OIL AND GAS

Buoyed by fresh petrodollars, 'Energy City' dares to hope

PORT ARTHUR, Texas -- Battered by the petroleum industry's decline in the 1980s and hit hard by Hurricane Rita in 2005, the self-proclaimed "Energy City" has struggled for years with high unemployment, crime and pollution.

But there is hope here that a surge of petrodollars might be bringing the good times back at last to this small city on the Gulf Intracoastal Waterway.

Motiva Enterprises is doubling the size of its refinery here -- the largest U.S. refinery project in decades. Two other refiners, Valero and Total SA, have announced plans to expand their Port Arthur facilities; DuPont Co. is expanding its chemical plant; and two liquefied natural gas terminals have opened a short drive away, in Cameron Parish, La., and Freeport, Texas, respectively.

All told, officials say, more than $15 billion will be flowing to this city of 56,000 and the surrounding area in the next five years. Now comes the challenge of finding qualified workers in a city that endured a large exodus of its better-educated residents during a prolonged petroleum industry slump.

"With all the projects going on in this area, there is a shortage of skilled workers," said Rick Strouse, a project manager for the Motiva refinery. "[The area] could be 10,000 to 12,000 workers short over the next few years with all that we have going on."

And that is where Melvin White comes in. White directs the Golden Triangle Empowerment Center, or "G-Tech," a dual job and life skills training program launched last fall by Motiva, Lamar Community College and the city, and funded by state and federal grants.

"Our ability is to go into economic distressed levels and provide training," White said in an interview. "It wasn't that industry didn't want to hire local people, but local people didn't have the training."

White's 14-week program starts by teaching life skills -- how to dress for and conduct yourself in a job interview, for example -- then proceeds to construction basics and training for well-paying trades like pipefitting and equipment operations. The program also provides access to drug counseling and finds work outside of the refinery for those with criminal records, as they are prohibited from working at the refinery.

The program helped one graduate, Rubie Jack, 43, go from being a stay-at-home mom struggling to find work in retail to working at a construction job at Motiva that pays enough to allow her to save for her son's college education.

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"I think this is going to be like the biggest boom ever to happen," she said of the expanding petroleum facilities' effect on the city. "People are going to start moving in here."

Long decline

Port Arthur, which is 90 miles east of Houston, is known to music fans as the home of the late, great blues singer Janis Joplin. The city was the place to be at the height of the 1950s and 1960s oil boom, with busy streets lined with shops, restaurants and theaters and schools ranked among the state's best.

But as the energy industry stumbled and fell in the late 1970s and 1980s, refineries shed jobs. Many of the most able Port Arthur residents fled as the city's economy flagged, moving to Orange, Nederland, Bridge City and other bedroom communities that offered better schools and neighborhoods, far from the refineries and their emissions.

Port Arthur today has an unemployment rate hovering around 7 percent, about 3 percent higher than the statewide average, and the median household income is $26,000. And among African-Americans, who make up 44 percent of the population, unemployment is almost 14 percent. Almost 23 percent of Port Arthur's families and 25 percent of its population are below the poverty line, including 35 percent of those under 18 and 14 percent of those age 65 or older.

"Drug problems are one reason there has been a lack of opportunity for so long," said Hilton Kelley, chief executive and founder of Community In-power and Development Association, an advocacy group. Drugs account for about half of the city's total criminal convictions, according to Love at Work Academy Inc., a nonprofit that provides educational services to troubled young people.

Kelley, 46, grew up on the west side of Port Arthur, near the Motiva Refinery, and left to be a Hollywood stunt double before returning four years ago. He said energy companies have done little historically to communicate or participate with the community, to help address the local economy's underlying problems.

Meanwhile, Port Arthur residents -- most of whom were considered unqualified to work at the refineries and chemical plants -- lived with the facilities' pollution but with none of the economic benefits offered by those facilities, Kelley said.

"For a long time, it was an acceptance simply because they felt there was nothing they could do about it," Kelley said. "Even when I was a kid, we didn't think there was anything we could do about it."

But many people stayed because of family history and interests. The city is surrounded by abundant places to fish, hunt, boat and birdwatch, and the cost of living is low, people said at the Boudain Hut, a hangout on the eastern edge of town that serves "Boudain," a Cajun sausage, and other local favorites.

As Floyd Batiste, CEO of the Port Arthur Economic Development Corp. and a Port Arthur resident for 20 years, put it, "Here, you know your next-door neighbor and everybody in the next 12 blocks. It's a small-town mentality. It operates like a town with 8,000 or 9,000 people."

'This community is us'

The Motiva project -- being done in partnership with Royal Dutch Shell PLC and Saudi Aramco -- will make the Port Arthur refinery the largest in the United States and one of the 10 largest in the world. The refinery will process about 325,000 barrels of sour crude oil a day -- dwarfing the existing unit that goes through 195,000 barrels per day of medium crude oil, although the two units eventually will be integrated.

The new facility, Strouse promised, will be more efficient and produce significantly less air pollution.

The Motiva refinery plans to ramp up activity this summer, Strouse said. It will employ as many as 6,000 people at peak construction early next year and create around 300 permanent jobs when it is finished in 2010.

Motiva and the other refineries will hire as many workers as possible from Port Arthur, according to the agreement they made with the city and Jefferson County, which in return granted millions of dollars' worth of tax abatements.

Todd Monette, the refinery's general manager, maintains that the facility will give a lot to the community.

"Part of what drives me is [the refinery's] 105-year history," Monette said. "This community is us. I put a lot of value into how am I going to help this community long-term."

Motiva has set aside portions of contracts for local businesses, he said, and is aiming to hire as many Port Arthur residents as possible.

"I was told early on, 'You need to bring in a huge amount of workers,'" Monette said. But with White's training program, as well as others at the community college and high schools, Monette said his goal is to fill 35 to 40 percent of the new jobs with local residents.

Setting a precedent?

White, meanwhile, is trying to build a community around his training center -- located in the heart of the impoverished west side of the city in a building that had been vacant since 1978.

"In the area where we actually have the training school, there is not a grocery store or convenience store within five miles," White said. The center will soon include morning, afternoon and evening classes to accommodate more people.

"The real thing that solidifies the whole picture is revitalizing an area that has been neglected well over 30 years," White said.

So far, more than 700 people have applied to the program, but the center does not have enough capacity right now to accommodate everyone, he said. About 125 people are now enrolled; 28 -- including Rubie Jack -- have graduated and have jobs at Motiva.

Kelley, the community activist who fought against Motiva's expansion project, said the training program gives him hope. "What we really are doing here is setting a precedent," he said.

Said White, "I think what I see as the major difference is for the first time, industry has sat at the table with the community. Before, industry has kind of gone to the community and said, 'We are going to support this effort,' but they never had to sacrifice.

"Now, they are not only talking about it but they are investing money into programs such as ours to bring about that particular change and healing."

Piggybacking

For his part, Strouse said jobs will remain long after Motiva and the other companies finish their expansions.

"People don't have to worry about the up-and-down cycles because people will be needed" to replace retiring workers and maintenance on the aging facilities, he said.

"You don't make a $7 billion investment without thinking that there is going to [be] some success there," Strouse added. "When you look at high gas prices and where the market is, we do think this is going to be a good fit."

While Kelley still worries about air pollution from petroleum plants, he is hoping the area can also attract other energy companies, including renewable and alternative energy manufacturers. He said he has spoken to a company that manufactures batteries for electric bicycles, Segways and electric cars and would like to see solar panel or wind-turbine manufacturers arrive.

"I am fighting to piggyback off of this and try to look at new ways to bringing opportunity to the area, now that we have the stimulus and new money," Kelley said.

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