‘Largest’ oil export project in US waters greenlighted: Smooth sailing or more legal action on the horizon?

With court approval out of the way, the United States Maritime Administration (MARAD), an agency within the federal Department of Transportation, issued a deepwater port license for an oil export project, which is said to be the largest one in U.S. history. This $1.8 billion terminal off the coast of Brazoria County, Texas, does not seem to be out of the woods yet, as Earthjustice, a nonprofit environmental law organization, is determined to fight tooth and nail to stop the development of the project, thus, more legal battles may be in the offing.

After the Fifth Circuit Court of Appeals ruled in favor of the fossil fuel industry earlier this month, giving the green light to a giant oil export project in the United States, the U.S. Department of Transportation issued a license to the Sea Port Oil Terminal (SPOT) the following week, enabling the Houston-based Enterprise Products Partners to move through the regulatory morass to the next step in developing the offshore terminal capable of loading 2 million barrels per day (bpd) of crude oil for export to foreign markets.

A.J. ‘Jim’ Teague, Co-chief Executive Officer of Enterprise’s General Partner, said at the time the license was given: “I would like to congratulate the entire Enterprise team, which demonstrated outstanding technical skills, dedication and perseverance over the past five years, allowing us to receive this license. With U.S. exports of crude oil at 4 million bpd, SPOT offers a more environmentally friendly, safe, efficient and cost-effective way to deliver crude oil to global markets. The receipt of the license is the most significant milestone to date in the development and commercialization of SPOT.”

SPOT bringing employment, economic boost, and energy security

Following the submission of the original application for a deepwater port license in January 2019, MARAD and the U.S. Coast Guard led a four-year environmental review of the project. The reviews by more than a dozen federal governmental agencies, including the Army Corps of Engineers and Environmental Protection Agency, and reviews and approvals by the State of Texas are some of the notable ones that SPOT received.

According to MARAD, the construction and operation of the port is perceived to be “in the national interest because the project will benefit employment, economic growth, and U.S. energy infrastructure resilience and security. The port will provide a reliable source of crude oil to U.S. allies in the event of market disruption and have a minimal impact on the availability and cost of crude oil in the U.S. domestic market.

“Construction and operation of an offshore export terminal and the installation of a vapor combustion system at the DWP [deepwater port] will reduce the number of ship-to-ship transfers of crude oil and lessen emissions from conventional crude oil loading, thus providing a more efficient, less impactful crude oil transport facility within the offshore waters of the United States.”

In a bid to secure the required approvals for SPOT, the Houston-headquartered midstream energy services player has worked with various federal, state, and local authorities, and participated in multiple public meetings to obtain comments on several environmental impact studies, which produced more than 30,000 pages of documentation.

Curbing emissions on oil terminal’s agenda

The development plan envisages the SPOT offshore platform, which will be situated approximately 30 nautical miles off the Brazoria County, Texas coast in 115 feet of water, and manned 24 hours per day. This facility is designed to load very large crude carriers (VLCCs) and other crude oil tankers up to a rate of 85,000 barrels per hour.

Aside from this, dual 36-inch diameter, bi-directional pipelines will be built to connect to the company’s new Oyster Creek crude oil terminal in Brazoria County which will be constructed about 10 miles inland. With a direct connection not only to the firm’s Houston ECHO terminal but also to its extensive integrated midstream network, SPOT is expected to offer access to more than 40 distinct grades of crude oil, including Midland WTI.

Enterprise underlines that SPOT reduces operational risks, including those associated with reverse lightering, an unregulated process in which crude oil is offloaded from multiple smaller ships onto a larger vessel in federal waters off the U.S. Gulf Coast. The company believes that limiting reverse lightering and the SPOT platform’s vapor combustion capabilities will significantly reduce emissions.

Teague explained: “Compared with the current industry practice of reverse lightering, SPOT is expected to reduce crude vapor emissions by 95 percent, and lower total greenhouse gases by 65 percent. Considering that as many as eight smaller vessels are required during the reverse lightering process, SPOT offers a safer alternative and reduces the potential for accidents and spills. At full capacity, SPOT would eliminate more than 900 ship-to-ship transfers in federal waters annually. The SPOT platform would also serve as a reef, supporting marine life.”

Thumbs-up for SPOT seen as a red flag by activists

While many have welcomed the license for SPOT with open arms, not everyone is happy with the decision to give the go-ahead for this oil terminal. As expected, the main opponents of the project are environmental groups and organizations like Earthjustice, which see the development of this offshore oil export terminal as a threat to climate action and net zero goals. These groups are convinced that projects like this will lock in fossil fuel infrastructure, derailing the transition to clean energy.

Commenting on the green light for SPOT, Erin Gaines, Earthjustice Attorney, stated: “This is devastating news, but we are prepared to keep fighting. We will work with our partners and supporters to push back against dangerous oil export projects that threaten communities and the climate.”

Earthjustice claims that SPOT will drive massive oil production expansion in the Permian Basin and produce “disastrous levels” of greenhouse gas pollution for the 30-year life of the project. The nonprofit law organization underlines that crude oil exports from SPOT could have lifecycle emissions equivalent to operating nearly 90 new coal-fired power plants.

Devorah Ancel, Senior Attorney with the Sierra Club, remarked: “The evidence is clear that SPOT would be catastrophic to the climate, wildlife, and frontline communities of the Gulf. It threatens the future existence of the endangered Rice’s whale with a population of less than fifty, and its ozone pollution would compromise the health of thousands of Gulf residents who have endured decades of fossil fuel industry pollution. Make no mistake, SPOT is not in the national interest.”

Moreover, Earthjustice is also worried that this terminal could set a precedent for similar projects in the permitting pipeline that would allegedly damage air quality along the Texas and Louisiana Gulf Coast.

Gaines emphasized: “Earthjustice is working with communities throughout the Gulf Coast to fight the industry’s aggressive plans to lock in new oil and gas infrastructure in the form of pipelines, petrochemical facilities, and crude oil and gas export terminals.

“This infrastructure would dramatically increase fossil fuel consumption, damage our health, and heat our climate. We’re using the power of the law to fight back and stop these destructive expansions in their tracks.”