Corps of Engineers Funding for Navigation Infrastructure

1
Corps of Engineers Funding for Navigation
Infrastructure
U.S. Army Corps of Engineers

• David V. Grier
• Institute for Water Resources
• Presented at
• Financing Freight Transportation Improvements
• U.S. Dept. of Transportation Seminar
• April 29, 2001
  St. Louis, MO

2
Corps of Engineers Activities

• Civil Works Missions
• Navigation
• Flood Control
• Hydropower
• Environmental Stewardship
• Emergency Response Recovery
• Shore Hurricane Protection
• Water Supply
• Recreation
• Regulatory Programs

3
Principal U.S. Ports
Handling Over 10 Million Tons in 1997
Anacortes
Seattle
Tacoma
Two Harbors
Presque Isle
Portland
Duluth/Superior
Portland
Calcite
Boston
Burns WW Hbr
Lorain
Detroit
Indiana Hbr
Ashtabula
Chicago
New York/NJ
Pittsburgh
Toledo
Philadelphia
Gary
Cleveland
Richmond
Paulsboro
Baltimore
Marcus Hook
Oakland
Cincinnati
Newport News
Huntington
Norfolk
St. Louis
Los Angeles
Long Beach
Memphis
Charleston
Baton Rouge
Savannah
Pascagoula
Lake Charles
Jacksonville
Houston
Mobile
Texas City
Honolulu
Plaquemines
Freeport
Port Arthur
New Orleans
Tampa
Beaumont
S. Louisiana
Galveston
Valdez
Corpus Christi
Port Everglades
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National Challenge Aging Water Resources
Infrastructure

• Investments in water resources Infrastructure
  have declined
• Aging infrastructure will cause performance and
  customer satisfaction problems
• Corps infrastructure
• 49 of lock chambers 29 of dams at least 50
  years old
• OM backlog of 450M doesnt provide needed
  maintenance to prolong life of infrastructure

National Need A High-Performance, Environmentally
Sustainable Infrastructure
6
National ChallengeWater Transportation System

• Contributes 8 of GDP
• System nearing capacity
• Commerce to double by 2020
• Already a generation behind in channel design
• Capacity constraints increase transportation
  costs, pollution, congestion

National Need A strong environmentally
sustainable maritime transportation
system Investment Required 14.7 B
7
U.S. Waterborne Commerce1960 - 1999
Annual Growth
1.9
3.3
0.8
8
Key Deep-Draft Harbor Improvement Projects in
FY01 Budget
L. Washington
Ship Canal
Columbia R.
Great Lakes
Boston
Navigation System
Port Jersey
Waukegan Hbr
Arthur Kill
New York/NJ
Redwood City
Delaware R.
Kill Van Kull
Stockton
Baltimore
CD Canal
Oakland
James R.
Norfolk/Craney I.
Santa Barbara
Los Angeles
Wilmington
San Diego
Charleston
Savannah
Pascagoula
Under Study (17)
Brunswick
Houston/
Under
Galveston
Sabine-Neches
Construction (14)
Pt. Everglades
Manatee
Corpus
Christi
Miami
9
Top 25 U.S. Container Ports
Seattle
Tacoma
Portland
Boston
New York/NJ
Philadelphia
Wilmington, DE
Oakland
Baltimore
Hampton Roads
Los Angeles
Long Beach
Wilmington, NC
Charleston
Savannah
Jacksonville
Houston
Gulfport
Anchorage
New Orleans
Palm
Honolulu
Beach
San Juan
Port Everglades
Miami
10
Forecasted Growth in TEU Throughput at U.S. Deep
Draft Ports 2000-2020(thousands of TEUs)
60,000
50,000
40,000
Imports
TEUs (thousands)
Exports
30,000
Total
20,000
10,000
0
Year 2000
Year 2010
Year 2020
11
Containership Sizes
Million Tons
500
Post-
Panamax
Panamax
400
300
200
100
0
1990
1995
2000
2005
2010
12
Constrained Containership Calls by Coastal
Region with and without Planned Corps Projects
Year 2000 and 2020
20
16
Year 2000
constrained calls (thousands)
Year 2020 with planned projects
12
Year 2020 without planned projects
8
4
0
Atlantic Coast
Pacific Coast
Gulf Coast
Great Lakes
13
Total U.S. Inland Waterway Traffic
Historic and Forecast 1975-2020
Million Tons
1,000
950
900
836
800
700
722
630
600
500
400
75
80
85
90
95
2000
05
10
15
20
Year
14
Average Queue Delays at Locks
Locks Over 1.5 Hours, 1998
Inner Harbor
Bayou Sorrel
Miss 25
Miss 24
Kentucky
Algiers
Miss 22
Marmet
Miss 14
Ohio 52
Port Allen
Miss 17
LaGrange
Miss 15
Lockport
Greenup
Harvey
Miss 20
Chickamauga
Miss 21
Miss 27
Miss 16
Marseilles
0
2
4
6
8
10
12
14
Hours
15
Why delays at locks?
Multiple lockages to pass a tow result in long
queues that are costly and inefficient.
Queues at old LD 26 on the Mississippi could
last hours or even days.
A new 1200-foot main chamber allows tows of 15
barges to pass in a single lockage, eliminating
most of the delay. The new lock handles 70
million tons annually -- mostly export grain.
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Inland NavigationConstruction Program

• Ongoing construction
• 9 lock dam construction projects
• 5 major rehabs
• Cost 4.4 billion

LD 3 Rehab
LD 12 Rehab
Lower Mon 2-4
LD 14 Rehab
Winfield
Byrd
LD 24 Rehab
Marmet
London Rehab
McAlpine
Olmsted
Kentucky
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Major Inland Navigation Studies

• Several major studies of inland navigation needs
  to 2020 and beyond
• Upper Miss Illinois - 7 locks authorized for
  PED if justified
• Ohio River 600 lock extensions at Greenup and
  Myers auth WRDA 2000
• Other candidate locks on GIWW and BWT

LD 11 Rehab
Greenup
Myers
Ohio River Mainstem
(19 Locks)
White R.
Chickamauga
Arkansas R.
Red R. to Index
Ala. R.
Calcasieu
GIWW Texas Coast
Bayou Sorrel
(Multiple Studies)
LA Intracoastal
Waterway Locks
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Corps Civil Works Appropriationby Business
Program, FY 2001
Water Supply 7.2M 0.2
Recreation 280.1M 6
Hydropower 196.5M 4
Environment Regulatory 808.0M 18
Navigation 1,887.5M 42
Total 4.5 billion
Flood Coastal Storm Damage Prevention
1,358.4M 30
Emergency Management 7.3 M 0.1
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FY01 AppropriationNavigation Business Program
GI 40 million
MRT 32.9 million
TOTAL 1,887.5 million
Const. Gen. 571.6 million
OM 1,179.9 million
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Navigation Operations Maintenance Expenditures
1977-99Current and 1996 Constant
(000)
1,400,000
Current

1,200,000
Constant
1,000,000
1996
800,000
600,000
400,000
200,000
77
80
85
90
95
99
Year
21
Navigation Construction Expenditures1990-2000Cur
rent and 1996 Constant
Million
550
Current
500

450
Constant
1996
400
350
300
250
200
90
92
94
96
98
2000
Year
22
Navigational ActivitiesFY 2001 Civil Works
Budget ( Millions)

• Navigation Studies 14
• Preconstruction Eng. Design 14
• RD, etc. 13
• Inland Construction 175
• Coastal Harbor Construction 285
• Other Construction 11
• Inland Waterway Operation Maint. 475
• Coastal Harbor OM 665
• Gen. Expenses 64
• Total in Civil Works Appropriation 1,716

Cost-Shared Activities (sponsor contributions
not included except IWTF)
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Funding Sources forCorps Navigation Expenditures

• Harbors
• OM Federal Government 0
• Harbor Maintenance TF 100
• Construction Federal Government 40-80
• Project Sponsors 20-60
• Inland Waterways
• OM Federal Government 100
• Construction Federal Government 50
• Inland Waterways TF 50

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Harbor MaintenanceTrust Fund

• Established in WRDA 1986
• Ad valorem tax of .125 on cargo value
• Reimburses Treasury for 100 of harbor OM since
  1990
• Issues
• Tax on exports ruled unconstitutional by U.S.
  Supreme Court in 1998 and no longer collected
• Tax on imports may be challenged at WTO
• Alternative Harbor Services Fee rejected by
  Congress
• Increasing balance

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Harbor Maintenance Trust FundRevenues, Transfers
and Balance1988 - 2000 and Projected 2001-04
Million
2,000
Projected
Balance
Revenues
1,500
Interest
Transfers
1,000
500
0
88
90
95
2000
04
Year
26
Harbor ImprovementCost Sharing Requirements

• Non-Federal sponsors pay a share of project
  cost based on deepening increment
• 20 or less
• 10 up front
• 10 over time
• 20-45
• 25 up front
• 10 over time
• 45
• 50 up front
• 10 over time

45
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Inland Waterways Trust FundLegislative Background

• Inland Waterways Revenue Act of 1978
• Created fuel tax at 4 cents per gallon
• Designated 26 shallow draft waterways on which
  the tax would apply
• Water Resources Development Act of 1986
• Established Users Board
• Authorized expenditures from fund for 8 lock
  dam projects
• Precedent for 50/50 cost-sharing
• Increase tax to 20 cents by 1995
• WRDAs 88, 90, 92, 96, 99, 2000
• Criteria for major rehab and modernization
• Added 7 new locks, 9 major rehabs, 1 protective
  coastal barrier
• PED for 1200-ft chambers at 5 Upper Miss and 2
  Illinois locks

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Inland Waterways Trust FundCurrent Status End
FY 00

• Starting Balance 370.6 Million
• Revenues 99.6 Million
• Interest 20 Million
• Outlays 102.4 Million
• Ending Balance 387.8 Million

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Funding for Lock Dam ConstructionCost-Shared
with IWTF 1987 - 2007
Million
600
Historic
Historic
Potential Outlays
500
Ceilings
400
Capability
300
200
100
0
88
90
92
94
96
98
2000
02
04
06
Year
30
IWTF BalanceBased on Historic and Potential
Outlays 1987 - 2002
Million
700
Historic
Historic
With Potential Outlays
600
Ceilings
500
400
Capability
300
Income
200
100
0
(100)
88
90
92
94
96
98
2000
02
04
06
Year
31
Summary

• Navigation infrastructure will need major
  investments through 2020 to meet traffic growth
  nearly 15bn est.
• Funding has been and continues to be constrained
• Mix of funding sources and policies complicates
  situation and adds to uncertainty
• Trust fund balances continue to grow and are
  treated as part of Corps budget ceiling