Officials say wider canal can boost natural gas exports

Transportation and port officials reiterated Tuesday that the nearly complete expansion of the Panama Canal will provide opportunities for growth in exports, but won’t immediately strain the state’s road, railroads and pipelines.

During a state Senate Transportation Committee hearing at the Capitol in Austin, the heads of the Texas Department of Transportation and the Port of Houston Authority summarized and elaborated on the findings of a report last week that described the effects on Texas of the $5.25 billion project that will nearly triple the canal’s capacity.

The report said the bigger canal mainly will allow for more exports to Asia, including natural gas as soon as companies get government permits to liquefy the gas for export in special tankers.

But the canal expansion isn’t likely to provide a boom in imports and container shipping at Gulf Coast ports, the report concluded.

A working group convened by state transportation officials and chaired by Harris County Judge Ed Emmett produced the report after a series of public meetings earlier this year.

The report noted that liquefied natural gas tankers, too large to traverse the canal now, will be able to get through after the expansion is complete sometime before the end of 2015.

Phil Wilson, the executive director of the Transportation Department, told the committee that the opportunity to export natural gas extracted from Texas shale plays through the canal to Asia was his biggest takeaway from the report.

“The challenge we have as a state is to make sure we do everything we can to ensure that those opportunities to export that gas across the world are taken full advantage of,” Wilson said, noting the significant capital investment required to create a natural gas export facility.

Port of Houston Executive Director Leonard Waterworth, who described the state’s energy boom and rapidly growing population as trends that are “beyond the Panama Canal,” said the U.S. will become a net energy exporter sometime in the next 20 years, and that the petrochemical complex on the Houston Ship Channel will play a big role in that.

Katherine Turnbull, a research scientist with the Texas A&M Transportation Institute who helped compile the report, told the committee the state is well situated to handle any short- and mid-term effects of the canal upgrade.

Topics covered at Tuesday’s hearing also included a Transportation Department study examining the effects of overweight vehicles have on roads, possible increases in fees those vehicles are charged and ways to improve enforcement against toll road scofflaws.