Report: Raven Petroleum's Mexico Export Plans Ignore Major Market Challenges
DUVAL COUNTY, Texas, Sept. 16, 2019 /PRNewswire/ -- An updated economic study released today reveals new vulnerabilities in Raven Petroleum's amended plan to open a 30,000 barrels per day (bpd) oil fractionation facility outside of Laredo. According to Raven's website, the South Texas Energy Complex (STEC) will produce diesel fuel, naphtha, and liquid petroleum gas products to be exported to Mexico via a nearby railroad. While betting on market demand from Mexico may have been a viable market strategy at the time of the project's inception three years ago, the report contends that Mexico is no longer an attractive market for U.S. refined products.
The study, conducted by economist Dr. Daniel J. Pastor of the University of Texas at El Paso, is an updated look at Raven's amended plans. STEC was first introduced to the public in 2016 as an oil refinery that would export 55,000 bpd by rail to Mexico. In early 2019, Moore changed course, downgrading STEC to a smaller-capacity oil fractionation facility.
The report highlights important considerations for investors who might be considering financing the project. Raven still identifies Mexico as a prominent market for its products, despite uncertain conditions with regard to the future of bilateral relations and trade with the U.S.
"Raven's business plan still appears to be heavily reliant on exporting their product to Mexico," said Dr. Pastor. "Despite Mexico's move towards greater energy independence from the U.S., despite the fact that Mexico already partners with Pemex to supply their remaining fuel needs, and despite President Trump's threats of tariffs over ongoing immigration disagreements. That's a lot of unpredictability."
Pastor used the National Renewable Energy Laboratory's Jobs and Economic Development Impacts tool - or JEDI - to estimate the number of jobs that would be created by Raven's reduced-capacity facility and the cost of construction - more than $500 million. While Raven has made no public statements about construction costs for the smaller facility, their website claims the region will benefit from "hundreds" of permanent full-time jobs once construction is complete. However, the data suggests the real number is closer to 50.
"Nobody I know is surprised to hear that Raven is once again trying to oversell the project," said Bob Bruni, a landowner from the area. "That would be consistent with [Moore's] typical approach. The difference now is that folks around here are paying far less attention to him than before."
In 2017, Moore suffered a loss of credibility after being accused of inflating the number of jobs that would result from STEC, underestimating the cost of construction, plagiarizing Raven's website, and withholding information from local elected officials.
"What began as a potential employment opportunity for more than a thousand South Texas residents has now devolved into a story about a shifty land developer who has yet to name his investors, cannot defend discredited job estimates, and cannot substantiate claims that clients are ready to buy Raven's products," said Webb County Judge Tano Tijerina. "He continues to inflate his job numbers and has made no attempt to correct for Mexico's changing energy market."
About South Texans Against the Refinery: South Texans Against the Refinery (STAR) is a coalition of residents, landowners, and organizations concerned that Raven Petroleum's proposed refinery in the tri-county area (Duval, Webb, and Jim Hogg counties) will cause harmful air pollution, threaten local water supplies, and disrupt area wildlife for generations.
Contact: Elyse Yates
Phone: (512) 565-9143
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SOURCE South Texans Against the Refinery
