WASHINGTON, D.C. — Inland waterway proponents can take heart that their drive to increase investment in locks and dams and speed up project construction is taking hold within the Beltway.
House Transportation and Infrastructure Chair Bill Shuster and Chamber of Commerce CEO Tom Donohue recently voiced support for spending more on the maintenance of the arteries crucial to bulk shippers. The low water levels of the Mississippi River that threatened to shut down barge traffic last month appears to have drawn Washington’s attention to the oft-ignored industry. The threat grabbed the attention of the White House, making it arguably the first time in many years that inland waterways have grabbed such national prominence, said Rick Calhoun, president of Cargo Carriers, a subsidiary of major shipper Cargill.
“I believe we are at a tipping point, and if we don’t deal with (the nation's transportation infrastructure) issues, we will suffer the consequences,” said Shuster, R-Pa., on Wednesday at the Chamber of Commerce’s first annual Transportation and Infrastructure Summit in Washington. “The average age of (lock and dams) is 60 years old, and they were built to last 50 years. The need to invest in locks and dams is critical. It is cheapest mode of transportation we have.”
As part of his speech on how the private sector is willing to pay higher taxes to fund transportation infrastructure, Donohue urged Congress to consider the barge industry’s proposal to do just that. The barge industry wants the next Water Resources Development Act to raise its fuel tax by 30 percent to 45 percent, or between 6 and 9 cents per gallon. The extra revenue would help get annual inland waterway spending to the needed level of $380 million, which is more than twice what's being spent now.
“We have been complacent for decades. It is really time to pay the piper,” American Electric Power CEO and President Nick Akins said at the conference.
AEP, which operates its own barge company, is dependent on the nation’s rivers to transport grain, coal, petroleum products, fertilizer and a growing amount of frac sand for the natural gas industry. But the business is hampered by underinvestment in dredging and lock and dam maintenance, causing barge delays. Roughly 90 percent of U.S. dams and locks have some type of unscheduled operation delays in 2011, Akins said.
The barge industry also wants the federal government to do more of the heavy-lifting on all dam construction and major rehabilitation. Instead of using the Inland Waterways Trust Fund, which is driven by fuel taxes, to pay for the Olmsted Locks and Dam project, the industry wants the federal government to take on the project cost separately.
The Olmsted project was originally slated for completion in 2000 and at a cost of $775 million, but construction is only half way done and not expected to be finished until 2020, Akins said. The cost estimate is now four times higher than what was originally projected.
"You can see with projects like that they are soaking up additional funding and that’s causing a shortfall for new facilities," Akins said.
The timeline for potential reform through WRDA is unclear. The Senate has been holding hearings on the bill, with Sen. David Vitter, R-La., pushing hard for inland waterway interests by proposing Army Corps of Engineers reform and more maintenance funding. Although Shuster says WRDA is a priority, his committee has yet to schedule hearing on the bill.
“We are still the envy of the world when it comes to moving bulk goods, but the gap is narrowing," Calhoun said. "If you are afraid to feed the cow, then you need to be prepared to stop milking it at some point."