Economist Dr. Jim Richardson releases economic impact results with benefits experienced to date–nearly two years into project construction.
Westlake, Louisiana–The economic benefits of Sasol’s ethane cracker and derivatives project, which is now under construction at Westlake in Calcasieu Parish, are already being felt across the region and the state, according to a study commissioned by Sasol and conducted by economist Dr. Jim Richardson. Jobs and revenues being generated by the project’s construction are projected to grow over the next few years, and benefits created by project operations will sustain for at least three decades.
“The benefit-cost ratio for the state could reach nearly 2 to 1 through 2050,” Dr. Richardson said. “Southwest Louisiana and the state will see an outstanding return on its investment in Sasol’s project.”
The study projects Sasol’s capital expenditures will generate a total of $270 million in revenues for state and local governments during the construction period, of which more than $110 million has already been paid. Sasol is also projected to spend more than $3.5 billion directly in Louisiana during the construction period. To date, $2.5 billion has been committed to Louisiana contractors and businesses. More than 3,500 construction workers are currently on site, and peak construction is expected to reach 5,000 workers on site in 2017.
“The economic impacts we projected years ago during the front-end engineering and design phase are coming to life now that we are two years into construction,” Mike Thomas, senior vice president of Sasol U.S. Operations, said. “Sasol and the state entered into a partnership to bring this project to Louisiana and we are proud to be delivering on the local jobs and revenues we promised.”
Sasol has already hired about 350 of the more than 500 full-time jobs it expects to add for the operational phase of the project. The average salary for these jobs is $80,000. Additionally, economic activity generated by the project would sustain nearly 1,900 direct and indirect jobs in the area over the 30-year operational period. These jobs are in addition to the approximately 450 full-time positions that support Sasol’s existing operations.
When operations begin in 2019, the project is expected to generate $7.5 million annually in taxes payable to the state. Local governments will collect $6.2 million annually. From 2015-2016, Sasol paid a net total of $10.4 million in taxes to the state and $8.8 million in taxes to local governments related to ongoing production. In 2014 and 2015, Sasol paid $7.9 million in state income tax. This will continue to grow as the company hires the remaining full-time employees.