600451-00080 — Southwest Region University Transportation Center

SWUTC Research Project Description

Impact of the Gulf Intracoastal Waterway (GIWW) on Freight Flows in the Texas-Louisiana Megaregion

University: University of Texas at Austin

Principal Investigator:
Robert Harrison
Center for Transportation Research
(512) 232-3113

Project Monitor:
Jennifer Stastny
Executive Director
The Port of Victoria

Funding Source: USDOT and State of Texas General Revenue Funds

Total Project Cost: $61,900

Project Number: 600451-00080

Date Started: 1/1/13

Estimated Completion Date: 12/31/13

Project Summary

Project Abstract:
The 700 mile Gulf Intracoastal Waterway (GIWW) plays a critical role in moving petrochemical products, both imports and exports, through the Texas – Louisiana coastal region, identified in America 2050 as one the nation’s megaregions. More recently, materials (both imports and exports) related to the Eagle Ford shale in south Texas have spurred more barge traffic. Moreover, the relocation of a variety of industries to south Texas based on cheap energy suggests that other commodities will adopt barge use in the near future. This studywill measure freight flows moving through the general catchment area of the proposed Interstate 69 in Texas and Louisiana and evaluate current modal shares as they relate to truck, rail, pipeline and GIWW traffic. The impact on this system from dredging the GIWW from its current operating draft to the authorized depth will then be estimated. In addition, impacts to current GIWW bottlenecks will be examined and cost-benefit estimates for both additional dredging and removal of bottlenecks made.

Project Objectives:
This study will measure freight flows moving through the general catchment area of the proposed Interstate 69 in Texas and Louisiana, and evaluate current modal shares as they relate to truck, rail, pipeline, and GIWW traffic. The impact on this system from dredging the GIWW to authorized depths will then be estimated. In addition, impacts to current GIWW bottlenecks will be examined and cost-benefit estimates for both additional dredging and removal of bottlenecks will be made.

Task Descriptions:

Task 1. Literature Review
Literature on the GIWW is rather sparse but research and commercial interest is growing, resulting in a wide variety of outreach, articles and specific research studies such as this one. TxDOT sponsored a Panama Canal Stakeholder Advisory group in 2012, which provided sufficient material to lead to a major conclusion that the GIWW needed to be dredged to authorized depth irrespective of increased traffic through the new locks at Panama. Articles in the trade press and increased calls for higher investment in the GIWW on the part of barge operators, petrochemical plants, and shallow drafts ports whose livelihood depends on the GIWW are all publishing material which will be categorized and used to form the basis on the study.

Task 2. Port Interviews
Interviews are planned with Directors of the ports of Brownsville, Corpus Christi, Victoria, Houston, Beaumont, and Orange, and from these, interviews will be conducted at terminals in Louisiana, particularly on Lake Charles and at New Orleans. The Texas Ports Association has funded a substantial economic impact study conducted by John Martin covering both deep and shallow draft ports and this material will be used at the 2013 state legislative session to support initiatives related to port and marine productivity. The Project Monitor, Jennifer Stastny will play a crucial role since her port – Victoria – has experienced a sharp growth in barge canal tonnage that has recently grown from 3.4 million tons 7.5 million tons, with a projected 2013 value of 8.5 million tons. Much of this growth is related to the new energy exploration and production that drives equipment, pipe, sand and related fracturing material imports, and the oil and distillate exports. In addition, selected shippers will be interviewed and Mr. Jim Sartwelle, Director of Public Policy at the Texas Farm Bureau has agreed to be interviewed as part of this study.

Task 3. Barge Operators
Trinity Industries, who have a large share of the U.S. barge fabrication, have offered to assist the researchers in locating a sample of GIWW barge operators. This is critical to estimate the productivity gained by dredging down to the authorized depth. In a previous study, TTI-CTR researchers calculated the benefits of dredging an additional foot and these and other estimates need examination. Barges are pushed on the GIWW and the tow boats may requires certain amounts of clear water to drive the barges forward. The team will examine operations on key sections of the GIWW to see where the most benefit to dredging can be found. In addition to channel depth, a variety of other improvements to the GIWW will be established during this task. These could include widening channels, improving passing places, improving lock capacity and identifying key bottlenecks in the entire Texas-Louisiana corridor that lower system efficiencies.

Task 4. Army Corps of Engineers
No GIWW study would be complete without contacting and reviewing material supplied by the U.S. Army Corp of Engineers (ACE) – the federal agency responsible for maintaining the waterway. The users of the system pay a harbor maintenance tax (HMT) on imported commodities, levied by the Federal Government to maintain and improve both channels and waterways. In 2011, the U.S. government received $200,113,745 in revenue from the Harbor Maintenance Tax levied in Texas. The average amount received by Texas ports for harbor maintenance and operations (ACE) was $70,645,000 per year. Texas is therefore a donor state – getting back only 35% of the money collected – substantially lower than the 85% returned to the state in motor fuel taxes. Moreover, the current need to dredge the Mississippi because of a lack of water after 2 years of Midwest drought, together with the damage to channels in the Northeast following the recent hurricane, strongly suggests that diversions from the fund to address the wide range of needs in these two areas will keep Texas and Louisiana HMT receipts at current levels. Other remedies, in the form of funding mechanisms, will need to be examined.

Task 5. Truck-Rail Tool Kit Analysis
The study will concentrate on three modes used to move freight in the corridor. Pipelines are omitted but are recognized as playing an important complementary role in moving petrochemical products safely in the region. The barge costs will be determined from a previous study and data set of operating costs, calibrated to meet current operations through the surveys conducted in Task 3. They will be compared with the truck and rail modal costs derived from a cost model developed under an ongoing TxDOT research study (0-6692) that is ready to be tested on a case study. Opportunities to link mode cost data to replicate actual commodity transport “chains” will also be explored. It is hoped that output from the model can be used in future TxDOT strategic corridor modeling work, particularly in cases where TxDOT is unable to match highway demand from freight vehicles because of funding constraints and alternatives to trucking are sought by shippers.

Task 6. Final Report
This will summarize the findings of the study and recommendations for future work. It will focus on implementation at the metropolitan and state DOT levels, as well as convincing skeptics that the Texas-Louisiana stretch of the GIWW is major asset in the region’s transportation system asset base. The European Union has demonstrated that canal and river systems can play major roles in moving freight efficiently, safely and at a lower energy and social cost than other modes.

Implementation of Research Outcomes:
This report examines the question of GIWW viability and utility from a policy perspective, using economic and planning data to provide strategic evidence for a range of potential multistate policies. It is organized to identify and describe the limitations, financing and operational challenges associated with alternative policies. It considers the potential value gained by megaregional planning and identifies opportunities to coordinate, rather than compete, with other modes on a multistate basis. It finds evidence to strengthen GIWW operations, both in terms of state and multistate perspectives. It also recognizes that there may be future transportation water-based freight technologies that can be adopted as long as the GIWW right-of-way is not lost through encroachment or abandonment.

Products of this research:

Presentation: Impact of the Gulf Intracoastal Water (GIWW) on Freight Flows in the Texas-Louisiana Megaregion, Robert Harrison, University of Texas at Austin, presented to TxDOT, Austin Headquarters Office, July 2013.

Course Module Developed: Study results incorporated in curriculum for CE 392U Transportation Systems Management at the University of Texas at Austin.

Impacts/Benefits of Implementation:
This report argues for the long term preservation of a 1200 mile five state Gulf Intracoastal canal currently underfunded in terms of both capital (locks) and the maintenance authorized dimensions. It is critical for chemicals, petrochemicals and fuels in addition to more mundane bulk commodities. The lower pollution from barges of all sizes impacts social benefits in addition to offering interstate right of way to new designs of barges and propulsion that will occur over the next 15 years.

Web Links:
Final Technical Report