During Texas Railroad Commission member Ryan Sitton’s visit in August 2017 to the Port, he stated that two new planned major pipelines from Midland-Odessa will increase oil shipments through the Port by 2 million barrels per day. He is promoting deepening and widening the Port channel to handle the new shipments and deeper draft tankers. I have been an opponent to deepening and widening the ship channel at a total cost of $350 million, because the Port’s present customers didn’t require that.
The new customer shipments of 2 million barrels a day is a new customer need and I now support the deepening and widening. At the present Port fee rates, each additional 1 million barrels a day generates about $44 million per year. The new 2 million barrels per day will generate new port revenues of about $88 million per year. The Port will incur no additional operating and maintenance cost because private owned terminals will provide any new terminal equipment needed.
Based on total projected cost of about $350 million and a typical 60-40 Federal-local cost sharing, the Port’s cost would be about $135 million. That’s about a 1.5-year payback which is a great investment. The Port’s $215 million federal share match has been approved by Congress 3 times, but the Corps of Engineers and Office of Management and Budget have stripped the funds and used them to deepen the Ports in Boston, Charleston, Tampa and Jacksonville, although those projects had a poorer cost benefit ratio. Shame on our Texas congressional delegation of Cronyn, Cruse, and Farenthold.
The Congressional delegation of Massachusetts, Florida, and South Carolina did a good job representing the interest of their constituents. Ours did a lousy job representing Texas. The Corps of Engineers and Office of Management & Budget work directly for the President. Obviously, President Obama directed that our Port money approved by Congress be spent instead on other States’s ports.
President Trump has included $13 Million in his proposed budget for the project which must be approved and appropriated by Congress. It’s a small start on the total $215 Million needed. The Port and our local congressional delegation and area city and county officials should persistently lobby Trump and Congress until the full $215 Million is budgeted and appropriated. The Port should not spend its own $215 million to replace the federal match. That would be blatantly unfair to the Corpus Christi area. There are better uses for the Port’s $215 million for the economic benefit of the Port and the area.
Author: Ralph Coker
Bio: Ralph Coker is a retired petroleum refinery plant manager. He writes on business, economic, military and political topics