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Louisiana’s chemical sector continues to benefit from one decisive advantage: natural gas prices that significantly undercut those in Europe and Asia.
That’s according to economist Loren Scott’s 2025-26 Louisiana Economic Forecast, released in October.
The disparity in natural gas prices, Scott writes, has helped spur a surge in large-scale industrial projects across the state. Louisiana is currently the nation’s sixth-largest chemical producer.
“Louisiana brings three important assets to this industry: a plentiful supply of, and easy access to, natural gas; access to plenty of water; and access of ocean-going ships to the Gulf of Mexico, and hence to global markets,” Scott writes. These factors have added up to make Louisiana a magnet for global chemical manufacturers.
The global imbalance in natural gas prices is stark. In the U.S., prices have hovered around $2.50 per million British thermal units as of late, compared to $15 in Europe and Asia.
This disparity has stemmed largely from the advent of fracking, which has allowed the U.S. to produce abundant, low-cost natural gas. The European Union has banned fracking and much of Asia lacks natural gas reserves, meaning those markets are forced to rely on imports.
“Remember that many chemicals use natural gas as a raw material,” Scott writes. “There is no way chemical firms in Europe and Asia, making chemicals out of $15 natural gas, can compete with U.S. firms that are making the same product out of $2.50 natural gas.”
The disparity has resulted in a “massive industrial boom” in Louisiana, according to Scott’s report. Global natural gas prices began to diverge in earnest around 2012, and since then, Louisiana has seen a deluge of investment.
Some $34.4 billion in projects are currently under construction and a staggering $115.7 billion in projects have been announced but are awaiting final investment decisions in the Baton Rouge, New Orleans and Lake Charles metros alone.
“As a reference point, prior to 2012, if there was just $1 billion in projects under construction across the entire state, that was considered good news,” Scott writes.
