'Huge leap forward' for Soo Locks
DULUTH—A two-year study released Friday dovetails with President Trump's call to fund a critical upgrade in the Great Lakes navigation system.
The study into Soo Locks expansion by the U.S. Army Corps of Engineers makes a compelling case for lawmakers to approve roughly $1 billion for the construction of a new lock, said Lt. Col. Dennis Sugrue, commander of the Army Corps' Detroit District, which maintains and operates the locks connecting Lake Superior with the rest of the Great Lakes.
"We recognize domestic steel production is almost entirely reliant on this project for their viability," Sugrue said in a conference call with media members on Monday, July 2.
In May, President Trump spoke at length at a Michigan campaign rally about the Soo Locks.
"We're going to get them fixed," Trump said.
At the time of Trump's vocal support, the Army Corps' economic validation study was nearly completed and not likely influenced by the president's words, Sugrue said. But he added that he suspected the president's advocacy helped influence $58 million in more recent funding for rehabilitation of the existing Soo Locks.
"It's great to hear his voice for it," Sugrue said of Trump's support.
The study was being treated as a major development in what has been a languid, decades-long saga.
"It's a huge leap forward," Duluth Seaway Port Authority spokesperson Adele Yorde said. "The discussion has been going on for longer than many of us have been working in the industry."
The study identified benefits over costs of a new lock equating to $44.7 million annually with a 2.42 benefit cost ratio — a figure which replaces a much smaller number, below 1, from a 2007 Army Corps' analysis.
"The need has always been there, but the demonstration of that need with benefit-to-cost ratio was flawed," Yorde said, echoing beliefs from others within the industry, including the Lake Carriers Association. The Carriers tsaid earlier this year that previous cost-benefit analysis used flawed assumptions, including that truck and rail traffic could pick up slack if necessary. But Yorde said that was always unrealistic given the sheer volume of taconite and other products moved on the lakes. It takes as many as 700 rail cars to make up a single load from a 1,000-foot lake freighter, she said.
The new economic validation study put less stock in alternatives and called a new lock "vital to the U.S. iron ore, steel and automobile manufacturing supply chain." All taconite iron ore mined in Minnesota transits through the Soo Locks.
Currently, there are two operable locks at the Soo — the Poe and MacArthur. But only the Poe can accommodate modern 1,000-foot ships.
"Right now it handles 89 percent of commercial commodities moving through that facility," Sugrue said of the Poe, which was completed in 1968.
A new lock would replace the mothballed Sabin and Davis locks and would have the same dimensions as the Poe — 1,200 feet long, 110 feet wide and 32 feet deep. The Soo Locks are necessary to help navigate the 21-foot drop in elevation between Lake Superior and the St. Marys River leading into Lake Huron.
Creating a companion lock to the Poe has been a priority for many in the industry since the Army Corps first identified the need for an additional 1,000-foot lock in a 1986 study. At the time, it would have cost $227.4 million. A subsequent cost estimate from the Army Corps in 2007 grew to $341.7 million.
The current figure, $922.4 million, is the result of changing costs of concrete, steel and labor, better accounting practices within the Army Corps and the challenging environment presented by building in the Soo Locks, where construction would be done from barges, Sugrue explained.
The new study also cited a 2016 Department of Homeland Security study which projected that a 6-month closure of the Poe Lock would cost nearly 11 million jobs with the potential to send the nation's economy into a depression.
"It's exciting to see the momentum is building to bring a new lock to fruition," Yorde said, nodding to Minnesota's federal lawmakers, including Rep. Rick Nolan and Sen. Amy Klobuchar, for continually pressing the issue. "We've been pushing for funding for a long time. It impacts not only the national economy, but close to home our regional and state economy."
The new study seemed to look harder at alternatives to shipping taconite iron ore and concluded that, among other things, rail connections would be inadequate.
"The steel mills are not set up to receive by rail," Sugrue said. "The steel industry on the Great Lakes navigation system kind of grew up together. They're very closely intertwined."
The new study will be presented to federal lawmakers as the Army Corps bids for funding in the 2020 fiscal year, which begins October 2019. All things moving forward would mean the estimated seven- to 10-year project would be completed by 2030, Sugrue said.
"That's the year we've set our sights on," he said, "but that's not locked in stone right now."