BROWNSVILLE, RGV – Brownsville Navigation District held its State of the Port address on Wednesday evening and its leaders discussed in depth a range of major projects.
Topics included SpaceX, Keppel AmFELs ship building work, Liquefied Natural Gas export terminals, Big River Steel, grain exports, new oil docks, and deepening of the port’s ship channel.
Eduardo Campirano, CEO and port director for the Port of Brownsville, kicked things off, while the main remarks were given by the chairman of the Brownsville Navigation District, John Reed.
Here are the prepared remarks:
In 2018, the Port of Brownsville made significant strides in further securing its place as the region’s economic engine. To remind you where we stand, let me begin by stating that we are now updating our most recent economic impacts study, last completed in 2015.
In 2016, Martin Associates, led by John Martin, the nation’s leading maritime economist, found that the Port of Brownsville is responsible for creating 7,965 jobs directly, indirectly and by inducement, all generated by cargo and vessel activity associated with the actives of the port; and that the port supports $3 billion of economic activity within the state.
The port and its users generate $122 million in state and local tax revenue created by maritime activities at the port, and by related users of the cargo moving through our marine terminals.
I remind you, that these numbers were collected in 2015. A lot has changed since then, and as you will soon learn, the potential impacts are expected to grow dramatically.
Delivering the message is Brownsville Navigation Chairman John Reed. Chairman Reed’s combined experience in banking, civic involvements and business has prove effective since he was elected to the Board of Commissioners in May 2008.
Chairman Reed has been instrumental in marketing the Port of Brownsville effectively and insuring that it has the proper infrastructure in place to provide a pro-business environment for port stakeholders and the community, as well as for new businesses considering relocation or expansion in the area overall. Chairman Reed has been politically and socially active in this area for many years, serving on numerous committees and boards of trustees, including the Brownsville & Rio Grande International Railroad, Southmost Regional Water authority, Brownsville Chamber of Commerce, Valley Regional Medical Center, Brownsville Boys & Girls Club, an the Dean Porter Park Renovation Committee, to name a few. Chairman Reed lives in Rancho Viejo. Please join me in welcoming BND Chairman John Reed.
Good evening and welcome everyone.
Thank you, Eddie for the kind introduction. And thank all of you here this evening foe your interest in the port, and for your continued support of the Port of Brownsville. We really can’t do it without you.
Tonight, we’re mixing things up a little, with the hope that what you hear may open your eyes, open your hearts and open your minds to the opportunities and challenges of what lies just beyond the horizon.
For the past several years at this annual event, we’r even discussing with you our performance metrics, highlighting some important accomplishments, and talking about the really big projects that we’ve been ushering forward.
We’re closer that ever in reaching those milestone achievements, with important announcements maybe only a month or two away. As evidence, on March 6, the Brownsville Navigation District Commission approved a long-term lease with Next Decade, parent company of Rio Grande LNG. And there are other projects of major significance in the works, too.
But for the purpose of helping frame how we got here, lest’s start with our performance in 2018.
Record tonnage and operating revenues
I’m pleased to announce tonight, that for the second year – and three out of the last four years – the port has again set new tonnage and total operating revenue records.
In 2018, the port moved a record 11.3 million short tons of cargo, up from the previous record of 10.6 million short tons set just a year ago. And while I’m extremely proud of this, we’re working harder than ever to continue this trend.
In 2017, I was excited to report that we nearly topped the $24 million revenue mark, missing it by a mere $337,368.
According to preliminary unaudited numbers, 2018 total operating revenue hit an impressive new record of $24,226,454, busting through the 24-million-dollar ceiling for the first time ever.
I should point out, that the previous record of $23.6 million included a one-time payment from Valley Crossing Pipeline of one-million dollars. So, considering the impact of that extraordinary income anomaly of one-million dollars, the new record of $24.2 million is that much more impressive.
Congratulations to our partners, customers and port users who all contributed to these new high-water marks.
Just look around this room. The businesses and people representing them here tonight set these records: Steel was up; almost all petroleum categories were up; dry build carries like cement and sugar were way up.
Rail car movements were up, from 36,709 and 46,043.
Truck counts are dramatically on the rise.
And our port’s foreign trade zone set another record, accounting for exported cargo valued at $3.6 billion and ranking second in national for the third year in a row – out of 293 FTZs in the nation.
Something good is happening at the Port of Brownsville. And that’s impacting what’s happening in Brownsville, and throughout the Rio Grande Valley. Right now, nearly 8,000 local people have jobs because of the direct and indirect impacts of the port, and everyday nearly a thousand more pick up or deliver truckloads of goods not reflected in that total. And that employment base has a significant impact on the region’s economy, driving growth in multiple sectors.
Just driving around town – the impacts of new growth is clearly evident. Housing starts are up; retail is growing, and tourism is showing improvements.
Roads are being built – including our own South Port Connector Road from Ostos Road to State Highway 4. And that puts us that much closer to SpaceX.
The port experts to play an important role in the operation of SpaceX, similar in scope to what’s happening at Port Canaveral in Florida. Whether that’s in mission vehicle recovery operations, or shipping and receiving critical components, the port will be involved.
Liquefied Natural Gas
I think everyone in this room knows that for several years, multiple liquefied natural gas export operations have been eying the Port of Brownsville. And our position on this matter has been consistent from the start: We believe that the regulatory requirements associated with granting state and federal permits must ensure that each LNG facility demonstrates the ability to address the safe construction and operation of the plants; that they meet all of the requirements necessary to protect the community and workers; meet all the requirements necessary to satisfy all water and air quality standards, and assure safe shipping operations.
To be clear, we do not issue the permits. But if the issuing agencies are satisfied that their high standards are met, then why wouldn’t they issue the permits?
Now, these projects are in the homestretch of receiving their Federal Energy Regulatory Commission permits. And, if they achieve success – and we are confident they will – we are looking at a combined investment representing $38.75 billion. That’s not our number. That’s from the respected business publication Industrial Info Resources.
Assuming all three LNGs are constructed to complete design capacity, construction activity will peak at more than 7,400 jobs for a period of seven to ten years. Nearly 500 permanent jobs will result from the projects, further boosting the direct job creation impacts of the port.
Big River Steel
And there’s been a lot of talk about a steel mill locating at the Port of Brownsville. Last May, Big River Steel exercised an option on 500 acres of channel side land to construct a modern, $1.6 billion LEED Certified electric arc steel mill. Earlier this year, Big River Steel exercised an option to extend its land lease option for another year, exhibiting further evidence of its interest in the Port of Brownsville.
If Big River builds the mill, it expects to employ 1,200 construction workers for almost two-full years and create 400 new high-tech full-time jobs, paying an average wage of $75,000 annually. That’s an annual economic shot in the arm to the local economy of $30,000.000 in just wages.
Keppel AmFELS is on the rebound. Not only is it pioneering ship building at the Port of Brownsville, it’s introducing an entirely new industry to the Lone Star State. The Port of Brownsville is the only place in Texas where deep-draft ships are being built.
And, Keppel’s rig construction and repair businesses are showing signs of life. Keppel recently announced that it is expecting to need 4,000 employees in the near future. And 700 of those are just for shipbuilding. And remember, Keppel is the largest industrial employer in the region! It’s reassuring to see Keppel’s employee parking lot getting more crowded by the day as I drive past.
And, the port is investing in its own future. We expect the new $28 million Oil Dock 6 to be complete and in service by the end of the second quarter, following closely behind the completion of the modernized and enhanced features of Oil Dock 3 just a few months ago.
Additionally, we have entered into an agreement with West Plains, the operator of our grain elevator, to completely rehabilitate the Bulk Cargo Dock, with the port spending about $4.5 million in the process. Construction is expected to be finished and the dock operational by June. That opens the dock for grain exports this year for the first time in nearly a decade.
The port’s $350 million channel deepening project is expected to receive its U.S. Army Corps of Engineers’ permits by year’s end, putting us that much closer to reaching a channel depth of 52-feet.
Now, we’ve been at this a long time.
To recap the project:
- The project feasibility study started in 2007.
- The U.S. Army Corps of Engineers Value Engineering Study was completed in 2011.
- In 2014, the Corps of Engineers completed the feasibility study and authorized the project.
- And in 2016, the U.S. Congress made the project eligible to receive federal funding.
We expect the project to be paid for within a combination of public-private partnership dollars, port funds and federal funds.
When complete, the deep channel will make us among the deepest ports on the Gulf of Mexico, enhancing our competitiveness by closely matching the design features of the expanded Panama Canal.
And, last August, we moved into our fully renovated and expanded administrative office complex. The $7 million investment gives us a proper home for years to come. All of these projects are happening at your port – the Port of Brownsville. And still, there are these large projects – and others yet to be announced – that will have far-reaching impacts on not just the port but our community and our region.
The port of Brownsville was dedicated on May 16, 1936. According to historical news accounts, there was a lot of excitement about the port back then. I can only impact what that must have been like.
Today, we are on the verge of transformational change for the port, the community and the region. Our time is here.