Many people may not know the difference between the Port Houston Authority and the Greater Houston Port Bureau. In fact, at one time, Port Houston Chairman Ric Campo was one of those people.
"A lot of people don't get what the Port Authority is," Campo said. "First of all, the Port Authority's singular mission is creating jobs for the people in our region. It's all about job creation and the quality of life. I thought the Port Authority controls everything in the port. They actually do not."
Campo explained the Port Authority has two main roles.
"One is we're the nonfederal sponsor of the Houston Ship Channel. The federal government owns the channel ⦠It's not owned by the state or the local government. The federal government controls all the waterways in America, around the coast and the rivers, and controls them through the Coast Guard and the Army Corps of Engineers," Campo said.
The second function of the Port Authority is to manage the port's eight public docks.
"The port has invested a massive amount of money in those eight public docks, and container business creates massive cash flow for the port," Campo said. "We are able then to reinvest that cash flow into channel improvements to enhance the ability for people to use the channel."
Port Houston Authority's 700 employees "are committed to creating value for the community, to creating jobs and to making sure our regional prosperity is driven by everything that happens around the port," Campo said.
The Greater Houston Port Bureau is a member-driven nonprofit trade organization dedicated to promoting the maritime industry that fosters communication and information about the Port of Houston, the Houston Ship Channel and the maritime industry to constituents both in and out of the port region. The Port Bureau's four core services to members, maritime stakeholders and the community at large provide vessel information, port information, networking and advocacy.
"This port is the largest manufacturing center in the United States," said Bill Diehl, president of the Greater Houston Port Bureau. "There are 274 plants and 190 companies in the port. The secondary part is the ship channel. The ship channel is the highway that gets you out to market."
The similarity between the Port Houston Authority and the Greater Houston Port Bureau is that their leaders understand the vital need for the Houston Ship Channel to undergo a major expansion. As featured speakers at the Gulf Coast Industry Forum held recently in Pasadena, Texas, Diehl and Campo made the case that in order for Texas and the U.S. to maintain stature in supplying energy to the world, that expansion must occur sooner rather than later.
Depth and width
Thanks in large part to hydraulic fracturing technology and the shale renaissance, the U.S. "now has more energy than ever," Campo said.
"We're pretty much energy independent in America, but when you look at the industry, America's demand is sort of flat ⦠because of energy efficiency in our cars and the things we're doing to create a better environment for America," he continued. "So every incremental hydrocarbon that comes out of the ground has to be processed and exported. And that's going through Houston."
The key to getting those products exported is to widen and deepen the Houston Ship Channel, Campo said.
The Port of Houston Authority reported the port's financial impact on the U.S. in 2018 was $802 billion in economic value, with $38 billion in taxes and more than 3.2 million jobs supported. That same year, the port's financial impact on Texas was $340 billion in economic value and $5.6 billion in tax revenue, and it supported more than 1 billion jobs.
"In order to make sure we have this long-term economic engine that keeps humming and creating jobs, we have to have two-way traffic long term in the channel," Campo said. "A wider channel continues to provide economic benefits for the region, state and nation."
Currently, the ship channel is approximately 52 miles long and 530 feet wide. The proposed expansion of 170 feet would increase that width to a total of 700 feet.
"But the channel is not just about commerce," Campo said. "A wider channel is a safer channel. The communities in and around the channel need to be protected from an environmental perspective, from a human life perspective."
The Texas Chicken
The Port of Houston Authority reported there were nearly 9,000 vessel calls for a total of over 20,000 ship movements within the port in 2018 -- more than the next three largest U.S. ports combined.
Energy and manufacturing exports are increasing at the Port of Houston, and so is the size of the vessels navigating it. The Houston Ship Channel is one of the most complex to navigate due to high traffic volume and its narrow, shallow and winding characteristics.
Currently, an approximately 100-foot bypass makes for nearly impossible, highly dangerous maneuvers.
"Container ships are getting wider and our LPG ships are getting longer, and they've got to pass each other through the channel," Diehl said.
In order for these large vessels to safely pass each other, pilots must execute a maneuver that has become known as "the Texas Chicken."
"If you and I were driving toward each other down a narrow road in our neighborhood, I would slow down and just kind of squeeze by you in this narrow lane," Diehl said. "Well, it doesn't work that way in the ship channel. What happens is, when I come through with my big ship, I'm leaving a big hole back here because I've sucked all the water out, so I'm going to actually suck you into my ship as I go by you."
To accomplish the Texas Chicken, two ships "have to pass each other in a different way," Diehl explained. "They line up and go right at each other. Then when they're about half a mile apart, each ship turns about 10 degrees, [and] the bow waves give them the cushion to push them off the edge of the channel."
This slight turn creates enough of a buffer to allow the second ship to "come in right behind" the first ship.
"And that's the Texas Chicken. They go right at and around each other," Diehl said. "Nowhere else do they do this in the United States. Our Houston pilots are fantastic."
The problem, he said, is when the ships are about 1,100 feet long or longer, they "can't get back in on the Texas Chicken, because they can't get far enough out. They can't do it without crashing into each other, so we need a wider channel."
It takes money to make money
According to Diehl, the Port of Houston generates $2 billion each day. The Army Corps of Engineers calculated the proposed deepening and widening of the Houston Ship Channel would cost $1 billion.
"The price of doing business in our channel is to dig the dirt out. Yes, that's the issue that we're looking at as an industry. And we have to pay for it," Diehl said.
"When you think about the $339 billion of economic impact and $5.4 billion of taxes that are driven from the channel, $1 billion is not a lot of money," Campo said. "We have to make that investment. The way to accelerate is for Houston to have a plan that doesn't rely on federal funding. We need industry and the Port Authority to participate, and we need the federal dollars to be smaller than normal."
Campo encouraged industry and community leaders to work with their elected officials to make sure they understand this is "a high-priority project" that must be completed sooner rather than later.
"When you start talking about how long it would take and what the federal process is, we wouldn't have the channel until 2030 or 2035. But we can't wait that long," Campo said. "The time to act is now. Our people can't wait, our environment can't wait, and safety can't wait. So we have to figure out a way to accelerate, and the U.S. economy can't wait. Dredging must begin by 2021."
Campo estimated that if $1 billion is raised and dredging begins by 2021, "we think we have a pathway to get our channel completed by 2025 or 2026 -- much faster than the normal process -- so we can continue to create jobs and ride this growth wave of energy, container and bulk cargo businesses up the curve."
As Houston and the surrounding Gulf Coast region grow, "we need more freight logistics, more mobility, and we need to make sure we're making those investments so we can continue that growth process," Campo said. "It's pretty simple: No channel, no port. No port, no cargo. No cargo, no commerce. No commerce, no jobs.
"When you get down to it, this is about jobs and quality of life. We need to make sure we keep producing jobs for our folks. We have an incredible opportunity to create a lot of value for the future. Let's deepen and widen the port."
