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NextDecade says it has enough money to construct long-delayed LNG plant outside of Port Isabel

The Port Isabel Lighthouse at sunset.
Gaige Davila
/
TPR
The Port Isabel Lighthouse at sunset.

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The company behind Rio Grande LNG, one of two liquified natural gas (LNG) export projects in the Port of Brownsville, said this week that it now has enough money to build the long-delayed project.

A $5.9 billion deal was secured among NextDecade, New York-based Global Infrastructure Partners, Singapore-based GIC, Abu Dhabi-based Mubadala Investment Company, France’s TotalEnergies and unnamed financial investors. In total, NextDecade collected nearly $20 billion in financing for the project through various loans, making the Rio Grande LNG one of the most expensive projects in U.S. history, NextDecade claimed.

Some of that money, $12 billion, will be used to build the first phase of the project, consisting of three trains that will be fed gas run through the Rio Bravo Pipeline. That gas will then be exported via tanker ship across the world, through companies like ExxonMobil and others from China, Portugal, Japan, France and Singapore, all of whom NextDecade signed gas contracts within the last year.

After announcing the contracts, NextDecade told its contractor, Virginia-based Bechtel, that it was cleared to start constructing the trains on Wednesday. NextDecade did not state when construction would finish or when it would start exporting gas.

Matt Schatzman, NextDecade’s chairman and chief executive officer, called the deal a “landmark event.”

The announcement came just days after the Sierra Club, the City of Port Isabel and the Carrizo Comecrudo Tribe of Texas appealed the Federal Energy Regulatory Commission’s (FERC) approval of the Rio Grande LNG and Texas LNG projects.

The groups and many Laguna Madre area residents have organized against the projects since 2014, in an effort to prevent the pollution and environmental plants would cause. The projects particularly disturb the Carrizo Comecrudo Tribe members, whose ancestral lands, the Garcia Pasture, are inside property boundaries. Tribe Chair Juan Mancias said NextDecade never spoke with the tribe about the project.

“As the project continues it destroys sacred ancestral lands of the Esto’k Gna without our consent, and commits environmental racism by creating negative health impacts on our predominantly non-white communities which already lack access to health care and the means to pay for it,” said Christopher Basaldu, a Native American Studies scholar, Carrizo Comecrudo tribe member and a Brownsville resident, in a statement. “This project damages our quality of life and creates a less healthy future for our children and grandchildren.”

Activists gather on the side of Highway 48, between Port Isabel and Brownsville, just outside of the Rio Grande LNG site, protesting gas projects in the area.
Gaige Davila
/
TPR
Activists gather on the side of Highway 48 in 2022, between Port Isabel and Brownsville, just outside of the Rio Grande LNG site, protesting gas projects in the area.

For the City of Port Isabel, not supporting the projects is a matter of protecting its tourism-based economy and the people who live in the area.

“For eight years, the children of Port Isabel have been spared from the effects of pollution caused by these LNG facilities,” Port Isabel City Manager Jared Hockema said in a statement. “Our fight so far has meant something, and our successes remind us of what we are fighting for. We will continue our opposition to this LNG facility, and to any other developments that harm the environment, quality of life or our local economy.”

Along with Port Isabel, neighboring South Padre Island and Laguna Vista have signed anti-LNG ordinances in the past. Port Isabel’s school district has twice voted to deny tax abatements to gas projects, saying they would adversely affect the community and its students.

Despite significant local resistance and litigation, FERC approved the projects in late April, a day after SpaceX launched the largest rocket ever created just a few miles away from the LNG projects. That approval came nearly two years after the D.C. Court of Appeals ruled that FERC insufficiently measured how much the plants would impact surrounding communities. Though FERC acknowledged there were more communities that would be impacted by the plants and that pollution would exceed federal standards, the agency approved them anyway.

In response, Port Isabel, the Sierra Club and the tribe, along with residents of Laguna Heights, a colonia directly downwind of the plants, filed a request for rehearing with FERC in May. The request was denied in late June.

Local support for the project had been artificially inflated via an astroturfing campaign by NextDecade, first revealed by a DeSmog investigation. NextDecade wrote letters on behalf of local officials to submit FERC to pressure the agency to approve the Rio Grande LNG, Texas LNG and Rio Bravo Pipeline projects. TPR independently confirmed the letters through records requests.

As the United Nations warns that the planet is warming beyond return and that fossil fuel production must cease, NextDecade claimed Rio Grande LNG is different. The project would be the “greenest LNG project in the world,” through a Carbon Capture System (CCS), meant to capture up to 90% of the carbon emitted from the plant to be moved to storage.

NextDecade still hasn’t found where to store that carbon, however, and the CCS wouldn’t filter the other pollutants the plant would emit. Activists and experts alike have called the technology a form of “greenwashing.”

A week before granting the LNG projects approval, FERC suspended an environmental review of the CCS because NextDecade could not provide enough information on the system in time for the agency’s assessment. But this might not matter at all, regarding NextDecade’s efforts to build: according to NextDecade’s FERC filing from August 2022, the CCS is a “voluntary effort” that could not be built for “any number of reasons.”

Inside Climate News reported that Rio Grande LNG would cap the sprawl of gas projects from Louisiana and Texas. The Port of Brownsville, the last deepwater port in Texas untouched by gas projects, will lose that distinction if Rio Grande LNG is built.

NextDecade said it will detail its construction at the end of July in its monthly report.

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Gaige Davila is the Border and Immigration Reporter for Texas Public Radio.