Corpus Christi Authorizes Self-Funding Dredging
After waiting 28 years for Congress to come up with funding for its 1990 authorization of dredging of the Corpus Christi Ship Channel to 54 feet, the Port of Corpus Christi’s board voted on March 20 to authorize the issuing of up to $400 million in debt to pay for the job itself, a measure it has discussed for years.
Port commissioners called a decision to issue any new debt a fallback option. The port already has already contributed $102 million for the dredging project to an account, along with another $32 million for a special study.
Since the 1990 authorization, Congress has never funded the project. At the time, estimates for the project were $190 million, but delays and inflation have pushed the estimated costs to about $327 million.
Responding to the dramatic increase in oil and gas production by U.S. hydraulic fracturing, the U.S. government ended a long-standing ban on U.S. oil exports (except to Canada and Mexico) at the end of 2015. Since then, oil exports from the port have exploded by 270 percent from 2016 to 2017 alone, from 80,000 barrels per day to 300,000. According to the U.S. Energy Information Administration, the U.S. is set to become a net energy exporter by 2022, regaining a status it last enjoyed in 1953.
The ability to export the light sweet crude that fracking has unlocked from the nearby Permian Basin is an urgent matter for the oil industry, since these exports to trading partners will help fund the retooling of the Energy Coast’s oil refineries, built to handle heavier crude imports in the pre-fracking era.
Testifying before the Texas Senate Committee on Transportation on February 21, Sean Strawbridge, CEO of the Port of Corpus Christi Authority, noted that since the end of the export ban, the port has exported more than $6 billion of crude oil and is now the largest U.S. energy-exporting port. “Over the past decade, the Port of Corpus Christi has attracted over $50 billion in privately funded industrial investment to the Coast Bend, more investment than some entire states,” he told the committee.
Strawbridge was testifying in support of a Texas bill that would set up a revolving state loan program for seaport improvements. He noted that unlike some states, Texas does not have a recurring funding source for seaports. “The Port of Corpus Christi is not immune from these funding shortfalls, and we are at a time when the need for infrastructure investment has never been higher,” he said.
This year, a plea by Strawbridge to President Donald Trump to include proper funding for the project in his budget request to Congress, signed by the heads of six major oil producers, resulted only in $13 million.