U.S. Opens Spigot for Lock-and-Dam Fixes, Even as Coal Traffic
Wall Street Journal
2 February 2016
By Robbie Whelan
CHARLEROI, Pa.—A few years ago, coal barges lined up 20 or 30
deep, waiting their turn for a towboat to shuttle them through the
locks near this town along the Monongahela River.
These days it is the towboats that often sit idle. Cheap natural
gas, stricter power-plant-emissions rules and a weak steel market
have gutted coal demand, and with it traffic on the rivers that
have served as the industry’s commercial arteries for over a
Nevertheless, river infrastructure is about to be flooded with
federal cash. In December, Congress authorized $405 million to
improve river locks and dams over the next fiscal year, the most
The money follows a multimillion-dollar lobbying effort
spearheaded by the Waterways Council Inc., which represents an
array of companies including coal producer Murray Energy Corp.,
utility FirstEnergy Corp. FE -0.63 % , agricultural-commodities
trader Cargill Inc. and Marathon Petroleum MPC -6.03 % Corp.
“I want the locks and dams open so I can keep the cost of
transportation cheap,” said Michael Somales, president of Murray
American Transportation, Murray Energy’s river-shipping arm. “We
are forever in Washington, D.C., making sure they spend the
dollars to keep the locks and dams up.”
Most of the money Congress approved for river-transport
improvements is expected to go toward a few major construction
projects in coal country along the Ohio River and its tributaries,
including at Charleroi, where infrastructure built before World
War II strains to handle even reduced traffic from the mining
The river shipping industry says it hopes shoring up crumbling
locks and dams will help the coal industry by keeping
transportation costs low, and entice other shippers to transport
more of their goods by river. Some critics say the money could be
better spent on day-to-day maintenance of river infrastructure and
on other waterways, including parts of the Mississippi, where
shipments of grain and oil products are rising.
“It’s kind of ironic—we’re spending even more to update and
modernize this system when the value and volume of the commodities
is diminishing, and coal is something that we as a country are
moving away from,” said Steve Ellis, vice president of Taxpayers
for Common Sense, a conservative-leaning advocacy group that
analyzes infrastructure spending.
The funds would come as a boon to construction companies that have
been contracted by the U.S. Army Corps of Engineers to work on the
locks and dams, including local companies such as Saxonburg,
Pa.-based Brayman Construction Corp., which is working on the
Charleroi project, and URS Corp., a unit of engineering giant
Aecom, ACM 2.01 % which is handling the largest Corps of Engineers
improvement project, on the Illinois and Kentucky border.
Each month, about a million tons of coal and other industrial
commodities like sand, salt and chemicals pass through Charleroi’s
locks, which help vessels navigate a steep drop in the
Monongahela’s water levels.
But when a lock breaks down or is closed for maintenance, barges
can sit for hours or even days, a costly inconvenience that is
becoming more frequent. On the six lock-and-dam facilities in the
area surrounding Pittsburgh, outage time rose 42% between 2014 and
2015, to more than 288 days, according to the regional Corps of
The Corps of Engineers is building a new lock wall out of
46,000-cubic-foot concrete blocks and replacing wobbly 80-year-old
timber pilings with steel supports. The project, along with
repairs to two other locks nearby, is expected to be completed in
2022 at a total cost $2.7 billion. About $60 million of the fiscal
2016 budget for lock repair is expected to go toward the project.
“This is a county road, when what we need is an interstate,” said
Kirk McWilliams, an engineer with the Corps of Engineers who is
overseeing the renovation.
Coal shipments have plummeted as utilities shift to cheaper
natural gas-fired power plants. China’s economic problems have
reduced the country’s demand for steel, which requires coal in its
manufacturing process. The U.S. Energy Information Administration
reports that coal production fell 10% in 2015, to its lowest level
The amount of coal passing through the nearby Port of Pittsburgh
fell 21% between 2003 and 2013, the most recent year for which
data is available. River shippers say it has fallen even more
since then. In December, just before Congress allotted funding for
lock repair, DTE Energy DTE -0.23 % said it would close a
Pittsburgh steel coking plant responsible for about 5% of coal
shipments in the region.
Barge and towboat companies say they have cut their rates to hold
on to dwindling coal shipments. Others are looking for alternative
cargo, including grain and petrochemicals.
Some in the river-shipping industry remain optimistic that coal
will remain a big source of business. Low transportation costs are
one of coal’s competitive advantages over natural gas, and rivers
remain the cheapest way to move large amounts of the fuel, said
Murray American’s Mr. Somales.
In the past two years Murray has bought at least two mines with
direct access to the Ohio River so that coal can be shipped by
barge to power plants.
Others say the rivers’ future lies away from coal. Campbell
Transportation Co. Inc., a Houston, Pa.-based company that
operates 600 barges, started converting coal barges to carry grain
three years ago. More recently, the company has used towboats to
transport barges full of natural gas and materials used in the
natural-gas fracking process.
The company generates about half its profit from coal, compared
with nearly all seven years ago, said Michael Monahan, Campbell’s
president. Mr. Monahan said demand from coal shippers is likely to
“There’s a new bottom that we haven’t hit yet,” Mr. Monahan said.
Write to Robbie Whelan at email@example.com