The Poe Lock – Lynchpin of the Great Lakes Navigation System Marie Strum U.S. Army Corps of Engineers Detroit District Chief, Engineering & Technical Services July 20, 2017

Federal Projects on the Great Lakes Burns Small Boat Harbor A non-linear navigation system with 60 federal commercial projects and 80 federal shallow draft/recreational projects Chippewa Harbor Grand Marais Lake Superior Taconite Silver Bay Two Harbors Eagle Harbor Cornucopia Lac La Belle Knife River Keweenaw Waterway Grand Traverse Bay Duluth-Superior La Pointe Bayfield Big Bay Port Wing Little Lake Black River Ontonagon Whitefish Point Harbor Presque Isle Grand Marais Soo Locks Ashland Saxon Marquette St. Marys River MI Channels in Straits of Mackinac Manistique Detour Grays Reef Les Cheneaux Island Mackinac Island CANADA Little Bay de noc St. James Mackinac City Cheboygan Hammond Bay Cedar River Washington Island Inland Route Petoskey WI Menominee Charlevoix Oconto Leland Alpena Lake Huron Ogdensburg Pensaukee Sturgeon Bay Morristown Big Suamico Algoma Greilickville Frankfort Harrisville Green Bay Kewaunee Arcadia Cape Vincent Au Sable Harbor Two Rivers Portage Lake Tawas Bay Sackets Harbor Manitowoc Manistee Point Lookout Port Austin Ontario Ludington Lake Harbor Beach Port Ontario Sheboygan Pentwater Caseville Oswego Great Lakes system is comprised of: 140 federal harbors on the great lakes: 60 commercial and 80 recreational Connecting channels: St. Marys, Detroit River, St. Clair River, and Channels of Lake St. Clair 3 locks: Soo, Chicago, Black Rock (Buffalo) We maintain the channels (dredging) and also maintain the navigation structures at each harbor. Saginaw Bay Port White Lake Port Sanilac Port Washington Sebewaing Lake Michigan Muskegon MI Lexington Little Sodus Bay Niagara River Little River Oak Orchard Grand River Black River Wilson Olcott Rochester Irondequoit Bay Great Sodus Bay Milwaukee Grand Haven Pine River St. Clair River Holland Black Rock Lock/Tonawanda Buffalo Clinton River Belle River Kenosha NY Saugatuck Sturgeon Point Lake St. Clair South Haven Lake Erie Cattaraugus IL Waukegan St. Joseph Rouge River Dunkirk Commercial Detroit River Barcelona St. Joseph River Monroe Put-In-Bay Erie Chicago Harbor New Buffalo Recreational Bolles Harbor Michigan City Conneaut Fairport PA Chicago River Ashtabula Calumet Toledo Burns Small Boat Harbor Cooley Canal Rocky River Indiana Harbor Burns Waterway Harbor OH Toussaint River Port Clinton West Harbor Vermilion Cleveland IN Lorain Sandusky Huron 2

St. Marys Falls The St. Marys Falls created a barrier for shipping between Lake Superior and the Lower Great Lakes until the first Lock was constructed in 1855 to circumvent the 21 foot drop at the falls.

>10M Ton Harbor 1-10M Ton Harbor <1M Ton Harbor GREAT LAKES NAVIGATION SYSTEM Lake Superior Lake Michigan Lake Huron Lake Erie MI NY PA IL WI IN CANADA OH Alpena Chicago Harbor Green Bay Duluth-Superior Rouge River Detroit River Calumet Grand Haven Monroe Fairport Cleveland Toledo Burns Waterway Harbor Indiana Harbor Ludington Milwaukee Two Harbors Silver Bay Charlevoix Buffalo Huron Sandusky Muskegon Presque Isle Marquette Ashland Saginaw Ashtabula Conneaut Lorain Harbor Beach Manistee Manitowoc Cheboygan Marysville St. Joseph Waukegan Put In Bay Menominee Ontonagon Gladstone Holland St. Clair Lake Ontario >10M Ton Harbor 1-10M Ton Harbor <1M Ton Harbor Interdependent Ports Key Challenges Balancing System Requirements Dredging Dredged Material Management Harbor Infrastructure Soo Locks HQ metrics focus on tonnage – system approach recognized but not used in metrics - GL is a system of interdependent ports High tonnage harbors are dependent on low and moderate tonnage harbors vast majority of traffic is within the system; US-US or US – Canada

Transportation Mode Comparison 1 Ship 47 Barges 700 Railroad Cars 2,800 25-Ton Trucks 70,000 Net Tons

Fuel Efficiency & Environmental Impact Tons of Carbon Dioxide (CO2) Produced to Transport 1000 Tons of Bulk Cargo 1000 Miles2 Miles One Ton of Cargo can be Carried per Gallon of Fuel1 Mode 100 200 300 400 500 600 700 607 514 202 59 25 50 75 100 125 175 200 Truck 190 Rail 55 Barge 22 GL Carrier 18 Slide’s Key Massage (s): Waterborne Transportation is Green (environmentally friendly) due to its natural efficiency Background and source Info: Source USDOT Maritime Administration," Environmental Advantages of Barge Transportation”, and Minnesota's Department of Transportation “Environmental impacts of A modal Shift” Miles Tons CO2 1. Source: USDOT Maritime Administration and Minnesota Department of Transportation 2. Assumes US DOE Fuel and Energy Emission Coefficient of 22.38 lbs of CO2 per gallon (No.1,2,4 Fuel Oils and Diesel) for GL Carrier

Major Shipping Routes Present day routes Routes in 1897 Source: U.S. DHS, Oct 2015

Great Lakes iron ore Major Shipping Routes Waterways allow heavy, bulk commodities to be delivered economically from source to destination. Industry has built up along the lakes where they can take delivery of these bulk commodities. That is the business model – waterborne commerce delivering commodities to industry; other modes are not available and/or not economical GL Nav system saves $3.5B each year over next least costly mode of transportation

Integrated Steel Mills 13 of 14 North American Mills are dependent on the Soo Locks for transport from Minnesota and Michigan. 9 of the 14 mills are on the shores of the Great Lakes Likelihood of a primary steel mill being shut down is proportional to its distance from the Great Lakes. Specifically required for production of auto, appliance, construction, farm, and mining equipment, rail car and locomotive industries. Typical Great Lakes mill layout receives taconite by ship; most mills do not have infrastructure to receive taconite by rail.

Importance to U.S. Economy U.S. Auto Industry The auto industry is one of the most important industries in the U.S. economy: Over 7 million private sector jobs supported by auto manufacturers, suppliers and dealers in the United States Every vehicle manufacturer job creates almost 7 other jobs in industries across the economy A typical automobile made in North American contains steel from the 9 Integrated Steel Mills that produce automotive quality steel. Competition and efficiency have spurred just-in-time delivery (minimized inventories) at every stage in the supply chain. Interruptions to any part of the supply chain quickly ripple down to the final product Source: Center for Automotive Research, Jan 2015

WORLD WAR II Lock Protection The only activity in the Central Defense Command that involved the use of Army Combat units was the protection of the Soo Locks and the St. Marys River waterway. Keeping iron ore moving through the locks was so important to the U.S. during the war that 10,000 soldiers were stationed in Sault Ste. Marie to protect the locks Torpedo nets across locks Early warning radar net built to protect locks MacArthur Lock built in 18 months during WWII Historically the national economic and strategic importance of the Soo Locks was well understood. Keeping iron ore moving through the locks was so important to our country that during the war thousands of soldiers were stationed in Sault Ste. Marie to protect

It has been nearly 50 years since a new lock was built at the Soo Today The reason that the Soo Locks have been so reliable over the years is due to the recurring construction of new locks ever two or three decades. Up until now the biggest gap was 24 years from opening of the Sabin to the MacArthur. We are now at 47 years since the last construction of a new lock (the current Poe) It has been nearly 50 years since a new lock was built at the Soo

SOO LOCKS FACILITY

The Soo Locks Lynch Pin of the Great Lakes Navigation System 85% of the commercial commodities transiting the Soo Locks are limited by size to the Poe Lock Aging and deteriorating infrastructure; unscheduled outages increasing There is currently no redundancy for the Poe Lock The economic impact of a 30-day unscheduled closure of the Soo Locks = $160M Two major efforts are underway to improve reliability of the Soo Locks Maintain existing infrastructure through Asset Renewal Plan New lock with the same dimensions as the Poe Lock – Economic reevaluation required.

Soo Locks Asset Renewal Plan Asset Renewal Plan will maximize reliability and reduce risk through 2035 $86M funded to date through FY17 New hydraulics, stop logs, utilities. (Complete) Compressed Air System. (Complete) Poe Gate Anchorage Replacement. (In progress) Mac and Poe Electrical System Replacement. (In progress) Poe Miter and Quoin Block Replacement (FY17 Award) Remaining key priorities. Poe Lock Gate 1 Replacement. Pier rehabilitation Davis Pump Well -

Poe Lock Embedded Anchorages Typical Poe Lock Embedded Anchorages Poe Primary Embedded Anchorage Poe Primary Embedded Anchorage Secondary Anchorage controls from recess to halfway point Primary Anchorage controls from halfway point to miter Gate 1 – No redundancy Gate 3 is the only downstream Gate that can be used during the winter. Gate 3 is equipped with: steam lines and plates that cover the girders to protect the steam line infrastructure from ice damage’ Upstream gate sill is equipped with compressed air bubblers to flush ice Lock chamber is 70’ longer when using Gate 3 vs Gate 2 which allows for more room for ice in the chamber Poe Secondary Embedded Anchorage Poe Secondary Embedded Anchorage

Soo Locks – West Center Pier Repairs

2nd Poe-Sized Lock Authorized for construction of a redundant Poe-size lock in WRDA 1986; WRDA 2007: Construction at 100% federal expense Inconsistent with Administration policy due to BCR of 0.73 computed in 2005 Limited Reevaluation Report (LRR) Currently working on Economic Reevaluation Report to recalculate BCR Target report completion: March 2018; dependent on funding; new authorization is required for increased construction cost

2005 New Lock BCR Issues Assumption that 100% of commodities are delivered is not true Rail capacity was assumed as sufficient which is not true Assumption of major overhaul in 2017 not accurate; have been condition assessment and risk information Probabilities of component failures have increased Gate failure outage days underestimated Assumption of all new vessels being Mac Lock sized is not true Economic impacts of alternate modes need to be updated

New Soo Lock Partial Benefits Analysis - 2014 Expert elicitation held with two dozen stakeholders reliant on Soo Locks to determine how lock closures affect business and what their response would be to a significant lock outage. It is not possible to move 100% of the commodities in the event of a Poe Lock closure with current infrastructure without additional major capital outlays; only 35% of iron ore and coal could be moved by alternate modes Lightering is limited due to few available smaller vessels Increased shipments through Escanaba are extremely limited due to rail limitations, storage, and loading capacity (Escanaba now closed) Foreign ore is not readily available and requires plant retooling Rail can’t handle the cargo and would not consider it without a 20-year contract Trucking would be very expensive and not realistically feasible due to quantity of trucks needed

Economic Reevaluation Report Reliability: Information will be leveraged from recent detailed inspections to update reliability and projected outage model Forecast: A commodity and transportation forecast study will be conducted Alternate Modes of Transportation: Alternate modes are being developed for various outage lengths Updated Cost: The risk-based cost estimate for construction of the new lock will be updated by the Cost Engineering MCX Agency Technical Review and Independent External Peer Reviews will be conducted The entire ERR process is expected to take 24 months

Economic Reevaluation Path Forward Completion economic report is pending funding New authorization by Congress is required for higher construction cost Pending a budgetable Benefit-to-Cost Ratio, could include construction request for FY20 PBUD

Great Lakes Navigation System The GL system’s savings over the next least costly mode of transportation $3.6 Billion/year More competitive American steel Essential to sustaining U.S. auto industry Lower cost energy Lower cost concrete (construction) More competitive grain for export Less fuel consumption and greenhouse gas emissions Less congested highways/rails 23

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