Yearslong effort to bring export terminals to RGV marked by protest at every step

PORT ISABEL — On a sunny afternoon in May 2015, the Port Isabel Event and Cultural Center was packed to the gills with people as they shuffled about from one large presentation board to another.

Standing among the throng were the top leaders of an industry that was then largely unfamiliar to the Rio Grande Valley — liquefied natural gas.

CEOs and COOs from three burgeoning companies mingled with the crowd, smiling and answering questions from residents. The corporate leaders represented Rio Grande LNG, Annova LNG and Texas LNG — three energy companies that hoped to build LNG export terminals along the vacant banks of the Brownsville Ship Channel.

The atmosphere inside the “open house,” which was hosted by the Federal Energy Regulatory Commission, was optimistic.

But standing outside the event center, the picture was radically different.

Outside stood a crowd bearing signs and banners of protest — locals who worried that expanding the fossil fuel industry in the Valley would do more harm than good.

“Their pipedream is our nightmare,” read one sign. Another person was costumed as a natural gas flare stack, complete with bright orange “flames” made of cloth.

Some of the protesters also held signs bearing the words “Save RGV from LNG.”

GRASSROOTS OPPOSITION

More than a slogan, those words soon became the name of a grassroots movement made up of local residents, small business professionals, environmentalists and others who opposed the LNG projects.

And their presence at that May 2015 “open house” wound up being a sign of the persistent and continuous opposition to LNG that would continue to this day.

The members of Save RGV mobilized quickly, staging informational meetings and gathering in force to deliver public comments at local government meetings.

The group soon joined forces with other community groups, including the local chapter of The Sierra Club, the Carrizo Comecrudo Tribe, and Vecinos para el Bienestar — an organization representing the Laguna Heights colonia.

From left: John Woods, Ludivina Estrada, Bekkah Hinojosa and Freddie Jiménez protest outside the Port Isabel Event and Cultural Center on Tuesday, Sept. 27, 2022. (Dina Arévalo | [email protected])

OFFICIALLY OPPOSED

Their well-organized efforts paid off.

Just three months after that FERC open house, the Laguna Madre Water District became the first local government to officially oppose LNG by refusing to supply water to any of the companies should they request annexation.

In the weeks that followed, the city councils of Port Isabel, Laguna Vista and South Padre Island also approved resolutions to oppose the projects during standing-room-only meetings.

LNG officials had attended the meetings, bringing with them their own coteries of supporters.

And so it went for years. It was a tit for tat tug-of-war for the community’s support as the companies work to obtain approval from state and federal regulators.

LNG WINS

Perhaps because of the stout opposition, the LNG companies’ efforts have resulted in a mixed bag — sometimes securing a financial win, other times not.

For instance, in 2017, Rio Grande LNG, owned by Houston-based NextDecade, obtained a multiyear, multimillion-dollar tax abatement agreement from the Cameron County Commissioners’ Court.

Cameron County Judge Eddie Treviño Jr. cast the sole vote against the measure.

The four separate, 10-year agreements guaranteed the county between $21-81 million of payments in lieu of taxes over the course of 16 years.

However, the commissioners court went on to table a similar tax abatement agreement for Annova LNG.

The proposal lay on the shelf until October 2019, when a restructured commissioners’ court approved a whopping $373 million tax abatement for Annova by a 3-to-2 vote.

However, last year, Annova LNG scrapped its plans to build in the Valley entirely citing its inability to secure customer purchase agreements.

BREAKING FORM

But the county hasn’t been the only entity the companies have sought incentives from.

Rio Grande LNG and the now-defunct Annova LNG also sought tax credits from the Point Isabel Independent School District through an appraised value limitation agreement commonly referred to as a “Chapter 313” agreement.

In September 2015, PI-ISD became the first school district in the state to reject such an agreement when it reneged on sending the proposal to the state comptroller’s office for review.

And in June, the school board rejected a Chapter 313 proposal from Rio Grande LNG — the company’s second attempt at securing tax incentives from the district.

COURT CASES

The battle for the future of the Laguna Madre has stretched beyond boardrooms and legislative chambers, however; it has also wound its way through the courts — both state and federal.

And, perhaps more than any other entity, the city of Port Isabel has positioned itself in the very thick of the fray.

The city has sued — or joined lawsuits — against both the Port of Brownsville and FERC.

“The city of Port Isabel has fought back to the best of its ability,” Port Isabel City Manager Jared Hockema said in a recent interview with The Monitor.

To date, the tiny town of about 5,000 has spent hundreds of thousands of dollars on litigation, Hockema said.

In January 2020, the city filed suit against the port, alleging that allowing the LNG projects to be built would be “subversive of public health.”

The court later dismissed the suit, but Port Isabel appealed to the 13th Court of Appeals. There the case remains stalled pending the outcome of litigation in the Washington, D.C. U.S. Circuit Court of Appeals.

In a win for Port Isabel, the appellate court found that FERC had not given adequate consideration to residents’ environmental concerns and ordered the commission to reevaluate.

“…(T)he Commission’s analyses of the projects’ impacts on climate change and environmental justice communities were deficient under NEPA and the APA, and that the Commission failed to justify its determinations of public interest and convenience,” reads the appellate court’s opinion, in part.

That finding highlights what Port Isabel has been alleging all along, Hockema said.

“When decisions are made to site these facilities, it seems as if they decide to site them in places where they think they can get away with it,” Hockema said.

The city manager has previously characterized the proposed facilities as “environmental racism” given the sites’ proximity to socioeconomically depressed communities of color.

MOVING FORWARD

But the company remained unfazed by the ruling.

In a news release posted to the company website in August, NextDecade noted that, though the court had remanded a portion of the issue back to FERC for reconsideration, it had also rejected two other claims made by Vecinos para el Bienestar and Port Isabel.

“We are pleased the court affirmed the validity of the FERC authorization of our Rio Grande LNG project and we look forward to the FERC’s response to the Court’s requests,” NextDecade CEO Matt Schatzman said.

When FERC hosted its first open house in 2015, officials projected that the projects would begin construction by 2019.

Seven years later, Rio Grande LNG returned to the Port Isabel Event and Cultural Center for another FERC event this week — this time seeking public comment on its proposal to include carbon capture technology at its facility.

As they did in 2015, Save RGV from LNG protesters made their presence known during Tuesday’s “scoping” meeting.

Rio Grande LNG estimates it won’t be ready to export LNG until 2026.

In January, Rio Grande LNG announced its final investment decision could be delayed to the latter half of this year. Recently, things appear to be moving again.

On Sept. 15, the company announced the sale of $85 million worth of common stock to select investors in anticipation of that FID.

The company has also made significant strides in finding buyers for its product.

That includes agreements with several companies across the Pacific, and at least one European customer.

The first came in April, when the company announced a 20-year, 1.5 million tons per annum sale agreement with Singapore-based ENN LNG.

The following month, ENGIE, a French company, signed a 15-year purchase agreement for 1.75 MTPA.

And lastly, in July, China Gas, Guangdong Energy, and Exxon Mobil all signed 20-year, 1.0 MTPA purchase agreements to supply the Asia Pacific region with NextDecade LNG.