No Trump call yet, but Soo Locks upgrade gains steam
Washington — The Army Corps of Engineers had not heard from President Donald Trump as of Thursday about jump-starting the process to upgrade the Soo Locks after the president made a show last weekend of promising to immediately contact the agency.
“We are not aware of the president having reached out to USACE about the Soo Locks at this time,” said Gene Pawlik, a spokesman for the Army Corps’ headquarters in Washington, D.C.
But the White House said Thursday someone there had been in touch with the Army Corps about the Soo Locks in the last few days. It hadn’t been able to confirm contact prior to Thursday.
After hearing from three Michigan Republican congressmen about the decades-long stall in constructing a new lock on the river connecting Lakes Huron and Superior, Trump told a Macomb County rally he would get to work on the issue immediately.
“Can I call on a Sunday, is that OK?” Trump said at his Saturday rally. “It would be nice to fix it. After spending all that money in the Middle East, we can’t fix a lock?”
Even if a Trump call hasn’t happened, the president’s publicly declared interest is pumping new energy into efforts to get a new lock built after decades of delay.
Advocates and officials are optimistic that the president’s attention can propel the project through the hurdles ahead, including congressional authorization and funding. The cost is estimated at $922 million, said Lt. Col. Dennis P. Sugrue, commander of the Army Corps’ Detroit District that includes the Soo Locks.
“I am hopeful. Absolutely,” Sugrue said. “For the last year and a half, I have felt a strong interest both politically and from private entities on this project. It’s been a priority action for many years — decades even. That the president has expressed interest in it I think encourages that.”
A long-awaited study expected from the Army Corps in late June could provide a cost-benefit rating that allows the project to finally compete for construction funding among other navigation projects, he said.
“It does look favorable,” Sugrue said of the report.
But some stakeholders are concerned that the Army Corps will produce another flawed analysis that undervalues the project and disqualifies it for funding — as happened in 2005.
“It took congressional intervention to take a second look. Now, they have spent two years and $2 million looking at it, and some in the Corps continue to make assumptions and policy interpretations that handicap the project,” said Jim Weakley, president of the Lake Carriers’ Association that represents 13 companies owning 45 Great Lakes vessels.
“They just don’t believe in the project. I’m hoping the president’s comments will have some impact on them.”
Lock on ‘borrowed time’
Only one of the four aging locks owned and operated by the Army Corps in Sault Ste. Marie is big enough to handle the largest freighters that carry 85 percent of the cargo through the corridor — including the modern vessels that carry iron ore vital to steel production for the nation’s manufacturing supply chain.
Michigan’s congressional delegation and Gov. Rick Snyder 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 1,200-foot-long Poe lock needs repairs.
A study by the U.S. Department of Homeland Security 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.
The department estimated that, depending on the season of the outage, 75 percent of the U.S. integrated steel production would cease within two to six weeks, shutting down roughly 80 percent of iron ore mining operations and the North American manufacturing of appliances, automobiles and rail cars, as well as equipment for construction and farming.
A January report commissioned by the U.S. Treasury estimated that a new lock at the facility could provide an economic benefit of up to $1.74 billion.
But the new lock could take more than seven years to build. In the meantime, industry and regional leaders worry about the potential for a lock closure that could significantly disrupt navigation and cause commodity shortages downstream.
“We are really on borrowed time,” said Sen. Debbie Stabenow, D-Lansing, who has sponsored a bill in Congress with GOP Rep. Jack Bergman of Watersmeet to authorize spending on the Soo Locks modernization.
“I would welcome (the president) doing that call. So far, we haven’t heard that he made it,” Stabenow said. “It certainly would help in showing this is a priority if he were willing to do that.”
Trump unexpectedly brought up the Soo Locks during a campaign rally Saturday in Washington Township after being briefed by Reps. Bergman, Paul Mitchell of Dryden and John Moolenaar of Midland.
The White House said it has reached out to Michigan Lt. Gov. Calley, as well as Michigan Attorney General Bill Schuette and the lieutenant governors of Wisconsin, Illinois and Indiana about the Soo Locks.
Snyder this week designated Calley to lead the state’s efforts to work with the federal government to prioritize and allocate money for the project. Calley visited the Soo facility this week and said he received a briefing from the Army Corps.
“This is the first time that a U.S. president has made a commitment to make the restoration and fixing and hopefully expansion of the locks a priority since 1986 when Congress approved the project,” Calley said.
“It would be difficult to overstate how big of a game-changer that really is.”
Calley sees a need to generate public awareness of the need for the project and reinforce that priority that the president set, he said.
“The main challenge now is to make sure the president has enough support to get the appropriation acquired. It’s a big appropriation,” Calley said.
This week, he launched a website, michigan.gov/fixthesoolocks, urging people to send Trump a thank-you note and to learn about the Soo Locks. For instance, how it would take 3,000 trucks on Michigan roads to transport the cargo carried by one 1,000-foot freighter through the Soo Locks, Calley said.
“To try to do this over our roadways would have traffic and congestion and wear and tear issues that make it not even really feasible. The lock is the answer,” he said.
Study drops faulty premise
Sugrue said the Army Corps’ new study dropped a false assumption made in its 2005 analysis that the capacity exists to move cargo by other means, such as rail, if the Poe lock were to experience an outage, Sugrue said. Steel mills on the lower Great Lakes can accept iron ore only by ship.
The Corps also recognizes that, since 2005, Great Lakes vessels have increased their reliance on the Poe lock, Sugrue said.
In 2005, roughly 30 percent of vessels on the lakes were restricted to the Poe because of their size. Today, roughly 60 percent of vessels carrying 85 percent of the commodities traversing the Soo Locks are restricted to the Poe, Sugrue said.
“There’s always going to be risk on existing infrastructure. What the benefits in our economic analysis illustrate, though, is a reduction in that risk by having a second lock the same dimension as the Poe,” Sugrue said.
“That was always in the intent — to get redundancy there at the Soo Locks for the large vessels.”
Stabenow said the study would have been done last year if the White House budget office had released the additional $600,000 that the Army Corps needed to finish it.
“This has gone much slower than it should, and it’s frustrating that we couldn’t get OMB to reprogram dollars so we couldn’t get the study done last December,” she said, referring to the Office of Management and Budget.
“This was previously authorized at a much lower level of funding for construction. We have to have the new economic study in order to be able to increase the authorization.”
Cost estimate politics
Weakley says the Army Corps study is expected to include part of the cost of a rail connection to Escanaba into the cost of a new lock when calculating the project’s benefit-cost ratio, even though the new lock would render such a rail connection unnecessary.
An Army Corps contractor estimated the cost of building the rail connector at $6.5 billion, but the Corps instead is expected to use an averaging model to set the cost of the rail connector at $2 billion, Weakley said.
James Dalton, director of Civil Works for the Army Corps, was questioned by Mitchell about this during a March U.S. House Oversight committee hearing.
“The questions that Mr. Weakley is bringing up is something that we are also questioning within the Corp of Engineers and taking a look at that economic validation report,” Dalton said.
Weakley won’t know if he won the argument until he sees the final report, but he’s hopeful that Trump’s attention to the project will boost the chances of getting funded.
“It’s got to be making the Corps economists who oppose this uncomfortable,” Weakley said. “Don’t get me wrong — we’re still pushing for the call to happen. It would still make a bigger impact.”
Calley said he doesn’t have a way of knowing whether Trump made a call to the Corps or not, “but I suspect it is immaterial.”
“As a practical matter, I know that the president has a big team full of people to take care of details around the commitments that he makes,” Calley said Thursday.
“What I heard yesterday when I visited the locks is that there’s a ton of activity happening on scoring the project and finalizing the engineering. It sounded to me like things were really moving.”
Stabenow said Trump could really help the Soo Locks by telling his budget director to fully fund the Army Corps’ efforts to keep the facility operational while the new lock is built.
This year, the Army Corps said it needed $22 million, but the administration budgeted $8.9 million, Stabenow said. The Corps requested $23.4 million to keep the locks operational next year, but the administration has budgeted $2.4 million.
“We are working right now to fill the funding gap to get additional money into the Army Corps budget,” she said.