City of Houston Grants Fairway Energy Partners Tax Abatement
The City of Houston recently granted Fairway Energy Partners a tax abatement on a crude oil storage facility. From the company’s perspective, the abatement was a crucial element in the project going forward, and even with the abatement the tax benefits for the City of Houston stand to be substantial. The abatement represents a “win” for both the company and the City, and The Perryman Group is pleased to have been a part of the process.
Any discussion of economic incentives hinges on analysis of the benefits of the proposed project or location including not only the direct economic stimulus associated with the project, but also the multiplier effects through the economy. Understanding the scope of benefits can help ensure incentives are structured in such a way as to encourage desirable economic development while still generating tax benefits over time. (Click to read more), (Less)
The Perryman Group also found that all local taxing entities would likely experience significant gains in tax receipts stemming from Fairway’s Pierce Junction project, even considering possible tax abatements. The project has the potential to generate notable tax receipts for the City of Houston stemming from
- real property taxes on the facility value during the abatement period and 100% beyond that time,
- personal property taxes paid on crude oil inventory, and
- taxes stemming from increased business activity including incremental retail sales and overall increases in property tax values associated with economic expansion.
Dr. Perryman also met with City officials to discuss the project and its economic and fiscal benefits.
Fairway’s Pierce Junction crude oil storage facility has the potential to serve as a notable source of economic stimulus for the City of Houston and surrounding area. It can generate jobs, increase tax receipts, and enhance Houston’s emergence as a market center for crude oil. The economic and tax implications of the facility were an important consideration in the abatement process, and by granting an abatement, the City of Houston has enabled the project to move forward while simultaneously generating future economic and tax benefits for the City as well as other taxing entities in the area.
Cheniere Ships First Load from Sabine Pass LNG Facility
In late February 2016, Cheniere loaded the first cargo of liquefied natural gas (LNG) produced at its Sabine Pass liquefaction project in Cameron Parish, Louisiana (just across the state line from Beaumont, Texas). The LNG was shipped to Brazil, where it was regasified and used to supply the Brazilian market, including power plants. The US currently has an overabundant supply of natural gas, and access to international markets helps support the industry while providing clean-burning fuel to other countries.
According to the National Gas Act, the Federal Energy Regulatory Commission (FERC) must approve any application to build or operate LNG facilities. The FERC’s review involves a number of perspectives including, among others, environmental effects, cultural and geological resources, land use, engineering and safety adequacy. As part of Cheniere’s successful application process, The Perryman Group (TPG) provided analysis on another required component: the socioeconomic impact. (Click to read more), (Less):
The Cheniere facilities lead to a sizable stimulus in a variety of sectors, as well as generating spillover benefits for an even wider range of businesses. At the same time, consumers around the world have the potential to benefit from access to reasonably priced, clean-burning natural gas. The Perryman Group, which has performed similar analysis for several other proposed LNG facilities in the US and Canada, congratulates Cheniere on this significant milestone, and is honored to have been a part of the process.