The U.S. locks and dams debate

by Stormy Wylie
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Proposed improvements to the system of locks and dams system along the upper Mississippi and Illinois river system in the United States, through which barges move about 60% of U.S. grain to Gulf ports for export, have been awash in controversy in recent months, and the issues have been as murky as the river itself.

A still unfinished seven-year, U.S.$54-million feasibility study and economic analysis by the U.S. Army Corps of Engineers was to have been completed in December 2000 but is on hold pending investigations by the Department of Defense, the National Academy of Sciences and several members of Congress into allegations that top Corps officials tried to manipulate the study to justify the costly improvements.

The whistleblower, a senior regional economist with the Corps and the original technical manager of the economic study of the project, told the U.S. Office of Special Counsel that his figures showed the project to be "unnecessary and expensive," and said he was pressured to change his results in favor of the project.

A spokesperson with the O.S.C. in Washington said any further investigation is pending the completion of a report from the Secretary of Defense, expected in mid-October.

Dave Tipple, a spokesman for the U.S. Army Corps of Engineers, Rock Island District, said he could not comment on the investigations. However, he said the agency was currently reviewing the original draft feasibility report; traffic volumes on the river system have been less than was anticipated in the draft document several years ago, he said, and may affect the outcome of the study.

The river improvement project, which would renovate or in some cases double the length of many of the 37 lock sites over 1,200 river miles at a cost somewhere between U.S.$1 billion and $2 billion, has pitted the grain and barge industries against environmentalists and economist against economist.

For the U.S. grain industry, the answer is simple: quit studying and start repairing the inland waterway locks and dams.

Steve Lucas, vice-president of export operations for Louis Dreyfus Corp., Wilton, Connecticut, U.S., and chairman of the National Grain and Feed Association's waterborne commerce committee, said barge congestion caused by an inadequate locks system increases the cost of U.S. grain and threatens the country's international competitiveness as foreign competitors invest heavily in their own water infrastructure.

"With the increasing age of much of the U.S. inland waterways system, the United States may be losing the competitive advantage it has enjoyed for so long," Mr. Lucas said recently at a hearing of the House Transportation and Infrastructure Committee. "Our foreign competitors — Argentina, Brazil and China — all have made substantial investments to improve their inland waterways, rail and ports systems. These increased transportation efficiencies in these countries will lead to lower delivered prices for their commodities — prices that United States commodities will have to compete against."

But the high price tag and political pressure from environmentalists — who say the wakes and currents created by the massive barges are dangerous to wildlife and the shallow, slow-moving places that many species need to survive — may sink the project.

OUTDATED SYSTEM. Most of the current system of locks and dams on the Upper Mississippi and Illinois river systems were built in the 1930s and '40s, with an expected 50-year life span, and are fast approaching obsolescence, many experts say. Many locks are only 600-feet long — too short to handle modern tows, which are nearly one-quarter of a mile long.

Towboats usually need two passes to get barges through the locks. The extra time required increases river congestion and creates bottlenecks. In some areas, delays have been as long as four hours per lock.

Proponents say barges are slow, but efficient, and use far less fuel to transport a ton of grain than trucks or trains. According to the National Waterways Conference, one 1,500-ton barge can carry 52,500 bushels of grain. That's equivalent to 15 jumbo rail hoppers or 57 semi-trailer trucks.

Expanding the locks would eliminate the bottlenecks that drive up the cost of corn, soybeans and many other goods transported on the river, according to the National Grain and Feed Association, a non-profit trade organization of about 1,000 grain, feed, processing and grain-related companies that handle more than two-thirds of all U.S. grains and oilseeds. The N.G.F.A. for years has advocated modernizing the locks and dams for the benefit of U.S. agriculture.

The group cites empirical studies conducted by economists at the universities of Illinois, Minnesota, Iowa State and Texas A&M as well as the Allegheny Institute and Criton Corp., which show that the benefits of modernizing the locks and dams on the Upper Mississippi and Illinois rivers are three times greater than estimated by the Corps of Engineers.

However, a recent report by the Northeast-Midwest Institute in Washington, prepared by three independent economists, said that the Corps' projections of grain exports were far too high and that costly lock expansions were not economically justified.

Another report by the Institute for Agriculture and Trade Policy, Minneapolis, Minnesota, said the only winners in the river project are those who transport and sell grain on world markets.

"The barge companies have developed towboats so powerful that they will tow more barges than will fit through existing 600-foot locks," said Mark Muller, one of the authors of the I.A.T.P. report. "An obvious, and very compact, analysis is that if the barge tows are too big, then they are too big and that is the end of the story.

"Another obvious approach is that private companies, and not the public, should figure out a way to pay the full costs of the river project if they want to use the larger equipment. Unfortunately, neither of these points of view is getting consideration. Rather, a massive taxpayer-financed program has been proposed to make it possible to use larger tows."

Jim Keistler, merchandising manager for the Twomey Co., Smithshire, Illinois, and an N.G.F.A. member, pointed out that barge companies pay a fuel tax of 24.3 cents per gallon. Of that, about 20 cents is earmarked for the Inland Waterways Trust Fund to finance construction and renovation on the U.S. inland waterways system. (The remainder is diverted to the U.S. Treasury for deficit reduction.)

The fund currently has nearly $400 million, but disbursements by the Corps of Engineers has been declining, according to the N.G.F.A.

Mr. Keistler said there were many interest groups who want no improvements to navigation whatsoever. "Then they begin to politicize the problem and that drags it out even further," he said. "This country needs commerce to survive and you have to do some things that make that possible."

In response to environmental groups who oppose the project, Mr. Keistler said the grain industry does not oppose "reasonable efforts" to address environmental impacts of commercial and recreational use of the inland waterways.

"Nevertheless, those who claim that other modes of transportation can offset the river tonnage at no increased cost, public safety risk or environmental damage, are not being realistic," he said. "The economic reality is that the availability of competitive water transportation holds rail and truck costs in check. The environmental reality is that maintaining commercial barge transportation is a better alternative than increasing truck and rail traffic."