Making Mississippi River deeper remains unknown—and unfunded—variable in local impact from Panama Canal expansion
Originally scheduled to be concluded in October 2014, the newly expanded Panama Canal will be inaugurated on June 26. The canal, which links the Atlantic and Pacific oceans, underwent an extensive renovation to allow modern, larger cargo ships through its locks. Photography by The Associated Press
Port officials throughout North America are hoping to see more traffic and bigger ships once the historic $5.3 billion Panama Canal expansion opens on June 26. But Jay Hardman, who directs the Port of Greater Baton Rouge, is more interested in a potential project much closer to home: the deepening of the Mississippi River’s deep-draft shipping channel.
The two projects go “hand-in-hand,” he says. As important as the Panama Canal expansion project is for the industry, Hardman says deepening the river is crucial to maximize the local impact. Port tenants such as Louis Dreyfus Commodities, which operates a grain elevator at the port, would love to use a deeper channel to the mouth of the river, as would any number of companies in the agriculture, petrochemical and energy sectors.
“There won’t be a real strong port system set up to capitalize on that trade through the Panama Canal until the Mississippi River is deepened.” —Sean Duffy, Big River Coalition director
“The trucks and the ships just aren’t getting any smaller; they continue to get bigger,” Hardman says says. “I think all the players on the deep-draft side [of the port] would have a keen interest in being able to load more cargo on the vessels.”
He’s not saying Louisiana ports won’t benefit from a wider and deeper Panama Canal. But to Hardman, the trip through the canal is sort of like a “bus route.”
“Now you’re giving me a bigger bus,” he muses. “I’m probably going to make the same stops.”
Bigger ships can carry more cargo, so the ability to move larger ships through the Panama Canal will save shippers time and money. But Mississippi River ports won’t benefit nearly as much from the change if the river isn’t deepened to accommodate those larger vessels. And over time, without a deeper channel, Louisiana ports might even fall behind their peers.
Industries that depend on shipping—often through ports—are responsible for one in five Louisiana jobs, according to a recent study by LSU economist Jim Richardson for the Port Association of Louisiana. The rest of the nation also benefits from that infrastructure.
“The Mississippi River keeps the American farmer competitive in world markets,” says Sean Duffy, who directs the Big River Coalition, an advocacy group focused on maximizing transportation efficiencies on the deep-draft ship channel from Baton Rouge to the Gulf of Mexico.
Farmers in Argentina and Brazil can grow many of the same crops more cheaply, he says. But getting their products to world markets is more expensive. “That’s where we win,” Duffy says.
After the expansion, the Panama Canal will accommodate ships with a draft of 50 feet. While there will always be a need for smaller ships, the canal expansion will encourage “an incremental shift over many years” toward the larger vessels, says Joe Accardo, executive director of the Ports Association of Louisiana.
Accardo says Louisiana’s major port facilities can handle those larger ships, and Hardman agrees that the Port of Greater Baton Rouge is ready for them. But the U.S. Army Corps of Engineers only maintains the Mississippi River shipping channel to 45 feet.
“There won’t be a real strong port system set up to capitalize on that trade through the Panama Canal until the Mississippi River is deepened,” Duffy says.
The 2014 version of the federal Water Resources Development Act authorized deepening the river channel to 50 feet. The project would be paid for by a 50/50 federal-state match, but crucially for Louisiana, the act also established that the federal government would pay the full cost of maintaining the channel at the increased depth.
But just because the project has been authorized doesn’t mean it will happen. The Corps is currently working on a cost/benefit analysis of the project. Corps spokesman Rene Poche says the full report will be submitted late next year, adding a cost estimate is not yet available. Duffy expects a draft of the report to be ready by this fall, adding it may cost somewhere in the ballpark of $300 million to deepen the channel to 50 feet all the way north to Baton Rouge.
Duffy says securing state and federal funding is going to be a “tough road,” noting Congress barely funds the Corps well enough to maintain the channel at its current depth. He says some deepening projects on the East Coast are backed primarily by state money with hopes of federal reimbursement later.
“The Corps budget is real tight,” he says. “I think it’s a disgrace how [little] we invest in our infrastructure.”
Obviously, Louisiana’s budget isn’t in great shape either. Gov. John Bel Edwards’ administration is looking for help from other states to pay the non-federal half of the project’s cost, says Phil Jones, intermodal transportation deputy assistant secretary with the Louisiana Department of Transportation and Development.
Along with the local impact, Jones says 38 other states would benefit from a deeper Mississippi River. One study that he considers credible shows deepening the river from the mouth to Baton Rouge would “move the market” that uses the river about 300 miles to the west and 150 miles to the east. For example, a Midwestern farmer who ships by land to the West Coast or Canada might find it cheaper to use the Mississippi River because of the cost savings associated with the larger ships, he says. The Corps recently held a conference about public-private partnerships, which might also be worth exploring, he adds.
“You’re starting to hear more and more talk about asking private industry to contribute to some of the Corps projects,” Jones says.
U.S. Rep. Garret Graves, who serves on the House Transportation and Infrastructure Committee and is a longtime critic of the Corps, says the Corps would have taken “30 to 50 years” to expand the Panama Canal. It took Panama less than a decade.
Even so, he expects the Mississippi River project to get done, possibly because the state stepped in and dredged the spots where the river needs to be deepened and used the sediment to help rebuild the coast. Under that scenario, money set aside for coastal restoration could be put toward the state’s match for the river project, he says.
“You could even do the entire project on your own,” Graves says.