EDITORIAL: Investment

Rewards from abatements should offset potential risk

After several delays and significant opposition, Cameron County commissioners voted to give Annova LNG a package of tax breaks if the company moves into the Port of Brownsville.

Such enticements are common, although they are risky; essentially, the county is investing in the company’s potential to provide benefits that exceed the revenue lost in the abatement.

Annova is one of three liquefied natural gas companies that are looking to set up distributorship centers at the port.

Many residents oppose the companies, citing environmental concerns, while proponents cite the promise of jobs and other revenue that will offset the abatement.

Local governments offer tax breaks to convince them to choose those locations over any other they might be considering.

Some have said that the LNG companies don’t need such enticements, since their need to be located at a maritime port limits their options. A majority of the county Commissioners Court saw the value of the abatement — the vote was 3-2 — expressing that the benefits outweigh the risks.

Like any investment, tax abatements require knowledgeable decisions based on the best research possible.

Officials owe it to their taxpayers, whose money will replace the waivers given to the companies, to avoid long shots, and have reasonable expectations that the abatement will pay off.

Annova will pay $500,000 a year to the county in lieu of tax charges during the 10 year abatement. The company also plans to pay $100 million in leases and other costs.

The company also expects some 700 construction jobs will be created during the four-year construction period, and once it’s operating it expects to have 165 permanent workers earning an average base salary of $70,000. That’s five times the local median income of $14,000.

And the risks of success for the LNG companies — and the benefits they will provide to the local economy — seem a safe bet.

Technological advances have made gas a cheaper source of fuel for power generation. The Institute for Energy Research reports that as of 2016, gas-fired electricity plants now generate more energy in the United States than coal fired turbines. Gas is 16% cheaper than coal, saving both utilities and homeowners money.

Environmentally, gas emits 50% to 60% less carbon dioxide than other fossil fuels with significantly less sulfur, mercury and other particulate matter released into the air, according to the Union of Concerned Scientists. While we share environmentalists’ concerns for renewable energy options, the cost of such technology doesn’t yet make it a viable option.

Thus, hindering the development of natural gas at this time would only prolong the use of older, dirtier energy options, and seems contrary to environmental goals.

Helping promote cleaner energy, even if it isn’t the cleanest possible, is a worthwhile endeavor. But the priority for Cameron County commissioners is the best use of taxpayers’ money.

The possible long term benefits of LNG distribution plants could be a worthwhile investment.