Marine Transportation System

Archive for 2013|Yearly archive page

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2013: The Year Before the Year of LNG?

In Efficiency, Energy/Environ, Green Transportation, Infrastructure, Ports on December 29, 2013 at 4:51 pm

A year in which U.S. shipyards announced contracts for over twenty new ocean going vessels (with options for several more) is noteworthy, especially given the recent difficult times experienced by the shipbuilding industry.  What makes this fact even more significant is that LNG as a propulsion fuel is a central feature in each of these vessels, either as the intended fuel source upon delivery or at some point in the future.

So does this mean that the U.S. maritime industry in America has reached the LNG tipping point, where a tidal wave of even more marine projects will be announced in the coming year?  My short answer would be a heavily qualified, but nonetheless definite: “maybe.”

A distinction has developed between ships that will be “LNG-ready” as opposed to those that are “LNG-capable,” the difference being those vessels that will use LNG upon delivery and those that can be converted to operate on LNG at some later date.  While certain design modifications are incorporated into these ordered vessels, such as foundations for LNG fuel tanks and dual fuel main engines, they will operate on conventional diesel fuels when they are delivered.

The reasons for taking a half step to LNG rather than making the plunge are several, among them the additional cost of the entire fuel gas system, including the fuel tanks.  However I suspect the greatest reason is uncertainty related to LNG supplies in the ports where these vessels will call.  This is particularly the case with the product tankers that have been ordered that, unlike the LNG-powered container vessels do not operate in a classic point-to-point liner service.  Their deployment is largely dictated by cargo availabilities throughout the United States and thus, until LNG is more widely available, the owners will likely hold back on a full commitment to LNG.

If one is looking for positive signs on the infrastructure front, they are there.  The Port Fourchon terminal project on the Gulf of Mexico in Southern Louisiana is being developed by Harvey Gulf Marine to serve its fleet of LNG-powered offshore service vessels.  It will be the first operational LNG bunkering facility in the United States and is expected to be operational next year.  Clean Energy has announced its intent to construct facilities dedicated to the marine industry in Jacksonville.  Tote, Inc. issued a request for proposal (RFP) to potential LNG suppliers to provide LNG for their vessel operations based in Tacoma, Washington and Jacksonville, Florida.  Each announcement of new LNG-powered ships results in a deluge of phone calls from potential LNG suppliers seeking meetings and making proposals to vessel owners.  So again, there is clear movement, growing interest and some tangible progress; but it is slow and these projects still face regulatory challenges and uncertainty that may result in delays and higher costs.

Given the delivery schedules of the Tote, Inc. ships, in late 2015 and early 2016, and the Crowley vessels in 2017,  it seems that the window for putting bunker infrastructure in place—completing land acquisition, clearing Federal and local permit requirements, and facility construction—is growing very tight.  This raises the possibility of ships being delivered and no LNG being available, which will greatly increase operating costs due to the requirements to use ultra-low sulfur diesel (ULSD) to meet Emission Control Area (ECA) regulations.

So, to offer a slightly more elaborate answer to the tipping point question, the U.S. is closer today than a year ago but one cannot conclude that the LNG revolution has begun.  Of the limited number of Jones Act liner operators, three have already announced projects–Matson being the third–and another has announced intentions to convert existing vessels to LNG. The product tanker market has been effectively replaced over the last ten years so there are limits to the expansion there.  I think the greatest opportunities for achieving critical mass in a marine fuel transformation can be found when and if several large harbor services or tug and barge companies either convert existing tugs to LNG or CNG or acquire new tonnage or the top-tier international liner companies announce new construction programs with LNG-fuelled vessels.  Either – and certainly both – of these developments would be a critical next step to accelerate widespread LNG deployment.

Marine vessels represent the potential for a large concentrated market for LNG/CNG, and a port that has both ocean going and harbor vessels that need LNG for fuel would surely provide sufficient basis for investments in LNG marine terminal infrastructure for bunkering.

While there is still a way to go until we all agree that the breakthrough has occurred we are seeing some decisions and investments that are the necessary predicate to making LNG a common transportation fuel throughout the country.  John E. Graykowski

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LNG: Ports as a Catalyst?

In Energy/Environ, Green Transportation, MTS Policy, Ports on October 10, 2013 at 8:47 am

MTS Matters welcomes a well-known and regarded figure in D.C. transportation circles. John Graykowski, a Principal of Maritime Industry Consultants, served as Deputy Administrator of the Maritime Administration, and for two years as Acting Administrator, during the Clinton Administration. He is an attorney with experience in both private and public sectors. The subject of LNG-fueled transportation and how it might develop in the context of maritime policy and port communities has been a focus of his attention in recent years. This is the first of his contributions to this blog’s musings on port/maritime policy—present and future.

Over the past year, LNG as a marine fuel has gone from novel concept to an accepted alternative fuel here in the United States. Some LNG-capable vessels are operating and more will be under construction as appreciation is growing for the environmental, economic and energy security benefits offered by LNG. This transformation of a marine cargo commodity to emerging marine fuel in here and elsewhere might lead one to conclude that the broad deployment of LNG throughout the U.S. is underway and faces no challenges or constraints—but this is not the case. Lagging behind LNG-fueled vessel development here are the necessary market and regulatory structures that promote its widespread development.

The most common platitude in any discussion of LNG is the “chicken and egg” problem. Ship owners are loathe to make the large capital investment in LNG technologies absent certainty of supply.  Meanwhile gas suppliers are averse to spending $150 million or more on bunkering infrastructure without firm, long term purchase contracts by ship owners. This reflects the lack of historic relationships between the gas supply industry and marine operators, who purchase bunker fuel in virtually every port on a spot basis and never needed long term contracts.

Compounding that is a lack of understanding and knowledge about each other’s industries. Marine operators are not familiar with gas production, transportation and market dynamics and gas suppliers have little direct knowledge about the marine industry practices, requirements, and the like. Emblematic of the divide between the two industries is the simple fact that marine operators purchase fuel on the basis of metric tons or barrels of oil, while the gas industry sells LNG on the basis of million BTUs. Potentially complicating this market disconnect, are increasingly stringent accounting rules that likely require a long term LNG contract to be carried as a contingent liability, thus impairing a balance sheet and constraining future capital expenditures for a marine company.

Beyond these market issues are significant regulatory challenges related to both operational procedures for bunkering vessels and, more importantly, the siting, permitting and operation of small and medium sized LNG marine terminals. It may come as a surprise to some, but there are no existing uniform federal regulatory structures that apply specifically to LNG marine fueling terminals.

The United States Coast Guard (USCG) and Pipeline and Hazardous Materials Administration (PHMSA) each have regulations that apply to LNG fueling terminals. These regulations, however, were developed with large scale export and import facilities in mind and thus are largely inapplicable to a small marine fuel terminal and the fueling of other than LNG carriers. In many cases these regulations may conflict, which creates a large area of potential regulatory confusion and will most likely result in ad hoc development of LNG regulations. Adding to this uncertainty is the probable requirement that these facilities will be subject to local permitting actions, which can provide opponents of LNG the opportunity to intervene and delay the project.

Where do ports fit in this puzzle of a marketplace?

Ports can and should be a catalyst to spur LNG development throughout the transportation industries since they are at the center of marine activities in the United States. They provide a ready-made, multi-modal market for LNG expansion beyond large oceangoing vessels, which includes ferries and harbor craft, trucking, and rail operations. Port agencies may have some degree of jurisdiction, and even control, over property where LNG operations will occur. Depending on the port, it may have a role in the siting, permitting, financing, development, or even operations of an LNG fueling terminal. As a responsible economic development agency, a port can also play a critical role in the public education and promotion of LNG and the mitigation of local opposition to such projects.

Public port agencies generally understand this is a constructive role they are in a position to play. We are seeing that in isolated initiatives, notably on the West Coast, as well on an international scale with Antwerp leading a working group that includes the Ports of Los Angeles and Long Beach.

The expansion of LNG and compressed natural gas (CNG) as a replacement fuel in port related operations, already showing benefits, is also a powerful tool that ports can use to achieve significant emissions reductions and thus reduce the cost and impact of increasingly more stringent environmental regulations or measures to meet local community demands. If LNG is used to fuel vessels’ auxiliary generators while in port there may be no need to install costly shore power systems for cold ironing since equivalent emissions results could be obtained with LNG.

Collectively, ports can be in the forefront of a “Green” initiative, leading to the expansion of LNG as a transportation fuel throughout the nation. Individually, ports that facilitate LNG bunkering operations could find them to be a competitive factor in attracting and retaining liner business as those companies bring LNG-capable vessels on line to meet IMO global standards by 2020.

Much has been written of the significant impact that domestically produced natural gas and its liquefied form will have on our on our nation. Ports are where all surface modes of commercial transportation intersect and where LNG distribution will naturally occur. They are in a position to be influential in the development of national policies that promote and accommodate the broad deployment of LNG as a transportation fuel.
John E. Graykowski

 

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The Murray-Cantwell Approach to Problem Solving

In Competition, Congress, Infrastructure, Intermodal, Water Resources on September 23, 2013 at 7:05 pm

This past week State of Washington Senators Patty Murray and Maria Cantwell introduced the Maritime Goods Movement Act of 2013 (S. 1905). Their inspiration for legislation came from what I have described as the unintended consequences of the Harbor Maintenance Tax, starting with complaints from the ports of Seattle and Tacoma that the Canadian competition to the north and the shippers, who are obliged to pay the Harbor Maintenance Tax when entering U.S. ports, were taking full advantage of the cost-differential where the HMT does not apply.

It is a complaint that was given some appearance of validity in a Federal Maritime Commission report issued last year and, a bit more convincingly, by data comparisons published by The Journal of Commerce last month.

At the request of the senators the FMC studied the role played by the HMT (0.125% of cargo value) in decisions to use the Vancouver and Prince Rupert gateways. The report, adopted by the FMC commissioners on a party line vote, didn’t make a strong case as to cause and effect. It did suggest that if an equivalent of the tax were applied in Canada “a portion of the U.S. cargo…likely would revert to using U.S. West Coast ports.” The report concluded by suggesting any remedy is in the hands of Congress not the regulatory agency.

The JOC looked at the issue by comparing market share within the PNW and among U.S. West Coast ports, where the HMT is uniformly applied. This is their finding in a nutshell:

Port data collected by The Journal of Commerce shows clearly that while Seattle and Tacoma have lost no market share relative to U.S. West Coast ports, their market share in the Pacific Northwest, a region that includes the Canadian ports of Vancouver and Prince Rupert, has slipped significantly in recent years.

That may not be conclusive of HMT culpability but it is indicative of competitive weakness just south of the 49th Parallel.  The comparative strength in British Columbia could be attributed to the HMT in addition to other factors, among them the efficient intermodal delivery system established as part of Canada’s ongoing Pacific Gateway Transportation Strategy.

Enter the Maritime Goods Movement Act User Fee proposed in the bill. The HMT would be repealed and then, for all practical purposes, recreated as the “MGMA User Fee.” In virtually every respect it would be like the HMT. The principal difference is that it also would be applied to U.S. bound cargo that first enters North America through Canada or Mexico.  Shippers would pay when the cargo crosses the land border.  On this bill rest the hopes of Puget Sound’s largest ports.

But the senators didn’t stop there. They also decided to try to fix the issue that is troubling most U.S. ports—the Harbor Maintenance Trust Fund. The bill would make several changes—including expanded uses of the HMTF such as are found in the Senate-passed WRDA (S. 601)—but let’s here focus on the greatest failing of the law as it now stands. That is the under-spending of HMTF funds.

Unlike the RAMP Act that would rely on a parliamentary mechanism to leverage full funding over the objections of appropriators, and unlike the WRDA bills of the Senate and House that set funding targets at which appropriators might aim, the MGMA bill uses a direct approach. At the bottom of page 10 is this: “[N]o fee may be collected…except to the extent that the expenditure of the fee [for allowable activities] is provided for in advance in an appropriations Act.” It is a rarely used means tying revenue collections to the spending of those revenues. The transaction would occur outside the section 302 allocations that cap appropriations committee spending. In doing so it would remove the incentive for appropriators to limit allocations and would treat the HMTF more like a dedicated trust fund.

This approach is employed in other areas of government where a user fee is collected to support a specific function of government. The only downside is that to meet the requirements of budget rules Congress also would have to identify offsetting revenue to fill the hole that would be created when, as a first step to creating the new MGMA User Fee, the HMT would be repealed, thereby eliminating 10 years of projected revenue.  Yes, it gets murky down deep in the budget process. But the result would be the very easily understood concept of “dollars in, dollars out,” as a Murray aide summarized.

Finding the offset, in the range of billions of dollars, presents a real challenge to the bill sponsors. There is a reason why other attempts at legislative solutions have produced little more than “sense of Congress” statements of principle and funding targets that are…well…just targets. The climb up this legislative Hill is very steep and the obstacles—including leadership objections and the search for offsetting revenue—have been daunting.

While we are noting the degree of incline ahead, let’s add to this particular bill the likelihood of complaints to the State Department from Mexico and Canada, who are major U.S. trading partners, and opposition from shippers and the railroads that carry their cargo into the U.S.

But that doesn’t mean it is the wrong solution to an HMTF problem that has existed since the early 1990s. It is the right one because it would be a more effective and lasting way to link the revenue to the reason for the revenue, which is to keep American harbor channels maintained and our ports competitive.  Pbea

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Bottom Line Thoughts on the MTS

In Congress, Federal Government, Infrastructure, Marine Highway, MTS Policy, Ports on September 17, 2013 at 11:30 pm

AASHTO, the association of State DOT chiefs, issued this summer the last of its “bottom line” modal reports. This one–Waterborne Freight Transportation–is a useful addition to the studies and papers that indicate a marine transportation system in great need of policy attention. It is not that the MTS is in failing condition–certainly not that part engaged in international commerce–but “the very success of the MTS has masked serious underlying structural problems” that, if left unaddressed, “pose critical threats to the long-term health of the MTS and the nation as a whole.”

The report notes that unlike the American interstate highway system the MTS “has evolved without larger scale coordinated policy and planning.” Indeed the ports and related infrastructure and services that developed without a “master plan” make the MTS a “collection of competitors.”  Persons who follow action in the ports of Charleston and Savannah, both overseen by State port authorities and championed by their respective State legislatures, can be fascinated watching that competition in real time.

The AASHTO report, the focus of which lands principally on the MTS infrastructure, identifies areas requiring attention. Waterway maintenance needs are not being met, navigation projects often take far too long to accomplish, funding for MTS expansion needs is uncertain, national investments are not being effectively targeted to meet national needs, and responsibility for the MTS in official Washington is widely diffused.  That last item can be easily understood by looking at the “comprehensive matrix” spreadsheet on the CMTS website.

In a statement that could apply to maritime elements of the private sector as much as it most definitely does to government policy, the AASHTO report offers this bottom line thought: “Embracing business as usual will inevitably lead to significant further declines in MTS condition and performance, and to lost opportunities for our transportation system and economy.” Today, former Pennsylvania Governor Ed Rendell, the nation’s inconvenient truth teller on matters infrastructure, and National Association of Manufacturers CEO Jay Timmons used the Philadelphia port as a backdrop for a similar message that is bolstered by a survey of manufacturers. “Improving our ports, highways, and bridges is essentially an economic driver. Modernized ports and transportation systems enable American manufacturers and businesses to export their goods to countries around the world, which strengthens our economy here at home,” said Rendell.

Much of that message in Philly and the AASHTO report is centered on international commerce, understandably. Ports and their modal connectors enable U.S. exports to make it to other markets in competitive fashion. They also speed imported goods to Costco shelves and components to American assembly plants.

One had to look for it, but the AASHTO “bottom line” document also makes the suggestion, however briefly, that the MTS can play an increasingly important role stateside. With reference to the potential for Marine Highway freight transport the document notes that “with growing highway congestion, waterborne transportation becomes an even more attractive transportation alternative.” It concludes with the statement that “[w]aterborne trade and transportation will be cornerstones of the 21st century economy.”

Among the actions called for in the report is the establishment of an office of multimodal freight at USDOT, an oft-made recommendation by various stakeholders and in the reports of appointed and self-appointed commissions. Among the tasks of the office would be to create a “system map and classification of MTS facilities, analogous to the National Highway System and the National Freight Network.” Congress specified in MAP-21 that the designated NFN be highway only, a decision that reflects more the congressional committee jurisdictions and the “highway bill” tradition than it does the multimodal operating freight sector. (A recently introduced House bill, H.R. 2875, grandly named the “Waterfront of Tomorrow Act,” would amend MAP-21 to “ensure that ports and harbors are incorporated into the national freight network.”)

The recommended freight office would also be used to prepare a “long-range vision plan for the national MTS development and investment to meet national transportation and economic development objectives.” The report also calls for full utilization of Harbor Maintenance Trust Fund monies for navigation infrastructure maintenance as well as an exemption from the Harbor Maintenance Tax for “domestic Marine Highway services.”

These recommendations are pointed in a constructive direction. But there is a missing element in the report. More significantly, it also is missing from the national transportation policy discussion on Capitol Hill, in those many departments and agencies tagged on the CMTS spreadsheet, and in the White House, then and now.  What is missing is visible interest in what the national maritime policy need be. The weakest element of the multifaceted American marine transportation system, oddly enough, is marine transportation. The long, sloping trend line representing flagging support for U.S.-flag merchant shipping, an aging Jones Act coastal fleet that frustrates Marine Highway development, and a shrinking ship building sector needs to be reversed.  It’s far from being the cornerstone of the economy that it once was and perhaps still can be.  Pbea

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The Late Senator Frank Lautenberg

In Congress, Environment, Federal Government, Leadership, MTS Policy, New York Harbor, Politics, Ports, Security, Surface Transportation Policy, Water Resources on June 9, 2013 at 11:53 pm
Frank_Lautenberg,_official_portrait

Senator Frank Lautenberg
1924 – 2013

Last Friday was a somber day of steady rain as New Jersey Senator Frank Lautenberg was buried at Arlington National Cemetery. News reports this past week cited how his passing was notable because he was the last sitting senator of the “greatest generation,” that chamber’s last veteran of World War II. His death came just months after Hawaii’s Senator Daniel Inouye, a wounded veteran of that war, took his resting place among the nation’s noted military and civilian leaders at Arlington.

(They also had a common  interest in the MTS—the marine transportation system. Inouye was a reliable and principal advocate for American shipping; Lautenberg for the landside elements—the ports and intermodal connections. Both were friends of labor.)

It need be said that Senator Lautenberg’s death on June 3, also is notable because it marked the passing of a champion of Federal policy to making communities healthier, the environment cleaner, and industry and travel safer and better. It was a personal agenda well suited to his home State of New Jersey but carried out with no less than the nation in mind.

In his 28 years as a senator he served on virtually every committee and subcommittee that touched on authorizing and funding transportation, civil works and environmental policy. For a period he chaired the Transportation Subcommittee on Appropriations while as a senior member of the Environment & Public Works Committee (EPW).  For a few years after the attack of September 2001 he also was on the Homeland Security & Governmental Affairs Committee. In recent years he chaired the Surface Transportation and Merchant Marine, Infrastructure, Safety and Security Subcommittee of the Senate Commerce, Science & Transportation Committee (CST). In recent years he served on EPW, CST and Appropriations, including the Corps funding subcommittee, concurrently.

As was evident in his committee work his approach to legislating was to cover all the bases, or at least as many as he could. He championed improving airports and the aviation system, expanding the use of transit and passenger rail, modernizing freight transportation, bringing American port infrastructure to world standards, and securing them all from the those who would do us harm.

He was appointed to the President’s Commission on Aviation Security and Terrorism after the tragic downing of Pan Am Flight 103 over Lockerbie, Scotland, and returned to the Senate, after a two-year hiatus, to help write and oversee anti-terrorism law after the downing of the World Trade Center towers. In those towers he had served on the Board of Commissioners of the Port Authority of New York & New Jersey before being elected senator in 1982. His time with the Port Authority–and his building the Automatic Data Processing Corporation (ADP) from scratch–were credits on his resume in which he took great pride and enjoyed telling people about if the occasion would allow.

Frank Lautenberg put much effort into environmental issues. He gave his attention to the recovery of old industrial wastelands through brownfields initiatives and Superfund legislation and to making the Toxic Substances Control Act more effective. He was protecting the coastline whether the recreation beaches or the nurturing marshlands. In his last year he walked the Jersey Shore in the wake of Superstorm Sandy, secured bi-partisan support for his toxic substances legislation and, from his wheel chair, cast his final vote in support of tighter gun legislation.

He was a tough fellow and could be an relentless advocate.  Just ask the trucking industry that couldn’t budge him from the centerline where he stood in the way of increasing truck size and weight limits year after year after year. Ask the FAA whose employees’ merit increases were at risk while their work was incomplete on the redesign of East Coast airspace in the Newark/LaGuardia/JFK market. Ask Norfolk Southern and CSX who found the Senator immovable on key issues pertaining to assuring competitive rail service for his home port when Conrail’s assets were on the block. Was he always the advocate that some of us wanted him to be? No, but then you rarely find a senator who is that agreeable.

From start-to-finish Senator Frank Lautenberg was an advocate for his New Jersey and his United States, which he strove to make  better by improving the quality of people’s lives and the means of commerce.    Pbea

(A version of this ran on The Ferguson Group blog.)

 
 

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WRDA Words

In Infrastructure, Ports, Water Resources on May 7, 2013 at 12:05 am

The Senate is about to take up the first water resources bill since President George W. Bush signed WRDA 2007 into law.  By the count of many stakeholders–ports, river dependent shippers, flood weary communities–it is around four years late.  So if, for argument’s sake, the Senate passes the bill this month of May will WRDA 2013 spring into House action and to the desk of President Obama before Tidal Basin cherry trees feel the autumn cold and drop their leaves?  There’s reason to doubt it will happen that quick. But rather than peer that far into the legislative fog, let’s take a look at what is before the Senate now.

Committee Chairman Barbara Boxer (D-CA) and Ranking Member David Vitter (R-LA) proudly produced S. 601 with the full support of the Committee on Environment and Public Works. They patterned their WRDA 2013 bill after MAP-21, which emerged from a dysfunctional Congress with bipartisan support. The water resources bill would authorize Army Corps of Engineers civil works projects to move ahead, update and reform parts of the base law dating to WRDA 1986, and attempt to streamline Federal process and delivery (construction) of projects. There is a lot to pick at and find fault with as with most public works bills. Some stakeholders will see more benefit than others. But for an economy that has been going wanting for the stimulus of public works construction the bill’s advancement to the Senate floor is being trumpeted. Five hundred thousand jobs, or so they say.

The bill has run into some buzz-saws. Environmental organizations and “tax-payer” groups have  loudly complained. It might be said that both are traditionally unfriendly to water project bills. The former argues for keeping navigation and other projects to an absolute minimum while favoring “environmental projects,” such as habitat restoration. The latter assumes there will be wasteful spending, which I would argue was certainly more true before the reforms of WRDA 1986 than it is today. The bill will result in “overspending, overcapacity, and substantial and unnecessary damage” to estuaries and harbors, or so they say.

Then there are the complaints made by leaders of the Senate Appropriations Committee who predictably don’t like sections having to do with with the Harbor Maintenance Trust Fund. House and Senate Appropriators don’t like being told they have to fund seaport channel maintenance at the rate of collected Harbor Maintenance Tax revenue. And it’s not just because setting funding levels is their prerogative. It’s the little matter of having to come up with around $700,000,000 in additional funds. That’s a big lift in good fiscal times…and these are not good fiscal times.

Meanwhile Great Lakes senators who want the bill to assure full-use of HMT revenues for port channel maintenance are nervous, on behalf of their generally small-sized port industry, by the wording of the bill. The bill gives “high-use deep draft” ports priority status for HMTF expenditures. They want certainty that all small commercial ports are not “perennially put at the ‘back of the line’.” There are lots of other small ports in the country that would like that assurance spelled out.

Then there are the Washington State senators who have been champions of the ports of Seattle and Tacoma. Budget Committee chairman Patty Murray (D-WA) is in a strong position to say something about how much HMTF funds are budgeted, how the monies are being used and, more parochially, how the collection of the HMT in Pacific Northwest ports can be a reason for U.S. imports to enter North America through Canada.

Let’s not forget the Administration in all this. The White House official view cites reasons why the bill “doesn’t currently support all” of the Administration “key policies and principles” but it is carefully worded not to threaten a veto. It echoes the complaints of environmental organizations in the Statement of Administration Policy released today. The bill’s project streamlining provisions, among other things, undermine “the integrity of several foundational environmental laws.”

In her testimony before the committee where she once worked, Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy told Boxer and Vitter last February that the Obama Administration supports a channel maintenance  spending level that “reflects consideration for economic and safety return of each potential investment” in maintenance as well as taking into consideration “other potential uses of the available funds,” the meaning of which is troubling for ports whose primary concern is ensure the use of “available funds” for harbor maintenance only. The testimony includes a flat statement in opposition to the idea of fully using collected HMT revenue for channel maintenance. Spending “should not be based not the level of receipts from the current tax.”

The SAP has a few odds things in it, including an incorrect description of the proposed change to the cost-sharing requirement that ports have to pay part of the incremental cost of maintenance of  channels deeper than 45 feet. The bill would shift the sharing of costs to apply to channels deepened beyond 50 feet. It is in the bill as recognition of the increasing standard size of vessels and the fact that cost-sharing was to be required only when greater depths are needed exceptionally large vessels, which in 1986 were super tankers and colliers, not container ships.

Senators Boxer and Vitter have been preparing a “manager’s amendment” to serve as a substitute for the version of S. 601 that emerged from their committee. We await its debut because it will reflect the compromises that have been made to address some of those complaints.

Word is that the HMTF full-use provisions were weakened at the appropriators’ insistence in return for a pledge to increase O&M appropriations somewhat. Word is that changes were made to accommodate some concerns of environmental organizations. We now wait to see the words.      Pbea

 

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A Red Cape Wish List

In Environment, Infrastructure, Ports, Water Resources on March 17, 2013 at 11:28 pm

The first formal expression of what the Obama Administration is looking for in a water resources bill came to light the other day in a March 14 letter from Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy to Senate Environment & Public Works Committee Chairman Barbara Boxer (D-CA). The letter provides requested “input on the development of a Water Resources Development Act.” It arrives none too soon. The chairman, with ranking Republican David Vitter (R-LA), is about to release their bipartisan recommendations for WRDA 2013.  A Committee mark-up session is scheduled days from now.

Ms. Darcy outlines a sort of policy wish list, one that has familiar themes from current and past Administrations–watershed planning, process improvement, and authorization of projects “most likely to generate a high return to the Nation.”  More notably the letter’s message crosses into territory that knowingly will have the effect of a matadors’ red cape in a dirt-floor arena.

For flood plain communities…the letter suggests that Congress “re-examine the Federal role following a flood in reconstructing public infrastructure including levees and other flood and storm damage reduction features.” It goes on to suggest reconsideration of “law and policies that influence where and how we rebuild.”

For shoreline and other flood prone communities…the Administration view goes further, calling on the legislature to “retroactively revise the stated purpose of all existing [Corps of Engineers] authorities that include flood control, storm or hurricane protection, or shore protection as a project purpose.” Reducing “the risk of flood damage in areas beyond the shore” is one thing; protecting and defending a shoreline alignment “for its own sake” is quite another.  Either way, it’s a timely subject just months after Superstorm Sandy carved its mark on the coastline.

What is driving this call for new water resources policy? Probably not much more than concerns about program cost and environmental consequence, aggravated by a whole lot of meteorological weirdness. Yes, global warming. And while both of those are concerns shared by some folks in Congress the letter’s recommendations run counter to civil works tradition and to the inclination of public officials to say yes to building and repairing solutions to flooding and the disappearance of coastline back home.

The letter doesn’t have a lot new—or reassuring—for the port/navigation community.  The statement on the navigation trust funds may break a few hearts but not new ground. The letter reiterates the Administration’s proposed fix for the broken Inland Waterways Trust Fund including a new fee structure, which the waterway industry has opposed in favor of building on the existing fuel tax regime.

It also expresses an unambiguous view in counter direction to the lobbying by ports and dredgers to increase channel maintenance funding and have full-use made of the Harbor Maintenance Trust Fund. Instead, the Darcy letter flatly states, “spending should not be based on the level of receipts from the current tax.”

That principle could be debated, but it fails to acknowledge the fact that the Corps of Engineers she oversees is on record as saying the annualized national need for port maintenance dredging is in the neighborhood of $1.5 billon, which is a whole lot closer to the HMT annual tax receipts, projected to be $1.659 billion this year, than the roughly $850 million budgeted by the Administration for O&M this year.

It’s hard to understand walking away from the obligation to maintain what you built when the lack of money ain’t an available excuse.  This from the White House that recently announced a “Fix It First” policy for U.S. infrastructure.

Interestingly enough, arriving the same day as ASA Darcy’s letter was an email message with a transcript of a recent meeting at which President Obama talked to mayors, seemingly off-the-cuff, about the need to address port and waterway infrastructure in order to keep the U.S. competitive on the export market. In fact there are faint signs that his next budget (FY 2014) will have a fairly strong channel maintenance budget, but the Darcy letter is a clear indication that we should not look for any structural improvements in policy to guarantee full-use of the HMTF.

The Senate committee will meet soon to take up a WRDA bill. It will attempt to address the HMTF issue, the insufferable slowness of the civil works project planning process, the brutalizing of coastal areas by powerful storms, and a lot of other things in need of attention. But views expressed in the Darcy letter, on behalf of the Administration, may not be represented to any significant degree, in a bill that is a bipartisan product. And it won’t come close to resembling the bill that the Republican dominated House will produce later this year.  Pbea

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What’s the Big Deal about Public Works?

In Congress, Federal Government, Infrastructure, Ports, Surface Transportation Policy, Water Resources on March 9, 2013 at 12:04 am

Questions of the Remotely Curious:

  • Why should I care if Congress approves a WRDA bill…and what’s WRDA anyhow!
  • So what if the surface transportation bill expires!
  • What business does Washington have to do with the  sewage treatment plant the county is trying to build!
  • And why the hell does the Army Corps of Engineers have anything to say about clearing the muck from the marina where I keep my boat!

Yeah, and what’s the big deal about public works!

The average person who has no experience with government-at-work might be given a pass if he made such not-really questions.  The average Federal elected official should be expected to know…or at least quickly learn…the answers.

Would it surprise you to learn that too many folks in Congress today don’t know and…judging by the rhetoric…may not care.

Over 200 persons were first sworn into House of Representatives membership in just the past four years.  Many of them came to reside in Congress without prior legislative or other public office experience; many came with the intent to shrink government and cut spending. While those objectives are worthy of debate we are seeing in the fiscal brinksmanship and political gun play (“Call of Duty 6: Fiscal Warfare”?) how the give and take of real debate has been hard to come by here in Washington. (Consensus? Fugetaboutit.) New congressional Republicans, those of the Tea Party strain, have been a particular challenge for their Republican colleagues who came…well…to legislate.

Not too deeply into the last Congress Rep. John Mica (R-FL), then chair of the House Transportation & Infrastructure Committee, came to publicly bemoan how a troubling number of freshman who were assigned to his committee had little interest in producing the aviation and surface transportation bills that were overdue for Hill attention.  Mica publicly would cite the large number of legislative neophytes who–oddly–were poised to vote against the meat-and-potato policy and program of a public works committee. Why? Because they said they took the trip to Washington to gut government and its budget.

So it is to Chairman Mica’s credit that his committee eventually did produce the transportation authorization bills, albeit ones that didn’t adequately address the full cost of tackling the nation’s infrastructure needs.

Today, Rep. Bill Shuster (R-PA) heads the committee.   He faces the same challenge as his predecessor, Mica, and expectations as his father, Bud.  From the get-go he identified his committee objectives, which include the first water resources bill (WRDA) since 2007 and a robust surface transportation reauthorization bill including possible funding initiatives to repair the failing revenue stream for the Highway Trust Fund.

The chairman knows a price tag comes with maintaining and improving American infrastructure but he is all too aware that for some in the House and Senate it is a price they may be unwilling to pay. So before Shuster rushes headlong into bill writing he wants his colleagues on the committee and in the House to learn why it is essential for Congress to take up these issues. He has been conducting “roundtable” sessions for his committee members so they may hear from trade associations and other public and private sector stakeholders. He convened a hearing with a 101 course title–The Federal Role in America’s Infrastructure—and a Peaceable Kingdom kind of witness list.  And he has called on any and all persons who want to see transportation and infrastructure bills to get past third base to start their own education efforts on Capitol Hill.

Maybe, just maybe, the 113th Congress can be the did-something Congress.