Texas looks to port overhaul to keep pace with oil and gas exports

A commissioner at a state energy regulator tells UPI some of the funding necessary for improved market completion is caught up by red tape.

By Daniel J. Graeber
Texas state energy regulator says ports need an overhaul to help keep pace with increasing U.S. oil and natural gas exports. Photo courtesy of the Corpus Christi port authority
Texas state energy regulator says ports need an overhaul to help keep pace with increasing U.S. oil and natural gas exports. Photo courtesy of the Corpus Christi port authority

Dec. 1 (UPI) -- Texas needs capital support to expand the port infrastructure necessary to help keep up with the increase in U.S. oil and gas exports, a commissioner said.

The port at Corpus Christi is the fourth largest sea port in the country by tonnage, the largest crude oil export terminal and, by 2020, could be one of the largest points for liquefied natural gas leaving the United States.


The port authority there started working on improvements to the regional shipping channel in the 1990s. A partnership agreement was signed with the U.S. Army Corps of Engineers in September for improvements, but the Texas Railroad Commission, the state's energy regulator, told UPI they were still waiting for funding.

"The project would widen and deepen the port, allowing million barrel supertankers to load American crude and providing $100 million in annual transportation cost savings," Commissioner Ryan Sitton said. "The project has been in the works for decades but held up due to bureaucratic red tape."


Port authorities say increasing the depth and width of the shipping channel would let larger vessels in and improve the efficiency for crude oil and natural gas transportation. That, in turn, would make U.S. energy products more competitive on the global market, they said.

West Texas Intermediate, the U.S. benchmark for crude oil, is trading at a discount to other benchmarks, which means it's cheaper to buy on the open market. As of early Friday, WTI was trading at $3.24 per barrel less than the basket of crude oils from the Organization of Petroleum Exporting Countries.

For natural gas, European allies are seeing LNG derived from U.S. shale basins as a way to diversify a market that depends in large part on Russia for natural gas.

For crude oil exports alone, Sitton said a record was set in early November when more than 2 million barrels per day left ports like Corpus Christi, Houston and Beaumont.

"Upgrades at Corpus Christi, Houston and Beaumont are how we take advantage of our energy opportunities," he said. "When we invest in Texas infrastructure, we invest in our economic and national security."

Port infrastructure was damaged from the series of hurricanes that hit southern U.S. states this summer. Hurricane Harvey hit the southern coast of Texas and the largest density of refineries on the southern Gulf Coast in late August, though respondents to a survey from the Federal Reserve Bank of Dallas said Harvey would have only a modest, but lingering, impact on the energy sector.


The bank said in November that "positive signs are starting to reappear for the Texas oil and gas sector" as crude oil prices held above $50 per barrel for much of the third quarter. The price for WTI is up more than 25 percent since the start of July.

Dallas Fed Assistant Economist Amy Jordan last month said the market is tightening up, however, and there might not be too much room left for further economic growth overall.

"And given Texas is highly dependent on trade with Mexico, uncertainty surrounding ongoing trade negotiations is another headwind," she said.

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