An oil terminal on Harbor Island at Port Aransas, Texas, is not a ‘done deal’

At a recent community meeting in Corpus Christi, Nueces County Judge Barbara Canales said to one of our members, “Harbor Island is a done deal.” Not so, Barbara!

The Port of Corpus Christi Authority is currently executing a more-than-million-dollar PR and lobbying campaign for 2020 to convince everyone that its plans for an oil export terminal on Harbor Island to accommodate two very large crude carriers (VLCCs) are both desirable and inevitable. The Port Aransas Conservancy believes that neither is true.

The Port of Corpus Christi has proposed a multi-billion dollar project for an oil terminal on Harbor Island.

Regarding desirability the damage to the marine ecosystem around Harbor Island is not in dispute, the port just prefers not to talk about it. Lone Star Ports — the port’s lease holder — acknowledges in their application to TCEQ that the VLCC terminal would emit numerous air pollutants including sulfur dioxide, hydrogen sulfide, nitrous oxide, and carbon dioxide as well as particulate matter into the air just 1,000 feet across the channel from the Roberts Point Park playground. Dredging to 75-80 feet to accommodate VLCCs would result in 56.7 million cubic yards of dredge spoil to be dumped on our beaches as a “beneficial use.” The resulting siltation would kill seagrass and disrupt the migration patterns of the fish and shrimp larvae that support the coastal bend’s fishing industry, not to mention Port Aransas’ tourism-based economy. Nobody wants to vacation next to a supertanker terminal.

The inevitability of this project is also questionable. According to RBN Energy there are now more than a dozen possible projects for crude exports out of the Gulf Coast, many of them offshore and VLCC-capable. Enterprise Products Partners’ terminal off the coast from Houston has emerged from the permit purgatory that the port has just entered; EPP has made a final investment decision and is moving forward. Meanwhile the port needs an air quality permit from TCEQ and environmental clearance from the Army Corps. The Corps has already told the port that it needs a full environmental impact report, which would take a minimum of two years to prepare — and that’s before construction could begin, adding another year or two.

Port officials are stuck between a rock and a hard place. Midstream groups have grown hesitant to fund hugely expensive new terminals when they can just expand existing ones. The Port of Corpus Christi has greatly expanded its crude export capacity to over 1 million barrels per day but that’s entirely due to terminal expansions by EPIC, Buckeye, Pin Oak, Valero, NuStar, Moda and Flint Hills. With the Carlyle Group pulling out of the billion dollar Harbor Island project the money to build this terminal is in doubt. So far no one has come forth to plug the financial hole that Carlyle left and the port can’t afford to do it alone.

Also, in order to justify a final investment decision, the port would have to line up huge volume commitments from upstream suppliers and takeaway commitments from carriers; but no one wants to carry a large volume commitment on their balance sheets in case of an overbuild, which is a real possibility. Assuming that the port would flaunt such commitments if it had them, this is another missing Jenga block.

So Barbara, don’t count your chickens before they hatch. They may not.