The port of Corpus Christi is a major player when it comes to the oil industry.
It’s the largest exporter of crude oil in the nation and the fourth largest port in the United Sates. In 2015, the ban on U.S.-produced crude oil was overturned, creating a demand for American barrels of oil.
With oil exports expected to surge over the next five years, Switzerland-based commodities trading house Trafigura is looking to bypass the port and cash in on America’s oil. It’s proposed an offshore deepwater port facility in the Gulf of Mexico and it’s posing more questions than answers.
It’s a concern for not only the port of Corpus Christi, but several Coastal Bend agencies and area businesses.
“We have a lot of concern about this project and unless or until those questions are answered we are not going to be in support of this project,” said Sean Strawbridge, port of Corpus Christi CEO.
Proposed Texas gulf terminals project by Trafigura is a concern of Strawbridge. The project is an offshore deepwater port facility set to be located miles from shore utilizing a single port- mooring buoy system, essentially a floating inner-tube, to load Texas crude oil into very large crude carriers, bypassing the port of Corpus Christi. If given the go-ahead, the project has the possibility to pose a major impact to the local economy and environment.
“When you look at these offshore buoys, they are usually in venues that don’t have the same type of quality infrastructure that we have here in the United States.
Strawbridge said. “Places like Africa and India.”
The main concern is the buoy systems location. The offshore terminal is set to be just outside of Texas waters, circumventing the state’s regulations.
The Texas Commission on Environmental Quality is the environmental agency tasked with enforcing state rules and regulations.
Because it’s outside of Texas waters, TCEQ will have no authority ensuring safety measure will be followed. And that’s a problem for many in the Coastal Bend, although not everybody is against the proposal.
Kleberg County Judge Rudy Madrid is excited about what the project could bring to his county, he says. Four years ago when he took over as county judge, the oil industry had crashed. Citizens in his area lost their jobs and homes hurting the Kleberg County economy.
With the oil pipeline passing through the county, Madrid sees the project as a way to get the county more revenue and oil field workers jobs again.
“We do not have the industry such as Nueces County and some of our surrounding communities,” Madrid said. “And when you get a project like that, for our tax base that does wonders for us. Here in the next couple of years we’re talking about our immediate local citizens reaping the benefits. Benefits that Corpus Christi already has.”
With crude oil exports expected to surge over the next five years, the proposed Texas Gulf terminals project will begin at the King Ranch making its way to the gulf. It will mean big bucks for Kleberg County – something the area is hoping to secure.
“Aside from the wonders it’s going to do for our community, think about what it’s going to do for South Texas,” Madrid said. “That is a portal. That is an open door process to getting our oilfield back up and running.”
All of this sounds good. But who will be affected if something goes wrong?
The plan for the proposed buoy system is to be located close to 15 miles offshore. A major concern for the port of Corpus Christi is what if something goes wrong. What if there is a break in the pipeline? What will it mean to tourism and the fishing industry? Not to mention the local businesses that rely on these waters in the Coastal Bend.
“If there was a spill or some sort of catastrophic event being able to respond that that is going to take much longer,” Strawbridge said. “Which means the impact is going to be much greater than an event that happened on shore.
“When you look at ports all around the country and the terminals that are developed, whether it’s a container terminal or crude terminal or a finished product terminal like gasoline or diesel, they’re all done in safe harbor.”
Another major concern is Trafigura’s track record when it comes to criminal environmental violations and trade sanctions, which are all well documented.
Trafigura is using the Deep Water Port Act to get approval for the terminal and has 350 days from submission until a license could be issued.
And according to the U.S. Fish and Wildlife Service, Trafigura’s deepwater port license is deficient in terms of state oversight should an oil spill occur.
The company must still hold another public meeting before Secretary of Transportation Elaine Chow can issue the license. Despite discrepancies, the Texas gulf terminals project licensing approval is still unknown.
But the unknown isn’t stopping the Port of Corpus Christi from making progress. The port recently entered into an agreement with the Carlyle Group to develop the first onshore location in the U.S. gulf, capable of servicing the very large crude carriers, something Trafigura is hoping to service with its offshore terminal.
Strawbridge says the port is making progress to get the depth and infrastructure necessary to service any carrier in the future.
“We certainly are going to have the deeper water,” Strawbridge said. “It is a 100 percent certainty that we will be at 54 feet. We are working diligently to get to 75 feet to handle the very large crude carriers in a portion of the Corpus Christi ship channel.”
Having the ability to service the very large crude carriers will open up the Port of Corpus Christi to the global markets for U.S. oil producers, pipelines, supply chains and customers.
All of this could result in a $50 billion reduction in the nation’s annual deficit. The port is hoping the move will mean thousands of jobs for the city of Corpus Christi, while pumping billions of dollars into the local economy.