, Port Arthur, Texas

August 28, 2013

Sabine-Neches expansion positions area as global exporter

Sherry Koonce
The Port Arthur News

BEAUMONT — An expanded Panama Canal combined with a glut of U.S. natural gas and the likelihood of Canadian oil pumped to Port Arthur via the Keystone Pipeline have set the stage for U.S. lawmakers to decide whether to fund plans to deepen the Sabine Neches Waterway.

When Congress returns to Washington in September, it will consider water resources infrastructure reform legislation, including the deepening of the Sabine-Neches Waterway, the nation’s fourth largest waterway.

The Water Resources Reform and Development Act of 2013 passed by the Senate in May by a vote of 86 to 14. When Congress reconvenes the House version will be introduced, Randy Weber, R-Alvin, District 14 U.S. Representative, told a roomful of Southeast Texas business men and women Wednesday.

Weber and renowned economist Ray Perryman were guest speakers at the Beaumont Chamber of Commerce Legislative Update Breakfast.

Both touted the economic benefit an expanded Sabine Neches Waterway would bring to the area.

Known as the “Water Bill,” the Water Resource Development Act contains funding to deepen the Sabine-Neches Waterway from 40 feet to 48 feet and extend it another 13 miles offshore.

“Deepening this port will be a critical thing to the nation and our area,” Perryman said.

As proposed, the Sabine-Neches, which has not been improved since 1962, would be deepened from 40 to 48 feet to allow larger ships to reach U.S. ports and industrial facilities.

A study recently conducted by Perryman on current and projected impact of the Sabine-Neches Waterway projects the creation of more than 115,000 new jobs in Texas.

At the same time, an expanded port would position the area to be on the ground floor of the nation’s increased role as energy exporter.

Today a 100 million tons of cargo passes through the Sabine-Neches. If the waterway is deepened, that number is estimated to reach a half million, Perryman said.

“It is a huge economic engine,” Perryman said.

Fourteen years ago when the U.S. Army Corps of Engineers first made application to widen the Sabine-Neches, few could have guessed that the nation would be poised to become a leading global natural gas exporter.

Even three years ago, no one could have guessed what was going to happen with the liquefied natural gas facilities that are calling the Texas and Louisiana Gulf Coasts home.

Because of shell formations, the dynamics of energy has changed within the last five years, Perryman said.

“For years we thought we’d only sue our natural gas in the U.S.,” Perryman said. “We now know it is worldwide.”

The next round of new investment in energy will happen in ports that accommodate Panamax vessels, those larger vessels from the Panama Canal.

In mid-2015, the $5.25 billion expansion of the Panama Canal is expected to be complete, opening the way for new global trade routes.

While a deeper Sabine-Neches would open a natural trade route between Panama and the U.S., the local waterway is not the only competitor.

Others are figuring out they are opening the Panama Canal, Perryman said.

“It is a global competition and there will be winners and losers,” he said. “This project is so critical.”

While Texas would see the bulk of the new jobs, Perryman’s report estimates a total of 176,000 new permanent jobs would be created.

The expansion would bring to the nation an added $186 billion in business activity, $57 billion in gross product, nearly $11 billion in retail sales and $6 billion in federal taxes.

Weber is a member of the House Committee on Science, Space, and Technology, where he serves as the Vice Chairman of the Energy Subcommittee.

District 14, which includes all of Jefferson and Galveston counties, the lower half of Brazoria and a small portion of Chambers County, has more ports than any district in the nation.

“We are poised at the cusp of the greatest energy explosion in the history of this country,” Weber said. “I want the Gulf Coast of Texas to be the gateway to the United States of America.”

The proposed waterbill is a very good bill, and one that very likely will pass.

“I am very optimistic, and I don’t see a lot of pushback,” Weber said. “It looks like we will get it out in September.”

Weber said the impact would be even greater if the Keystone Pipeline is permitted.

The controversial project will bring 800 barrels of oil to this area, and from 5,000 to 20,000 jobs, and would allow the U.S. to purchase oil from its neighbors to the north rather than unfriendly nations, Weber said.