Industrial Desalination Plans in Flux as Council Questions Project Transparency
By Beatz Alvarado, Matt Tedrow
Highlights:
- City Council will vote on whether to continue funding the Inner Harbor Desalination Plant on Sept. 2.
- Drew Molly, chief operating officer for Corpus Christi Water, resigned shortly after council members paused funding for Inner Harbor project.
- Industry-led stakeholder group formed in 2014 to pursue seawater desal slips into advocacy role to keep project from dying.
On Sept. 2, the Corpus Christi City Council will decide whether to continue funding the City’s most expensive water project in consideration to meet industrial water needs in the coming years.
It’s been a contentious month since council members began hard-line questioning City staff on the implications of building the Inner Harbor desalination plant, the first municipally-owned, large-scale seawater desal facility in the country.
City staff now must grapple with the loss of Drew Molly, chief operating officer for Corpus Christi Water, who tendered his resignation about a month after five council members voted to pause the project for the first time since design work began. All the while, opposition has ramped up for alternative projects that are now being aggressively pursued.
The City’s Inner Harbor plant, planned for the Hillcrest neighborhood in north Corpus Christi, has become an expensive feat, going from a $222 million plant capable of producing 20 million gallons of water a day (MGD) in 2019 to now a $1.2 billion plant capable of producing 30 MGD.
History of Desal Fight
While opposition to seawater desalination as a new regional water source has historically stemmed from its potential ecological and environmental costs, as well as its role in enabling further industrial expansion in the Coastal Bend, the Inner Harbor plant has attracted fiscal conservatives to the anti-desal fight whose opposition hinges on ballooning costs.
Read more: The Desal Divide Pt. 1: The Science
Area residents continue to reshape the City’s narrative on the plant’s impact on water rates and the bays. During the public comment portion of the July 15 City Council meeting, a cost analysis shared by a resident influenced the discourse among council members.
The Inner Harbor project was ranked as the most expensive seawater desalination plant in the world “per unit of output,” in this case MGD, by Corpus Christi resident Michael Miller, a principal with Teal Construction.
“We are probably going to be paying more for one gallon of water than anyone in the world at the price we’re getting for 30 MGD,” said at-large councilwoman Carolyn Vaughn during the July 29 council meeting. “That’s just too high … I don’t know who negotiated this, but I don’t think a very good job was done.”
On July 29, the Council voted to pause funding for the controversial plant, following a motion by District 3 council representative Eric Cantu. Supported by Sylvia Campos, Gil Hernandez, Kaylynn Paxson and Carolyn Vaughn, the delay allows more time to address rising building costs and loan repayment questions.
History of Desal and Alternatives
Some alternatives to desalination now being pursued as aggressively as the Inner Harbor plant, such as wastewater reuse and groundwater, were included in the City’s strategic plans for growth as early as 2014 but were deprioritized as industrial customers pushed against dependency on surface water.
“We strongly solicited and supported the Mary Rhodes II pipeline,” said Roger TenNapel, with Flint Hills Resources during an Aug. 28, 2018 City Council meeting. “(It) also illuminated the fact that we would now be even more dependent upon Mother Nature to supply surface water and maybe the risk of having enough wasn’t less with Mary Rhodes but, because of all this development, maybe the risk was even higher. At that point, a broad-based group of stakeholders began to work on whether or not desalination would be an economic, rain-independent addition to the city’s water supply.”
The stakeholder group TenNapel mentioned formed in 2014. It was made up of City staff, the Corpus Christi Regional Economic Development Center, the Port of Corpus Christi, the San Patricio Municipal Water District and the area’s largest industrial water users, including Flint Hills.
Together, the group procured funding for an economic feasibility study that determined a municipally-owned project would be the most cost-effective option to meet growing industrial water needs due to available state and federal funding.
Initially, the working concept was that industrial users would shoulder the construction and operational costs of such a facility. As proposed, the Inner Harbor desalination plant would be mostly funded by state loans and payments would be absorbed into water rates.
In 2018, this stakeholder group worked with the City to pass an ordinance to amend the Drought Contingency Plan to allow large volume water users to pay a voluntary fee as a way to not follow drought restrictions. The 2018 Drought Surcharge Exemption Fee is still in place today and raked in $20.8 million between 2018 and 2023. The revenue from the program is meant for the Inner Harbor plant, or other other non-curtailable source of water.
“I’m not sure that the public realizes the significance of this action that we’re fixing to take,” then-Mayor Joe McComb said during the first reading of the ordinance on Aug. 28, 2018. “This basically says there’s going to be a funding mechanism in place … we have a process going now identifying two potential sites, maybe more, through a Freese and Nichols contract that will identify a site for potential desal processing with part of that contract to come back with permit in hand."
“This is a giant step toward getting us an uninterruptible, non-curtailable source of water, which means for the future of Corpus Christi and expansion of existing industry and attracting new industry, I think it's just going to put us light years ahead of our competition.”
Industrial Water Needs
About 95% of the Coastal Bend region’s manufacturing demand occurs in Nueces and San Patricio counties, and both counties anticipate substantial growth in the future, according to the Texas Water Development Board’s regional water plan. Of the industries present in the region, chemicals and petroleum refining are the largest water users, according to TWDB’s plan.
The plan also states that the San Patricio Municipal Water District (SPMWD) expects a 397% increase in demand for water from manufacturing operations by 2030 while Nueces County expects a 38% increase. The SPMWD is a wholesale provider to industry in San Patricio and buys water from the City of Corpus Christi.
As council members have become skeptical of the Inner Harbor project, some members of the stakeholder group formed in 2014 have slipped into advocacy roles to keep the project from dying.
On Aug. 18, a letter to Council in support of the Inner Harbor project was penned by members of the 2014 stakeholder group and Gulf Coast Growth Ventures (GCGV).
Exxon Mobil and the investment arm of the Saudi Arabian royal family – Saudi Basic Industries Corporation (SABIC) – co-own the GCGV plant in Gregory.
GCGV is the region’s largest water user. They launched a public relations campaign during the 2024 election season to combat “growing anti-business rhetoric (that) has eroded support for our region’s manufacturers and major employers,” according to the My Town Our Future campaign’s website.
Read more: Who's Behind 'My Town Our Future' PR Campaign?
Most recently, “Water We Waiting For?” yard signs with the My Town Our Future and the United Chambe of Commerce logos have sprung up around town.
While the Inner Harbor desalination plant could still advance, the pause shifts focus to alternative water proposals with varying costs, timelines and infrastructure needs.
Read more: Op-ed: Here’s why the City Council should pursue the most affordable, least risky water projects
The below alternatives to the City’s Inner Harbor project have been presented to council throughout 2025.
Reach out to us for access to the above spreadsheet: chismecollective@gmail.com.