Vol.44 No.2 OCT‑DEC 2015

V O L U M E 4 4 O C T O B E R – D E C E M B E R 2 0 1 5 N U M B E R 2 Treating ballast water . Changes coming for tugs . Building more new ships . Investing in ports G LGREAT LAKER Interlake Steamship The Interlake Steamship Company 7300 Engle Road Middleburg Heights, Ohio 44130 Phone: 440-260-6900 • 800-327-3855 FAX: 440-260-6945 Email: boconnor@interlake-steamship.com Website: www.interlakesteamship.com DEDICATION Throughout Interlake Steamship’s successful history, one thing has never changed – the company’s dedication to providing superior customer service. Interlake builds on its past by looking ahead every day – to changing customer needs, to engineering innovation, to personnel training, to safety upgrades. Ensuring a modern, competitive, well-maintained fleet operated by knowledgeable shore-side staff and experienced vessel crews means that Interlake’s customers receive safe and reliable cargo delivery. Interlake is committed to using yesterday as a benchmark to be exceeded tomorrow. Great Lakes transportation is our business, our only business. Let us deliver for you. GREAT LAKES/SEAWAY REVIEW October-December, 2015 1 Great Lakes/Seaway fleets begin adding ballast treatment systems. Page 7. Iron ore remains the world’s second most valuable commodity. Page 19. Algoma expands its newbuild program at Croatian shipyard. Page 25. 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 Maritime Heritage PAYING TRIBUTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 A new memorial to be constructed at Welland Lock 3 for fallen workers. Marine Photography TAKING IT EASY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Crews enjoy onboard activities when off-the-clock. Shipbuilding History GIANTS ON THE LAKES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Shipping experts on the Great Lakes are watching closely to see what provisions are included in new federal legislation to assist the construction of additional new ships. Meet The Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 On The Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Ballast Water Management INSTALLING TREATMENT SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Fleets make commitments to systems operating as Alternative Management Systems. Towing & Barging TOWING COMPANIES WATCHFUL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 U.S. Coast Guard finalizing changes to regulations requiring inspection of towing vessels. Commodities THE IRON ORE STORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 This little recognized commodity is the second most valuable resource globally. Shipbuilding & Ship Repair BUILDING NEW, MODERNIZING SHIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Algoma Central Corporation contracts for new ships, expands ship repair scope. ENDING AN ERA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Interlake leaves steam behind with off-season conversion of Herbert C. Jackson. Ports REINVENTING THE PORT OF MONROE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 State funding makes way for major dock improvement. Fleets SETTING UP SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 New shipping company plans to connect Lake Michigan ports with Europe. Shipbuilding & Ship Repair BUILDING THE FLEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Great Lakes Towing purchases new, plans newbuild program. INNOVATIVE IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 CSL’s Assiniboine picks up speed with retrofitted bilge plates. Ports PRIMED FOR GROWTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Port of Johnstown completes new wharf. GREAT LAKER O C T O B E R – D E C 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 Editorials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 37 The Administrator’s Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The international maritime magazine of the Great Lakes/St. Lawrence Seaway system Marine Pollution Control Pere Marquette Shipping 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; 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, Vice President of Business Development, Toledo-Lucas County Port Authority; Steven A. Fisher, Executive Director, American Great Lakes Ports Association; Tim Heney, Chief Executive Officer, Thunder Bay Port Authority; 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; Kevin McMonagle, Vice President-Operations, American Steamship Company; Mark Pathy, President and Co-CEO, Fednav Limited; Wayne Smith, Senior Vice- President, Commercial, Algoma Central Corporation; Joseph P. Starck, Jr., President, Great Lakes Shipyard; John Vickerman, Founding Principal, Vickerman & Associates, LLC; James H.I. Weakley, President, Lake Carriers’ Association; Wendy Zatylny, President, Association of Canadian Port Authorities. 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. One year print & digital edition $38. Foreign: One year $47.00; two years $68.00; three years $100.00. One year print & digital edition $53. One year digital edition $20. iOS mobile app $2.99 per issue. Payable in U.S. funds. Back issues available for $7.50. 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: Unloading iron ore. Great Laker Cover: A Canadian mariner heads for the bum boat. Photo by Jerry Bielicki. THE INTERNATIONAL MARITIME MAGAZINE OF THE GREAT LAKES/ST. LAWRENCE SEAWAY SYSTEM VOLUME 44 OCTOBER-DECEMBER 2015 NUMBER 2 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 October-December, 2015 3 Congress finalizes, President signs budget for fiscal year 2016 Just prior to calling the holiday recess, Congress finalized appropriations for fiscal year 2016. The $1.14 trillion package includes 12 traditional appropriation bills into a consolidated act. Included in the bill is: • Use of $1.25 billion of the Harbor Maintenance Trust Fund, which maintains the Congressional outline approved in the Water Resources Reform and Development Act. According to the act, 2016 spending is 69 percent of the 2015 Harbor Maintenance Tax, which is $1.25 billion. Of that total, $1.2 billion is allotted for the U.S. Army Corps of Engineers Operation and Maintenance fund. The Corps is now tasked with establishing its 2016 plan of work, which is generally released in the spring. • A $28.4 million allotment for the Saint Lawrence Seaway Development Corporation (SLSDC), about $8 million less than was called for in the President’s Budget. The difference—similar to a shortfall for FY2015—could again impact SLSDC’s plans to install hands-free mooring at a U.S. lock. • A $5 million appropriation for the U.S. Maritime Administration’s Marine Highway Program. . The U.S. Coast Guard is proposing rate adjustments that have ignited interest by shipping industry stakeholders and pilots. During its rulemaking process, public comments included dissension regarding a change in methodology that will increase pilotage costs by more than 50 percent— beginning in spring of 2016. According to a federal transcript of a public meeting, Dave Dean of the Great Lakes Pilotage Program explained the proposed methodology would increase costs by about $6.5 million. Costs driving the change were cited as the need to increase the number of pilots and pilot compensation. In addition to the 50 percent increase, a surcharge would fund training six more pilots for the Great Lakes. Rates for pilotage services on the Great Lakes were last revised in February 2015 and by law must be reviewed annually. According to Todd Haviland, Commandant of the Office of Great Lakes Pilotage, the biggest change involves adding pilots. Adjustments in compensation were determined through comparisons with the Canadian Great Lakes Pilotage Authority—increasing the targeted annual pay to $355,000. “We want to make sure that we either minimize, if not eliminate, the delays that we’ve seen in the system due to pilotage,” he said. During the public comment period, which was extended 30 days, 53 comments were submitted. “It is important to consider this increase in context. During the previous 10 years (2006-2015), the Coast Guard has increased pilotage rates a total of 114 percent, while at the same time shrinking the total pilot workforce,” said a letter submitted by Joachim Schrings of Fednav Limited on behalf of ThyssenKrupp Steel Europe AG. “The record clearly illustrates that Great Lakes pilotage has become a runaway cost for users of the Great Lakes/St. Lawrence Seaway navigation system. Today, the cost of pilotage exceeds the operating costs of the vessel itself during a Great Lakes transit.” Similar messages were sent by other industry stakeholders. While attending a public meeting, Paul LaMarre, Jr., Director of the Port of Monroe, said: “The association [AGLPA] is extremely troubled by this increase when we are trying to create sustainability within the system and promote new opportunities and new traffic. We’re already struggling to be competitive with our coastal counterparts on the rate structure that must exist in order to attract cargo into the Great Lakes/St. Lawrence Seaway system.” The public comment period is closed. The Coast Guard is now reviewing the comments.. Fednav’s first ship with ballast water treatment system delivers The Federal Biscay has delivered to Fednav, the sixth in a series of 19 Seaway-size vessels delivering through 2018. The vessel is an ocean-going laker destined to ship general cargo to the Great Lakes and bulk commodities from the Midwest to world markets. The Federal Biscay is equipped with a ballast water treatment system, a first for ships transiting the Great Lakes. Developed by JFE Engineering Corporation in Japan, the BallastAce system is expected to be effective in both freshwater and saltwater. In addition, the Federal Bering has delivered. A reception was held onboard to celebrate her maiden voyage to the Port of Antwerp. The port was chosen to recognize the ongoing operation of Fednav’s FALLine liner service between Europe to the Great Lakes. “By continuing to expand our fleet and operations, our fleet will be one of the most modern, efficient and environmentally-friendly trading between Europe and North America, especially in the Great Lakes and St. Lawrence Seaway system,” said Etienne De Vel, Commercial Manager of European operations. . 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 G3’s new grain terminal under construction in Hamilton Construction of G3 Canada Limited’s (G3) new lake terminal at Pier 26 in the Port of Hamilton is progressing quickly. The 50,000-metric-ton facility, slated for completion prior to the 2017 harvest, will load grains and oilseeds out of southern Ontario for transport to G3’s facilities on the St. Lawrence River. From there, they will be shipped onward to export markets around the world. Canadian mint releases commemorative “Lost Ship” coin The Royal Canadian Mint released a coin in October 2015 commemorating the anniversary of the wreck of the Edmund Fitzgerald. The coin is the third, and final, in a series of three honoring ships lost in Canadian waters. The coin was designed by Canadian artist John Horton and is crafted of 99.99 percent pure silver. It is produced using full color over a detailed engraving. The ship is depicted with great waves sweeping across her deck as she battles the fierce storm that claimed her and the entire crew on November 10, 1975. The words S.S. Edmund Fitzgerald and the outline of the ship’s anchor are engraved along the edge of the coin. The commemorative coin has a face value of C$20 and a limited mintage of 7,000 worldwide. . U.S. Coast Guard’s pilotage plan under fire Andrie D A T E L I N E 4 www.greatlakes-seawayreview.com 2015 due to a faulty gate mechanism, all traffic was diverted to the Poe. According to the Corps, 103 ships were delayed for 166 hours. Additional delays were experienced by the shipping companies as they slowed down in the system or were held at dock facilities to minimize wait times in the Soo. . Grain adds to solid tonnage totals The Great Lakes/St. Lawrence Seaway shipping industry’s late-season grain push has hiked the season’s cargo totals. Grain shipments (Canadian and U.S.) from April 2 to November 30 totaled 9.12 million metric tons. Down 11 percent from 2014, grain tonnage is still above the five-year average. The Port of Thunder Bay reports grain tonnage 23 percent higher than the five-year average, totaling 5.7 million metric tons. Wheat and canola accounted for 94 percent of the grain moved through the port. As a growing commodity, lentils made up 2 percent of the port’s grain shipments in 2015. A detailed report on the 2015 season and commodity totals will be available in the April- June edition of Great Lakes/Seaway Review. . U.S.-flag fleets investing more than $110 million in vessels U.S.-flag vessel operators on the Great Lakes are committing more than $110 million to maintain and modernize vessels in 2016, according to Lake Carriers’ Association. Maintenance and repair work over winter lay-up will cost about $60 million. Projects that involve repowering vessels or installing exhaust gas scrubbers cost upwards of $50 million. Two U.S.-flag steamships, the John G. Munson and the Herbert C. Jackson, are being repowered with state-of-the-art diesel engines. Both vessels have been in service on the Lakes since the 1950s. A U.S. Maritime Administration report noted repowering a Great Lakes freighter typically achieves 80 percent of the efficiencies of a newbuild at 20 percent of the cost. In addition to these repowerings, the James R. Barker and Lee A. Tregurtha will be fitted with exhaust gas scrubbers. . Tax credit for wind energy part of FY2016 Congressional budget Within the budget recently passed by Congress and signed by the President, the Production Tax Credit (PTC) for wind energy projects was extended. Enacted by Congress in 1992, it provides a 2.3 cent per kilowatt-hour tax credit for the first 10 years of a facility’s operation. With wind turbine components moving through the Great Lake/St. Lawrence Seaway en route to wind farms in the Midwest or as exports, the PTC is an important part of stimulating wind-farm construction. The legislation extends the PTC through the end of 2016. It is expected to be reduced until 2020, when it is scheduled to end. . Funding for Soo Locks study approved The Obama Administration approved $1.35 million in November 2015 to review critical upgrades to the locks at Sault Ste. Marie, Michigan. U.S. Senators are backing the U.S. Army Corps of Engineers’ request to replace the century-old Davis and Sabin Locks—no longer in use—with a lock similar in size to the Poe Lock. A new lock was authorized in 1986. However, a 2005 Corps report found the benefit-tocost ratio of a replacement lock to be less than 1.0—mathematically too low to be considered in the President’s budgets. New funding will allow the Corps to reevaluate the benefit-to-cost ratio. A new lock would cost about $580 million and take seven-to-10 years to build. With 10,000 lockages during the annual navigation season, the Soo Locks are the busiest in the U.S. Of the two locks still operating—MacArthur and Poe—only the Poe can accommodate the Great Lakes’ largest vessels, which carry 70 percent of the cargo moving through the locks. When the MacArthur Lock failed in July SHIP ASSISTS • TOWING CREW BOAT SERVICES • ICE BREAKING SPECIAL PROJECTS ASPHALT & FUEL OIL TRANSPORTATION VESSEL & FLEET MANAGEMENT PROJECT MANAGEMENT 561 E. Western Ave. Muskegon, MI 49442 TUGS • BARGES • JACK-UP BARGES • CREW BOAT • CRANES Call Stan Andrie at (231) 332-9227 or Mike Caliendo at (231) 332-9243 www.andrietg.com Duluth Seaway Port Authority REGIONAL CALENDAR D A T E L I N E GREAT LAKES/SEAWAY REVIEW October-December, 2015 5 Melford terminal project moving forward Plans for a new container terminal and intermodal rail facility on the Strait of Canso in Nova Scotia continue to develop. The privately-owned Maher Melford Terminal is designed to be a highvolume intermodal transfer facility moving containers rapidly between vessel and rail, with an initial capacity exceeding 1.5 million twenty foot equivalent units, or TEUs. The company has paid for and acquired title to all the property required for the first phase of terminal construction and a 32-kilometer rail corridor—close to 700 acres in total. With zero air draft restrictions, ice-free and navigational water depth exceeding 90 feet (60 feet at the berth) the terminal could handle the world’s largest container ships and will provide on-dock access to the CN Rail network. “We are working on securing a cargo commitment,” said Richie Mann, Vice President Marketing, Melford International Terminal. “Given the global circumstances that continue to spin out in the sector, such as the larger ships and the need for efficient landside infrastructure, there continues to be tremendous interest in the Melford project.” . System port directors leading Canadian ports group The 2015/16 Board of Directors for the Association of Canadian Port Authorities (ACPA) well represents the Great Lakes/St. Lawrence Seaway system. Four of eight board members run ports along Lake Ontario or the St. Lawrence River. They are: Board Chair Mario Girard, President and CEO, Quebec Port Authority; Vice Chair Donna Taylor, President/CEO and Harbourmaster, Oshawa Port Authority; and board Directors Carl Laberge, General Manager, Saguenay Port Authority and Sylvie Vachon, President and CEO, Montreal Port Authority. Remaining board members are: Bernie Dumas, Nanaimo Port Authority; Don Krusel, Prince Rupert Port Authority; Robin Silvester, Port Metro Vancouver and board Secretary Sean Hanrahan, Port of St. John. “With several international trade agreements completed and currently being negotiated, this is an exciting time for Canadian ports,” said Gerard. “As key players in the supply chain and drivers of economic growth, our ports will continue to push the limits to help Canada prosper within this age of expanding global trade.” . FEBRUARY 3-7 ISMA Grand Lodge Convention 2016 Embassy Suites Hotel, Chicago, Illinois www.chicagoshipmasters.com/ grand-lodge-convention.html 9-10 Great Lakes Waterways Conference, Marriott Downtown at Key Center, Cleveland, Ohio www.maritimemeetings.com/great-lakeswaterways- conference.php 23-25 Great Lakes Commission Semiannual Meeting and Great Lakes Day Washington, D.C. projects.glc.org/greatlakesday/ MARCH 1-9 Council of Great Lakes Governors Trade Mission Frankfort, Germany and London, United Kingdom www.cglslgp.org 218.727.8525 | www.duluthport.com Not by a long shot. Here in the Port of Duluth-Superior we welcome old friends like the Joseph L. Block several times a year. Launched in 1976, this venerable vessel still makes at least a dozen trips every season to the Twin Ports … hauling limestone in and loading iron ore pellets for downbound transits. Built to last decades, US-flag vessels spend their working lives serving customers across the Great Lakes. So do we. NEW KID ON THE BLOCK ? REGIONAL CALENDAR JANUARY 10-14 Transportation Research Board 95th Annual Meeting, Washington, D.C. www.trb.org/AnnualMeeting/ AnnualMeeting.aspx 15 Toronto Marine Club Royal York Hotel, Toronto, Ontario www.themarineclub.org Fednav | FMT | FALLine | Fednav Direct | DELIVERING A HIGHER S CLEA STANDARD IN ENVIRONMENTAL SUSTA AN MACHINE AINABILITY E www.fednav.com SUSTAINABILITY With available technology and regulations lacking alignment, CSL Americas is beginning to retrofit its self-unloaders with a ballast water treatment system. The OceanSaver system is operating aboard the Sheila Ann and undergoing testing that could lead to U.S. Coast Guard certification. “It took 1,000 hours to design the installation of the system and it only takes about 3,000 hours to design a whole boat,” said Kirk Jones, Vice-President, Sustainability, Government and Industry Affairs. The 50-metric-ton system was installed during a scheduled survey drydock in January 2015. It was officially commissioned in April and is undergoing a series of tests. OceanSaver is International Maritime Organization (IMO) approved and has received type approval certification by DNV. The Coast Guard has designated the system as an Alternate Management System (AMS) and is testing it for type approval. The final tests should be complete in early 2016, according to Kevin Begley, Director, Engineering and Projects for CSL International Inc. “Six consecutive tests in six months are required to pass,” Begley said, noting how demanding the timeline and requirements are on companies and the independent laboratories working with the Coast Guard. “The tests need to show seasonal differences and have to be done in a variety of ports so samples can be checked from different water areas.” Making an AMS choice. Investing in ballast water technology has become a priority for fleets. CSL, Canfornav and Fednav Limited have made commitments to systems in the face of uncertain regulatory requirements. However, with system tests and certifications falling behind regulatory installation dates, both fleets have committed to systems lacking full type approval. They B A L L A S T W A T E R M A N A G E M E N T GREAT LAKES/SEAWAY REVIEW October-December, 2015 7 Installing treatment systems Fleets make commitments to systems operating as Alternative Management Systems Donjon 8 www.greatlakes-seawayreview.com are operating as AMSs, a temporary Coast Guard designation given to ballast water treatment systems (BWTS) approved by a foreign administration but not yet through the process in the United States. Vessel operators may use the systems instead of ballast water exchange while the systems undergo Coast Guard testing. Using an AMS doesn’t guarantee type approval, but the Coast Guard considers their use a step forward in aquatic invasive species prevention and control. They follow a bi-national program requiring ballast water exchange and saltwater flushing for all oceangoing vessels and ballast tank inspections before the ships are given entry to the Great Lakes/St. Lawrence Seaway system after sailing outside the exclusive economic zone. Since ballast water exchange was required in 2006, no new ballast-attributed species have been identified in the Great Lakes. While much progress has been made developing and testing BWTS, hurdles remain— aligning international and system regulations and getting the systems approved for freshwater use. With roughly 200 U.S.- and Canadian-flag lakers requiring freshwater use, BWTS developers have focused on systems for the larger saltwater market involving about 60,000 vessels, Jones said. “The next step is to bring closure to the conundrum. It’s been an eight-year journey,” said Craig Middlebrook, Deputy Administrator for the Saint Lawrence Seaway Development Corporation, sourcing IMO documentation. “As of May 2015, there are 57 ballast water treatment systems that have received type approval certification by their respective administrations. Most of these systems have also been designated as AMS by the Coast Guard. This means there are 30 other distinct treatment process combinations being used for type approved BWTS.” Two-step approach. Like many other systems, OceanSaver uses a two-step approach to treating ballast water—filtering and chemical disinfecting. The ballast water is pumped onboard and run through a mechanical, fully-automated filter. The selfcleaning filter removes between 60 and 80 percent of organic matter above 40 micrometers. (There are 1,000 micrometers in a millimeter.) The captured organisms are flushed off the ship. About 1.5 percent of the filtered water is put through the secondary unit where a chemical reaction produces chlorine that is then re-injected into the main flow to disinfect the remaining ballast water. Sheila Ann was selected for the project to provide CSL’s engineers with a better understanding of what retrofitting a vessel with a BWTS involves. “One of our chief goals was to under- B A L L A S T W A T E R M A N A G E M E N T CSL, Canfornav and Fednav Limited have made commitments to systems in the face of uncertain regulatory requirements. Ocean Group GREAT LAKES/SEAWAY REVIEW October-December, 2015 9 stand how you take a big, complicated retrofit and make it ordinary, so that every time we go to drydock after 2016, we know how to install such a system,” Jones said. CSL had first announced plans to use the three salinity Unitor Ballast Water Treatment System on its Lakes bulkers; however, after testing the system onboard, the vendor decided to market it for use in saltwater only. “CSL has looked at all its vessels worldwide, considering all the ships based on age and operation—where they trade,” Begley said, noting the company’s plan to install OceanSaver on additional vessels based on outcomes of the current testing. “Our plans for implementation, at the moment, are based on the IMO requirements but the policy is not yet ratified,” he said. Like CSL, Fednav has been involved in looking at systems for years. Fednav chose the BallastAce system after completing tests of systems using copper ions aboard the Federal Yukon, electrodialytic disinfectant aboard the Federal Welland and chlorination on the Federal Venture. The BallastAce system uses a two-step process—filtration and chemical disinfection. It is being installed in all of Fednav’s new lakers and will be used in both freshwater and saltwater as the ships travel internationally. BallastAce has also received AMS approval by the Coast Guard and is now pursuing full type approval for freshwater and saltwater certification at the Great Ships Initiative and MERC test facilities in Superior, Wisconsin and Baltimore, Maryland. Getting BWTS to market. The type approval process to get BWTS onboard is complex. It consists of land-based and shipboard testing by independent laboratories. For systems whose performance could be affected by the cold and freshwater of the Great Lakes, additional testing may be necessary. Assessment of the BWTS’ ability to properly operate in harsh marine environments requires all of the systems’ components be examined for compliance with marine engineering, electrical and mechanical standards, according to a Coast Guard report recently delivered to the Great Lakes Panel on Aquatic Nuisance Species in Ann Arbor, Michigan. The testing and certification is usually conducted by vessel classification societies. The Coast Guard has certified five independent labs for the work, which includes Great Ships Initiative. As of October, the Coast Guard had received three applications for type approval. There are several systems in the process of type approval testing and another 30 vendors have submitted letters of intent stating they will begin testing soon. The minimum amount of time needed B A L L A S T W A T E R M A N A G E M E N T Using an AMS doesn’t guarantee type approval, but the Coast Guard considers their use a step forward in aquatic invasive species prevention and control. MARINE INGENUITY Our range of marine services is the most comprehensive in the industry. Whatever your needs in ship construction and repair, dredging, specialized equipment rental, harbour towing or marine transportation, our expertise and creativity will be useful in providing you with ingenious solutions tailored to your needs. WE ARE PROPELLED BY OUR MARITIME PASSION GROUPOCEAN.COM The Great Lakes Group 10 www.greatlakes-seawayreview.com YO U R ON T GREA EAT LAKES The Grea with our services system. on the G stop-sho at Lakes Towing Comp network of tugs servin safely and reliably for We have been prov Great Lakes and St. La p for all essential m pany is the one- E g 40nports and ears al r over 116 y sentia y viding es a es wrence Seaw marine service ERVICES Custom Fabrication Winter Layup Work 5-Year Regulatory S Drydocking Electronics & Navig Blasting & Painting Conversions Repow n & Repairs Surveys & Inspections ation Systems wers & Refits equipme and a w harbors a nt in Cleveland, Ohio. world-class shipyard w across all eight U.S. Gre THE GREA te-of-art s, with sta eat Lakes State AT LAKES TO Conversions, Mobile Repairs 24/7/365 Emergenc New Construction OWING COM cy Repairs PANY 21 6-621-4854 • sales@t GR thegreatlakesgroup.c SINCE EAT LAKES com • www.thegreatla 1899 SHIPYARD akesgroup.com to get a system through the process is estimated at two years and four months; a more likely time period is three years. “These are not technologies you buy off the shelf,” Middlebrook said. “It’s relatively new science being developed during ongoing uncertainty on compliance challenges.” Looking at costs. Fednav has estimated its cost for outfitting the fleet with the BallastAce system to be C$50 million. It has placed an order for 12 systems, which will be installed on its new lakers as they’re constructed at Oshima shipyard in Japan. The first system was installed on Federal Biscay, which delivered to Fednav in October. Capital costs associated with purchasing a system range from $175,000 to $3 million, with the higher costs reflecting faster pump speeds best suited for commerce. Some vessels will require more than one system. Carriers doing business globally have the IMO Ballast Water Convention to consider. Fleets remaining in the system have taken the stand that they shouldn’t be required to follow the same requirements as salties because the lakes flow into each other, providing gateways for the aquatic species already in the system to move from lake to lake. According to Lake Carriers’ Association (LCA), the exemption given to the U.S.-flag fleet by the Coast Guard regulation should remain intact and the EPA’s Vessel General Permit (VGP) should follow suit. In a document submitted to the EPA regarding its discharge criteria for vessels, LCA said that since nothing in the record supports the conclusion that the sediment in lakers’ ballast tanks is potentially harmful to the environment, flushing of tanks should again be permitted in waters covered by this permit. “Should systems that can accommodate lakers’ flow rates for volumes of ballast water become available at some point in the future, any requirement to install such systems must be preceded by a careful and thorough analysis of the benefits and costs,” LCA stated in the document. “Our members’ vessels never leave the Great Lakes so have never introduced a non-indigenous invasive species. Their ballast is but one of (at least) 64 vectors for spread. The Great Lakes are interconnected, so invasives migrate independent of any of these vectors. Theoretical models suggest it would cost $485 million to retrofit the U.S.-flag Great Lakes fleet with ballast water treatment systems. Given the lack of causation between the introduction and spread of invasives and laker activity, there is no basis for imposing these costs on our industry.” Uniform federal standard. A focus for LCA and other industry stakeholders is promoting the passage of S. 373, the Vessel B A L L A S T W A T E R M A N A G E M E N T GREAT LAKES/SEAWAY REVIEW October-December, 2015 11 Adapting to regulations Industry stakeholders continue to advocate for science-based regulations International fleets operating in the Great Lakes/St. Lawrence Seaway system are committing to ballast water treatment systems. The IMO’s Ballast Water Management Convention, of which Canada is a signatory, could enter into force in 2016, the year the U.S. Coast Guard and U.S. Environmental Protection Agency require installation of systems on ships trading in U.S. waters. However, installation dates continue to move as agencies deal with internal issues. Stakeholders continue to invest time, energy and finances into finding environmentally-friendly and commercially-responsible solutions. • The IMO Ballast Water Convention still needs a small number of member countries to ratify the convention. It will go into affect one year after being ratified by countries representing 35 percent of the world’s merchant shipping tonnage. Currently, 44 countries have signed, representing 32.89 percent of global shipping. Concerns over the reliability of the convention’s original system testing and proposed revisions are creating concerns. • Transport Canada has yet to release specific ballast water regulations, as the country is signatory to IMO. However, some are pushing the federal government to pass a domestic regulation that covers both Canadian- and U.S.-flag lakers. When trading between ports, ships cross the boundary between countries multiple times, even when trading between two U.S. ports or two Canadian ports, which would require U.S.-flag vessels to comply with Transport Canada’s regulation. • The U.S. Coast Guard regulation adopts the IMO standard and will require the installation of typeapproved BWTS on salties. The technology is required on ships built after December 1, 2013 and must be implemented on existing ships during the vessel’s first drydock after January 1, 2016. Initially, the requirements will not apply to lakers, but the Coast Guard may include them in future rulemaking. Additionally, the Coast Guard regulation states organisms must be “dead, rendered harmless or removed” in vessel discharge. It is unknown how the Coast Guard will decide on systems sterilizing the invasive from reproduction but not killing them. • The U.S. Environmental Protection Agency’s (EPA) Vessel General Permit 2013-17 (VGP) has been challenged in court. In October, the U.S. Court of Appeals for the 2nd Circuit ordered the EPA to reevaluate its regulation. The ruling included six contested actions, five of which were remanded for reconsideration in the 2018-22 VGP. One of the five contested actions is the exemption of pre-2009 lakers. The decision leaves specifics of America’s second ballast water regulation open ended. The current VGP, with a discharge standard aligning with IMO, remains in force until the new VGP is released. • In addition to international and federal standards, state regulations pose concerns for carriers, as the threat of lawsuits looms with the passing of BWTS implementation dates. For example, Minnesota 401 Certification requires ships to have the capacity to collect samples from ballast water tanks as of December 19, 2015 and requires a ballast discharge biological study be completed and approved by the Minnesota Pollution Control Agency by December 16. . Toledo Lucas Port Authority Incidental Discharge Act (VIDA), which sets a uniform federal standard. States can suggest more stringent requirements, but they would have to prove the need and the availability of systems to meet the proposed requirements. The bill also states that ships operating within a limited geographical area like the Great Lakes don’t have the potential to introduce aquatic invasives, allowing for best management practices rather than treatment. “In order to make investments in environmentally- protective ballast water treatment technology with confidence, vessel operators must have certainty that regulations won’t be a moving target,” said Tom Allegretti, President & CEO of the American Waterways Operators. “By moving swiftly to enact VIDA, Congress can eliminate this uncertainly and establish a single set of practicable science-based standards for ballast water and other incidental discharges that are good for the marine environment, good for the U.S. economy and good for the American taxpayer.” In addition to initial financial investments, costs for BWTS include ongoing purchases of biocides, filters and more. The vessels will also require twice the downtime for retrofitting vs. a typical maintenance drydocking. And with a large number of B A L L A S T W A T E R M A N A G E M E N T 12 www.greatlakes-seawayreview.com Since ballast water exchange was required in 2006, no new ballast-attributed species have been identified in the Great Lakes. THE PORT OF TOLEDO +1 419 243 8251 toledoseaport.org Just Got Bigger! Now Open For Business! 180 ACRES ADDED TO THE PORT OF TOLEDO AT THE IRONVILLE SITE Water Your Cargo Here! Rail Pipeline Truck 180 More Reasons to …………………… of Toledo! West Michigan Port Operators ships needing BWTS at the same time, the shipyards may not be able to accommodate vessels needing installations at their first drydock following the New Year. Laker fleets are conflicted with the idea of purchasing a BWTS that has been more fully tested in saltwater than in freshwater. The question remains whether ships which stay in domestic waters should be held to the same rules as ships trading internationally because the Great Lakes are all connected and invasive species could migrate from one lake to another without vessels. Representing its member fleets, Canadian Shipowners Association (CSA) has been working with Great Ships Initiative testing BWTS. In April, CSA formed a Ballast Water Research and Evaluation Fund to search for treatment technology for use in the system. Members contributed an initial C$1.5 million to evaluate BWTS that meet the unique operating conditions presented by cold freshwater. According to CSA, the lack of type-approved technology available to comply with ballast water regulations in both Canadian and American waters is causing its members to search for solutions to protect the marine environment while enabling continued operations. Janenne Irene Pung . B A L L A S T W A T E R M A N A G E M E N T GREAT LAKES/SEAWAY REVIEW October-December, 2015 13 Where things stand Status of approved ballast water treatment systems There are countless ballast water treatment systems operating globally. Foreign administrations have approved systems for use in their waters. With U.S. and Canadian regulations remaining scattered and uncertain, international fleets are looking to the International Maritime Organization’s (IMO) requirements when selecting a treatment system. Two- and three-step systems use a variety of combinations to reach the level of treatment required by IMO. The approaches use combinations of mechanical filtration, physical disinfection and chemical disinfection, such as those systems with IMO approval, including: • Filtration and ultraviolet disinfection • Filtration, electrolysis and electro-chlorination disinfection • Filtration and chlorination disinfection • Filtration, ultraviolet treatment and advanced oxidation Most systems use a combination of mechanical separation, such as filtration or cyclonic separation, and then either a chemical or physical disinfection, according to Craig Middlebrook, Deputy Administrator for the Saint Lawrence Seaway Development Corporation. Internationally, about 57 treatment systems have received type approval certification by the administrations. Most of them are designated as Alternate Management Systems (AMS) by the U.S. Coast Guard. Development and testing are ongoing. There are 55 systems temporarily certified by the U.S. Coast Guard as AMS. The status allows carriers to use the systems until they are put through federal rigors and either become fully type approved or fail the testing process. . 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To learn more, visit us at www.greatlakesseaway.org. Foll ow us on Twitter @GLSPartnersh ip After years in a proposed rulemaking status, the U.S. Coast Guard is nearing implementation of a new regulation expected to impact towing companies and shipyards. Defined within 46 CFR and referred to as Subchapter M, the regulation would require all towing vessels 26 feet in length or greater to undergo annual inspections. Towing vessels less than 26 feet in length carrying oil or other dangerous or combustible cargo could also be included. The proposed rule could impact 5,000 tugboats and towboats. The Coast Guard was directed by Congress to establish a towing vessel inspection regime in the Coast Guard and Maritime Transportation Act of 2004. Since then, the Coast Guard has engaged stakeholders to develop the rule through the Towing Safety Advisory Committee, which includes industry representation. “This notice of proposed rulemaking, which proposes an inspection regime for a previously uninspected class of vessels, is the result of the Coast Guard working closely with the industry to improve vessel safety to prevent accidents and protect vessels, crews, cargoes, our shared waterways and our environment while being mindful of the burden created by regulations,” said Vice Admiral Brian Salerno, who was serving as Coast Guard Deputy Commandant for Operations earlier in the rulemaking process. Currently, tugs are not subject to inspections. The change—proposed to increase safety—would include governance for: • Specific electrical and machinery requirements for new and existing towing vessels • The use and approval of third-party auditors and surveyors • Procedures for obtaining Certificates of Inspection Inspected vessels must meet more rigorous safety standards, according to the Coast Guard. The higher safety standards include approval of vessel construction plans, oversight of construction, increased safety equipment and more comprehensive operating requirements. Inspected vessels are issued a Certificate of Inspection and allowed to operate as a towing vessel. Minimum safety standards. Subchapter M is expected to ensure all towing vessels meet a minimum safety threshold for the crews, environment and property. There will be two ways companies can comply: 1) To submit to annual vessel inspections conducted by the Coast Guard or 2) To implement a Towing Safety Management System, T O W I N G & B A R G I N G GREAT LAKES/SEAWAY REVIEW October-December, 2015 15 Towing companies watchful U.S. Coast Guard finalizing changes to regulations requiring inspection of towing vessels Final Rule TSMS 2yrs fm FR YR 3 YR 11 YR 0 YR 6 YR 2 COI 4yrs fm TSMS 25% p/yr Deferred Machinery & Electrical (M&E) 5yrs fm COI Deferred redundancy M&E 5yrs from COI Compliance 22 INSPECTION OF TOWING VESSELS – Compliance Phase-in for a Towing Company The proposed rule phases-in the requirements to lessen the burden on the towing companies. SOURCE: JERRY BIELICKI SLSMC 16 or TSMS, that is accepted by the Coast Guard and audited by a Coast Guard-approved third party organization. The companies most impacted by Subchapter M will be those which have tugs needing maintenance or upgrades before passing inspections. While there is concern the regulation could put some smaller tugboat companies out of business, other tug owners are already meeting the potential requirements. “Great Lakes Towing has been getting inspected for years now, beyond the current requirements,” said Joe Starck, President & Director of The Great Lakes Towing Company and President of Great Lakes Shipyard. “Shipyards could see an uptick in repairs because some of the tugs out there haven’t been drydocked for 20 years.” In addition to service requirements, scheduling shipyard work could become an issue. With dock space at a premium during the system’s off-season, tug companies could be competing to get in a shipyard’s books. “If you don’t have a plan, you could find yourself without a dock,” Starck said, noting that with docks being developed for recreation and as entertainment piers, there is less open dock space available along the Lakes. The American Waterways Operators (AWO) and its members have worked with the Coast Guard in developing the proposed rule. “Securing the publication of and preparing AWO’s members to comply with the new regulations—known as Subchapter M— are AWO’s highest advocacy and safety priorities,” according to the organization. AWO members are already required to comply with a third-party-audited safety management system as a condition of membership in the association. Regulation specifics. Subchapter M details certification, vessel compliance, towing safety management systems, third-party organizations, operations, lifesaving, fire protection, machinery and electrical systems and equipment, construction and arrangement. The Coast Guard proposes accepting compliance with the International Safety Management Code as an equivalent to the towing safety management systems (TSMS), allowing approved classification societies to conduct surveys and audits without further approval. The Coast Guard would provide its typical oversight of third-party organizations conducting TSMS audits and surveys through approval and observation, and rely on registered certified professional engineers to verify compliance with construction and arrangement standards. The proposed rulemaking does not limit crewmembers’ hours of service; however, the Coast Guard has also been seeking information and public comment on potential requirements for hours of service or crew endurance management for mariners aboard towing vessels. If a rulemaking on crew practices is devised, the Coast Guard would request public comment on specific hours of service or crew endurance management before implementing specific requirements. After the final rule is issued, a company has two years to develop its TSMS if they choose that option. The first certification of inspection must be obtained within four years from TSMS approval in most cases. Janenne Irene Pung . While there is concern the regulation could put some smaller tugboat companies out of business, other tug owners are already meeting the potential requirements. can become Qualify as New Business on the Seaway and you save 20% on tolls If your cargo qualifies as New Business, you can add to your savings by shipping via the Great Lakes St. Lawrence Seaway System. New Business can include cargo that has a new origin, a new destination, or that was previously moving via a different mode of transportation. Or cargo that has not been previously shipped via the Seaway in the last 5 years in a volume larger than 10,000 tonnes. Visit our website for details and an application to qualify. www.hwyh2o.com WENDY ZATYLNY President Association of Canadian Port Authorities It may just be two rungs on the ladder, but Canada still has a long way to climb to break into the Top 10 ranking of the world’s most competitive countries. And in a period of sluggish global growth where competition is fierce, it’s vital to our longterm prosperity. As Canada continues to shine as a trading nation with a free and open economy, the time is now to pair 21st Century trade with 21st Century supply chain efficiency and excellence. A key component of this preparation will be improving the ability of our ports to handle even more cargo. Shipping is vital to Canada’s economy and to the standard of living we enjoy as individuals. More than C$400 billion worth of goods are shipped or received through Canadian ports each year with trading partners in more than 160 countries. Our ports handle more than 60 percent of the country’s waterborne cargo. Canada’s ports contribute to job creation and economic growth in every region of the country, by reducing supply chain costs and delivering efficient operations through multimodal connections. In the process, we create 250,000 direct and indirect jobs that pay higher-than-average wages. And with every 1 million metric tons of new cargo at Canada’s ports generating 300 new jobs, we are barely scratching the surface of our true potential. Canada’s world-class ports have helped shape a country that has depended on maritime trade since it was first settled. However, as we embark upon a new chapter in our trading history, we cannot rest on our laurels. Remaining competitive in a rapidly- changing world will require us to strengthen our port facilities and improve their supply chain efficiencies. Germany is a world leader when it comes to logistics and stands in first place out of 160 countries in the World Bank’s 2014 Logistics Performance Index. Canada is ranked 12th—two spots higher than the previous year—but still out of the Top 10 ranking Association of Canadian Port Authorities (ACPA) has set in its sights. This ranking is important because it is an alternate measure for the efficiency of a nation’s economy and is indicative of a country’s competitiveness. We’re confident we can improve our position in the World Bank’s Logistics Performance Index and break into the Top 10 by ensuring our transportation infrastructure is able to accommodate increasing trade demands and that our supply chains operate as smoothly and as productively as possible. The government of Canada has shown it understands the importance of making this type of improvement. As of August, through an agreement between ACPA and the Department of Foreign Affairs, Trade and Development, a trade commissioner has been embedded in the National Ports System, providing client services to ports and companies trying to grow internationally. We need more of this kind of creative thinking and commitment from our partners as we prepare for the expanded global trade that will come through Canada’s ports. Additionally, Canada’s National Port System needs to be strengthened by amending the Competition Act to allow port authorities to collaborate with an eye toward maximizing asset utilization. This will help ease the burden of uneven pressure and demands that will be exerted on ports by shifting global trade patterns. Ports can continue to be powerful trade enablers for Canada, but to do so we have to be flexible and able to adapt to changing commercial market forces. Greater autonomy and enhanced commercialization would give port authorities the power to pursue trade-related opportunities and reduce current restrictions that can serve as obstacles. Simply put, we need to change the way we think about ports and see them for what they are: the honest broker that binds together the very supply chains that underpin Canada’s maritime trade. We look forward to playing a leading role as we advance measures that encourage enhanced productivity with our stakeholder partners across the transportation and marine shipping sector. As Canada continues to advance its global commercial agenda, Canadian Port Authorities stand ready to help seize what truly is a golden opportunity. Breaking into the Top 10 list for competitiveness is a good place to start. . G U E S T E D I T O R I A L BOOSTING PRODUCTIVITY Canadian ports look to enhance competiveness GREAT LAKES/SEAWAY REVIEW October-December, 2015 17 Wendy Zatylny is President of the Association of Canadian Port Authorities and a member of the Great Lakes/Seaway Review Editorial Advisory Board. Originally published in the Fall 2015 issue of Power & Influence Magazine. Simply put, we need to change the way we think about ports and see them for what they are: the honest broker that binds together the very supply chains that underpin Canada’s maritime trade. Lower Lakes Towing 18 www.greatlakes-seawayreview.com Our latest vessel repowering featuring the most advanced technology and environmental protection available • 41% reduction in fuel consumption • Corresponding reduction in GHG Emissions • 46% reduction in SOx emissions • 33% reduction in NOx emissions And generator package • Fourth vessel to be repowered since the Year 2000 • Shaft alternators • Economizers • Water lubricated stern bearings • Full automation • Increased annual carrying capacity due to improved performance Setting A Course for the Future! LOWER LAKES TOWING LTD. LOWER LAKES TRANSPORTATION COMPANY P.O. Box 1149, 517 Main Street, Port Dover, Ontario N0A 1N0 Telephone 519-583-0982 Fax 519-583-1946 lowerlakes@kwic.com PETER KAKELA, PH.D. Professor, Department of Community, Agriculture, Recreation and Resource Studies Michigan State University Afriend was in town recently to show her teenage son Michigan State University. The mother was born in Michigan and worked in state government for years. She now lives in the Washington D.C. area. Her 17-year-old son considers D.C. home, but was interested in seeing Michigan State University as a potential college. In showing him the campus, I just had to drive by the newly-placed, 29-ton-block of raw iron ore that was given to the Geological Sciences Department by the Ishpeming City Council. As we looked at the iron ore, displayed in front of the Natural Science Building, she asked: Mother: “But we don’t do iron ore any more, right?” Peter: “Oh, yes we do! We are mining about 50 million tons each year in northern Michigan and northern Minnesota. About three-quarters of this ore is shipped through the Soo Locks in giant 1,000-foot boats. These shipments supply the steel mills of Chicago, Gary, Detroit, Cleveland and others on the south shores of the Great Lakes.” Then my friend and former Michigan resident said: “But I thought we didn’t do iron ore any more. Didn’t we run out of it … or something?” She knew part of the story, the old part, but not the new part. Here’s the most important part of the story. Earlier, I began to do extensive research to show how we were running out of iron ore. I thought we were depleting our reserves of high-grade iron ore and needed to mine low-grade iron ore just like my friend. I thought the extra processing required for the low-grade iron ore was making this taconite ore unusable. To my surprise, I discovered the low-grade ore coming out of the ground with 25 to 30 percent iron, when concentrated, is better than the naturally rich ore mined with 55 to 60 percent iron. It didn’t make sense. No one suspected it, not even the mining engineer who created the processing. Even after running the numbers, I was hesitant, embarrassed, skeptical. Eventually, I admitted that when lower-grade iron ore is mechanically concentrated, it could be better than naturally concentrated high-grade ore. In other words, we were doing better than nature—which is hard for a young environmentalist to admit, but I’ve gotten over it and now enjoy telling the story. There are many reasons why people don’t know the iron ore story. Here are some: • Ninety-nine percent of U.S. iron ore is mined in just two remote regions, northern Michigan and northern Minnesota, so not many people see it. • It is shipped in huge boats on the Great Lakes, not in trucks or trains passing through cities. • It is a raw material that is transformed into the steel that we are familiar with as part of our automobiles, appliances and other products, but not used in its raw (material) state. • Most iron ore is turned into the steel that becomes hidden in the steel girders of buildings and bridges or becomes the reinforcing bars (re-bars) buried in the concrete of highways or foundations. • Iron ore and the resulting steel are mostly out of sight and, therefore, out of mind. You could say we are out of touch about iron ore because it is so hidden. The fact is: We are still mining a lot of iron ore in Michigan and Minnesota and American engineers are still developing processes to create superior iron ores. Because we have an abundance of low-grade taconite ore, the industry will continue to mine and ship iron ore for the next 100 years. Iron ore on a global scale. To many people’s surprise, this little recognized resource— iron ore—became the second most valuable mineral resource in the world in 2012, with oil being No. 1. Over the last decade, as China’s demand soared for iron ore and steel to support its booming industrialization, iron ore became a major world commodity. About 98 percent of iron ore mined is used to make steel and steel is a critical component in major construction projects, including manufacturing consumer goods. As development has increased around the world, demand for iron ore has risen to more than 2.2 billion metric tons per year, with about 1.4 billion tons of it being shipped by seaborne trade. Seaborne shipments of iron ore have more than tripled and prices have escalated. China is building roads, bridges, buildings, cars and appliances, etc., at an escalating rate. The nation is going through the first stage of the developmental transition where C O M M O D I T I E S GREAT LAKES/SEAWAY REVIEW October-December, 2015 19 The iron ore story This little recognized commodity is the second most valuable resource globally Locating the mines The Mesabi Iron Range in northern Minnesota is a narrow strip of land, three miles wide and 120 miles long. Most of this iron rich formation is buried under a thin coating of glacial drift. Iron ore was first reported on the Mesabi Range in 1866. It wasn’t until the early 1890s, however, that mining actually began there, starting near the current town of Mountain Iron, Minnesota. KCBX Terminals 0 200 400 600 800 1000 1200 92 94 96 98 2000 02 04 06 08 2010 12 14 Millions of Metric Tons/Year CHINA’S IRON ORE IMPORTS AS PART OF WORLD SEABORNE TRADE China’s

Maritime Editorial