Two new Texas laws aimed at preserving two-way traffic in the bustling Houston Ship Channel will take effect in September, easing holdups that arose last year between tankers and the largest-ever container ships.
Texas Gov. Greg Abbott last week signed both bills. One addressed periodic shutdowns of two-way traffic to accommodate larger container ships, and the other altered the Houston Port Commission's governance over channel traffic.
As of September 1, the Houston Pilots, the arbiters of ship traffic and safety in the world's second-largest petrochemical port behind Rotterdam, will decide what sizes of ships can safely accommodate two-way traffic. The pilots will also have their own governance, separate from the Houston Port Commission, which now oversees the pilots.
The traffic law sets the maximum length of a ship at 1,100 feet to maintain two-way traffic, but also says the pilots' board may authorize a longer ship if two-way traffic can be maintained efficiently. The governance law states that the pilots can adopt traffic rules for ships if at least 80% of pilots that operate under the board's jurisdiction recommend them. In effect, with that majority recommendation, the pilots can set traffic rules without needing authorization from the Houston Port Commission.
The changes emerged from an impasse between port officials and liquids operators along the channel last August when the first-ever container ship to exceed 1,100 feet in length traversed the 23-mile stretch between the entrance to the channel near Texas City and the port's two container terminals, which are businesses controlled by the port.
Before those larger container ships started arriving, vessels that move in and out of the 530-mile-wide channel did so freely, and veered around each other in a carefully orchestrated move overseen by the pilots to maintain consistent two-way traffic.
However, the pilots had determined that oncoming traffic had to shut down when a ship which is 1,100 or more feet long and 150 feet wide entered or left the channel because it essentially became a 231-foot-wide ship when veering - too wide for other ships to safely veer around it.
That left liquids tankers and other ships carrying oil, refined products, liquefied petroleum gas or chemicals waiting for up to 10 hours to enter or leave the channel until the larger container ship docked or exited the waterway. Those holdups caused delivery delays and racked up demurrage costs that are incurred by loaded ships that sit still.
PERMANENT SOLUTION SOUGHT
The Houston Port Commission in April agreed to limit larger container ships to one arrival per week - a proposal from liquids operators that it rejected last year. However, the liquids operators had turned to the legislature for a more permanent route for consistent two-way traffic because the commission could change the rule again.
Thirteen midstream, storage and exploration and production companies formed the Coalition for a Fair and Open Port, which said such holdups could chill investment in channel facilities to accommodate US liquids export growth. The US Energy Information Administration expects US crude production to average 12.3 million b/d this year and 13 million b/d in 2020. Most of that will come from the Permian Basin in West Texas and southeast New Mexico, where projected output of 3.9 million b/d in 2019 could double by 2025.
In 2018, 71% of 18,790 ships that traversed the channel involved energy - 55% tankers, 10.5% natural gas and 5.6% barges. Of the rest, 11.1% were container ships, according to Houston Pilots data.
Both sides agreed the ultimate solution was the widening of the 530-foot-wide channel to at least 750-800 feet to accommodate two-way traffic that includes larger container ships. However, such a project would likely cost billions of dollars and require Congress to provide federal funds - which can take years, if not decades. In the interim, the new laws are intended to ensure two-way traffic remains the norm in the channel.
"The codification of two-way traffic establishes a positive fundamental foundation for widening and deepening the Houston Ship Channel, which is the focus of the coalition now," Vincent DiCosimo, executive director of the coalition, said Monday.
Ric Campo, chairman of the Houston Port Commission, did not respond to a request for comment.
