Saint Lawrence Seaway Development Corporation Asset Renewal Program

When the St. Lawrence Seaway opened in 1959 it was hailed as one of the world’s most ambitious achievements in maritime infrastructure. Fifty years hence, that infrastructure has shown signs of age, prompting the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) to unveil in 2009 a forward-looking Asset Renewal Program (ARP). Similar to the Army Corps’ ARP for the Soo Locks, the SLSDC’s objectives were to identify and address pressing long-term needs for the U.S. portion of the Seaway infrastructure, including two locks, the Seaway International Bridge near Cornwall, Ontario, maintenance dredging, operational systems, and SLSDC facilities in Massena, New York.  The program was deliberate in its commitment not to increase the authorized depth or width of the Seaway’s navigation channel, or the size of the two U.S. locks.

The SLSDC ARP was developed on the premise that a “perpetual infrastructure asset, such as a lock, requires a capital investment equivalent to its original cost over its design life, which is typically 50 years, in order to sustain itself.” The U.S. share of the Seaway’s construction cost was about $130 million in 1959 dollars, or about $1.1 billion today. Over the first ten years of the ARP, from 2009 to 2018, the SLSDC spent $152 million on some 50 projects, including such technologically innovative improvements as a hands-free mooring system to eventually be installed on both U.S. locks. Over the next five years, the SLSDC ARP proposes 58 more projects at an estimated cost of $83.7 million, dependent on annual U.S. Department of Transportation acceptance and federal budget appropriations. 

Soo Locks Upgrades and Rehabilitation

The Soo Locks linking Lake Superior to the lower Great Lakes, particularly the Poe Lock, represent the single most critical navigation structure in the Great Lakes maritime transportation system (MTS). Some 80 million tons of cargo - primarily downbound iron ore for steel manufacturing, coal for electric power generation, and export grain - transit the Soo Locks annually. An economic impact study conducted by Martin Associates estimated that maritime commerce moving through the Soo Locks in 2017 supported 123,172 jobs in the U.S. and Canada, and generated $22.6 billion (C$29.3 billion) in economic activity. Currently there are two locks at the Soo available to cargo carriers, the 800-foot long, 80-foot wide MacArthur Lock built in 1943, and the 1,200-foot long, 110-foot wide, Poe Lock, enlarged to its current size in 1968. As Great Lakes commercial vessels have grown larger, reliance on the Poe has increased: it now handles over 90 percent of the cargo transiting the Soo. Given the criticality of the Soo Locks to the North American industrial supply chain, the 2016 Regional Maritime Strategy prioritized modernization of the locks through two major investments: 1) Acceleration of an asset renewal program for both the MacArthur and Poe Locks; and 2) Construction of a second large, Poe-class lock on the site of two long-retired locks.

Collaborative efforts to address environmental challenges

The U.S. and Canadian federal governments, vessel operators, academic partners and others are collaborating in a number of areas to address environmental challenges associated with maritime transportation in the Great Lakes and St. Lawrence River. This includes investments, research, management practices, and new regulations in the following areas (see investments for additional background):

Canadian Ballast Water Regulations

Transport Canada (TC) is proposing updated ballast water regulations that will implement Canada’s obligations under the International Convention for the Control and Management of Ships’ Ballast Water and Sediments. The proposed regulations would apply to Canadian vessels everywhere and vessels in waters under Canadian jurisdiction. Subject vessels would be required to develop and implement a ballast water management plan and comply with a performance standard that would limit the number of organisms discharged by 2024. Vessels would need to obtain a certificate, keep records of ballast water operations, and be subject to inspections to verify compliance. While most vessels would need to install a ballast water management system (BWMS) to comply with the proposed regulations, smaller vessels would have the option of an equivalent compliance regime more tailored to their operations. The proposed regulations attempt to accommodate differences between the U.S. ballast water regulatory regime and the Convention by providing sufficient time for vessel owners to install BWMS for use in the North American market, and certainty that capital investments would be respected given the challenging water quality conditions on the Great Lakes and the St. Lawrence River. TC published the Proposed Regulatory Text and Regulatory Impact Analysis Statement on June 8, 2019 (Canada Gazette Part I, Volume 153, Number 23: Ballast Water Regulations).

Green Marine Environmental Certification

Green Marine is a voluntary environmental certification program for the maritime industry which is endorsed by a wide range of environmental groups and governments. Program participants such as shipowners, ports, terminals, Seaway corporations, and shipyards benchmark their annual environmental performance through exhaustive self-evaluation guides, which cover 12 performance indicators.

Green marine tracks the following performance indicators:

For ship owners:

  • Oily water
  • Pollutant air emissions – NOX
  • Pollutant air emissions – SOX and PM
  • Aquatic invasive species
  • Greenhouse gas (GHG) emissions
  • Garbage management
  • Cargo residues
  • Underwater Noise

For Ports, terminals and shipyards:

  • Community impacts
  • Dry bulk handling and storage
  • Greenhouse gas (GHG) emissions
  • Environmental leadership
  • Spill Prevention
  • Waste management
  • Underwater Noise

Participants must have their results verified by an accredited external auditor and agree to the publication of their individual results annually.

Great Waters Research Collaborative

The Great Waters Research Collaborative (GWRC) is a project of the University of Wisconsin-Lake Superior Research Institute devoted to objective, third-party research to support sustainable industrial, commercial and public use of the nation’s Great Waters, particularly via green shipping. Its primary focus is on preventing new ballast water introductions of invasive species in the Great Lakes. The GWRC executes type approval tests of ballast water management systems for U.S. Coast Guard type approval. It also monitors ship-mediated transfers of organisms in the Great Lakes and researches risks from ship-mediated invasive species introduction and spread. GWRC’s work is coordinated with ongoing private sector, state, federal and international policy activity. The GWRC includes researchers with the Lake Superior Research Institute, University of Minnesota-Duluth Natural Resources Research Institute, and AMI Consulting Engineers.

Shipowner investments in vessel fuel and technology

In order to improve fuel economy, reduce operating costs, and comply with emissions regulations, vessel operators in the Great Lakes-St. Lawrence River Maritime Transportation System (MTS) have been investing in new vessels, new engines, and emission treatment systems. Some examples of recent emissions-related investments from MTS vessel operators include:

  • Canada Steamship Lines’ recently added six new Trillium class vessels to its Great Lakes fleet. These vessels have new hull designs intended to reduce fuel consumption, and new engine technology to reduce air emissions such as nitrogen oxide and particulate matter.
  • Interlake Steamship Company has repowered its steamships with more efficient engines and installed freshwater scrubbers to remove sulfur and particulate matter from engine exhaust. Interlake also utilizes excess engine heat to generate steam, helping to reduce air emissions associated with heating boilers. Interlake has also ordered a new vessel which will be equipped with newer, more efficient engines.
  • Algoma Central Corporation has added eight new Equinox class vessels to its domestic fleet, with an eighth scheduled for completion in 2019. In addition to being about 45% more fuel efficient than previous generations of vessels, these new vessels are outfitted with exhaust scrubbers that remove sulfur emissions.
  • Groupe Desgagnés has invested $200 million (CAD) to build four new tanker vessels equipped with dual-fuel engines that can be powered by liquefied natural gas, marine diesel, or heavy fuel oils. The use of natural gas as a primary fuel source means that these new vessels will emit about 25% less carbon dioxide, 85% less nitrogen oxide, and nearly no sulphur oxide or particulate matter.
  • American Steamship Company has installed scrubbers on at least two of its vessels.

In addition to these equipment investments, many Great Lakes vessel operators have chosen to purchase low-sulfur marine diesel fuel, which complies with regulations for the North American Emission Control Area established under the International Convention for the Prevention of Pollution from Ships (MARPOL).

U.S. Vessel Incidental Discharge Act

The Vessel Incidental Discharge Act (VIDA) became law in December 2018 attempts to resolve these issues by directing the U.S. EPA to set national standards for ballast water and directs USCG to implement and enforce the standards. The new standards are to be promulgated within two years, with the associated USCG regulations to follow within another two years. The new regulations must be at least as stringent as current standards in the VGP. It pre-empts states from establishing separate discharge standards, although state standards can remain in place until the new federal standard is fully implemented and enforceable.

The U.S. Coast Guard (USCG) was first given authority to regulate ballast water to prevent the introduction and spread of AIS in 1990. However, the agency did not finalize comprehensive ballast water regulations until 2012. Throughout the 2000s and 2010s, U.S. states individually developed state-specific requirements related to the treatment and discharge of ballast water. Further, in 2008, the U.S. Environmental Protection Agency (EPA) initiated ballast water requirements under a Vessel General Permit (VGP). This action was taken following a 2006 U.S. District Court decision that the agency could no longer exempt vessel discharges from regulation under the Clean Water Act. This patchwork of regulations created an uncertain and complicated compliance environment for vessel owners operating on the Great Lakes. Major concerns included cost (due to separate application, certification, or registration processes for multiple states), and technical feasibility, as some treatment requirements exceeded the capabilities of current technology, among others.

VIDA recognizes the unique conditions in the Great Lakes. It maintains the requirement for ballast water exchange or flushing for ocean-going vessels entering the Seaway, and allows any Great Lakes governor to petition for a new standard or requirement, including new equipment or management practices, to address vessel discharges in the Great Lakes. The Great Lakes Commission (GLC) is charged with assessing and assisting in the development of recommendations regarding any new proposed standards or requirements.

VIDA also established a new Great Lakes and Lake Champlain Invasive Species Program at U.S. EPA, authorized at $50 million annually. Among other purposes, this includes authority to develop and promote type-approved ballast water management systems for Laker vessels. A new Coastal Aquatic Invasive Species Mitigation Grant Program is established and funded by fines and federal appropriations to help states with inspection, monitoring, and enforcement programs.

Ballast Water Treatment Systems

Systems capable of removing, rendering unviable, or killing live organisms in ballast water can help ensure that non-native species are not introduced to, or more quickly spread, throughout the Great Lakes-St. Lawrence River Maritime Transportation System (MTS). Canadian and U.S. agencies and shipowners are actively testing and evaluating ballast water treatment systems to meet the unique regulatory, environmental, and operational requirements that exist within the MTS. The selection of a suitable ballast water treatment system remains a significant challenge. Some particular challenging considerations include:

  • Most commercially-available systems are designed for operation in salt water.
  • Use and release of treatment chemicals (such as chlorine or brine) that may conflict with state or provincial water pollution standards.
  • Lake or river sediment that can clog filtration systems.
  • Limited space for treatment equipment installation aboard domestic vessels.
  • Voyages within the MTS are often shorter than ocean voyages, giving treatment systems less time to process large volumes of ballast water.

Actions to reform pilotage

 As pilotage represents a significant operational consideration for MTS users, its regulation, management and service delivery are of keen interest to the commercial maritime industry in both Canada and the United States. For its part, the Regional Maritime Strategy acknowledges the need for a new look at the pilotage delivery service structure and calls for a more open, collaborative process involving relevant governmental agencies and industry from both side of the border.

Management Practices for Ballast Water

The St. Lawrence Seaway is the primary potential route for the introduction of non-native species into the Great Lakes-St. Lawrence River Maritime Transportation System (MTS). In recognition of this vulnerability, the Seaway system has enacted the world’s most stringent ballast water management requirements.

The U.S. and Canadian St. Lawrence Seaway agencies require all ocean-going vessels entering the Seaway to comply with the Code of Best Practices for Ballast Water Management. This includes a requirement that all vessels entering the Seaway from overseas exchange or flush their ballast tanks at sea, which is intended to remove and kill any freshwater organisms before the vessel enters the Great Lakes. If ships do not flush their ballast water, they are required to retain the ballast water until they leave the Great Lakes, treat the ballast water, or return to sea to flush their tanks. Additionally, vessels that declare “no ballast on board” must ensure that residual water in their ballast tanks has either come from water properly exchanged at sea, or has been treated to meet international standards.

In addition to these mandatory requirements, vessels operating strictly on the Great Lakes and Seaway must regularly inspect their ballast tanks and remove accumulated sediment which could harbor unwanted flora and fauna.

All-season buoys to improve navigation

Historically, navigation buoys in the Great Lakes and St. Lawrence River Maritime Transportation System have been a high-maintenance component of MTS infrastructure. The ice coverage that largely closes navigation in the system for the winter months requires that buoys be deployed early each spring and retrieved in the late fall. To reduce the costs of this work, the Canadian federal government announced in October, 2018 that the Canadian Coast Guard had procured 184 four-season lighted navigation buoys at a cost of $12 million (CAD) to be deployed in the St. Lawrence River shipping channel, between Québec and Montréal. According to the announcement, the four-season buoys are “unique in the world, designed using Canadian Coast Guard expertise to withstand the severe ice and tidal conditions found in the St. Lawrence shipping channel.” They will remain in the water year-round and only require maintenance every two to four years.

U.S. Port Infrastructure Development Program

Congress created the Port Infrastructure Development Program in 2010, with the goal of supporting improvements to port infrastructure. The program is administered by the Maritime Administration (MARAD), and provides planning, stakeholder engagement, operational and capital financing, and project management assistance to ports and port stakeholders.

While it was created in 2010, the Port Infrastructure Development Program did not receive funding until 2019, when $292.7 million (USD) was appropriated for port improvements.

Since the Port Infrastructure Development Program was only funded in early 2019, it has not yet been used to support any improvements on the Maritime Transportation System (MTS). While $292.7 million (USD) has been appropriated, about 1/3rd of the funds are reserved for the United States’ 15 largest container ports. This means that MTS ports are only eligible for about $200 million (USD) of the program’s funding at most.

U.S. Infrastructure for Rebuilding America (INFRA) grants

The Infrastructure for Rebuilding America (INFRA) grant program is administered by the US Department of Transportation’s Build America Bureau. It was originally established by the 2015 Fixing America’s Surface Transportation Act (FAST), and is intended to support the renewal of deteriorating infrastructure. While INFRA is primarily highway- and bridge-focused, freight projects within the boundaries of ports or intermodal facilities are eligible.

Examples of Past or Current Investments

INFRA’s predecessor, FASTLANE was used to fund two Maritime Transportation System projects:

  • $5 million (USD) for replacement of Lake Michigan ferry dock facilities in Ludington, Michigan, and Manitowoc, Wisconsin.
  • $9.8 million (USD) for cargo handling efficiency improvements at Port of Indiana – Burns Harbor.

INFRA’s 2019 funding application deadline closed in March, but $1.0 billion has been allocated for FY2020 grants.

U.S. Better Utilizing Investments to Leverage Development (BUILD) program

The Better Utilizing Investments to Leverage Development (BUILD) program is a discretionary grant program that supports investment in road, rail, transit and port projects. Before 2018, the program was known as Transportation Investment Generating Economic Recovery, or TIGER. BUILD/TIGER was created in 2009 as part of the American Recovery and Reinvestment Act of 2009 and has provided $7.1 billion (USD) for 554 projects. Available funds have varied over time, and the graphic below illustrates the amount BUILD/TIGER funds awarded each year since the program’s creation.

Canada National Trade Corridors Fund (NTCF)

The National Trade Corridors Fund (NTCF) is part of the Government of Canada’s Transportation and Trade Corridors Initiative. This initiative was created in 2017 for the purpose of spending $10.1 billion (CAD) on transportation investments by 2028. The NTCF was allocated $2 billion (CAD) of that amount, and this $2 billion (CAD) in funding is being used to invest in strategic projects that:

  • Support the flow of goods and passengers by reducing bottlenecks, and address capacity issues
  • Help the transportation system withstand the effects of climate change and make sure it is able to support new technologies and innovation
  • Address the unique transportation needs in Canada's territorial North to improve safety and foster economic and social development
  • Build on investments made by a variety of public and private sector partners
  • Increase the flow of Canadian trade around the world through ports, airports, roads, railways, intermodal facilities, bridges and border crossings

NTCF funding is available to a wide range of parties, including provincial, territorial, and municipal governments, indigenous groups, non-profits and for-profits, Crown Corporations, Canadian Port Authorities, and airport authorities.

U.S. Harbor Maintenance Tax and Fund

The US Harbor Maintenance Tax (HMT) was created by the Water Resources Development Act of 1986. The HMT is a means for the US government to raise funds to pay for the dredging and maintenance costs of US coastal and Great Lakes ports, and specifically the dredging of harbor channels to meet required shipping standards. Other maintenance costs paid for by the HMT include repair of breakwaters, and the operation of the Soo Locks. Prior to 1986, US Treasury general funds were used to pay for this maintenance. The dredging of port berths has been, and remains the responsibility of individual port authorities or terminal operators.

The HMT is applied to the value of cargo being loaded or unloaded from a vessel, and is assessed on imported cargo, domestic cargo and the transport of passengers moving through US ports, including Maritime Transportation System (MTS) ports. The owner of the cargo, not the vessel operator nor port is responsible for paying the HMT, and export cargo is not taxed. The HMT is a tax imposed on cargo using the marine mode only: cargo moving on competing modes of transportation such as trucks and railroads does not pay HMT.

Tax revenues from the HMT are deposited into the Harbor Maintenance Trust Fund (HMTF), which was also created by the Water Resources Development Act of 1986. Each year, Congress appropriates the funds from the HMTF to the US Army Corps of Engineers (USACE) for harbor maintenance and dredging.

There is no direct link between the inflow of tax revenue from the HMT into the HMTF and outflow of dredging funds from the HMTF to the USACE. Congress appropriates funds for dredging, but not all of each year’s tax receipts are spent. In 2018, about $1.7 billion (USD) in revenue was received from the HMT, but only $1.54 billion (USD) was appropriated. As a result of many years of under-spending relative to revenue, HMTF has an estimated $9.3 (USD) billion surplus.

The US portion of the MTS currently has a significant backlog of USACE maintenance work, including:

  • A $160 million (USD) backlog for dredging channels and harbors.
  • A $320 million (USD) backlog for maintenance and replacement of breakwaters and other navigation structures.
  • $75 million (USD) of upgrades for the Soo Locks. This cost of upgrades does not include the cost of construction of a new lock, which is discussed at [INSERT LINK TO SOO LOCKS CARD HERE].

Given these unaddressed maintenance needs, and the large HMTF surplus, Section 2101 of the 2014 Water Resources Reform and Development Act(WRRDA) called for full use of HMT tax receipts each year by 2025. The following 2016 Water Infrastructure Improvements for the Nation Act provided further guidance on targets for spending. For the past five years, Congress has met the spending targets established by the two acts above.