How Exxon Lobbyists Led Push to Deepen US Ports and Increase Natural Gas Exports

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The U.S. has signed a major deal with China to shipย liquefied natural gas (LNG) toย Asia, adding further momentum to America’sย hydraulic fracturing (โ€œfrackingโ€) boom.

The deal, whichย includes the export of other commoditiesย from the U.S. to China, was signed about a month after President Donald Trump met with Chinese President Xi Jinping. Much of the LNG in this deal will move across a recently expanded Panama Canal, offering a fast-track route to Asia for larger vessels, an expansion for which the oil and gasย industryย lobbied.

A DeSmog investigation has revealed that expanding the Panama Canal was part of a two-part process, whichย included an oil and gas industry push to deepen ports in the Gulf of Mexico as well. Emails obtained under the Texasย Public Records Act show that lobbyists for ExxonMobil were leading thisย effort.

In an interview with Fox Business Network, U.S. Secretary of Commerce Wilbur Ross touted the deal with China and its implications for the global LNGย market.

โ€œWe have worked out a new regime for LNG exports. As you probably know, China is the world’s number one importer of LNG [and] we’re just in the early days of exporting,โ€ย Ross told Neil Cavuto. โ€œLNG prices have been languishing for quite a little while because, frankly, we have a good deal of oversupply. So it seemed weird, we have too much of it, itโ€™s much cleaner than coal would be, and yet we werenโ€™t really doing a big job of exporting it toย China.โ€

Not long after the deal was signed, Cheniere, a top U.S. exporter of LNG, also declaredย that it may soon be shipping more of its product to China. However,ย without Congress taking legislative action back in 2014, pushed by Exxon’s lobbyists, the U.S.-China LNG export deal may have never existed atย all.

Art ofย LNGย Deal

In 2014, Congress passed theย Water Resources Reform and Development Actย (H.R. 3080/S. 601), which gave U.S. ports like the Sabine-Neches Navigation District in Texas the legal authority to deepenย theirย waters.

Deepening ports allows them to receive bigger and heavier tankers that sit lower in the water column, such as those carrying LNG or larger shipments of oil. For ports on the East Coast and Gulf of Mexico, it opens up possibilitiesย for these larger tankers and container ships to pass through the now expanded Panama Canal. Marine commerce is seeing a rise in such โ€œmegashipsโ€ and ports are rushing to accommodateย them.

โ€œAs more of the worldโ€™s cargo is transported on these massive ships, weโ€™ve got to make sure that weโ€™ve got bridges high enough and ports that are big enough to hold them and accommodate them so that our businesses can keep selling goods made in America to the rest of the world,โ€ Obama said as he signedย the bill.ย 

According to lobbying disclosure forms, companiesย such as ExxonMobil, BP, Sempra Energy, BG Group (now owned by Shell), Chevron, Koch Industries, and others all lobbied for H.R. 3080/S. 601. Section 2106 of the bill, the โ€œEnergy Transfer Portโ€ section, calls for a $50 million per year subsidy for ports maintaining 25 percent of business activityย related to the energy industry and carrying at least 40 million tonsย of cargo for this industry asย well.

The Sabine-Neches Navigation District deployed lobbyist Milam Mabry to advocate for the cause of deepening this key port and LNG export hub, which isย home to both Cheniere’s Sabine Pass LNG terminal and ExxonMobil and Qatar Petroleum’sย Golden Pass LNGย facility.

Months after successfully lobbying forย the bill, which President Obamaย signed into law in June 2014,ย Mabry agreed to begin lobbyingย for Golden Pass Products, the owner of the Golden Pass LNGย facility.

Golden Pass received a permit to export LNG from the Department of Energy (DOE) on April 25, 2017. The DOE‘s authorization letter for Golden Pass LNG cites congressional lettersย of support for the project, which as DeSmog revealed inย April 2015, were actually ghost-written by lobbyists for Golden Pass from the firm Harris, DeVille & Associates.ย 

Mabry, who formerly served as a congressional staffer for Sen. Phil Gramm (R-TX) and Sen. Kay Bailey Hutchinson (R-TX), still lobbies for both the Sabine-Neches Navigation District and Exxon and Quatar Petroleum’sย Golden Pass Products.

Back in 2014, however, emails obtained from the navigation district show that Mabry worked alongsideย the Golden Pass Products lobbyists fromย Harris, DeVille & Associatesย as the Water Resources Reform and Development Actย moved through Congress. The district’s goal was two-pronged: toย get its desiredย language inserted into the bill and secureย federal fundingย under the bill’s legislative mandate (the latter beingย the reason the district isย still employing Mabry’s lobbyingย services).

Emails show the strategy revolved around Mabry working his network, with an open line of communications to the Office of Texasย Governor Greg Abbott, the Obama White House, the Office of U.S. Rep. Ted Poe (R-TX), fellow Exxon lobbyist Kathleen Jackson, and others. Jacksonย sits onย the Texas Water Development Board, and was inititally appointed by former Texas Governor Rick Perry, who currently serves as U.S. Secretary ofย Energy.

In a February 2014 email to the navigation district’s leadership, Exxon’s Jackson explained how the district could best make its case to Congressional leadership drafting the bill, saying that the soon-to-be-expanded Panama Canal should be part of theย pitch.

โ€œWe need the large channel users to embrace the work effort, commit their top resources and think creatively so we can capture all possible benefits. And we need an industry champion to coordinate the effort,โ€ wrote Jackson. โ€œ[Sabine-Neches Waterway] is uniquely positioned to capture the benefits of the Panama Canalย expansion.โ€

Paul Beard, president of Sabine Universal Products and chair of the navigation district’s board, was also regularly looped into emails about the bill’s progress and strategy around its passage. Sabine Universal describes itself as a โ€œdistributor of specialized products for the commercial marine and offshore rig industries,โ€ which deals with โ€œoffshore drilling contractors, inland tug and barge operators, shipyards, and offshore supply boatย companies.โ€

โ€œStartย Digging!โ€

While nudging members of Congress to get the bill passed,ย the Harris, DeVille & Associates team and Mabry launched a localย advertising campaign in support of the legislation’s passage. This included designing and placingย billboards, emailing local government bodies about the signs, writingย talking pointsย for the media, andย pushing LNGย as a central pillar in billย discussions.

โ€œIn developing the billboards, we focused on two key themes,โ€ Michelle Hultberg of Harris, DeVille & Associates wrote in a February 2014 emailย to navigation district leadership. โ€œFirst, as indicated in our previous Facebook ad campaign and as we are also seeing in the ongoing digital ad campaign, our audience responds well to ‘jobs’ messaging. So, weโ€™ll continue to weave that theme throughout our materials. Second, we want to introduce a ‘Dig it’ message that can be used in several ways (‘Letโ€™s dig it,’ ‘We dig it,’ ‘I dig it’) and would be a great way for [Sabine-Neches Navigation District] to get our supportersย involved.โ€

The billboard and accompanying social media campaign included both a pre-bill passage and post-bill passage component, with graphics and talking points prepared forย both.


Credit:ย Sabine-Neches Navigationย District

The navigation district also put together and disseminated a fact sheet, discussing how the district serves as a key national hub for oil and gas pipeline infrastructure, including LNG.


Credit:ย Sabine-Neches Navigationย District

After the bill passed in Congress, PR specialist Hultbergย drafted a press release celebratingย its passage on behalf of the navigationย district.

โ€œSo many of our local, state and federal leaders and past [Sabine-Neches Navigation District]ย leaders and staff deserve a huge thanks,โ€ Beard said in the release, โ€œItโ€™s been a pleasure to help lead this once-in-a-lifetime project to this point. Now itโ€™s time to get out there and startย digging!โ€

Traversingย Panamaย Canal

The centerpiece of this particularย port deepening project, as the navigation district points out, wasย ensuring the port couldย cater to a widened Panama Canal capable of handling LNG tankerย traffic.

โ€œA huge benefit to the LNG producers is that it will cut transit time to the Orient from something like 63 days to 47 days, very significant,โ€ wrote Beard in a December 2015 email. โ€œIf ever we are allowed to export crude oil again it would provide the same advantage for oil going to the West Coast or theย Orient.โ€

Cheniere wasย the first company to ship LNG across the Panama Canal and into China. The expanded canal is expected to see 550 LNG ships cross per year by 2021, according to the U.S. Energy Informationย Administration.ย 


Credit: U.S. Energy Informationย Administration

Signaling the expanded canal’s importance to the oil and gas industry, the Texas Department of Transportation created aย Panama Canal Stakeholder Working Group in 2012, which involved contributions from several industryย representatives.

The working groupย had an official memberย fromย the Texas Oil and Gas Association, and briefed or received testimonyย fromย ExxonMobil,ย Koch Industries, Chesapeake Energy, and Halliburton,ย among others. The Sabine-Neches Navigation District was also involved in the working group, which culminated with a report pointing to the business opportunitiesย for the LNG industry from an expanded Panamaย Canal.

โ€œCurrently LNG vessels are not able to use the Panama Canal due to the width limitations in the locks. The new locks will accommodate LNG vessels, thus opening the Asian market to LNG from Texas,โ€ the working group wrote in its November 2012ย report. โ€œCheniere, Golden Pass Products LLC, and other companies are making major investments in LNG plants along the Texas and Louisiana coast, focusing on exporting LNG.โ€

Half a decade later, it appearsย that vision has becomeย reality.ย ย 

Main image: Bintulu LNG port, Sarawak, Malaysia.ย Credit: Ahmad Afif Isa,ย CC BYย 2.0

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Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

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