Texas economy

The Houston Ship Channel is vital to the Texas economy

A few years ago I was asked to name the major events that shaped the Texas we know today. Topping the list was the development of Allen’s Landing and the Port of Houston in the early Republic and subsequent efforts at the dawn of the 20th century to develop a deep-water canal in the area just as the oil industry was emerging. . Without this critical infrastructure, Texas could not have become a vital hub of global commerce. I am tempted to say, “And the rest is history” — but, in reality, it is also the future.

The Houston Ship Channel’s latest $1 billion expansion is underway after a decade of planning. The project includes deepening and widening parts of the fairway to improve capacity, efficiency and safety. It is known locally as Project 11 as it is the eleventh major construction initiative in the waterway’s long history.

Cotton was a large part of the cargo at first, with Houston offering connections through the natural harbor of Galveston. In the early 20th century crude oil became dominant and the area became the site of refineries and other processing facilities. As the economy evolved, Houston was the first port in the country to offer container shipping.

The canal also serves more than 200 private and public facilities (many energy and chemical related), collectively known as the Port of Houston. More than 275 million short tons of cargo passed through the canal in 2020, some 50 million tons over the second largest port.

Carolina the dredge, which will be used in the expansion and deepening of the Houston Ship Channel, is pictured during the launch ceremony Wednesday, June 1, 2022 in Galveston.

Yi-Chin Lee / Staff Photographer

The Port of Houston accounted for more than 44.5 million tons of cargo in 2021, most of which is containerized. Major exports include resins and plastics; chemicals and minerals; automobile; Food and drink; and machinery, appliances and electronics. The main imports are hardware and building materials; Food and drink; and machinery, appliances and electronics. Steel and bulk are other notable commodity categories.

The Houston Ship Channel is a cornerstone of the American logistics system and its economic importance is profound. Imports drive commercial activity through transportation, distribution and retail of finished goods and additional production of inputs. Exports primarily reflect domestic manufacturing and processing. There are also spillovers and a boost in consumer spending. In short, the benefits are enormous.

Beyond these gains, the Port is an essential element in dealing with a variety of critical issues. Hours have been expanded to help address supply chain challenges; the transport of oil and liquefied natural gas has enormous geopolitical importance; major imports support our way of life.

Larger ships and more cargo require upgrades to the Houston Ship Channel. Project 11 provides the essential infrastructure to keep Texas at the forefront of global commerce, simultaneously improving safety, efficiency, capacity, and the environment.

Mr. Ray Perryman is President and CEO of The Perryman Group, a Waco-based economic research and analysis firm.

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