Dec. 03–U.S. crude oil production is at historic highs, and more of the black gold is finding its way to tankers along the Texas Gulf Coast and into the global market.
At the beginning of 2018, Sean Strawbridge, 52, became CEO of the Port of Corpus Christi, one of the hot spots of U.S. oil exports. He’s emerged as a leading proponent for investing in new crude oil docks and loading infrastructure to allow for higher volumes of U.S. oil to flow to destinations across the world.
U.S. oil exports have averaged 1.8 million barrels a day through August.
Under Strawbridge’s leadership, the port is building its own crude oil export terminal on Harbor Island on land owned by the port two miles inland from the Gulf of Mexico. The project, which could cost about $1 billion, would allow for very large crude carriers, or VLCCs — among the largest oil tankers in the world — to dock and load their holds before sailing to far-flung markets.
The port and the U.S. Army Corps of Engineers are also widening and deepening the shipping channel, a $360-million project that has been decades in the making. The work will provide for two-way tanker traffic in the Corpus Christi Ship Channel and allow larger ships to access the port.
Quick facts about Port of Corpus Christi CEO Sean Strawbridge
The San Antonio Express-News sat down with Strawbridge when he visited San Antonio in September. Here is an edited transcript of the interview:
Q: What has changed since the first crude oil export left the Port of Corpus Christi in Dec. 2015?
A: The level of activity in the industry and in Texas has grown significantly. What we have to do is make sure that we’re elevating our game, that we’re being more responsive in a shorter period of time, and … there’s a lot of chatter out there. There’s a lot of people that come and knock on my door, and claim they’ve got the next best mouse trap. We have to really take a good, hard look at who do we want to do business with. How do we want to do business with them? We don’t want to put ourselves fully at risk. As a government agency, these are public funds. We want to make sure those funds are stable, that our bondholders … can feel confident about our revenue growth and our revenue trajectory.
Q: There’s a race right now along the Texas Gulf Coast to build the first oil export terminal that can handle very large crude carriers, or VLCCs. Who do you think is going to win?
A: The market appears to be frothy, as I’ll call it, with a lot of these announcements. And I’m sure for the investor community, it’s difficult to separate the wheat from the chaff.
We (the Port of Corpus Christi) have the good fortune of being very close to the continental shelf. Deep water is just a couple of miles from the entrance to the ship channel. And so for us to be able to go deeper and bring that deep water to the safe harbor, to the terminals, is much more economically feasible and realistic.
Q: You’ve raised concerns with Swiss commodity trader Trafigura’s plans to build an offshore crude oil loading terminal near Corpus Christi. Why?
A: The great state of Texas has invested billions of dollars in its coastal infrastructure — in its ports, its harbors, its navigable channels. It’s got 18 port authorities and six deep-draft ports. It’s got a huge inter-coastal infrastructure. All of that has been done under the collaborative construct of state agencies and the local port authorities and local municipalities. What Trafigura is proposing is a circumvention of that conventional construct, which from our standpoint is very concerning. They have dusted off an obscure, arcane federal statute that was enacted at another time, back in the early ’70s for another purpose.
What it does is it essentially puts all the oversight with the federal government. The reason why they (want to build) out in federal waters is not to get to deep water, because we’re close to the shelf here. We can get deep water in state waters. It’s to try and fast-track their permitting process using the statute that they believe is a loophole.
With their track record in environmental violations globally, we just think that we’ve got a better idea, and we’re hopeful that Trafigura recognizes that and decides that they’re not going to continue to pursue that. If they don’t come to that decision on their own, I’m sure that Governor (Greg) Abbott will recognize those risks, and he wouldn’t want to put the citizens of the great state of Texas … he wouldn’t want to risk their livelihood. We learn that from the Deepwater Horizon (disaster). We don’t want a repeat of that if we don’t have to.
Q: The port has been working on a lot of projects — an ethane steam cracker joint venture between Exxon Mobil and SABIC, Cheniere Energy’s liquid natural gas export facility, your own proposed crude oil export terminal on Harbor Island. What does all this development mean for the port?
A: You know, I like to say to the industry that, “Come to the Port Corpus Christi ’cause we are open for business.” I am trying to, and I think my staff is doing a good job of really making us a shining example of government that works, at a time when we so rarely have an opportunity to say that.
Q: There has been resistance to some of these projects. Citizens in Portland have protested against the Exxon Mobil and SABIC joint venture while residents in Port Aransas have voiced their own concerns over the plans for Harbor Island. What’s your reaction to the people who are concerned about these developments?
A: There’s always going to be people who have concerns. So the important thing, as a Port Authority and a public agency, is transparency. At the end of the day, what we’ve got to do is make sure that there’s no ambiguity about what our intentions are, about how we want to go about our developments, and how our customers are going to go about their operations. And we also have to keep an open mind. Minds are like parachutes, right? They work better when they’re open.
So when there are voices of concern, that’s different than voices of opposition. Voices of concern are people who really want to better understand before they can form an opinion. They want more facts. They want more information. Voices of opposition have already taken a position without knowing all the facts. There’s always going to be voices of opposition in any development, particularly developments that are going to have to do with fossil fuels.
We’re not going to change that constituency’s core values. In fact, that’s not what we’re trying to do is change anybody’s core values. We’re trying to align our values and our commitment to doing things in a responsible, sustainable way with what the community wants. The commerce and environmental sustainability and stewardship — those are not mutually exclusive disciplines.
We’ve got to constantly earn the trust of the local and regional communities, and the best way to do that is give them a seat at the table, listen to what their concerns are, answer all the questions that we can possibly answer. If we don’t have the information at that time, we certainly have a commitment to going and getting that information to them. But we have to recognize, again, there’s going to be voices of opposition and voices of concern.
Q: What if concerned residents hear all the information and then become opponents?
A: With a certain constituency, they’re not going to agree with everything that the port is doing. All we can do is continue to make that commitment for making sure that quality of life, and that ecosystem, is protected as well as continuing to drive economic prosperity.
Look, at the end of the day, without economic prosperity, nothing else happens. Somebody’s got to pay for it. Here is a great opportunity for us to generate more revenues that we can then plow into more educational programs, more environmental restoration programs, more shoreline (barricade-building) programs, more social programs. There’s a lot of things. Private industry isn’t going to do that to the level that a port authority is, and that’s really why you want the port involved.
Rye Druzin is a San Antonio-based staff writer covering Texas energy. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. — email@example.com — Twitter: @druz_journo
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