TULSA
– The 445-mile McClellan-Kerr Arkansas River Navigation System faces
$91 million in critical maintenance repairs across Arkansas and
Oklahoma.
While that’s an impressive chunk of cash, it pales
against the $5.5 billion or more weighing against America’s nearly
11,000-mile inland waterway system over the next five years, analyst
Norb Whitlock warned Friday.
And that’s less than half the $12
billion in new construction needs that are facing a water highway
system where 117 of its 240 locks are more than 50 years old.
“If
those numbers are even close to being correct, we have a major
problem,” Whitlock told a group of about 100 executives gathered Friday
at Muskogee’s Three Forks Harbor River Center for the 39th Annual
McClellan-Kerr Navigation Conference.
While the Obama
administration continues to pour $1.5 billion or more in economic
stimulus funds into river projects, allowing the Army Corps of
Engineers’ Tulsa Division to cut a third of its critical backlog this
year, river system projects continue to receive lower priority at
Congress than highway construction or other issues, as U.S. Sen. Jim
Inhofe indicated Thursday in his tour of the Corps’ dewatering project
at Lock 18.
Perhaps more troublesome, the primary funding
mechanism for new waterway construction stands dangerously depleted –
and few people have any ideas on how to replenish it.
Nourished
by a 20-cent diesel fuel tax on barges, the Inland Waterways Trust Fund
has enabled some $2 billion in new construction along the waterways
since its inception two decades ago, filling a federal mandate to
provide 50 percent of those costs. But with inflation, congressional
interference, poor scheduling, potential waste and other factors
playing havoc on project costs, Whitlock said the fund now holds only
$85 million in its coffers.
To rejuvenate the trust enough for
America’s construction needs, Whitlock said the fuel tax may have to
rise five times to $1 a gallon – an amount he said could eliminate the
economic advantages water transportation offers.
“It seems unfair
that the system would punish an industry so environmentally friendly,
so economical, and is the safest mode of transportation today,” said
Whitlock, the recently retired chief of operations for American
Commercial Lines of Jeffersonville, Ind., and former chairman of the
Inland Waterways Users Board.
Whitlock pointed to one possible
alternative, establishing a bank-like inland waterway authority capable
of issuing grant anticipation revenue vehicles (GARVEE) bonds.
“That
could take some of the peaks out of the federal appropriation flow,” he
said. “It could smooth costs, and takes the industry out of the
pay-as-you-go system.”
Noël P. Comeaux, a transportation industry
analyst with the Office of Marine Highways and Passenger Services in
Washington, suggested funding relief may also come available from
still-developing programs under the Energy Independence and Security
Act of 2007.
Designed to lower highway and rail congestion by
encouraging increased use of inland waterways, Comeaux said the OMH
leaders are studying several different funding mechanisms, including
shipper tax credits.
But such credits, and the fuel tax itself, depend on barge traffic severely wounded by the national recession.
“There’s
not a whole lot of good right now,” said John Janoush, vice president
of the family-owned towing company Jantran of Rosedale, Miss. “Inbound
tonnage can’t get a grip.”
Revenue for St. Louis-based American
Commercial Barge Lines fell 28 percent in the first half of 2009, said
Regional Sales Director Janice Luchan. This reflects a 43-percent drop
in steel shipments and a 27-percent decline in liquids. While grain
volumes rose 49 percent and coal shipments climbed 8 percent, she said
that traffic provides lower margins.
Janoush said this recession has spurred a round of mergers among operators while reversing once-surging barge prices.
“It
wouldn’t surprise me if in the near future we may have five or less
major barge lines,” he said. “We’re very close to that now.”
Terrence
M. Moore, director of business development for AEP Barge Line, said
operators must look for new solutions to survive this downturn. He
suggested they consider partnerships among rail and trucking carriers
to provide the services customers need.
“In this day and age,
you’ve got to look beyond the boxed barge,” said Luchan. “It’s what you
do with the equipment. How smart you are. How efficient you are.”
The
only direction everyone seemed to agree on was opposition to the lock
tax funding mechanism Obama administration officials have tossed around
to replenish the waterways trust fund.
“It’s a question of whether we keep our barges floating or do we sink them with an unaffordable tax,” said Whitlock.
Moore
said his barge fleet, which moves 66 million tons of cargo a year, pays
$9.6 million a year to the 20-cent fuel tax. He said it would pay $38
million if the lock tax goes into effect.
While that would harm
most carriers, Whitlock said it would prove grossly unfair to upstream
destinations like the Tulsa Port of Catoosa, accessible only after
ships go through 18 locks.
“We’ve got to make sure the systems put forth are uniform and fair to everyone who uses the waterways,” said Moore.