[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

HOW RELIABILITY OF THE
INLAND WATERWAY SYSTEM IMPACTS
ECONOMIC COMPETITIVENESS

=======================================================================

(112-82)

HEARING

BEFORE THE

SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

APRIL 18, 2012

__________

Printed for the use of the
Committee on Transportation and Infrastructure

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committee.action?chamber=house&committee=transportation

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
FRANK A. LoBIONDO, New Jersey Columbia
GARY G. MILLER, California JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida
SAM GRAVES, Missouri BOB FILNER, California
BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California RICK LARSEN, Washington
ANDY HARRIS, Maryland MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri HEATH SHULER, North Carolina
BOB GIBBS, Ohio STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania LAURA RICHARDSON, California
RICHARD L. HANNA, New York ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN,
Tennessee

(ii)

Subcommittee on Water Resources and Environment

BOB GIBBS, Ohio, Chairman

DON YOUNG, Alaska TIMOTHY H. BISHOP, New York
JOHN J. DUNCAN, Jr., Tennessee JERRY F. COSTELLO, Illinois
GARY G. MILLER, California ELEANOR HOLMES NORTON, District of
TIMOTHY V. JOHNSON, Illinois Columbia
BILL SHUSTER, Pennsylvania RUSS CARNAHAN, Missouri
SHELLEY MOORE CAPITO, West Virginia DONNA F. EDWARDS, Maryland
CANDICE S. MILLER, Michigan CORRINE BROWN, Florida
DUNCAN HUNTER, California BOB FILNER, California
ANDY HARRIS, Maryland EDDIE BERNICE JOHNSON, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL E. CAPUANO, Massachusetts
JAIME HERRERA BEUTLER, Washington, GRACE F. NAPOLITANO, California
Vice Chair JASON ALTMIRE, Pennsylvania
CHIP CRAVAACK, Minnesota STEVE COHEN, Tennessee
LARRY BUCSHON, Indiana LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana MAZIE K. HIRONO, Hawaii
JEFF DENHAM, California NICK J. RAHALL II, West Virginia
JAMES LANKFORD, Oklahoma (Ex Officio)
REID J. RIBBLE, Wisconsin
JOHN L. MICA, Florida (Ex Officio)

(iii)

CONTENTS

Page

Summary of Subject Matter........................................ vi

TESTIMONY

Major General John W. Peabody, P.E., Commander, Mississippi
Valley Division, United States Army Corps of Engineers......... 8
Mark Knoy, President and CEO, American Commercial Lines and
Jeffboat....................................................... 8
Martin Hettel, Senior Manager, Bulk Sales, American Electric
Power, River Operations........................................ 8
Robert C. Dolence, Vice President, Leonardo Technologies, Inc.... 8
Mike Steenhoek, Executive Director, Soy Transportation Coalition. 8
Kristin Meira, Executive Director, Pacific Northwest Waterways
Association.................................................... 8
James A. Rossberg, Managing Director, Engineering Programs,
American Society of Civil Engineers............................ 8

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Russ Carnahan, of Missouri.................................. 40

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Major General John W. Peabody, P.E............................... 44
Mark Knoy........................................................ 49
Martin Hettel.................................................... 52
Robert C. Dolence................................................ 58
Mike Steenhoek................................................... 68
Kristin Meira.................................................... 73
James A. Rossberg................................................ 77

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HOW RELIABILITY OF THE
INLAND WATERWAY SYSTEM IMPACTS
ECONOMIC COMPETITIVENESS

----------

WEDNESDAY, APRIL 18, 2012

House of Representatives,
Subcommittee on Water Resources
and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:07 a.m. in
Room 2167, Rayburn House Office Building, Hon. Bob Gibbs
(Chairman of the subcommittee) presiding.
Mr. Gibbs. Good morning. This hearing for the Water
Resources and Environment Subcommittee of the Committee on
Transportation and Infrastructure will come to order.
I want to welcome everybody today. In this committee
hearing we are dealing with how reliability of the inland
waterways system impacts economic competitiveness.
I will start here with my opening statement, and we will
turn it over to Ranking Member Bishop.
Again, welcome. Transportation savings are a key factor in
economic growth. As fuel prices continue to escalate, waterways
transportation becomes an even more viable alternative for
shippers, but an unreliable transportation system will inject
uncertainty into decisions made by U.S. farmers and
manufacturers, making U.S. products more uncompetitive in world
markets.
While the Nation supports our rightfully called ``Nation's
gateways,'' the inland navigation system provides access to
foreign export markets for manufacturers and commodity
producers.
Water transportation is the most fuel efficient, least
polluting, safest and least expensive means of moving cargo.
In addition, waterways provide freight mobility for
products that are too large to move by any other means.
There are also some industries located on a river that are
completely dependent on the inland waterways system to bring in
the raw materials to their facilities.
Trade, especially global trade, is increasing. That means
the need for transportation services will continue to grow and
grow rapidly.
The question is not whether it will be rail or truck or
boats, the question is whether or not we can produce an
efficient integrated network of airports, railroads, highways,
waterways and ports, that can respond to a changing world
economy.
When we are trying to run this mode for a national
integrated transportation system with infrastructure that was
largely built before World War II, we do not do that for roads,
rail or aviation.
While there is room for improvement in those sectors as
well, in general, we have modernized in those areas and our
economy has benefitted from those investments.
When it comes to the inland waterways system, we have been
investing too slowly for too long.
Fifty-seven percent of our inland system is more than 50
years old, and 37 percent of that system is more than 70 years
old. It is literally falling apart and we are falling behind.
Navigation outages along the system are increasing. For
instance, the high river outages have increased from 25,000
hours in 2000 to 80,000 hours today.
This trend of increasing outages is expected to continue,
while it affects the reliability of the system, it also
foretells the likelihood of a major physical failure at one of
the structures.
Without some rehabilitation and rebuilding, we can expect
to pay more each year for an increasingly unreliable system.
The Corps of Engineers is charged with maintaining and
improving the inland waterways system with the authorities and
the funding provided by Congress each year.
For decades, the Corps had made to do with constrained
funding, leaving the Commanders with no choice but to defer
some maintenance projects and reduce operations at some of the
locks.
I am concerned that if the Corps reduces the efficiency of
some parts of the system, other segments are adversely
affected.
If this cycle is not broken, we are going to lose water
transport as a viable part of our intermodal transportation
system, completely diverting cargo from water to rail that
would require hundreds of thousands of additional railroad cars
and an additional 2,500 locomotives.
If the cargo that is currently moved by the waterways had
to move by truck, it would require an additional 58 million
trucks moving on already congested highways annually.
After Hurricane Katrina, it became obvious that the warning
signs were there all along, but many experts have been telling
us for years that conditions were ripe in the New Orleans area
for a disaster.
Today, we are getting a similar warning on the Nation's
inland waterways system of transportation.
Finding alternative ways to move cargo will be expensive if
not impossible. If transportation costs go up, the
competitiveness of American products in the world market goes
down.
I would just add I think some of our competitors in the
world markets are making those investments and putting us at a
disadvantage and uncompetitiveness that will cost us in the
long run.
Addressing the infrastructure needs of the inland waterways
system is not about economic benefits to a few barge companies,
it is about keeping American farms, manufacturers and
businesses competitive and growing American jobs.
Letting the inland waterways system decline further would
be an economic disaster to add to the Nation's already
significant fiscal problems.
Having an inland waterways system that is a viable
alternative will keep costs down among all modes of
transportation. If you take inland waterways out of the mix of
transportation, in terms of transportation options, costs will
go up, American products will become less competitive in the
global marketplace, and that means lost jobs.
That is why I can say I am a fiscal conservative and I
support investing in America where those expenditures stoke the
fires of our economic engines and create jobs throughout our
economy.
For a tiny percentage of the $1 trillion failed stimulus
program in 2009 or the $450 billion jobs program recently
suggested by the administration, we could spend that $8 billion
necessary to recapitalize the inland waterways system, to
finish the projects under construction and begin and finish the
slate of authorized projects.
Given our economic conditions, I know that coming up with
additional public money is going to be a huge challenge.
I think it makes sense to explore financing options. The
administration has suggested a new lockage fee and the Inland
Waterways Users Board has developed a comprehensive plan of
increased user fees and changes to the current cost sharing
arrangement.
While these ideas deserve more consideration, I think it is
time to think further outside the box and consider enhanced
public-private partnerships.
A significant part of project delays has come from project
funds being parceled out to the Corps of Engineers in small
amounts that drag the project out over many years than
necessary.
Perhaps a private investor could supply all the funds
needed upfront and pay back over an extended period of time. I
think this is a possible paradigm worth exploring.
I welcome our witnesses today and look forward to hearing
from you. At this time, I will yield to my ranking member, Mr.
Bishop, for any comments you may have.
Mr. Bishop. Thank you very much, Mr. Chairman. I appreciate
you holding yet another hearing on the declining state of our
Nation's infrastructure.
Today's hearing reinforces what most of our constituents
already know, that America's system of infrastructure is
crumbling and that consequences that result from infrastructure
congestion, unreliability and failure are widespread and impact
all sectors of the economy.
This morning we will hold our second hearing on the long-
term challenges facing the movement of goods and services along
our Nation's inland waterways system.
As one witness from our last hearing said on this issue:
``The inland waterways system is one of this country's greatest
assets that has allowed the low-cost movement of large bulk
commodities in an efficient and timely manner.''
Yet as the chairman also noted at our last hearing, our
water resources infrastructure, especially our inland waterways
system, is falling apart faster than we can fix it. I agree.
In my view, we are underinvesting in our Nation's critical
infrastructure systems, including our highways, mass transit,
sewers, and other water related infrastructure, as well as the
projects carried out by the Corps of Engineers.
What I cannot seem to rectify are statements in strong
support of the benefits that come from sustaining the projects
and activities of the Corps while Members vote time and again
to slash funding for these very same projects and activities.
The rhetoric does not match up with the actions, and this
is troubling.
In my view, our infrastructure will only be as good as our
willingness to pay for it. If we want a world-class
infrastructure network, then we need to support the resources
necessary to pay for it.
Unfortunately, in recent months, we have seen a concerted
effort by some in Congress to go in the opposite direction,
which in my view would hasten the reality that we warn against
today.
Over the past year, this chamber has insisted on massive
cuts to the appropriations of the U.S. Army Corps of Engineers,
the Federal agency responsible for the construction and
maintenance of much of the Nation's water related
infrastructure.
For example, over the past two appropriations periods, the
Republican led House has recommended cuts of close to 25
percent from the Corps' construction account, which is the
principal account responsible for moving forward the major
construction and rehabilitation projects along the inland
system.
Similarly, the House has voted in support of significant
cuts to the Corps' operation and maintenance accounts, that
according to our witnesses' testimonies have strained the
ability of the Corps to keep our existing water related
infrastructure up and running.
Unfortunately, these cuts mark only the beginning of the
Republican leadership's long-term plan for the Corps. The long-
term plan for the Corps is what is displayed before you on
these screens.
Under the Republican House budget, approved just before the
Spring District work period, and for which every Republican of
this committee save one, Representative Duncan of Tennessee,
voted for, we can expect to see significant sustained cuts to
the Corps' budget over the next 5 years to the point where
total appropriations for the Corps may dip below $4 billion
within the next 2 fiscal years.
That would represent more than a 25-percent reduction to
the total Corps' appropriations over 5 years, not counting for
inflation.
With all due respect to the witnesses, I hope someone can
explain to me how we can even expect to maintain the adequacy
of the inland system, let alone make recommended improvements
with forecast reductions of over 25 percent of the Corps'
construction operation and maintenance activities.
Later this morning, the Corps will highlight difficulties
in maintaining the current system with diminishing funds, and
how it must continuously defer necessary maintenance and
rehabilitation to some future date.
My fear is that by knowingly providing the Corps with fewer
resources than its current portfolio of projects requires, we
are only increasing the likelihood that a major failure on the
inland system will occur.
We have been warned. If the Ryan budget is maintained, in
my view, we will have chosen to ignore these warnings.
In my view, it is irresponsible for Congress to expect our
Nation's infrastructure to keep pace with all that our modern
economy requires when we do not provide the resources necessary
to even properly maintain these critical assets.
Similarly, it is irresponsible for this committee to
continue to ignore the calls of stakeholders, Republican and
Democratic administrations, and others to address issues
surrounding the Inland Waterways Trust Fund that currently
provides half of the cost of construction and major
rehabilitation for projects in the inland system.
We all know that the greatest limiting factor for
additional capital investment in the inland waterways system is
the availability of funds in the Inland Waterways Trust Fund.
There was almost uniform agreement at our last hearing that
the current structure is broken and in need of attention.
To date, we have been presented with an array of potential
alternatives, ranging from the lockage fees proposed by both
the Bush and Obama administrations, the proposal to generate
additional revenues that was included as part of President
Obama's jobs bill last Fall, and the capital development plan
recommended by the Inland Waterways Users Board.
We have seen the offer of the administration to work with
Congress to resolve this issue and the recognition from other
committees that it is our responsibility to come up with a
solution to this challenge.
Now is the time for this committee to roll up its sleeves
and work through these proposals and others to address the
long-term needs of the inland waterways system.
To that end, I have requested, as you know, Mr. Chairman,
that we jointly hold a working roundtable to start moving this
process forward.
I am hopeful that each of the witnesses here this morning
as well as other stakeholders be asked to begin such an effort
in the very near future.
This issue and the long-term needs of our entire water
related infrastructure systems are far too important to delay
any further.
Thank you very much, Mr. Chairman. I yield back.
Mr. Gibbs. At this time, before I introduce the witnesses,
I want to recognize Congressman Todd Young from Indiana for
special privilege. Go ahead.
Mr. Young. Thank you, Chairman Gibbs and Ranking Member
Bishop. I applaud the committee for convening this very timely
and critical hearing on the reliability of the inland waterways
system, and how it impacts our economic competitiveness.
As a Representative of one of the major inland waterways
port cities, Jeffersonville, Indiana, I am dedicated to seeing
that our Nation's inland waterways remain a commercial super
highway capable of moving products to producers and goods to
consumers.
I am deeply thankful and honored as all my colleagues are
to have Mark Knoy, a constituent, and president and CEO of
American Commercial Lines, here today to testify and share his
expertise on the economic impact of the inland waterways.
As the son of a river boat captain, Mark grew up with
firsthand knowledge of the waterways system. He worked his way
from deck hand to pilot and eventually started his own fleeting
business with his father.
Before joining American Commercial Lines, he was vice
president at American Electric Power Fuel Emissions and
Logistics Group, and president of AEP River Operations.
Among other responsibilities, he currently serves as
director of the Corps of Engineers' Inland Waterways Users
Board, and vice chairman of National Waterways Foundation, and
is former chairman of both the Waterways Council in the Midwest
Region of the American Waterways Operators.
ACL is one of the Nation's largest and most successful
marine transportation and manufacturing companies, and I am
proud they have made Jeffersonville, Indiana, home.
ACL is an industry leader in efficiency, safety, and
innovation, and I look forward to hearing Mark's insight into
the industry's most pressing challenges, as well as potential
reform proposals.
I thank the chairman and I yield back.
Mr. Gibbs. Thank you. At this time, I want to recognize the
ranking member of the full Transportation Committee, Mr.
Rahall.
Mr. Rahall. Thank you, Mr. Chairman. I just very briefly
want to commend you for calling today's hearing. I think this
is a very critical issue for our Nation, not only are our
inland waterways' operators responsible for number one,
providing jobs for our people, but they are certainly important
for this Nation's national security and safety.
You are important as far as moving goods, especially the
coal that is so well produced in my part of the country, and
moving that coal to its markets, both domestically and
worldwide.
I commend you, Mr. Chairman. I also by way of passing note
bipartisan legislation that has been introduced and I believe
pending before this body, which is H.R. 4342, which has a wide
range of supporters, both from the labor community, from the
business community, and from the environmental community.
That legislation is called ``The Inland Waterways Capital
Development Plan.''
I say that because I believe we could bipartisanly address
the critical issues facing our inland waterways' operators.
Thank you, Mr. Chairman.
Mr. Gibbs. Thank you. At this time, I want to introduce our
witnesses.
Our first witness is Major General John Peabody,
Mississippi River Valley Division, United States Army Corps of
Engineers.
I do want to congratulate him in his new position. He moved
from Great Lakes to the whole Mississippi Basin.
Mr. Knoy was just introduced by his congressman.
Mr. Martin Hettel is senior manager, American Electric
Power River Operations.
Mr. Robert Dolence, vice president, Leonardo Technologies.
Mr. Mike Steenhoek, executive director of the Soy
Transportation Coalition.
Ms. Kristin Meira, executive director, Pacific Northwest
Waterways Association, and Mr. James Rossberg, managing
director of engineering programs of ASCE, Association of Civil
Engineers.
I have just been informed we have some more statements, so
we will get back to you in a minute, General Peabody, in a
second.
Mr. Carnahan, go ahead. The floor is yours.
Mr. Carnahan. Thank you, Mr. Chairman. I want to welcome
the panel and really thank the chairman and ranking members
from our side for being here, for their leadership on this
issue. I am going to ask unanimous consent to submit my full
opening statement for the record.
Just to say briefly how important this is for our country,
for our economy, for jobs, particularly for cities like St.
Louis that I represent. This is a big deal.
This river system, this inland waterways system, really
connects our country together in ways that are vital for our
economy.
This is a win-win. Too many times the different modes of
transportation get into this competition. This is a way, I
think, for all those modes to look at how they can work
together to really create a functioning, modern intermodal
system in this country that is going to help all modes of
transportation.
That is why I am especially proud to be an original co-
sponsor of H.R. 4342, and all the groups that have come
together behind that to actually get some of these things done.
I appreciate the way this coalition has stepped up to the
plate, and we welcome you all here today.
Mr. Gibbs. Ms. Johnson? Go ahead.
Ms. Johnson of Texas. Thank you very much Mr. Chairman and
Ranking Member Bishop for holding this hearing, as it is
critical that we maintain and improve our inland waterways
system.
Failing to maintain these waterways will stifle trade and
curtail economic competitiveness.
Having served both as ranking member and chair of this
subcommittee, I am fully aware of how important it is to the
country and most especially to my State.
Inland waterways are a significant component of our
Nation's marine transportation system, and in Texas, trade and
the ability to move goods is the life blood of our economy.
Texas has more than 1,000 miles of channel maintained by
the Corps of Engineers, which I highly appreciate, and Texas
ports create nearly 1 million jobs.
The maritime industry represents over $135 billion in
economic value to my State.
If our inland waterways system is not maintained, that
means loss of trade opportunities, delay in movement of
commodities, and the potential to lose thousands of jobs.
I am realistic about the current weakness in our economy
and the difficult fiscal climate, but without these adequate
funds for these waterways, we are doing far more harm to
American economic competitiveness.
I welcome the opportunity that this hearing brings to
advance solutions to address the insolvency of the Inland
Waterways Trust Fund.
Without an adequate maritime transportation system, the
U.S. will lose its competitive edge in this global economy.
Thank you and I yield back.
Mr. Gibbs. Thank you. General Peabody, welcome.
The floor is yours.

TESTIMONY OF MAJOR GENERAL JOHN W. PEABODY, P.E., COMMANDER,
MISSISSIPPI VALLEY DIVISION, UNITED STATES ARMY CORPS OF
ENGINEERS; MARK KNOY, PRESIDENT AND CEO, AMERICAN COMMERCIAL
LINES AND JEFFBOAT; MARTIN HETTEL, SENIOR MANAGER, BULK SALES,
AMERICAN ELECTRIC POWER, RIVER OPERATIONS; ROBERT C. DOLENCE,
VICE PRESIDENT, LEONARDO TECHNOLOGIES, INC.; MIKE STEENHOEK,
EXECUTIVE DIRECTOR, SOY TRANSPORTATION COALITION; KRISTIN
MEIRA, EXECUTIVE DIRECTOR, PACIFIC NORTHWEST WATERWAYS
ASSOCIATION; AND JAMES A. ROSSBERG, MANAGING DIRECTOR,
ENGINEERING PROGRAMS, AMERICAN SOCIETY OF CIVIL ENGINEERS

General Peabody. Thank you, Mr. Chairman, Mr. Bishop, and
distinguished members of the subcommittee.
It is an honor for me to testify before you today on the
inland waterways operated and maintained by the Corps of
Engineers and the thousands of professionals charged with
making these systems work.
I currently command the Mississippi Valley Division but my
previous job, as you alluded to, Mr. Chairman, was in command
of the Great Lakes and Ohio River Division, where I also
developed intimate familiarity with the challenges of this
issue.
The Corps of Engineers facilitates commercial navigation by
providing safe, reliable, cost-effective and environmentally
sustainable waterborne transportation systems.
On the inland waterways, the Corps constructs, operates and
maintains, rehabilitates and recapitalizes locks, dams, levees,
floodways, and many other project features that enable vessels
to transport cargo along 12,000 miles of waterways.
This system includes 221 operable lock chambers and
associated dams at 178 active sites. About 9,000 miles of these
waterways are within the greater Mississippi River Basin.
The Mississippi watershed is the largest naturally
navigable river system in the world. Thanks to well over a
century of investments by the Nation, the Corps has engineered
structures throughout this watershed that resulted in a
navigable network of interior waterways that in combination
with the coastal system is longer than the navigable systems in
the rest of the world combined.
The watershed drains a vast area, including one of the
world's largest contiguous areas of productive farmland and
major sources of underground mineral and energy wealth.
This gives the U.S. a unique economic advantage in enabling
the inexpensive movement of goods from its interior to the gulf
coast for export and internally to the United States for
domestic consumption and industrial production as well.
I draw your attention to one example of hundreds that we
could provide of photos of the crumbling infrastructure that
has already been mentioned. I keep on my desk two examples as a
daily reminder to me of this challenge.
This right here is a hunk of concrete I picked up at
Allegheny 2 3 years ago when I visited that project.
This is difficult to see, but the nut on your right is a
greatly deteriorated nut that was taken as part of routine
maintenance off the Calcasieu system in Louisiana.
The nut on your left is what it is supposed to look like.
However, this competitive advantage is threatened by the
aging of America's infrastructure which will require major
investment or perhaps divestment, to sustain its reliability.
Our prior success in building engineered infrastructure
taught Americans to expect that this infrastructure has always
been, and will always be, there for us. But like everything
built by man, infrastructure has limits. It must be properly
maintained to ensure and extend its useful life. It must be
periodically rehabilitated when it begins to wear out and
deteriorate. When no longer viable to rehabilitate or
economical to maintain, it either must be recapitalized,
repurposed, or removed.
The Corps' portfolio of locks and dams has an average age
of 60 years. These structures have performed well but many of
them are showing obvious signs of wear and tear.
I draw your attention to the video here. What you are
seeing is the collapse of a wall along the pool just above the
Lockport Lock and Dam, in the Upper Illinois system. That was
an 1890s vintage concrete wall that sloughed off while we were
rehabilitating the project.
This was not built by the Corps. It was inherited by the
Corps, I think, in the 1970s or 1980s.
In a select few cases, the condition of a project has
deteriorated to a point that catastrophic failure is a real
possibility, not a high probability, but a real possibility.
In all such cases with which I am familiar, there is an
active construction project to replace or remediate the issue.
The Corps' ability to recapitalize this system, however, is
limited by the Inland Waterways Trust Fund constraints on
construction, most of which goes to the Olmsted Project in
recent years.
To avoid possible catastrophic failures, the Corps has
stepped up monitoring the system's condition via periodic
inspections and increased scheduled maintenance, but the
general reliability of the system is declining as unscheduled
lock outages have doubled in the last decade.
On the screen now is one of the sources of possible
failure. It is not just the crumbling infrastructure but from
time to time, there are operational challenges with the
navigation industry. This is a barge that struck the dam gates
on Lock and Dam 25 that necessitated a shutdown and significant
expenditures to repair it.
Other indicators also tell us that this trend is
increasing, this trend of declining reliability.
For the last decade, the Corps has been actively pursuing
several initiatives to address this challenge to include
increased efforts to document project conditions and prioritize
resources, efficiency initiatives to reduce equipment, cut
excess operations capacity, regionalize assets across multiple
districts, and other efforts.
We also studied lock and dam construction projects which
revealed some issues for improved construction management, and
recently the Corps partnered with the inland waterways
navigation industry to develop ideas for a long-term approach
to recapitalizing infrastructure. The report identified several
ways to strengthen our project delivery processes, and we have
incorporated many of its recommendations.
The Corps is also embarking on a Civil Works transformation
effort as part of a strategic plan to knit together these and
other efforts. The desired effect will be more effective and
efficient processes to deliver Corps' projects and manage them
with maximum efficiency.
Current revenue trends, however, makes sustaining our full
infrastructure portfolio unaffordable. We have made, and will
continue to make, hard choices and tradeoffs about prioritizing
resources to deliver the greatest return for the money
available. These tradeoffs include such things as reducing
hours of operations at some of our lower use locks. Without
additional funding or revenue sources, we may be forced to put
some projects in caretaker status in future years.
Mr. Chairman, I conclude by representing to you the
conditions that our workforce operates under, the photo that
was just on the screen shows our operators who were repairing
the Markland gate failure which occurred approximately 2 years
ago.
On behalf of the thousands of unheralded but dedicated
Corps' operations professionals who labor dutiful and long
hours and often in dangerous conditions, Mr. Chairman, Mr.
Bishop, members of the subcommittee, I thank you for the
opportunity to testify, and I look forward to your questions.
Mr. Gibbs. Mr. Knoy, the floor is yours.
Welcome.
Mr. Knoy. Good morning, Chairman Gibbs, Ranking Member
Bishop, and members of the subcommittee.
I am Mark Knoy, president and CEO of American Commercial
Lines and Jeffboat. We are based in Jeffersonville, Indiana,
and have 2,250 employees, 1,450 in the barge transportation
segment and 800 in our barge manufacturing segment, Jeffboat.
I appreciate the invitation of the subcommittee to appear
today and the initiative of our Congressman, Todd Young, to
bring perspective to the vital issue of reliable waterways
transportation.
My testimony today will cover three key topics,
accountability, reliability, and a plan for addressing the
challenges of aging infrastructure which support operations on
our most efficient transportation system, the inland waterways.
Where is the accountability today for stewardship of our
taxpayer provided funds for construction and rehabilitation of
inland waterways infrastructure?
In the private sector, a major cost overrun of a capital
investment program would be subjected to rigorous management
oversight and direct intervention when fiscal controls went
awry.
However, thus far, our Government treats a fourfold
increase in the estimated cost of just one project as no big
deal.
For too long, too little scrutiny has been provided to the
construction technique of this project. Congress has only
recently been informed that the project has increased in cost
by 50 percent, $1 billion, in the last year.
I am, of course, talking about the Olmsted Lock and Dam
Project on the Lower Ohio River.
Where is the outrage? Where is the accountability when a 7-
year project will now take 32 years to construct or perhaps
even longer?
The new twin 1,200-foot locks were built using a
traditional coffer dam technique. They will be 20 years old
when the first barge locks through in the early 2020s.
The dam is another story. It is being built using an
experimental technology, building in the wet. Initially, this
approach was envisioned as saving $60 million. However, the
project is now woefully behind schedule and billions of dollars
over budget.
As a result, we have lost faith in the technology and in
the investment in this project.
Remember, please, that we, the industry and its customers,
have absolutely no control over the decisionmaking for this
project.
We are expected to write a check for one-half of the
project costs and have paid $650 million towards this project
to date. With an annual appropriation of $150 to $185 million
for construction of inland navigation projects, the
consequences of Olmsted's overrun means that almost no other
investments will be made for any of the 24 projects authorized
by this committee for modernization of the navigation system
until at least 2022 at the earliest.
Reliability. How can you have any confidence in the
reliability of a system when 56 percent of the infrastructure
is beyond its designed life?
Where 34 locks are over 80 years old? When a significant
failure at a lock could close a major freight transportation
artery, a disaster for the local and national economy.
When we are told by the agency managers that we are in a
crisis and heading for a catastrophe, when a new initiative is
being rolled out this week to do less with less by shutting
down locks or reducing hours of service with the sole criterion
being the number of commercial lockages at the facility.
Ironically, we are experiencing more problems with our
newer locks, like Robert C. Byrd and Mel Price, than we are of
the older locks.
We are on the brink of losing customers because of fear of
unreliability. The industry is seeing the divergence of the
smaller shipper category first, but larger shippers are
questioning more often the continued investment in waterside
facilities.
How inefficient does our Government want our waterways to
be? As you have already noted, Mr. Chairman, replacing 1 barge
tow would require an addition of new capacity of 216 rail cars
plus 6 locomotives or over 1,000 tractor-trailer trucks to an
already clogged surface transportation system.
I am sure you are thinking that I must be a heck of an
optimist to be in this business. For all the challenges, the
inland waterways still serve as the Nation's best
transportation system.
What is lacking is the will to make change, to embrace a
vision of investment in waterways transportation.
There is a plan, a good solid strategy for reforming our
current approach and replacing outdated project delivery
methods with on time and on budget performance.
A plan for prioritizing our work, for funding the project
construction requirement through a combination of user fees and
cost sharing changes.
There are bipartisan champions who have authored this plan,
the ``Magnificent Seven,'' we call them. Congressmen Whitfield,
Costello, Duncan, Carnahan, Johnson, Congresswoman Terri
Sewell, and Congressman Bob Aderholt.
They have come together to propose legislation, H.R. 4342.
Waterways are vital for the economy, energy, efficiency,
and the environment.
This is a farsighted vision for the future of our Nation's
inland waterways transportation system.
Four of these Members of Congress serve on this committee,
and we urge this subcommittee to act this year on H.R. 4342 as
part of your Water Resources Development Act.
Mr. Chairman and members of the subcommittee, we indeed
face daunting challenges and great opportunities.
The administration has not brought forth a realistic
workable plan to address these challenges. Detractors of the
current program offer no alternative, but there is one plan out
there, H.R. 4342, and a good place to begin the discussion on
the path forward.
I look forward to working with the subcommittee to continue
to provide the best transportation service to our Nation.
Thank you, sir.
Mr. Gibbs. Thank you.
Mr. Hettel, welcome, and the floor is yours.
Mr. Hettel. Good morning and thank you, Chairman Gibbs and
Ranking Member Bishop for allowing me to testify here today.
My name is Martin Hettel. I have been employed within the
river transportation industry for the last 32 years, 16 of
these years have been with American Electric Power River
Operations Division.
AEP owns and/or operates 3,275 barges and 90 tow boats. Our
headquarters is in Chesterfield, Missouri, and we have field
offices in Pittsburgh, Pennsylvania; Lakin, West Virginia;
Paducah, Kentucky; Convent, Louisiana; and Mobile, Alabama.
AEP River Operations currently employs over 1,500 people.
In 2011, AEP River Operations transported over 74.4 million
tons of cargo within the inland waterways system. Our traffic
patterns move freight from the gulf coast between Brownsville,
Texas, and Pensacola, Florida, between New Orleans and Catoosa,
Oklahoma; St. Paul, Minnesota; Chicago, Illinois; Pittsburgh,
Pennsylvania; and all points in between.
Within the last few years, we have seen what is a very
reliable transportation system deteriorate more and more each
year to the point we now experience lock outages on a regular
basis.
While the reliability of the entire river transportation
system is vital to AEP River Operations, of the 74.4 million
tons of cargo we moved in 2011, 48.3 million tons were
delivered into, out of, and within the Ohio River Basin.
Therefore, the rest of my testimony will focus on the
extraordinarily serious problems within the Ohio River Basin.
Within the last 8 years, we have experienced several lock
failures on the Ohio River.
In 2003, Greenup was down for 52 days. In 2004, McAlpine
experienced a total river closure for 10 days.
In 2005, the Hannibal Lock experienced a 13-day closure of
the main chamber, and during that time, the auxiliary chamber
failed which caused a 5-day total river shutdown.
In 2009, Markland experienced a failure at the main chamber
which lasted 154 days. In 2010, we had yet another failure at
Greenup Lock, along with a closure at J.T. Meyers, an outage of
Lock 52, that lasted 32 days. This outage at Lock 52 cost AEP
River Operations $4.6 million in delay costs while waiting to
transit that lock.
These outages are in my graph here as Attachment 1 to my
testimony.
An outage at Markland that started July 11 of last year is
still not operational. The lock is not expected to be
operational until August 3 of this year. This will amount to a
389-day main chamber closure at Markland Lock.
As of the end of last month, this outage at Markland has
cost AEP River Operations already $3.8 million in delay costs.
By the time this lock is back operational by August 3, the
total cost to AEP River Operations is estimated at $5.5
million.
In addition this year, we had another outage at Greenup
scheduled for June 3 through September 1. This 90-day outage is
expected to cost us $1.3 million in delay costs.
When you add up the outage at 52 in 2010, Markland last
year and this year and Greenup, AEP's total exposure will be
over $11.4 million of delay costs.
These outages are increasing each year. The Corps of
Engineers predicts that by 2015, we will experience eight more
lock outages. By the year 2020, they predict 14 lock chamber
outages. By the year 2025, 18 lock chamber outages, and by the
year 2030, 22 lock chamber outages.
This is in my Attachment 2. Just for the record, green is
good, red is bad.
All these delays affect the consumer. As we all know, when
the cost of transportation increases, the final cost to the
consumer also increases.
As we have seen in our day to day lives at the grocery
store, when fuel costs increase, so do the costs of delivered
goods to the market. When the cost of transportation of raw
materials increases, the final cost to the finished product
also increases.
American Electric Power's electricity to the consumer
increases as our costs of delivering fuel to power plants
increase.
AEP has looked at the predicted lock failures and put
together a program that estimates the additional cost to
deliver fuel to our power plants, should we experience a
catastrophic failure in the upcoming years.
As an example, if both chambers at Willow Island fail as
the Corps predicts in 2015, the cost to get fuel to our power
plants via truck, rail, trans-loading around the lock or buying
coal on the spot market, would be well over $22 million a
month.
The predicted lock failure is compounded by the recent EPA
regulations put into law, particularly the Mercury and Air
Toxics Standards, that will shut down coal power plants, with
less availability for producing electricity coupled with a
complete lock closure such as the Corps predicts at Willow
Island, a situation could very well arise that affects the
reliability of an electricity grid potentially causing
brownouts or perhaps even limited blackouts.
Not only do these lock delays affect the consumer within
this country, it can also affect a producer of materials that
are exported out of this country.
With the world markets that the United States competes in,
increased costs of transporting these products can put the
producers at a competitive disadvantage in the world
marketplace. Thus, affecting the steel producers, the coal
producers, the farmers, and anyone else who competes with the
export of bulk commodities out of this country.
AEP River Operations and hundreds of other companies and
organizations believe one critically important step that
Congress should take to address this situation is to approve
and send to the President for his signature H.R. 4342, The
Waterways Are Vital for Economy, Energy, Efficiency, and
Environment Act of 2012.
This legislation introduced by Congressman Whitfield and
Congressman Jerry Costello, a member of this important
subcommittee, and others, introduced on a bipartisan basis,
would put in place what we believe is a balanced, comprehensive
workable 20-year inland waterways system modernization
investment plan.
A second critical step that Congress should take is to
ensure on a continuing basis the Corps of Engineers is provided
with adequate operational and maintenance funds to keep the
Ohio River and the remainder of the inland waterways
functioning at an optimal level.
Our Nation's waterways are too important to do anything
else.
In closing, I would like to thank you again for this
opportunity to testify, and I am pleased to answer any
questions the subcommittee may have.
Mr. Gibbs. Thank you. Mr. Dolence.
Sir, welcome, and the floor is yours.
Mr. Dolence. Thank you, Mr. Chairman and members of the
subcommittee for inviting me to speak to the subcommittee
today.
I have submitted my entire statement for the record but
will keep my opening remarks brief.
My name is Robert Dolence. I am vice president and
principal of Leonardo Technologies or LTI. LTI is a small
privately held business incorporated in the State of Ohio with
headquarters in Bannock, Ohio, and offices in Montana,
Pennsylvania, New Hampshire, New York, Virginia, and West
Virginia.
LTI is an energy technology consulting firm focused on
safe, affordable and environmentally acceptable production and
use of energy.
Our more than 100 professionals are involved in the fuel
and energy cycles from production, upgrading, transporting,
utilization and disposition of residual materials.
I was invited to speak today regarding a study LTI
performed in 2011 for the U.S. Army Corps of Engineers titled,
``Measuring the Impact of Monongahela Lock Closures on
Forecasts of Utility Steam Coal Consumption, Sourcing and
Transportation in the Ohio River Basin.''
In this study, LTI was asked to assess the likely impacts
to the regional and national electric utility industries and
the coal industry that provides fuel to those plants resulting
from a catastrophic failure of any one of the three lock and
dam sets, No. 2, No. 3, and No. 4, on the lower portion of the
Monongahela River closest to Pittsburgh, Pennsylvania.
I would like to note it is another great river city.
The locations can be viewed on the map on page three of the
written testimony. It is my understanding these lowest three
lock and dam sets on the Monongahela River closest to
Pittsburgh were selected because they are in the poorest state
of repair and more susceptible to a catastrophic failure.
For this study, it was decided to adopt the assumption of
failure at one of these lowest three lock and dam sets, would
shut down the entire traffic on the Monongahela River.
Our modeling effort using the Greenmont Energy Model or
GEM, automatically calculates the lowest cost transportation
alternative for each of many coals into a single electric
energy plant.
It is important to note that the model does not evaluate or
determine the adequacy of alternative transportation systems.
It simply assumed that the alternate transportation capacity
was available.
Although not specifically evaluated in the study, it is
likely that the alternate transportation system, if capacity
exists at all, would at least be stressed, thereby putting
further upward pressure on prices.
Therefore, the results are considered a conservative
estimate of impacts since the system would have to work harder
to supply the electricity demand, and might even fail if there
is a shortage of trucking and rail capacity.
It was also beyond the scope to assess the
interrelationships between river, rail, and truck
transportation and the subsequent non-coal or non-electricity
price impacts.
These areas include, but are certainly not limited to,
availability and price impacts to transportation fuel and non-
coal commodities, highway traffic density increases, highway
safety, and exacerbated physical impacts to highway and rail
infrastructure with increased traffic.
The Monongahela River Lock and Dam study resulted in the
following conclusions: Under the liberal assumption of adequate
over land transportation alternatives, no brownouts or
blackouts occurred, but economic impacts were significant.
Approximately 21 million individuals are affected by the
direct impact of the Monongahela dependent plants of interest
service areas.
The ripple effect goes far beyond the plants of interest
service areas, reaching out to a majority of U.S. electricity
users, in excess of 200 million.
Through domino effects of increased transportation costs
compounded by electricity dispatch reactions associated with
the loss of the Monongahela River waterway traffic, the cost of
producing electricity increases almost across the entire United
States.
Our modeling indicates the resulting price paid by
electricity customers nationwide would increase by as much as
$1 billion annually.
These impacts are single-year impacts that would occur
repeatedly for each year the lock and dam remained inoperable.
The impacts noted are only electric price effects resulting
from coal river traffic impedance. The impacts do not include
other commodities currently transported on the Monongahela
River, including petroleum, aggregates, grain, chemicals, ores
and minerals, and iron and steel.
If only one-half of the total 2008 tonnage, a little over
21 million tons, barged through the three Monongahela River
locks of interest were transported by truck, that is assuming
the other half could be shipped by rail, it would equate to an
additional 1,500 20-ton tri-axial trucks every day, or more
than 60 loaded trucks an hour entering the local roads and
highways. This number does not include the empty truck return
hauls.
Although not part of the study, increased price of
electricity causes an increase in production costs for
businesses and cost of living for the general population, which
typically results in a negative impact to economic growth.
In other work by LTI, it was forecast that even with
sustained low natural gas prices, maintaining less than $4 per
million BTU natural gas cost levels for 50-plus years, coal
maintains a significant role in electric fire generation,
industrial and commercial use, and exports, with a total coal
demand staying above the 1 billion tons per year level for the
next 50 years.
Based on the combined detailed modeling performed, LTI
concludes the Ohio River navigation system is a vital component
to ensuring safe, reliable, low-cost domestic energy, including
electricity to our country.
This concludes my prepared comments. Thank you for the
opportunity to present the results of our study and my personal
observations. I look forward to your questions.
Mr. Gibbs. Thank you.
Mr. Steenhoek, welcome, and the floor is yours.
Mr. Steenhoek. Thank you, Mr. Chairman and members of the
subcommittee.
In the interest of brevity, I am just going to confine my
comments to four statements.
Number one, transportation, particularly the inland
waterways system, is not just a contributing factor to the
economic competitiveness of U.S. agriculture in general and the
soybean industry in particular, it is the predominant one.
When you look at the cost our customers pay on the
international marketplace for agricultural products, and for
soybeans in particular, the reason why we in the United States
are the most economical choice on the international marketplace
is not due to our lower cost of production. It is due to the
lower cost of transportation.
We are not the only country that can produce what the
international marketplace needs, but what sets us apart is our
ability to deliver it to them in a cost-effective manner.
The expansion of the Panama Canal really presents an
opportunity for agriculture and freight interests in general,
with the greater efficiency of maritime transportation, but
that opportunity is incumbent upon us to make needed
investments in our port infrastructure and our inland waterways
system, otherwise, it will be a missed opportunity.
The next statement is our overall dilapidated locks and
dams exhibited by unscheduled maintenance, mechanical
breakdowns, and a threat of failure sends a terrible signal to
those who utilize the system.
How can we expect grain handlers in this country and other
freight interests to invest millions of dollars in new
facilities or upgraded facilities if they do not have the
confidence that they can make those deliveries to their
customers in a cost-effective manner?
It is sending a real terrible signal to industry. We want
rural America to be an attractive place for investments, and
our concern is the unintended consequences, but it is an
unambiguous consequence of our inability to invest in our
inland waterways system, and really sends a discouraging
message to that investment, that we in this country so
desperately need.
Number three, the third statement, how you allocate money
is just as important as how much money you allocate.
This is perhaps a blunt statement, but I think it is an
accurate one, that if I were to design a funding mechanism that
would result in consistent and dramatic cost overruns for our
inland waterways system, I would design a system that we have
right now, where there is great uncertainty, the money is not
provided in one lump sum.
As a result, you see work commence. You see work stop. That
is a very inefficient way to maintain the system.
I have been to the Panama three times over the last couple
of years, and really have observed the Panama Canal Expansion
Project and the Panama Canal right now.
Here is a project that was commenced in 2007. It is slated
to be completed in 2014. Actually, the Panama Canal Authority
had to swallow some pride over the last week where they made
the dire announcement that the canal expansion is not going to
be completed in October of 2014, it will be completed in
December of 2014. Actually, at the end of the day, it might be
early 2015.
What a contrast to how we do things in this country. The
reason why they have such a superior record on deliverance of
projects is not because they have superior engineers that we
have in this country. We have wonderful engineers in this
country.
When you look at how they are financing this project, you
see money provided in a lump sum. You see certainty of funding.
That is a much more appropriate way to invest in major capital
expansion projects.
You see it replicated throughout the world. I think that we
have a lot to learn. I think the country that built the Panama
Canal has a lot to learn from the country that currently owns
and operates the Panama Canal.
Fourth and finally, the statement I would like to make is a
predictably good inland waterways system is superior to a
hypothetically great one.
I think that we are failing on two fronts. Number one, we
are failing on our ability to build these new and expanded
locks. The testimony referenced--the earlier testimony
referenced the Olmsted Project, and that is the quintessential
example.
We are doing a poor job of building these new projects, but
at the same time we are doing a poor job of maintaining the
system we currently have.
I think it would be a much better message sent to industry,
to those who utilize the inland waterways system, if you can
provide some greater predictability and certainty to the
system, since we are asking them to make these millions of
dollars in investments and explore these markets, domestic and
international.
I think that would be a much better message to send.
Practicing good stewardship of this important system versus
trying to develop something that is hypothetical.
That concludes my comments, Mr. Chairman. I would be
pleased to answer any questions.
Mr. Gibbs. Thank you.
Ms. Meira, the floor is yours, and welcome.
Ms. Meira. Thank you. Mr. Gibbs, Mr. Bishop, members of the
subcommittee, I am honored to participate in this panel and
appreciate the opportunity to highlight our unique river system
in the Northwest.
We are grateful to the subcommittee for convening this
hearing to focus on the needs of the Nation's inland waterways.
Founded in 1934, PNWA represents Columbia River, Puget
Sound, and Northwest coastal interests on navigation,
transportation, energy, regulatory and environmental policies.
PNWA's membership includes over 115 public ports, tow boat
companies, steamship operators, ag and forest products
producers, public utilities, manufacturers, and others in
Oregon, Washington, Idaho, and Northern California.
Our Nation's economy relies on a safe, efficient and cost-
effective multimodal transportation system. That system
includes road, rail, air, and water.
The Columbia-Snake River System is a critical piece of the
Nation's navigation portfolio, providing benefits not just for
the Pacific Northwest, but far into the heartland of our
country.
The Columbia River is the Nation's number one gateway for
the export of wheat and barley, and when you consider the
movement of soy and other grains, our river system is the third
largest grain export gateway in the world.
The Inland Columbia-Snake River System is a water highway
that stretches from Vancouver, Washington, and Portland,
Oregon, inland 360 miles to Lewiston, Idaho, and Clarkston,
Washington.
Our inland system is comprised of a 14-foot-deep navigation
channel and a series of eight locks. These are the highest lift
locks in the United States, and are among the highest in the
world, with the John Day Lock tapping out at 110 feet.
Our inland system handles over 10 million tons of
commercial cargo each year, with a value of over $3 billion.
I mentioned earlier that we are the top wheat export
gateway in the Nation, roughly half of the wheat exported out
of the deep draft Lower Columbia River arrives at those export
facilities by barge.
Other commodities that move on our inland system include
petroleum products, containerized ag products, forest products,
and large project cargo.
Our system provides some environmental benefits as well. A
typical barge on the Columbia-Snake River System can carry
3,500 tons. That compares with 100 tons per rail car and 29
tons per truck.
We estimate that each year, barging on our system keeps
700,000 trucks off the highways that run through the sensitive
air shed of the Columbia River Gouge National Scenic Area.
Early in the last decade, our colleagues at the Portland
and Walla Walla Districts of the U.S. Army Corps of Engineers
recognized that our aging locks would require strategic repairs
to remain operational and reliable.
They also recognize that these projects would need to be
planned and executed to have the least impact to our regional
and national economy.
It is important to remember with the scale of our
navigation infrastructure projects, a catastrophic failure of
one of our lock dates would translate to at least a 1-year
closure of that project. That is how long it takes to design,
fabricate and install a lock gate of that size.
We also do not have any smaller backup locks at our
projects. Allowing our locks to degrade to the point of failure
simply is not an option.
A closure of one of our projects creates a bottleneck for
the entire system.
Beginning in 2006, the Corps and PNWA partnered to discuss
the highest priority repairs, funding estimates, and timeline.
The goal, minimize planned and unplanned system closures.
This collaborative planning meant that our river system was
well poised to execute funding made available through the 2009
American Recovery and Reinvestment Act.
The Corps began working with stakeholders to prepare for
new downstream gates at three of our projects, and major
repairs at three other locks.
A tremendous amount of coordination went into what was
eventually a 15-week complete closure of our inland navigation
system. This type of long-term plan closure had never been done
on any inland waterway in the United States.
We worked closely with the Corps for over a year to prepare
growers, shippers, ports, tow boaters, steamship operators, and
fuel companies, the media, the legislators, and the States of
Oregon, Washington, and Idaho for this unprecedented closure.
Special emphasis was placed on outreach to grain buyers
overseas who were accustomed to sourcing U.S. wheat from the
historically reliable Columbia-Snake River System.
Every moment of the 14 months leading up to the closure was
necessary to ensure that both domestic and international
stakeholders were prepared for the shutdown of our system.
I am pleased to say that this effort was a complete
success, and a project for which the Corps, stakeholders, and
Congress can truly be proud of.
Because of the outstanding partnership between the Corps
and stakeholders, impacts to our regional and national economy
were minimized.
I want to note that the positive experience we had is not
indicative of the economic impacts that would be suffered if
there were an unplanned closure of our system.
Because this was a well planned effort, shippers could
decide whether to ship early, use alternate transport where
available, or increase their storage locally with the intent to
ship after the system reopened.
A major study just completed at Washington State University
confirmed that most producers attempted to either ship their
goods prior to closure or after the system reopened.
The lock closure demonstrated that the Columbia-Snake is
key to the international competitiveness of many producers in
our region, and is the preferred mode of transportation for
many goods produced in our heartland.
Last year's closure addressed the most immediate needs on
our river system, but we know that our projects continue to
age, meaning more components will reach the end of their design
lives.
We continue to partner with our Corps' Districts and our
Division, and our joint goal is to identify major maintenance
needs, predict system closures years in advance, and protect
the reliability of our system.
We realize every agency is facing funding shortfalls. It is
imperative that our country continue to provide the
infrastructure that makes commerce possible.
It is our belief that future regional national economic
competitiveness hinges on the availability of reliable
navigation infrastructure, our water and highways.
Thank you again for this opportunity to testify, and I am
happy to answer any questions you may have.
Mr. Gibbs. Thank you.
Mr. Rossberg, the floor is yours. Welcome.
Mr. Rossberg. Thank you. Mr. Chairman, Congressman Bishop
and members of the subcommittee, the members of the American
Society of Civil Engineers are pleased to provide our views on
how the reliability of the Nation's inland waterways impacts
the economic competitiveness of the United States.
Mr. Chairman, you have our complete written statement for
the record, so let me just summarize a few key points.
First, efforts by the administration and Congress to
address the growing deficiency in investing in our waterways'
infrastructure have been largely ineffectual due to political
considerations that give preference to deficit deduction and
tax cuts over the badly needed and concededly expensive
restoration of our Nation's critical infrastructure.
These policy failures at the White House and in Congress
threaten our Nation's global economic competitiveness.
In 2009, ACSE's report card for America's infrastructure
gave the Nation's inland waterways a grade of D -, an
indication that the system is near failure, that you have heard
from other witnesses today.
Neither the President nor Congress has done anything in the
year since to improve upon that extremely dismal assessment,
such as the adoption of a long-term systemic approach to
improving the performance and condition of our national
waterways.
Second, 47 percent of all locks maintained by the U.S. Army
Corps of Engineers were classified as ``functionally obsolete''
in 2006.
Without the badly needed funding, by 2020, another 93
existing locks will be obsolete, or to put it another way, more
than 8 out of every 10 locks now in service will be outdated.
Most locks are now anywhere from 50 to 70 years old.
The current system of inland waterways lacks resilience.
Waterway usage is increasing, but facilities are aging, and
many are well past their design life of 50 years.
Recovery from any significant event will be hampered by the
age and deteriorating condition of the system, posing a direct
threat to the American economy.
The estimated cost of repairing and modernizing the assets
of the inland system is approximately $8 billion. Despite the
obvious needs, the balance in the Inland Waterways Trust Fund
has been declining for more than a decade. In April of 2010,
the Inland Waterways User Board, a consortium of waterways
users created by Congress, released a proposed investment
strategy for the inland waterways system that would increase
the 20 cent diesel fuel tax to 26 or 29 cents.
Applying a tax of 26 cents to each gallon sold to the
estimated fiscal year 2011 fuel sales would generate about $109
million annually or an additional $1 billion over 10 years.
The tax rate for the Trust Fund has been 20 cents per
gallon since January 1st of 1995. We believe that an increase
in the waterways users' fee is long overdue, and we concur with
the IWUB recommendation that the current fee be increased
between six and nine cents a gallon.
ASCE's support for the IWUB plan, however, is contingent
upon two important considerations. First, any increase in the
user fee should also include a provision to index that fee to
the consumer price index and be adjusted every 2 years.
And, second, any diesel fuel tax revenues received by the
Trust Fund should be firewalled to establish discretionary
spending limits in the same manner used for the Highway Trust
Fund and the Aviation Trust Fund, and to reserve the Inland
Waterways Trust Fund revenues exclusively for the
reconstruction of a systems aging infrastructure.
And lastly, our major point is the Corps of Engineers'
Civil Works Program has suffered from chronic underfunding for
essential infrastructure systems. If allowed to continue, this
trend will likely result in ever greater system failures and
the consequent expenditures of tens of billions of dollars to
rebuild what could have been built more economically in the
first place.
Following Hurricane Katrina in 2005, an ASCE study
commissioned by the Corps reported that chronic underfunding
and indifference to maintenance were the principal causes of
the levy failures after Katrina. The President's budget for the
Civil Works Program in fiscal year 2013 and the House budget
resolution would further reduce Federal investment in the
Nation's essential national Civil Works system.
This week the House Appropriations Committee has drafted a
bill that would set the Corps' fiscal year 2013 budget at $4.7
billion, a decrease of nearly 6 percent over the fiscal year
2012 enacted level of $5 billion. The funding level in the
legislation is inadequate to meet the needs of an aging
waterways infrastructure and must be increased.
Doing more with less is not a solution. It is a political
slogan that ignores the consequences of continuing to
underinvest in our essential infrastructure. America cannot
compete in the world marketplace with 100-year-old locks, two
shallow harbors, and promised investments in key infrastructure
systems and a seeming blindness on the part of policymakers to
the economic peril we face.
Congress and the President can never say ``we were not
told.''
Thank you.
Mr. Gibbs. Thank you.
I am going to start out the first round of questions, but I
would first like to say I think everybody is in agreement that
we have a challenge and potentially very even catastrophic
issue before us that affects our economy and our standard of
living in a large part of the country.
I do want to start out with General Peabody. I think we
need to talk maybe briefly about Olmsted. I do not want to
point fingers at anybody, but I think maybe we can learn from
the past, and I think there is plenty of blame to go around,
and one, I think it comes out as the evidence of basically
Congress' failure over many, many years to fund the projects
initially and get on with it. I know other things are factored
in there, the studies, the requirements, and feel free to talk
about that, General, too, why maybe there are some of the
delays to that beyond what the Corps can do.
But I want to give you a chance to respond a little bit on
what is happening in Olmsted because that is taking so much of
the capital budget and so much concern. I think that, like I
said, we can learn from the past, but not to blame totally
anybody's fault in particular, but let's see if we can use that
as constructive.
So, General, I will give you a chance to respond to some of
the discussion we have had so far.
General Peabody. Thank you, Mr. Chairman.
I would appreciate a little bit of leeway on the brevity
aspect. I will try to be as brief as possible, but as I think
you know, and you have visited there, this is a complex
project.
Let me focus on what I consider to be the bottom line.
There are four points. First and foremost, the location of the
Olmsted Project in the Lower Ohio River, just before the
confluence with the Mississippi, makes it the hub of the inland
marine transportation system in the Mississippi watershed. In
recent years, the tonnage that passes through that location
averages between 80 and 90 million a year, and if past is
prologue, we would anticipate that that tonnage over the next
couple of decades would continue to climb steadily above 100
million tons a year. So it is critically important to the
Nation, and I believe coal is the largest commodity that goes
through that location.
Second, Lock and Dam 52. There are two locks and dams that
the Olmsted project is replacing, both of which are in a highly
deteriorated state. They were built in the 1920s, and they are
sitting on timber piles. Lock and Dam 52, in particular the dam
component, is very fragile. The wicket dam is sagging
approximately 4 to 5 inches, and it is my belief that either
Lock and Dam 52, or Charleroi on the Lower Monongahela River,
are the two points in the system that are most likely to fail,
given what I know.
The challenge is that we do not have Superman x-ray vision
so we cannot see inside these projects. We cannot see
underground. Testing would require destructive processes which
could set in motion a sequence that would result in
catastrophic failure. So our state of knowledge is imperfect.
Third, once complete, the transportation rate savings at
Olmsted based on 2011 dollars are approximately $800 million a
year. I think it is just under that, $780 or $790 million. Now,
it is my understanding, and my information is a little bit
dated, but the latest information I have is that the current
estimate for the project completion in 2011 dollars is about
$2.8 billion. The project pays for itself in just 4 years in
transportation rate savings.
Fourth, the Corps can, and does, deliver complex projects
on time and under budget when enabled to do so. A great example
of this is the Hurricane Storm Damage Risk Reduction System.
This is a $14.6 billion project. Thank you for the multiple
supplementals from Congress enabling us to do that.
It was enabled by full funding upfront, which is not the
Civil Works model for the vast majority of our projects. It was
enabled by accelerated NEPA documentation and consideration by
EPA and CEQ, and it was enabled by advanced risk-based cost
estimating procedures which we have developed in the 20 years
intervening since we began the authorization for the Olmsted
Project, as well as other acquisition strategies that are much
more innovative and involve industry much more upfront so that
we have a greater clarity of the risk and industry can provide
us the benefit of their knowledge.
Finally, the final bottom line point I would make is the
truth regarding Olmsted is very complex, but the bottom line to
me is pretty simple. At the time that we developed the
authorization and the feasibility study, we simply
underforecast the technical complexity of putting the largest
lock and dam system this country has ever built in the most
dynamic location of the river anywhere in this country that we
have ever built a lock and dam. Those are just brutal truths.
And then, we suboptimized our way along the 20-plus years
of execution. So that is the bottom line, Mr. Chairman. I can
get into a lot of the details and the facts, and I would
highlight a couple.
If you accelerate for inflation, which is the only proper
way, in my opinion, to measure cost, then the cost is a little
bit less than double what the final estimate was at the time,
shortly after the authority was passed because I think our
final estimate was just slightly above what the original
authorization was.
We have sunk, and I do not have the precise figure, but it
is close to $1.4 billion to date into this project. So those
are sunk costs. We have done all the preliminary requirements
that are required to do this, all the Civil Works studies
processes, which goes back, I think, into the 1940s in this
case. So this is a project with a lot of history behind it.
We have all of the environmental and NEPA documents and
cultural and historical documentation and mitigation plans put
in place. We have the planning and engineering and design
complete. We have built all of the infrastructure that you saw
in place that enabled us to build these 3,500-ton Lego blocks
and put them into the riverbed. All that is sunk cost.
To walk away from it or to try to go toward a different
avenue, in my judgment, pending further analysis, which the
Corps is doing, we would have to look at that very closely
because there is a lot of effort and energy that has gone into
this already.
Now, the Corps is--and we started this under my watch, I
think, as you are aware, Mr. Chairman. We talked to you about
this when you visited the project back in August of last year--
the Corps is reviewing all possible alternative ways forward.
Those include changing to alternate construction methods, what
some people call ``in the dry,'' but that is a traditional
coffer dam. This is not a simple solution though because,
again, most dynamic areas of the water river, 40-foot river
stage change on an average year, which means the coffer dam has
to be extremely robust and there is no bedrock. It is 300 feet
down into alluvial river deposits before you hit bedrock. So
you have to get friction piles down there. They are very
expensive, technically complex, and it would likely be over-
topped at some point, especially if we were to have a high
water event like we had in 2011.
We are looking at project management oversight. I have
spent a lot of my time when I was in command of the Great Lakes
and Ohio River Division, examining the project management
oversight. I came away convinced that we had in place proper
procedures, but we are taking an external review to take a look
at that and see if there is something we can do better.
We are engaged in looking at funding alternatives, and we
are looking at the acquisition strategies. So, for example,
perhaps shifting from cost reimbursable approach, which was the
only way we could get the dam component to get bidders on it at
the time about a decade ago, perhaps early contractor
initiative, perhaps a firm fixed price, those are going to be
examined.
Mr. Gibbs. OK, John. I am going to have to----
General Peabody. That is my last point, sir. So I will turn
it back to you for any followup questions.
Mr. Gibbs. OK. We are going to go on to questions here. So
go ahead.
Mr. Bishop. No, no, no. You go.
Mr. Gibbs. We are fine. There are not going to be many
Members here. So we will have plenty of time to go back and
forth here a few times. So go ahead, Congressman Bishop.
Mr. Bishop. Mr. Chairman, I would be happy to defer.
Let me start with H.R. 4342, which several of my colleagues
have offered as legislation. I think Mr. Duncan is one of the
sponsors of it. Clearly, it represents a solution to a problem
that we all agree exists, and that we all agree we must find a
solution for.
But let me point out what I fear is the difficulty. It
would add approximately in a static environment where Corps
funding was steady state; it would add approximately $180
billion, million, $180 million of annual obligation to the
Corps, which would be difficult for the Corps to accommodate in
a static environment.
But we are not in a static environment. We are in an
environment in which we have twice now in the House of
Representatives, once right before Easter break and once again
as recently as yesterday, passed a budget that would cut Corps
funding for next year by at least $200 million.
So we are in an environment in which if we were to pass
4342, we would be adding $180 million of annual obligation to
the Corps and taking away $200 million worth of capacity from
the Corps. So round----
Mr. Gibbs. Just excuse me for a second. Indulge me. I have
got to go vote in a committee, and I want to turn it over to
Representative Bucshon until I come back.
Mr. Bishop. OK, fine. OK. So we are talking about a $400
million swing in 1 year, and so I guess my question to you,
General Peabody, and I know you do not speak for the Corps, but
I would presume that to accommodate a $400 million swing in 1
year and still try to maintain all of the other activities and
obligations of the Corps would be exceedingly difficult. Am I
right about that?
General Peabody. Mr. Bishop, yes, sir. Any budget cuts
require choices and tradeoffs or budget reductions I should
say, and those choices and tradeoffs are not easy, especially
at a time where our infrastructure is already aging and, as
testified to by many of us, requires, if we are going to
sustain the infrastructure we have, and I think that is a fair
question for us to ask ourselves.
Mr. Bishop. But we would be----
General Peabody. To require these tradeoffs.
Mr. Bishop. Is it not fair to assume that we would be
pushing around a problem, that we may very well solve the
inland waterways problem with an additional $180 million a
year, or at least be on a path to solving it?
General Peabody. Without an increase in the Corps' overall
budget, yes, we would have to reduce elsewhere.
Mr. Bishop. Something would give.
General Peabody. That is correct.
Mr. Bishop. Harbor maintenance, dredging.
General Peabody. Well, sir, you know the biggest----
Mr. Bishop. Shoreline protection, something would go away.
General Peabody. I cannot predict what that would take. It
would probably, you know, cut across several aspects of the
Corps' budget, from investigations, construction, on in, but
our biggest account where most of the money is, I think it is
on the order of 80 percent, is in the operations and
maintenance account.
Mr. Bishop. Yes.
General Peabody. So while I cannot predict where the cost
savings would come from, that is the account where, you know,
most of the money is and, you know, would likely take a large
proportion of the cut.
Mr. Bishop. OK. I cut off the chairman. I should not have
done that, but I have been suggesting to the chairman and to my
colleagues and to the various stakeholders that we have to move
off the dime here. We have got competing proposals. Each of the
proposals has merit associated with them. Each of the proposals
has problems associated with them. And what I have been
suggesting is a round table where we bring together Members and
stakeholders and try to sit down and has this out and hopefully
arrive at a solution that we can all find reasonable.
So let me just ask each of you, and I am just going to ask
each of you to answer yes or no: would you be willing to
participate in that kind of roll up your sleeves round table so
that we can try to move off the dime here?
And I will start with you, General.
General Peabody. Yes.
Mr. Knoy. Yes.
Mr. Hettel. I think I would be supportive of anything the
subcommittee could come up with in discussions to fix this
problem.
Mr. Bishop. So I will take that as a yes.
Mr. Hettel. I would be supportive of anything the committee
would come up with.
Mr. Bishop. I will take that as a yes. Thank you.
Mr. Dolence. Yes.
Mr. Steenhoek. Yes, sir.
Ms. Meira. Yes.
Mr. Rossberg. Absolutely.
Mr. Bishop. I will take that as a yes as well.
OK. Thank you. My time has expired. I will yield back to
the chairman. Thank you.
Dr. Bucshon. [presiding.] Mr. Duncan.
Mr. Duncan. Well, thank you, Mr. Chairman. I thought that
maybe you were going to ask some questions first, but that is
fine.
I can tell you that you cannot serve on this subcommittee
very long before you realize that the people of this country
take all these subjects that we deal with in here very much for
granted, our waste water system, our clean water system, our
inland waterways system, and all of these things are very, very
important to this country.
I was thinking just a moment ago another one of my
committees held three hearings, I think, 2 or 3 years ago on
the issue of steroids in sports, and we had many famous
baseball players testify, but I remember when Roger Clemens
testified the hearing room was packed with photographers and
reporters. The very next week in that same committee we had a
hearing on reforming the Federal contracting process, much more
important, no reporters, no photographers, because we live in
this celebrity age, and we a lot of times emphasize things that
we should not emphasize and do not emphasize things that we
should.
There are three or four people who have heard me tell this
story in here before, but many years ago, I had a businessman
in Knoxville who called me on a Thursday and asked if I would
meet with him concerning the Chickamauga Lock, which is not in
my district. It is close to Chattanooga, but I said, sure, that
I was flying back to Washington. I still remember. I was flying
at that time back to Washington on a 1:50 plane that afternoon,
and I said, ``I will meet you at a restaurant near the
airport,'' and I expected that gentleman, and I would not have
been surprised if he brought one or two people with him.
But I showed up in that restaurant, and there were about
100 people there that day, and I did not get to eat lunch
because just one after another they stood up and told me how
important the Chickamauga Lock was to their businesses, and it
really made an impression on me because, you know, I think for
the first time I realized that this lock, even though it was
not in my district, it was more important to me in the
Knoxville area than it was even to the people closer to the
lock.
And I have visited many of the locks around the country
when I chaired this subcommittee, and I think it is very
unfortunate that people do not realize how valuable this and
how important that inland waterway system is to this Nation.
And then almost every project we deal with in here, the
airports, the highways, we are taking three times or four times
as long to complete these projects as there are in any other
developed nation. I remember when I chaired the Aviation
Subcommittee. The Atlanta airport people told us their newest
runway, which now is several years old, had taken 14 years from
conception to completion. It took 99 construction days.
The Federal highway people, I now chair the Highways and
Transit Subcommittee, and their last two studies say 13 and 15
years, one study 13 years, one study 15 years, from conception
to completion. These are not transcontinental highways.
So, Mr. Knoy, I did not get to hear your testimony. I was
in some other meetings, but I read your testimony, and I loved
it when you had in there, ``Where is the outrage?'' about
Olmsted and talking about 32 years to take something that was
supposed to take 7 years.
Let me ask you this. I guess I do not have many questions.
I am just making some comments here, but one thing I noticed
that you said. You said that we are having more promise with
the new locks than the older locks. Why is that do you think?
Mr. Knoy. I do not know the answer to that question. Just
intuitively and through the practice of our business though,
our newest lock on the Ohio River system, Robert C. Byrd, we
have just as many problems with it as we do the older locks. I
do not understand why.
Mr. Duncan. Well, that is something that should concern all
of us. We certainly need to look into that.
Mr. Hettel, I read in your testimony about the outage at
Markland, and you said it is going to be 389 days; is that
correct?
That and the other outage you mentioned, it is going to
cost your company, you think, you are estimating $11.4 million?
Mr. Hettel. That is correct. The Markland outage, the Corps
is expected to get back in there this summer and complete that
project early August. That will be a total of a 389-day outage
at the main chamber at Markland.
But, yes, you add Lock 52 outage, the Markland outage, and
the Greenup outage together, it is estimated somewhere around
$11.4 million.
Mr. Duncan. Do you think that those outages are taking an
undue amount of time to correct or do you understand what is
causing outages of this length?
Mr. Hettel. I do understand that Markland is a situation on
water levels. I think the general is more apt to speak on that
than I am. I do not think they had the funding to go back in
and complete it. They did not want to go in and partially
complete the job, get flooded out, and go back in again because
of funding constraints. Again we come down to funding
constraints.
I believe there are 43 or 46 days of work left to do at
that facility, and it has been sitting idle since the end of
November.
Mr. Duncan. Well, I will just close with this. I know my
time is up, but you know, it really galls me that we keep
spending hundreds of billions in other countries, and I am not
just talking about Iraq and Afghanistan because years ago all
of these departments and agencies, they saw some department
having an office in Rome or London or Paris or whatever, and
they wanted to have offices there, and so I heard last year on
the news that the FBI has more offices in other countries now
than it does in the U.S., and it is every department and agency
in the whole Federal Government.
We are spending hundreds of billions in these other
countries. We are trying to run the whole world, and we cannot
afford it. And we have got to start taking care of this
country.
And I really appreciate the chairman calling this hearing
because anything that we can do, anything that you gentlemen
and lady can do to call attention to the situation in this
country so that we do not continue to take these water systems
and these inland waterways and so forth for granted because we
are not going to be able to--somebody was mentioning the global
competition. We talk about it, but we have got stop talking
about and start doing something about it or we are going to
lose out.
I met with the CSX Railroad about a month ago. This is an
unrelated kind of thing in a way, and he said that they tried
to 7\1/2\ years to get approval to mine this rare kind of
mineral, and they finally gave up and went down to Brazil and
got approval in a few weeks.
We have got to get these environmental radicals under
control so that we can open this country up. All the college
graduates wonder why they cannot find jobs except in
restaurants as waiters and waitresses and so forth.
Thank you very much, Mr. Chairman.
Dr. Bucshon. Thank you.
I think everyone can agree we need a dramatic effort to
modernize the infrastructure on our inland waterways. The
question continues to be, I guess, how we finance this work.
Money alone is not the answer without an assessment of why we
continue to have dramatic cost overruns and delays in the
United States.
I toured the Olmsted project also with Chairman Gibbs, and
so I have a pretty good understanding, and my district is on
the Ohio River, Evansville, Indiana. So it is very important to
my constituents.
Like many of the things we do here in Congress, it is time
to change business as usual. Continuing to authorize taxpayer
dollars without demanding more accountability and efficiency
across the Government has to stop.
In my view the Republican budget reflects this philosophy.
As a physician, I am going to reference a medical or have a
medical reference. It is schizophrenic to continue to do the
same thing over and over and over and expect a different
result.
With that I would like to start out and ask General
Peabody. Did the Corps receive stimulus money?
General Peabody. Yes, Mr. Bucshon, we did. I think it was
something approaching $5 billion total in stimulus money.
Dr. Bucshon. So reading about the situation, the total
assessment of the amount of money it would take to catch up on
all of our projects was approximately what, $11 billion,
something like that?
General Peabody. I would have to take that question for the
record, sir, but I can tell you that a little over $400 million
of that money went to inland marine transportation system
capital construction projects that were not cost shared by the
Inland Waterways Trust fund.
An additional amount went to operations, maintenance. I do
not have that.
Dr. Bucshon. I guess my point is, you know, we have been
talking a lot about millions today, and we have a stimulus of
$5 billion. You know, that seems like enough money to solve
quite a number of problems that we have been talking about here
today.
Does the Corps have an itemization of where all that money
went or has it been distributed to the Corps?
General Peabody. Yes, sir, we do. I think the figure, and
again, I will follow up for the record, but the figure on the
backlog of authorized Civil Works construction is somewhere
around $60 billion. So $5 billion, while a significant amount,
is a relatively small proportion of the overall requirement, if
we are going to sustain the infrastructure we have.
Dr. Bucshon. Yes. Five billion sounds like quite a bit of
money to me.
Since the mid-1980s, as you know, we have had a dramatic
change in how difficult it is to get projects completed, and it
is not the Corps' fault alone. Can you give me an assessment of
why you think since the mid-1980s all of a sudden there has
been a dramatic change in our ability as a country to complete
projects?
General Peabody. Well, I think a great example is one that
I have talked many times with Mr. Steve Little about. He is the
president of Crounse Corporation, and he talks about McAlpine
Lock and Dam, which is at a critical point at the falls of the
Ohio in Louisville. And in 1959 we started a project, the
original lock, the current main lock chamber, built that in 3
years, completed it in 1962.
Then in 1999, we started an auxiliary chamber to extend
that auxiliary chamber to 1,200 feet, and that took 10 years.
Now, what happened in between, tells the tale of the tape,
which is, we had a large number of new Federal laws, which the
Corps has to comply with that are associated with environmental
concerns, cultural and historical concerns, and so forth. That
is a part of it.
The other part of it at that particular location was the
location, you know--we took the easy spot on the first lock. So
that left the hard spot on the second lock, and that had harder
rock. I mean literally harder geology and more technically
complex location to actually build a lock. So that was part of
the other.
The last piece of that is what I talked about earlier:
full, efficient funding upfront. We can only build as
efficiently and as quickly as we have funding available to the
task, and typically we do not have that, with rare exceptions
like the New Orleans case.
Dr. Bucshon. Prior to 1986 did you have it? I mean, prior
to the mid-1980s the Congress was providing the appropriate
funds at the appropriate time? Is that what you are saying?
General Peabody. What changed in 1986 was the cost share
requirement, which became a principle in the case of capital
construction, was Inland Waterways Trust Fund cost shared. But
I would have to go back and see whether this model of
incremental, year by year funding has been. I think it has been
the model for a large period of time, Mr. Bucshon. I cannot
tell you how long though.
Dr. Bucshon. Thank you. My time has expired.
Mr. Bishop, I think we are back.
Mr. Bishop. Let's go to the chair. Gee, I keep trying to
defer to you.
Mr. Gibbs. [presiding.] Go ahead.
Mr. Bishop. A couple of things. Just with respect to the
stimulus, those projects, at least those projects under the
jurisdiction of the T&I Committee, were routinely reviewed. We
had at least 15 or 20 hearings over the course of the period of
time of the stimulus under the leadership of Chairman Oberstar,
in which we monitored where the money was going, how it was
being spent, the timeliness with which it was being spent and
so on.
So I think there really was some pretty good congressional
oversight in that regard. I think one of the points, General
Peabody, that you are making is that one of the reasons that
with the stimulus projects we were able to spend those out more
quickly was that the stimulus in many cases waived the local
cost share, and the 1986 WRDA brought in a local cost share.
General Peabody. Sir, the ability to execute those dollars
had nothing to do with the cost share requirement. Well, let me
recharacterize that. Our ability to execute it had to do with
the planning and engineering and design was mature for those
projects.
Mr. Bishop. So they were ready to go.
General Peabody. If it had to have been cost shared, we
would not have been able to execute it, notwithstanding the
Federal ARRA funding available. That is correct.
Mr. Bishop. OK. So at least that was a model that worked. I
am not suggesting, by the way, that we eliminate local cost
share. I do not know how we do that in this environment.
General Peabody. I am agnostic on how we get revenue to
execute our requirements. As the person charged with executing
requirements, it is just very helpful to have that revenue,
know when it is going to come, and have certainty year over
year that you are going to get the efficient funding needed to
execute the construction efficiently.
Mr. Bishop. One of the mantras of this committee over the
last 18 months has been that we need to do more with less. Mr.
Rossberg, you referenced this in your testimony, in which you
expressed some skepticism as to whether or not we can do more
with less.
My own view is that there probably are areas of the Federal
Government where we can do more with less, but I think in this
area we would be hard pressed to find--I mean, I think the cost
of rehabbing a lock is the cost of rehabbing a lock. You have
got raw materials costs, you have got labor costs, and I mean,
you showed us, General, a series of pictures. Do you have a way
forward in which you could do more with less to remediate some
of the problems that you showed us?
General Peabody. Sir, I think it is always possible to
search out and gain efficiencies. One of the good things that
has come out of this challenge for us is that we have been
forced to look very introspectively at the way we conduct our
business and find efficiencies.
However, there is an upper limit to how efficiently we can
get. I do not think we are there yet, but I do think we have
gotten most of the efficiencies squeezed out of our operations
and maintenance procedures.
On the construction side, the headquarters has initiated a
couple of different initiatives to look at increased project
management and focus on what we are calling mega projects, like
Olmsted, using the hurricane storm damage risk reductions
system program as a model, and then applying that for mega
projects in the future, but this is just something we are
starting.
Mr. Bishop. But if the Corps budget is, in fact, cut by
$200 million, will you be able to get the same amount of work
done or will there be at least some slippage from what you
would normally do?
General Peabody. Not in a year's time. That is for sure.
Some of that would have to be absorbed through doing less.
Mr. Bishop. OK. Last question. Ms. Meira, there was a
comment about the stimulus. There was about $400 million worth
of stimulus money that went to the Corps for inland waterway
systems. My understanding is the Columbia-Snake River System
got about $30 million of that; is that right?
Ms. Meira. That is correct.
Mr. Bishop. And had that money not been made available
through the stimulus, are you able to project when the
remediation of the problems on the Snake River would have taken
place? I mean, would it have happened a year later, 2 years
later, 5 years later? What is your projection on that?
Ms. Meira. Sure. Thank you, sir.
Until the stimulus package came along, the plan that had
been developed with the Portland and Walla Walla Districts was
to cobble together enough O&M funding because these were
repairs, not major rehabs or construction. It was to have
enough money in hand to have an extended closure and install
one gate, and then wait 4 or 5 or however many years, have
another closure, another impact to the system, install another
gate.
Mr. Bishop. So the stimulus really did have a very
beneficial impact at least with respect to that system.
Ms. Meira. For us it did. We had three gates and one
coordinated closure.
Mr. Bishop. And it is reasonable for me to assume that this
$30 million employed a handful of people? Is that fair to
assume?
Ms. Meira. I do not have the jobs numbers offhand, but
certainly more than a handful, sir.
Mr. Bishop. Thank you for that.
I yield back.
Mr. Gibbs. Thank you.
Sorry for my indulgence. I had to go vote in another
committee.
I have got some questions here. I will start with General
Peabody. We were talking about stimulus funding. Was there any
stimulus money that was going to capital projects, projects
that had been funded, and are they sitting? Were they fully
funded? Do we have any projects that are in limbo now because
of the stimulus funding?
General Peabody. Sir, the way we were able to do that was
project features or components were able to be advanced. So,
for example, I believe an approach wall in one of the monoliths
at Kentucky Lock was advanced. That was about, I think, $80
million. I think it was $87 million that went into Lower
Monongahela. I think it was $40 or $50 million that went----
Mr. Gibbs. But specifically the Kentucky Lock, what is the
status of the Kentucky Lock?
General Peabody. Of which one, sir?
Mr. Gibbs. Kentucky Lock.
General Peabody. Sir, that one is still under construction.
There are two major features that are being executed now. One
is basically being wrapped up. The other one will be wrapped up
next year, and moving forward on that project will depend on
availability of revenue and/or decisions about the allocation
of that revenue associated with the Trust Fund.
Mr. Gibbs. So when those two features are complete, will
the project be complete or is that just----
General Peabody. No, sir. It is just those features. The
project still has I think it is somewhere like $300 or $400
million worth of cost----
Mr. Gibbs. So even with the stimulus, the culture of
dribbling money here and there remains pretty much constant.
General Peabody. The stimulus in general, in terms of the
lock and dam systems, advanced our construction projects at
several of those locations. In some locations it completed it.
An example is the Emsworth Lock and Dam on the Upper Ohio. That
one had some dam safety scour issues, and we were able to
complete those scour remediation. I think the Lock and Dam 25
on the Upper Mississippi, the same thing.
Mr. Gibbs. OK.
General Peabody. But those are relatively small amounts.
Mr. Gibbs. Small amounts, OK.
General Peabody. $10 to $20 million.
Mr. Gibbs. Thank you for that.
Mr. Hettel, I was intrigued a little bit when you said
there are some issues with some of the newer locks that have
been refurbished or constructed, the functioning or not. Can
you expand on that a little bit?
That just kind of intrigues me. I want to know if there is
an issue.
Mr. Hettel. I think actually Mr. Knoy brought that up, but
at R.C. Byrd Lock, and the General can probably elaborate more
than me.
Mr. Gibbs. Oh, I am sorry. It was Mr. Knoy.
Mr. Hettel. They found some coin blunt problems or
something that they have to go into. We have got two 90-day
outages scheduled for R.C. Byrd main chamber and auxiliary
chamber, and I believe that was found through what they found
up at Greenup when that outage happened.
The general could probably explain.
Mr. Gibbs. Mr. Knoy, it was you who made that statement. I
am sorry.
Mr. Knoy. Yes. I responded to that earlier in your absence.
I do not know what the differences are, but I question whether
or not new technology is actually advancing our capabilities
verse the older technology that has been proven. I think an
example there is the miter gate. Throughout most of the
systems, our locks in the systems work and function very well.
We have put in some different ways that we hang and operate
those miter gates, going forward that seem to be less reliable
and also the type of gates themselves. And the spare gates, I
find it interesting that we have spare gates for Olmsted, which
the lock has never been used and will not be used for another
10 or 12 years, but we do not have spare gates for locks that
have heavier traffic.
So I do not know why the new technology is not lasting
longer.
Mr. Gibbs. I want to go to Mr. Steenhoek for just a second.
He referenced what was happening in Panama and other areas, and
obviously in the green site especially, soybeans are in
competition with Brazil.
Can you maybe expand just a little bit about the
investments that are being made there and how they are doing
things a little different and why we seem to become
uncompetitive?
Mr. Steenhoek. Yes, in Panama, the Panama Canal expansion
project.
Mr. Gibbs. Yes.
Mr. Steenhoek. Well, absolutely, and I think it is
important to note that one of the major talking points from the
inland waterway users is the age of our lock and M inventory,
60-, 70-plus years, and while that, indeed, is true and
possibly could be troubling, I think it is important to
remember that the Panama Canal was originally constructed in
1914, and when you go and tour that and you watch, and you can
get a very good vantage point of seeing ships go through these
locks, you do not see the leaky miter gates. You do not see the
crumbling infrastructure. You do not see concrete cracking.
And so one of the big take-aways that I and the farmer
board members that I took with me from that trip was
maintenance and preservation goes a long way when you look at
these types of infrastructure investments. Locks and dams are
not cell phones--what you bought 10 years ago is obsolete
today. The technology is very similar to how it has been, and
so it has remained quite steady.
But I think the major conclusion that we had as far as why
they are able to perform in a superior manner to us is how they
actually provide the funding; that they have secured the
funding. It is not provided lump sum upfront, but they have
certainty of funding, and some of it is going to be cash flowed
from their toll structure, but they know that the money will be
there so that when they work with contractors, contractors can
make massive purchases of concrete steel, secure labor force,
secure dredging equipment, excavating equipment.
And consider the fact that this is a $5.25 billion project
that is exponentially more complex than anything we have going
on in our inland waterway system. They are building six new
locks for post-Panamax vessels. They are widening the breach in
the Continental Divide. They are expanding the volume of a lake
to be able to service these new locks, but yet they are able to
do it relatively on time and under budget, and I think the main
reason for that is how they allocate the money is just as
important as how much money is allocated.
Mr. Gibbs. I am glad you expounded on that because I think
that is important.
A question, I guess, for all of the panelists and anybody
can answer or choose not to answer it, but obviously budgets
are tight and there has been declining funding, but there seems
to be prioritized by whomever--I will not mention, I guess--to
fund eco restoration systems. I am not against that, but when I
look at the Corps' budget and we have gone through this, there
is a lot more funding for that than for the assets, for our
locks, levees and dams.
And I would argue that, you know, a strong, growing economy
will provide resources to enhance the environment, and I think
we all agree we are at risk of this major mode of
transportation system at failure, and so does anybody want to
respond?
Yes, Mr. Knoy.
Mr. Knoy. I would like to make a couple of comments in that
regard, Mr. Chairman. I think part of what we tried to
establish in the capital development plan was an equal sharing
of the burden of the cost among all of the beneficiaries, and
as of this date the tow boat and barge industry is the only
industry that is paying a user fee of any of the beneficiaries
of the system, and certainly the ecosystem benefits greatly
from that system as well.
Mr. Gibbs. But you are aware that there is more funding
from the tax dollars from the administration for the budget
proposal, quite a bit more, for eco restoration funding.
Mr. Knoy. Yes, sir.
Mr. Gibbs. Does anybody else want to respond?
[No response.]
Mr. Gibbs. OK. I will move on.
The next question I had was I mentioned a little bit in my
opening statement about looking at a new paradigm of public-
private partnerships. Does anybody want to comment on the
potential for that?
One thing, I am working on a bill on the water-sewer side
to try to bring in private equity capital, which I think there
is lots of money out there. I will just give you an example. On
a sewage treatment plant, obviously rate payers cannot pay
upfront, and there is a lot of investment types that need a
decent return with not too high a tolerance for equity erosion
risk.
So we are trying to put something together that we think we
can match something up there for a public-private partnership,
and I think that maybe on the inland waterways system maybe we
could consider a pilot project, and the Corps might be looking
at something like this where you have got a specific project or
a region in a tributary or whatever. And my thinking is if you
have a public-private partnership, you would get that, for lack
of a better word, accountability for funding and pick up some
efficiencies.
So I would like to see if anybody would like to respond to
kind of that concept or be open to that concept to try to bring
in some private investment capital and then hopefully make the
whole process more efficient because they would be a partner in
it, and obviously they would have more say so than maybe what
we have at the Inland Water Board and the stakeholders.
Does anybody want to? Mr. Knoy.
Mr. Knoy. I would be happy to comment again, sir. The
inland river industry, we have met as a team. We have met with
private funding sources. We have put forward a variety of
different plans, just like we have the capital development
plan, and we have heard that the administration is going to put
forward an alternative funding plan as well, but all we keep
hearing is they are going to, they are going to, and we are not
getting any feedback or definition.
Mr. Gibbs. Well, I do not believe there have been any
specifics on the administration's plan.
Mr. Knoy. Correct, not how to charge it, not how to collect
it, what it would be, dollar amounts, et cetera.
Mr. Gibbs. Yes, Mr. Steenhoek.
Mr. Steenhoek. Well, I think you are on target in exploring
this option, Mr. Chairman. I think, you know, engaging the
private sector could present the possibility of getting funding
for these projects in more of a lump sum fashion so that it
could mitigate the opportunity for further cost overruns for
some of these projects.
The concern that we have though is the overall cost of
these projects in the first place. You know, I try to put
myself in the shoes of a rating agency, the Fitches or the
Moodies of this world, and when they rate an investment as to
whether or not it is investment grade or junk grade, they are
looking at three things. They are looking at the size of the
debt issuance, the volume of the money to apply to it, and the
predictability of that funding.
And the concern that we have is, OK, if you get private
money into the system, and there are foreign entities that are
actually interested in this as well. We had a group of farmers
that went to China just a couple of weeks ago, and one of the
repeated refrains from our customers in China was, ``We are
concerned about the integrity of your supply chain.''
And there is an expressed willingness to actually help
finance U.S. infrastructure projects. Now, that is a whole
different subject for another time, but there is this desire to
apply money, but there is this concern about the cost of these
overall projects. It is one thing to say we invite alternative
sources of funding, but the problem still is these costs are so
expensive, and the question is what is there payment plan for
those projects for whether or not it is going to be an
attractive investment.
Mr. Gibbs. Yes. Yes, Mr. Dolence.
Mr. Dolence. I think that we would all be remiss to not
consider private investment. We talked earlier of efficiencies
in the system and to introduce the free market and competition
is one of the best ways to do that in my experience, and not
only should you look for repayment from users, but the
beneficiaries.
A lot of people spoke here today and talked about what the
river traffic take off of the rails and takes off of the
highways, and is there room for a quid pro quo there?
If you talk to the average person at least in the
Pittsburgh area where I live, they complain about traffic and
then they complain about trucks. Then they complain about truck
traffic. So if the locks and dams fail, we are going to
exacerbate that problem.
So who are the beneficiaries of the recapitalization?
Mr. Gibbs. Yes, General.
General Peabody. Sir, just a quick comment. I cannot speak
to the overall administration proposal or where that is, but I
know that the Headquarters and, I believe, the Secretary's
Office, has begun what I would characterize as exploratory
discussions with Department of Transportation, I think other
Federal agencies, and some private venture capitalist interests
to look at the possibility of this exact issue.
I believe this would likely take some authority, you know,
changes, but it is something that the Corps has actively begun
looking at.
Mr. Gibbs. One just quickly. I do not know if Mr. Bishop
has any more questions or not, but I want to just mention also
we saw over the years the railroad industry abandon a lot of
lines, tear up a lot of lines, and it seems to me I am
concerned. I know the Corps has to make some tough decisions
prioritizing, you know, and it might affect some of the
tributary systems.
Does anybody care to comment if we kind of let the
tributary system decline? Would that be analogous to what is
happening in some of the railroad industry, you know, feeder
lines that are feeding the system, and the importance of maybe
that is a problem?
Do you want to comment on that? Mr. Dolence.
Mr. Dolence. Again, in the Western Pennsylvania area, I
would suspect that there are a lot of people who gave up their
right-of-ways on their rail lines which have developed into
beautiful rails to trails, if you will. With the development of
the Marcellus Shale, I am sure there are a lot of people who
are second guessing that decision 20, 30, 40 years ago of
giving up those right-of-ways because now they have the
challenges of a lot of truck traffic on back rural roads where
you look down over the hill, and there is a beautiful rail to
trail.
I use the rail to trails. I like them, but it is just
anecdotal in response to your question.
Mr. Gibbs. Yes.
Mr. Knoy. Sir, it is a trunk and branch system, if you
will. We do need the ancillary rivers, the tributaries to feed
the trunk, and a lot of the funding comes off the Lower
Mississippi River which does not have the lock and dam
infrastructure. So we do need it to work as a system.
Could we manage it more efficiently? Likely so.
Mr. Gibbs. OK. Go ahead.
Mr. Bishop. Two things quickly. Thank you, Mr. Chairman.
I just want to return, Ms. Meira, just to the issue of the
stimulus funding that funded the Columbia-Snake River Project.
The fact that you were able to get it all done at once, was the
total project cost less being able to get it all done at once
as opposed to extending it out over the multiyear period,
phasing it in that had been your original plan absent the
stimulus money?
Ms. Meira. I think our Corps districts would agree that the
answer to that is yes. To try to do it in a phased fashion
would have cost much more over the years, and even worse, to
wait for a catastrophic failure and to have that 1 year amount
of time that it would have taken to on an emergency basis
construct a new lock gate would have been exponentially more
expensive than what they spent back in 2009, 2010, and 2011.
Mr. Bishop. OK. Thank you.
The last thing, the chairman talked about a bill that he is
working on for waste water infrastructure that would take what
we refer to as a WIFIA approach, direct lending guaranteed by
the Government, very low rates to municipalities.
I also am working on a bill that takes a similar approach.
We have something that we call TIFIA in the surface
transportation bill, again, direct lending to municipality,
very low rates backed by proceeds from the motor fuels tax.
Is this something in the environment we are now in where we
clearly have a constrained budget? We clearly have limited
capacity to make the kind of investment that I think we all
agree is required? Is this something that we should be looking
at?
We obviously would have to figure out a receiving entity, I
mean, because right now 100 percent of the system is owned and
operated by the Federal Government. So the Federal Government
would not be loaning to itself. It would have to be loaning
to--I do not know--the Ohio River Authority or something like
that.
Should we be thinking seriously about that kind of approach
as, again, part of this toolbox approach, multi-avenues of
bringing dollars to the table that would help solve our
problem?
Mr. Steenhoek.
Mr. Steenhoek. Well, I commend you, Ranking Member, for
considering that and bringing new funding into the stream. My
concern is, and I have mentioned this before, that we have to
be careful that we are not trying to buy a $2 million home on a
$20,000 salary.
Mr. Bishop. That did not work out for a lot of people.
Mr. Steenhoek. Right, right. And you could make sure that
that $20,000 salary has a lot of certainty to it and
predictability to it, but you cannot just solve this problem on
the revenue side. You have to also address it on the cost side
as well.
And so you have to ask the question: how can we bring
greater equilibrium between the costs of these projects and the
revenue to support them? And so looking at some of these things
about preserving maintenance, you know, prioritizing that, I
think that really needs to be a part of that discussion as
well.
Mr. Bishop. Fair enough. Anyone else?
[No response.]
Mr. Bishop. OK. Thank you, Mr. Chairman. I yield back.
Mr. Gibbs. I have just got another question. I know we have
had a lot of discussion about the competitiveness, for global
competition and moving our products in and out, but I want to
go back to Mr. Hettel's testimony, and since they run a
significant barge operation, American Electric Power, on the
Ohio-Mississippi River systems, in your testimony you talked
about how many millions of dollars ADP has lost in delays, and
that is a big problem. We all know that.
And you talked about also the potential of a complete
failure and rolling brownouts, even blackouts. Can you maybe
expound a little bit on the likelihood, and I may give General
Peabody a chance to respond, too, of having--my understanding
is on the Ohio River, there are no locks that do not have an
alternative. Now, on the Lower Mon that is not true. On the
Upper Mississippi or Illinois, I guess, it is not true.
But since you guys navigate the Ohio River a lot, is there
a possibility we could have a complete lock failure at one of
the locks that would shut down the system?
And if that were the case, and this might be where General
Peabody might help, what kind of timeframe would we be looking
at if we had a complete shutdown on the river?
Mr. Hettel. Well, just to clarify, there are multiple locks
on the Ohio River, a 1,200-foot chamber and a 600-foot chamber.
All of the delay cost I referenced was having the 1,200-foot
chamber closed for repairs, just to clarify that, and having to
use the auxiliary chamber because then the system has too much
volume to be able to handle it through a 600-foot chamber.
One of my attachments in my statement, testimony, shows the
predictability that the Corps has put together for lock
failure, and that is why I specifically mentioned Willow
Island. The Corps predicts that both the main and the auxiliary
chamber will fail in 2015.
Now, that may fail, the main chamber, the first part of the
year, the auxiliary chamber the second part of the year, but if
the main chamber goes down first and you put that much traffic
through the auxiliary chamber, I am afraid we will have the
same thing we had at Hannibal where they shut down the main
chamber and then the auxiliary chamber failed afterwards.
Mr. Gibbs. General Peabody.
General Peabody. Sir, I believe in Lower Mon there is
actually auxiliary chambers at the first four or five of the
lower locks. I would have to get the details for you.
But Mr. Hettel is correct in that there is high risk at
several of the points along the system. Now, the two points as
I mentioned earlier that I personally am most concerned about
in the Ohio system are the Lower Monongahela and the Lower Ohio
where I believe all the indicators we have are that the
possibility of failure is real.
And it is very difficult to put a probability to that. It
is probably in the low single digit percentage year over year,
but when you accumulate that over time, those probabilities
escalate and become fairly significant.
The 2011 flood that happened last year is a very low
probability event, but it happened. The Nashville flood of 2010
resulted from a rain event that is something on the order of 1
to 10,000-year event, but it happened.
So these failure possibilities, any time that there is a
possibility, it is too much of a concern for me.
Mr. Gibbs. General, I am interested in a lock failure. What
would be the typical failure of a lock failure? Is it the miter
gates not functioning or is the concrete walls or what?
General Peabody. There is a host of causes. Most of them
that cause outages in the locks have to do with operating
machinery associated with the miter gates, and they are not all
miter gates, but most of them are miter gates. So that is the
most common issue.
However, we have been detecting what I would characterize
as previously unknown failure modes recently. So, for example,
when Markland went out in 2010, what happened, it was a
cascading series of events, as these often are. It was a simple
failure of the solenoid with the inflow chamber in the open
position. So when the operator did not know that it had failed,
he thought he had shut it off, but it was still water flowing
in. He tried to close the gates. That created a water head
difference. That led to pressure that caused the gates to fail,
fall in the river; the chamber closed for, I think, 150-some
days.
So there are a variety of issues. This gets to an important
issue though. Our knowledge is imperfect when it comes to
understanding potential failure modes or design deficiencies,
and so as we go forward in time operating these designed
infrastructures, we discover things that we did not previously
know, and this is a constant of the engineering profession.
Understanding new failure modes, understanding design
changes, and we constantly have to update our profession and
make changes in this, what I characterize as progressive
elaboration. That is part of the problem.
With regard to whether we have greater lock outages or
greater issues on new locks, I would have to check on the data
on that. I am not aware what the data says.
Mr. Gibbs. I think we are done with questions. We are all
done. Everybody else has abandoned us.
I would like to conclude. First of all, I want to thank
everybody for coming. I think we are trying to highlight the
issue here of how important our maritime system is in the
inland and the ports and how much commerce. I know the
President had talked about wanting to double exports in 5 years
or whatever it was, and I think the only way is you have got to
have a transportation system to move all of that out to do it,
and I think we certainly do not want to have an event where the
American people wake up because we had an event like the levy
failure in Hurricane Katrina. We do not want to have the system
shut down because that will impact a lot of people's lives
because of energy production, energy generation. That could be
severely affected and all of the jobs in that entire major
region of the country.
So thank you for coming, and we will work ahead and keep
working on this, but thank you, and that concludes this
hearing.
[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]