We have made much progress over the last 18 years, Mr. Chairman, largely with the help and leadership of this committee. 15 lock and dam structures on the Ohio River Navigation System are under construction or complete. Those projects include major rehabilitation of Emsworth, Dashields, and Montgomery Locks and Dams, Ohio River, PA; and construction of the Robert C. Byrd Locks and Dam, formerly the Gallipolis Locks and Dam on the Ohio River, OH/W; Grays Landing Lock and Dam and Point Marion Lock, Monongahela River, PA; Winfield Lock Replacement on the Kanawha River, WV; Olmsted Locks and Dam, replacing Locks and Dams 52 and 53 on the Lower Ohio River, IL/KY; Monongahela River Locks and Dams 2,3 & 4, PA; McAlpine Lock Project on the Ohio River, IN/KY; Marmet Lock Replacement on the Kanawha River, WV; and Kentucky Lock Addition on the Tennessee River, KY.
But the task is not finished. We are here before this distinguished subcommittee to urge your support in two specific areas:
First, for all lock and dam modernization projects already authorized and under construction, we would urge that the currently scheduled diesel fuel/user tax revenues, as well as surplus of monies gathering in the Inland Waterways Trust Fund, be drawn down to complete all lock and dam construction projects in a timely manner. In the Ohio Valley about $250 million is needed annually -- 50% from the Inland Waterways Trust Fund and 50% from the General Treasury to complete Olmsted, Lower Monongahela River 2, 3 & 4, McAlpine, Marmet, and Kentucky by 2008 or earlier. What is needed is funding predictability on efficient funding schedules of the Corps of Engineers.
The private sector entered into a partnership with the federal government to fund 50% of the costs of a lock and dam modernization project by paying 20 cents per gallon for each gallon of diesel fuel consumed by towboats operating on America's inland navigation system. The private sector has met its obligations in this regard each and every year since the user taxes were established. What has been missing is a federal government reciprocation of its partnership responsibilities to pay its share of the costs for the nation's lock and dam modernization program.
The construction schedule for lock and dam construction projects on the Ohio River Navigation System has in some instances slipped by as many as six years, primarily due to insufficient funding. Funding for lock and dam construction in the Ohio Valley plummeted from about $220 million in FY 1996 to $115 million in FY 2000. (The President's Civil Works Budget for FY 2000 requested lock and dam construction in the region at $70 million.) According to a March 2000 report of the Institute for Water Resources, US Army Corps of Engineers, for the Inland Waterway Users Board more than $1.34 billion in transportation savings has already been washed down the Ohio River because of construction schedule slippage for Ohio valley projects. An additional $534 million of potential future benefits can be saved if these projects on the Ohio River System are completed by 2008 or earlier. Currently there is more than $370 million in the Trust Fund, and annual revenues and interest on the Trust Fund Balance is about $120 million annually. DINAMO believes that the 20 cents per gallon diesel fuel tax will provide adequate revenue under the cost-sharing arrangements established by the Congress is the Water Resources Development Act of 1986 to rebuild our nation's waterways infrastructure.
Secondly, we urge the leadership of this Committee to provide construction authorization of improvements at the John T. Myers and Greenup Locks and Dams, in accordance with the recommendations of the Interim Feasibility Reports of the US Army Corps of Engineers. The Division Engineers Notice will be released by the Great Lakes and Ohio River Division Commander this month, and a Final Report of the Chief of Engineers should be complete by the Fall of 2000. Mr. Chairman, we urge these projects receive a contingent authorization, subject to a Final Report of the Chief of Engineers by the end of this calendar year.
Contingent construction authorizations for the Myers and Greenup projects are needed now, Mr. Chairman, because it takes a long time to get these lock and dam modernization projects constructed. The Olmsted Locks and Dam project, for example, was authorized in 1988 after five or six years of study. It probably will not be fully operational until at least 2008 about 25 years of heavy lifting -- if efficient funding levels are met. Monies for Pre-Construction Engineering and Design for both projects have been included in the Presidents FY 2001 Civil Works Budget. So the opportunity is ripe for these projects to move forward in an orderly manner.
You might also note, Mr. Chairman, that DINAMO navigation and other waterways interests have been sitting at the table in discussions with environmental representatives from the Fish and Wildlife Service. We have been working together with the US Army Corps of Engineers on a program of Ecosystem Restoration projects at more than 200 sites in conjunction with the Ohio River Main Stem Study. These projects include riverine and tailwater enhancements, embayment restoration, island protection/restoration, near-shore habitat restoration, and riparian and wetlands restoration.
Finally we applaud the bi-partisan leadership of this committee to address the deplorable underinvestment in our nation's infrastructure. TEA-21 and AIR-21 will provide the investment America expects in our highways and airways. We urge the committee to focus now on the real problems and needs of our inland waterways and provide leadership to resolve our problems.
Profile of Ohio River Navigation System, Traffic and Selected Economic Activity:
There are 60 active navigation locks and dams in the Ohio River Basin operated by the US Army Corps of Engineers. There are 20 active projects on the Ohio River, 9 on the Monongahela River, 8 on the Allegheny River, 3 on the Kanawha River, 4 on the Kentucky River, 2 on the Green River, 4 on the Cumberland River, 9 on the Tennessee River and 1 on the Clinch River. Twenty of the navigation structures are over 60 years in age, twenty-six are between 30 and 60 years old, ten are between 10 and 30 years old, and four are less than 10 years old.
The older locks date to the 1930's, and there is an increasing likelihood of structural failure of some of these facilities. This situation portends decreasing reliability. Hence there will be a need for increasing repair and maintenance costs, as well as closure times. These closure times will increase delay costs and diversion of commodities to other modes from closures. In 1989 the main lock at John T. Myers Locks and Dam was closed for major maintenance for 45 days. This closure cost industry an additional $15 million while transiting the smaller 600' x 110' auxiliary chamber. The McAlpine closure of the main chamber in 1997 created an average delay per tow of four days at an additional cost to industry of $12 million. Last summer closures at Greenup cost industry an additional $3.4 million.
The river has always been an economic generator, and it will continue to be a dominant catalyst for private investment as long as we maintain and upgrade its infrastructure. There are over 1000 manufacturing facilities, terminals, and docks in the Ohio River Basin that shipped and received about 275 million tons of waterborne commerce in 1998. The Port of Pittsburgh Commission recently commissioned a study conducted by Martin and Associates, Lancaster, PA, that estimated the amount of jobs that were directly, indirectly, and induced from 49.1 tons of waterborne commerce transiting Western Pennsylvania's navigable rivers in 1994. The study reflected the following results: the positive benefits of the rivers include 120,000 jobs, or 12% of private sector employment and average employee earnings of $37,808. Using traffic data from 1994 and extrapolating the job information from the Port of Pittsburgh study to the entire Basin, a case could be made that jobs associated with waterborne commerce on the Ohio River Navigation System are more than 650,000 today.
In 1998, almost 275 million tons of commodities moved on the waterways of the Ohio River Basin. These commodities had a combined value of just more than $32.8 billion. Coal made up more than 57% of this tonnage, followed by aggregates with almost 18%. An analysis of the Ohio River Basin waterborne commerce data shows that almost 52 million tons of commodities were shipped on the river system out of the basin. A sizeable portion of this tonnage (almost 23.5 million tons) consisted of coal. Docks in the basin received just less than 42 million tons from outside the Ohio River System, with petroleum products being the largest commodity brought in. Just less than 180 million tons moved within the basin.
Traffic doubled on the main stem Ohio River between 1950 and 1965 (15 years). Traffic doubled again between 1965 and 1990 (25 years). Traffic on the Ohio River grew 60% between 1983 and 1997, while traffic on the Mississippi River System grew 39% to 489 million tons over the same period. While the tonnage today is pegged at about 275 million tons on the Ohio River Navigation System, the most probable forecast of traffic on the system will be 385 million tons by 2020 and 500 million tons by 2050.
Coal for Electric Power Generation: The Ohio River Basin is a major coal producing and power generating area. Utility companies have historically been attracted to a plentiful supply of water for plant use. The utilities also take advantage of the transportation savings provided by barges and the lock and dam system on the basin's waterways.
The Ohio River and its navigable tributaries are the kilowatt highways for one of the nation's most industrialized areas, the corridor from Pittsburgh to St. Louis. 1998 coal shipments on the Ohio River basin's waterways totaled just less than 157 million tons, or 57% of all barge cargo. Of this amount, more than 117 million tons were destined for coal-fired power plants. In 1998 this coal moved to 47 power plants along the Ohio River and its tributaries and also to 21 power plants in 8 states outside of the basin. Coal moving in the Ohio River basin destined for power plants had a value of over $4.5 billion.
Most of the utility coal moving by barge in the Ohio River basin originated on the Ohio River. Some of this coal actually was mined in the western United States and moved by rail to docks on the Ohio River, where it was loaded into barges to complete the trip to power plants. Other significant origins for utility coal were the Monongahela River and the low-sulfur coal producing areas along the Kanawha and Big Sandy Rivers. Rivers outside the Ohio River System that received coal from the basin included the Mississippi, Black Warrior/Tombigbee, Panama City harbor, Escambia, Biloxi Harbor, Arkansas, Illinois and Neches.
West Virginia shipped the most utility coal by water, moving over 40 million tons of primarily low sulfur coal to 40 plants in 9 states. Kentucky, also a source of low sulfur coal, was next with almost 35 million tons. Ohio's 11 power plants, which received coal by barge, took in almost 30.5 million tons of coal worth almost $1.2 billion. More of this coal (41%) came from West Virginia than any other state. Indiana was next with over 16.5 million tons of coal received by 5 power plants, with Illinois supplying two-thirds of the tonnage.
The most recent lock modernization project on the Ohio River was the building of two new lock chambers at Robert C. Byrd Locks and Dam (formerly Gallipolis Locks and Dam). The new 1200' x 110' and 600' x 110' locks located in a canal removed a major bottleneck to navigation. This improvement was a major benefit to the shipment of coal to power plants, as over 22 million tons of coal bound for power plants transited R. C. Byrd Locks in 1998. This was 38% of the total tonnage at these locks.
Other recent improvements in the Ohio River Basin were at Winfield Locks on the Kanawha River. Winfield Locks processed over 12.5 million tons of utility coal (59% of total tons) in 1998. Navigation infrastructure on the Monongahela River has also been improved lately with new locks at Grays Landing and Point Marion Lock and Dams. In 1997, Grays Landing moved 4.2 million tons of utility coal (87% of total) and Point Marion moved 4.1 million tons (89% of total).
Future improvements to navigation on the Kanawha River will benefit utility coal shipping. A new lock 800' x 110' is planned at Marmet Locks, where 11.9 million tons of utility coal made up 72% of the total traffic in 1998. A major rehabilitation of London Locks will include an extension of the lock. London transited 6.5 million tons of utility coal, which was 85% of the total traffic.
The Chemical Industry and the Ohio River Navigation System: The Ohio River basin's sixth largest commodity group is chemicals. There were 236 waterside chemical plants, docks and terminals in the basin which shipped or received chemical commodities by barge in 1998.
As with the utility companies, chemical companies have historically been attracted to a plentiful supply of water and raw materials. These companies also take advantage of the transportation savings provided by barges and the lock and dam system on the basin's waterways. In the Ohio River Basin, important clusters of waterside chemical plants have developed along the lower Monongahela and upper Ohio Rivers; along the Ohio River from Parkersburg, West Virginia through Huntington, West Virginia to Portsmouth, Ohio; in the Louisville, Kentucky area and along in the Tennessee and Kanawha River valleys.
Chemical plants are located along the lower Monongahela River and Upper Ohio for access to coal and salt deposits and chemical raw materials from coking plants. Plastics plants are located in the Parkersburg area due to the proximity to auto parts and plastics manufacturers. In the Huntington-Portsmouth area, much of the plant development was tied to the Ashland Oil refinery at Catlettsburg, Kentucky or the Armco Steel mill in Ashland, Kentucky. The chemical complex at Louisville developed during World War II, when the Defense Department looked for a waterside location to manufacture synthetic rubber. Chemical plants were also attracted to the cheap electricity of the Tennessee Valley and the salt, coal and mineral deposits of the Kanawha Valley.
1998 chemical shipments on the Ohio River basin's waterways totaled just less than 10.2 million tons, or 3.7% of all barge cargo. Of this amount, more than 8 million tons were shipped into the basin from outside. Just over 1 million tons were shipped out of the basin, and almost 1.1 million tons moved within the Ohio River System. Chemicals are a high-value commodity. The almost 10.2 million tons moving by barge in 1998 had a combined value of almost $6.5 billion, which is over 20 per cent of the value of the basin's commodities moving by water.
The largest chemical commodity that moves by barge in the basin is styrene, which is used in the manufacture of polystyrene for insulation and packaging uses and in the manufacture of synthetic rubber. Most of the almost 1.4 million tons of styrene which moved in 1998 originated in the Houston and Baton Rouge areas and moved to docks on the upper Ohio River. Cumene, which is used in the manufacture of acetone and phenols for the manufacture of products such as building materials, carpets, auto parts, cosmetics, and medicines is the second ranking waterborne chemicals. Sodium hydroxide, which is used in the manufacture of rayon and cellophane is another ranking waterborne chemical. Over 1.6 million tons of various types of fertilizers also move in barges.
Most of the chemicals that moved by barge in the Ohio River basin originated in Texas and Louisiana. The leading basin state in chemical shipments was Kentucky. The main destination for chemical barges in the basin were plants and docks in Ohio, which received over 2.5 million tons. Kentucky and Alabama also received more than 1 million tons of chemicals each. Since 90% of the chemicals shipped by water in the Ohio River basin enter or leave the basin, the lower Ohio River Locks passed the most chemical tonnage in 1997. Lock and Dam 52 moved 9.7 million tons of chemicals. Wilson Lock and Dam on the Tennessee River had the highest percentage of chemical tonnage, with almost 1.9 million tons of chemicals of its 13.6 million total tons, for 13.7%.
Petroleum, Petroleum Products and the Ohio River Navigation System: The Ohio River basin's third largest commodity group is crude petroleum and products made from petroleum. There were over 250 waterside refineries, tank farms, pipelines, factories and terminals in the basin, which shipped or received petroleum or petroleum products by barge in 1998.
Petroleum and petroleum product shipments on the Ohio River basin's waterways totaled just over 20.25 million tons in 1998, or 7.4% of all basin barge cargo. Of this amount, just less than 9.7 million tons were shipped into the basin from outside. Over 1.1 million tons were shipped out of the basin, and over 9.4 million tons moved within the Ohio River System. The petroleum and petroleum products that moved by barge in 1998 had a combined value of over $3.3 billion, which was over 10 per cent of the value of the basin's commodities moving by water. 1998 was the first year since 1979 with more than 20 million tons of petroleum moved on Ohio River Basin waterways.
The largest petroleum product that moves by barge in the basin is gasoline. Most of the 7.5 million tons of gasoline which moved in 1998 moved from the Huntington area to the Louisville, Cincinnati and Pittsburgh areas or from the lower Mississippi River into the basin. Distillate fuel oil is the second ranking waterborne petroleum product. Almost 300 thousands tons of crude petroleum moved by barge in the basin.
Over 35 per cent of the grain that moved by barge in the Ohio River basin originated in West Virginia. Gasoline and distillate and residual fuel oils made up most of this tonnage. Louisiana docks shipped gasoline oils and petroleum coke into the basin.
The main destinations for petroleum barges originating in the basin were facilities in Kentucky on the Ohio, Tennessee, Green and Licking Rivers. A majority of the movements to Ohio were destined for facilities in the Cincinnati and Marietta areas and consisted of gasoline, petroleum coke and distillate fuel oil as well as asphalt, tar and pitch.
Since more than half of the petroleum shipped by water in the Ohio River basin enters or leaves the basin, the lower Ohio River Locks passed the most petroleum tonnage in 1998. Locks and Dam 53 moved 10.7 million tons of petroleum and petroleum products. Almost half of this tonnage was gasoline and petroleum coke. Meldahl Locks and Dam, just upstream of the Cincinnati area, had the highest percentage of petroleum tonnage, with over 7.3 million tons of petroleum of its 63.7 million total tons, for 11.6%.
Grain and the Ohio River Navigation System: The Ohio River basin's fourth largest commodity group is grain. There were 144 waterside grain elevators, plants and terminals in the basin, which shipped or received grain by barge in 1998.
Ohio River System waterways serve grain shippers primarily by affording access to the export and industrial markets for grain. These markets have been the most dynamic sector of the grain market and the strong growth in grain traffic in the basin reflects the prominence of these sectors in waterborne movements. Large movements of grains are made by water out of the basin to the export market through lower Mississippi River ports. The only other significant movements of barged grains are those to the South, most importantly to processors in the Tennessee River Valley.
Grain shipments on the Ohio River basin's waterways totaled just less than 14 million tons in 1998, or 5.1% of all barge cargo. Of this amount, just less than 3.9 million tons were shipped into the basin from outside. Over 10.3 million tons were shipped out of the basin, and over 900 thousand tons moved within the Ohio River System. The 14 million tons moving by barge in 1998 had a combined value of over $2.7 billion, which is over 8.25 per cent of the value of the basin's commodities moving by water. 1998 was the fourth largest year on history with more than 14 million tons of grain moved on Ohio river Basin waterways.
The largest grain commodity that moves by barge in the basin is corn. Almost all of the over 5.1 million tons of corn which moved in 1998 fell into one of two categories: moving from the upper Mississippi or Illinois River to the Tennessee River for processing; or moving from the lower Ohio River to the lower Mississippi River for export. Soybeans is the second ranking waterborne grain. The leading processed grain product is animal feed preparations.
Most of the grain that moved by barge in the Ohio River basin originated in Illinois. Corn, soybeans and animal feed preparations were shipped out of Illinois on the Ohio, Mississippi and Illinois Rivers.
The main destinations for grain barges originating in the basin were export facilities in Louisiana. Within the basin, processing plants in Decatur and Guntersville, Alabama and Loudoun and Chattanooga, Tennessee were major destinations for corn and other grains.
Since 94% of the grain shipped by water in the Ohio River basin enter or leave the basin, the lower Ohio River Locks passed the most grain tonnage in 1998. Lock and Dam 52 moved 9.76 million tons of grain. Watts Bar Lock and Dam on the Tennessee River had the highest percentage of grain tonnage, with over 800 thousand tons of grain of its 1.7 million total tons, for 47%.
Ohio River Main Stem Study and Near-Term Investment Needs:
The Ohio River Main Stem Study, initiated within the past 5 6 years, is intended to be an authorization document for near-term needs (over the near 15-20 years) and a Master Plan for long-term needs. During the last several years it has become clear that an additional eight locks and dams will become candidates for substantial capital improvements over the next 10 years on the Ohio River Main Stem. Because of a combination of factors -- including forecasted traffic growth, the age and condition of a number of older navigation facilities, [and hence] normal operating transit costs, projected closure delay costs, and additional operation and maintenance and major maintenance costs we will be back to this committee several times in the next decade seeking construction authorization for additional capacity at several locations along the Ohio River. These lock and dam projects include, in addition to John T. Myers and Greenup Locks and Dams, Emsworth, Dashields, and Montgomery Locks and Dams near Pittsburgh; Newburgh and Cannelton Locks and Dams on the Lower Ohio; and Meldahl Locks and Dam on the Middle Ohio. Attached is a graph depicting which projects appear to be the next likely candidates for major capital improvements. More importantly, during the course of the study a clear justification was found for present authorization of large scale improvements at two Ohio River facilities namely John T. Myers and Greenup. The Great Lakes and Ohio River Division Commander will forward his notice of improvements at these locks and dams to Washington, D.C. We are told that a Final Report of the Chief of Engineers will be completed before the end of this calendar year. We are therefore asking the Committee to include contingent authorizations for these projects in this year's version of the Water Resources Development Act of 2000.
In terms of both traffic levels and delays, John T. Myers and Greenup are the two busiest lock projects on the Ohio River for which major improvements are not already under construction (or authorized). In 1998 the US Army Corps of Engineers reports traffic volume through John T. Myers at nearly 73.6 million tons and traffic volume through Greenup at more than 71.8 million tons. Each facility consists of one 1200' x 110' main lock (capable of locking 16 jumbo barges and a towboat in a single operation) and one 600' x 110' auxiliary lock (capable of locking 6 jumbo barges and a towboat in a single operation). The current problem is that traffic volume in the Myers and Greenup portions of the river are growing at such a rapid pace that the practical capacity of each main lock chamber will soon be overwhelmed. Construction of increased capacity at the auxiliary chambers of the John T. Myers and Greenup locks is needed soon, in order the forestall the need for construction of a new third 1200' x 110' lock at some time in the future. The US Army Corps of Engineers, Great Lakes and Ohio River Division, is recommending 600' x 110' extensions to the existing 600' x 110' auxiliary locks. DINAMO concurs with these recommendations and has been participating fully in the Corps' process to reach this recommendation.
Fewer delays also mean reduced air emissions. The Corps of Engineers estimates that with the John T. Myers lock extension 6.8 million fewer gallons of fuel will be burned, 342 fewer tons of carbon monoxide/dioxide will be put into the air, as will 854 fewer tons on nitrous oxide, 171 fewer tons of hydrocarbons and 85 fewer tons of particulates. Lock and Dam modernization is good for the environment. The project cost for the John T. Myers Auxiliary Lock extension is about $182 million, for Greenup about $176 million. Each extension could be completed by 2008 if the projects were included in the Water Resources Development Act of 2000. The benefit/cost ratio for John T. Myers is 1.8, and the benefit/ cost ratio for Greenup is 2.5. It is important to note that the Final Interim Report of the Chief of Engineers for both lock and dam modernization projects will be completed this year. These projects should achieve final reviews and be included in this years' WRDA legislation.
In summary, Mr. Chairman, we urge your leadership in providing construction authorization for capital improvements at the John T. Myers and Greenup Locks and Dams on the Ohio River, in accordance with the recommendations of the US Army Corps of Engineers, its Great Lakes and Ohio River Division, and its Louisville and Huntington Districts, as contained in their Interim Feasibility Reports for the projects. We recommend that you continue with the cost-sharing arrangements for these projects as established by the Water Resources Development Act of 1986. The tax levels on diesel fuel consumed by towboats operating on America's inland navigation system are sufficient to fund our appropriate share of the costs of lock and dam modernization. The work of rebuilding our lock and dam system is serious business, and the federal government needs to expedite projects already under construction in a timely and orderly manner.
Thank you for the opportunity to present our views on these matters.