TxDOT Maritime Division Texas Ports: Essential to the Economy TXDOT AND THE MARITIME TRANSPORTATION SYSTEM FAST FACTS 1.8 MILLION jobs supported by the port industry ( 12.5% since 2015)1 TEXAS PORTS: 597.5 MILLION total tons of cargo moved ESSENTIAL TO makes Texas 1st in U.S. maritime commerce THE ECONOMY ( from 2nd place in 2018)2 Generating over $242 billion in annual overall trade, Texas ports play an essential role in driving $102 BILLION the Texas economy.3 In 2019, Texas became the personal income and local number one state in maritime commerce by tonnage, consumption supported overtaking Louisiana. Three of the top five ports in by the port industry the U.S. based upon tonnage were in Texas with Port ( 11% since 2015)1 Houston becoming the tonnage leader among U.S. ports for the first time.2 Even during the coronavirus pandemic, Texas ports stayed in business— $7.8 BILLION protecting jobs, bolstering the economy, and keeping state/local tax shelves stocked with food and medical supplies for revenue generated by consumers. Despite the effects of the pandemic and port industry in part due to the strong export market for oil and gas, ( 13% since 2015)1 Texas ports continue to thrive. Page 1 Texas Ports: Essential to the Economy TxDOT Maritime Division TxDOT Maritime Division Texas Ports: Essential to the Economy Ports Port of Port of Orange Deep Draft Channel Beaumont TEXAS MARITIME Shallow Draft Channel Cedar Bayou Navigation District Port of SYSTEM AND NEEDS Shallow Draft Recreational Channel Anahuac Highways Port Houston Port of The Texas maritime system includes 11 deep draft ports, eight shallow draft Port Arthur ports, two recreational shallow draft ports, and the 379-mile-long Texas arm of the Gulf Intracoastal Waterway (GIWW). Ports are a vital part of the national freight 0 30 60 network, helping farmers move their product to markets overseas, bringing raw Sabine Neches ! Miles Navigation District materials to Texas manufacturers and clothes, electronics, and other consumer ° Port of Texas City goods to all Texans. All of the Texas ports are interconnected by the GIWW, a shallow draft channel that links intrastate barge traffic with ocean-going vessels and handles both domestic and foreign trade. Port of Port Freeport Texas ports are critical to the economic growth of Texas and affect all Texans. Galveston The total economic value of the port and maritime cargo activity provided by the Port of GIWW Texas ports and GIWW was estimated at just under $450 billion in 2018.1 To better Bay City $56.8 million support Texas businesses, the maritime industry must continually improve port Calhoun average estimated annual Port Authority facilities, waterways, inland connectivity to the ports, and the GIWW via maritime maintenance costs improvement projects. Port project needs are outlined in the 2022-2023 Texas Port Mission Plan. Port of Victoria Port of Deep Draft Ports Palacios MARITIME PROJECT TYPES $323 million PROJECT TYPE DESCRIPTION Port of average project West Calhoun Port facility improvements inside the gates include berth backlog per port Port Facilities expansions, terminal developments, cargo laydown area expansions, and dock improvements. Shallow Draft Ports Projects are federally authorized construction projects for Ship Channels $19.7 million waterway deepening and widening. average project Aransas Co. Projects outside the gates improve interchanges and intersections, Navigation District backlog per port Inland Connectivity reduce congestion and improve mobility, enhance safety, improve rail and bridge crossings, and improve pedestrian access. Port of Corpus Christi Projects include maintenance dredging, identifying new dredged Authority Gulf Intracoastal material placement areas (DMPAs), and construction for navigation Waterway Gulf of improvements. Mexico Brazos River Floodgates & Colorado River Locks Other GIWW Needs 1. Maintenance Dredging 2. Dredged Material The Brazos River Floodgates & Colorado River Locks are outdated The Corps does not receive adequate Placement Areas structures that contribute to significant safety hazards and navigational delays funding to maintain the GIWW to its Dredged Material Placement Areas, or on the GIWW. Beginning in 2016, TxDOT partnered with the U.S. Army Corps of Port of authorized dimensions. Just one foot of DMPAs, are sites that are authorized to Port Mansfield Engineers to analyze various modifications to modernize these new facilities. The lost draft across the GIWW system increases contain dredged material after it is extracted improvements outlined in the study would reduce bottlenecks and allisions on costs for barge operators by $58.7 million from waterways. New DMPA acquisitions the GIWW that currently cause up to 12-hour-long delays. annually, a 14.8 percent increase in the will be needed over the next several years Port of cost of doing business.4 The average as existing DMPA capacity decreases. The This priority project was authorized by Congress in the Water Resources Harlingen annual cost to maintain the GIWW to cost to ensure that TxDOT can make timely Development Act of 2020. Before construction on the planned improvements its authorized depth is $56 million. In FY acquisitions of future DMPAs is estimated to can begin, the project must receive funding from Congress, which is typically 2020, the U.S. Army Corps dedicated $40.4 be $1.6 million per biennium. done via an Energy and Water Development Appropriations Act. The one-time million—nearly 40 percent less than what is construction cost is estimated at $409.7 million and will be borne entirely by the Barge approaching the Colorado River Locks Port of needed—to maintenance dredging. federal government. along the GIWW. Port Isabel Port of Page 2 Brow nsville Page 3 Re d Ri AR ve r E xp an si NM on R e d O a W k ink to LA Mi W dla eb R nd st ed to er E Ri AR Texas Ports: Essential to the Economy ch ve TxDOT Maritime Division TxDOT Maritime Division Texas Ports: Essential to the Economy o 3 r Ex pa E n P si NM IC on UNITED STATES VOLATILITY IN THE ENERGY MARKETS TEXAS R Percent Change in Energy e V d o k ya During 2019 and 2020, leading petroleum producers Saudi Arabia and Russia 5 a g O er Exports from Ports in Texas O a d ( increased exports to increase their world market shares. This increase in supply, k e ! W R Houston ink Beaumont combined with the coronavirus pandemic, caused a decrease in the world demand LNG Petroleum Crude Oil to LA Mi W 150% dla E eb for petroleum and resulted in an oversupplied market. The resulting drop in crude +138% nd P ste to IC r Ec oil prices below the cost of production significantly impacted Texas producers. As Midla ho cho 4 (! nd t o3 E Freeport a result, weekly exports at Texas ports declined by almost half from June 2019 to 100% Jupiter E ( PIC ( June 2020, when exports began to rebound. UNITED STATES 50% +44% +40% The trickle-down effects associated with the volatility in the energy markets +17% TEXAS ( 0% ! !!( Vo and subsequent loss of business impact port revenues over the long term. The 0% k yag LNG Terminals a G er -10% -3% Corpu Os d ( uncertain future for the energy market has had repercussions for future planned -19% ! Operational Cheristi ! R Houston -50% Beaumont pipelines, offshore crude terminals, and LNG export terminals in Texas. -46% ( Under Development E Crude Terminals P I G u l f ! MEXICO C Jan 2019-Dec 2019 (pre-pandemic) Operational Mid ho 4 (! o f Pipelines land to Ec Freeport G Suspended M e x i c o It was expected that 2019 and 2020 would be record years for crude pipeline and Jan 2020-July 2020 Jupiter ( ( Under Development ( buildout projects. With the global pandemic, only a quarter of the planned pipeline Jan 2019-July 2020 (overall) ((( Crude Pipelines Brownsville capacity miles were constructed in 2020, and most pipeline construction projects Operational have been deferred to 2021 or later. Without the construction of anticipated (! ( Under Construction ! ! pipelines, the receiving ports (namely, Houston, Corpus Christi, Beaumont, LNG Terminals G Deferred or On Hold Corpus Freeport) may be forced to defer expansion and capital improvement projects. Percent Change in Energy ! Operational Christi Delayed ( Under Development Export Prices from Ports Crude Terminals Deepwater Crude 5 MEXICO G u l f in Texas ! Operational o f Offshore oil terminals can load Very Large Crude Carriers, vessels with drafts too large G Suspended M e x i c o to dock in most Texas ports. Constructing deepwater crude terminals would improve LNG Petroleum Crude Oil ( economies of scale for exporting oil by allowing these largest crude-carrying vessels 20% Under Development +13% +12% ((( Crude Pipelines Brownsville to load. Several offshore terminals are planned for exporting oil from Texas, but their sponsors have delayed submitting permit applications because of lower prices and OpeMARITIMErational ADAPTS 0% market uncertainty. The viability of new offshore oil terminals also depends upon the Under Construction -6% Deferred or On Hold construction of additional pipelines to transport crude oil through Texas. The only -20% DelaTOyed NEW REALITIES operational offshore oil terminal in the U.S. was completed in 1981 for imports. -25% -27% -26% -32% -34% PORTS PLAY PIVOTAL ROLE DURING 2020 PANDEMIC LNG Export Terminals -40% -34% Liquefied natural gas (LNG) exports have increased rapidly in the U.S. since the Jan 2019-Dec 2019 (pre-pandemic) While they feature significantly in the state and national Although container vessel traffic was disrupted for several first shipment in 2016, and the two LNG terminals in Texas completed in 2018 economies under normal circumstances, Texas ports months and ports nationwide had challenges maintaining and 2019 now dominate U.S.