Corps talks of diverting funds from project downstream
June 10, 2012 5:29 PM
Pam Panchak / Post-Gazette
Work continues on the new river wall at Charleroi Lock and Dam No. 4.
The new river wall on the downstream side of the Charleroi Lock and Dam No. 4.
By Len Boselovic Pittsburgh Post-Gazette
Long-delayed work on modernizing crumbling locks and dams on the Monongahela River could accelerate under proposals being considered by the U.S. Army Corps of Engineers.
But speeding up the pace of work in Pittsburgh would mean further delays and higher costs for the Corps' No. 1 priority: a project 964 miles down the Ohio River that is also billions of dollars over budget and nearly a quarter of a century behind schedule.
The Corps is asking the river industry for its advice on whether to divert some or all of the $150 million a year that goes to the Olmsted, Ill., project to the Mon and other projects. The $150 million is part of the $170 million available each year for construction and major repairs at locks and dams operated and maintained by the Corps.
But Corps officials estimate they need $900 million a year over the next 20 years to take care of a growing list of aging, debilitated locks and dams that are an economic engine in Pittsburgh and other river towns.
Locked and Dammed
A four-part Post-Gazette series on the cost of fixing our crumbling infrastructure.
"What we're doing is not sustainable," Corps Maj. Gen. Michael J. Walsh told members of the Inland Waterways Users Board. The industry panel, which advises the Corps on lock and dam spending, met Tuesday and Wednesday in Pittsburgh.
About 550 million tons of coal, grain and other commodities move on the nation's rivers each year. Corps and industry officials say many river facilities are on the verge of failing, including a 105-year-old dam at Elizabeth that would be eliminated as part of the Mon project.
A lock or dam failure would close the river to barge traffic, increasing truck traffic on roads, raising costs for shippers and perhaps causing electricity prices to increase. Board members were told a failure on a lock or dam on the Mon would jeopardize 1,300 jobs at U.S. Steel's Clairton plant, which they visited Tuesday.
Much of the discussion at the meeting centered on what to do about Olmsted, which has been a lightening rod for critics who say the Corps could do a better job controlling costs if it received more and consistent funding from Congress. They say piecemeal funding is one reason for the lengthening delays and massive cost overruns at Olmsted. The Corps estimates the project will cost $3.1 billion -- a $1 billion increase over an estimate it made last year -- and won't be completed until 2024. When it was authorized by Congress in 1988, the new locks and dam at Olmsted were to cost an estimated $775 million and be completed by 2000.
A task force of Corps and industry officials made finishing Olmsted the No. 1 priority in a 2010 report, a recommendation endorsed by the user board. No. 2 on the list is the Mon project, now expected to be completed in 2033 at an estimated cost of $1.7 billion. It was originally scheduled to be completed in 2004 at a cost of $750 million.
While the Corps is asking for industry help with deciding which holes in the dike to plug and where to cross its fingers that a lock or dam won't fail, some user board members are pushing for the Corps-industry plan they endorsed two years ago.
The plan ranks projects in order of importance, calls for reforms in the ways the Corps manages projects, and would boost a diesel tax barge operators pay. The tax generates about $85 million a year to replace locks and dams or make major repairs to them. The tax revenue is matched by taxpayer money, bringing total funding to $170 million a year.
The Corps-industry plan also recommended increased funding from Congress and making the federal government burden more of the costs. That flies in the face of massive federal budget deficits and opposition to raising taxes, particularly in the Republican-controlled House.
Legislation introduced this year by U.S. Rep. Ed Whitfield, R-Ky., would implement the Corps-industry plan, including raising the diesel tax to 26 cents a gallon. It has been 20 cents a gallon since 1995. Mr. Whitfield's bill is cosponsored by 15 other House members, none of them from Western Pennsylvania.
The White House wants to raise $1.1 billion over 10 years by charging barge operators fees to use the locks. That is something presidents since Franklin Roosevelt have tried and failed to do.
Barge operators at the meeting made it clear to U.S. Army assistant secretary Jo-Ellen Darcy, who rejected the 2010 Corps-industry proposal, that they remain opposed to lock fees. While they go along with the higher diesel tax, they say hydroelectric companies, recreational boaters and other groups who benefit from locks and dams should help pay for them.
"We're willing to put more on the table. The other beneficiaries are at the trough benefiting from what the system has to offer," said board member Scott Noble of Ingram Barge, a Nashville, Tenn., barge operator.
Board members also wondered why their advice was being sought on whether to divert money from Olmsted when the White House rejected the Corps-industry plan the board endorsed. They said that plan, embodied in Mr. Whitfield's legislation, would give the Corps $380 million in annual funding for 20 years.
"It seems we're being asked to set that all aside," said board member Mark Knoy of American Commercial Lines, a Jeffersonville, Ind., barge operator.
Corps officials proposed several alternatives for Olmsted, including increasing annual funding to $215 million. That would complete the project four years earlier and save an estimated $250 million.
Other options included diverting $100 million from Olmsted to other projects and halting the project altogether. If Olmsted was stopped and all the money went to the Mon project, new locks at Charleroi would be completed in six years, the Corps' Richard Hancock told board members.
However, that would risk the failure of a dam that Olmsted will replace, something that would halt traffic on one of the busiest stretches on U.S. rivers. Mr. Hancock told board members completing Olmsted will provide $875 million in annual benefits compared to $488 million in annual benefits that would be realized by completing the Mon project and 21 other projects on the Corps' high-priority list.
"I believe it's compelling we continue with Olmsted," Mr. Hancock said.
Board members were skeptical about some of the estimates Corps officials provided at the meeting.
"None of us completely understand the economic benefit numbers they're throwing out there," said board chairman Larry Daily of Alter Barge Line, which is based in Bettendorf, Iowa.
One thing industry and the Corps do understand are the risks posed by not fixing failing locks and dams.
"The challenge for us is to figure out how to get you more money faster," Mr. Knoy told Gen. Walsh.