2018 Annual Review

2018: The Annual Review Of Waterways Events

The year 2018 was one full of historic milestones for the inland waterways, marking both ends and beginnings.

A major lock and dam construction project that had threatened to “eat the waterways” was dedicated. A 180-year-old inland shipyard closed. A historic sternwheel vessel finally got clearance to sail the rivers once again. The Subchapter M regulations became final. Congress passed, and the president signed, a national vessel discharge act as part of a Coast Guard authorization bill.

The overall economy and business investment rose to levels not seen for decades. Employment soared and some employers in a revived manufacturing sector began complaining of not being able to find enough workers, but the economic benefits were not evenly distributed.

The president’s infrastructure plans, with his stated desire for private funding participation, were sidelined. But working closely with the navigation industry, Congress moved ahead to provide record levels of funding for the Corps of Engineers.

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At the same time, the president’s protectionist trade policies and tariff wars against Canada, Mexico, Europe and especially China threw international and domestic markets into turmoil and were a major driver of events both in the larger economy and on the rivers.

Mississippi River Navigation

Concerns about maintaining Mississippi River navigation at both ends and the middle emerged in late 2017, and some were addressed in 2018.

In late 2017, a researcher at Louisiana State University warned at the fall meeting of the American Geophysical Union that excessive sedimentation near the Old River Control Structure coupled with a large flood could alter the course of the Lower Mississippi River, sending it into the Atchafalaya River bed.

In December 2017, an unusually large number of groundings in Lake Pepin led the St. Paul Engineer District to cooperate on a study to determine how to dredge the area more effectively. The district was repairing relations with local communities following a strong backlash to earlier plans to take productive riverside farmland through eminent domain for disposal of dredged materials. On June 5, the district signed a memorandum of understanding with the city of Wabasha, Minn., and the Wabasha Port Authority pledging to give local officials a say in plans to dispose of dredged materials.

At the beginning of the year, the Corps of Engineers took advantage of extreme low water on the Lower Mississippi River near Cape Girardeau, Mo., to resume work on submerged rock pinnacles that could be a threat to navigation; they had been partly removed in 2013.

In August, the long-held dream of a 50-foot channel for the Lower Mississippi River from Baton Rouge southward came one step closer to reality when James Dalton, chief of engineers for the Corps, issued a memorandum to newly installed Assistant Secretary of the Army for Civil Works R.D. James in support of the plan.

Ohio River Navigation

On February 8, the Ports of Indiana announced its own milestone when it reported that the Mount Vernon Port handled 6.8 tons of cargo in 2017, more than any port in the 57-year history of Indiana’s port system. Those gains came despite delays and shutdowns at Ohio River locks.

On April 16, the Central Ohio River Business Association announced that the newly-expanded Ports of Cincinnati and Northern Kentucky now ranked as the busiest inland port in the nation, with freight tonnage of 5 million tons for 2014.

The Ohio River’s biggest news came in August, with the official opening of Olmsted Locks and Dams 52 and 53 Replacement Project after many twists and turns.

Tariff Winners And Losers

In January, the Trump administration placed punitive tariffs on Chinese solar panels and washing machines to protect U.S. manufacturers. Trump followed that in March with tariffs on all imports of Chinese steel and aluminum, under an existing law giving the president authority to restrict imports by citing national security concerns. Though many countries were later exempted from the U.S. import tariffs on steel and aluminum, China was the main target.

In April, China responded by imposing tariffs on U.S. exports worth $3 billion. Another round of U.S. tariffs on Chinese products prompted more tariff retaliation from China in July on $34 billion worth of U.S. goods.

The president’s tariff wars created winners and losers among the barge industry’s customers. A major winner was the U.S. domestic steel industry, while manufacturers that import foreign steel and aluminum faced higher prices. The exemptions to the steel and aluminum tariffs weren’t finally removed until June, boosting domestic producers.

In August, U.S. Steel announced that it was reopening and upgrading a 110-year-old steel plant in Gary, Ind., investing $750 million to revitalize it. The company explicitly cited Trump’s protectionist tariffs in its decision.  The facility, U.S. steel’s largest, employs about 3,800 workers at full capacity.

On May 11, mini-mill operator Nucor Corporation announced that its board had approved the construction of a galvanizing line at the company’s barge-served sheet mill plant in Hickman, Ark., to serve the automotive market. In September, Nucor announced a further investment of $650 million to expand production capacity of Nucor Steel Gallatin, another barge-served, flat-rolled steel mill located on the Ohio River in Ghent, Ky. Nucor saw its profits triple in the third quarter as tariffs kicked in and a strong economy drove the price of its steel up by 23 percent.

Big River Steel announced on June 29 a $1.2 billion investment to double capacity in its barge-served steel mill and recycling facility in Osceola, Ark., at Lower Mississippi River Mile 785.

In December, ArcelorMittal and U.S. Steel collectively agreed with the United Steelworkers union in the latest round of collective bargaining to put $5.6 billion into their U.S. operations, much of which are concentrated along the Northwest Indiana lakeshore. The union sought the investment guarantees to ensure that local mills remain sustainable and jobs remain secure over the long-term.

Soy Farmers’ Distress

The biggest tariff losers have been farmers, and especially soy farmers. Uncertainties about tariffs caused market turmoil even before they went into effect. China’s own tariff retaliations against American agricultural imports, especially soybeans, caused a huge blow to U.S. soy exports to China, which ended the year down 96 percent. Farmers had to scramble to find other markets, and piles of soybeans accumulated after bins were full to bursting.

Until the tariff wars began, China was the second-largest export market for all U.S. agriculture products (behind Canada). Among the American goods targeted by China for retaliatory tariffs were cotton, wheat, dairy, wine, fruits, nuts, soybeans, and pork. China is the world’s largest consumer of soybeans, buying 65 percent of all trade of the commodity. The Chinese bought more than $12 billion in American soybeans in 2017, or 57 percent of all U.S. soy exports.

To offset the impact of the tariffs among American farmers, Trump promised up to $12 billion in aid under existing farm relief laws. Farmers scrambled to find new buyers, but by November, the U.S. Department of Agriculture noted that the soy tariffs were driving down barge rates.

At the Inland Marine Expo in May, Mike Steenhoek, executive director of the Soy Transportation Coalition, referred to farmers’ “disappointment” at some of Trump’s trade moves. “President Trump said the right stuff about fixing locks and dams, but many of us [farmers] are very disappointed by his trade policies.”

After some tit-for-tat tariff moves, the U.S. signed a new trade agreement with Canada and Mexico (although the U.S. tariffs had not been removed at press time). Some called it a “new NAFTA,” since it replaced the North American Free Trade Agreement. When deputy secretary of agriculture Stephen Censky spoke at a Waterways Council Inc. meeting in Chicago in November, he said the agreement eliminated unfair Canadian restrictions against American wheat farmers and dairy producers.

How the trade war with China will end is still not clear at the end of 2018.  The threat of further tariffs by America on virtually the whole range of imported Chinse goods has been put on a 90-day hold after talks between America and China at the G20 trade summit in Argentina, and at this writing, China was promising to make large U.S. soy purchases as a way of soothing tensions.

Jeffboat Closure Ends Era

The signposts were clear on February 1, when Jeffboat announced that it would lay off a further 226 employees from its Jeffersonville, Ind., facility, following an earlier layoff of 278 employees in November.

On April 23, 180 years of vessel-building at the site that later became Jeffboat ended as its 12,917th and final vessel, a hopper barge for Coeyman’s Marine Towing, slid down the ways into the Ohio River.

Jeffboat’s run was unparalleled in the history of the inland waterways, or indeed of boatbuilding in the U.S. It survived and thrived during two world wars and many economic ups and downs. It was founded as the Howard Shipyard on the banks of the Ohio River in Jeffersonville, Ind., in 1834. During the 19th century, it was the premier shipbuilder of the steamboat era.

In 1938, it was bought, along with the adjacent yard, by American Barge Line and renamed Jeffboat. During World War II, Jeffboat built sub chasers and landing craft for the U.S. Navy, which bought it to expand its operations.  As the U.S. barge industry grew in the postwar period, so did Jeffboat; with investment and expansion, its annual output of vessels grew to 2,527 by the 1970s.

The historic yard finally fell victim to overbuilding and a changing economy. In an interview with The Waterways Journal, Mark Knoy, chairman and CEO of ACBL, said the yard’s operations had become unsustainable. It needed to build at least 250 barges a year to remain profitable but hadn’t built that many since 2012. In 2017, only 105 barges and two towboats were built at Jeffboat. Knoy said the barge industry was currently in the midst of an oversupply of barges that might last five years, and that it would be too expensive to modernize the facility during a time of reduced demand.

One of the factors that swung ACBL in favor of closing Jeffboat was the fact that it is an open yard. The future of inland boat-building and barge-building is represented by technologically sophisticated facilities like the fully-automated, climate-controlled indoor blast and paint facility of C&C Marine & Repair, which opened in November. Located in Belle Chasse, La., the 83,000-square-foot facility can house barges measuring up to 320 feet by 75 feet by 20 feet.

Inland Marine Expo Milestones

At this year’s Inland Marine Expo in May, The Waterways Journal announced a few milestones of its own. It began a new annual tradition when it honored 40 inland industry people under the age of 40. It announced an updated, overhauled new website. Finally, it named longtime river correspondent Jeff Yates as the new editor of the Inland River Record, the barge industry’s indispensable directory of vessels. Yates replaced legendary river enthusiast and IRR editor Dan Owen, who passed away in January.

Arcosa Marine Products

In May, Trinity Industries announced plans to spin off its marine products division as a separate company, Arcosa Marine Products.

The process took place in the fall and was completed November 1 when a stock distribution was made to Trinity stockholders. The new company includes the Madisonville, La., shipyard, which the company told investors on October 4 would be reopened due to a surge in orders for tank barges. Arcosa is expected to be “a growth-oriented manufacturer and producer of infrastructure-related products for construction, energy and transportation markets.”

Antonio Carrillo, the president and CEO of Arcosa, said, “Our new name symbolizes the ‘arc’ of progress for our business and our ongoing commitment to meeting critical infrastructure needs through innovation, entrepreneurship and flexibility. … We are proud of our historical roots as part of Trinity and are equally honored to be part of Arcosa’s exciting future as a standalone company.”

Trinity said its inland barge building unit, which will now be part of Arcosa, had backlogged orders worth $198.4 million at the end of 2018’s second quarter, compared with a backlog of $98.2 million a year earlier.

In November, Arcosa announced an investment of more than $10 million to expand its existing barge-building operation in Ashland City, Tenn., which is expected to create up to 300 jobs during the next five years.

Barge Industry Consolidation

Barge industry consolidation continued in 2018, as smaller operators were snapped up by larger companies and those seeking to grow through acquisitions.

The years’ biggest deal was announced on February 4, when Kirby corporation said it would buy Houston-based Higman Marine Inc—including 75 towboats and 159 barges—for about $419 million.

On January 2, Hines Furlong Line Inc. bought Hunter Marine Transport Inc. On March 21, Terral River Service bought Kinder-Morgan’s river assets in Blytheville, Ark., and Decatur, Ala., including three fleets on the Lower Mississippi and Tennessee rivers. Metal Shark boats of Jeanerette, la., announced on June 11 that it had acquired the assets of Horizon Shipbuilding of Bayou la Batre, Ala.

In July, Conley Marine Services of New Orleans announced that it was buying Kody Marine, located in metro New Orleans on the Harvey Canal. Parker Towing Company Inc. expanded its marine and terminal operations with its acquisition of Henry Marine Service Inc., announced in September.

In October, Epic Alabama Shipyard LLC bought BAE Systems Southeast Shipyards Alabama LLC and all of its related shipyard facilities in Mobile, Ala.

Consolidation wasn’t limited to the commercial tow sector. In November, American Queen Steamboat Company bought the Victory I and Victory II boats, as well as the Victory brand, from Sunstone Ships Inc.

Subchapter M Becomes Final

July 20 was the date for the final implementation of the Coast Guard’s Subchapter M regulations. The second half of 2018 was filled with announcements of barge operators and boats earning their certificates of inspection (COIs), some through third party organizations (TPOs) and others who chose the direct Coast Guard inspection option.

The barge industry had already been making substantial progress on safety; a safety report released in February by the Coast Guard and American Waterways Operators showed a dramatic decrease in crew fatalities, injuries and spills over the past 22 years.

As many observers have pointed out, the Subchapter M voyage is not over. The Coast Guard is still issuing policy and guidance letters clarifying points of interpretation. The Coast Guard’s leaders have repeatedly said that it does not have the personnel to handle all the required inspections. It reserves some discretion in interpretation to local officers in charge of marine inspection (OCMIs), even as it is, in effect, extending some of its rule-making authority to TPOs.

While this pace frustrates some marine operators, it also provides avenues for the industry, through its advocacy organizations, to continue to influence the ongoing process of Subchapter M implementation.

Olmsted Dedicated

On August 31, the Olmsted Locks and Dams 52 and 53 Replacement Project was officially dedicated. A crowd of about 250 elected officials, Corps of Engineers project and contractor personnel, barge industry representatives and elected officials watched as the American Commercial Barge Line’s mv. Glenn W. Jones became the first towboat to enter the lock after its official opening. The wicket-lifting boat Keen was also dedicated. The Corps later announced the construction of a second backup wicket-lifter boat. The project had become the largest and most expensive in the history of the Corps of Engineers.

The occasion was met with widespread relief by the inland waterways industry, which had been key to ensuring the project’s completion and funding. In 2006 and 2007, at a key moment in the project’s history, when delayed funding and rising costs made Olmsted “the project that ate the waterways,” members of the inland waterways industry stepped up. They worked closely with the Corps to produce a prioritized list of outstanding lock and dam projects, then went to work again to develop better estimating, modeling and cost control measures.

The resulting list of recommendations and priorities, dubbed the Capital Development Plan, was a key tool in educating the members of Congress who eventually came up with funding that allowed the project to be completed—four years earlier and more than $300 million below the last previous estimate.

Key members of Congress who had worked closely with the barge industry spoke at the opening. Showing the spirit of bipartisanship that waterways projects often inspire, Sen. Mitch McConnell (R-Tenn.), Senate Majority leader, and Sen. Dick Durbin (D-Ill.) both spoke. McConnell, a consistent champion and supporter of Olmsted who shepherded its fortunes through Congress, had received the Waterways Council’s Leadership Service Award in February for his efforts on Olmsted.

On a practical level, the Olmsted opening immediately relieved Ohio River barge traffic. Marty Hettel, vice president of government affairs at American Commercial Barge Lines and chairman of the Inland Waterways Users board, estimated the total costs of delays at deteriorating Locks 52 and 53 from November 2017 through September 2018 at about $75 million.

Olmsted became fully operational in October. Some elements of the project—including the complete decommissioning and demolition of Locks and Dams 52 and 53, which Olmsted replaced—will not be completed until next year.

Fracking Reverses Energy Trends

America’s fracking boom accelerated during 2018.  On December 4, the Energy Information Administration (EIA) announced that net U.S. exports of crude oil and petroleum products totaled 211,000 barrels per day in the week ended November 30. That marked the return of the U.S. to the status of a net exporter of oil, a status it hadn’t enjoyed in 75 years. According to the American Petroleum Institute, the United States has been a net oil importer since 1949. As recently as 2005, just before fracking took off, U.S. net oil imports averaged more than 12.5 million barrels per day.

“We are becoming the dominant energy power in the world,” said Michael Lynch, president of Strategic Energy & Economic Research. “Because the change is gradual over time, I don’t think it’s going to cause a huge revolution, but you do have to think that OPEC is going to have to take that into account when they think about cutting.”

The rise of fracking and the resulting boom in oil and gas production have not been steady or without bumps along the way.  The glut of oil and natural gas produced by fracking has shifted the U.S. barge market toward liquid barges. Cheap oil and gas can also hurt barge operators, though, when prices drop too low and affect barge rates—as they did, for example, when crude oil dropped from more than $100 a barrel in 2014 to below $40 in 2015.

Kirby Climbs Back

Reflecting the growth in liquid cargoes on the waterways, Kirby Corporation, the nation’s leading carrier of liquid cargoes as well as a midstream petrochemical player through its various holdings, enjoyed revenue growth and continued to grow through acquisitions, in accordance with its established strategy.

The acquisition of Higman’s 159 barges and 75 towboats, with their average ages of seven and eight years respectively, helped make Kirby’s fleet younger and enabled it to avoid future expense, the company said.

In April, Kirby reported first-quarter earnings of $32.5 million compared with $27.5 million for the first quarter of 2017. Consolidated revenues for 2018’s first quarter were $741.7 million, compared with $491.7 million for the first quarter of 2017. Kirby reported its equipment utilization rates were back into the 90 percent range after slipping during the turndown last year.

Kirby announced an agreement in May to buy Targa Resources Corporation’s inland marine tank barge business for about $69.3 million in cash.

Energy Coast Booms

According to a study by the Center for Public Integrity, more than 80 plants, terminals and other major oil and gas projects are either under construction or planned up and down the Texas coast, from Port Arthur to Brownsville. In the past few years, companies have laid more than 8,000 miles of pipeline in Texas.

The oil and gas infrastructure boom extends to neighboring Louisiana. On April 23, Louisiana Gov. John Bel Edwards and Keh-Yen Lin, executive vice president of Taiwan-based Formosa Petrochemical Corporation, announced Formosa’s plans to build a $9.4 billion petrochemical manufacturing complex in St. James Parish, La., on the west bank of the Mississippi River.

In June, the Port Commission of the Port of Corpus Christi voted to authorize $217 million in revenue bonds, with fully half that amount set to contribute to funding the Corpus Christi Ship Channel Improvement Project (CIP).

In October, the port announced that in the first nine months of 2018 it hit a new record of 79.3 million tons of cargo. This surpassed the previous record of 77.9 million tons set in the first nine months of 2015, while also eclipsing the same period in 2017 by 4 million tons, an increase of 5 percent year-over-year. The port’s volume growth was driven by increases of crude oil (up 11 percent), other petroleum products (up 8 percent), and breakbulk shipments (up 3 percent).

That same month, the port announced an agreement with equity firm the Carlyle Group to develop a major crude oil export terminal on Harbor Island.

On October 17, Jupiter MLP LLC, a privately held midstream company that provides crude oil producers and gas plants with logistics and offtake solutions, announced that it had secured funding from Charon System Advisors sufficient to build the 1 million-barrel-per-day- capacity Jupiter Pipeline from the Permian Basin to the Port of Brownsville, Texas. The pipeline is expected to be operational in late third quarter of 2020. Jupiter has completed engineering, design, and right-of-way planning.

In November, the Corps of Engineers announced $59 million for CIP in its work plan in addition to $13 million already earmarked. This funding brings the total federal appropriations for CIP to $95 million.

Port Houston Surges In Containers

Port Houston, named Port Operator of the Year by Lloyd’s List’s 2018 America’s Awards, had already reported a record year in 2017. Port Houston facilities reached the highest total tonnage in port history, 38.3 million tons, surpassing the record of 37.8 million tons set in 2014.

It was also a record-setting year for container business. Port Houston handled 2.46 million TEUs for 2017, nearly 13 percent higher than the previous record set in 2016 with a volume of 2.18 million TEUs.

In January, Port Commission Chairman Janiece Longoria announced, “We are again on our way to another tremendous year of opportunity and growth at Port Houston.”

That proved prophetic. By August, Port Houston had surged to become the fifth largest container port in the U.S., according to data covering the second quarter of 2018. Much of Port Houston’s growth was driven by imports from the Trans-Pacific region; during the first six months of 2018, Port Houston imports from that region jumped by 24 percent, a significant hike compared to overall U.S. Trans-Pacific imports, which increased by 5 percent. Port Houston is now the largest container port in the Gulf of Mexico, handling about two-thirds of its containers.

New Orleans Growth

The Port of New Orleans (Port NOLA), too, saw major gains during 2018. In October, Louisiana Gov. John Bel Edwards announced that the 206-acre Avondale shipyard, closed in 2014, had been purchased for an undisclosed price by Avondale Marine LLC, which reportedly plans to spend up to $100 million to transform it into a commercial transit hub.

In a November State of the Port address, Brandy Christian, Port NOLA President and CEO, announced that Port NOLA’s containerized cargo volumes posted a 10 percent increase in fiscal year 2018 over 2017. She cited the expansion of the Panama Canal and the growth in containerized exports, particularly resin and frozen poultry.

“We handled 527,000 TEUs in 2017,” said Christian. “This year, we will approach 600,000 TEUs and expect to exceed that volume in 2019.”

Port NOLA is also growing the country’s largest container-on-barge operation, in partnership with the Port of Greater Baton Rouge and operator SEACOR AMH. The service repositions containers from Memphis to Baton Rouge, where they are loaded with plastic resins. The loaded containers are then shipped by barge along the Mississippi River to Port NOLA to be loaded onto vessels for export to overseas markets.

Christian called the sale of the Avondale site a “major milestone” for the port and added, “The entire port complex can benefit as Avondale Marine implements that vision.”

On a more somber note, Christian said that breakbulk cargo, sensitive to manufacturing trends and economic fluctuations, declined 30 percent during FY2018 versus FY2017, mostly due to the effects of the steel and aluminum tariffs. The port plans to invest another $50 million in its breakbulk wharves.

Inland Container Plans Move Forward

On containers, American Patriot Holdings continued to tout its plans and investments for moving containers on the inland waterways via its patented, specially-designed, self-propelled container vessels. The container vessels planned for Mississippi River service can range from 592 feet to 952 feet in length, with a beam of 100 feet. Completed designs have a deadweight tonnage ranging from 9,489 to 16,079 long tons and a TEU capacity ranging from 1,824 to 2,960 units.

These vessels will “revolutionize inland marine transportation of containers,” the company claims, by giving shippers “un-paralleled cost efficiencies and a reliable liner service, utilizing LNG as the main propulsion fuel.” The propulsion system consists of four diesel generators (2880 kw.) driving four main azimuthing drives and two bow pumps, which the company says will eliminate the need for docking and undocking tug assist without compromising safety.

The company plans an initial Mississippi River run between a planned main container terminal in the Plaquemines Port, between Miles 50 and 55, and two upriver ports planned for Memphis and St. Louis.

Big Legislative Wins

In terms of legislative goals, 2018 was one of the most productive years ever for the barge industry and its partners and advocates.

On September 21, President Trump signed a series of so-called “minibus” or partial appropriations bills that included funding for the Corps of Engineers. Reflecting bipartisan consensus on the importance of infrastructure and the desire of both parties to avoid a government shutdown, the bill enjoyed overwhelming bipartisan support, with the House voting for it 377-20 and the Senate 92-5.

The minibus bill raised FY2019 funding levels for the Corps’ Civil Works program to $6.99 billion, an increase of 46.08 percent from the administration’s request of $4.79 billion. This was the fourth consecutive year that Congress has increased funding for the Corps over and above what the president had requested. Operations and maintenance funding was increased to a record $3.74 billion, up 24.67 percent from the administration’s request of $3 billion.

Federal funding for projects supported by the Inland Waterways Trust Fund (IWTF) FY19 was set $326.5 million—an increase of 833 percent over the administration’s request for a mere $35 million, which would have funded only the completion of Olmsted.

Waterways Council Inc. said, “This is the first time in many years that a number of appropriations bills have been finalized before the start of the new fiscal year. This means the Corps of Engineers will receive its full funding rather than operating from a continuing resolution that provides the previous fiscal year’s funding level.”

Even more important was the retaining of an amendment to change the cost-share formula at Chickamauga Lock to 85 percent federal funding and 15 percent from the IWTF (from a 50/50 cost share). This change allowed full work plan allocations to the top IWTF-supported projects, including Chickamauga Lock and Dam and Kentucky Lock and Dam on the Tennessee River, the Lower Mon project on the Monongahela River, and major repairs to LaGrange Lock and Dam on the Illinois River.

WCI President and CEO Mike Toohey said, “With the dedication of the Olmsted Locks and Dam project … strong funding for the Corps in fiscal year 2019, and a potential final WRDA [Water Resources Development Act] bill in 2018, the inland waterways’ many beneficiaries and the U.S. economy have much to celebrate.”

2018 WRDA

On October 25, that final WRDA was signed into law, having passed the Senate by a vote of 99-1 and passing the House by voice vote. The law’s passage and signing kept WRDAs on the recommended two-year schedule. The law met a key goal of the inland navigation industry when it did not include any language that would authorize lockage fees and/or tolls on the inland waterways system.

It authorized 12 Chief’s Reports, including one that will be funded by the Inland Waterways Trust Fund (for the Three Rivers project in southeast Arkansas). It also ensured that Chickamauga can continue construction once it has reached its original authorized amount.

The new law also directed the National Academy of Sciences to evaluate the current organizational structure of the civil works function of the Corps, to identify impediments to efficient project delivery, and to provide recommendations to Congress.

Toohey said, “The passage of WRDA 2018 is a win for the nation’s towboat operators, freight shippers, ports, and labor and conservation groups that rely on an efficient inland waterways system. … This bill strengthens our nation’s vital inland waterways transportation system, will create and sustain American jobs, increase exports and keep the United States competitive in world markets.”

VIDA Passed, Signed

Another top waterway priority was achieved when President Trump signed the Frank LoBiondo Coast Guard Authorization Act of 2018 into law on December 4. The act, which included a Vessel Incidental Discharge Act (VIDA), had been passed by both houses of Congress in November.

The AWO described VIDA as “bipartisan legislation that will streamline a broken regulatory system in which commercial vessels…are subject to inconsistent and duplicative vessel discharge regulations from 25 states and two federal agencies.”

The bill achieved broad bipartisan support by sharing ballast-water regulation between the Coast Guard and Environmental Protection Agency under the Clean Water Act instead of reserving it solely to the Coast Guard (as the navigation industry had originally wanted). Nevertheless, VIDA pre-empts the states from imposing their own ballast regulations on vessel operators.

Under VIDA, EPA and the U.S. Coast Guard will work together under the Clean Water Act to jointly set and implement standards for ballast water and incidental discharges, in consultation with the states. The legislation will give vessel owners and mariners the certainty of a nationally consistent regulatory system, while ensuring high standards of environmental protection using the best technology economically achievable.”

WOTUS Still Up In Air

One of President Trump’s prominent campaign promises was to reverse the Obama administration’s expansion of water regulating authority by unilaterally redefining the term “Waters of the United States,” but his efforts to do so have become hung up in the court system.

The expanded rule, known by the shorthand acronym WOTUS, was hugely unpopular with farmers, ranchers, and business owners of all kinds even before its official release. Among many other objections, critics charged that the Environmental Protection Agency was in effect bypassing Congress and creating new laws on its own authority. When the EPA released it in 2015, it was immediately sued by 36 states and many farm and business interest groups. The rule was suspended while judges consolidated lawsuits and considered them.

A major point of contention was the status of “ephemeral waterways” that exist only after rainfall. The expansive 2015 definition of “Waters of the U.S.” would, critics argued, have embraced much of the productive land of the country and would have amounted to a federal power grab.

On February 28, the president issued an executive order directing EPA and the Corps to review and rescind or revise the 2015 Rule. Since then, several judges have ruled that more public comment is needed to revise the rule.

On December 11, the EPA published its revised definition of “Waters of the United States” consistent with the executive order. It provoked immediate backlash and is itself likely to be challenged in court by environmentalist groups.

Brandon Road Carp Plan

At the end of November, after much controversy and many delays, the Rock Island Engineer District released its Final Preferred Plan for stopping Asian carp at its Brandon Lock and Dam facility. Apparently bowing to local pressure and to periodic media frenzies about findings of individual carp or carp DNA in the region, the plan included a redundant array of carp-fighting measures at an estimated cost that ballooned from an original estimate of $275 million to almost $800 million.

It’s now up to Congress to debate the plan. Whether and how it will be funded remains uncertain. The state of Illinois, which would be responsible for significant cost-sharing in implementing the plan, has expressed reservations about it.

Delta Queen Exemption

The legislative good news was crowned by a significant milestone for waterways supporters. On December 4, the 91-year-old Delta Queen finally received the long-awaited renewal of its exemption from the 1966 Safety of Life At Sea Act, allowing it to once again ply the rivers. Leah Ann Ingram, vice president and chief operating officer of the Delta Queen Steamboat Company, said, “This marks the beginning of a new chapter in American steamboat history.”

In anticipation of the boat’s returning to service, the port of Kimmswick, Mo., where it is homeported, has been expanding its facilities. The historic vessel’s planned renovations and upgrades can now go ahead. The Delta Queen is expected to return to passenger service in 2020.

Caption for top photo: Olmsted Locks and Dam, the multi-billion-dollar project on the lower Ohio River that was decades in the making, finally began operating in 2018. The Louisville Engineer District held a formal dedication ceremony August 30; in this photo, senators, Corps of Engineers officials and industry leaders push a ceremonial red button to open the new facility, which replaces the aging Locks 52 and 53. (Photo by Nelson Spencer Jr.)