Posted on March 26, 2018
By Tim Acosta, Caller Times
Stand out on the shore in downtown Corpus Christi or on the North Beach side of the Harbor Bridge, and you’re likely to see quite a sight.
Large tankers or barges, some pushed by one or more tugboats, making their way across Corpus Christi Bay sail into the Port of Corpus Christi. Those vessels will later make their way back out, carrying dry goods or crude oil to various markets overseas. There’s a lot going on, but the hope is that this is only the beginning for the port as a global player.
Since Congress lifted a ban on oil exports in late 2015, the Port of Corpus Christi has become the nation’s largest exporter of crude oil. It is also the nation’s fourth-largest in total annual tonnage, and handles shipments of dry goods, wind turbine parts and military equipment.
To say the port is a key for growth in the Coastal Bend, and the need for federal support is urgent, is an understatement.
“The increasing exportation of U.S. oil and gas has widespread economic, geopolitical, and security implications, and the global balance of power is certainly shifting to our shores,” Port of Corpus Christi CEO Sean Strawbridge said in prepared testimony before congressional leaders earlier this month.
A Dec. 12 article on the Forbes website highlighted the amount of growth in exports nationally in a list of Top 10 ports. The Port of Corpus Christi, according to the list, was just behind the Port of Houston with exports increasing by $4.69 billion. It was one of four Texas ports listed on the magazine’s Top 10 list.
The Port of Corpus Christi also accounts for 60 percent of the nation’s crude oil exports, and is preparing to stake a claim on liquid natural gas. One of the largest examples of that is a pending project from Cheniere Energy, which does business locally as Corpus Christi Liquefaction LLC.
The company is in the process of constructing a multi-billion dollar plant in Gregory that will produce liquefied natural gas. The first of four planned phases is underway now, encompassing the construction of two storage tanks, jetties and a pair of LNG liquefaction trains. The trains are facilities that operate independently to produce liquefied natural gas.
Each will be capable of producing 4.5 million tons annually at full capacity, officials have said.
But all that growth hinges on one major project — deepening and widening of the Corpus Christi Ship Channel. Without that, the Port of Corpus Christi could very well find itself unable to keep up with the explosion of demand projected to take place in 2022 and beyond.
Years in the making
Why is the Corpus Christi Ship Channel expansion project so important?
Put simply, it’s a matter of efficiency. The deeper a ship channel is, the larger the vessels that can travel in and out of a port. Larger vessels mean more goods being shipped at once, which in turn results in fewer trips. Fewer trips means lower fuel and associated transportation costs.
For companies who rely on their goods being shipped overseas or into the United States, being able to save money on transporting products is something that benefits their operations. The port is trying to get its channel deepened to a maximum depth of 54 feet in some areas and widened to accommodate vessels coming in and out of the port at the same time.
A taller replacement to the current Harbor Bridge is under construction that will provide higher clearance for larger vessels as well. It is scheduled for completion in 2020.
“Our customers tell us that larger, deeper draft cargo ships could save them $0.50 to $0.75 per barrel, a major global competitive advantage,” Strawbridge said in his testimony to Congress. “At over 600 million barrels a year of energy exports in Corpus Christi alone, these transportation cost savings are in excess of $300 million per year for our port customers.”
It was 1990 when Congress first authorized an exploration of expansion of the Corpus Christi Ship Channel. The project was later approved twice by Congress, but no funding has ever been allocated for it from the federal government. In the meantime the project has ballooned from an initial cost of nearly $190 million to the current $327 million price tag.
Port officials have committed up to $102.4 million in advanced funding for the ship channel project, including more than $32 million to get the first of six phases underway. But if the federal government can’t hold up its end of an existing Project Partnership Agreement between the port and Corps of Engineers — in which the federal share of $225 million is outlined — the port is prepared to issue debt to ensure its completion.
“I think that’s a monumental step forward for the Port of Corpus Christi, and our willingness to do what we as a group have said for a long time is important to the future — not only of the Port of Corpus Christi, but to our region and the state and the nation,” port commission chairman Charlie Zahn said.
The project cost could increase even more if it continues to languish in bureaucratic purgatory. U.S. Rep. Blake Farenthold pointed out at a congressional hearing on March 6 that the Army Corps of Engineers, which is responsible for work like the Corpus Christi Ship Channel improvement project, is woefully underfunded through Congress’ budget appropriations process.
The result is a “stunningly large backlog” of nearly $100 billion in Corps projects, with the number representing the federal government’s obligation in matching funds, Farenthold said. But federal leaders and port officials have placed the blame on Congress, not the Corps, for the backlog and delay in getting projects done.
“Approximately $96 billion worth of projects are being bogged down in red tape and, quite frankly, Congress’ broken appropriations process,” he said.
The Port of Corpus Christi is one of five ports competing for federal dollars to improve their infrastructure, including larger ports in Savannah, Georgia and Boston, Massachusetts. But port officials argue that Corpus Christi differs in that it is primarily an export facility — it wants to send American energy and goods out, rather than bringing foreign goods in, to help lower the nation’s trade deficit.
That has been a goal of President Donald Trump since he took office.
Federal leaders are acknowledging the importance of the Port of Corpus Christi in that regard. About $5 billion in pipeline projects transporting energy products from the Permian Basin to Corpus Christi are either under construction or in the planning stages.
“The United States is in a position to dominate the world in energy,” said Alabama Congressman Gary Palmer. “It is absolutely critical that our ports be able to handle the shipping that is going to be necessary to do that. It’s absolutely critical for our economy.”
One idea being considered at the federal level is to allow ports to take over responsibility for getting projects, like the channel expansion, done. The idea is to have the Corps move to a more advisory role while ports move more quickly to complete projects for which they already have funding available.
“I really think it’s a good idea to delegate a lot of these projects down to the state and local level,” Palmer said. “I think that we’ll see projects implemented much more expeditiously and I think it’ll save us a boatload of money.”
When such a move would be implemented, if at all, is still unknown. Meanwhile Port of Corpus Christi officials are pushing to have their channel project done by 2021, the same year the current Harbor Bridge is scheduled for demolition. Other Texas ports, including in Freeport and Brownsville, are trying to get their channels deepened to over 50 feet, as well.
Corpus Christi, though, could be the first to have its port dredged to over 50 feet, putting it at a great competitive advantage and setting it up for continued growth. Port officials and state leaders also plan to make a push for federal funding from the new omnibus spending bill approved by Congress and signed by Trump on Friday.
“The importance of this project is so much so that we can’t let the federal government stymie its progress through its arcane appropriations process,” Strawbridge said. This is such an important project for this nation and our path to energy resiliency, energy independence.”
Source: Caller Times
