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transport tips Rough Times on the Rivers BY DAVE GAMBREL The drought has riveted the interest of river shippers, carriers and managers for the last six months or more. In late summer the Corps of Engineers' focus was dredging the river near Greenville, Miss. More recently it has been the need to dredge rock pinnacles in the St. Louis-to-Cairo reach, specifically in the areas near Thebes, Ill., and Grand Tower, Ill. While rock pinnacles may seem like a new problem, the Corps has been working on them for years. Their problem is they have to wait for water levels to get low enough to allow them to work. We have been focusing on the Mississippi River for at least a year-and-a-half, first with floods and now with low water. These are rough times for the barge industry and for the U.S. Corps of Engineers. For the Corps it is more complicated than simply hiring a company to do the dredging and managing their work. It is a juggling act of making sure there is enough water in certain pools, which may require releasing water from reservoirs such as Carlyle Lake, or beseeching Congress to allow more releases from Upper Missouri River reservoirs. For the barge companies it is making sure enough barges are provided to satisfy customer tonnage needs, even though they may have to use more towing power to haul that tonnage. One hard rainfall can make it seem like their problems are all over, but it takes more water than that to return the river to normal. Coal shippers may feel frustrated if their shipments are delayed, but lots of people are working hard to keep the river system running. The Drought The Dust Bowl of the 1930s lasted about a decade. Its primary area of impact was on the southern Plains. The northern Plains were not so badly affected, but nonetheless, the drought, windblown dust and agricultural decline were no strangers to the north. In Figure 1, the area shown in brown would have covered the Dust Bowl, which was centered in western Kansas and eastern Colorado under the map word "Persistence." The current drought is expected to last at least until the end of April 2013. For the Corps of Engineers and the barge industry the Drought Outlook map seems to 24 www.coalage.com offer some hope. Many of the states (Minnesota, North Dakota, Iowa and Illinois) that feed the Upper Mississippi and Missouri rivers are projected to see improving conditions. Unfortunately, many of the states (Nebraska, Kansas, Missouri, Oklahoma and Colorado) that produce agricultural crops are projected to see persistent drought conditions through April and perhaps beyond. The Missouri River is the primary source of water in the St. Louis-toCairo reach. By next fall we could have a situation in which the Mississippi River has returned to normal navigational depths, but crop production to ship on the river has not. How is that likely to affect coal rates? If hopper barges are not needed for grain haulage, we are likely to see them competing for coal haulage business. The main difference between coal and grain barges is the fact that grain barges are covered, a fact that makes little difference to utility plants that are primarily interested in the lowest rate per ton. There is another factor that could have a depressing effect on barge rates, one that has nothing to do with river levels. Some electric utilities have already announced their intention to close some of their power units and replace them with gas-fired units. This would free up that portion of Figure 1: Drought Outlook image suggests improvement over the headwaters of the Mississippi River in Minnesota and tributaries of Wisconsin, North Dakota and Eastern Iowa. (Source: NOAA) Table 1: Projected Economic Impact of Two-month River Closure in St. Louis Cairo Reach Commodity, Upbound and Downbound Combined Tonnage (Thousands) Coal, Lignite, & Coal Coke Petroleum & Petroleum Products except Crude Oil Crude Oil Chemicals and Related Products Crude Materials, Inedible except Fuel Primary Manufactured Goods Food and Farm Products All Manufactured Equipment, Machinery & Products 3,840 1,333 712 1,705 1,582 608 7,793 50 TOTAL 17,623 Value ($/Ton) Total ($Million) 50 1,000 750 1,100 150 1,000 300 1,200 192 1,333 534 1,875 237 608 2,338 60 7,177 March 2013