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The Senate Interim Committee on Natural Resources The Senate Interim Committee on Natural Resources Interim Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion November 2000 Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion TABLE OF CONTENTS ACRONYMS ................................................... 4 INTRODUCTION .............................................. 5 INTERIM CHARGE .............................................. 5 BACKGROUND ................................................. 7 History of Texas Ports and Their Role in Commerce .................. 7 Brief Overview of Ports in the Lone Star State ...................... 9 History of Ocean Shipping in Texas ............................. 12 Gulf Intracoastal Waterway .............................. 16 Role of the Federal Government ............................... 19 Comparison of Other Ports Nationwide .......................... 22 Senate Bill 1665: Port of Houston’s Acquisition of the Port of Galveston .. 23 ECONOMIC IMPACT ............................................ 24 Economic Impact of Texas Ports ............................... 25 Economic Impact of Ports Along the Gulf Intracoastal Waterway ... 26 Economic Impact of U.S. Ports ................................ 26 Economic Importance of Waterways ............................ 27 GROWTH AND REGIONALIZATION TRENDS .......................... 27 Megaships and Megaports: An Emerging Trend in Shipping ........... 28 Transitioning to Megaships .............................. 34 Center for Ports & Waterways ................................ 37 Port Authority Advisory Committee ........................ 39 Maritime Intermodal Impediments Research Project ............ 39 Port Infrastructure .........................................40 Environmental Aspects of Port Operations ........................ 42 Air Quality .......................................... 42 Dredging ........................................... 44 Contaminated Sediments ............................... 45 Wetlands ........................................... 46 Erosion ............................................ 47 DESIGN BUILD AUTHORITY ...................................... 48 TESTIMONY RECEIVED BY THE INTERIM COMMITTEE .................. 50 CONCLUSIONS/RECOMMENDATIONS .............................. 50 Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion “For“For whomsoeverwhomsoever commandscommands thethe seasea commandscommands thethe trade;trade; WhomsoeverWhomsoever comman ds the commands the tradetrade ofof thethe worldworld commandscommands thethe richesriches ofof thethe world,world, and consequently the world itself.” and consequently the world itself.” Sir Walter RaleighRaleighSir The Invention of Ships (early 1600's)1600's)The Photo courtesy of Maritime Images. www.maritime-images.com/defaultbackup.htm Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion ACRONYMS APEC Asia Pacific Economic Cooperation CERCLA Comprehensive Environmental Response, Cleanup, and Liability Act CPW Center for Ports and Waterways EPA Environmental Protection Agency HGB Houston-Galveston-Brazoria GATT General Agreements on Tariffs and Trade GIWW Gulf Intracoastal Waterway IDP Intermodal Development Program IGR Senate Intergovernmental Committee NAFTA North American Free Trade Agreement NOAA National Oceanic and Atmospheric Administration NRC National Research Council PAAC Port Authority Advisory Committee PCB Polychlorinated Biphenyls PHA Port of Houston Authority POG Port of Galveston SIP State Implementation Plan TAMU Texas A&M University TEA Transportation Economic Assistance TEEX Texas Engineering Extension Service TEU Twenty-foot Equivalent Unit TNRCC Texas Natural Resource Conservation Commission TPWD Texas Parks and Wildlife Department TTI Texas Transportation Institute USACE United States Army Corps of Engineers UT-B The University of Texas at Brownsville WTO World Trade Organization Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion INTRODUCTION The story of Texas’ ports is one of business and commerce. Over the past few decades, state leadership has responded to public concerns through actions such as direction to state agencies to focus on port issues, consideration of regionalization, and the future growth of ports, initiation of more public involvement in developing responses to port issues, statewide water planning initiatives, and proactive efforts to ensure high quality air and water. Long-term planning and careful development in Texas have given rise to some of the most accessible ports in North America. Recent innovations in state law and regulation regarding the regionalization of Texas ports have set the pace for future economic development. INTERIM CHARGE The Senate Committee on Natural Resources (“the Committee”) was charged by Lieutenant Governor Rick Perry to examine issues related to port expansion and growth, including the implementation of SB 1665, 76th Legislature, Regular Session, relating to the authority of certain navigation districts to acquire land, equipment, or improvements and issue bonds. The Committee was further directed to study the potential economic impact of losing cargo to other states due to inadequate port infrastructure, as well as to examine the statutory and constitutional powers granted to those political subdivisions with jurisdiction over ports and which are organized pursuant to Article 16, Section 59 of the Texas Constitution, and to determine how regional port cooperation might assist in easing congestion at current ports and cargo exchange terminals. Finally, the Committee was charged to measure the success of other state, national, or international efforts to regionalize port planning and expansion. 6 Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion BACKGROUND History of Texas Ports and Their Role in Commerce To understand the role that Texas' ports play in Twenty percent of the total shipping and navigation, some history needs to tonnage of goods flowing be provided. Historically, economic through all U.S. ports moves through Texas ports. In a nation development has been based on commerce, of 50 states, one-fifth of the flow of trade moving goods and people waterborne commerce moves through one state. from city to city, region to region, or country to country. Traditionally, that trade began in seaports and the great cities of the world. The coasts and inlets where that trade docked and stopped became the great port cities of the world we know and talk about.1 Twenty percent of the total tonnage of goods flowing through all U.S. ports moves through Texas ports. In a nation of 50 states, one-fifth of the waterborne commerce moves through one state.2 A record of U.S. waterborne traffic by state shows Texas to be 2nd only to Louisiana in tonnage over the past two years, both carrying significanlty more tonnage than any other state.3 The chart of state rankings can be found in Appendix A. 1 Jurey, Wes. Texas Transportation Comm. Mtg., Austin, Texas. March 25, 1999. 2 Pat Younger, Government Relations Manager, Port of Houston Authority during her presentation at the Ports and Waterways Conference, Brownsville, Texas. August 1999. 3 U.S. Waterborne Traffic by State in 1998. U.S. Army Corps of Engineers Navigation Data Center. www.wrsc.usace.army.mil/ndc/fcstate.htm 7 Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion 8 Senate Interim Committee on Natural Resources Report to the 77th Legislature The Economic Impact of Port Regionalization and Expansion Brief Overview of Ports in the Lone Star State4 In Texas there are 11 deep-draft ports, each of which is directly accessible to the Gulf of Mexico, and there are 18 shallow-draft ports or port districts.5 Texas has a great number of major ports which are operated by independent administrative authorities. Following is a list of the ports and their governing bodies: • Port of Beaumont Navigation District—Governed by a five-member board of commissioners that is elected for two-year terms; residents and qualified voters are eligible for election; the president, vice president and secretary/treasurer are elected and compensated in the following manner: all commissioners are paid travel expenses while the president is paid $150 per month and other commissioners $125 per month. • Brazos River Harbor Navigation District (Port of Freeport)—Six-member board of commissioners who are all elected for six-year terms and provided $200 per month as compensation. • Brownsville Navigation District—Three-member board of commissioners who are elected for two-year terms; no compensation. • Calhoun County Navigation District—Six- Map Courtesy of the Texas Ports Association member board of commissioners who are elected and provided $75 per meeting as compensation. • Port of Corpus Christi Authority— Five-member board of commissioners who are appointed to six-year terms; no compensation. 4 CanagaRetna, Sujit M., Southern Legislative Conference “The Future of Southern Ports: Megaships and Megachanges on the Horizon”, October 1999. 5 Younger, Pat. During testimony given to the Agenda Meeting of the Texas Department
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