The only large new U.S. oil refinery in 40 years will export fuel to MEXICO
Largest new U.S. oil refinery in nearly 40 years slated for South Texas
It will be the largest one built in 40 years
By Rye Druzin, San Antonio Express-News
November 22, 2016 Updated: November 23, 2016 11:20am
Photo: Patrick Semansky /Bloomberg
A crude oil unit stands soon after completion in March 2010 at Marathon Oil Corp.’s Garyville refinery in Garyville, Louisiana. As the last major crude oil refinery built in the U.S., Garyville’s initial ... more
A Houston-based company is building the largest new U.S. oil refinery in nearly 40 years on 200 acres of South Texas ranch land, strategically located to process the Eagle Ford shale field’s lighter crude and export it to Mexico.
The $500 million refinery is being built by Raven Petroleum in the southwest corner of Duval County on the borders of Jim Hogg and Webb counties.
The facility will refine about 50,000 barrels a day of light crude oil, a rarity in a market where most refineries are geared for heavier crude oil.
The company plans to export diesel, jet fuel, naphtha, gasoline and liquified petroleum gas products to Mexico’s recently opened energy market, the company said in a news release.
The property is bisected by a Kansas City Southern Railroad line, which already transports those products for other refiners, Kansas City spokeswoman C. Doniele Carlson said.
She declined to say whether the railroad would do the same for Raven.
Marathon Petroleum Corp. built the last major U.S. refinery in Garyville, Louisiana in 1977. It could process 200,000 barrels of oil a day when it first opened.
The facility since has been upgraded to process 539,000 barrels of oil a day.
Other refineries have been built since then, but most process condensates, an oil byproduct.
Duval County Judge Ricardo “Rocky” Carrillo said Raven Petroleum’s project will bring close to 1,800 construction jobs to a rural economy ravaged by the downturn. It’s slated to break ground in the third quarter of 2017.
“Our current value countywide is $900 million, so just put a pencil to it our tax rate would drop tremendously, by about 50 percent,” Carrillo said.
With a county population of around 12,000, Carrillo said the jobs created will help bolster the economy.
Between 400 and 500 permanent jobs will be needed to staff the facility after it’s finished, Carrillo and Jim Hogg County Judge Humberto Gonzalez said. Raven Petroleum is aiming to open the refinery by the end of 2018.
The company eventually could build a pipeline from Laredo to Brownsville to access the Caribbean oil market, Raven managing director Christopher Moore said in the news release.
Gonzalez said Raven Petroleum told him it had been working on the Duval County project for two years. He expects some of the benefits to spill over into Hebbronville, which is 5 miles away and the county seat for Jim Hogg.
“We’re going to benefit from sales tax, from housing, all the people who need services to survive. When you’ve got at least 1,500 (workers), that’s half the town of Hebbronville coming in,” Gonzalez said.
In its news release the company said “Raven has received positive support from local county officials and the Texas Governor’s Office regarding permitting and development of the project.”
Sam Taylor, deputy press secretary for the governor’s office, confirmed in an email that it had been contacted by the company and said “our office provided positive support for the project by facilitating (Raven Petroleum’s) communication with TCEQ.”
Over the past few months, Carrillo and Gonzalez said they have created a tri-county economic development coalition along with Webb County Judge Tano Tijerina in an attempt to take advantage of the economic opportunities presented by the refinery project.
Gonzalez said that with many people who used to work in the Eagle Ford shale now underemployed, he and other leaders need to prepare for the influx of activity and opportunities the refinery’s construction and operation will bring.
“Food services, lodging, all kinds of restaurants that need to prepare for this onslaught,” he said. “It’s an opportunity for our small businessman and our community people to take advantage of this.”
Duval County, population 11,388, had a staggering unemployment rate of 11.9 percent in September, compared with an unemployment rate of 5.3 percent near the oil market’s peak two years before. The U.S. unemployment rate currently is 4.9 percent.
Unemployment in Jim Hogg County, which has 5,200 residents, stood at 10.3 percent in September.
The oil industry is staggering to recover from the biggest downturn in oil prices since the mid-1980s. U.S. crude prices peaked at $107 a barrel in June 2014 before falling to $26 a barrel in February. They since have rebounded, settling around $47.50 a barrel on Tuesday.
Jim Hogg County has lost at least $21 million in valuation on its minerals, reducing annual tax revenue by $500,000 over the past three years, Gonzalez said.
“You can only take so many hits of those every year, and for a $10 million budget that’s significant,” he said. “All the counties surrounding us are in the same predicament … and there’s not enough increase on the housing and other projects side to make up the difference, so we all lose.”
The Environmental Integrity Project, a Washington-based environmental group with offices in Austin, is keeping a close watch on the refinery. Ilan Levin, associate director for the group, said “we’re hoping to get more information because it’s a sizable (project) … and will have a pretty big environmental footprint.”
“We want transparency and there should be some due process, the normal public meetings and public hearings that go along with these things just to make sure that the safety precautions are being met and the top-of-the-line standards are being implemented,” Levin said.
Neither Raven Petroleum nor Raven Resource Group LLC have active permits to refine crude on file with the Texas Commission on Environmental Quality. Any new refiner would need to obtain permits through the TCEQ before it can begin construction.
Gonzalez called Raven Petroleum “an American company.” Moore, said Raven Resources Group LLC was formed about 2½ years ago as a development holding company that founded Raven Petroleum.
Moore says he is a sixth-generation Texan originally from Houston.
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