Congressman Conaway Urges Corps of Engineers' Action on Deepening Port of Corpus Christi

SAN ANGELO, TX — In December 2015, the U.S. Congress passed a law that President Obama signed to allow oil and gas producers to export their commodity. Congressman Mike Conaway reflected on the ramifications of that at the West Texas Legislative Summit Aug. 2 in San Angelo.

“It really was a game changer,” he said. “Without the ability to export, all of this extra shale production in the Permian Basin would have no where to go. And, pre-export ban, there was a large differential between the price of West Texas Intermediate and Brent crude. That has shrunk now.”

Pointing to the amount of Texas crude oil being shipped out of the Port of Corpus Christi—several million barrels per day—Conaway called for dredging the channel there to 54 feet in order to accommodate Very Large Crude Carriers, or VLCCs, “to load larger amounts of crude to sell into the international markets.” A VLCC's capacity is around 320,000 deadweight metric tons, or DWT. Currently, the Port of Corpus Christi is designed to handle 160,000 DWT tankers. Increasing capacity of the ships lowers the cost per barrel for transporting Texas oil, making it more profitable to all involved in the supply chain. 

Conaway noted that oil and gas exports from Texas have reshaped the geopolitical landscape. “Russian no longer has a stranglehold on Europe as its sole source of oil and natural gas as well.”

“That helps take [Russian President] Vladimir Putin’s boot off their necks quite a bit,” Conaway said.

The CEO of the Port of Corpus Christi Authority, Sean Strawbridge, told us this week that deepening his port has hit some speed bumps that he said are caused primarily by bureaucracy at the U.S. Army Corps of Engineers. (See Port for the Permian, Aug. 1, 2018).

Conaway said in some ways, Congress’s hands were tied when Congress eliminated the ability to add earmarks in legislation. Congress can no longer direct an executive branch agency to take a specific action through the budgeting process. “We don’t want to go back to [using] earmarks,” Conaway said. But there are other tactics Congress can use to speed the process of deepening the Port of Corpus Christi, Conaway said.

One of the general conversations ongoing with some in Congress is whether or not the Corps of Engineers should remain a part of the Department of Defense. He said the idea is to move the responsibilities of the Corps, which includes management of U.S. ports, into a civilian branch of government. Or, he said, Congress can move just the ports management away from the Corps of Engineers, assigning that process to a civilian agency, and leave the Corps with its other role, military base construction, in place. “They [the Corps] are not responsive to industry,” Conaway said.

Conaway said an alternative path for the Corps is for them to allow the local port authority in Corpus Christi take the lead for dredging its channels with Corps support or supervision. Currently the Corps has a larger project related to the recovery effort from damage done by Hurricane Harvey. It may make sense for the agency, already stressed from a lack of resources, to leverage efforts by the Port of Corpus Christi Authority to increase the port’s capacity that is needed now.

“This isn’t rocket science. This is just about getting projects done that happen all the time. Dredging channels is not new technology. It’s just about getting it done. I’m frustrated with the Corps of Engineers for not allowing the private sector to assume a greater role in getting this thing done,” Conaway said.

For Conaway’s district, that includes Midland and the Permian Basin, he said the more immediate challenge for oil and gas producers is pipeline capacity for transporting oil and gas to the Port of Corpus Christi and Houston. “It’s a matter of getting the oil down there,” he said.

Conaway said he wanted construction of the pipelines to remain in the private sector. But the Trump administration’s proposal for the Infrastructure Package was made with the vision of creating private-public partnerships. “The Port of Corpus Christi’s project certainly falls into that category,” Conaway said.