Panama Canal expansion could boost Texas exports

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by DAVID SCHECHTER

Bio | Email | Follow: @davidschechter

WFAA

Posted on February 6, 2013 at 8:06 PM

Updated Monday, Nov 25 at 5:30 PM

PANAMA — The creation of the Panama Canal was an audacious vision 100 years ago. It cut through roughly 50 miles of mountains and malaria-infested jungle.

And it changed the world.

Today, that vision has a sequel. In Panama, they’re building a new lane that can move ships three times larger then the canal can currently handle.

That means — for the first time — the canal will also be able to handle the massive ships that can carry one of Texas’ most precious natural resources: Natural gas.

Ilya de Marotta, a Texas A&M grad, is in charge of construction of the canal's $5.2 billion project. Does she feel like she’s making history?

"Of course, yes," de Marotta said.

They’re building two new sets of locks, one on each end of the canal construction zone. At each end, it's much like building 27 skyscrapers in one tight spot.

"In complexity, these locks are way bigger than the original ones,” de Marotta explained.

There are still many moving parts and regulatory hurdles in the way, but when the canal is complete in 2015, here's what may be possible:

Texas natural gas from the Barnett Shale is piped to the Gulf Coast.

From there, it is processed into a highly concentrated, liquid form.

Then it's shipped through the Panama Canal to countries that are clamoring for it — like Japan, Korea, India, and even China.

Adolfo Quintero is an economics professor at the University of Panama. He says the expanded canal will let Texas become one of the world's largest exporters of natural gas.

"The future of Texas with natural gas, through the Panama Canal, will reinvigorate not only Texas' economy but America's economy,” Quintero said.

We contacted several natural gas companies active in the Barnett Shale, but none wanted to speak about the possibility of exporting local gas to Asian markets.

So we contacted Bill Cooper, president of the trade group for the Liquid Natural Gas industry.

"We're talking billions of dollars of trade, certainly, per cargo vessel," he said. "So, over time, it can be significant sums of money.”

But profit is not the point to Jim Schermbeck, a vocal opponent of natural gas fracking, the controversial technique used to unlock underground reservoirs of the fuel. He opposes exporting gas from the Barnett Shale.

“It's leaving us in the position of what we used to do with third world countries: Exploit all their resources, leave them with the mess, and say goodbye. And that's what North Texas is now to China and India,” Schermbeck said.

"Essentially what we're seeing is speculation, conjecture and fear on the part of those that oppose our projects,” Cooper said in response to the criticism.

That argument is sure to play out in the coming years.

But at the Panama Canal, audacious plans do not wait for the resolution of political questions.

They are busy altering their tropical landscape, again.

And possibly altering the way the world gets its energy.

E-mail dschechter@wfaa.com


Click here to read David's blog about his experience in Panama

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