lengths of time individuals stay in a job);

• Percentage of women and minorities assisted;

• Cost per person trained;

• Number of businesses hiring from the training program; and,

• Number of businesses that keep coming back for new hires.

Qualitative measures

• Business involvement in design of training programs (e.g. identifying skill standards);

• Type and range of supportive services (e.g. retention services);

• Stated project goals and the degree to which they have been achieved; and,

• Follow up (does the program follow up with businesses and individuals to ensure that training is appropriate).

Quality of Life

Quality of life is the economic well being, life style, and environment an area offers. Improving the quality of life is the ultimate aim of economic development programs and initiatives. A balance has to be maintained between encouraging the growth of the local economy without impinging upon the quality of life: using the growth to fund positive change. In this post-industrial / new economy, people seek better quality of life, including: 

• Well paid jobs;

• Educational opportunities for all, including life long learning;

• Medical facilities;

• Quality and affordable housing;

• Low pollution/environmental damage;

• Public amenities, including public school systems;

• Low crime;

• Recreation, entertainment, shopping, and intellectual stimuli;

• Low cost of living/low taxation; and,

• Aesthetic built and natural environment.

High school, college and university standards are a key consideration for families moving into an area. Relocating or expanding businesses also place a strong emphasis on education standards to encourage existing employees to move, attract new employees and to take advantage of a well-educated workforce. In general,

• Businesses migrate to areas where the quality of life matches the group of employees that they are trying to attract. Many areas are trying to attain a mix of urban and rural to help foster new economy businesses and workforce. Urban lifestyles cater for young professionals and start up businesses. Rural/suburban lifestyles cater for family orientated workforce.

• Taxation and housing costs contribute to quality of life by freeing up disposable income, but people also recognize that quality costs.

• Rural areas offer lower costs of living, less pollution, open spaces, lower crime, which is very attractive to people who can find employment in similar fields or launch new businesses.

• Parks, trails and aesthetics are critical variables in the quality of life equation.

Many factors influence the decision of a company or an individual to move into or out of a city; focusing on business cost factors ignores the human side of the equation to the detriment of communities that focus exclusively on business climate. The goal is to give the people making business location decisions the arguments they need to convince their partners and board members and their spouses and children.

Getting Organized: Public-Private Partnerships

As St Mary Parish's economic development initiatives get underway, the Council will need to transition into a formal organization operating either under the auspices of the Parish or as an independent entity. In some communities, economic development is strictly a public sector function, while in others it becomes the purview of private sector organizations, often Chambers of Commerce. However, public and private organizations often come together, forming non-profit organizations with the aim of: 

• Undertaking economic development efforts;

• Promoting sustainable business;

• Improving workforce development;

• Diversifying the economic base of a region; and,

• Improving the quality of life.

Both the public and private organizations who form these non-profits contribute either financially or "in kind" support (i.e. administrative support, grant writings, etc.). Public-private partnerships can act as a strong voice for the interests of local businesses, while also possessing immediate access to the highest levels of local government. These organizations have greater flexibility than the public sector to conduct economic development activities since they do not have to answer to such a broad constituency. The need for a broad range of skills, information and finance in many economic development projects has led to the creation of many public-private partnerships. The form of most public-private partnerships is very similar however the aims of many partnerships vary: 

• Small public-private partnerships are being created to focus on smaller geographic areas for better access to funding programs, reaching out to public and private stakeholders in the community, and recruiting community volunteers.

• Universities create partnerships targeting economic development in their communities.

• Enterprise Communities/Empowerment Zones bring public and private partnerships together to further their goals.

• Communities have formed public-private partnerships to build such needed infrastructure improvements as fiber optics networks.

Infrastructure

Infrastructure encompasses existing transportation, communication and utility networks. Rebuilding the physical infrastructure of a community improves the local business climate. Infrastructure gets people to their jobs and goods and services to their markets. Inadequate infrastructure decreases access to economic opportunities and the ability to integrate into wider state, national and international markets. Programs to build roads, provide water and waste removal and offer telecommunications services all bestow substantial economic benefits such as job and business creation and retention to a community. Additionally, modernizing physical infrastructure can help improve the image of a distressed region.

Transportation infrastructure includes: 

• Roads;

• Rail for freight and passenger service;

• Airports;

• Waterways and ports; and,

• Bus services.

Communication infrastructure includes: 

• Copper wire for telecommunications, installed by telecommunications companies;

• High bandwidth and fiber optic cable capable of carrying voice, data and video streams;

• Satellite communications and microwave antenna;

• Mobile phone networks;

• The Internet; and,

• Local area networks (LAN).

Utility infrastructure includes: 

• Electric power;

• Water and sewage treatment; and,

• Natural gas lines.

The need for fast, reliable and cost effective transportation and communications is driven by businesses operating in competitive global markets. Many manufacturers operate a 'just in time' supply and delivery process, which requires a highly efficient transportation infrastructure. Consequently, government at all levels is under pressure to improve road, rail, air, and even waterway transportation. Telecommunications companies and utilities, such as water and electricity, are also upgrading their services to cope with growth in demand, especially as the Internet becomes increasingly important. Low, medium and high-tech companies seek reliable communications service around the clock; breakdowns result in trade losses and stall information flow among businesses and high speed access is becoming a standard requirement. Some communities use tax increment financing for infrastructure improvements, such as road repairs, utility upgrades and raising low-level clearance viaducts.

The pay off isn't immediate, however. While infrastructure installation does help create jobs and stimulate new business development, a community may not feel its full impact for 5 to 10 years. Economic impacts of infrastructure improvements should only be critically evaluated after an appropriate period of time has elapsed. Moreover, infrastructure installation may have negative impacts on the community initially (roads torn up, noise pollution from machines, etc.), before benefits are felt. For St. Mary Parish, one critical benefit associated with infrastructure improvements lies in outsiders' perceptions of the region. In the case of high speed internet access, benefit is also found in companies increased ability to compete globally.

Foreign Trade

Export/trade development and promotion enables firms to expand their market area and possibly extend the life cycle of products or services that have exhausted their existing markets. Typically, firms do not have the resources to explore or develop an export marketing plan. Exporting can contribute to a firm's sales volume and create new jobs for the local economy.

Businesses often need information about the export process, potential opportunities such as agents and distributors, patent copyright and intellectual property right regulations, technical assistance and financing programs and country-specific information related to exporting. With the development of NAFTA and increasing global trade, U.S. businesses can look at new markets for their products and services. Falling costs for transportation and communications enable U.S. and foreign businesses to penetrate new markets and export virtually anywhere in the world. St. Mary Parish's excellent transportation network gives it access to the entire NAFTA region, in which U.S. companies can export products and services with low tariffs. However other trading blocks such as the EU, impose tariffs on imports from non-member countries.

The Internet has facilitated export growth in four primary ways: 

• Internet Web sites penetrate markets around the globe, 24 hours a day, seven days a week at a low cost.

• Businesses can use the Internet to search for potential customers.

• Businesses and their clients can transfer accurate product or service specifications, at high speeds across any distance.

• Businesses can search on-line for companies offering a product or service they need and even find out whether it's currently in inventory.

Marketing St. Mary Parish Opportunities

St. Mary Parish can market the region as a whole, individual properties or sites, particular neighborhoods or specific programs or policies. From an economic development point of view, one major business relocation can revitalize an economy by creating jobs, spinning off ancillary businesses and changing the image of the community as a business-friendly area. Alternatively, when businesses leave the area, they eliminate jobs and have negative economic consequences on other businesses in the area that had relied on their patronage. In the current environment where businesses and labor are increasingly footloose, communities have become increasingly aggressive.

Economic development marketing is a group effort involving: state and local governments, chambers of commerce, utility companies, regional organizations, community development corporations, property developers, hospitals, universities, and hotel, convention and tourist bureaus. The degree to which these organizations coordinate their activities around a common vision is a critical determinant of marketing success.

• Manufacturing businesses have traditionally been the target of marketing. In recent years, however, communities have included retail, services, and technology firms.

• The role of web-based marketing continues to increase dramatically, especially when coupled with Geographic Information Systems (GIS) offering up-to-the-minute site selection information including: available properties, demographics, core business analysis, etc.

• Practitioners often promote the attributes of the broader region to increase appeal, instead of focusing only on their specific community. Taken to extremes, this can become ridiculous, but kept in perspective it helps establish the benefits associated with the location.

• Cluster analysis is often used to target investments, although other approaches include all industries in a region, sectoral analysis and geographic targeting.

• Marketing is used to re-enforce image and identity and to project a high quality of life.

• Public-private partnerships and entities increasingly conduct regional marketing.

• Marketing through foreign trade missions and hosting foreign delegations bolster the local economy by improving the region's global stature and by identifying new markets.

Communities use marketing to achieve different objectives. Some use it to attract businesses, others to retain businesses, others to drum up tourism, and still others to get local residents to shop locally or stop littering. Marketing efforts should be evaluated to the degree their marketing campaign meets their economic development objectives. Given the range of organizations with an interest in marketing efforts, coordinating and pooling resources helps maximize the potential of marketing efforts.

Innovations in St. Mary Parish Industries

NOTE: The following pages explore new directions in industries with a significant presence in St. Mary Parish. During the retreat, participants will examine these industries with an eye towards matching them up to the cluster system initiative being spearheaded by the State of Louisiana.

Welding

1. Shipping Container Manufacturing

Morgan City is a Gulf of Mexico port and has a substantial shipping industry. As such, heavy containers move in and out of the port constantly. According to the Steel Shipping Container Institute, however, there are just two companies in Louisiana that manufacture such containers, both in New Orleans.

One company, Con-Tech International, manufactures specialty components for the shipping industry, and does not actually make the containers themselves. Such components include drum closures, gaskets, plugs, and specialty nuts and bolts. The other company, CP Louisiana, manufactures steel drums, and touts its location in New Orleans as a cost saver, as it does not have to pay as much for transporting steel as do competitors located inland.

2. Specialty Metal Products

A booming market in the metalworking industry is the specialty products industry. There are a myriad of niche products demanded by consumers today, ranging from wrought iron fences, to boat accessories, to components for specialty manufacturing. Of particular interest in Morgan City is the market for unique metal products for boats, given the popularity of recreational boating in Louisiana.

Boat owners demand all kinds of metal products, from countertops to deck rails to special brackets. In particular, owners of larger yachts are always looking for personal touches to their boats, and will purchase things like ornamental iron rails for decks in order to add a special feeling. Beyond boaters, there is demand for other accessories, as there are companies in the United States that make everything from special metal products for all-terrain vehicles to model cars to fireplace screens. With the welding and metalworking talent available in Morgan City, these industries may prove attractive.

3. Transportation-Related Manufacturing

The United States Bureau of Economic Analysis has identified transportation equipment as a growth industry for welders over the next decade. There are a number of examples of niche industries within the transportation manufacturing sector, including aircraft manufacturing, specialty automotive manufacturing, shipbuilding, and equipment for building transportation systems (i.e., asphalt plant equipment).

These industries often congregate in areas with a base of skilled metalworkers. For example, an aggregation of transportation manufacturing has developed in central Wisconsin, including a company that builds Challenger Ultralite aircraft and another that manufactures metal piers for boaters. Nearly all such industries are located in rural areas, as well as with other companies located in rural parts of Georgia, Minnesota, Michigan, and New York.

4. Reproduction Appliance Manufacturing

Demand has grown in recent years for reproductions of historic appliances such as kitchen stoves, wood-burning stoves, iceboxes, and fireplaces. Many people living in historic homes seek to recreate the "look" of historic appliances, combined with modern conveniences. In this quest, a few companies have emerged that specialize in the fabrication of modern appliances that feature historic metalwork details.

An example of this is the Elmira Stove Works in Ontario, which manufactures a variety of kitchen appliances, such as historic-looking iron stoves and ovens, as well as "panel kits" that give modern appliances like dishwashers and microwaves a matching look. This company's products are quite expensive, and feature high-quality metalworking. Other companies, such as Vermont Castings and Harman Stove Company offer historic-looking wood burning stoves with modern technology behind the facades.

Knowing that the Morgan City area has the skilled craftspeople for this type of manufacturing, it could emerge as a location for similar specialty kitchen and home appliances. This industry is still very small, but is likely to grow in the coming years as baby boomers near retirement age and seek traditional touches to their homes.

Uses for Sugarcane and Byproducts

1. Sugarcane Juice

One of the primary byproducts of sugarcane processing is sugarcane juice. Historically, the juice has not been able to be marketed as a consumer product due to two problems: the presence of microbes and the inability to remove colloidal particles. A research project sponsored by the French government in Guadaloupe came up with a special ultra filtration process that solves these two problems. Using this technology, a company call Jucann'Tech was formed and holds the patent for this process.

Today Jucann'Tech serves two purposes: it produces and markets products and it provides R&D services for other companies that want to purchase its technologies. Products that can be made from this process include juice, sparkling wine, ice cream, health drinks, and carbonated beverages.

Beyond consumer uses, sugarcane juice is also used as a liquid feed product for livestock, particularly for pigs, as it is a good source of carbohydrates. However, the flaw with its use is that pure cane juice ferments rapidly (within 12 hours), and if it cannot be quickly transported to hog farms, it is no longer useful. Preservatives can be used to stave off the fermentation process somewhat, but the juice still ferments within three days.

2. Bagasse

Another byproduct of sugarcane juice extraction is bagasse, a fibrous residue. In recent years, many processes have been established for using bagasse for industrial purposes. Its primary use has been to produce energy, as the combustion of bagasse is frequently used to produce steam for power turbines. In India, many sugar mills use bagasse as their primary power sources and, in times mills are not in production, they often sell the power generated to local electrical utilities.

Bagasse is also useful in manufacturing processes, as it can be pulverized into a raw material for paper. Bagasse has also been used as an ingredient in animal feed.

3. Cane Trash Disposal

As its name implies, "cane trash" has historically been a useless waste product resulting from sugarcane processing. There are three traditional methods of dealing with cane trash-incineration, compacting, and leaving it on the field-all of which have major drawbacks. Incineration causes poor air quality, compacting is expensive and requires proper storage facilities, and leaving the trash on the field has been found to reduce crop yields.

In response to the cane trash problem in Louisiana, LSU researchers have been studying the use of a cane trash/urea combination as an organic fertilizer. The study is not yet complete, but merits investigation. It is being conducted in two places: the Sugar Research Station in St. Gabriel and the Iberia Research Station in Jeanerette.

If cane trash is to be burned, it is better to put its energy to use. The typical process has been to burn it in the field, causing air pollution without using its energy. Many third-world sugar producing countries have begun to use cane trash for boiler fuel. A study has found that, even with the costs of baling, collecting, and transporting cane trash, it is still 50 percent cheaper than buying oil for boilers.

4. Ethanol

Ethanol is a fuel made from agricultural byproducts, with sugar and corn being the two most common sources. Although ethanol has not yet caught on as a major fuel in the United States, it is very popular elsewhere in the world, particularly Brazil, where 10 percent of that country's energy comes from sugarcane. Today, all U.S. automobile manufacturers are developing prototype vehicles that run on "gasohol," which is made from a combination of gasoline and ethanol.

According to the Alternative Fuels Data Center, there are currently 150 gas stations in the United States that sell gasohol, mainly in the Midwest and Rocky Mountain states. However, most of the ethanol made in the U.S. comes from corn, not sugarcane. This trend could shift, however. In response to environmental concerns and a declining sugar industry, the state of Hawaii recently passed legislation giving investment credits to any firm in the state that manufactures ethanol.

5. Fiber Production

Another use for cane trash is in the production of fibrous products. Fibercore Industries, a company in Florida, manufactures and markets machinery that converts cane trash and other agricultural waste products into fibers. The fibers from this process can then be converted into construction material products like fiberboard and cement board.

Although it does use cane trash in its processes, Fibercore Industries advocates the use of Ramie (a.k.a. China grass) for such uses. The Fibercore website calls Ramie "the most perfect plant nature has ever offered," as its end uses are innumerable. Perhaps struggling sugar producers in Louisiana could switch to growing Ramie instead of sugarcane, as the end market for Ramie is extremely broad.

6. Filter Mud

Filter mud is a waste byproduct of sugar production that historically has had little use. Today, it is used for two purposes. The first is to act as an agent that helps speed the process of compacting cane trash. The second is as an ingredient in animal feed.

Uses for Sugar and Alternative Sugar Products

There are a great many uses for sugar in the home: a substitute for rocket fuel, a way to prevent halitosis, a damper of spicy foods, and even a cure for hiccups. However, publicizing these uses really would not have much impact on the sugar industry, as people already buy sugar and would only buy a little more for such uses.

There are some industrial-level uses and/or alternative products that can be made from sugar. These products could be used to develop new markets for sugar.

• Lithium Ion Batteries - Researchers have developed lithium ion batteries that use sugar as an input product. These batteries are being tested as a source for power for electric cars.

• Electroplating - The process of electroplating, or metal finishing, involves hardening and flattening metals like chrome, nickel, copper, and tin for use as plating materials. Sugar has been effectively used as a brightening agent in these processes.

• Panela - An alternative product that can be made from sugar is panela, or "whole sugar." This product, which is commonly used in India and Brazil, among other places, is an unrefined brown-colored sugar that has been found to be much better for teeth than refined white sugar.

• Extender - Sugar has been found to slow the process by which glue sets. As such, glue manufacturers use sugar as an ingredient in glue, so that it does not need to be containerized as quickly. Sugar also slows the hardening of concrete and other industrial products.

• Hydrophilic Agent - Printing ink requires a hydrophilic ingredient to absorb the ink solvent and to hasten drying. Sugar can be used for such purpose.

Deep-Water Diving

1. Recreational Diving

Louisiana is underappreciated as a recreational diving destination. Its muddy rivers and bayous create the image that its Gulf frontage is not conducive to undersea exploration. However, as a result of its development for offshore oil drilling, it now has something no other Gulf of Mexico diving destination has-3,800 steel platforms off of its coast.

Although recreational diving has not yet caught on as a major tourist destination in Louisiana as of yet, there are a few operators now touting the unique virtues of diving off of its coast. Harry's Dive Shop in Metairie refers to the experience as "Steel Reef" diving, and that it presents a diving opportunity not available anywhere else. Xtreme Fishing Charters in Gretna has recently begun offering dive tours specifically aimed at viewing the unique ecosystems that have developed around the oil platforms, the likes of which do not exist elsewhere in the Gulf.

One quirk in the diving experience is that the platforms require specific techniques, different from typical deep-water diving. Due to the massive steel structures, divers can only go beneath the surface starting from a rig, as the rig's structure affects the proper operation of compasses.

Another aspect of recreational diving could be the oil platforms themselves. Much as former coal miners in West Virginia and Pennsylvania now work as tour guides in exhibition coal mines, former oil rig divers could lead dive and/or submarine tours to show tourists the workings of the rigs. This could evolve into a truly unmatchable visitor experience.

2. Hyperbaric Oxygen Therapy Research

Hyperbaric Oxygen Therapy (HBOT) can be used to treat many different medical problems, including Embolism, carbon monoxide poisoning, decompression sickness, thermal burns, strokes and, most notably, cerebral palsy. Hyperbaric treatment has become closely identified with diving over the years, as it combines the pressure of diving with increased oxygen levels, and is often used to treat diving-related illnesses.

In practice, hyperbaric chambers are usually free-standing machines that can now be located in any hospital. However, the technology of hyperbaric medicine is continually evolving, and research for this field frequently relies upon professional divers. For example, the University of Southern California operates the Catalina Hyperbaric Chamber on Catalina Island, near Los Angeles. This chamber is actively used to treat divers, but also conducts research, using a crew of divers from around the country. It should be noted that the crew used by this center is comprised of unpaid volunteers.

As the recreational diving industry in Louisiana grows, the number of divers will increase-as will the number of diving accidents. In response to this growth, there will need to be facilities to treat such accidents. Since a hyperbaric chamber will need to be built for this purpose, the state may be interested in establishing a research facility around it that would not only make use of the divers in the area-it would also attract many medical researchers to the area.

3. Submarine Telecommunications

In April 2000, UnderWater magazine reported that submarine telecommunications industry was booming. According to the magazine, "While the last year or two has been tough on contractors that focus on offshore oil support, just the opposite has been true for companies servicing the submarine telecommunications industry. A seemingly insatiable global appetite for Internet access continues to drive the demand for increased bandwidth."

Companies like Global Marine Systems and CTC Marine Projects, both based in the United Kingdom, and Caldwell Cable Ventures (part of General Dynamics) in the United States, have emerged as international leaders in the submarine telecommunications business. These companies have built special cable ships that have been installing and conducting maintenance on high-tech cables under the oceans. These companies, which were once threatened by satellite communications, now are thriving as the world demands fiber-optic lines.

With the outlook for the submarine telecommunications industry looking strong, and demand for fiber optics rising in the Caribbean, Central America, and South America, underwater cable will be needed in the Gulf of Mexico region. Again, given Morgan City's concentration of divers, there may well be a desire for such a company to establish a base of operations there. At the present time, companies with locations in the Southeast U.S. tend to be located in Florida, but there may be possibilities to aggressively recruit such corporations to Louisiana.

4. Research and Development

A 1997 article in UnderWater magazine addressed the perceived decline of the oil industry in the Gulf of Mexico. Its findings were that the number of exploration companies had actually increased, but the average size had gotten much smaller. In this transition from larger corporations to smaller operators, the pursuit of research and development often got left behind. The article advocated the establishment of companies that specialized in R&D, in order to aid the industry.

Recent history shows the value of this statement. In 2001, the Minerals Management Service (MMS) of the U.S. Department of the Interior reported record production from the Gulf of Mexico's deepwater oil industry, and credited the industry's success, in part, to cooperation among industry, government, and research scientists. The MMS has been a leader for many years for balancing oil industry growth with local economic development needs, environmental concerns, and technology transfer.

In this framework, there may be a need to broaden the research & development capabilities in the Morgan City area in order for it to continue to maintain its presence in the oil industry. Since Morgan City has a particular advantage in its diving skills, perhaps a research center could be established that studies new methods and best practices for offshore diving. Between the MMS, foundations, the State of Louisiana, and individual oil companies that need others to do research, there could be an opportunity to create R&D operations in the Morgan City area.

5. Deepwater Diving Adventures

A growth industry in the diving world is the "diving adventure" market. This niche concentrates on adventure seekers, and often is aimed at exploring shipwrecks. For example, a cottage industry has evolved around visiting the wreckage of the Titanic. Companies like Catalina Deep Sea Divers and Destination Adventure operate worldwide deepwater diving adventure tours.

Although there is no Titanic off the coast of Louisiana, there are many shipwrecks in the Gulf, including some historic ones. If the state was interested in promoting shipwreck tours as part of its tourism program, Morgan City would be an ideal jumping-off point. Local divers could lead deepwater adventure tours to explore shipwrecks, as they are likely to know of resources under the water that others may not know about.

Carbon Black

Carbon black is an engineered compound found in countless items used on a daily basis. It is an essential ingredient in tires and other mechanical rubber goods, improving their strength, durability and overall performance. It also is used as a pigment in printing inks, paints and plastics. Carbon black is made primarily from a petroleum-based feedstock. The oil is pumped into a specially designed furnace, where it is heated above 2,000° F. This process "cracks" the oil to produce a gas stream laden with carbon black powder. The gas stream passes through a series of filters, where the carbon black is separated from the gases. The carbon black powder then is bound with water to create larger beads or granules, which are passed through a dryer and packaged for delivery worldwide.

The disposal of 280 million tires generated each year in the U.S. by landfill is becoming an increasingly unacceptable solution. The estimates of the number of tires already stored in tire piles in the U.S. are in the range of 2-3 billion. The tires take up large amounts of valuable landfill space and also present fire and health hazards. Tire-pyrolysis plants have been in operation for years, but the economics are poor. This is due to the low value of the end products, which are usually fuels (oil, pyrolysis gas, char). Reprocessing of waste tires into value-added products would improve the economic leverage.

1. Tire conversion and waste disposal

The main innovation here is the substitution of tire pyrolysis oil for traditional petroleum feed stocks and the processing of the oils to produce high value carbon black products. "Tire pyrolysis refineries" could produce a range of products from used tires in collaborations with operators of solid waste incinerators.