Wed, May 29 2024 29 May, 2024

Biden oks new oil terminal days after COP27 appearance

A new oil export terminal in Texas given the go-ahead by President Biden could significantly expand U.S. oil export capacity.

A Louisiana Offshore Oil Port Services Marine Terminal Facility (Photo credit: Benjamin Applebaum/DHS)

The Biden administration recently approved a massive oil export terminal on the Texas coast, potentially adding as much as 2 million barrels per day of oil export capacity despite pledges to prioritize climate action.

In mid-November, President Biden traveled to Egypt to attend the international climate negotiations, where he proclaimed that the United States is “meeting the climate crisis with urgency and with determination to ensure a cleaner, safer, and healthier planet for all of us.” He cited landmark investments in clean energy and climate adaptation recently passed into law. “The United States is acting. Everyone has to act. That’s the duty and responsibility of global leadership,” he said at COP27 in Sharm El Sheikh to friendly applause.

But just a few days later, his Maritime Administration (part of the Department of Transportation) approved the Sea Port Oil Terminal (SPOT), a major crude oil export facility proposed by Houston-based Enterprise Products Partners that is to be constructed near Freeport, Texas.

The project would bring Permian basin crude oil to a storage facility near the coast. From there, two more pipelines would be constructed to take the oil to a fixed platform 30 miles off the coast of Freeport in the Gulf of Mexico, where enormous oil tankers would load up that crude for export. If built, the project would significantly increase the volumes of oil going overseas, adding as much as 2 million barrels per day (mb/d) of export capacity. By way of comparison, the U.S. has averaged 3.4 mb/d of oil exports so far this year.

Not only would that result in more climate pollution when the oil is burned abroad, but the new terminal would also require new pipelines and could unleash even more drilling upstream in the Permian basin, exacerbating the methane crisis in West Texas.

“Currently, we are not set to be on target to meet the goal of the Paris agreement, which is 1.5 degrees Celsius,” Lauren Parker, a staff attorney with the Center for Biological Diversity, told Gas Outlook. “For the Secretary of Transportation, for the president, for the entire Administration to continue to approve these projects is directly contrary to the national interest.”

The federal government’s assessment was that the project would have “very little effect” on emissions because “the majority of these emissions likely already occur as part of the U.S. crude oil supply chain.”

But other experts see it differently. An analysis prepared by the California-based environmental consultant Petra Pless found numerous problems with the government’s calculations, including outdated assumptions on methane leaks. The Biden administration also only looked narrowly at emissions from the facility itself, not from the impacts upstream when more oil is extracted, or from the emissions when more oil floods onto the global market and is burned elsewhere.

A more comprehensive look at the full climate impact yields a range of 367 to 396 million tons of CO2 per year, or roughly equivalent to the yearly greenhouse gas emissions of all of the major stationary sources of air pollution in Texas in 2018, according to Pless.

The Center for Biological Diversity and 289 other organizations filed a legal petition in early November, calling on the Biden administration to reject SPOT and a half dozen other deepwater ports slated for the Gulf Coast that would ship oil and gas abroad. The petition criticized government agencies for “turning a blind eye to the climate impacts” of the large export terminal.

But on November 21, the Maritime Administration approved the project.

The Biden administration has supported the rush to build new oil and gas export projects on the Gulf Coast in light of the war in Ukraine. But projects like SPOT will take years to build, making them all but irrelevant to today’s energy disruptions, Parker said.

“By the time this terminal gets online, it’s not going to meet whatever need domestically or internationally that this project is purported to do,” Parker said. “All it does is lock us into carbon investment and more fossil fuels, which means that we can’t transition.”

More pollution on the Texas coast

The SPOT project will be constructed on a part of the Texas coast already inundated with polluting industries. Brazoria County, which includes Freeport and the location of SPOT, is home to oil refineries, plastic manufacturing plants, and liquid natural gas facilities. Most notably, this stretch of coast also hosts Freeport LNG, a facility that suffered a major explosion in June that sent a 450-feet-high fireball into the air and has sidelined a sizable portion of U.S. gas export capacity for months.

Within one mile of SPOT’s proposed onshore infrastructure, much of the population is minority and low-income, raising environmental justice concerns.

“SPOT is going to be in an area that is already in ‘non-attainment’ by the [U.S. Environmental Protection Agency], which means that air quality does not meet their standards,” Parker said. “To place another project there — it’s saying that climate justice doesn’t matter, that environmental justice does not matter, that black and brown people do not matter.”

As part of the oil export project, SPOT plans to construct pipelines that would cut through the town of Surfside Beach, a small residential coastal town with picturesque beaches. The plan is for the pipeline to pass beneath the beach and out to sea.

“I’m probably about a mile or less from where it’s going to pass through,” Sue Page, a retired resident of Surfside, told Gas Outlook. She’s worried about the additional pollution that will come to the area and how it might disturb her town. While the broader Freeport area has a lot of heavy industry, Surfside is a residential oasis along the coast, with charming houses and vacation rental properties.

“When you are driving, there’s almost like this whole city of lights when you’re coming at night,” Page said, referring to the concentration of polluting industries nearby that light up the sky. “You get onto the bridge and you look over to Surfside, and it’s just a very different feel as far as the peaceful aspect.” But new pipelines and an offshore terminal threaten that tranquility, she said.

Page has organized neighbours to oppose SPOT, and they have written letters and pressured local politicians to speak out against it. But she feels that their voices were not heard. “I did check with public officials. I can’t get really anywhere with them,” she said.

Completion of the project is not a done deal. While the Biden administration approved the application, the project still needs to obtain other permits. The timeline remains unclear and depends on how fast SPOT wants to move forward.

The one thing working in favour of project opponents is the fact that market conditions have somewhat soured since the project was originally proposed. Several years ago, the U.S. shale industry was expanding rapidly, and the gusher of oil led developers to propose export projects to ship product abroad. But that has changed. Since the downturn from the pandemic, which capped off a decade of financial losses from oil producers, major investors have pressured the oil industry to slow down on drilling.

SPOT has estimated that the U.S. will be exporting 8 million barrels per day by 2025, a figure that now looks overly optimistic. As the Houston Chronicle noted, Enterprise CEO Jim Teague said earlier this year that how high of a priority the project is “depends on the environment at the time we get” the license, “and what kind of customer base we can get.”

As it stands, U.S. shale drilling has slowed and the best acreage has been drilled. The drilling boom is over, so it’s not clear that a bunch of new oil terminals are really needed.

But local residents were not happy that the Biden administration continues to sign off on big sources of new pollution.

“Freeport has been a dumping ground for these oil & gas plants for decades. DOW Chemical, Freeport LNG, and other fossil fuel and petrochemical companies have already had toxic emission releases night and day. There has never been any recourse,” Gwen Jones, a resident of Freeport, said in a statement after the Maritime Administration approved the project.

“Why does this keep happening? Because we are poor minorities,” Jones said. “The company claims that SPOT will be good, but in reality, it’s a death sentence for my community.”