The issue of deteriorating locks and other infrastructure on an inland waterway system that is vital to moves of tens of millions of tons of coal each year was the focus of an April 18 hearing of the House Committee on Transportation and Infrastructure’s Subcommittee on Water Resources and Environment.
Major General John Peabody, commander of the Mississippi Valley Division of the U.S. Army Corps of Engineers, said in his prepared remarks that the Corps has a portfolio of 221 locks with an average age of 60 years. They have performed well, but many of them are showing signs of wear and tear. In a select few cases, the condition of a lock or dam has deteriorated to a point that catastrophic failure is a real possibility, he added. In all such cases with which he is familiar, there is an active construction project to replace or remediate the project.
“Catastrophic failure of a lock or dam at a high-volume point along one of the major waterways would have significant economic consequences because other transportation modes generally lack the capacity to either quickly or fully accommodate the large volume of cargo moved on the inland waterways,” Peabody added. “Therefore, cost and congestion of other modes (mostly rail) could be greatly affected and some cargoes may be delayed for extended periods. For example, the Corps extended a planned 18 day closure at Greenup Locks in 2006 when extensive deterioration of the miter gates was discovered. This lengthy, unplanned delay cost shippers over $40 million and several utilities came within days of having to shut down due to exhausted supplies of coal.”
The Corps’ increased monitoring efforts over the past decade illustrate that there has been a recent increase in the number of unscheduled lock outages and the Corps will continue its efforts to “attack” this trend, Peabody said.
In allocating funds within the civil works program, the Corps gives priority to the work that offers the greatest return to the nation in achieving economic, environmental, and public safety objectives. However, current revenues to the Inland Waterways Trust Fund require the Corps to limit spending for inland waterways capital projects, Peabody noted.
In September 2011, as part of his jobs bill proposal, President Obama sent a legislative proposal to Congress to reform the laws governing the Inland Waterways Trust Fund. This would provide an additional source of financing for major new investments in the inland waterways to support economic growth. It includes a new user fee, which would supplement the revenue collected from the fuel tax, and would increase the total paid by commercial navigation users enough to meet their share of the costs of activities financed from the Inland Waterways Trust Fund, Peabody said.
Martin Hettel, a senior manager for American Electric Power’s (NYSE: AEP) River Operations Division, testified at the hearing that rampant lock failures in recent years along the Ohio River, with the failure rate only rising as lock repairs are delayed or cancelled, are an electric power reliability issue. AEP and other utilities get much of their coal via barge. And with more and more coal-fired power plants being shut due to U.S. Environmental Protection Agency regulations, that puts a lot of load on the remaining coal plants, which makes a lock failure that deprives any of those surviving plants of coal a critical power reliability issue, Hettel noted.
Subcommittee Chairman Bob Gibbs, R-Ohio, said in an April 18 statement: “Letting the inland waterway system decline further would be an economic disaster to add to the Nation’s already significant fiscal problems. Having an inland waterways system that is a viable alternative will keep costs down among all modes of transport. If you take inland waterways out of the mix in terms of transportation options, costs go up and American products become less competitive in the global marketplace. And that means lost jobs.”
Robert Dolence, Vice President of Leonardo Technologies Inc. (LTI), testified that in work done by LTI, it has been forecasted that even with sustained low natural gas prices (maintaining less than $4/mmBTU natural gas cost levels for 50 plus years), coal maintains a significant role in electric power generation. “Based on the combined detailed modeling performed, LTI concludes the Ohio River Navigation System is a vital component to ensuring safe, reliable, low cost, domestic energy – including electricity – to our country,” he added.