Lower Miss Deepening Will Have Regional, National Impacts
The U.S. Army Corps of Engineers recently awarded the first contract to jumpstart the deepening of the Mississippi River Ship Channel from Baton Rouge, La., to the Gulf of Mexico to 50 feet. The phased project will begin by deepening Southwest Pass to the new depth, which will bring a 50-foot channel to the mighty river from the Gulf to an area 50 miles above New Orleans.
Five experts involved with the effort to get the 50-foot Mississippi River Ship Channel project not only authorized but also funded and initiated teamed up for a panel discussion during the final day of IMX 2020, held virtually September 29–October 1. The panel was made up of moderator Sean Duffy, executive director of the Big River Coalition; Capt. Michael Miller, president of the Associated Branch Pilots Association (Bar Pilots); Port of South Louisiana Executive Director Paul Aucoin; Robb Ewoldt, president-elect of the Iowa Soybean Association; and Mike Steenhoek, executive director of the Soy Transportation Coalition.
Duffy started the panel discussion by showing a map of the Mississippi River Basin, which drains 1.25 million square miles of the country and connects to 31 states and more than 350 million acres of farmland.
Most immediately in southeast Louisiana, the Mississippi River Ship Channel touches the ports of Plaquemines, St. Bernard, New Orleans, South Louisiana and Baton Rouge, representing the largest port complex in the world.
Duffy pointed to a 2012 study by the Institute for Water Resources (IWR) titled “U.S. Port and Inland Waterways Modernization Preparing for Post-Panamax Vessels,” which did not specifically examine the benefit of deepening federal channels along the Gulf Coast in view of serving post-Panamax ships.
At the request of the Big River Coalition (BRC), the Institute for Water Resources issued a follow-up memo in August of that year to say that deepening the river from 45 feet to 50 feet did indeed warrant further study. In that memo, IWR said the Port of South Louisiana’s role as a leading bulk cargo-handling port, “coupled with the expected deployment of larger bulk vessels in the world fleet, suggest it is reasonable to consider the merits of such action in more detail.”
“That happened on August 24, , and on August 25 I spoke to my board and said, ‘I think it’s time we reinvigorate going to 50 feet,” Duffy said. “We’d been authorized since 1986. WRDA of 1986 actually authorized us to 55 feet.”
Duffy and BRC identified three steps needed to make deepening the ship channel to 50 feet a reality: 1) increase the threshold for full federal funding for deepwater channels from 45 feet to 50 feet; 2) have the Corps of Engineers conduct a general re-evaluation report to update the economic impact of deepening the channel to 50 feet; and 3) appropriate funding for the project.
The first task was accomplished in the Water Resources Reform and Development Act of 2014, while the second occurred with the Director’s Report, which was signed August 3, 2018. Finally, securing the funding and then implementing the Project Partnership Agreement for the project was completed with a formal signing on July 31, with the Corps awarding the first contracts for the project soon thereafter.
The federal funding threshold increase was huge, Duffy said, because it meant the federal government is now responsible for maintaining the channel, rather than the increased maintenance cost falling to a non-federal sponsor.
“If that had stayed, we’re probably not here today,” Duffy said.
For objective two, Duffy explained that the original economic study for 55 feet happened years before anyone dreamed of expanding the Panama Canal to accommodate larger vessels. In its re-evaluation, the Corps determined the project will have a benefit to cost ratio of 7.2 to 1.
Duffy then outlined the contracts awarded for the initial phase of the deepening, with dredging first focused on deepening Southwest Pass. The rest of the river from Southwest Pass to above New Orleans is naturally deeper than 50 feet. There are currently three dredge contracts awarded: two cutterhead dredges and one hopper dredge.
Total expected cost is just under $238 million. That breaks down to $110 million for Southwest Pass, $47.5 million for the 12 crossings between New Orleans and Baton Rouge, and $80.2 million for pipeline and utility relocations.
Work to establish a 50-foot channel all the way to Baton Rouge is expected to wrap up by 2024.
Duffy also mentioned two “lagniappe” developments that helped move the project from concept to initiation. First, WRDA 2016 changed the cost-share between the federal government and the non-federal sponsor from 50-50 to 75-25. Second, the U.S. Soybean Board gave $2 million to the Louisiana Department of Transportation and Development, the non-federal sponsor, to help offset the agency’s share of dredging and pipeline relocations.
“There’s a lot of buy-in to the benefits of deepening the river,” Duffy said.
Importance, Impact Of 50 Feet
Miller outlined what a normal day looks like on Southwest Pass, with oceangoing ships maneuvering not only around each other but also around cutterhead dredges and hopper dredges working to maintain the channel.
The challenge—and importance of consistently maintaining the ship channel to its authorized dimensions—comes from how ships, particularly bulk cargo and container ships, are growing. Miller gave the example of the bulk carrier Advantage Start, which measures 900 feet by 157 feet, with a draft of 45 feet.
“That takes up a lot of the channel,” Miller said, “so going to 50 feet, even if this ship doesn’t take advantage of the 50 feet, it will give it some more clearance and area for displacement. Because when we put two of these ships together meeting in Southwest Pass, because we are a 24/7/365 two-way traffic, it does get tight with two ships like this.”
Beyond aiding the flow of navigation on the lower river, the project to deepen the ship channel is one of several in the nation that are having far-reaching impacts on the dredging industry. Duffy highlighted hopper dredges available to work in Southwest Pass—15 in all—with four new dredges expected in the coming years. Manson Construction, Weeks Marine and Great Lakes Dredge & Dock have all announced new hopper dredges under construction.
The panel also highlighted the significance of beneficially using dredge material from the deepening work at Southwest Pass. Corps officials have estimated that deepening Southwest Pass to 50 feet will yield 1,400 to 1,500 new acres in the marshland that makes up the birds-foot delta near the mouth of the river. That new land will join the more than 10,000 acres created over the past decade through the beneficial use of dredge material.
But it’s not just the lower river that will benefit from a deeper ship channel. Farmers in the Midwest will reap the benefits of bulk cargo ships being able to load more agricultural products.
Steenhoek, rather than viewing the Mississippi River Ship Channel deepening a Louisiana project, called it “the single infrastructure investment that would provide the greatest degree of benefit to soybean farmers throughout the country.”
“We believe this project also needed to be regarded as an Iowa thing, an Illinois thing, a Minnesota thing, a Missouri thing, an Ohio thing,” Steenhoek said. “Because the reality is, what happens along the Lower Mississippi River impacts what happens up here in the Midwest. This inland waterways supply chain that eventually reaches these export facilities along the Lower Mississippi River is integral to our success and competitiveness in the global marketplace.”
Steenhoek pointed out that 60 percent of U.S. soybean exports and 57 percent of U.S. corn exports exit through the Lower Mississippi River.
The Soy Transportation Coalition, the American Soybean Association and state soybean associations all advocated for the project at the federal level, Steenhoek said.
Many of those agricultural products bound for export are loaded onto ships within the Port of South Louisiana, which covers 54 miles along both banks of the Mississippi River between New Orleans and Baton Rouge. In 2019, Aucoin said, the port handled close to 259 million short tons of cargoes, accommodating 3,945 vessels and close to 55,000 barges. Thirty-five percent of that cargo was made up of grains. Every foot of extra draft on a ship, Aucoin said, amounts to $1 million of added cargo it can carry down the river.
“Deepening the mouth of the river—it doesn’t take a genius to figure it out—makes all these five deepwater ports [in Louisiana] and everybody in the grain industry in the midwestern states more reliable and more competitive, and it’s important for us to maintain that competitiveness and reliability,” Aucoin said.
Ewoldt then closed out the panel. Representing farmers in the upper Midwest, Ewoldt referenced an Informa Economics study that found deepening the river would translate to an 8- to 12-cent increase in price by improving farmers’ basis on their crops.
“That may not seem like a whole lot, but if you look at what we’re generating on a per acre basis, that should be $8 to $10 per acre that we’re going to benefit from the efficiencies of being able to put another half million bushels on a ship heading over to China, Japan or where have you,” Ewoldt said, adding, “If we can move it out and have that advantage over South America, I think that’s a huge, huge thing to have.”
Ewoldt said he’s also excited about the possibility of large-scale container transport on the Mississippi River, which could open the door to the containerized export of agricultural products.
Whether it’s the deepening or the development and buildout of more efficient transportation systems and facilities, Ewoldt said the important thing is it gives U.S. producers a competitive advantage over other regions, namely South America.
“And I think that’s what it’s all about,” he said.