Rio Grande LNG is moving forward with a proposal to build a liquefied natural gas export terminal in deep South Texas, company officials said, despite losing a tax abatement vote that could have made the project more attractive to investors. Point Isabel Independent School District board members on Tuesday evening rejected the company’s application for a 10-year tax abatement in a 5-2 decision. James Markham-Hill — a spokesman for Rio Grande LNG’s parent company, NextDecade LLC — said the company was disappointed by the vote but is proceeding with its application before the Federal Energy Regulatory Commission while evaluating its options. “The school district lost out on millions of dollars that it otherwise would have received,” Markham-Hill said.
As a “property-rich” school district whose territory includes luxury condos and hotels on South Padre Island, Point Isabel ISD is a so-called “Robin Hood” district that under Texas state law must share its wealth with school districts that are property poor. Markham-Hill said the tax abatement agreement would have limited the school district’s property tax on Rio Grande LNG’s land for 10 years and kept more money in Point Isabel ISD’s coffers due to state laws that authorize local incentives for economic development on major projects.
“From a financial perspective, if the project moves forward, they would have been much better off with their agreement,” Markham-Hill said. The proposed Rio Grande LNG export terminal and two similar projects by Annova LNG and Texas LNG all face stiff opposition from environmentalists, fishermen, shrimpers and community groups. But they have the support of Texas Lt. Gov. Dan Patrick and other allies.
One of the the key opponents to the projects is the Sierra Club-supported environmental group Save RGV from LNG, which on its Facebook page touted the school board’s vote as a victory. With the cities of South Padre Island and Port Isabel publicly against the projects and dozens of anti-LNG activists regularly packing its meetings, the Point Isabel ISD board voted down a similar tax abatement application for Annova LNG in September. “Strategically, they need to get these types of tax breaks to secure funding,” Save RGV from LNG organizer Stefanie Herweck told the Business Journal following the Annova LNG vote.
During the Tuesday evening vote for the Rio Grande LNG tax abatement application, only school board members Diane O’Leary and Mickey Furcron voted in the project’s favor.
Like the other two terminals proposed for the Port of Brownsville, Rio Grande LNG is requesting permission to take natural gas extracted in the Eagle Ford Shale region south of San Antonio, liquefy it and export it to overseas customers. The company did receive some good news last month when the U.S. Department of Energy issued an order authorizing Rio Grande LNG to export natural gas to free-trade agreement nations.