Soo closer to getting 2nd big lock
Washington — A long-awaited study by the U.S. Army Corps of Engineers recommends a large replacement lock at Sault Ste. Marie, providing an economic analysis that will allow the project to finally compete for construction funding.
A summary of the study obtained by The Detroit News emphasizes the potential economic consequences of not updating the shipping corridor, formally recognizing a 2015 Department of Homeland Security report that found no alternative transportation mode exists for getting iron ore from Minnesota mines to steel mills on the lower Great Lakes.
"The strategic importance of the Soo Locks cannot be overstated," wrote James C. Dalton, director of Civil Works for the Army Corps, in a memo dated Friday and provided to lawmakers.
Dalton noted that only one of the four aging locks owned and operated by the Army Corps in the Soo is big enough to handle the largest freighters that carry 89 percent of the cargo through the corridor.
He said an unexpected outage of that lock would create a "bottleneck," disrupting the supply chain for steel production and thus manufacturing — particularly the auto industry.
Based on the study, the cost of engineering and construction of a new shipping lock in Sault Ste. Marie is estimated at $922 million at next year's pricing level, or $1 billion over the seven to 10 year construction period, said Lt. Col. Dennis P. Sugrue, commander of the Army Corps' Detroit District.
The analysis of the project out Friday provides a cost-benefit ratio of 2.42.
A ratio over 1 is needed to compete for funding among other navigation projects, so the project can now move forward with congressional authorization.
Dalton's memo said construction of a new Soo Lock would result in average annual benefits of $77.4 million and incur average annual costs of $32.7 million, for a net benefit of $44.7 million.
The project had previously received a ratio of 0.73 under a study completed in 2005.
"This is very, very good news — been a long time in coming," said Sen. Debbie Stabenow, D-Lansing, on Friday. “I've been leading a bipartisan effort to push the Army Corps both to do a new economic analysis and look at all the factors. They’ve done that now."
U.S. Rep. Jack Bergman, R-Watersmeet, whose district includes the Soo Locks, applauded the study's release, saying it represents the beginning of a "new effort" to prioritize the Soo Locks upgrade on a national level.
He noted the benefit-cost ratio is nearly three times higher than that of the "flawed" 2005 analysis.
"The information released today, which I've fought to expedite, fund and complete, reflects a more realistic picture of the enormous value and benefit of the Soo Locks," Bergman said in a statement.
"Previous studies and analysis have failed to take into account national security implications and many economic realities."
President Donald Trump told a Macomb County rally in April that he would get to work on the issue immediately after hearing from Bergman and Reps. Jim Moolenaar, R-Midland, and Paul Mitchell, R-Dryden, about the decades-long stall in constructing a new lock on the river connecting Lakes Huron and Superior.
"It would be nice to fix it. After spending all that money in the Middle East, we can't fix a lock?" Trump said.
Sen. Gary Peters, D-Bloomfield Township, said the Army Corp’s study confirms what lawmakers "have known for some time — an outage at the Soo Locks would have disastrous effect on our economy."
"I have long supported building a replacement lock to ensure we have a backup that keeps our economy running in the event of an outage and will be working in the Senate to secure the updated authorization for this essential project," Peters said
"This is a priority for protecting our economic and national security, and I urge President Trump to fulfill his commitment to support this project.”
Michigan's congressional delegation, Gov. Rick Snyder and the shipping industry have pushed to replace two outdated locks with another 1,200-foot-long lock to allow for better maintenance and to keep shipping traffic moving when the Poe lock needs repairs.
Lt. Gov. Brian Calley said funding for the Soo Lock upgrade is "long overdue."
"The high scoring for the project shows the significance of the Soo Locks upgrade and underscores why it is a top priority for President Trump," Calley said. "A shutdown at the locks would be devastating to the entire nation."
The Homeland Security report in October 2015 concluded the Poe lock is a weak link in the North American industrial economy.
It said an unplanned, six-month closure of the lock could plunge the U.S. economy into recession, costing up to 11 million jobs.
Congress initially authorized the Soo Locks project in 1986 for a much lower amount — $227.4 million. Progress then stalled amid scrutiny by the Army Corps of Engineers.
With the new Army Corps analysis complete, lawmakers say they will move to authorize funding for the project at the $922 million level.
Stabenow said she secured language in the Water Resources Development Act that passed out of committee a few weeks ago that authorizes the project, leaving a "placeholder" for the amount pending the Army Corps' anticipated study.
The Trump administration would also need to include the Soo Locks project in its budget request. If not, Stabenow said she will work with the Appropriations Committee to get it included in the Army Corps' budget.
"There's a great sense of urgency to get this done," she said.