UPDATED: Rio Grande LNG project ‘becoming more and more concrete’

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BROWNSVILLE, RGV – Amid speculation that Rio Grande LNG has successfully cleared all hurdles posed by the Federal Energy Regulatory Commission, a spokesman says the group hopes to make some announcements soon.

Rio Grande LNG, part of NextDecade, wants to build an export terminal at the Port of Brownsville.

“We are continuing to make good progress with the development of our proposed facility at the Port of Brownsville,” said James Markham-Hill, manager of communications for Rio Grande LNG. “We are hoping to make some announcements in the near future.”

The Rio Grande Guardian caught up with Markham-Hill at an apprenticeship summit hosted by the Texas Workforce Commission, Workforce Solutions Cameron and Texas Southmost College, earlier this week. Asked how the FERC process was going, Markham-Hill said:

“Last May we filed our formal application with the Federal Energy Regulatory Commission. Since then, FERC has been going through our application, our resource reports and materials with a fine-tooth comb. As they have been doing that they have been asking us questions, seeking clarification and feedback. To date we have gone through that and responded to everything they have asked.”

Markham-Hill said regulatory process is “very important.” He said it includes environmental, safety and engineering reviews. “It has been going well. We are pleased with the progress. We see the potential for this project to be developed at the Port of Brownsville. It is becoming more and more concrete.”

Asked what the economic impact of an LNG export terminal would be at the Port of Brownsville, Markham-Hill said:

“From what I understand, the Rio Grande LNG project is the largest proposed private investment anywhere in Texas and one of the largest proposed private investments anywhere in North America. If the numbers do not make sense, that comparison ought to. For the full build of our facility, we are looking at potentially a $15 to $20 billion private investment in the Port of Brownsville.”

Asked about the anticipated payroll, Markham-Hill said: “For the construction phase we are looking at an average monthly workforce for five to seven years of 2,750 construction workers on average, over the course of that five- to seven-year period. Our peak workforce will be close to 5,000. So, this is a very, very, significant employment and represents a major opportunity for skilled workers in the Valley to find a job that pays well, has benefits, health, dental, vision, it is a great opportunity. That will last five to seven years. Then, beyond that, we are looking at a permanent workforce of between 150 and 300 full-time, permanent, direct employees.”

Markham-Hill pointed to a favorable economic impact study Rio Grande LNG commissioned from the Perryman Group.

“The Perryman Group completed the study some time ago. They found that our construction operation would create an additional 3,000 jobs, just in Cameron County. That is because of our plan to work with local people, to bring new investment into the region, to partner with subcontractors and suppliers in the area. That will stimulate the economy significantly. It is a very big opportunity,” Markham-Hill said.

Rio Grande LNG plans to work closely with the local workforce training board in order to maximize the number of local workers it hires, its spokesman said. “It is not unreasonable to assume the average wage will be in the region of $75,000. Not everyone is going to be making that but certainly there will be people making more than that. These are well-paying jobs, far from minimum wage, they come with full benefit packages. Very competitive,” Markham-Hill said.

In almost every interview with reporters, Markham-Hill is asked about the environmental impact an LNG export terminal will have on South Padre Island and eco-tourism in the lower Rio Grande Valley. On this occasion, Markham-Hill said:

“There is very little evidence to assume that it should impact things like tourism, recreational activities. One of the things we like about coming into the region is we get to appreciate the wonderful resources we have down here, including eco-tourism. A very high priority of ours is not only minimizing and reducing our environmental impact, but looking for ways to have significant environmental benefits through environmental projects that are ongoing in the region. So, as our project progresses, we will be talking about some projects we are looking to complete.”

Asked where the demand for liquefied natural gas will come from for a facility at the Port of Brownsville, Markham-Hill said:

“All over the world. We are in the process of speaking with a number of potential customers. The demand for LNG worldwide is tremendous and growing. We are looking at fast growth in Asia, in Europe, in the Middle East, there are just so many developing and emerging markets for LNG because they recognize the significant environmental benefits that using natural gas to replace their coal or oil fuel can have on their air pollution and things like that. So, there is tremendous demand.”

To illustrate his point, Markham-Hill cited these statistics: In 2000, there were 11 LNG importing countries around the world. By 2010 that number had doubled to 22.

“Today, I think we are at about 38 LNG importing countries around the world and that is continuing to grow. Developing and emerging markets like China, India and Pakistan, these are huge potential growth markets and then you go to Europe. They have access to resources but much of it is controlled by a single entity or a handful of entities. From a geopolitical standpoint or an energy security standpoint, people are looking to diversify and why not from their allies in the United States.”

Impact of a failed SpaceX launch

The Rio Grande Guardian asked Markham-Hill about a report that was commissioned by Rio Grande LNG following an October 2016 request from FERC to look at the potential impacts, if any, from failed launches at the planned SpaceX launch site on Boca Chica beach. The report was filed by Rio Grande LNG in its FERC docket on March 21, 2017.

Markham-Hill highlighted these excerpts:

PDF Page 4:

“The RG Developers contracted with ACTA, Inc. (“ACTA”) to complete the requested analysis of potential future space launch missions at the Space Exploration Technologies Corporation (“SpaceX”) Boca Chica, Texas commercial spaceport launch site (“Spaceport”). ACTA is a recognized subject matter expert in the evaluation of range safety hazards and risks from launch vehicle debris, blast and toxic gases, for the Department of Defense, the Federal Aviation Administration (“FAA”), National Aeronautics and Space Administration (“NASA”), and other international companies and agencies.”

“The results of the ACTA analysis conclude that the risk (including likelihood and consequence) of a potential launch failure leading to an impact to the Terminal boundary or BSC is insignificant.”

“1. Consequence distances for launch failures leading to toxic vapor dispersion, flammable vapor dispersion, radiant heats, and overpressure do not extend to the Terminal boundary and BSC. These hazards do not pose a risk to the RG LNG Project even in an adverse wind condition”

“2. The consequence distances for projectiles show the potential for debris with kinetic energy of 11 ft-lbs (foot–pound-force) or greater could impact the Terminal boundary and BSC. However:

a. A launch failure leading to the potential for debris impacts… also requires a launch attempted during adverse wind conditions.3

b. The occurrence of the adverse wind conditions at the Spaceport is a low probability event, with the Spaceport having a greater than 97% launch availability for favorable wind conditions.

c. During favorable wind conditions, there is a remote potential (less than 1 in 100,000,000 per launch) for debris of greater than, or equal to 11 ft-lbs impacting the Terminal boundary.”

“3. The probability of debris impacting the Terminal boundary and BSC (assuming a launch during adverse wind conditions) is less than FAA risk criteria detailed in 14 CFR 417.4”

Footnote 3: “These adverse wind conditions are likely to be excluded from the permitted launch conditions.”

PDF Page 5:

“Given the distance of the Terminal location and the BSC to the Spaceport, and the fact that the ACTA analysis illustrates a risk less than the FAA risk criteria and FERC likelihood criteria, there is no additional action required from the RG Developers in response to FERC’s siting concerns. As part of the Waterway Suitability Assessment (“WSA”) process, the RG Developers will continue to work with the United States Coast Guard (“USCG”) to define the appropriate safety and security measures for LNG vessels transiting the BSC and define the extent of open sea (Gulf of Mexico) exclusion area, downrange from the launch-pad for (general and LNG) shipping around the actual time of launch.”

PDF Page 8:

“Additionally, the probability of an individual event that would reach or extend into the Terminal boundary, cumulatively impacting the Terminal assets, or the BSC does not exceed the FAA criteria of 1 x 10-6 per launch (14 CFR 417).”

PDF Page 9:

“For a launch under an adverse wind condition, the probability of an individual event that would reach or extend into the LNG plant boundary will not exceed the FAA criteria of 1 X 10-6 per launch for the LNG Terminal boundary.”

“For a launch under an adverse wind condition, the probability of an individual event that would reach or extend into the BSC will not exceed the FAA criteria of 1 X 10-5 per launch for the BSC.”

“c. Based on the results of the ACTA analysis, which illustrates that the risk to the Terminal critical assets and BSC are lower than the FAA risk criteria (per launch basis), and the FERC likelihood criteria, the societal and individual risks are concluded to be insignificant and adequately controlled…”

Editor’s Note: The main image accompanying the above story shows an artist’s impression of an LNG export terminal at the Port of Brownsville. It was commissioned by Rio Grande LNG.