(The Center Square)
U.S. Sen.r Ted Cruz, R-Texas, is demanding answers from the Department of Transportation’s Maritime Administration (MARAD) about extensive delays in approving applications for deepwater ports for exporting oil and natural gas.
MARAD has failed to meet its statutory deadlines to make decisions, which impacts Texas the most, Cruz said. Four of the seven applications for licenses are for projects off the Texas coast.
MARAD has until Monday, Feb. 27, to provide Cruz with a planned timeline for issuing all pending deepwater port licenses, according to a letter he sent to Rear Admiral Ann Phillips Administrator, Maritime Administration U.S. Department of Transportation. He also requested quarterly updates be provided to his staff about the progress of any pending license or license application.
According to the Deepwater Port Act of 1974, applicants are required to obtain licenses from MARAD to own, construct, operate and decommission deepwater port structures for the import and export of oil and natural gas. Congress established mandatory timelines of 240 days to conclude public hearings and 356 days to reach a decision on a deepwater port applications.
However, on average, the agency’s taken three years without issuing a deepwater port licensing decision. According to MARAD, delayed applications go as far back as May 2019.
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To “skirt the 356-day timeline” created by Congress, Cruz argues, “MARAD has asked applicants for additional information, often paused the clock, and has not resumed it in many situations. The result has been that the average project approval time has ballooned to approximately 1,000 days, which is close to triple the mandatory time limit.”
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“While these projects are complex and require the review and input of the public and other state and federal agencies, applicants have complained of prolonged delays associated with the Maritime Administration’s slow processing time and general lack of communication during the process,” he wrote. He also expressed concerns that deepwater port projects “are being delayed unnecessarily.”
The delayed projects in Texas “will create or support thousands of jobs and generate billions of dollars in economic benefits,” he added. “Once operational, these deepwater ports will increase our energy export capabilities, helping to establish greater energy security for our allies who are suffering from Russia’s weaponization of its energy reserves. These ports will also support the environment by displacing less efficient export modes and foreign-produced sources of energy with higher levels of emissions and pollution.”
Part of the delays relate to MARAD requiring applicants to complete an “Environmental Justice engagement plan.” Texas Attorney General Ken Paxton and multiple attorneys general, state associations and organizations are fighting a similar agenda promulgated by an EPA “environmental justice” rule they argue jeopardizes American energy and national security.
“The uncertainty over whether and when MARAD will approve these plans (or move the goalposts) makes planning and investment difficult for applicants, thus reducing job growth, and hurting allies seeking to import U.S. energy,” Cruz said.
Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO), told The Center Square, “Impeding the development of oil and natural gas infrastructure projects creates uncertainty in the market and hesitation from investors. These projects are necessary to address growing energy demand here and abroad, and this red tape only further constrains a tight oil and gas market, driving higher energy prices and ultimately hurting everyday Americans.”
He also pointed out that “advancing new energy infrastructure projects, including pipelines, deepwater ports and LNG export facilities, is critical” at a time when “exports are also expected to reach records highs. As this trend continues, the United States will need more deepwater ports.”
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In its most recent Short Term Energy Outlook, the U.S. Energy Information Agency forecast that U.S. natural gas pipeline exports will reach record highs between 9.0 Bcf/d and 10.0 Bcf/d in the 2022-2023 winter season, largely driven by record production in the Permian Basin in west Texas and southeast New Mexico.
In 2022, Texas was the top oil producer in America, supplying 1.83 billion barrels of oil to energy markets. The state broke a new record in natural gas output with over 11.2 trillion cubic feet (Tcf) of gas produced. It did so as it broke records with reduced methane emissions intensity in the Permian Basin by over 76% as it increased production by 345%, according to a recent report.
In the first half of 2022, the U.S. became the world’s largest liquid natural gas exporter, led by Texas, according to EIA data.
Syndicated with permission from The Center Square.
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