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"The Impact of Deepening the Sabine-Neches Waterway on Business Activity in Jefferson County, the Surrounding Region, and Texas"

The Sabine-Neches Waterway is a critical component of the port infrastructure for the region, state, and nation. The terminals and ports along the Waterway and the industries supported by them (in particular, the refining and petrochemical complex and energy imports and exports) are vital to economic activity throughout the US and form an important linkage to the global community.

•The Perryman Group measured the economic impact of current Waterway/terminal operations, and found the economic benefits to include billions of dollars in gross product each year as well as tens of thousands of jobs (as noted in the table below).

Annual Economic Benefits Associated with the Operation of the Sabine-Neches Waterway(Monetary Values in Billions of 2010 Dollars)

Gross Product(Output)/Permanent Jobs
Jefferson County $3.586/ 41,727
Area Served by the Waterway $3.788/ 44,686
Southeast Texas Region $3.996/ 47,416
Texas $4.695/ 52,966
*Includes Jefferson County, Orange County, and parts of Louisiana with industrial facilities.


•Proximity to terminals is essential to certain export/import sectors including petroleum and petrochemical-related manufacturing, grain production, forestry, steel, and quarrying and aggregates, as well as supporting industries such as ship repair, drydock, and maintenance. These sectors provide a large stimulus to business activity in the local area, region, state, and beyond. By summing the economic benefits of the Waterway operations (including ports and terminals) and production in associated major export and related sectors, TPG found the current total positive effects noted in the following table.

Total Annual Economic Benefits of Current Waterway and Associated Operations and Production in Major Export and Related Sectors Supported by the Sabine-Neches Waterway (Monetary Values in Billions of 2010 Dollars

Gross Product(Output)/Permanent Jobs
Jefferson County $10.279/ 106,361
Area Served by the Waterway* $12.307/ 124,553
Southeast Texas Region $13.535/ 139,776
Texas $21.190/ 206,103
*Includes Jefferson County, Orange County, and parts of Louisiana with industrial facilities.


•An enhancement to the Sabine-Neches Waterway is now under consideration. This expansion would allow the Waterway to accommodate deep draft tankers and increase efficiency, enhancing competitiveness for locations, creating jobs, producing tax revenue, and stimulating economic development.

•Deepening the Waterway would involve a significant investment and positive economic effects during the construction and development phase as noted in the table below. (Each person-year of employment is one full-time equivalent worker employed for one year; this designation is necessary because of the temporary nature of construction projects.)

Total Economic Benefits of Construction Activity Associated with the Proposed Deepening of the Sabine-Neches Waterway(Monetary Values in Billions of 2010 Dollars)
Gross Product(Output)/Employment
Jefferson County $1.588/ 21,335
Area Served by the Waterway* $1.603/ 21,531
Southeast Texas Region $1.629/ 21,467
Texas $2.028/ 24,638
*Includes Jefferson County, Orange County, and parts of Louisiana with industrial facilities.

•Enhancing the Sabine-Neches Waterway would lead to expanded operations along the Waterway and enhance efficiency and reduce cost. As these resources are used for other, productive purposes, they generate additional economic activity. The Perryman Group quantified a net measure of the total economic benefits stemming from the investment (including expanded operations, enhanced efficiencies, and increased production in major export and related sectors), which is adjusted for anticipated levels of debt and its likely cost. Economic benefits are described in the table below; overall incremental tax revenues (in constant 2010 dollars) include almost $1.7 billion in State revenue and $394.8 million to various local taxing authorities (including $201.4 million to entities in Jefferson County).

The Net Typical Anticipated Annual Incremental Economic Benefits Associated with the Proposed Deepening of the Sabine-Neches Waterway and Increased Production in the Major Export and Related Sectors Supported by the Waterway
(Monetary Values in Billions of 2010 Dollars)

Gross Product(Output)/Permanent Jobs
Jefferson County $17.823/ 21,517
Area Served by the Waterway* $21.415/ 25,273
Southeast Texas Region $23.578/ 28,402
Texas $37.141/ 42,017
*Adjusted to reflect the net costs of annual debt service paid by local sources and the resulting declines in spending on other items.Employment projections for major industries supported by the improved waterway halfway through a fifty-year planning cycle are used to define a typical year. Results are fully adjusted for anticipated patterns in productivity growth. Includes Jefferson County, Orange County, and parts of Louisiana with industrial facilities.

•The enhancement to the Sabine-Neches Waterway would better position regional terminals/ports (including those in Beaumont, Port Arthur, Sabine Pass and Orange as well as private facilities) to capture a larger share of future trade volume, thus encouraging the ongoing development, expansion, and retention of major export-related industries.


The Perryman Group • 510 N. Valley Mills Drive • Suite 300 • Waco, Texas 76710-6076 • 254.751.9595 • FAX 254.751.7855 • e-mail: info@perrymangroup.com

 

Nov. 10th, 2010