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EDITORIAL

Report says Obama’s Export Goal ‘On Target’

Critics of President Obama, including us at times, have used a broad brush to paint his administration as unproductive, though our intention has never been to ignore progress or deny credit where due. Examples that come to mind include the lack of dredging on the Lower Mississippi, how we believe it will impact imports and exports; and the stimulus program and its failure or success in producing results.
We have been among the many trying to convince the government that not dredging the rivers could cost the U.S. $9.2 billion of cargo annually, according to a recently released study. The fact that the Lower Miss is THE focal point for exports (particularly agricultural) supports our conclusion.

We have on many occasions asked the question: How does the president expect to meet his goal of doubling exports within five years if he will not allow the dredging of the Lower Mississippi? The answer appears to lie in other areas. A little surprising to us, The New York Times reported on January 20 that the “administration is on track—for now—to meet its ambitious goal.” The paper says, “Growing exports have been one of the central drivers of recovery, accounting for about half the nation’s economic growth since the recession ended.” The Times gives credit to the administration for “pressuring China to increase the value of its currency and open its markets to American business.

“Exports,” according to the Times and Commerce Department data, are running at about $180 billion a month, up from $140 billion a month two years ago. They are currently growing at an annual pace of about 16 per cent—a percentage point higher than necessary to double exports to $3.1 trillion by 2015.” The administration also “pushed through three long-stalled trade deals with Columbia, South Korea and Panama and also announced the framework for a trade and investment agreement among nine Pacific nations, the Trans-Pacific Partnership.” The Times reported that the global rebound from recession and rising commodity prices also gave exports a boost.

According to the Times, “farm exports reached a record $137.4 billion in the 2011 fiscal year, which ended September 30, beating the previous annual peak by $22.5 billion, or 20 percent. Sales of petroleum products also hit a record of about $90 billion in 2011, making fuels the country’s biggest export.”

Gary C. Hufbauer, a senior fellow at Peterson Institute for International Economics, told the Times, “You could say the best thing the Obama administration did for trade is the stimulus program, bolstering domestic and global demand.” We do know that the accelerated depreciation provisions, part of Obama’s America’s Recovery and Reinvestment Act (ARRA) or stimulus program, made it possible for nearly 1,000 new hopper barges to be delivered in 201l, that according Sandor Toth, publisher of the River Transport News. He told the WJ that he expects the number of deliveries to increase in 2012.

Other influences on our foreign trade include demand from abroad. For example, a need for coal in Australia due to disastrous weather in 2011 impact our coal exports. It is expected to decline this year. Foreign trade, then, is a many-faceted issue. The needs, or lack thereof, in nations of the world influence our foreign trade figures.
There is some feeling among forecasters that exports will continue to expand, but the rate of expansion may slow down.

However, dredging on the Lower Miss remains a serious issue that needs to be handled sooner rather than later. Losing $9.2 billion annually is no small matter. That amount of money, spent on our navigational system annually, could produce wonders.

We applaud the Obama administration for the trade agreements and for its goal of increasing exports. Just imagine, though, how much stronger our exports would be with a modern river infrastructure and proper dredging of ports and navigation channels.

Weekly News Summary For January 30 – February 5, 2012:

Kinder Morgan, Arch Coal Sign Long-Term Pact

Kinder Morgan Energy Partners announced January 24 that it will invest about $140 million to further expand its coal-handling facilities along the Gulf Coast. Kinder Morgan and Arch Coal also announced they have signed a long-term throughput agreement that will help support the expansion of the export facilities.

The companies said in the announcement that they are in final discussions on port space for coal shipments at Kinder Morgan-owned facilities on the East Coast.

Upon completion of the proposed terminal upgrades, and subject to certain rail service agreements, Arch will ship coal at guaranteed minimum volume levels through Kinder Morgan-owned terminals. The expansion of Kinder Morgan’s export facilities along the Gulf Coast and East Coast will provide incremental port capacity for Arch’s growing seaborne coal volumes, the companies said.

“The demand for export coal continues to grow and we are pleased to offer Arch and other customers options in various markets through our multi-location terminal network,” said Jeff Armstrong, president of Kinder Morgan Terminals. “We are also extending existing long-term coal agreements with Arch at our upriver terminals in Illinois.”

Those terminals, at Cora, Cahokia and Kellogg, are all rail-to-barge facilities on the Upper Mississippi River….
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Port of Brownsville Approves LNG Terminal Plan

The Port of Brownsville (Texas) Board of Commissioners announced January 24 that it has approved a lease option agreement with liquefied natural gas company Gulf Coast LNG Export LLC for 500 acres of port property. Gulf Coast LNG’s application with the U.S. Department of Energy seeking authorization to export liquefied natural gas out of a proposed facility located at the Port of Brownsville was filed January 10.

While authorization has not yet been granted by the U.S. Department of Energy, Gulf Coast LNG Exports and port officials are optimistic, due to significant demand for U.S. LNG.

Gulf Coast officials said that the Port of Brownsville’s location and business-friendly approach were among some of the reasons they decided on the port.
“We believe the Port of Brownsville is in a strategic geographic location to assure the success of this project, and we envision this to be a long-term relationship with the port,” said Michael Smith, principal owner and chief executive officer for Gulf Coast LNG Export LLC.

Smith is also chief executive officer and founder of Freeport LNG Development L.P., which owns and operates a 2-billion-cubic feet/day LNG receiving and re-gasification facility near Freeport, Texas, and is currently expanding that facility to add liquefaction and export capability….
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Washington Governor Brokers Longview Deal

Washington Gov. Chris Gregoire announced on January 23 that her office had brokered a tentative settlement between the International Longshore and Warehouse Union (ILWU) and EGT Terminals that could result in the commencement of grain exports from the new grain export terminal in Longview, Wash. (see WJ, January 23).

The ILWU, which has a contract with the port, has protested EGT Development’s decision to use another union to operate the terminal and has a suit pending against EGT on the issue.

The release from the governor’s office did not mention a contract between the ILWU and EGT. Larry Clarke, EGT’s chief executive officer, said, “We are pleased to announce that after a series of discussions convened by Gov. Gregoire, the ILWU and EGT have reached a tentative settlement to resolve the pending legal matters between the parties and the Port of Longview.”
Gov. Gregoire said, “I asked EGT and ILWU to come together in a good-faith effort to overcome their differences. Both parties should be commended for their willingness to work together and compromise.”

The port and the union maintain that the ILWU, which has represented workers at West Coast ports for the past 80 years, has the legal right to perform dockworker jobs in Longview. EGT challenged that assertion in litigation before the U.S. District Court in Tacoma….
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Pine Bluff Sand & Gravel Christens Mv. Bill Atkinson

Pine Bluff Sand & Gravel Company christened the mv. Bill Atkinson December 3 in Little Rock, Ark. It is not brand-spanking-new, having been in operation for almost two years, but it looked like it at the dedication ceremony. Capt. George Rauls brought it out from Gulf Island Marine Fabricators’ yard in Houma, La., where it was built, in April 2010. He can remember the exact date because it’s the same as his birthday, he said.
As he welcomed guests aboard the 6,000 hp. towboat, in the company of his daughter, Courtney, Rauls’ pride in the vessel was easy to see. His crew had it in squeaky clean condition, so much so that it prompted Scott McGeorge, the company’s president—who was in the Coast Guard and knows something about keeping vessels shipshape—to tell the crowd before the tour that the boat would stand up to the most stringent of white-glove inspections. He complimented the crew for its efforts.

Down in the engineroom, among the twin EMD engines and Lufkin gears, engineer D.J. Lovegrove, a veteran of 15 years on the river, was obviously proud, too, but not only of the boat. He also considered himself fortunate to be working for a company like Pine Bluff Sand & Gravel. Once, he said, he was changing the oil in an engine while the Atkinson was laid up, standing there with grease up to his elbows, when in walked “Mr. McGeorge,” wearing a T-shirt and khakis. “He called me by my first name,” he said proudly, “put his arm around my shoulder and asked me how everything was going.”

Sherry Patterson’s feelings could not be mistaken, either, as she posed for a photograph in the boat’s expansive galley. At 166 by 48 feet, the Bill Atkinson has plenty of room for crew comforts. Patterson is one of the cooks for the vessel’s 17-person crew, many of whom were stationed at strategic points on the boat to assure christening guests of a safe tour on their way through the vessel. “Thank you for coming,” each said. “Watch your step.”

Safety is the highest priority at Pine Bluff Sand & Gravel, according to Brian McGeorge, the company’s vice president and chief operating officer. He pointed out in opening remarks that since taking delivery of the boat, the crew has not had a single personal injury and only one minor incident during a period that included record flooding on the Mississippi River. “And that was knocking down a flag pole on the way to this event,” he said, laughing. “The crew has done an outstanding job.”…
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Record Cruising Year For Port Of New Orleans

The Port of New Orleans set a record for cruise passengers in 2011—handling 736,908 passengers, 2,265 more than the previous record year of 2004—but port officials say that number will pale compared to what they expect for 2012.

“We are experiencing tremendous growth in our cruise industry,” said Gary LaGrange, port president and chief executive officer. “New Orleans is a hugely popular cruise port, and cruise lines are taking notice and investing larger and newer ships in their New Orleans itineraries. This year we will be knocking on the door of the 1-million-passenger mark.”

In addition to the four home-ported cruise ships sailing from New Orleans each week, the port hosted two unique cruise ship calls last week. The 1,778-passenger Balmoral berthed January 23 at the Julia Street Cruise Terminal to allow passengers to explore New Orleans. Owned by United Kingdom-based Fred Olsen Cruise Lines, the ship is the largest and newest of the company’s fleet. On January 26, P&O Cruises’ Oceana called on the Julia Street Cruise Terminal to allow passengers to visit the Crescent City before departing the next night for Cozumel. The 857-foot, 2,272-passenger cruise ship is in the midst of a Caribbean cruise for the United Kingdom-based cruise line and visited Grand Cayman prior to New Orleans.

The cruise industry is big business for the port and the New Orleans tourism industry. In 2011, the total direct local economic impact of the industry is estimated at $132.1 million, or $937,000 per ship call. Economic impact studies determined the industry contributes more than $226 million overall to the state, supporting more than 3,000 jobs. And those impacts will surely rise in the coming year with further increased activity….
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