While the natural gas and shale revolution has led to unprecedented economic growth in the U.S., petrochemical industry leaders are faced with the ever-growing challenge of moving those products in and out of the expanding Gulf region.
How much is this export of crude oil and its related petrochemical products anticipated to grow in coming years?
“The most conservative prognostication with respect to inland marine transportation is 45 percent for 10 to 12 years, and some are saying 15 years,” said Tom Marian, in-house counsel for Buffalo Marine Service, a barge and bunker company with a fleet of more than 52 vessels. “That is spectacular growth.”
This growth requires diligent attention to maintaining the infrastructure of the Port of Houston and Houston Ship Channel, Marian stressed, including “dredging the ditch, deepening the on-ramps and replacing half century old locks.”
“We’ve got to make sure those things that are approaching and are well beyond the end of their shelf life are properly maintained,” he said at the recent 2014 Petrochemical and Maritime Outlook Conference. “The ports are the major on-ramps for which commerce unfolds in the country.”
Marian noted San Antonio, Austin, Houston and Dallas, Texas, are currently the fastest-growing geographic regions of the U.S. in terms of population.
“More people, more goods, more demand,” Marian reasoned. “We’re seeing a lot more aggregate building and construction material coming into the U.S. on freight bulk vessels and being moved around by barges. This is a feeding frenzy of economic activity that moves on the waterways because it’s cheaper and more efficient. And environmentally, it’s better for all of us.”
Marian noted the safety record for the tank barge industry is approximately 18 times better than that of rail and 132 times better than that of trucking.
“Barges may not be sexy,” Marian said, “but they’re beautiful to us because they get the job done and they do it in a cost-effective fashion.”
Lawrence Waldron, global account director for Vopak, an independent tank storage provider, said investment resulting from the shale revolution has hit the supply chain “like a wave.”
“You see refinery upgrades, chemical plant expansion, ethane and ethylene production. Eventually you’ll see more and more downstream petrochemical production as well,” Waldron added.
Matt Woodruff, director of government affairs for Kirby Corp., an operator of inland tank barges and towing vessels, estimates oil growth and energy demand after 2035 will increase by 33 percent.
“There is solid demand in future and emerging development markets that are going to support that,” he said. “We’re on the leading edge of a 20- or 30-year wave of prosperity of investment we’re going to see in this area.”
Woodruff pointed out though its needs are relatively modest in comparison to the rest of the nation, the Gulf Coast region provides more economic impact to the nation than any other region’s waterways.
“The Gulf Intracoastal Waterway is the most important waterway to the U.S.,” he said.
Port Terminal Railroad Association General Manager Jeff Norwood is confident members of his organization are committed to ensuring infrastructure can and will handle future business growth.
“Member lines have invested more than $32 million in maintenance to make sure our railroads are safe to operate on,” Norwood said.
“We’re ready,” he added confidently. “Any crude oil shippers or ethanol shippers — anything you want to ship, bring it on. We’re open for business.”
For more information, visit www.allianceportregion.com or call (281) 476-9176.
