Vol.44 No.1 JUL‑SEP 2015

V O L U M E 4 4 J U L Y – S E P T E M B E R 2 0 1 5 N U M B E R 1 Impacts of globalization . Lock outage causes delays . The future of coal . Reducing emissions G LGREAT LAKER Interlake Steamship GREAT LAKES/SEAWAY REVIEW July-September, 2015 1 The international maritime magazine of the Great Lakes/St. Lawrence Seaway system Outage at the MacArthur Lock delays 103 vessels. Page 13. Interlake Steamship Company begins installing emission scrubber systems. Page 27. Bob Desh lives a life of adventure on the Great Lakes. Page 56. www.greatlakes-seawayreview.com Great Lakes/Seaway Review 221 Water Street, Boyne City, Michigan 49712 USA (800) 491-1760 FAX: (866) 906-3392 harbor@harborhouse.com Between issues of Great Lakes/Seaway Review, stay current with our free weekly news service, Digital Dateline, at www.greatlakes-seawayreview.com/digdateline/ A R T I C L E S Great Lakes People FROM GREAT PLAINS TO GREAT LAKES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Retired Coast Guard Captain Bob Desh charts a course of learning and adventure. Marine Photography SUN COLORS ON THE LAKES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Photographer captures lakers, salties during late day, early morning beauty. Maritime Heritage SUNKEN TREASURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Sidewheel tug Julia’s fascinating history revealed. Meet The Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 On The Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Globalization NEW MARKETS, NEW WAYS OF DOING BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 7 A robust discussion on how accelerated globalization is impacting the system. Locks LOCK CLOSURE IMPACTS SHIPPING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Two unscheduled closures at the Soo Locks hinder commercial shipping, heighten infrastructure concerns. Commodities THE FUTURE OF COAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Provincial, federal decisions continue to impact coal tonnage on the Lakes. Interview CLARITY OF DIRECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Allister Paterson returns to domestic regional fleet operations. Technology CLEANING EMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Interlake is first U.S.-flag shipowner to install wet scrubber technology. Logistics QUEBEC’S NEW MARITIME PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Province releases detailed Maritime Strategy, reaching to 2030. Ferries CONTAINING COAL ASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 SS Badger’s upgrades keep the passenger-freight vessel sailing on Lake Michigan. Training & Recruitment MARITIME TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Training academies prepare seafarers for uncharted futures. Towing & Barging A DEAD TOW LEGACY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Nadro Marine delivers Captain John’s restaurant to Port Colborne for scrapping, draws additional oversight with Transport Canada adding pre-tow inspections. Ports PREPARING FOR PORT DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Wisconsin’s port planning can inform efforts at other Great Lakes ports. GREAT LAKER J U LY- S E P T E M B E R 2 0 1 5 Great Lakes/St. Lawrence Seaway D E P A R T M E N T S Dateline: Great Lakes/St. Lawrence Seaway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Guest Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 The Administrator’s Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Great Lakes Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Pere Marquette Shipping Marine Pollution Control Business and Editorial Office 221 Water Street Boyne City, Michigan 49712 USA (800) 491-1760 FAX: (866) 906-3392 harbor@harborhouse.com www.greatlakes-seawayreview.com www.greatlaker.com EDITORIAL AND BUSINESS STAFF Jacques LesStrang Publisher Emeritus Michelle Cortright Publisher Janenne Irene Pung Editor Cris Shankleton Creative Director Lisa Liebgott Production Manager Tina Felton Business Manager Amanda Korthase Circulation Manager ADVERTISING DEPARTMENT Kathy Booth Account Manager Rex Cassidy Account Manager James Fish Senior Account Manager Patricia A. Rumpler Account Manager Ellen Trimper Account Manager William W. Wellman Senior Account Manager EDITORIAL ADVISORY BOARD John D. Baker, President, Great Lakes District Council, International Longshoremen’s Association; Mark Barker, President, The Interlake Steamship Company; Noel L. Bassett, Vice President-Operations, American Steamship Company; Dale Bergeron, Maritime Transportation Specialist and Educator, Minnesota Sea Grant; David Bolduc, Executive Director, Green Marine; Stephen Brooks, President, Chamber of Marine Commerce; Joe Cappel, Director of Cargo Development, Toledo-Lucas County Port Authority; Rick Dystra, Member of Parliament, St.Catharines, Ontario; Steven A. Fisher, Executive Director, American Great Lakes Ports Association; Anthony G. Ianello, Executive Director, Illinois International Port District; Peter Kakela, Ph.D., Professor, Department of Community, Agriculture, Recreation and Resource Studies, Michigan State University; Robert Lewis-Manning, President, Canadian Shipowners Association; Mark Pathy, President & Co-CEO, Fednav Limited; John Vickerman, Founding Principal, Vickerman & Associates, LLC; James H.I. Weakley, President, Lake Carriers’ Association. SUBSCRIPTIONS – (800) 491-1760 or www.greatlakes-seawayreview.com www.greatlaker.com Published quarterly. One year $32.00; two years $53.00; three years $75.00. Foreign: One year $47.00; two years $68.00; three years $100.00. One year digital edition $20.00; Mobile app $2.99 per issue available at the iTunes store; Back issues available for $7.50; Payable in U.S. funds. Article reprints are also available. Reprints and scans produced by others not authorized. ISSN 0037-0487 SRDS Classifications: 84, 115C, 148 Great Lakes/Seaway Review and Great Laker are published quarterly in March, June, September and December. Postmaster: Send address changes to Great Lakes/ Seaway Review, Great Laker, 221 Water Street, Boyne City, Michigan 49712 USA. © 2015 Harbor House Publishers, Inc., Boyne City, Michigan. All rights reserved. No article or portion of same may be reproduced without written permission of publisher. Great Lakes/Seaway Review Cover: HHL Amur hauls wind blades in Duluth. Photo by Robert Welton. Great Laker Cover: The pilothouse on the Paul R. Tregurtha. THE INTERNATIONAL MARITIME MAGAZINE OF THE GREAT LAKES/ST. LAWRENCE SEAWAY SYSTEM VOLUME 44 JULY-SEPTEMBER 2015 NUMBER 1 2 www.greatlakes-seawayreview.com Combining the economy of Great Lakes shipping with flexibility for cargoes not suitable for traditional self-unloaders, the tug barge PERE MARQUETTE 41 offers a level of dependable service that translates into outstanding value. Let us help you evaluate how our new articulated tug barge system can benefit your company. Self-loading/unloading: hydraulic crane with grapple, clamshell or magnet; conveyor unloading places material approximately 80′ from side of ship Stone, logs, pig iron, scrap metal, coils, slabs and over-dimensional pieces Conveyor unload materials up to 15 inch Articulated tug barge coupler technology U.S.- flag Great Lakes service PERE MARQUETTE SHIPPING COMPANY 701 Maritime Drive P.O. Box 708 Ludington, MI 49431 (231) 845-7846 Fax (231) 843-5383 www.pmship.com INTO YOUR IS OUR BUSINESS BARGING BUSINESS vice YEAR Anchor Ser 52 YEARS52 Red S vi of R ervi dA Land Solu d. Sea. utions. WMD CAPABILITIE ADVANCED TECHN TRAINING AND COM INDUSTRIAL MAINT EMERGENCY RESP ES NOLOGY MPLIANCE TENANCE PONSE M www.MarinePollu +1 (313) 84 Marine MPC IS OSRO #003 utionControl.com 49-2333 – 24/hour MPC Environmental Pollution Control GREAT LAKES/SEAWAY REVIEW July-September, 2015 3 Fincantieri launches North America’s first LNG ferry The F.-A. Gauthier, a new liquefied natural gas (LNG)-fuelled ferry, has entered service. North America’s first LNG ferry was built by Fincantieri Marine Group in Naples, Italy for the Society of Quebec Ferries, a Quebec government corporation. In addition to dual diesel-LNG-fueled propulsion, the ferry is equipped with four dual powered generators. The propulsion system meets all the requirements of the emission control area by reducing emissions of CO2, NOx and SOx. At 436 feet (133 meters) long and 72 feet (22 meters) wide, the F.-A. Gauthier will have a service speed of 20 knots and be capable of carrying 800 passengers. She will be used in the Province of Quebec and is expected to transport more than 180,000 passengers and 85,000 vehicles a year, according to the society. The ferry will operate year-round in the Gulf of St. Lawrence between Matane and Baie-Comeau, Quebec. Design innovations include eight loading ramps at both bow and stern, counter rotating and transverse propellers for maneuverability and a hull design and classification showing its ability to break through ice. She has replaced the Camille-Marcoux. . Port of Saguenay launches new intermodal rail yard The new 7.4-mile (12.5 kilometer) rail link from Roberval & Saguenay Railway line to the port’s intermodal rail yard is operational. The link provides additional transportation options to shippers and is expected to boost the effectiveness and capacity of port operations. Traffic on the link is bi-directional. The government investment in Grand-Anse marine terminal is part of the plan to improve international trade. Port officials hope the new link and rail yard will generate 125 jobs. . Port of Duluth-Superior expanding with a new dock The Duluth Seaway Port Authority is preparing to close on the purchase of 35.7 acres of land October 31. The land, currently owned by XIK Corporation, consists of a dock in the Duluth Industrial Waterfront zoning district. Since entering into a purchase agreement for the land, the port authority has engaged in a two-phase environmental assessment. The property will be marketed to industrial operations in need of leasable land, while further detailing a long-term redevelopment strategy for returning the industrial dock to full maritime service. The land was last used from 2010-13 by Stella-Jones Corporation for its wood-chipping operations. Similar industries used the property from 1992 to 2010, according to Adele Yorde, port authority Public Relations Director. The Dock 7 property is located in the Irving Neighborhood of West Duluth, near the Waseca industrial area and I-35. It is served by a BNSF rail spur and has immediate access to the upper Duluth Harbor, 15 days sailing time from European markets via the Great Lakes/St. Lawrence Seaway system. Plans to purchase the dock came shortly after the groundbreaking for the $17.7 million Port of Duluth Intermodal Project—the largest infrastructure project undertaken by the port authority since the construction of Clure Public Marine Terminal prior to the Seaway’s opening. This project involves developing a 28-acre dock with the help of a $10 million Transportation Infrastructure Generation Economic Recovery (TIGER) grant awarded by the U.S. Department of Transportation. . G R E A T L A K E S / S T . L A W R E N C E S E A W A Y DATELINE New stamp commemorates U.S. Coast Guard anniversary, community center dedicated The U.S. Postal Service has issued a stamp in honor of the U.S. Coast Guard’s 225th anniversary. The stamp shows the Coast Guard Cutter Eagle, known as America’s Tall Ship, and an MH-65 Dolphin helicopter, the Coast Guard’s standard rescue aircraft. “The Coast Guard is truly a symbol of safety to all Americans,” said Postmaster General Megan Brennan. “Those who live in a coastal community, or spend time on our waterways and shores, know that the Coast Guard does whatever it takes to ensure that they are safe and protected.” Aviation artist William Phillips of Ashland, Oregon painted the images using oil and Masonite. The back of the stamp sheet includes information on the Coast Guard. Just prior to the anniversary, the Coast Guard dedicated a new, $650,000 community center in Sault Ste. Marie, Michigan. Stakeholders from the Great Lakes/St. Lawrence Seaway shipping community donated funds toward constructing the center, which has a gym and lounge area for Coast Guard members and their families. The center is named Capt. Jimmie H. Hobaugh Community Center after the former Commanding Officer of the Coast Guard Cutter Woodrush, Commanding Officer of Group Sault Ste. Marie and On-scene Commander during the seven-month salvage operation of the Coast Guard Cutter Mesquite in 1989. . Andrie Inc. D A T E L I N E 4 www.greatlakes-seawayreview.com have U.S.-European trade continue to establish balance.” While the government is looking to increase exports, CETA isn’t the answer for all. “We’ve taken an enormous hit post-NAFTA (North American Free Trade Agreement) in southern Ontario,” said Louis Erlichman, Canadian Research Director for the International Association of Machinists and Aerospace Workers, whose members include shipbuilders. “We feel CETA is likely to undercut whatever hope we have for a government committed to shipbuilding on the Canadian side of the border. CETA would be an excuse for saying ‘we can’t do anything because we would be subject to international panels and retribution.’” On the U.S. side, discussions continue on the Obama-backed Trans-Pacific Partnership (TPP), which would connect the U.S., Canada and Mexico with several Asian and Pacific nations— expanding NAFTA. The trade agenda is expected to pass and has won final approval in the Senate. To read more about trade agreements, please turn to page 21. . Mackinaw prepared for coming ice season Bay Shipbuilding recently completed repairs on the U.S. Coast Guard heavy icebreaker Mackinaw, preparing her for winter operations on the Great Lakes. Last winter, icebreaking started in December and lasted for 128 days, according to the Coast Guard. The recent repair work included port-side azipod and air compressor overhaul, inspection of the CO2 cylinders and fire suppression system, inspection of the air receiver, deck renewal, door replacements and cleaning the ballast, waste and fuel tanks. The 240-foot vessel was built by Fincantieri Marinette Marine (FMM), sister company to Bay Shipbuilding, for heavy icebreaking. She delivered in 2006. . Water levels remain high throughout the system In the Great Lakes basin, lake levels remain above long-term averages. As fall approached, the difference from 2014 to 2015 showed Lake Superior up 1 inch, Lakes Michigan-Huron up 9 inches, Lake St. Clair up 6 inches, Lake Erie up 8 inches and Lake Ontario up 6 inches, according to the U.S. Army Corps of Engineers, Detroit District. Because of the increased level in Lake Superior, the outflows through the lower Lakes and connecting rivers were above average for August and are expected to be beneficial for water levels in Lake Erie, the Niagara River, Lake Ontario and the St. Lawrence River. Water levels are beginning to ebb as the winter season approaches, as is customary. . Pending trade agreements spotlight desired export growth Making eastern Canada’s ports more attractive to the European Union, the federal government has posted plans to confirm the Canadian- European Union Comprehensive Economic and Trade Agreement (CETA). The agreement is undergoing legal review. Trade incentives, reduced processing times at the border and eliminated duties on vessels are some of the factors expected to feed increased international trade with the EU, said Louise Laflamme, Chief, Marine Policy and Regulatory Affairs/Seaway and Domestic Shipping Policy for Transport Canada. While the trade agreement is detailed, Jean Aubry-Morin, Vice President, Corporate Sustainability for The St. Lawrence Seaway Management Corporation, said its overall impact from a marine perspective will be minor. “From a marine perspective, it’s extremely overplayed,” he said. “There’s not going to be that much impact for the system. It’s more of a strategic positioning and it’s important to Duluth Seaway Port Authority REGIONAL CALENDAR REGIONAL CALENDAR D A T E L I N E GREAT LAKES/SEAWAY REVIEW July-September, 2015 5 National U.S. ballast legislation being considered The Vessel Incidental Discharge Act (VIDA) remains before the U.S. House and Senate. The act mandates the U.S. Coast Guard to oversee nationally-uniform regulations for vessel discharges, replacing the state-to-state ballast water regulations impacting the single waterway. It also establishes a program for certification of ballast water management systems and grandfathers systems already in use. The Senate Committee on Commerce, Science and Transportation has passed its version of the act, S. 373, leaving the Members to consider the act as part of the Coast Guard bill. The House version, H.R. 980, has been passed by three Congresses and is expected to pass again. It is before the House Subcommittee on Coast Guard and Maritime Transportation. . Efforts expand to educate, communicate regional shipping The number of communication outlets for the Great Lakes/St. Lawrence Seaway system is increasing. Two new initiates were launched this summer—The Great Lakes Seaway Partnership, a bi-national group, and the Maritime Information Bureau in Quebec. These new efforts join those of individual businesses and existing organizations like Marine Delivers. The Great Lakes Seaway Partnership is a partnership of the American Great Lakes Ports Association, Lake Carriers’ Association, Fednav Limited and the Saint Lawrence Seaway Development Corporation. The group is focusing on education and research to highlight the benefits of marine transportation. The group has launched a website at www.greatlakesseaway.org/. The Maritime Information Bureau (MIB), created by the St. Lawrence Economic Development Council (SODES), provides information to experts about the marine sector and its activities in the Province of Quebec. “Recent news coverage has shown that the public and some elected officials know little about our industry,” said Nicole Trépanier, President of SODES. “It was unthinkable for us to stand idly by while misinformation was being circulated.” The MIB can be accessed online at www.stlaurent. org/bim/en/. . OCTOBER 5-8 Breakbulk Americas 2015 George R. Brown Convention Center Houston, Texas www.breakbulk.com 27 Quebec Marine Day Quebec National Assembly Quebec City, Quebec www.st-laurent.org 27-29 Natural Gas for High Horsepower Summit Kay Bailey Hutchison Convention Center Dallas, Texas www.hhpsummit.com NOVEMBER 2-4 American Association of Port Authorities Annual Convention Intercontinental Miami Hotel Miami, Florida www.aapaportmiami.com 3-7 World Maritime Technology Conference/ SNAME Maritime Convention Rhode Island Convention & Omni Hotel Providence, Rhode Island www.sname.org/2015wmtc/home 18-19 Hwy H2O Conference 2015 Hilton Toronto Airport Hotel & Suites Toronto, Ontario www.hwyh2o-conferences.com 218.727.8525 | www.duluthport.com The Port of Duluth has earned a worldwide reputation for award-winning service, handling all types of project cargo for the wind energy industry…nacelles, tower sections, hubs & blades for projects across North America’s heartland. So, when it comes to delivering heavy-lift, dimensional equipment for the wind energy, mining, or oil and gas industries, customers discover that using the fast, flexible multi-modal freight network thru Duluth works best. RIDING THE WIND THRU DULUTH Fednav | FMT | FALLine | Fednav Direct | FULL SPEED AHEA D www.fednav.com Great Lakes/Seaway Review: We’ve seen an acceleration in globalization (the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture). Are you seeing the same and what do you think is bringing globalization into focus in the Great Lakes/St. Lawrence Seaway region? Cappel: I believe the individual and collective marketing efforts of the ports, terminals, vessel lines and other system stakeholders have given the Great Lakes/St. Lawrence Seaway system a much more visible profile in global markets in recent years. At international trade shows, attendees now recognize HWY H2O as both a brand and waterway system and understand that HWY H2O has a membership of entities that can assist them in reaching markets deep within the interior of North America. The efforts are paying off as more shippers and carriers are beginning to utilize the system. Coda: Globalization has always been in focus along the Great Lakes/Seaway. With 46 percent of North American manufacturing located in this region, we’ve always competed on a global scale. This region first started feeling the effects of intense global competition in the 1970s and ‘80s. We’re still standing. Our manufacturing base is a tribute to being tough-minded, remaining relevant and staying competitive in world markets. We’ve seen the greatest degree of acceleration in globalization in the wind energy industry where, for a single project, it’s not unusual for components to be sourced from facilities in multiple countries from Germany to Spain to Indonesia. By the same token, while wind turbine components are primarily an inbound cargo here in the Port of Duluth, we’ve also handled outbound shipments of domestically manufactured blades through our Clure Public Marine Terminal to Chile, Spain and Brazil. Bulk commodities have faced challenges, both up and down. By their very nature, production and shipments of those cargoes run in cycles. Globalization has accelerated and accentuated some of those swings, making them even less predictable than they were a decade ago. We knew a couple of years ago that iron ore was going to face problems when companies in countries around the world began creating an oversupply that one day would hit the global market and cause prices to plummet. And the demand picture is changing—China posting 5 percent growth is very different than posting 10 percent growth. The strength of our U.S. dollar hurts us from an export perspective, especially on G L O B A L I Z A T I O N GREAT LAKES/SEAWAY REVIEW July-September, 2015 7 New markets, new ways of doing business A robust discussion on how accelerated globalization is impacting the system The global economy is changing the way stakeholders throughout the Great Lakes/ St. Lawrence Seaway system are doing business. To discuss changing strategies for business development, we contacted delegates from the bi-national trade mission, which included participation in Breakbulk Europe and a number of special meetings scheduled by mission hosts: The St. Lawrence Seaway Management Corporation and Saint Lawrence Seaway Development Corporation. A discussion with responding trade mission delegates follows. They are: Joe Cappel, Vice President of Business Development for the Toledo-Lucas County Port Authority; Vanta Coda, Executive Director of the Duluth Seaway Port Authority; Peter Hirthe, Senior Trade Development Representative for the Port of Milwaukee; Bruce Hodgson, Director, Market Development for The St. Lawrence Seaway Management Corporation and Jenna MacDonald, Director of Marketing for the Belledune Port Authority. Joe Cappel Vice President of Business Development Toledo-Lucas County Port Authority Vanta Coda Executive Director Duluth Seaway Port Authority Peter Hirthe Senior Trade Development Representative Port of Milwaukee the Great Lake/St. Lawrence Seaway system, where it becomes harder to balance outbound loads. So if we can’t always compete on price to be globally competitive, we compete based on quality and reputation. Hirthe: Yes, we regularly experience globalization within our customer base here at the Port of Milwaukee. There is an everincreasing global awareness of the Great Lakes/St. Lawrence Seaway system as a direct route to and from the Midwest’s economic engine. As other regions of the world look to expand and grow, they are contacting us directly in an effort to utilize the Great Lakes via the St. Lawrence Seaway efficiently. This literally puts us in daily contact with a worldwide “who’s who” of transit and logistics professionals. Hodgson: Our business is driven by global supply and demand for key commodities. Global commodity prices have an impact on trade flows and the volume of business moving through our system. Globalization has created new competition between markets that previously would not be competing with each other. This has created opportunities for the Great Lakes and has also brought about some cargo shifting to other markets. MacDonald: We are seeing the same thing at the Port of Belledune with the world being our market. An example is the smelter operations next door; in the past it was fed by a local mine, but since the mine closure, it is fed from concentrates originating in South America, Australia, etc. It has become a truly global operation. Similarly, the same is likely true for operations in the Great Lakes/St. Lawrence Seaway region. We are fortunate to work in an industry that bridges the gap between resource supply and demand by being able to provide efficient multi-modal transportation options. Great Lakes/Seaway Review: In the last five years, how has globalization changed the way you do business? Cappel: At the Port of Toledo, we have expanded our port and made investments in both equipment and infrastructure to modernize our facilities and provide worldclass throughput rates and capabilities. Shippers have many choices, so we must be competitive and flexible enough to handle a wide variety of cargo. Relying on strategic location and traditional cargo flow is not a sustainable way to manage a port in the global marketplace. Cargo that has traditionally been inbound can quickly shift to outbound and vice versa while new cargo-handling opportunities can vanish if a port is not prepared or is unresponsive. Toledo’s port expansion and modernization efforts have given us the ability and capacity to meet the ever-changing needs of the global marketplace so we are ready to respond rapidly to any new opportunity. Coda: It’s been more a matter of improving upon how we react and respond to ever-changing market conditions. We have re-focused on our core trade lane. Outside of our Canadian trade partners, the European Union remains our primary market. Those are tried-and-true trade corridors. The Port of Duluth-Superior does not play a large role in Asian trade, so any advances in trade across the Pacific would be niche G L O B A L I Z A T I O N 8 www.greatlakes-seawayreview.com At international trade shows, attendees now recognize HWY H2O as both a brand and waterway system. JOE CAPPEL The most complete marine offering on earth includes hundreds of ways to improve efficiency. Wärtsilä is the market leader in fuel efficiency, proven gas solutions and ensuring environmental compliance while protecting profitability. Our global network of over 160 service locations offers upgrades, minimises downtime and optimises performance when and where you need it. Read more at www.wartsila.com WÄRTSILÄ: YOUR SHORTER ROUTE Van Enkevort Tug & Barge market opportunities. Hirthe: The Port of Milwaukee now must communicate with customers, freight forwarders and shipping lines all over the globe. Cargo transiting into or out of the port could be controlled by someone literally anywhere in the world. Moving cargo from Milwaukee to the other side of the globe regularly involves contacting someone in another part of the world. Finding the person overseeing the freight movement can be a challenge. Hodgson: The improvement of available data to monitor market shifts allows us to better analyze trade data and traffic flows. Our analysis has allowed us to create various initiatives for new cargo opportunities that make good business sense, such as the incentive programs that have realized new business for the system. We will be adding a new incentive to the mix, the Gateway Incentive, which will provide further opportunity to develop business. MacDonald: Globalization makes every market more competitive and all of us better— over the past five years the Port of Belledune has been paying more attention to international competitors and best practices from ports doing similar activities rather than learning from and sharing experiences with ports in our immediate geographical region only. Great Lakes/Seaway Review: How do you perceive the pending international trade agreements between the U.S. and Canada with European groups impacting your business? Coda: Any opportunity for increased trade is a good thing, especially with our largest foreign trading partners (i.e. Canada and the EU). What we worry about are the unintended and unforeseen consequences that some trade agreements cause. We’ll just have to wait and see how these pending agreements play out. We need to optimize all of the positives. Hopefully, the U.S. won’t have to look in the rearview mirror and ask for revisions. Hirthe: The more stabilized the trading partner relationships are the more stable the trade so, in that respect, trade agreements in general are a positive step toward increased port activity. Equitable trade agreements eliminate some uncertainty. Hodgson: The CETA (Canadian-European Union Comprehensive Economic and Trade Agreement) will provide opportunity for the Great Lakes/Seaway system. Although it is too early to tell the detailed impact of those opportunities at this time, we are optimistic about the potential. MacDonald: The Port of Belledune currently exports wood chips and wood pellets to Europe; the pending trade agreements should help to accelerate growth in the forestry sector in general and therefore be a benefit to our current operations. Additionally, we are looking forward to learning more about how CETA will impact bulk/breakbulk trade, as this is an area in which the Port of Belledune specializes. Overall I think the agreement will be beneficial to ports in eastern Canada and open trans-shipment opportunities between ports like the Port of Belledune and those within the St. Lawrence Seaway systems and on the Great Lakes. Great Lakes/Seaway Review: How do you anticipate the expansion of the Panama and Suez canals will impact trade in the Seaway system? Cappel: Depending on vessel rates and availability, more transloading activity could occur in eastern Canada as lakers feed even larger vessels with export commodities like grain, coal and other bulk material exports. Coda: We don’t believe it will have G L O B A L I Z A T I O N GREAT LAKES/SEAWAY REVIEW July-September, 2015 9 SEEKING MARINE PROFESSIONALS MATES, ENGINEERS AND AB’s / DECKHANDS Van Enkevort Tug & Barge, Inc. 909 N. Lincoln Rd. • Escanaba, MI 49829 (906) 786-1717 Days • Fax: (906) 786-1700 vtbarge@vtbarge.com GREAT LAKES | BULK SELF-UNLOADING IRON ORE | STONE | COAL Any Type Dry Cargo Bulk Commodity Clean. Green. Safe. Smart. The next generation of CSL self-unloaders and bulkers are setting new standards. Inland-Coastal-Lake Ship Operator of the Year cslships.com much impact at all. In fact, it remains to be seen whether those expansions will impact more than just a few East Coast ports. Today it is a 17-day transit from Shanghai to Long Beach. Once the Panama Canal opens, you’re looking at 30 days to Houston or Savannah and closer to 32 to New York. So it’s still cheaper and faster to drop your cargo on the West Coast and onto an intermodal train to Chicago four days later. What do we in the Great Lakes/Seaway system have to offer if trying to compete for cargoes originating in Asia if not on price or speed? Hirthe: We anticipate that these expansions will alter shipping services provided on the ocean routes through the increased cargo volumes the expansions will allow, resulting in more shipping options available into the Great Lakes from both the east and west. As these changes disrupt the status quo for other ports, we believe Milwaukee is in a position to benefit from them. Hodgson: The expansion of the Panama Canal will hopefully provide new cargo opportunities. We also see potential with containerized movements with the expansion of the Suez Canal. MacDonald: The expansion of both the Panama and Suez canals should see larger container vessels calling on coastal ports— hopefully this will open the shipping market to then see a stronger number of feeder services along the Seaway system making use of our waterways and relieving some of the ground transportation modes. Great Lakes/Seaway Review: Regarding business development, what markets are you no longer pursuing and what markets have been added to your plans and why? Cappel: In Toledo, we have not given up on pursuing any particular market. We have seen markets disappear then reappear as time passes, so we try to monitor the slower markets and stay in touch with our contacts in those markets to see when the next opportunity might be to reengage. In the Toledo region, we are currently particularly dialed into opportunities to participate in oil-and-gas-related transloading projects due to our robust rail, pipeline, waterway and roadway infrastructure and proximity to regional refineries. Coda: Let’s boom in the region(s) that make sense, where we already have a solid history and pattern of success (i.e. Canada and the EU) before we run off to new markets and expend millions of dollars in new marketing efforts. Hirthe: For the Port of Milwaukee, the container market is a challenge due to the current void of a competitive service. Even in that sector, however, we are still very active in working towards an intermodal solution with the rail industry that serves our customer base. As for new markets, I would refer back to the globalization question we began with and say that we continue to push out the boundaries beyond our traditional European/Atlantic Ocean customer base, trying to mesh new opportunities with the available shipping services offered to find transportation solutions for new customers. Hodgson: We continue to pursue any and all opportunities. MacDonald: The Port of Belledune has pursued markets in China and Asia in general in the past; although we still see opportunities in these areas, our focus over the past two-to-three years has switched to the northern regions in Canada (arctic regions especially) and Europe. The main reason for the shift is to focus on the Port of Belledune’s geographical advantages for trade north-south (Canada’s north and the arctic)/ east-west (Europe). Great Lakes/Seaway Review: How are changes in commodity flows impacting your infrastructure needs? Cappel: In Toledo, connectivity between rail and water has never been more important. Having the ability to handle full-sized 100-car-plus unit trains and the capacity to store and reload large volumes of cargo is paramount. In the past five years we have completely refurbished over 17,000 feet of dock rail at our overseas terminal and have installed over 20,000 feet of rail at our new Ironville terminal. We have also constructed new multi-purpose facilities and have acquired equipment capable of handling a wide variety of cargo so we are always prepared to respond to new and changing cargo handling opportunities. Coda: Mining, oil/gas exploration and energy production in North Dakota and western Canada are big growth areas for us. Those fields are 50- to 60-year plays, even if commodity pricing is at its base right now. Who knows what the international outlook for coal may be, but as a natural resources port, the future for coal moving overseas looks bright, at least for the next decade or two. From a breakbulk and project cargo perspective, there is a desire for everything to be made bigger today, it seems, which poses dimensional and weight challenges for water and landside transport. So our infrastructure needs are for heavy-lift components. Our $18 million dock redevelopment project, once completed next fall, will include a heavy-lift dock capable of handling 2,000 pounds per square foot. G L O B A L I Z A T I O N GREAT LAKES/SEAWAY REVIEW July-September, 2015 11 Bruce Hodgson Director of Market Development The St. Lawrence Seaway Management Corporation Jenna MacDonald Director of Marketing Belledune Port Authority Globalization has created new competition between markets that previously would not be competing with each other. BRUCE HODGSON Sarnia Harbour Bridge clearances and axle/weight distribution factor heavily into how states route trucks along rural roads and state highways. In some areas, we do see manufacturers reverse engineer huge components for overland clearances. This often makes offloading and handling that much easier for all transport modes (e.g. wind turbine manufacturers shipping drive trains separate from nacelles). Here in Duluth, with the best road and rail clearances to/from the interior of North America, our Clure Public Marine Terminal, adjacent Dock D and new ro-ro dock are all engineered for large capacity jobs and multi-modal connectivity. Hirthe: The Port of Milwaukee has been able to keep pace with commodity flow shifts and maintain its infrastructure to date while developing plans to expand in the areas where our current capacity may be stretched by growth. Hodgson: The St. Lawrence Seaway Management Corporation has invested in various infrastructure projects in order to try to increase commodity flows and to maintain a system that is consistent and reliable. Investments include the Hands Free Mooring equipment which allows vessels to transit the locks through the use of vacuum pads instead of wires. This allows for a safer transit and for more vessels to call in the system, as there is no need to be Seaway- fitted. Other investments over the years include: Hydraulic Gates/Valves, Hydraulic Ship Arresters, Vessel Self Spotting, 3D Navigation Draft Optimization and Remote Bridge Operation. MacDonald: Infrastructure needs and constant development are a must at ports. At the Port of Belledune, we have seen our wood pellet exports remain constant over the past three-to-five years with modest growth each year; however, the shipment sizes have nearly doubled and in some cases tripled, putting a strain on storage capacities and possibly on water depths available alongside the marine terminal in the future. With this in mind, and other opportunities coming to fruition for the Port of Belledune, we have developed an infrastructure plan that will ensure we can best serve our existing clients and develop trade from Belledune even further. The infrastructure plan could see a new ultra-deep water terminal being built in the next few years as well as other port infrastructure improvements. Great Lakes/Seaway Review: In terms of revenue, is your business development focused on supplementing dips in some commodities/business opportunities or is it targeting business growth? Cappel: Normally, when one commodity is down there is another that is up to offset the loss. That is the advantage of having a diversified port like Toledo. We are diversified not only in types of commodities handled, but also in modes of transportation offered and services provided. If we keep attracting new customers to the mix, we can overcome some of the losses, caused mainly by factors that we can’t directly control, and net year-over-year business growth. Coda: We—the Duluth Seaway Port Authority—are targeting growth. This region is highly subject to shifts in global commodity pricing, so we adjust our marketing efforts periodically to remain focused on securing additional breakbulk and project cargoes for customers trying to move units in and out of mid-America. Serving the hinterland is what the Port of Duluth- Superior is strategically positioned to do— particularly with a bi-national waterway connecting us to the Atlantic, service by four Class I railroads and direct access to an expansive interstate highway system. We continually strive to recruit and facilitate the expansion of businesses in this region that can capitalize on that multi-modal freight transport system. Hirthe: With some of our traditional operations such as coal winding down, targeting growth opportunities is a vital focus of our business development plans. We are looking to expand our existing base and add complementary operations in the areas of energy, manufacturing and agriculture to achieve a long-term balance. Hodgson: Our business development is focused on both supplementing dips in some commodity areas as well as targeting business growth. MacDonald: The Port of Belledune always targets business growth—wherever possible each business unit has been developed to be self-sustainable. That said, one of our greatest assets is our flexibility and our ability to make quick decisions to see business growth become a reality. Our model is to help our clients in any and all ways possible to ensure the Port of Belledune is the best option for them to grow their business; growth in each of our businesses are directly correlated, therefore, we grow with our customers. . Outside of our Canadian trade partners, the European Union remains our primary market. VANTA CODA Situated at the center of the Great Lakes and St. Lawrence Seaway systems, where the St. Clair River joins with Lake Huron, Sarnia Harbour is positioned to serve shipping needs on one of the busiest inland waterways in the world. Tankers, bulk carriers, self-unloaders, foreign vessels, tugs and barges constantly navigate this waterway, and take advantage of the safe harbour and expert repair services that are available at Sarnia. Facilities at the Sarnia Harbour include the Government Dock and warehouse area, the East Dock, the North Slip, the Sidney Smith Wharf, the Cargill dock and elevator complex, all with reliable hydro facilities and laydown areas. Berthage, Storage, Ship Repair and much more… Sarnia Harbour 100 Seaway Rd, PO Box 123 Sarnia, Ontario N7T 7H8 Allan Columbus, Sarnia – Harbour Master/Wharfinger Office: 519-344-8894 | Facsimile: 519-344-5598 Peter Hungerford, MCIP, RPP Director of Economic Development & Corporate Planning Corporation Of The City Of Sarnia Telephone: 519-332-0330 extension 3343 www.sarniaharbour.com 12 www.greatlakes-seawayreview.com Mechanical problems with the upstream gates on the MacArthur Lock caused the 800-foot lock to close for repairs July 29. While the MacArthur was down, the Poe Lock—the only other lock large enough for freighters—went down for an hour. Minor repairs quickly reopened the Poe; however, according to the U.S. Army Corps of Engineers, the MacArthur Lock outage lasted 20 days and delayed ships for a total of 156 hours. Additional delays were experienced when shipping companies slowed vessels or held ships at dock facilities to minimize the wait time at the Soo Locks. Combined totals from the Lake Carriers’ Association (LCA) and Western Great Lakes Pilots, which are not all-inclusive, involve slowed movements of 79 vessel transits and 1.9 million tons of cargo for about 190 hours, according to Thomas Rayburn, Director of Environmental and Regulatory Affairs for the LCA. “We are working with the shipping industry to fully quantify these delays because we only have visibility on the delays that occurred right at the locks,” said Mike O’Bryan, Great Lakes Navigation Business Line Manager for the Corps. “Also, many tour boats were re-directed to the Canadian lock during this outage.” At one point during closure of the 73- year-old MacArthur, a line of ships formed awaiting passage from Lake Superior to the St. Marys River. For Algoma Central Corporation, the outage cost 24 hours of lost vessel time, spread over six vessels, according to Laura Ireland, Manager, Traffic & Customer Service. An outage at the locks is considered a homeland security issue as much as a critical disruption in commerce. “Conversations are taking place in Washington, D.C. about the Soo Locks at a frequency and level I’ve never seen before,” said Jim Weakley, President of Lake Carriers’ Association (LCA), noting that representatives from the steel industry traveled with LCA on a recent trip to the Capitol because of their concerns of keeping iron ore moving on the Great Lakes. While the regional economic impact of the closure is still being calculated, deliveries of iron ore, coal and limestone were stalled. According to Glen Nekvasil, Vice President of Lake Carriers’ Association, the backup interrupted the movement of 1,365,000 tons of iron ore. The MacArthur Lock is the first in the L O C K S GREAT LAKES/SEAWAY REVIEW July-September, 2015 13 Lock closure impacts shipping Two unscheduled closures at the Soo Locks hinder commercial shipping, heighten infrastructure concerns Midwest Energy Resources row of four locks. It was completed in 1943 and is 800 feet long and 80 feet wide. Intermediate and operating gates are located at each end of the lock. The intermediate gates are seldom used; however, the main gates must close fully to allow the emptying and filling valves to adjust the water level inside the chamber, bringing vessels up and down to match the higher or lower water levels on the other side of the lock. The main gates upstream in the MacArthur caused the outage by not closing properly. When asked if this could become a problem on the Poe Lock, O’Bryan said: “We are working with lock design experts from across the Corps to conduct an extensive analysis of the Poe Lock and all its components. The Poe Lock is nearly 50 years old, so many components are beginning to show their age. We will continue with an aggressive asset renewal program as funding allows and will continue to work with lock experts from within the Corps as well as independent outside expertise to assess the current condition of components and develop a path forward to ensure reliability of the lock.” Behind the scenes. The first step to repair the MacArthur required dewatering the lock, which includes setting stoplogs on the upstream end of the lock and closing the dewatering gates on the downstream end. The stoplogs were first inspected by a structural engineer and then set into place. When stoplogs are in place, it is necessary to put chinking—pieces of rope or other material—between the logs. The Corps hired a contract dive team to quickly chink the stoplogs so the lock could be dewatered, providing dry workspace for the crew to begin repairs. A manlift and crane were rented to assist with repairs. While details of the repairs are being withheld due to national security, the Corps can speak to the condition of the gates that led to the malfunction. While the asset renewal program is ongoing, the malfunction in the gates was not an area where upgrades had taken place. Although the Corps had re-stressed the gates, which helps them come back into alignment and provides for better mitering, or closing, the gates had not been stressed in many years, according to O’Bryan. The cost of the recent repairs was $160,000, which included fabricating parts, renting equipment, dive team support, gate stressing support and overtime labor. The Great Lakes Navigation Team has submitted a request for additional funds to cover the repairs. If no additional funds are provided, another area of work will be delayed until the next federal appropriations cycle. Recent asset renewal upgrades on the MacArthur involve modernizing the electrical and controls system. “We have experienced short outages due to this aged equipment in recent years,” O’Bryan said. “The electrical and controls system is original to the lock from its construction in 1943. This overhaul will significantly improve the reliability of the lock.” Poe kept commerce moving. Other than the brief outage, operation of the Poe Lock kept commerce moving, although at L O C K S 14 www.greatlakes-seawayreview.com An outage at the locks is considered a homeland security issue as much as a critical disruption in commerce. For more informatio n, visit our website at www.midwestenergy.com or call 715-392-9807 WHATEVER IT TAKES TO MEET YOUR COAL TRANSPORTATION REQUIREMENTS • Coal Sourcing • Rail Transportation • Dock Services • Blending • Trucking • Vessel Transportation West Michigan Port Operators a slower place. The Poe stands as the only lock able to accommodate the U.S.-flag fleet’s largest ships, which load iron ore, coal, grain and other cargoes in Lake Superior for delivery to the Lower Lakes. Had gates at the Poe Lock malfunctioned as on the MacArthur, regional impacts would have been far worse. “The impacts would have been amplified 100 times,” Nekvasil said. “Poe-class vessels cannot transit the MacArthur, so if the Poe goes down, 70 percent of U.S.-flag carrying capacity is effectively idled. Major disruptions in ore and coal deliveries would have followed. While stockpiles are not critically low right now, losing 20 days of navigation would have had an impact on meeting customers’ annual requirements. We very well could have needed an extension of the lock closing date, which would have been a real problem for the Corps given all the work that needs to be done at the locks this winter.” Construction of a new Poe-sized lock has been approved by Congress. More recent legislation stipulates full federal funding for the construction of the lock. Yet, construction stalled after the installation of coffer dams because money is not being appropriated for the project—which is caught in governmental processes. “Congress can’t fund the lock until it’s in the President’s budget or it will be considered an earmark,” Weakley said. “In order for that to happen, the benefit-cost ratio must get above 1.” The benefit-cost ratio (BCR) is a measurement used by the Corps. Work is ongoing to update an older BCR that has been acknowledged to include errors based on the special nature of trade patterns and available alternative modes to move bulk commodities from Lake Superior to the Lower Lakes. Assumptions were made that would have been true in other regions of the country. A new BCR could be completed in the next 24-36 months. If the final outcome is satisfactory for federal funding, a two-year budget cycle could put appropriations four years out and construction an additional 10 years. “We’ve been asking the Corps to keep the lock running on bailing wire and duct tape for 15 years already,” Weakley said, noting that once the appropriations appear in the President’s budget, he’s certain the House and Senate will finalize the funding for the new lock. Until then, the Corps team at the locks will continue to use what money it is given to proceed with the asset renewal plan, in hopes of keeping closures at bay. “We fully understand how this unscheduled outage of nearly three weeks affected the shipping community,” O’Bryan said. “Our crews worked as quickly as possible to accurately assess the problem and conduct repairs in a safe manner. The significant delays that the shipping community experienced underscore the importance of both the MacArthur and Poe Locks to the shipping and manufacturing industry. It is more important than ever that we do all we can to ensure reliability of both locks into the future.” Janenne Irene Pung . L O C K S GREAT LAKES/SEAWAY REVIEW July-September, 2015 15 If the Poe goes down, 70 percent of U.S.-flag carrying capacity is effectively idled. The largest port on the coast of West Michigan Providing your Lake Michigan bulk storage needs 75 years of cargo and material handling experience (231) 722-6691 westmichiganportoperators.org • e-mail inquiries to info@wmpo.com Internationally Accessible Marine Freight Corridors FERRYSBURG | HOLLAND | MUSKEGON The Great Lakes Seaway Partnership I am Great La akes Sea away Ship pping… Rebecca H The Interla Second M Hancock ake Steamship Comp ate pany wide rang As Secon with The In Academy, R A 2002 gra “ ge of duties includi nd Mate, I am resp terlake Steamship Com Rebecca Hancock beg aduate of the Great Lak creating sible for a ing ons mpa an h kes being pa of the no the load p in the pilo the daily art of a great team n-traditional workp plan. I enjoy the da ot house, and adm work schedule, stan ace and challenges istering ng watch m.” pla ily c mini ndin Great Lakes Seaw supporting 227,000 way shipping dri jobs in the Un ives economic ited States and growth, d Canada. supp orting organizatio The Great Lakes Seaway To learn more, visit us at ww ons promoting the benefits of c y Partnership is a coalition of le w.greatlakesseaway.org. F ommercial shipping. ading U.S. and Canadian maritim Follow us on Twitter @GLSP me Partnership The writing has been on the wall for a decade, signaling coal’s slide as one of the Great Lakes most reliable cargoes. Coal-fired power plants fed by lake carriers are shrinking due to lower natural gas prices and stricter federal environmental standards. Plant closings and conversions to other fuel types are shrinking the market for carrying coal in small and large bites. In recent years, coal shipments within the Great Lakes averaged about 27 million metric tons annually, according to Lake Carriers’ Association. A major impact occurred in 2014 when the Province of Ontario shuttered the last of its five coal-fired power generating plants. Ontario closures included the Nanticoke Generating Station on Lake Erie, the largest coal-burning facility in North America. Nanticoke required shipments of as much as 12 million tons of coal annually. In its shift away from coal, Consumers Energy, a Michigan public utility, will close the B.C Cobb plant next April. The Muskegon, Michigan power plant sits along a deepwater port on Muskegon Lake and consumes 640,000 tons of coal annually, producing enough electricity to power a community of about 200,000 people. While Cobb is one of seven Consumers generators closing, it’s the only one served by the laker fleet. Consumers has partnered with community leaders in exploring options to keep the port vital by expanding cargo volume. Stakeholders are investigating the feasibility of establishing the port as a logistic hub for West Michigan commercial shippers and developing trade lanes from Muskegon to European and Asian markets. “We’re looking at several different commodities and all types of deepwater development—agribusiness and container C O M M O D I T I E S GREAT LAKES/SEAWAY REVIEW July-September, 2015 17 Pending coal-burning plant closures The following facilities are among a growing list of coal-fired plants within the Great Lakes states scheduled for near-term retirement or conversion. Illinois Joliet, 2016 (conversion to natural gas) Will County, 2015 Indiana Frank E. Ratts, 2015 Tanners Creek, 2015 Wabash River, 2015 Michigan B.C. Cobb, 2016 J.C. Weadock, 2016 J.R. Whiting, 2016 Harbor Beach, 2015 Trenton Channel, 2016 Minnesota Black Dog, 2015 Silver Lake, 2015 Taconite Harbor, 2015 Syl Laskin, 2015 (conversion to natural gas) Ohio Ashtubula, 2015 Avon Lake, 2016 (partial conversion to natural gas) Miami Fort, 2015 Muskingum River, 2015 Picway, 2015 Hutchins, 2015 Wisconsin Alma, 2015 Nelson Dewey, 2015 SOURCE: INSTITUTE FOR ENERGY RESEARCH The future of coal Provincial, federal decisions continue to impact coal tonnage on the Lakes An Interlake Sheamship vessel delivers coal to the DTE power plant in Monroe, Michigan. Ocean Group 18 www.greatlakes-seawayreview.com shipping,” said Roger Morgenstern, Senior Public Information Officer for Consumers. “We think there’s potential.” Out-of-the-box thinking may be the key to turning the closure into an asset. “We have blighted homes,” pointed out Jonathan Wilson, Muskegon County Economic Development Coordinator. “We’re working with the Van Andel Global Trade Center studying markets for shipping the deconstructed debris.” In Wisconsin, We Energies is cutting ties to coal with a $70 million investment to convert Valley Power Plant at Milwaukee to natural gas. When fired by coal, the Valley plant burned 400,000 tons annually, all of which was received via lake carriers. The conversion is expected to be completed in November. The company’s Presque Isle Power Plant along Lake Superior at Marquette, Michigan, will likely be replaced by a modern plant by 2020. Lakers currently deliver 1.4 million tons of coal annually to the Upper Peninsula plant. To comply with new regulations and maintain coal use, Michigan’s DTE Energy Monroe Power Plant along Lake Erie at Luna Pier completed a $2 billion investment in 2014. It took more than a decade to implement the clean technology, which meets federal emission standards. The plant is among the largest coal-fired power generators in the country. “We believe we’ll see little or no impact on the vessel shipments over the next five years,” said DTE Spokesperson Erica Donerson. Looking long-term. The Clean Power Plan announced by President Obama in August 2015 is expected to result in the closure of 60 percent of coal-fired plants over the next five to 15 years, according to Donerson. The Clean Power Plan is the first national standard addressing carbon standards for power plants. It mandates that power plants reduce carbon dioxide emissions 32 percent from 2005 levels by 2030. Utility companies are challenging the rule in court. The Power Plan announcement came just weeks after a major ruling on mercury emission standards for power plants. DTE and other utilities strategized future operations in front of the 2015 enactment of the U.S. Environmental Protection Agency’s (EPA) Mercury and Air Toxics Standards (MATS) for power plants. Michigan and 22 other states and interest groups sued the EPA claiming it unreasonably overlooked costs associated with compliance. In June, the U.S. Supreme Court ruled in favor of the utilities. The MATS suit was remanded to the District of Columbia Court of Appeals, which will decide whether the high C O M M O D I T I E S The Clean Power Plan announced by President Obama in August 2015 is expected to result in the closure of 60 percent of coal-fired plants over the next five to 15 years, according to Donerson. KCBVX GREAT LAKES/SEAWAY REVIEW July-September, 2015 19 court’s rule is valid and whether the EPA must go back to the drawing board to amend or rewrite the standards. MATS remains enacted during the court process. As originally presented, MATS requires most coal-powered plants to reduce emissions for mercury and other hazardous airborne emissions by 90 percent. The cost of upgrading facilities was projected to force as many as 400 American coal-fired plants to close, 21 in Michigan alone. MATS took effect last April; however, many plants received an extension for compliance. The Court’s five-to-four decision supporting utility companies came too late to substantially influence the shift away from coal. Outcome unchanged. “It had no effect on the closing of the Cobb plant,” said Morgenstern. “We already had an agreement with the EPA to close seven units, including two units in Cobb.” We Energies is also unaffected by the Court decision. “We do not expect the ruling to affect our current multi-emission approach, which has led to an 80 percent system-wide reduction in combined emissions since 2000, while increasing generating capacity by 50 percent,” said company Spokesperson Amy Jahns. “As for our Presque Isle Power Plant, we will continue to move forward with our current plan, which will allow the plant to operate in compliance with the MATS rule.” Midwest Energy Resources Co. (MERC), a subsidiary of DTE Electric Company, transports about 15 million tons of coal each year, which is short of its 25-millionton capacity. Based at Superior, Wisconsin, MERC moves coal from Western mines to end users. While 60 percent of its business feeds DTE facilities, the remainder supports thirdparty customers. In 2011, MERC took a bold step to increase tonnage by diversifying its customer base. The company brought together stakeholders, including Quebec Stevedoring and Canada Steamship Lines, to develop a supply mechanism meeting Northern Europe’s demand for American coal. The goal was to export 4 million tons annually. But the innovative partnership to increase shipments met a disappointing end after three years due to coal’s slower world growth and higher coal output in other coal exporting countries. Despite waning domestic and foreign demand for coal, MERC management continues to seek emerging opportunities for moving the important bulk commodity. “We’re looking at new markets,” said company President Fred Schusterich. “We never sit still.” Sally Barber . C O M M O D I T I E S We Energies maintains the coal-powered Valley Power Plant in Milwaukee, Wisconsin. 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