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HOW RELIABILITY OF THE 

INLAND WATERWAY SYSTEM IMPACTS 

ECONOMIC COMPETITIVENESS 

(112–82) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

APRIL 18, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

BOB GIBBS, Ohio, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington, 

Vice Chair 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

JEFFREY M. LANDRY, Louisiana 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

JOHN L. MICA, Florida (Ex Officio) 

TIMOTHY H. BISHOP, New York 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

RUSS CARNAHAN, Missouri 

DONNA F. EDWARDS, Maryland 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

JASON ALTMIRE, Pennsylvania 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

MAZIE K. HIRONO, Hawaii 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Major General John W. Peabody, P.E., Commander, Mississippi Valley Division, United States Army Corps of Engineers ................................................... 8 

Mark Knoy, President and CEO, American Commercial Lines and Jeffboat ..... 8 

Martin Hettel, Senior Manager, Bulk Sales, American Electric Power, River 

Operations ............................................................................................................ 8 

Robert C. Dolence, Vice President, Leonardo Technologies, Inc. ......................... 8 

Mike Steenhoek, Executive Director, Soy Transportation Coalition ................... 8 

Kristin Meira, Executive Director, Pacific Northwest Waterways Association .. 8 

James A. Rossberg, Managing Director, Engineering Programs, American 

Society of Civil Engineers .................................................................................... 8 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Russ Carnahan, of Missouri .......................................................................... 40 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Major General John W. Peabody, P.E. ................................................................... 44 

Mark Knoy ............................................................................................................... 49 

Martin Hettel ........................................................................................................... 52 

Robert C. Dolence .................................................................................................... 58 

Mike Steenhoek ....................................................................................................... 68 

Kristin Meira ........................................................................................................... 73 

James A. Rossberg ................................................................................................... 77 

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(1) 

HOW RELIABILITY OF THE 

INLAND WATERWAY SYSTEM IMPACTS 

ECONOMIC COMPETITIVENESS 

WEDNESDAY, APRIL 18, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON WATER RESOURCES

AND ENVIRONMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:07 a.m. in Room 

2167, Rayburn House Office Building, Hon. Bob Gibbs (Chairman 

of the subcommittee) presiding. 

Mr. GIBBS. Good morning. This hearing for the Water Resources 

and Environment Subcommittee of the Committee on Transportation and Infrastructure will come to order. 

I want to welcome everybody today. In this committee hearing 

we are dealing with how reliability of the inland waterways system 

impacts economic competitiveness. 

I will start here with my opening statement, and we will turn it 

over to Ranking Member Bishop. 

Again, welcome. Transportation savings are a key factor in economic growth. As fuel prices continue to escalate, waterways transportation becomes an even more viable alternative for shippers, but 

an unreliable transportation system will inject uncertainty into decisions made by U.S. farmers and manufacturers, making U.S. 

products more uncompetitive in world markets. 

While the Nation supports our rightfully called ‘‘Nation’s gateways,’’ the inland navigation system provides access to foreign export markets for manufacturers and commodity producers. 

Water transportation is the most fuel efficient, least polluting, 

safest and least expensive means of moving cargo. 

In addition, waterways provide freight mobility for products that 

are too large to move by any other means. 

There are also some industries located on a river that are completely dependent on the inland waterways system to bring in the 

raw materials to their facilities. 

Trade, especially global trade, is increasing. That means the need 

for transportation services will continue to grow and grow rapidly. 

The question is not whether it will be rail or truck or boats, the 

question is whether or not we can produce an efficient integrated 

network of airports, railroads, highways, waterways and ports, that 

can respond to a changing world economy. 

2 

When we are trying to run this mode for a national integrated 

transportation system with infrastructure that was largely built before World War II, we do not do that for roads, rail or aviation. 

While there is room for improvement in those sectors as well, in 

general, we have modernized in those areas and our economy has 

benefitted from those investments. 

When it comes to the inland waterways system, we have been investing too slowly for too long. 

Fifty-seven percent of our inland system is more than 50 years 

old, and 37 percent of that system is more than 70 years old. It is 

literally falling apart and we are falling behind. 

Navigation outages along the system are increasing. For instance, the high river outages have increased from 25,000 hours in 

2000 to 80,000 hours today. 

This trend of increasing outages is expected to continue, while it 

affects the reliability of the system, it also foretells the likelihood 

of a major physical failure at one of the structures. 

Without some rehabilitation and rebuilding, we can expect to pay 

more each year for an increasingly unreliable system. 

The Corps of Engineers is charged with maintaining and improving the inland waterways system with the authorities and the 

funding provided by Congress each year. 

For decades, the Corps had made to do with constrained funding, 

leaving the Commanders with no choice but to defer some maintenance projects and reduce operations at some of the locks. 

I am concerned that if the Corps reduces the efficiency of some 

parts of the system, other segments are adversely affected. 

If this cycle is not broken, we are going to lose water transport 

as a viable part of our intermodal transportation system, completely diverting cargo from water to rail that would require hundreds of thousands of additional railroad cars and an additional 

2,500 locomotives. 

If the cargo that is currently moved by the waterways had to 

move by truck, it would require an additional 58 million trucks 

moving on already congested highways annually. 

After Hurricane Katrina, it became obvious that the warning 

signs were there all along, but many experts have been telling us 

for years that conditions were ripe in the New Orleans area for a 

disaster. 

Today, we are getting a similar warning on the Nation’s inland 

waterways system of transportation. 

Finding alternative ways to move cargo will be expensive if not 

impossible. If transportation costs go up, the competitiveness of 

American products in the world market goes down. 

I would just add I think some of our competitors in the world 

markets are making those investments and putting us at a disadvantage and uncompetitiveness that will cost us in the long run. 

Addressing the infrastructure needs of the inland waterways system is not about economic benefits to a few barge companies, it is 

about keeping American farms, manufacturers and businesses competitive and growing American jobs. 

Letting the inland waterways system decline further would be an 

economic disaster to add to the Nation’s already significant fiscal 

problems. 

3 

Having an inland waterways system that is a viable alternative 

will keep costs down among all modes of transportation. If you take 

inland waterways out of the mix of transportation, in terms of 

transportation options, costs will go up, American products will become less competitive in the global marketplace, and that means 

lost jobs. 

That is why I can say I am a fiscal conservative and I support 

investing in America where those expenditures stoke the fires of 

our economic engines and create jobs throughout our economy. For a tiny percentage of the $1 trillion failed stimulus program in 2009 or the $450 billion jobs program recently suggested by the 

administration, we could spend that $8 billion necessary to recapitalize the inland waterways system, to finish the projects under 

construction and begin and finish the slate of authorized projects. 

Given our economic conditions, I know that coming up with additional public money is going to be a huge challenge. 

I think it makes sense to explore financing options. The administration has suggested a new lockage fee and the Inland Waterways 

Users Board has developed a comprehensive plan of increased user 

fees and changes to the current cost sharing arrangement. 

While these ideas deserve more consideration, I think it is time 

to think further outside the box and consider enhanced public-private partnerships. 

A significant part of project delays has come from project funds 

being parceled out to the Corps of Engineers in small amounts that 

drag the project out over many years than necessary. 

Perhaps a private investor could supply all the funds needed upfront and pay back over an extended period of time. I think this 

is a possible paradigm worth exploring. 

I welcome our witnesses today and look forward to hearing from 

you. At this time, I will yield to my ranking member, Mr. Bishop, 

for any comments you may have. 

Mr. BISHOP. Thank you very much, Mr. Chairman. I appreciate 

you holding yet another hearing on the declining state of our Nation’s infrastructure. 

Today’s hearing reinforces what most of our constituents already 

know, that America’s system of infrastructure is crumbling and 

that consequences that result from infrastructure congestion, 

unreliability and failure are widespread and impact all sectors of 

the economy. 

This morning we will hold our second hearing on the long-term 

challenges facing the movement of goods and services along our 

Nation’s inland waterways system. 

As one witness from our last hearing said on this issue: ‘‘The inland waterways system is one of this country’s greatest assets that 

has allowed the low-cost movement of large bulk commodities in an 

efficient and timely manner.’’ 

Yet as the chairman also noted at our last hearing, our water resources infrastructure, especially our inland waterways system, is 

falling apart faster than we can fix it. I agree. 

In my view, we are underinvesting in our Nation’s critical infrastructure systems, including our highways, mass transit, sewers, 

and other water related infrastructure, as well as the projects carried out by the Corps of Engineers. 

4 

What I cannot seem to rectify are statements in strong support 

of the benefits that come from sustaining the projects and activities 

of the Corps while Members vote time and again to slash funding 

for these very same projects and activities. 

The rhetoric does not match up with the actions, and this is troubling. 

In my view, our infrastructure will only be as good as our willingness to pay for it. If we want a world-class infrastructure network, then we need to support the resources necessary to pay for 

it. 

Unfortunately, in recent months, we have seen a concerted effort 

by some in Congress to go in the opposite direction, which in my 

view would hasten the reality that we warn against today. 

Over the past year, this chamber has insisted on massive cuts to 

the appropriations of the U.S. Army Corps of Engineers, the Federal agency responsible for the construction and maintenance of 

much of the Nation’s water related infrastructure. 

For example, over the past two appropriations periods, the Republican led House has recommended cuts of close to 25 percent 

from the Corps’ construction account, which is the principal account responsible for moving forward the major construction and 

rehabilitation projects along the inland system. 

Similarly, the House has voted in support of significant cuts to 

the Corps’ operation and maintenance accounts, that according to 

our witnesses’ testimonies have strained the ability of the Corps to 

keep our existing water related infrastructure up and running. 

Unfortunately, these cuts mark only the beginning of the Republican leadership’s long-term plan for the Corps. The long-term plan 

for the Corps is what is displayed before you on these screens. 

Under the Republican House budget, approved just before the 

Spring District work period, and for which every Republican of this 

committee save one, Representative Duncan of Tennessee, voted 

for, we can expect to see significant sustained cuts to the Corps’ 

budget over the next 5 years to the point where total appropriations for the Corps may dip below $4 billion within the next 2 fiscal 

years. 

That would represent more than a 25-percent reduction to the 

total Corps’ appropriations over 5 years, not counting for inflation. 

With all due respect to the witnesses, I hope someone can explain to me how we can even expect to maintain the adequacy of 

the inland system, let alone make recommended improvements 

with forecast reductions of over 25 percent of the Corps’ construction operation and maintenance activities. 

Later this morning, the Corps will highlight difficulties in maintaining the current system with diminishing funds, and how it 

must continuously defer necessary maintenance and rehabilitation 

to some future date. 

My fear is that by knowingly providing the Corps with fewer resources than its current portfolio of projects requires, we are only 

increasing the likelihood that a major failure on the inland system 

will occur. 

We have been warned. If the Ryan budget is maintained, in my 

view, we will have chosen to ignore these warnings. 

5 

In my view, it is irresponsible for Congress to expect our Nation’s 

infrastructure to keep pace with all that our modern economy requires when we do not provide the resources necessary to even 

properly maintain these critical assets. 

Similarly, it is irresponsible for this committee to continue to ignore the calls of stakeholders, Republican and Democratic administrations, and others to address issues surrounding the Inland Waterways Trust Fund that currently provides half of the cost of construction and major rehabilitation for projects in the inland system. 

We all know that the greatest limiting factor for additional capital investment in the inland waterways system is the availability 

of funds in the Inland Waterways Trust Fund. 

There was almost uniform agreement at our last hearing that the 

current structure is broken and in need of attention. 

To date, we have been presented with an array of potential alternatives, ranging from the lockage fees proposed by both the Bush 

and Obama administrations, the proposal to generate additional 

revenues that was included as part of President Obama’s jobs bill 

last Fall, and the capital development plan recommended by the 

Inland Waterways Users Board. 

We have seen the offer of the administration to work with Congress to resolve this issue and the recognition from other committees that it is our responsibility to come up with a solution to this 

challenge. 

Now is the time for this committee to roll up its sleeves and work 

through these proposals and others to address the long-term needs 

of the inland waterways system. 

To that end, I have requested, as you know, Mr. Chairman, that 

we jointly hold a working roundtable to start moving this process 

forward. 

I am hopeful that each of the witnesses here this morning as well 

as other stakeholders be asked to begin such an effort in the very 

near future. 

This issue and the long-term needs of our entire water related 

infrastructure systems are far too important to delay any further. 

Thank you very much, Mr. Chairman. I yield back. 

Mr. GIBBS. At this time, before I introduce the witnesses, I want 

to recognize Congressman Todd Young from Indiana for special 

privilege. Go ahead. 

Mr. YOUNG. Thank you, Chairman Gibbs and Ranking Member 

Bishop. I applaud the committee for convening this very timely and 

critical hearing on the reliability of the inland waterways system, 

and how it impacts our economic competitiveness. 

As a Representative of one of the major inland waterways port 

cities, Jeffersonville, Indiana, I am dedicated to seeing that our Nation’s inland waterways remain a commercial super highway capable of moving products to producers and goods to consumers. 

I am deeply thankful and honored as all my colleagues are to 

have Mark Knoy, a constituent, and president and CEO of American Commercial Lines, here today to testify and share his expertise on the economic impact of the inland waterways. 

As the son of a river boat captain, Mark grew up with firsthand 

knowledge of the waterways system. He worked his way from deck 

6 

hand to pilot and eventually started his own fleeting business with 

his father. 

Before joining American Commercial Lines, he was vice president 

at American Electric Power Fuel Emissions and Logistics Group, 

and president of AEP River Operations. 

Among other responsibilities, he currently serves as director of 

the Corps of Engineers’ Inland Waterways Users Board, and vice 

chairman of National Waterways Foundation, and is former chairman of both the Waterways Council in the Midwest Region of the 

American Waterways Operators. 

ACL is one of the Nation’s largest and most successful marine 

transportation and manufacturing companies, and I am proud they 

have made Jeffersonville, Indiana, home. 

ACL is an industry leader in efficiency, safety, and innovation, 

and I look forward to hearing Mark’s insight into the industry’s 

most pressing challenges, as well as potential reform proposals. 

I thank the chairman and I yield back. 

Mr. GIBBS. Thank you. At this time, I want to recognize the 

ranking member of the full Transportation Committee, Mr. Rahall. 

Mr. RAHALL. Thank you, Mr. Chairman. I just very briefly want 

to commend you for calling today’s hearing. I think this is a very 

critical issue for our Nation, not only are our inland waterways’ operators responsible for number one, providing jobs for our people, 

but they are certainly important for this Nation’s national security 

and safety. 

You are important as far as moving goods, especially the coal 

that is so well produced in my part of the country, and moving that 

coal to its markets, both domestically and worldwide. 

I commend you, Mr. Chairman. I also by way of passing note bipartisan legislation that has been introduced and I believe pending 

before this body, which is H.R. 4342, which has a wide range of 

supporters, both from the labor community, from the business community, and from the environmental community. 

That legislation is called ‘‘The Inland Waterways Capital Development Plan.’’ 

I say that because I believe we could bipartisanly address the 

critical issues facing our inland waterways’ operators. 

Thank you, Mr. Chairman. 

Mr. GIBBS. Thank you. At this time, I want to introduce our witnesses. 

Our first witness is Major General John Peabody, Mississippi 

River Valley Division, United States Army Corps of Engineers. 

I do want to congratulate him in his new position. He moved 

from Great Lakes to the whole Mississippi Basin. 

Mr. Knoy was just introduced by his congressman. 

Mr. Martin Hettel is senior manager, American Electric Power 

River Operations. 

Mr. Robert Dolence, vice president, Leonardo Technologies. 

Mr. Mike Steenhoek, executive director of the Soy Transportation 

Coalition. 

Ms. Kristin Meira, executive director, Pacific Northwest Waterways Association, and Mr. James Rossberg, managing director of 

engineering programs of ASCE, Association of Civil Engineers. 

7 

I have just been informed we have some more statements, so we 

will get back to you in a minute, General Peabody, in a second. 

Mr. Carnahan, go ahead. The floor is yours. 

Mr. CARNAHAN. Thank you, Mr. Chairman. I want to welcome 

the panel and really thank the chairman and ranking members 

from our side for being here, for their leadership on this issue. I 

am going to ask unanimous consent to submit my full opening 

statement for the record. 

Just to say briefly how important this is for our country, for our 

economy, for jobs, particularly for cities like St. Louis that I represent. This is a big deal. 

This river system, this inland waterways system, really connects 

our country together in ways that are vital for our economy. 

This is a win-win. Too many times the different modes of transportation get into this competition. This is a way, I think, for all 

those modes to look at how they can work together to really create 

a functioning, modern intermodal system in this country that is 

going to help all modes of transportation. 

That is why I am especially proud to be an original co-sponsor 

of H.R. 4342, and all the groups that have come together behind 

that to actually get some of these things done. 

I appreciate the way this coalition has stepped up to the plate, 

and we welcome you all here today. 

Mr. GIBBS. Ms. Johnson? Go ahead. 

Ms. JOHNSON OF TEXAS. Thank you very much Mr. Chairman 

and Ranking Member Bishop for holding this hearing, as it is critical that we maintain and improve our inland waterways system. 

Failing to maintain these waterways will stifle trade and curtail 

economic competitiveness. 

Having served both as ranking member and chair of this subcommittee, I am fully aware of how important it is to the country 

and most especially to my State. 

Inland waterways are a significant component of our Nation’s 

marine transportation system, and in Texas, trade and the ability 

to move goods is the life blood of our economy. 

Texas has more than 1,000 miles of channel maintained by the 

Corps of Engineers, which I highly appreciate, and Texas ports create nearly 1 million jobs. 

The maritime industry represents over $135 billion in economic 

value to my State. 

If our inland waterways system is not maintained, that means 

loss of trade opportunities, delay in movement of commodities, and 

the potential to lose thousands of jobs. 

I am realistic about the current weakness in our economy and 

the difficult fiscal climate, but without these adequate funds for 

these waterways, we are doing far more harm to American economic competitiveness. 

I welcome the opportunity that this hearing brings to advance solutions to address the insolvency of the Inland Waterways Trust 

Fund. 

Without an adequate maritime transportation system, the U.S. 

will lose its competitive edge in this global economy. 

Thank you and I yield back. 

Mr. GIBBS. Thank you. General Peabody, welcome. 

8 

The floor is yours. 

TESTIMONY OF MAJOR GENERAL JOHN W. PEABODY, P.E., 

COMMANDER, MISSISSIPPI VALLEY DIVISION, UNITED 

STATES ARMY CORPS OF ENGINEERS; MARK KNOY, PRESIDENT AND CEO, AMERICAN COMMERCIAL LINES AND 

JEFFBOAT; MARTIN HETTEL, SENIOR MANAGER, BULK 

SALES, AMERICAN ELECTRIC POWER, RIVER OPERATIONS; 

ROBERT C. DOLENCE, VICE PRESIDENT, LEONARDO TECHNOLOGIES, INC.; MIKE STEENHOEK, EXECUTIVE DIRECTOR, 

SOY TRANSPORTATION COALITION; KRISTIN MEIRA, EXECUTIVE DIRECTOR, PACIFIC NORTHWEST WATERWAYS ASSOCIATION; AND JAMES A. ROSSBERG, MANAGING DIRECTOR, 

ENGINEERING PROGRAMS, AMERICAN SOCIETY OF CIVIL 

ENGINEERS 

General PEABODY. Thank you, Mr. Chairman, Mr. Bishop, and 

distinguished members of the subcommittee. 

It is an honor for me to testify before you today on the inland 

waterways operated and maintained by the Corps of Engineers and 

the thousands of professionals charged with making these systems 

work. 

I currently command the Mississippi Valley Division but my previous job, as you alluded to, Mr. Chairman, was in command of the 

Great Lakes and Ohio River Division, where I also developed intimate familiarity with the challenges of this issue. 

The Corps of Engineers facilitates commercial navigation by providing safe, reliable, cost-effective and environmentally sustainable 

waterborne transportation systems. 

On the inland waterways, the Corps constructs, operates and 

maintains, rehabilitates and recapitalizes locks, dams, levees, 

floodways, and many other project features that enable vessels to 

transport cargo along 12,000 miles of waterways. 

This system includes 221 operable lock chambers and associated 

dams at 178 active sites. About 9,000 miles of these waterways are 

within the greater Mississippi River Basin. 

The Mississippi watershed is the largest naturally navigable 

river system in the world. Thanks to well over a century of investments by the Nation, the Corps has engineered structures throughout this watershed that resulted in a navigable network of interior 

waterways that in combination with the coastal system is longer 

than the navigable systems in the rest of the world combined. 

The watershed drains a vast area, including one of the world’s 

largest contiguous areas of productive farmland and major sources 

of underground mineral and energy wealth. 

This gives the U.S. a unique economic advantage in enabling the 

inexpensive movement of goods from its interior to the gulf coast 

for export and internally to the United States for domestic consumption and industrial production as well. 

I draw your attention to one example of hundreds that we could 

provide of photos of the crumbling infrastructure that has already 

been mentioned. I keep on my desk two examples as a daily reminder to me of this challenge. 

This right here is a hunk of concrete I picked up at Allegheny 

2 3 years ago when I visited that project. 

9 

This is difficult to see, but the nut on your right is a greatly deteriorated nut that was taken as part of routine maintenance off the 

Calcasieu system in Louisiana. 

The nut on your left is what it is supposed to look like. 

However, this competitive advantage is threatened by the aging 

of America’s infrastructure which will require major investment or 

perhaps divestment, to sustain its reliability. 

Our prior success in building engineered infrastructure taught 

Americans to expect that this infrastructure has always been, and 

will always be, there for us. But like everything built by man, infrastructure has limits. It must be properly maintained to ensure 

and extend its useful life. It must be periodically rehabilitated 

when it begins to wear out and deteriorate. When no longer viable 

to rehabilitate or economical to maintain, it either must be recapitalized, repurposed, or removed. 

The Corps’ portfolio of locks and dams has an average age of 60 

years. These structures have performed well but many of them are 

showing obvious signs of wear and tear. 

I draw your attention to the video here. What you are seeing is 

the collapse of a wall along the pool just above the Lockport Lock 

and Dam, in the Upper Illinois system. That was an 1890s vintage 

concrete wall that sloughed off while we were rehabilitating the 

project. 

This was not built by the Corps. It was inherited by the Corps, 

I think, in the 1970s or 1980s. 

In a select few cases, the condition of a project has deteriorated 

to a point that catastrophic failure is a real possibility, not a high 

probability, but a real possibility. 

In all such cases with which I am familiar, there is an active construction project to replace or remediate the issue. 

The Corps’ ability to recapitalize this system, however, is limited 

by the Inland Waterways Trust Fund constraints on construction, 

most of which goes to the Olmsted Project in recent years. 

To avoid possible catastrophic failures, the Corps has stepped up 

monitoring the system’s condition via periodic inspections and increased scheduled maintenance, but the general reliability of the 

system is declining as unscheduled lock outages have doubled in 

the last decade. 

On the screen now is one of the sources of possible failure. It is 

not just the crumbling infrastructure but from time to time, there 

are operational challenges with the navigation industry. This is a 

barge that struck the dam gates on Lock and Dam 25 that necessitated a shutdown and significant expenditures to repair it. 

Other indicators also tell us that this trend is increasing, this 

trend of declining reliability. 

For the last decade, the Corps has been actively pursuing several 

initiatives to address this challenge to include increased efforts to 

document project conditions and prioritize resources, efficiency initiatives to reduce equipment, cut excess operations capacity, regionalize assets across multiple districts, and other efforts. 

We also studied lock and dam construction projects which revealed some issues for improved construction management, and recently the Corps partnered with the inland waterways navigation 

industry to develop ideas for a long-term approach to recapitalizing 

10 

infrastructure. The report identified several ways to strengthen our 

project delivery processes, and we have incorporated many of its 

recommendations. 

The Corps is also embarking on a Civil Works transformation effort as part of a strategic plan to knit together these and other efforts. The desired effect will be more effective and efficient processes to deliver Corps’ projects and manage them with maximum 

efficiency. 

Current revenue trends, however, makes sustaining our full infrastructure portfolio unaffordable. We have made, and will continue to make, hard choices and tradeoffs about prioritizing resources to deliver the greatest return for the money available. 

These tradeoffs include such things as reducing hours of operations 

at some of our lower use locks. Without additional funding or revenue sources, we may be forced to put some projects in caretaker 

status in future years. 

Mr. Chairman, I conclude by representing to you the conditions 

that our workforce operates under, the photo that was just on the 

screen shows our operators who were repairing the Markland gate 

failure which occurred approximately 2 years ago. 

On behalf of the thousands of unheralded but dedicated Corps’ 

operations professionals who labor dutiful and long hours and often 

in dangerous conditions, Mr. Chairman, Mr. Bishop, members of 

the subcommittee, I thank you for the opportunity to testify, and 

I look forward to your questions. 

Mr. GIBBS. Mr. Knoy, the floor is yours. 

Welcome. 

Mr. KNOY. Good morning, Chairman Gibbs, Ranking Member 

Bishop, and members of the subcommittee. 

I am Mark Knoy, president and CEO of American Commercial 

Lines and Jeffboat. We are based in Jeffersonville, Indiana, and 

have 2,250 employees, 1,450 in the barge transportation segment 

and 800 in our barge manufacturing segment, Jeffboat. 

I appreciate the invitation of the subcommittee to appear today 

and the initiative of our Congressman, Todd Young, to bring perspective to the vital issue of reliable waterways transportation. 

My testimony today will cover three key topics, accountability, 

reliability, and a plan for addressing the challenges of aging infrastructure which support operations on our most efficient transportation system, the inland waterways. 

Where is the accountability today for stewardship of our taxpayer 

provided funds for construction and rehabilitation of inland waterways infrastructure? 

In the private sector, a major cost overrun of a capital investment program would be subjected to rigorous management oversight and direct intervention when fiscal controls went awry. 

However, thus far, our Government treats a fourfold increase in 

the estimated cost of just one project as no big deal. 

For too long, too little scrutiny has been provided to the construction technique of this project. Congress has only recently been informed that the project has increased in cost by 50 percent, $1 billion, in the last year. 

I am, of course, talking about the Olmsted Lock and Dam Project 

on the Lower Ohio River. 

11 

Where is the outrage? Where is the accountability when a 7-year 

project will now take 32 years to construct or perhaps even longer? 

The new twin 1,200-foot locks were built using a traditional coffer dam technique. They will be 20 years old when the first barge 

locks through in the early 2020s. 

The dam is another story. It is being built using an experimental 

technology, building in the wet. Initially, this approach was envisioned as saving $60 million. However, the project is now woefully 

behind schedule and billions of dollars over budget. 

As a result, we have lost faith in the technology and in the investment in this project. 

Remember, please, that we, the industry and its customers, have 

absolutely no control over the decisionmaking for this project. 

We are expected to write a check for one-half of the project costs and have paid $650 million towards this project to date. With an 

annual appropriation of $150 to $185 million for construction of inland navigation projects, the consequences of Olmsted’s overrun 

means that almost no other investments will be made for any of 

the 24 projects authorized by this committee for modernization of 

the navigation system until at least 2022 at the earliest. 

Reliability. How can you have any confidence in the reliability of 

a system when 56 percent of the infrastructure is beyond its designed life? 

Where 34 locks are over 80 years old? When a significant failure 

at a lock could close a major freight transportation artery, a disaster for the local and national economy. 

When we are told by the agency managers that we are in a crisis 

and heading for a catastrophe, when a new initiative is being rolled 

out this week to do less with less by shutting down locks or reducing hours of service with the sole criterion being the number of 

commercial lockages at the facility. 

Ironically, we are experiencing more problems with our newer 

locks, like Robert C. Byrd and Mel Price, than we are of the older 

locks. 

We are on the brink of losing customers because of fear of 

unreliability. The industry is seeing the divergence of the smaller 

shipper category first, but larger shippers are questioning more 

often the continued investment in waterside facilities. 

How inefficient does our Government want our waterways to be? 

As you have already noted, Mr. Chairman, replacing 1 barge tow 

would require an addition of new capacity of 216 rail cars plus 6 

locomotives or over 1,000 tractor-trailer trucks to an already 

clogged surface transportation system. 

I am sure you are thinking that I must be a heck of an optimist 

to be in this business. For all the challenges, the inland waterways 

still serve as the Nation’s best transportation system. 

What is lacking is the will to make change, to embrace a vision 

of investment in waterways transportation. 

There is a plan, a good solid strategy for reforming our current 

approach and replacing outdated project delivery methods with on 

time and on budget performance. 

A plan for prioritizing our work, for funding the project construction requirement through a combination of user fees and cost sharing changes. 

12 

There are bipartisan champions who have authored this plan, 

the ‘‘Magnificent Seven,’’ we call them. Congressmen Whitfield, 

Costello, Duncan, Carnahan, Johnson, Congresswoman Terri Sewell, and Congressman Bob Aderholt. 

They have come together to propose legislation, H.R. 4342. 

Waterways are vital for the economy, energy, efficiency, and the 

environment. 

This is a farsighted vision for the future of our Nation’s inland 

waterways transportation system. 

Four of these Members of Congress serve on this committee, and 

we urge this subcommittee to act this year on H.R. 4342 as part 

of your Water Resources Development Act. 

Mr. Chairman and members of the subcommittee, we indeed face 

daunting challenges and great opportunities. 

The administration has not brought forth a realistic workable 

plan to address these challenges. Detractors of the current program 

offer no alternative, but there is one plan out there, H.R. 4342, and 

a good place to begin the discussion on the path forward. 

I look forward to working with the subcommittee to continue to 

provide the best transportation service to our Nation. 

Thank you, sir. 

Mr. GIBBS. Thank you. 

Mr. Hettel, welcome, and the floor is yours. 

Mr. HETTEL. Good morning and thank you, Chairman Gibbs and 

Ranking Member Bishop for allowing me to testify here today. 

My name is Martin Hettel. I have been employed within the 

river transportation industry for the last 32 years, 16 of these 

years have been with American Electric Power River Operations 

Division. 

AEP owns and/or operates 3,275 barges and 90 tow boats. Our 

headquarters is in Chesterfield, Missouri, and we have field offices 

in Pittsburgh, Pennsylvania; Lakin, West Virginia; Paducah, Kentucky; Convent, Louisiana; and Mobile, Alabama. 

AEP River Operations currently employs over 1,500 people. In 

2011, AEP River Operations transported over 74.4 million tons of 

cargo within the inland waterways system. Our traffic patterns 

move freight from the gulf coast between Brownsville, Texas, and 

Pensacola, Florida, between New Orleans and Catoosa, Oklahoma; 

St. Paul, Minnesota; Chicago, Illinois; Pittsburgh, Pennsylvania; 

and all points in between. 

Within the last few years, we have seen what is a very reliable 

transportation system deteriorate more and more each year to the 

point we now experience lock outages on a regular basis. 

While the reliability of the entire river transportation system is 

vital to AEP River Operations, of the 74.4 million tons of cargo we 

moved in 2011, 48.3 million tons were delivered into, out of, and 

within the Ohio River Basin. 

Therefore, the rest of my testimony will focus on the extraordinarily serious problems within the Ohio River Basin. 

Within the last 8 years, we have experienced several lock failures 

on the Ohio River. 

In 2003, Greenup was down for 52 days. In 2004, McAlpine experienced a total river closure for 10 days. 

13 

In 2005, the Hannibal Lock experienced a 13-day closure of the 

main chamber, and during that time, the auxiliary chamber failed 

which caused a 5-day total river shutdown. 

In 2009, Markland experienced a failure at the main chamber 

which lasted 154 days. In 2010, we had yet another failure at 

Greenup Lock, along with a closure at J.T. Meyers, an outage of 

Lock 52, that lasted 32 days. This outage at Lock 52 cost AEP 

River Operations $4.6 million in delay costs while waiting to transit that lock. 

These outages are in my graph here as Attachment 1 to my testimony. 

An outage at Markland that started July 11 of last year is still 

not operational. The lock is not expected to be operational until August 3 of this year. This will amount to a 389-day main chamber 

closure at Markland Lock. 

As of the end of last month, this outage at Markland has cost AEP River Operations already $3.8 million in delay costs. By the 

time this lock is back operational by August 3, the total cost to 

AEP River Operations is estimated at $5.5 million. 

In addition this year, we had another outage at Greenup scheduled for June 3 through September 1. This 90-day outage is expected to cost us $1.3 million in delay costs. 

When you add up the outage at 52 in 2010, Markland last year and this year and Greenup, AEP’s total exposure will be over $11.4 

million of delay costs. 

These outages are increasing each year. The Corps of Engineers 

predicts that by 2015, we will experience eight more lock outages. 

By the year 2020, they predict 14 lock chamber outages. By the 

year 2025, 18 lock chamber outages, and by the year 2030, 22 lock 

chamber outages. 

This is in my Attachment 2. Just for the record, green is good, 

red is bad. 

All these delays affect the consumer. As we all know, when the 

cost of transportation increases, the final cost to the consumer also 

increases. 

As we have seen in our day to day lives at the grocery store, 

when fuel costs increase, so do the costs of delivered goods to the 

market. When the cost of transportation of raw materials increases, 

the final cost to the finished product also increases. 

American Electric Power’s electricity to the consumer increases 

as our costs of delivering fuel to power plants increase. 

AEP has looked at the predicted lock failures and put together 

a program that estimates the additional cost to deliver fuel to our 

power plants, should we experience a catastrophic failure in the 

upcoming years. 

As an example, if both chambers at Willow Island fail as the 

Corps predicts in 2015, the cost to get fuel to our power plants via 

truck, rail, trans-loading around the lock or buying coal on the spot 

market, would be well over $22 million a month. 

The predicted lock failure is compounded by the recent EPA regulations put into law, particularly the Mercury and Air Toxics 

Standards, that will shut down coal power plants, with less availability for producing electricity coupled with a complete lock closure such as the Corps predicts at Willow Island, a situation could 

14 

very well arise that affects the reliability of an electricity grid potentially causing brownouts or perhaps even limited blackouts. 

Not only do these lock delays affect the consumer within this 

country, it can also affect a producer of materials that are exported 

out of this country. 

With the world markets that the United States competes in, increased costs of transporting these products can put the producers 

at a competitive disadvantage in the world marketplace. Thus, affecting the steel producers, the coal producers, the farmers, and 

anyone else who competes with the export of bulk commodities out 

of this country. 

AEP River Operations and hundreds of other companies and organizations believe one critically important step that Congress 

should take to address this situation is to approve and send to the 

President for his signature H.R. 4342, The Waterways Are Vital for 

Economy, Energy, Efficiency, and Environment Act of 2012. 

This legislation introduced by Congressman Whitfield and Congressman Jerry Costello, a member of this important subcommittee, and others, introduced on a bipartisan basis, would put 

in place what we believe is a balanced, comprehensive workable 20- 

year inland waterways system modernization investment plan. 

A second critical step that Congress should take is to ensure on 

a continuing basis the Corps of Engineers is provided with adequate operational and maintenance funds to keep the Ohio River 

and the remainder of the inland waterways functioning at an optimal level. 

Our Nation’s waterways are too important to do anything else. 

In closing, I would like to thank you again for this opportunity 

to testify, and I am pleased to answer any questions the subcommittee may have. 

Mr. GIBBS. Thank you. Mr. Dolence. 

Sir, welcome, and the floor is yours. 

Mr. DOLENCE. Thank you, Mr. Chairman and members of the 

subcommittee for inviting me to speak to the subcommittee today. 

I have submitted my entire statement for the record but will 

keep my opening remarks brief. 

My name is Robert Dolence. I am vice president and principal of 

Leonardo Technologies or LTI. LTI is a small privately held business incorporated in the State of Ohio with headquarters in Bannock, Ohio, and offices in Montana, Pennsylvania, New Hampshire, 

New York, Virginia, and West Virginia. 

LTI is an energy technology consulting firm focused on safe, affordable and environmentally acceptable production and use of energy. 

Our more than 100 professionals are involved in the fuel and energy cycles from production, upgrading, transporting, utilization 

and disposition of residual materials. 

I was invited to speak today regarding a study LTI performed in 

2011 for the U.S. Army Corps of Engineers titled, ‘‘Measuring the 

Impact of Monongahela Lock Closures on Forecasts of Utility 

Steam Coal Consumption, Sourcing and Transportation in the Ohio 

River Basin.’’ 

In this study, LTI was asked to assess the likely impacts to the 

regional and national electric utility industries and the coal indusVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
15 

try that provides fuel to those plants resulting from a catastrophic 

failure of any one of the three lock and dam sets, No. 2, No. 3, and 

No. 4, on the lower portion of the Monongahela River closest to 

Pittsburgh, Pennsylvania. 

I would like to note it is another great river city. 

The locations can be viewed on the map on page three of the 

written testimony. It is my understanding these lowest three lock 

and dam sets on the Monongahela River closest to Pittsburgh were 

selected because they are in the poorest state of repair and more 

susceptible to a catastrophic failure. 

For this study, it was decided to adopt the assumption of failure 

at one of these lowest three lock and dam sets, would shut down 

the entire traffic on the Monongahela River. 

Our modeling effort using the Greenmont Energy Model or GEM, 

automatically calculates the lowest cost transportation alternative 

for each of many coals into a single electric energy plant. 

It is important to note that the model does not evaluate or determine the adequacy of alternative transportation systems. It simply 

assumed that the alternate transportation capacity was available. 

Although not specifically evaluated in the study, it is likely that 

the alternate transportation system, if capacity exists at all, would 

at least be stressed, thereby putting further upward pressure on 

prices. 

Therefore, the results are considered a conservative estimate of 

impacts since the system would have to work harder to supply the 

electricity demand, and might even fail if there is a shortage of 

trucking and rail capacity. 

It was also beyond the scope to assess the interrelationships between river, rail, and truck transportation and the subsequent noncoal or non-electricity price impacts. 

These areas include, but are certainly not limited to, availability 

and price impacts to transportation fuel and non-coal commodities, 

highway traffic density increases, highway safety, and exacerbated 

physical impacts to highway and rail infrastructure with increased 

traffic. 

The Monongahela River Lock and Dam study resulted in the following conclusions: Under the liberal assumption of adequate over 

land transportation alternatives, no brownouts or blackouts occurred, but economic impacts were significant. 

Approximately 21 million individuals are affected by the direct 

impact of the Monongahela dependent plants of interest service 

areas. 

The ripple effect goes far beyond the plants of interest service 

areas, reaching out to a majority of U.S. electricity users, in excess 

of 200 million. 

Through domino effects of increased transportation costs compounded by electricity dispatch reactions associated with the loss 

of the Monongahela River waterway traffic, the cost of producing 

electricity increases almost across the entire United States. 

Our modeling indicates the resulting price paid by electricity customers nationwide would increase by as much as $1 billion annually. 

These impacts are single-year impacts that would occur repeatedly for each year the lock and dam remained inoperable. 

16 

The impacts noted are only electric price effects resulting from 

coal river traffic impedance. The impacts do not include other commodities currently transported on the Monongahela River, including petroleum, aggregates, grain, chemicals, ores and minerals, and 

iron and steel. 

If only one-half of the total 2008 tonnage, a little over 21 million 

tons, barged through the three Monongahela River locks of interest 

were transported by truck, that is assuming the other half could 

be shipped by rail, it would equate to an additional 1,500 20-ton 

tri-axial trucks every day, or more than 60 loaded trucks an hour 

entering the local roads and highways. This number does not include the empty truck return hauls. 

Although not part of the study, increased price of electricity 

causes an increase in production costs for businesses and cost of 

living for the general population, which typically results in a negative impact to economic growth. 

In other work by LTI, it was forecast that even with sustained low natural gas prices, maintaining less than $4 per million BTU 

natural gas cost levels for 50-plus years, coal maintains a significant role in electric fire generation, industrial and commercial use, 

and exports, with a total coal demand staying above the 1 billion 

tons per year level for the next 50 years. 

Based on the combined detailed modeling performed, LTI concludes the Ohio River navigation system is a vital component to ensuring safe, reliable, low-cost domestic energy, including electricity 

to our country. 

This concludes my prepared comments. Thank you for the opportunity to present the results of our study and my personal observations. I look forward to your questions. 

Mr. GIBBS. Thank you. 

Mr. Steenhoek, welcome, and the floor is yours. 

Mr. STEENHOEK. Thank you, Mr. Chairman and members of the 

subcommittee. 

In the interest of brevity, I am just going to confine my comments to four statements. 

Number one, transportation, particularly the inland waterways 

system, is not just a contributing factor to the economic competitiveness of U.S. agriculture in general and the soybean industry in 

particular, it is the predominant one. 

When you look at the cost our customers pay on the international 

marketplace for agricultural products, and for soybeans in particular, the reason why we in the United States are the most economical choice on the international marketplace is not due to our 

lower cost of production. It is due to the lower cost of transportation. 

We are not the only country that can produce what the international marketplace needs, but what sets us apart is our ability 

to deliver it to them in a cost-effective manner. 

The expansion of the Panama Canal really presents an opportunity for agriculture and freight interests in general, with the 

greater efficiency of maritime transportation, but that opportunity 

is incumbent upon us to make needed investments in our port infrastructure and our inland waterways system, otherwise, it will be 

a missed opportunity. 

17 

The next statement is our overall dilapidated locks and dams exhibited by unscheduled maintenance, mechanical breakdowns, and 

a threat of failure sends a terrible signal to those who utilize the 

system. 

How can we expect grain handlers in this country and other 

freight interests to invest millions of dollars in new facilities or upgraded facilities if they do not have the confidence that they can 

make those deliveries to their customers in a cost-effective manner? 

It is sending a real terrible signal to industry. We want rural 

America to be an attractive place for investments, and our concern 

is the unintended consequences, but it is an unambiguous consequence of our inability to invest in our inland waterways system, 

and really sends a discouraging message to that investment, that 

we in this country so desperately need. 

Number three, the third statement, how you allocate money is 

just as important as how much money you allocate. 

This is perhaps a blunt statement, but I think it is an accurate 

one, that if I were to design a funding mechanism that would result in consistent and dramatic cost overruns for our inland waterways system, I would design a system that we have right now, 

where there is great uncertainty, the money is not provided in one 

lump sum. 

As a result, you see work commence. You see work stop. That is 

a very inefficient way to maintain the system. 

I have been to the Panama three times over the last couple of 

years, and really have observed the Panama Canal Expansion 

Project and the Panama Canal right now. 

Here is a project that was commenced in 2007. It is slated to be 

completed in 2014. Actually, the Panama Canal Authority had to 

swallow some pride over the last week where they made the dire 

announcement that the canal expansion is not going to be completed in October of 2014, it will be completed in December of 2014. 

Actually, at the end of the day, it might be early 2015. 

What a contrast to how we do things in this country. The reason 

why they have such a superior record on deliverance of projects is 

not because they have superior engineers that we have in this 

country. We have wonderful engineers in this country. 

When you look at how they are financing this project, you see 

money provided in a lump sum. You see certainty of funding. That 

is a much more appropriate way to invest in major capital expansion projects. 

You see it replicated throughout the world. I think that we have 

a lot to learn. I think the country that built the Panama Canal has 

a lot to learn from the country that currently owns and operates 

the Panama Canal. 

Fourth and finally, the statement I would like to make is a predictably good inland waterways system is superior to a hypothetically great one. 

I think that we are failing on two fronts. Number one, we are 

failing on our ability to build these new and expanded locks. The 

testimony referenced—the earlier testimony referenced the 

Olmsted Project, and that is the quintessential example. 

18 

We are doing a poor job of building these new projects, but at the 

same time we are doing a poor job of maintaining the system we 

currently have. 

I think it would be a much better message sent to industry, to 

those who utilize the inland waterways system, if you can provide 

some greater predictability and certainty to the system, since we 

are asking them to make these millions of dollars in investments 

and explore these markets, domestic and international. 

I think that would be a much better message to send. Practicing 

good stewardship of this important system versus trying to develop 

something that is hypothetical. 

That concludes my comments, Mr. Chairman. I would be pleased 

to answer any questions. 

Mr. GIBBS. Thank you. 

Ms. Meira, the floor is yours, and welcome. 

Ms. MEIRA. Thank you. Mr. Gibbs, Mr. Bishop, members of the 

subcommittee, I am honored to participate in this panel and appreciate the opportunity to highlight our unique river system in the 

Northwest. 

We are grateful to the subcommittee for convening this hearing 

to focus on the needs of the Nation’s inland waterways. 

Founded in 1934, PNWA represents Columbia River, Puget 

Sound, and Northwest coastal interests on navigation, transportation, energy, regulatory and environmental policies. 

PNWA’s membership includes over 115 public ports, tow boat 

companies, steamship operators, ag and forest products producers, 

public utilities, manufacturers, and others in Oregon, Washington, 

Idaho, and Northern California. 

Our Nation’s economy relies on a safe, efficient and cost-effective 

multimodal transportation system. That system includes road, rail, 

air, and water. 

The Columbia-Snake River System is a critical piece of the Nation’s navigation portfolio, providing benefits not just for the Pacific 

Northwest, but far into the heartland of our country. 

The Columbia River is the Nation’s number one gateway for the 

export of wheat and barley, and when you consider the movement 

of soy and other grains, our river system is the third largest grain 

export gateway in the world. 

The Inland Columbia-Snake River System is a water highway 

that stretches from Vancouver, Washington, and Portland, Oregon, 

inland 360 miles to Lewiston, Idaho, and Clarkston, Washington. 

Our inland system is comprised of a 14-foot-deep navigation 

channel and a series of eight locks. These are the highest lift locks 

in the United States, and are among the highest in the world, with 

the John Day Lock tapping out at 110 feet. 

Our inland system handles over 10 million tons of commercial 

cargo each year, with a value of over $3 billion. 

I mentioned earlier that we are the top wheat export gateway in 

the Nation, roughly half of the wheat exported out of the deep draft 

Lower Columbia River arrives at those export facilities by barge. 

Other commodities that move on our inland system include petroleum products, containerized ag products, forest products, and 

large project cargo. 

19 

Our system provides some environmental benefits as well. A typical barge on the Columbia-Snake River System can carry 3,500 

tons. That compares with 100 tons per rail car and 29 tons per 

truck. 

We estimate that each year, barging on our system keeps 

700,000 trucks off the highways that run through the sensitive air 

shed of the Columbia River Gouge National Scenic Area. 

Early in the last decade, our colleagues at the Portland and 

Walla Walla Districts of the U.S. Army Corps of Engineers recognized that our aging locks would require strategic repairs to remain operational and reliable. 

They also recognize that these projects would need to be planned 

and executed to have the least impact to our regional and national 

economy. 

It is important to remember with the scale of our navigation infrastructure projects, a catastrophic failure of one of our lock dates 

would translate to at least a 1-year closure of that project. That is 

how long it takes to design, fabricate and install a lock gate of that 

size. 

We also do not have any smaller backup locks at our projects. Allowing our locks to degrade to the point of failure simply is not an 

option. 

A closure of one of our projects creates a bottleneck for the entire 

system. 

Beginning in 2006, the Corps and PNWA partnered to discuss 

the highest priority repairs, funding estimates, and timeline. 

The goal, minimize planned and unplanned system closures. This 

collaborative planning meant that our river system was well poised 

to execute funding made available through the 2009 American Recovery and Reinvestment Act. 

The Corps began working with stakeholders to prepare for new 

downstream gates at three of our projects, and major repairs at 

three other locks. 

A tremendous amount of coordination went into what was eventually a 15-week complete closure of our inland navigation system. 

This type of long-term plan closure had never been done on any inland waterway in the United States. 

We worked closely with the Corps for over a year to prepare 

growers, shippers, ports, tow boaters, steamship operators, and fuel 

companies, the media, the legislators, and the States of Oregon, 

Washington, and Idaho for this unprecedented closure. 

Special emphasis was placed on outreach to grain buyers overseas who were accustomed to sourcing U.S. wheat from the historically reliable Columbia-Snake River System. 

Every moment of the 14 months leading up to the closure was 

necessary to ensure that both domestic and international stakeholders were prepared for the shutdown of our system. 

I am pleased to say that this effort was a complete success, and 

a project for which the Corps, stakeholders, and Congress can truly 

be proud of. 

Because of the outstanding partnership between the Corps and 

stakeholders, impacts to our regional and national economy were 

minimized. 

20 

I want to note that the positive experience we had is not indicative of the economic impacts that would be suffered if there were 

an unplanned closure of our system. 

Because this was a well planned effort, shippers could decide 

whether to ship early, use alternate transport where available, or 

increase their storage locally with the intent to ship after the system reopened. 

A major study just completed at Washington State University 

confirmed that most producers attempted to either ship their goods 

prior to closure or after the system reopened. 

The lock closure demonstrated that the Columbia-Snake is key to 

the international competitiveness of many producers in our region, 

and is the preferred mode of transportation for many goods produced in our heartland. 

Last year’s closure addressed the most immediate needs on our 

river system, but we know that our projects continue to age, meaning more components will reach the end of their design lives. 

We continue to partner with our Corps’ Districts and our Division, and our joint goal is to identify major maintenance needs, predict system closures years in advance, and protect the reliability of 

our system. 

We realize every agency is facing funding shortfalls. It is imperative that our country continue to provide the infrastructure that 

makes commerce possible. 

It is our belief that future regional national economic competitiveness hinges on the availability of reliable navigation infrastructure, our water and highways. 

Thank you again for this opportunity to testify, and I am happy 

to answer any questions you may have. 

Mr. GIBBS. Thank you. 

Mr. Rossberg, the floor is yours. Welcome. 

Mr. ROSSBERG. Thank you. Mr. Chairman, Congressman Bishop 

and members of the subcommittee, the members of the American 

Society of Civil Engineers are pleased to provide our views on how 

the reliability of the Nation’s inland waterways impacts the economic competitiveness of the United States. 

Mr. Chairman, you have our complete written statement for the 

record, so let me just summarize a few key points. 

First, efforts by the administration and Congress to address the 

growing deficiency in investing in our waterways’ infrastructure 

have been largely ineffectual due to political considerations that 

give preference to deficit deduction and tax cuts over the badly 

needed and concededly expensive restoration of our Nation’s critical 

infrastructure. 

These policy failures at the White House and in Congress threaten our Nation’s global economic competitiveness. 

In 2009, ACSE’s report card for America’s infrastructure gave 

the Nation’s inland waterways a grade of D –, an indication that 

the system is near failure, that you have heard from other witnesses today. 

Neither the President nor Congress has done anything in the 

year since to improve upon that extremely dismal assessment, such 

as the adoption of a long-term systemic approach to improving the 

performance and condition of our national waterways. 

21 

Second, 47 percent of all locks maintained by the U.S. Army 

Corps of Engineers were classified as ‘‘functionally obsolete’’ in 

2006. 

Without the badly needed funding, by 2020, another 93 existing 

locks will be obsolete, or to put it another way, more than 8 out 

of every 10 locks now in service will be outdated. Most locks are 

now anywhere from 50 to 70 years old. 

The current system of inland waterways lacks resilience. Waterway usage is increasing, but facilities are aging, and many are well 

past their design life of 50 years. 

Recovery from any significant event will be hampered by the age 

and deteriorating condition of the system, posing a direct threat to 

the American economy. 

The estimated cost of repairing and modernizing the assets of the inland system is approximately $8 billion. Despite the obvious 

needs, the balance in the Inland Waterways Trust Fund has been 

declining for more than a decade. In April of 2010, the Inland Waterways User Board, a consortium of waterways users created by 

Congress, released a proposed investment strategy for the inland 

waterways system that would increase the 20 cent diesel fuel tax 

to 26 or 29 cents. 

Applying a tax of 26 cents to each gallon sold to the estimated fiscal year 2011 fuel sales would generate about $109 million annually or an additional $1 billion over 10 years. 

The tax rate for the Trust Fund has been 20 cents per gallon 

since January 1st of 1995. We believe that an increase in the waterways users’ fee is long overdue, and we concur with the IWUB 

recommendation that the current fee be increased between six and 

nine cents a gallon. 

ASCE’s support for the IWUB plan, however, is contingent upon 

two important considerations. First, any increase in the user fee 

should also include a provision to index that fee to the consumer 

price index and be adjusted every 2 years. 

And, second, any diesel fuel tax revenues received by the Trust 

Fund should be firewalled to establish discretionary spending limits in the same manner used for the Highway Trust Fund and the 

Aviation Trust Fund, and to reserve the Inland Waterways Trust 

Fund revenues exclusively for the reconstruction of a systems aging 

infrastructure. 

And lastly, our major point is the Corps of Engineers’ Civil 

Works Program has suffered from chronic underfunding for essential infrastructure systems. If allowed to continue, this trend will 

likely result in ever greater system failures and the consequent expenditures of tens of billions of dollars to rebuild what could have 

been built more economically in the first place. 

Following Hurricane Katrina in 2005, an ASCE study commissioned by the Corps reported that chronic underfunding and indifference to maintenance were the principal causes of the levy failures after Katrina. The President’s budget for the Civil Works Program in fiscal year 2013 and the House budget resolution would 

further reduce Federal investment in the Nation’s essential national Civil Works system. 

This week the House Appropriations Committee has drafted a 

bill that would set the Corps’ fiscal year 2013 budget at $4.7 bilVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
22 

lion, a decrease of nearly 6 percent over the fiscal year 2012 enacted level of $5 billion. The funding level in the legislation is inadequate to meet the needs of an aging waterways infrastructure and 

must be increased. 

Doing more with less is not a solution. It is a political slogan that 

ignores the consequences of continuing to underinvest in our essential infrastructure. America cannot compete in the world marketplace with 100-year-old locks, two shallow harbors, and promised 

investments in key infrastructure systems and a seeming blindness 

on the part of policymakers to the economic peril we face. 

Congress and the President can never say ‘‘we were not told.’’ 

Thank you. 

Mr. GIBBS. Thank you. 

I am going to start out the first round of questions, but I would 

first like to say I think everybody is in agreement that we have a 

challenge and potentially very even catastrophic issue before us 

that affects our economy and our standard of living in a large part 

of the country. 

I do want to start out with General Peabody. I think we need to 

talk maybe briefly about Olmsted. I do not want to point fingers 

at anybody, but I think maybe we can learn from the past, and I 

think there is plenty of blame to go around, and one, I think it 

comes out as the evidence of basically Congress’ failure over many, 

many years to fund the projects initially and get on with it. I know 

other things are factored in there, the studies, the requirements, 

and feel free to talk about that, General, too, why maybe there are 

some of the delays to that beyond what the Corps can do. 

But I want to give you a chance to respond a little bit on what 

is happening in Olmsted because that is taking so much of the capital budget and so much concern. I think that, like I said, we can 

learn from the past, but not to blame totally anybody’s fault in particular, but let’s see if we can use that as constructive. 

So, General, I will give you a chance to respond to some of the 

discussion we have had so far. 

General PEABODY. Thank you, Mr. Chairman. 

I would appreciate a little bit of leeway on the brevity aspect. I 

will try to be as brief as possible, but as I think you know, and you 

have visited there, this is a complex project. 

Let me focus on what I consider to be the bottom line. There are 

four points. First and foremost, the location of the Olmsted Project 

in the Lower Ohio River, just before the confluence with the Mississippi, makes it the hub of the inland marine transportation system in the Mississippi watershed. In recent years, the tonnage that 

passes through that location averages between 80 and 90 million 

a year, and if past is prologue, we would anticipate that that tonnage over the next couple of decades would continue to climb steadily above 100 million tons a year. So it is critically important to the 

Nation, and I believe coal is the largest commodity that goes 

through that location. 

Second, Lock and Dam 52. There are two locks and dams that 

the Olmsted project is replacing, both of which are in a highly deteriorated state. They were built in the 1920s, and they are sitting 

on timber piles. Lock and Dam 52, in particular the dam component, is very fragile. The wicket dam is sagging approximately 4 to 

23 

5 inches, and it is my belief that either Lock and Dam 52, or 

Charleroi on the Lower Monongahela River, are the two points in 

the system that are most likely to fail, given what I know. 

The challenge is that we do not have Superman x-ray vision so 

we cannot see inside these projects. We cannot see underground. 

Testing would require destructive processes which could set in motion a sequence that would result in catastrophic failure. So our 

state of knowledge is imperfect. 

Third, once complete, the transportation rate savings at Olmsted based on 2011 dollars are approximately $800 million a year. I 

think it is just under that, $780 or $790 million. Now, it is my understanding, and my information is a little bit dated, but the latest 

information I have is that the current estimate for the project completion in 2011 dollars is about $2.8 billion. The project pays for 

itself in just 4 years in transportation rate savings. 

Fourth, the Corps can, and does, deliver complex projects on time 

and under budget when enabled to do so. A great example of this 

is the Hurricane Storm Damage Risk Reduction System. This is a 

$14.6 billion project. Thank you for the multiple supplementals 

from Congress enabling us to do that. 

It was enabled by full funding upfront, which is not the Civil 

Works model for the vast majority of our projects. It was enabled 

by accelerated NEPA documentation and consideration by EPA and 

CEQ, and it was enabled by advanced risk-based cost estimating 

procedures which we have developed in the 20 years intervening 

since we began the authorization for the Olmsted Project, as well 

as other acquisition strategies that are much more innovative and 

involve industry much more upfront so that we have a greater clarity of the risk and industry can provide us the benefit of their 

knowledge. 

Finally, the final bottom line point I would make is the truth regarding Olmsted is very complex, but the bottom line to me is pretty simple. At the time that we developed the authorization and the 

feasibility study, we simply underforecast the technical complexity 

of putting the largest lock and dam system this country has ever 

built in the most dynamic location of the river anywhere in this 

country that we have ever built a lock and dam. Those are just 

brutal truths. 

And then, we suboptimized our way along the 20-plus years of 

execution. So that is the bottom line, Mr. Chairman. I can get into 

a lot of the details and the facts, and I would highlight a couple. 

If you accelerate for inflation, which is the only proper way, in 

my opinion, to measure cost, then the cost is a little bit less than 

double what the final estimate was at the time, shortly after the 

authority was passed because I think our final estimate was just 

slightly above what the original authorization was. 

We have sunk, and I do not have the precise figure, but it is 

close to $1.4 billion to date into this project. So those are sunk 

costs. We have done all the preliminary requirements that are required to do this, all the Civil Works studies processes, which goes 

back, I think, into the 1940s in this case. So this is a project with 

a lot of history behind it. 

We have all of the environmental and NEPA documents and cultural and historical documentation and mitigation plans put in 

24 

place. We have the planning and engineering and design complete. 

We have built all of the infrastructure that you saw in place that 

enabled us to build these 3,500-ton Lego blocks and put them into 

the riverbed. All that is sunk cost. 

To walk away from it or to try to go toward a different avenue, 

in my judgment, pending further analysis, which the Corps is 

doing, we would have to look at that very closely because there is 

a lot of effort and energy that has gone into this already. 

Now, the Corps is—and we started this under my watch, I think, 

as you are aware, Mr. Chairman. We talked to you about this when 

you visited the project back in August of last year—the Corps is reviewing all possible alternative ways forward. Those include changing to alternate construction methods, what some people call ‘‘in 

the dry,’’ but that is a traditional coffer dam. This is not a simple 

solution though because, again, most dynamic areas of the water 

river, 40-foot river stage change on an average year, which means 

the coffer dam has to be extremely robust and there is no bedrock. 

It is 300 feet down into alluvial river deposits before you hit bedrock. So you have to get friction piles down there. They are very 

expensive, technically complex, and it would likely be over-topped 

at some point, especially if we were to have a high water event like 

we had in 2011. 

We are looking at project management oversight. I have spent a 

lot of my time when I was in command of the Great Lakes and 

Ohio River Division, examining the project management oversight. 

I came away convinced that we had in place proper procedures, but 

we are taking an external review to take a look at that and see if 

there is something we can do better. 

We are engaged in looking at funding alternatives, and we are 

looking at the acquisition strategies. So, for example, perhaps shifting from cost reimbursable approach, which was the only way we 

could get the dam component to get bidders on it at the time about 

a decade ago, perhaps early contractor initiative, perhaps a firm 

fixed price, those are going to be examined. 

Mr. GIBBS. OK, John. I am going to have to—— 

General PEABODY. That is my last point, sir. So I will turn it 

back to you for any followup questions. 

Mr. GIBBS. OK. We are going to go on to questions here. So go 

ahead. 

Mr. BISHOP. No, no, no. You go. 

Mr. GIBBS. We are fine. There are not going to be many Members 

here. So we will have plenty of time to go back and forth here a 

few times. So go ahead, Congressman Bishop. 

Mr. BISHOP. Mr. Chairman, I would be happy to defer. 

Let me start with H.R. 4342, which several of my colleagues have 

offered as legislation. I think Mr. Duncan is one of the sponsors of 

it. Clearly, it represents a solution to a problem that we all agree 

exists, and that we all agree we must find a solution for. 

But let me point out what I fear is the difficulty. It would add 

approximately in a static environment where Corps funding was 

steady state; it would add approximately $180 billion, million, $180 

million of annual obligation to the Corps, which would be difficult 

for the Corps to accommodate in a static environment. 

25 

But we are not in a static environment. We are in an environment in which we have twice now in the House of Representatives, 

once right before Easter break and once again as recently as yesterday, passed a budget that would cut Corps funding for next year 

by at least $200 million. 

So we are in an environment in which if we were to pass 4342, we would be adding $180 million of annual obligation to the Corps 

and taking away $200 million worth of capacity from the Corps. So 

round—— 

Mr. GIBBS. Just excuse me for a second. Indulge me. I have got 

to go vote in a committee, and I want to turn it over to Representative Bucshon until I come back. 

Mr. BISHOP. OK, fine. OK. So we are talking about a $400 million swing in 1 year, and so I guess my question to you, General 

Peabody, and I know you do not speak for the Corps, but I would 

presume that to accommodate a $400 million swing in 1 year and 

still try to maintain all of the other activities and obligations of the 

Corps would be exceedingly difficult. Am I right about that? 

General PEABODY. Mr. Bishop, yes, sir. Any budget cuts require 

choices and tradeoffs or budget reductions I should say, and those 

choices and tradeoffs are not easy, especially at a time where our 

infrastructure is already aging and, as testified to by many of us, 

requires, if we are going to sustain the infrastructure we have, and 

I think that is a fair question for us to ask ourselves. 

Mr. BISHOP. But we would be—— 

General PEABODY. To require these tradeoffs. 

Mr. BISHOP. Is it not fair to assume that we would be pushing 

around a problem, that we may very well solve the inland waterways problem with an additional $180 million a year, or at least 

be on a path to solving it? 

General PEABODY. Without an increase in the Corps’ overall 

budget, yes, we would have to reduce elsewhere. 

Mr. BISHOP. Something would give. 

General PEABODY. That is correct. 

Mr. BISHOP. Harbor maintenance, dredging. 

General PEABODY. Well, sir, you know the biggest—— 

Mr. BISHOP. Shoreline protection, something would go away. 

General PEABODY. I cannot predict what that would take. It 

would probably, you know, cut across several aspects of the Corps’ 

budget, from investigations, construction, on in, but our biggest account where most of the money is, I think it is on the order of 80 

percent, is in the operations and maintenance account. 

Mr. BISHOP. Yes. 

General PEABODY. So while I cannot predict where the cost savings would come from, that is the account where, you know, most 

of the money is and, you know, would likely take a large proportion 

of the cut. 

Mr. BISHOP. OK. I cut off the chairman. I should not have done 

that, but I have been suggesting to the chairman and to my colleagues and to the various stakeholders that we have to move off 

the dime here. We have got competing proposals. Each of the proposals has merit associated with them. Each of the proposals has 

problems associated with them. And what I have been suggesting 

is a round table where we bring together Members and stakeVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
26 

holders and try to sit down and has this out and hopefully arrive 

at a solution that we can all find reasonable. 

So let me just ask each of you, and I am just going to ask each 

of you to answer yes or no: would you be willing to participate in 

that kind of roll up your sleeves round table so that we can try to 

move off the dime here? 

And I will start with you, General. 

General PEABODY. Yes. 

Mr. KNOY. Yes. 

Mr. HETTEL. I think I would be supportive of anything the subcommittee could come up with in discussions to fix this problem. 

Mr. BISHOP. So I will take that as a yes. 

Mr. HETTEL. I would be supportive of anything the committee 

would come up with. 

Mr. BISHOP. I will take that as a yes. Thank you. 

Mr. DOLENCE. Yes. 

Mr. STEENHOEK. Yes, sir. 

Ms. MEIRA. Yes. 

Mr. ROSSBERG. Absolutely. 

Mr. BISHOP. I will take that as a yes as well. 

OK. Thank you. My time has expired. I will yield back to the 

chairman. Thank you. 

Dr. BUCSHON. [presiding.] Mr. Duncan. 

Mr. DUNCAN. Well, thank you, Mr. Chairman. I thought that 

maybe you were going to ask some questions first, but that is fine. 

I can tell you that you cannot serve on this subcommittee very 

long before you realize that the people of this country take all these 

subjects that we deal with in here very much for granted, our 

waste water system, our clean water system, our inland waterways 

system, and all of these things are very, very important to this 

country. 

I was thinking just a moment ago another one of my committees 

held three hearings, I think, 2 or 3 years ago on the issue of 

steroids in sports, and we had many famous baseball players testify, but I remember when Roger Clemens testified the hearing 

room was packed with photographers and reporters. The very next 

week in that same committee we had a hearing on reforming the 

Federal contracting process, much more important, no reporters, no 

photographers, because we live in this celebrity age, and we a lot 

of times emphasize things that we should not emphasize and do 

not emphasize things that we should. 

There are three or four people who have heard me tell this story 

in here before, but many years ago, I had a businessman in Knoxville who called me on a Thursday and asked if I would meet with 

him concerning the Chickamauga Lock, which is not in my district. 

It is close to Chattanooga, but I said, sure, that I was flying back 

to Washington. I still remember. I was flying at that time back to 

Washington on a 1:50 plane that afternoon, and I said, ‘‘I will meet 

you at a restaurant near the airport,’’ and I expected that gentleman, and I would not have been surprised if he brought one or 

two people with him. 

But I showed up in that restaurant, and there were about 100 

people there that day, and I did not get to eat lunch because just 

one after another they stood up and told me how important the 

27 

Chickamauga Lock was to their businesses, and it really made an 

impression on me because, you know, I think for the first time I 

realized that this lock, even though it was not in my district, it was 

more important to me in the Knoxville area than it was even to the 

people closer to the lock. 

And I have visited many of the locks around the country when 

I chaired this subcommittee, and I think it is very unfortunate that 

people do not realize how valuable this and how important that inland waterway system is to this Nation. 

And then almost every project we deal with in here, the airports, 

the highways, we are taking three times or four times as long to 

complete these projects as there are in any other developed nation. 

I remember when I chaired the Aviation Subcommittee. The Atlanta airport people told us their newest runway, which now is several years old, had taken 14 years from conception to completion. 

It took 99 construction days. 

The Federal highway people, I now chair the Highways and 

Transit Subcommittee, and their last two studies say 13 and 15 

years, one study 13 years, one study 15 years, from conception to 

completion. These are not transcontinental highways. 

So, Mr. Knoy, I did not get to hear your testimony. I was in some 

other meetings, but I read your testimony, and I loved it when you 

had in there, ‘‘Where is the outrage?’’ about Olmsted and talking 

about 32 years to take something that was supposed to take 7 

years. 

Let me ask you this. I guess I do not have many questions. I am 

just making some comments here, but one thing I noticed that you 

said. You said that we are having more promise with the new locks 

than the older locks. Why is that do you think? 

Mr. KNOY. I do not know the answer to that question. Just intuitively and through the practice of our business though, our newest 

lock on the Ohio River system, Robert C. Byrd, we have just as 

many problems with it as we do the older locks. I do not understand why. 

Mr. DUNCAN. Well, that is something that should concern all of 

us. We certainly need to look into that. 

Mr. Hettel, I read in your testimony about the outage at Markland, and you said it is going to be 389 days; is that correct? 

That and the other outage you mentioned, it is going to cost your company, you think, you are estimating $11.4 million? 

Mr. HETTEL. That is correct. The Markland outage, the Corps is 

expected to get back in there this summer and complete that 

project early August. That will be a total of a 389-day outage at 

the main chamber at Markland. 

But, yes, you add Lock 52 outage, the Markland outage, and the 

Greenup outage together, it is estimated somewhere around $11.4 

million. 

Mr. DUNCAN. Do you think that those outages are taking an 

undue amount of time to correct or do you understand what is 

causing outages of this length? 

Mr. HETTEL. I do understand that Markland is a situation on 

water levels. I think the general is more apt to speak on that than 

I am. I do not think they had the funding to go back in and complete it. They did not want to go in and partially complete the job, 

28 

get flooded out, and go back in again because of funding constraints. Again we come down to funding constraints. 

I believe there are 43 or 46 days of work left to do at that facility, and it has been sitting idle since the end of November. 

Mr. DUNCAN. Well, I will just close with this. I know my time 

is up, but you know, it really galls me that we keep spending hundreds of billions in other countries, and I am not just talking about 

Iraq and Afghanistan because years ago all of these departments 

and agencies, they saw some department having an office in Rome 

or London or Paris or whatever, and they wanted to have offices 

there, and so I heard last year on the news that the FBI has more 

offices in other countries now than it does in the U.S., and it is 

every department and agency in the whole Federal Government. 

We are spending hundreds of billions in these other countries. 

We are trying to run the whole world, and we cannot afford it. And 

we have got to start taking care of this country. 

And I really appreciate the chairman calling this hearing because 

anything that we can do, anything that you gentlemen and lady 

can do to call attention to the situation in this country so that we 

do not continue to take these water systems and these inland waterways and so forth for granted because we are not going to be 

able to—somebody was mentioning the global competition. We talk 

about it, but we have got stop talking about and start doing something about it or we are going to lose out. 

I met with the CSX Railroad about a month ago. This is an unrelated kind of thing in a way, and he said that they tried to 71⁄2

years to get approval to mine this rare kind of mineral, and they 

finally gave up and went down to Brazil and got approval in a few 

weeks. 

We have got to get these environmental radicals under control so 

that we can open this country up. All the college graduates wonder 

why they cannot find jobs except in restaurants as waiters and 

waitresses and so forth. 

Thank you very much, Mr. Chairman. 

Dr. BUCSHON. Thank you. 

I think everyone can agree we need a dramatic effort to modernize the infrastructure on our inland waterways. The question 

continues to be, I guess, how we finance this work. Money alone 

is not the answer without an assessment of why we continue to 

have dramatic cost overruns and delays in the United States. 

I toured the Olmsted project also with Chairman Gibbs, and so 

I have a pretty good understanding, and my district is on the Ohio 

River, Evansville, Indiana. So it is very important to my constituents. 

Like many of the things we do here in Congress, it is time to 

change business as usual. Continuing to authorize taxpayer dollars 

without demanding more accountability and efficiency across the 

Government has to stop. 

In my view the Republican budget reflects this philosophy. As a 

physician, I am going to reference a medical or have a medical reference. It is schizophrenic to continue to do the same thing over 

and over and over and expect a different result. 

With that I would like to start out and ask General Peabody. Did 

the Corps receive stimulus money? 

29 

General PEABODY. Yes, Mr. Bucshon, we did. I think it was something approaching $5 billion total in stimulus money. 

Dr. BUCSHON. So reading about the situation, the total assessment of the amount of money it would take to catch up on all of 

our projects was approximately what, $11 billion, something like 

that? 

General PEABODY. I would have to take that question for the record, sir, but I can tell you that a little over $400 million of that 

money went to inland marine transportation system capital construction projects that were not cost shared by the Inland Waterways Trust fund. 

An additional amount went to operations, maintenance. I do not 

have that. 

Dr. BUCSHON. I guess my point is, you know, we have been talking a lot about millions today, and we have a stimulus of $5 billion. 

You know, that seems like enough money to solve quite a number 

of problems that we have been talking about here today. 

Does the Corps have an itemization of where all that money 

went or has it been distributed to the Corps? 

General PEABODY. Yes, sir, we do. I think the figure, and again, 

I will follow up for the record, but the figure on the backlog of authorized Civil Works construction is somewhere around $60 billion. 

So $5 billion, while a significant amount, is a relatively small proportion of the overall requirement, if we are going to sustain the 

infrastructure we have. 

Dr. BUCSHON. Yes. Five billion sounds like quite a bit of money 

to me. 

Since the mid-1980s, as you know, we have had a dramatic 

change in how difficult it is to get projects completed, and it is not 

the Corps’ fault alone. Can you give me an assessment of why you 

think since the mid-1980s all of a sudden there has been a dramatic change in our ability as a country to complete projects? 

General PEABODY. Well, I think a great example is one that I 

have talked many times with Mr. Steve Little about. He is the 

president of Crounse Corporation, and he talks about McAlpine 

Lock and Dam, which is at a critical point at the falls of the Ohio 

in Louisville. And in 1959 we started a project, the original lock, 

the current main lock chamber, built that in 3 years, completed it 

in 1962. 

Then in 1999, we started an auxiliary chamber to extend that 

auxiliary chamber to 1,200 feet, and that took 10 years. Now, what 

happened in between, tells the tale of the tape, which is, we had 

a large number of new Federal laws, which the Corps has to comply with that are associated with environmental concerns, cultural 

and historical concerns, and so forth. That is a part of it. 

The other part of it at that particular location was the location, 

you know—we took the easy spot on the first lock. So that left the 

hard spot on the second lock, and that had harder rock. I mean literally harder geology and more technically complex location to actually build a lock. So that was part of the other. 

The last piece of that is what I talked about earlier: full, efficient 

funding upfront. We can only build as efficiently and as quickly as 

we have funding available to the task, and typically we do not have 

that, with rare exceptions like the New Orleans case. 

30 

Dr. BUCSHON. Prior to 1986 did you have it? I mean, prior to the 

mid-1980s the Congress was providing the appropriate funds at the 

appropriate time? Is that what you are saying? 

General PEABODY. What changed in 1986 was the cost share requirement, which became a principle in the case of capital construction, was Inland Waterways Trust Fund cost shared. But I 

would have to go back and see whether this model of incremental, 

year by year funding has been. I think it has been the model for 

a large period of time, Mr. Bucshon. I cannot tell you how long 

though. 

Dr. BUCSHON. Thank you. My time has expired. 

Mr. Bishop, I think we are back. 

Mr. BISHOP. Let’s go to the chair. Gee, I keep trying to defer to 

you. 

Mr. GIBBS. [presiding.] Go ahead. 

Mr. BISHOP. A couple of things. Just with respect to the stimulus, 

those projects, at least those projects under the jurisdiction of the 

T&I Committee, were routinely reviewed. We had at least 15 or 20 

hearings over the course of the period of time of the stimulus under 

the leadership of Chairman Oberstar, in which we monitored where 

the money was going, how it was being spent, the timeliness with 

which it was being spent and so on. 

So I think there really was some pretty good congressional oversight in that regard. I think one of the points, General Peabody, 

that you are making is that one of the reasons that with the stimulus projects we were able to spend those out more quickly was 

that the stimulus in many cases waived the local cost share, and 

the 1986 WRDA brought in a local cost share. 

General PEABODY. Sir, the ability to execute those dollars had 

nothing to do with the cost share requirement. Well, let me recharacterize that. Our ability to execute it had to do with the planning and engineering and design was mature for those projects. 

Mr. BISHOP. So they were ready to go. 

General PEABODY. If it had to have been cost shared, we would 

not have been able to execute it, notwithstanding the Federal 

ARRA funding available. That is correct. 

Mr. BISHOP. OK. So at least that was a model that worked. I am 

not suggesting, by the way, that we eliminate local cost share. I do 

not know how we do that in this environment. 

General PEABODY. I am agnostic on how we get revenue to execute our requirements. As the person charged with executing requirements, it is just very helpful to have that revenue, know when 

it is going to come, and have certainty year over year that you are 

going to get the efficient funding needed to execute the construction 

efficiently. 

Mr. BISHOP. One of the mantras of this committee over the last 

18 months has been that we need to do more with less. Mr. 

Rossberg, you referenced this in your testimony, in which you expressed some skepticism as to whether or not we can do more with 

less. 

My own view is that there probably are areas of the Federal Government where we can do more with less, but I think in this area 

we would be hard pressed to find—I mean, I think the cost of 

rehabbing a lock is the cost of rehabbing a lock. You have got raw 

31 

materials costs, you have got labor costs, and I mean, you showed 

us, General, a series of pictures. Do you have a way forward in 

which you could do more with less to remediate some of the problems that you showed us? 

General PEABODY. Sir, I think it is always possible to search out 

and gain efficiencies. One of the good things that has come out of 

this challenge for us is that we have been forced to look very introspectively at the way we conduct our business and find efficiencies. 

However, there is an upper limit to how efficiently we can get. 

I do not think we are there yet, but I do think we have gotten most 

of the efficiencies squeezed out of our operations and maintenance 

procedures. 

On the construction side, the headquarters has initiated a couple 

of different initiatives to look at increased project management and 

focus on what we are calling mega projects, like Olmsted, using the 

hurricane storm damage risk reductions system program as a 

model, and then applying that for mega projects in the future, but 

this is just something we are starting. 

Mr. BISHOP. But if the Corps budget is, in fact, cut by $200 million, will you be able to get the same amount of work done or will 

there be at least some slippage from what you would normally do? 

General PEABODY. Not in a year’s time. That is for sure. Some 

of that would have to be absorbed through doing less. 

Mr. BISHOP. OK. Last question. Ms. Meira, there was a comment about the stimulus. There was about $400 million worth of stimulus money that went to the Corps for inland waterway systems. 

My understanding is the Columbia-Snake River System got about 

$30 million of that; is that right? 

Ms. MEIRA. That is correct. 

Mr. BISHOP. And had that money not been made available 

through the stimulus, are you able to project when the remediation 

of the problems on the Snake River would have taken place? I 

mean, would it have happened a year later, 2 years later, 5 years 

later? What is your projection on that? 

Ms. MEIRA. Sure. Thank you, sir. 

Until the stimulus package came along, the plan that had been 

developed with the Portland and Walla Walla Districts was to cobble together enough O&M funding because these were repairs, not 

major rehabs or construction. It was to have enough money in hand 

to have an extended closure and install one gate, and then wait 4 

or 5 or however many years, have another closure, another impact 

to the system, install another gate. 

Mr. BISHOP. So the stimulus really did have a very beneficial impact at least with respect to that system. 

Ms. MEIRA. For us it did. We had three gates and one coordinated closure. 

Mr. BISHOP. And it is reasonable for me to assume that this $30 

million employed a handful of people? Is that fair to assume? 

Ms. MEIRA. I do not have the jobs numbers offhand, but certainly 

more than a handful, sir. 

Mr. BISHOP. Thank you for that. 

I yield back. 

Mr. GIBBS. Thank you. 

Sorry for my indulgence. I had to go vote in another committee. 

32 

I have got some questions here. I will start with General Peabody. We were talking about stimulus funding. Was there any 

stimulus money that was going to capital projects, projects that 

had been funded, and are they sitting? Were they fully funded? Do 

we have any projects that are in limbo now because of the stimulus 

funding? 

General PEABODY. Sir, the way we were able to do that was 

project features or components were able to be advanced. So, for example, I believe an approach wall in one of the monoliths at Kentucky Lock was advanced. That was about, I think, $80 million. I 

think it was $87 million that went into Lower Monongahela. I 

think it was $40 or $50 million that went—— 

Mr. GIBBS. But specifically the Kentucky Lock, what is the status 

of the Kentucky Lock? 

General PEABODY. Of which one, sir? 

Mr. GIBBS. Kentucky Lock. 

General PEABODY. Sir, that one is still under construction. There 

are two major features that are being executed now. One is basically being wrapped up. The other one will be wrapped up next 

year, and moving forward on that project will depend on availability of revenue and/or decisions about the allocation of that revenue associated with the Trust Fund. 

Mr. GIBBS. So when those two features are complete, will the 

project be complete or is that just—— 

General PEABODY. No, sir. It is just those features. The project still has I think it is somewhere like $300 or $400 million worth 

of cost—— 

Mr. GIBBS. So even with the stimulus, the culture of dribbling 

money here and there remains pretty much constant. 

General PEABODY. The stimulus in general, in terms of the lock 

and dam systems, advanced our construction projects at several of 

those locations. In some locations it completed it. An example is the 

Emsworth Lock and Dam on the Upper Ohio. That one had some 

dam safety scour issues, and we were able to complete those scour 

remediation. I think the Lock and Dam 25 on the Upper Mississippi, the same thing. 

Mr. GIBBS. OK. 

General PEABODY. But those are relatively small amounts. 

Mr. GIBBS. Small amounts, OK. 

General PEABODY. $10 to $20 million. 

Mr. GIBBS. Thank you for that. 

Mr. Hettel, I was intrigued a little bit when you said there are 

some issues with some of the newer locks that have been refurbished or constructed, the functioning or not. Can you expand on 

that a little bit? 

That just kind of intrigues me. I want to know if there is an 

issue. 

Mr. HETTEL. I think actually Mr. Knoy brought that up, but at 

R.C. Byrd Lock, and the General can probably elaborate more than 

me. 

Mr. GIBBS. Oh, I am sorry. It was Mr. Knoy. 

Mr. HETTEL. They found some coin blunt problems or something 

that they have to go into. We have got two 90-day outages scheduled for R.C. Byrd main chamber and auxiliary chamber, and I beVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
33 

lieve that was found through what they found up at Greenup when 

that outage happened. 

The general could probably explain. 

Mr. GIBBS. Mr. Knoy, it was you who made that statement. I am 

sorry. 

Mr. KNOY. Yes. I responded to that earlier in your absence. I do 

not know what the differences are, but I question whether or not 

new technology is actually advancing our capabilities verse the 

older technology that has been proven. I think an example there 

is the miter gate. Throughout most of the systems, our locks in the 

systems work and function very well. 

We have put in some different ways that we hang and operate 

those miter gates, going forward that seem to be less reliable and 

also the type of gates themselves. And the spare gates, I find it interesting that we have spare gates for Olmsted, which the lock has 

never been used and will not be used for another 10 or 12 years, 

but we do not have spare gates for locks that have heavier traffic. 

So I do not know why the new technology is not lasting longer. 

Mr. GIBBS. I want to go to Mr. Steenhoek for just a second. He 

referenced what was happening in Panama and other areas, and 

obviously in the green site especially, soybeans are in competition 

with Brazil. 

Can you maybe expand just a little bit about the investments 

that are being made there and how they are doing things a little 

different and why we seem to become uncompetitive? 

Mr. STEENHOEK. Yes, in Panama, the Panama Canal expansion 

project. 

Mr. GIBBS. Yes. 

Mr. STEENHOEK. Well, absolutely, and I think it is important to 

note that one of the major talking points from the inland waterway 

users is the age of our lock and M inventory, 60-, 70-plus years, 

and while that, indeed, is true and possibly could be troubling, I 

think it is important to remember that the Panama Canal was 

originally constructed in 1914, and when you go and tour that and 

you watch, and you can get a very good vantage point of seeing 

ships go through these locks, you do not see the leaky miter gates. 

You do not see the crumbling infrastructure. You do not see concrete cracking. 

And so one of the big take-aways that I and the farmer board 

members that I took with me from that trip was maintenance and 

preservation goes a long way when you look at these types of infrastructure investments. Locks and dams are not cell phones—what 

you bought 10 years ago is obsolete today. The technology is very 

similar to how it has been, and so it has remained quite steady. 

But I think the major conclusion that we had as far as why they 

are able to perform in a superior manner to us is how they actually 

provide the funding; that they have secured the funding. It is not 

provided lump sum upfront, but they have certainty of funding, 

and some of it is going to be cash flowed from their toll structure, 

but they know that the money will be there so that when they 

work with contractors, contractors can make massive purchases of 

concrete steel, secure labor force, secure dredging equipment, excavating equipment. 

34 

And consider the fact that this is a $5.25 billion project that is 

exponentially more complex than anything we have going on in our 

inland waterway system. They are building six new locks for postPanamax vessels. They are widening the breach in the Continental 

Divide. They are expanding the volume of a lake to be able to service these new locks, but yet they are able to do it relatively on time 

and under budget, and I think the main reason for that is how they 

allocate the money is just as important as how much money is allocated. 

Mr. GIBBS. I am glad you expounded on that because I think that 

is important. 

A question, I guess, for all of the panelists and anybody can answer or choose not to answer it, but obviously budgets are tight 

and there has been declining funding, but there seems to be 

prioritized by whomever—I will not mention, I guess—to fund eco 

restoration systems. I am not against that, but when I look at the 

Corps’ budget and we have gone through this, there is a lot more 

funding for that than for the assets, for our locks, levees and dams. 

And I would argue that, you know, a strong, growing economy 

will provide resources to enhance the environment, and I think we 

all agree we are at risk of this major mode of transportation system 

at failure, and so does anybody want to respond? 

Yes, Mr. Knoy. 

Mr. KNOY. I would like to make a couple of comments in that regard, Mr. Chairman. I think part of what we tried to establish in 

the capital development plan was an equal sharing of the burden 

of the cost among all of the beneficiaries, and as of this date the 

tow boat and barge industry is the only industry that is paying a 

user fee of any of the beneficiaries of the system, and certainly the 

ecosystem benefits greatly from that system as well. 

Mr. GIBBS. But you are aware that there is more funding from 

the tax dollars from the administration for the budget proposal, 

quite a bit more, for eco restoration funding. 

Mr. KNOY. Yes, sir. 

Mr. GIBBS. Does anybody else want to respond? 

[No response.] 

Mr. GIBBS. OK. I will move on. 

The next question I had was I mentioned a little bit in my opening statement about looking at a new paradigm of public-private 

partnerships. Does anybody want to comment on the potential for 

that? 

One thing, I am working on a bill on the water-sewer side to try 

to bring in private equity capital, which I think there is lots of 

money out there. I will just give you an example. On a sewage 

treatment plant, obviously rate payers cannot pay upfront, and 

there is a lot of investment types that need a decent return with 

not too high a tolerance for equity erosion risk. 

So we are trying to put something together that we think we can 

match something up there for a public-private partnership, and I 

think that maybe on the inland waterways system maybe we could 

consider a pilot project, and the Corps might be looking at something like this where you have got a specific project or a region in 

a tributary or whatever. And my thinking is if you have a publicVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
35 

private partnership, you would get that, for lack of a better word, 

accountability for funding and pick up some efficiencies. 

So I would like to see if anybody would like to respond to kind 

of that concept or be open to that concept to try to bring in some 

private investment capital and then hopefully make the whole 

process more efficient because they would be a partner in it, and 

obviously they would have more say so than maybe what we have 

at the Inland Water Board and the stakeholders. 

Does anybody want to? Mr. Knoy. 

Mr. KNOY. I would be happy to comment again, sir. The inland 

river industry, we have met as a team. We have met with private 

funding sources. We have put forward a variety of different plans, 

just like we have the capital development plan, and we have heard 

that the administration is going to put forward an alternative funding plan as well, but all we keep hearing is they are going to, they 

are going to, and we are not getting any feedback or definition. 

Mr. GIBBS. Well, I do not believe there have been any specifics 

on the administration’s plan. 

Mr. KNOY. Correct, not how to charge it, not how to collect it, 

what it would be, dollar amounts, et cetera. 

Mr. GIBBS. Yes, Mr. Steenhoek. 

Mr. STEENHOEK. Well, I think you are on target in exploring this 

option, Mr. Chairman. I think, you know, engaging the private sector could present the possibility of getting funding for these 

projects in more of a lump sum fashion so that it could mitigate 

the opportunity for further cost overruns for some of these projects. 

The concern that we have though is the overall cost of these 

projects in the first place. You know, I try to put myself in the 

shoes of a rating agency, the Fitches or the Moodies of this world, 

and when they rate an investment as to whether or not it is investment grade or junk grade, they are looking at three things. They 

are looking at the size of the debt issuance, the volume of the 

money to apply to it, and the predictability of that funding. 

And the concern that we have is, OK, if you get private money 

into the system, and there are foreign entities that are actually interested in this as well. We had a group of farmers that went to 

China just a couple of weeks ago, and one of the repeated refrains 

from our customers in China was, ‘‘We are concerned about the integrity of your supply chain.’’ 

And there is an expressed willingness to actually help finance 

U.S. infrastructure projects. Now, that is a whole different subject 

for another time, but there is this desire to apply money, but there 

is this concern about the cost of these overall projects. It is one 

thing to say we invite alternative sources of funding, but the problem still is these costs are so expensive, and the question is what 

is there payment plan for those projects for whether or not it is 

going to be an attractive investment. 

Mr. GIBBS. Yes. Yes, Mr. Dolence. 

Mr. DOLENCE. I think that we would all be remiss to not consider 

private investment. We talked earlier of efficiencies in the system 

and to introduce the free market and competition is one of the best 

ways to do that in my experience, and not only should you look for 

repayment from users, but the beneficiaries. 

36 

A lot of people spoke here today and talked about what the river 

traffic take off of the rails and takes off of the highways, and is 

there room for a quid pro quo there? 

If you talk to the average person at least in the Pittsburgh area 

where I live, they complain about traffic and then they complain 

about trucks. Then they complain about truck traffic. So if the 

locks and dams fail, we are going to exacerbate that problem. 

So who are the beneficiaries of the recapitalization? 

Mr. GIBBS. Yes, General. 

General PEABODY. Sir, just a quick comment. I cannot speak to 

the overall administration proposal or where that is, but I know 

that the Headquarters and, I believe, the Secretary’s Office, has 

begun what I would characterize as exploratory discussions with 

Department of Transportation, I think other Federal agencies, and 

some private venture capitalist interests to look at the possibility 

of this exact issue. 

I believe this would likely take some authority, you know, 

changes, but it is something that the Corps has actively begun 

looking at. 

Mr. GIBBS. One just quickly. I do not know if Mr. Bishop has any 

more questions or not, but I want to just mention also we saw over 

the years the railroad industry abandon a lot of lines, tear up a lot 

of lines, and it seems to me I am concerned. I know the Corps has 

to make some tough decisions prioritizing, you know, and it might 

affect some of the tributary systems. 

Does anybody care to comment if we kind of let the tributary system decline? Would that be analogous to what is happening in 

some of the railroad industry, you know, feeder lines that are feeding the system, and the importance of maybe that is a problem? 

Do you want to comment on that? Mr. Dolence. 

Mr. DOLENCE. Again, in the Western Pennsylvania area, I would 

suspect that there are a lot of people who gave up their right-ofways on their rail lines which have developed into beautiful rails 

to trails, if you will. With the development of the Marcellus Shale, 

I am sure there are a lot of people who are second guessing that 

decision 20, 30, 40 years ago of giving up those right-of-ways because now they have the challenges of a lot of truck traffic on back 

rural roads where you look down over the hill, and there is a beautiful rail to trail. 

I use the rail to trails. I like them, but it is just anecdotal in response to your question. 

Mr. GIBBS. Yes. 

Mr. KNOY. Sir, it is a trunk and branch system, if you will. We 

do need the ancillary rivers, the tributaries to feed the trunk, and 

a lot of the funding comes off the Lower Mississippi River which 

does not have the lock and dam infrastructure. So we do need it 

to work as a system. 

Could we manage it more efficiently? Likely so. 

Mr. GIBBS. OK. Go ahead. 

Mr. BISHOP. Two things quickly. Thank you, Mr. Chairman. 

I just want to return, Ms. Meira, just to the issue of the stimulus 

funding that funded the Columbia-Snake River Project. The fact 

that you were able to get it all done at once, was the total project 

cost less being able to get it all done at once as opposed to extendVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
37 

ing it out over the multiyear period, phasing it in that had been 

your original plan absent the stimulus money? 

Ms. MEIRA. I think our Corps districts would agree that the answer to that is yes. To try to do it in a phased fashion would have 

cost much more over the years, and even worse, to wait for a catastrophic failure and to have that 1 year amount of time that it 

would have taken to on an emergency basis construct a new lock 

gate would have been exponentially more expensive than what they 

spent back in 2009, 2010, and 2011. 

Mr. BISHOP. OK. Thank you. 

The last thing, the chairman talked about a bill that he is working on for waste water infrastructure that would take what we 

refer to as a WIFIA approach, direct lending guaranteed by the 

Government, very low rates to municipalities. 

I also am working on a bill that takes a similar approach. We 

have something that we call TIFIA in the surface transportation 

bill, again, direct lending to municipality, very low rates backed by 

proceeds from the motor fuels tax. 

Is this something in the environment we are now in where we 

clearly have a constrained budget? We clearly have limited capacity 

to make the kind of investment that I think we all agree is required? Is this something that we should be looking at? 

We obviously would have to figure out a receiving entity, I mean, 

because right now 100 percent of the system is owned and operated 

by the Federal Government. So the Federal Government would not 

be loaning to itself. It would have to be loaning to—I do not know— 

the Ohio River Authority or something like that. 

Should we be thinking seriously about that kind of approach as, 

again, part of this toolbox approach, multi-avenues of bringing dollars to the table that would help solve our problem? 

Mr. Steenhoek. 

Mr. STEENHOEK. Well, I commend you, Ranking Member, for considering that and bringing new funding into the stream. My concern is, and I have mentioned this before, that we have to be careful that we are not trying to buy a $2 million home on a $20,000 

salary. 

Mr. BISHOP. That did not work out for a lot of people. 

Mr. STEENHOEK. Right, right. And you could make sure that that $20,000 salary has a lot of certainty to it and predictability to it, 

but you cannot just solve this problem on the revenue side. You 

have to also address it on the cost side as well. 

And so you have to ask the question: how can we bring greater 

equilibrium between the costs of these projects and the revenue to 

support them? And so looking at some of these things about preserving maintenance, you know, prioritizing that, I think that really needs to be a part of that discussion as well. 

Mr. BISHOP. Fair enough. Anyone else? 

[No response.] 

Mr. BISHOP. OK. Thank you, Mr. Chairman. I yield back. 

Mr. GIBBS. I have just got another question. I know we have had 

a lot of discussion about the competitiveness, for global competition 

and moving our products in and out, but I want to go back to Mr. 

Hettel’s testimony, and since they run a significant barge operation, American Electric Power, on the Ohio-Mississippi River sysVerDate Aug 31 2005 14:43 Jun 28, 2012 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\4-18-1~1\73826.TXT JEAN
38 

tems, in your testimony you talked about how many millions of dollars ADP has lost in delays, and that is a big problem. We all know 

that. 

And you talked about also the potential of a complete failure and 

rolling brownouts, even blackouts. Can you maybe expound a little 

bit on the likelihood, and I may give General Peabody a chance to 

respond, too, of having—my understanding is on the Ohio River, 

there are no locks that do not have an alternative. Now, on the 

Lower Mon that is not true. On the Upper Mississippi or Illinois, 

I guess, it is not true. 

But since you guys navigate the Ohio River a lot, is there a possibility we could have a complete lock failure at one of the locks 

that would shut down the system? 

And if that were the case, and this might be where General Peabody might help, what kind of timeframe would we be looking at 

if we had a complete shutdown on the river? 

Mr. HETTEL. Well, just to clarify, there are multiple locks on the 

Ohio River, a 1,200-foot chamber and a 600-foot chamber. All of the 

delay cost I referenced was having the 1,200-foot chamber closed 

for repairs, just to clarify that, and having to use the auxiliary 

chamber because then the system has too much volume to be able 

to handle it through a 600-foot chamber. 

One of my attachments in my statement, testimony, shows the 

predictability that the Corps has put together for lock failure, and 

that is why I specifically mentioned Willow Island. The Corps predicts that both the main and the auxiliary chamber will fail in 

2015. 

Now, that may fail, the main chamber, the first part of the year, 

the auxiliary chamber the second part of the year, but if the main 

chamber goes down first and you put that much traffic through the 

auxiliary chamber, I am afraid we will have the same thing we had 

at Hannibal where they shut down the main chamber and then the 

auxiliary chamber failed afterwards. 

Mr. GIBBS. General Peabody. 

General PEABODY. Sir, I believe in Lower Mon there is actually 

auxiliary chambers at the first four or five of the lower locks. I 

would have to get the details for you. 

But Mr. Hettel is correct in that there is high risk at several of 

the points along the system. Now, the two points as I mentioned 

earlier that I personally am most concerned about in the Ohio system are the Lower Monongahela and the Lower Ohio where I believe all the indicators we have are that the possibility of failure 

is real. 

And it is very difficult to put a probability to that. It is probably 

in the low single digit percentage year over year, but when you accumulate that over time, those probabilities escalate and become 

fairly significant. 

The 2011 flood that happened last year is a very low probability 

event, but it happened. The Nashville flood of 2010 resulted from 

a rain event that is something on the order of 1 to 10,000-year 

event, but it happened. 

So these failure possibilities, any time that there is a possibility, 

it is too much of a concern for me. 

39 

Mr. GIBBS. General, I am interested in a lock failure. What 

would be the typical failure of a lock failure? Is it the miter gates 

not functioning or is the concrete walls or what? 

General PEABODY. There is a host of causes. Most of them that 

cause outages in the locks have to do with operating machinery associated with the miter gates, and they are not all miter gates, but 

most of them are miter gates. So that is the most common issue. 

However, we have been detecting what I would characterize as 

previously unknown failure modes recently. So, for example, when 

Markland went out in 2010, what happened, it was a cascading series of events, as these often are. It was a simple failure of the solenoid with the inflow chamber in the open position. So when the operator did not know that it had failed, he thought he had shut it 

off, but it was still water flowing in. He tried to close the gates. 

That created a water head difference. That led to pressure that 

caused the gates to fail, fall in the river; the chamber closed for, 

I think, 150-some days. 

So there are a variety of issues. This gets to an important issue 

though. Our knowledge is imperfect when it comes to understanding potential failure modes or design deficiencies, and so as 

we go forward in time operating these designed infrastructures, we 

discover things that we did not previously know, and this is a constant of the engineering profession. 

Understanding new failure modes, understanding design 

changes, and we constantly have to update our profession and 

make changes in this, what I characterize as progressive elaboration. That is part of the problem. 

With regard to whether we have greater lock outages or greater 

issues on new locks, I would have to check on the data on that. I 

am not aware what the data says. 

Mr. GIBBS. I think we are done with questions. We are all done. 

Everybody else has abandoned us. 

I would like to conclude. First of all, I want to thank everybody 

for coming. I think we are trying to highlight the issue here of how 

important our maritime system is in the inland and the ports and 

how much commerce. I know the President had talked about wanting to double exports in 5 years or whatever it was, and I think 

the only way is you have got to have a transportation system to 

move all of that out to do it, and I think we certainly do not want 

to have an event where the American people wake up because we 

had an event like the levy failure in Hurricane Katrina. We do not 

want to have the system shut down because that will impact a lot 

of people’s lives because of energy production, energy generation. 

That could be severely affected and all of the jobs in that entire 

major region of the country. 

So thank you for coming, and we will work ahead and keep working on this, but thank you, and that concludes this hearing. 

[Whereupon, at 12:10 p.m., the subcommittee was adjourned.] 

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