ISSUE: NC International Terminal

Updated August 6, 2010

The North Carolina International Terminal (NCIT) is a megaport proposed by the North Carolina State Ports Authority, an agency of

the NC Department of Commerce. The Authority has purchased a 600-acre undeveloped industrial tract on the west bank of the

Cape Fear River in Brunswick County for the NCIT project. The proposed site is located four miles from the mouth of the Cape Fear

River and the Atlantic Ocean and only 17 miles from the Port of Wilmington. As envisioned, NCIT would greatly expand the capacity

of the Wilmington port.

According to the proposed plan, the NCIT would be a highly-automated, deep water container terminal capable of serving the most

advanced large vessels and handling two to three million TEUs* per year, a capacity similar to that of the ports at Charleston and

Savannah (* A TEU is a standard unit for describing a ship's cargo carrying capacity, or a shipping terminal's cargo handling capacity).

The Authority says the NCIT could be open for business in 2017 and reach its full capacity by 2030.

History

The concept for the NCIT began taking shape in 2005 when the Ports Authority learned that an undeveloped 600-acre site on the

Cape Fear River was on the market. On April 12, 2006, Ports Authority officials closed on the purchase of the $30 million property as

the proposed site for the NCIT.

After a comprehensive selection process during 2006, in July CH2M Hill, a global engineering and consulting firm was chosen to

manage the development process of the proposed NCIT. The Authority ultimately expanded the scope of CH2M Hill’s work in August

2006 to include the development of a business plan and financial strategy. Completed in March 2008, the plan portrays the project

in a very positive light, claiming that 461,000 jobs throughout the state will be related to the projected level of container operations

at the NCIT.

In June 2008, CenterPoint Properties, a Chicago-based company, became the Ports Authority’s partner in developing the NCIT.

However, in the midst of the economic downturn in the fall of 2008, the Ports Authority announced that CenterPoint would be

forced to withdraw from the project due to limited capital.

In 2009, the US Army Corps of Engineers began a Federally-funded reconnaissance study to determine if there is a Federal interest

for the deepening of the navigation channel to the NCIT. This study was due to be completed in June 2010, but a February 2010 draft

of this study recommends moving forward into the feasibility phase.

Meanwhile, the Ports Authority commissioned their own separate feasibility study by Moffatt & Nichol,a marine engineering firm,

for use in a revenue bond offering. This study was completed in February 2010 and concluded that the project was feasible.

In May 2010, the US Army Corps of Engineers asked the state to participate in the cost of a study to determine the feasibility of

dredging the Cape Fear River for the NCIT. The study would take about five years and cost $10 million, with the state being asked to

pay $4.7 million of this amount. The NC Department of Environment and Natural Resources (DENR) was prepared to sign a letter of

intent that would commit the state to share the cost of the feasibility study.

However, before a feasibility study could proceed, both Congress and the NC General Assembly would have to approve funding for

it. In June 2010, on a vote of 104-11, the state House overwhelmingly approved an amendment removing the proposed funding for

the feasibility study from the state’s 2010-11 budget, and they got no argument from the Senate. The final budget excluded all

funding for the study, placing the future of the NCIT in limbo, at least for the time being.

The Debate

SUPPORTERS say that the NCIT is destined to be “America’s Next Great Port.” According to the North Carolina State Ports Authority,

the project will:

• Support over 400,000 jobs.

• Provide an additional $1.2 billion in state and local tax revenues.

• Drive additional private investment and employment opportunities regionally as distribution centers and logistics facilities

emerge across Southeastern North Carolina.

• Offer convenience to millions of U.S. consumers and businesses.

• Supply valuable support to the region’s defense-related economy given proximity to the Military Ocean Terminal at Sunny

Point, and the State’s military bases.

• Serve as the state's only deep-water port, allowing cargo shipping to bypass ports at Savannah, Charleston, & Hampton

Roads and come directly into North Carolina.

In May 2010, the state Ports Authority CEO Tom Eager extolled the virtues of the project, stating, “There is no way this project will

fail. There is no way we can allow this project to fail.” He referred to the activist group No Port Southport, which opposes the

project, as a bunch of “know nothings and transplants.”

SUPPORTERS include:

Governor Beverly Perdue

North Carolina State Ports Authority

US Army Corps of Engineers

NC Department of Environment and Natural Resources (DENR) - Divisions of Coastal Management & Marine Fisheries

OPPONENTS question both the need and the cost for the NCIT. They assert that the Ports Authority's financial projections are based

on invalid assumptions and that the NCIT would lose approximately $25 million per year. Opponents also claim that:

• The current container terminal at the Port of Wilmington has sufficient capacity to handle projected shipping growth for the

next 20 years and beyond.

• NCIT would not create new jobs. Since it would compete with the Port of Wilmington, a job at NCIT would at best simply

replace a job lost at Wilmington, and automated container handling systems planned for NCIT will result in minimal

personnel needs.

• Existing ports at Savannah, Charleston, and Hampton Roads are already expanding to handle the largest container vessels.

• Since the Cape Fear River is not a deepwater harbor, a new channel must be dredged, involving the removal of 68 million

cubic yards of material and costing $1.35 billion.

• The nearest interstate highway, existing or planned, is over 20 miles from the NCIT site. A new four-lane highway costing

$261 million would be necessary.

• The nearest trunk-line railroad is 23 miles from the NCIT site. The connecting spur is a single-track, crossing the property of

a nuclear reactor (Progress Energy) and the largest ammunition depot in the Western Hemisphere (Military Ocean Terminal

Sunny Point; MOTSU), and passing through the center of a residential community. Necessary improvements would cost $73

million.

• The proposed private partner for NCIT terminated the agreement and no replacement has been found.

• The State Ports Authority’s model for NCIT is the new APM terminal in Virginia. Recently, the private company running that

terminal asked the Virginia Ports Authority to take over, as the terminal has been consistently unprofitable.

Opponents also cite a number of environmental concerns, including:

• Building NCIT would require destroying 100 acres of coastal wetlands, depriving essential habitat for commercial &

recreational fish populations, as well as many species of native and migrating birds.

• Dredging the NCIT shipping channel to the depth required for post-Panamax vessels will endanger the aquifer supplying

drinking water to much of Brunswick County.

• Independent studies have shown that unemployment, poverty, and environmental hazards are substantially higher in port

areas.

• Most container ships use bunker fuel, the dirtiest grade of diesel fuel, containing up to 45,000 ppm of sulfur. Ships using

bunker fuel emit more sulfur dioxide than the entirety of the world’s cars, trucks and buses combined and up to 21 percent

of the greenhouse gases from all transportation sources.

• An estimated 414 trucks per hour and 10-14 trains per day would move containers in and out of NCIT. Diesel fumes from

this huge amount of traffic, in addition to that generated by the container ships, would dramatically increase local and

regional air pollution.

• The Environmental Protection Agency says exposure to even low levels of diesel exhaust is likely to pose a risk of lung

cancer and other respiratory diseases.

• A recent scientific study published in the medical journal Pediatrics demonstrated a positive correlation between exposure

to air pollution and a lower IQ in children.

• The NC Ports Authority admits that its ports routinely handle shipments of highly dangerous materials, including PETN (the

explosive favored by terrorists). In January 2010, the entire Morehead City, NC area was evacuated due to an accident

involving a large shipment of PETN at the port.

• NCIT will be located right next to the above-ground, spent nuclear fuel storage area of the Progress Energy plant and the

huge ammunition storage sites of MOTSU. An accidental or terrorist explosion at NCIT could render a large swath of the

U.S. Eastern Seaboard uninhabitable for decades.

OPPONENTS include:

No Port Southport

City of Southport

Caswell Beach

Boiling Springs Lakes

Town of Saint James

Town of Oak Island

Village of Bald Head Island

Bald Head Island Conservancy

Baptist State Convention of NC, Business Services Committee

US Fish and Wildlife Service

Finally, some members of the Council of State, who had voted unanimously in 2006 to allow the Ports Authority to borrow the

money to buy the land for NCIT, are having second thoughts. Then State Auditor Les Merritt, now admits his support of the

proposed port was an error in judgment.

"It's not my proudest moment that I voted for it," said Merritt. "It could be a bigger boondoggle than the Global TransPark or the

Randy Parton Theater."

"The risks outweigh the potential rewards in this case," Merritt continued. "The idea needs to be killed before so much is invested

that the powers-that-be feel obligated to keep on going."

OTHER INTERESTED PARTIES who are following the issue closely without publicly expressing support or opposition include:

Sen. R.C. Soles, NC Senate District 8

North Carolina Department of Cultural Resources

North Carolina Wildlife Resources Commission

US Environmental Protection Agency

US Marine Fisheries Service

Progress Energy

Summary

Governor Bev Perdue, who also served on the Council of State in 2006 as Lieutenant Governor, has stated through a spokeswoman

that she still has faith that NCIT can provide significant financial returns for North Carolina. But Progress Energy is concerned about a

port of this size next to its nuclear plant that could possibly interfere with nuclear operations.

In July 2010, the Ports Authority announced that in light of the refusal of the General Assembly to provide necessary funding and

Congressman Mike McIntyre’s opposition, all work on the project would be halted indefinitely. But at the July meeting, Board

Chairman Carl Stewart told members of the board that he remains committed to the project, and despite a loss of $6 million for the

budget year ending June 30, 2010, the Ports Authority inked a three-year, $375,000 contract with Capstrat, a Raleigh-based public

relations & lobbying firm, to represent them.

In the five years since the project’s inception, North Carolina taxpayers have invested $10.2 million on the project, including fees for

planning, engineering costs, legal & financial fees, and debt service on the property.

NCIT TIMELINE

2005 NC Ports Authority learns that an undeveloped 600-acre site on the Cape Fear

River is on the market.

Feb.

2006

NC Council of State gives Ports Authority unanimous approval to borrow money

to purchase the 600-acre site.

April

2006

Ports Authority officials closes on the purchase of the proposed site for the

NCIT.

July

2006

CH2M Hill, a global engineering and consulting firm chosen to manage the

development process of the proposed NCIT.

Aug.

2006

The Authority expands the scope of CH2M Hill's work in to include a business

plan and financial strategy.

2008 NoPort Southport formed to oppose NCIT, steering committee begins to meet.

March

2008

CH2M Hill's business plan for NCIT completed portraying the project in a very

positive light.

March

2008

Town of Caswell Beach Board of Commissioners passes resolution opposing

NCIT.

June

2008

CenterPoint Properties becomes the Authority's partner in developing the NCIT,

but withdraws later that year due to the "depressed economy."

Feb.

2009

The US Army Corps of Engineers receives funding to determine Federal interest

for the deepening of the navigation channel to the NCIT.

Feb.

2010

Corps of Engineers asks the state to help fund a study to determine the

feasibility of dredging the river for the NCIT.

June

2010

Village of Bald Head Island, Bald Head Island Conservancy and City of Southport

pass resolutions opposing NCIT.

June

2010

Baptist State Convention of North Carolina's Business Services Committee

sends letter to Gov. Bev Perdue opposing NCIT on environmental grounds.

June

2010

NC final budget for 2010-11 excludes money for NCIT feasibility study. Though

supporters vow to search for funds elsewhere, Rep. Pricey Harrison declares

that the project is "on life support."

June

2010

U.S. Congressman Mike McIntyre expresses opposition to the port, placing

future federal support in jeopardy.

July

2010

NC Ports Authority announces that all work on the megaport will be halted

indefinitely while they examine other options.

July

2010

NC Ports Authority signs three-year, $375,000 contract with Capstrat to

represent their future interests.

SURVEY QUESTION:

Yes No Should North Carolina taxpayers pay to build the proposed megaport in Brunswick County?

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