Liquid Natural Gas at the Port of Brownsville could impact the entire Valley
A $10 billion investment is in the pipeline headed for the Port of Brownsville, but the idea of three liquefied natural gas plants situated close to sensitive wildlife habitat and a fragile coastal tourism economy does not sit well with everyone.
A final decision on what could be the largest industrial investment in Cameron County history remains to be seen as the Federal Energy Regulatory Commission proceeds with a review of applications from Rio Grande LNG, Texas LNG Brownsville and Annova LNG for the construction and operation of plants to convert natural gas into a hyper-cooled liquid to reduce its volume and ship to overseas markets.
“We looked at numerous sites up and down the coast and it became apparent that Brownsville met our selection criteria,” Texas LNG Chief Operating Officer Langtry Meyer said.
He said the Port of Brownsville is “strategically located” because of its proximity to natural gas resources and the existing natural gas pipeline network.
“The Port of Brownsville has plenty of land to accommodate an LNG facility, with sufficient waterfront and a deep-water channel to handle the LNG carriers,” Meyer said. “And we feel we’re getting good support from the community.”
The port, which encompasses some 40,000 acres, owns land on both sides of the Brownsville Ship Channel all the way out to the jetties, said Eduardo Campirano, Port Director and CEO.
The southernmost deep-water port on the Gulf Coast, it is also the U.S. shipping point closest to the Panama Canal.
Of the three proposed LNG plants Rio Grande LNG would be the largest, planned for construction on a 1,000-acre tract on the north side of the ship channel. Also on the north shore would be Texas LNG, the smallest of the three situated on a 625-acre tract. Annova LNG is proposed for a 655-acre site on the south side of the channel.
Rio Grande LNG also wants to build a 122-mile pipeline to connect the Port of Brownsville with other interconnected pipeline facilities serving gas producing areas in Texas.
But not everyone is jumping on the LNG bandwagon, with some environmentalists fearful that the developments would pollute the atmosphere with greenhouse gases, bring harm to wildlife and habitat, create health and safety risks for nearby communities, and damage the tourism industry that is so vital to Valley coastal communities.
While the LNG proposals have received support from area chambers of commerce and economic development organizations, some municipalities like Port Isabel, South Padre Island and Laguna Vista have gone on record either to oppose the LNG developments or voting not to sign off on a letter of support.
Jim Chapman, chairman of the Rio Grande Valley chapter of the Sierra Club, said the three LNG plans would dramatically change the face of the lower Valley, a coastal area that has avoided the heavy oil and gas industrialization that has taken place along the upper Texas coast.
“It’s a moment in time when the Valley can make a decision as to what we want this area to look like in the future,” he said. “If you want this area to remain nationally known for its beaches and its wildlife, then the last thing you want to do is put these massive plants along the ship channel right next to natural habitats like the Bahia Grande and the Laguna Madre.”
Proponents say that the technology has improved to a degree that it is a safe and clean method to supply large quantities of natural gas to markets in the United States and around the world.
“These plants are not the messy, stinky oil and gas refineries you see in other Texas ports,” Campirano said.
Liquefaction of natural gas is not a new technology. According to a U.S. Department of Energy report, liquefaction of natural gas for storage began in the early 1900s. In 1959 the world’s first LNG ship carried the liquid cargo from Louisiana to the United Kingdom.
The liquefaction process cools natural gas to about minus 260 degrees, reducing its volume by more than 600 times, making it easier to transport large quantities on the world market.
“We’re taking pipeline quality gas,” Meyer said. “So it’s important to understand it has already been processed at the wellhead. It is the same quality you would use at home.”
It is estimated that the natural gas that would be piped into the Port of Brownsville plants would be in the range of 91 percent to 93 percent pure methane. The gas must be purified to 99 percent before it can be liquefied, and that purification process has raised questions among opponents.
“There is some bad stuff they have to get out of the natural gas,” Chapman said. “We have concerns about where those byproducts will end up, whether they would be vented into the air or contained in some way.”
According to the DOE, natural gas consists mostly of methane, with some ethane, propane, butane and nitrogen.
Before liquefaction can take place, the gas is scrubbed of hydrocarbon liquids and dirt and treated to remove trace amounts of hydrogen sulfide and carbon dioxide, two common natural gas contaminants, according to the DOE.
“As part of the liquefaction process we need to remove certain elements like water, oxygen (and) there are some heavy hydrocarbon elements that are removed,” Meyer said.
The Valley chapter of the Sierra Club has issued a report expressing numerous concerns, starting with the potential for damage during the construction phase to vital habitat in wetlands that are “critical nurseries for fish, shrimp, oysters, crabs and other aquatic life that are important both ecologically and commercially.”
Economic damage is also cited in the Sierra Club report, which states the “industrialization and pollution that (the facilities) will bring could erode important economic drivers such as commercial fishing, shrimping, and beach and nature tourism.”
The third primary point addressed by the Sierra Club involves the LNG plants proximity to population centers such as Port Isabel and South Padre Island.
“If there is a breach of either the LNG facility or an LNG tanker here is potential for the release of a vapor cloud, which in the proper concentration could travel for miles before igniting and burning too intensely for first responders to extinguish,” the report states.
Since 1959, LNG vessels have completed more than 33,000 voyages and logged more than 60 million miles with a near-perfect safety record, said Bill Harris, South/West Division communications senior manager for Exelon, the parent company of Annova LNG.
According to a DOE report, “A Guide to LNG: What All Citizens Should Know,” only eight significant incidents involving LNG ships have been recorded, none of which resulted in spills from cargo tank ruptures.
“LNG is not flammable,” Harris said. “It will not explode. It dissipates as any gas does.”
The DOE report also states that LNG is not explosive or flammable in its liquid state.
“As LNG warms (above minus 160 degrees), it becomes lighter than air and will rise and disperse rather than collect near the ground. However, it is not explosive unless flammable concentrations of gas occur in enclosed or otherwise confined spaces,” according to the DOE report.
Harris noted that LNG facilities are highly regulated and include thermal exclusion zones to provide a safe distance between the terminals and population centers in the event something does go wrong.
The safety record for the land-based plants and terminals is also good, according to the DOE report, which states that “no serious accidents involving an LNG terminal facility in the U.S. has happened in over 25 years.”
“Nothing harmful is ever vented into the air,” Harris said. The process removes components that freeze at minus 260 degrees, and the byproducts are collected in tanks and removed to other safe locations or sold to industries that need them.
For much of its history in the United States, LNG operations focused primarily on domestic storage and imports. The three proposed South Texas plants will produce LNG for export to overseas markets, indicating a change in world energy markets.
The Eagle Ford Shale oil and gas boom in Texas has helped changed the dynamics of the LNG marketplace with the production of high volumes of gas at low cost that can help supply increasing demand around the world.
“This has been driven by the revolution in shale gas,” Meyer said. “Given the proliferation of shale gas, there is so much available and the prices are among the lowest in the world.”
An LNG export facility in Louisiana is expected to deliver its first cargo in January, and an export terminal is under construction in the Port Arthur area on the upper Texas coast.
“Anyone who is concerned about the environment, greenhouse gases and global climate change should be a champion of this project,” Annova LNG President David Chung wrote in a guest column published in The Monitor. “The LNG that leaves the Port of Brownsville would fuel the conversion of foreign power plants from coal to much cleaner-burning natural gas.”
With regard to local environmental concerns, Chung wrote in the McAllen newspaper that “…the facility’s impacts on the natural habitat will be identified and minimized or mitigated to the extent possible…”
And while Chapman conceded that it is difficult to specifically address some of the environmental concerns until more specifics are revealed during the regulatory review, that detailed information is beginning to become available.
Meyer said Texas LNG submitted the initial 13 required research reports to FERC in October. These lengthy reports, required from each company for its respective project, address issues that include water use and quality; fish, wildlife and vegetation; land use, recreation and aesthetics; PCB contamination; and a variety of other subjects. All filings with FERC relating to the three proposed projects are available online at www.ferc.gov.
The FERC review can take up to two years and is a costly affair, Meyer said. The process started in January of this year with the filing of applications by the three LNG companies involved.
As with any large-scale energy development, there is a lot of money on the line.
“To go through the FERC process it costs my company tens of millions of dollars,” Meyer said, which includes hiring environmental, engineering and other consultants to prepare information and respond to questions and concerns of regulators and the general public.
But the really big dollars begin to flow into South Texas with the actual investments to construct and operate the plants. This trio of projects, if approved, would amount to the largest industrial investment in the history of Cameron County.
Meyer said if final approval can be obtained by early 2017, Texas LNG could begin construction on phase one with a target date of mid-2020 to begin operation. A second phase is planned to become operational in 2022.
He said the Texas LNG phase one construction will cost approximately $80 million and last about three years.
All three LNG projects are on similar timelines.
The Sierra Club’s Chapman said the public needs to consider the overall impact to the economy of an industrial development of this scale.
“The only argument that these companies have that persuade people to be for it is the jobs argument,” he said. “These are relatively automated operations so there will be jobs, but not that many.”
The largest of the projects, Rio Grande LNG, is expected to generate more than $8 billion in direct investment during its first phase of development, according to the company’s website.
“Construction for this phase is expected to create between 4,000 and 6,000 jobs with long-term, well-paid permanent jobs in excess of 200,” according to the website. “The indirect impact through increased traffic to the area, tourism, housing, food and entertainment is likely to multiply this impact by a substantial factor.”
According to Meyer, an average of 600 construction workers will be on the job while the Texas LNG plant is built. Once up and running there will be 80 full-time employees to operate the facilities, with those jobs paying an average of $70,000 a year. The Annova project estimates 675 construction workers and 165 full-time employees to run the plant.
“When you put all three of these projects together, it would mean an economic boom for the Rio Grande Valley that’s never been seen,” Harris said.
Campirano said the port would benefit from the LNG plant operations by increasing the number of deep sea vessels coming and going. He estimated that over time the port could see an increase of between 300 and 400 deep water ships a year to service the LNG terminals.
“You’re going to need more pilots, more tug runners,” he said. “Each one of those vessels means money for the port.”
The port director also said the increase in traffic and associated revenue could help the port move forward on the already-approved dredging of the ship channel from its current depth of 42 feet to 52 feet.
The $250 million project is needed for the port’s future not just because of LNG vessels, but to allow today’s ships to bring in heavier cargoes and to service the vessels of the future that will be larger with deeper drafts, Campirano said.
The infrastructure needed to support the LNG terminals is part of the responsibility of the developers.
“The construction of turning basins, docks, etc. will be done by the developers,” Campirano said. “The port is not proposing to do any of this.”
In addition to the Sierra Club and other organizations, a vocal opponent has emerged with Save RGV from LNG, a coalition of area environmentalists using social media to promote opposition to the proposed LNG terminals.
Through a Facebook page with approximately 4,000 followers, Save RGV from LNG shares information and articles from around the world that raise questions about the safety and environmental impact of LNG operations. A leader of Save RGV from LNG, Stephanie Herweck, is among opponents who have also written anti-LNG opinion pieces for publications such as the online Rio Grande Valley Guardian that dispute virtually all the information put forth by the LNG companies. In a November article in the Guardian, Herweck wrote that “the LNG industrial complex would supersize the carbon footprint of the Rio Grande Valley.”
She asserts that the LNG plants would emit 6.8 million tons of greenhouse gases (GHGs) into the atmosphere each year.
“That’s more than 40 times the GHGs currently emitted by standing sources in Cameron County,” Herweck wrote. “It’s about as much as two coal-fired plants would emit in a year, and approximately the same amount of GHG pollution produced to power 900,000 homes with electricity.”
The LNG developers insist they are playing by the rules and working with environmental experts to mitigate concerns.
In addition to pollution concerns, one of South Texas’ most celebrated and most threatened creatures has been brought up as part of the debate.
The ocelot, a small wild cat that has become a popular symbol of wildlife conservation in South Texas, numbers from 50 to 80 in South Texas, according to most estimates. LNG opponents say that the plants would destroy habitat important to the range of the ocelot.
“The fact of the matter is the only documented ocelot is a single transient male that was captured in that area and radio tracked in 1998,” Harris said.
He added that the LNG companies have been working with U.S. Fish and Wildlife and other agencies and organizations to ensure protection of the ocelot.
“We’ve been working with all these experts on not just the ocelot, but all wildlife. We’re doing what the experts say,” Harris said.
Among them is the Caesar Kleberg Wildlife Research Institute at Texas A&M University-Kingsville, which has become one of the leaders in the study of the ocelot and its habitat and range. And organizations like the Kleberg institute would stand to benefit from investments in their work made by the LNG companies. “We have an entire philanthropic plan,” Harris said. “We sat down and looked at all the ways we could reach out to community leadership.” Annova LNG announced in December a $40,000 contribution to the Kleberg institute for GPS tracking and other work in monitoring the Willacy County ocelot population, which is the largest resident population of the endangered wild cat in the United States. In addition to wildlife research, local education and charitable causes would benefit from the corporate philanthropy planned by the LNG companies, he said. As the FERC review continues, Campirano said he expects the regulatory process to sort out and deal with any legitimate concerns. “We are supportive of these projects provided that they adhere to all of the regulatory requirements for the safe construction and operation of these facilities and if they cannot, they should not be granted a permit,” he said.
