The People of America's Oil and Natural Gas Indusry

Waterways Infrastructure: Supplying America

Mark Green

Mark Green
Posted April 19, 2016

The United States has about 25,000 miles of navigable waterways and channels – vital transportation infrastructure for the delivery of raw materials and products that American consumers count on every day. Yet, as vital as these waterways are, they don’t always get as much attention as highways, roads and railroads.

With Congress likely to take up legislation that will include funding for waterways in the next month or so, it’s a good time to link that debate with the critical role water-borne commerce plays. API’s Robin Rorick, group director for midstream and industry operations, recently briefed reporters on the nation’s pressing needs in the area of waterway infrastructure. Rorick said one key challenge helping the issue gain notice:

“What we’re finding as an industry when we talk about the various modes of infrastructure is that by far the community at large, the country at large, is least familiar with waterways. And I think most people kind of imagine that the goods that come into Wal-Mart, into Home Depots, whatever, magically appear on our shores and end up in the stores. So unless you live in a port city or along the Mississippi River oftentimes you find that people are largely unaware of the waterways.”

A couple of charts help illustrate the importance of U.S. waterways. First, when you’re talking about $3.8 in total U.S. trade (2013 data), waterways conveyed $1.7 trillion, nearly half the total:

foreign_trade

The chart below shows the breakdown of commodities transported via U.S. waterways:

commodity

According to Rorick, 40 percent of all crude arriving at U.S. refineries is delivered by water.

The critical need is for upkeep. Waterways and harbors are subject to silting, which narrows channels and can force vessels to reduce cargo sizes to avoid touching bottom. In addition, a number of waterways depend on locks to move vessels up and down in elevation. The average age of locks in the U.S. now exceeds 50 years. These are potential chokepoints on waterways that can cause delays and increase cost. Rorick:

“We’re already seeing impacts now for companies that are having to light-load during operations. We’re already seeing impacts now where some vessel traffic is starting to be limited, starting to build in the costs because vessel movement is slower because where there used to be two lanes now there’s a bottleneck and they have to use one.”

These are critically important because of the changes in transportation flows brought by the U.S. energy revolution. Rorick:

“This oil renaissance, this energy renaissance … we’ve gone from moving products from the coasts inward to supply the refineries in the Midwest, to now we’re at the point where we’re producing so much crude through the Bakken and even up into Canada that we’ve got an over-supply in the Midwest. We’re now seeing much more crude being moved down south on the Mississippi to go back onto the coasts. … We’ve really switched the dynamics of moving crude.”

This graphic depicts conditions on the Gulf Intracoastal Waterway, which illustrates an example of overburdened waterway infrastructure:

delays

It’s vital for U.S. water-borne commerce that the two relevant trust funds – the Harbor Maintenance Trust Fund and the Inland Waterways Trust Fund – be adequately funded and that the money be spent appropriately on maintaining and improving this national infrastructure. Rorick:

“It’s a critical component of competitiveness for our industry. … Without a well-functioning waterway system that level of flexibility, that level of competitiveness goes away very, very quickly. We advocate at API for an all-of-the-above approach to the infrastructure system to support oil and gas development. Waterways is certainly no different from that.”


ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.