Appeals court to hear challenge to offshore oil platform license

November 8, 2023

The Fifth U.S. Circuit Court of Appeals will hear a challenge Wednesday to the federal license of a crude oil export terminal project in the Gulf of Mexico.

The Department of Transportation’s Maritime Administration approved Enterprise Product Partners’ license for a crude oil export terminal in November 2022. The terminal, called the Sea Port Oil Terminal’s Deepwater Port, would be located 30 miles off the coast of Freeport, Texas.

Environmental groups, led by the Sierra Club, sued DOT in January, saying the crude oil being carried by the network of on- and offshore pipelines would pose a substantial threat to coastal communities and marine wildlife. The coalition alleges DOT failed to adequately assess the project’s oil spill and public health risks.

The three-judge panel has set aside 20 minutes for the case, one of three it will hear Wednesday afternoon. It’s not known how long it will take the panel to offer an opinion. Construction cannot begin until a final license is issued. 

DOT’s approval of the license, under the Deepwater Port Act of 1974, was a four-year process. As proposed, Sea Port Oil Terminal project, or SPOT, would be a deepwater marine terminal with a fixed platform in 115 feet of water. Two 36-inch bidirectional pipelines would connect the terminal to an onshore crude oil storage facility known as Oyster Creek Terminal.

The proposed Oyster Creek Terminal would be located about 2.5 miles northeast of Lake Jackson, Texas, and four miles southeast of Angleton, Texas. It would be capable of processing 2 million gallons of oil a day.

SPOT is one of four terminals currently in the planning stages along the Gulf of Mexico. If completed, it would be the largest offshore oil export terminal in the United States.

The project is intended to increase the efficiency of offshore oil exports along the coast. Currently, smaller oil tankers typically ferry oil from coastal depots to larger ships. SPOT would be capable of loading from smaller tankers at a rate of 85,000 barrels per hour.

Originally, SPOT was expected to be in operation by late 2025. During a recent RBN Energy export conference, Enterprise Co-CEO Jim Teague said the oil export terminal’s start date would be the second half of 2026 or early 2027.

Sierra Club will present arguments on Wednesday afternoon on behalf of the coalition, which also includes Better Brazoria, Texas Campaign for the Environment, Turtle Island Restoration Network and the Center for Biological Diversity.

Government Market News Staff

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