AP NEWS

Deer Park fire crimps commerce in ship channel

March 23, 2019

Energy and steel shipments were among those potentially delayed Friday when contaminated runoff at Intercontinental Terminals Co. closed a roughly seven-mile portion of the Houston Ship Channel near the Lynchburg Ferry.

Roughly half of the Ship Channel was cut off from the Gulf of Mexico and Gulf Intracoastal Waterway due to the central location of the closure, and no detours around it. Companies in the affected area could include LyondellBasell Industries, Royal Dutch Shell, Enterprise Products Partners, Targa Resources, Valero Energy and others.

“The amount of traffic that goes up and down that channel is huge,” said Jim Kruse, director of the Center for Ports and Waterways at the Texas A&M Transportation Institute. “Any time you’re closing the channel down, you’re having a major, major impact.”

Closures are not unknown to the Ship Channel, where fog often plagues ships and barges. But at least those scenarios have an estimated end date. The U.S. Coast Guard Vessel Traffic Services, which sent out the message to close the Houston Ship Channel at 12:36 p.m. Friday, did not know late Friday afternoon at what time the Ship Channel could reopen.

“With fog you can usually look at the weather and see how many more days you’re going to have with it,” said Capt. Bill Diehl, president of the Greater Houston Port Bureau trade organization. “Predictability is what companies want, and that’s what they don’t have right now.”

The fire at Intercontinental Terminals filled the Houston skies with black smoke and flared up again on Friday afternoon. The economic impact it will have on the Ship Channel ultimately depends on how long the waterway remains closed. A half-day closure will back up traffic, but that could be relieved in 24 hours or so. A closure for several days could stall the movement of products between the port’s various facilities, as well as crimp the region’s import and export businesses.

“This logistics chain, which we call the port, is in pause until we figure out what’s going to happen here,” Diehl said.

Royal Dutch Shell said it was trying to assess the situation, adding that its refining operations were normal at Shell Deer Park. Enterprise Products Partners likewise said its ship channel terminal is operational.

LyondellBasell Industries said its Channelview and Bayport facilities remain operating. “We are experiencing constrained barge and vessel logistics capabilities,” the company said. “We are currently evaluating the impact of this event on our production and logistics capabilities.”

Targa Resources and Valero Energy could not be reached for comment.

Not affected by the Ship Channel shutdown are cruises departing from Galveston and container ships calling on Bayport or Barbours Cut Container Terminals.