Ports Seek Hedge Against Congress Gridlock in Water Bill

Photographer: Charlotte Southern/Bloomberg

The Port Everglades dredging plan is projected to cost about $313 million, $181 million of which the federal government is supposed to cover. Close

The Port Everglades dredging plan is projected to cost about $313 million, $181 million... Read More

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Photographer: Charlotte Southern/Bloomberg

The Port Everglades dredging plan is projected to cost about $313 million, $181 million of which the federal government is supposed to cover.

Congress has run aground and Port Everglades doesn’t want to.

Officials at the Southeast Florida seaport have a simple request: They want to deepen and widen a harbor already home to some of the world’s biggest cruise ships to handle massive new Mediterranean Shipping Co. freighters and other vessels making passage through a widened Panama Canal in order to compete with harbors from Houston to New York in an age of megaships.

The challenge is they require approval from a Congress that hasn’t passed a water bill in seven years. Tired of waiting and worried those bigger ships will bypass it for deeper waters, Port Everglades is willing to risk up to $181 million of its own money to front harbor-deepening costs the U.S. government would otherwise cover.

“This is hedging, and you know, it keeps the project moving after sitting where it’s sat for so long,” said Steve Cernak, chief executive and port director for Port Everglades.

Cernak is one of many U.S. port officials who successfully lobbied the House of Representatives to approve a provision that would offer an end-run around future congressional stalling. The measure would allow water projects approved by the U.S. Army Corps of Engineers, though not yet authorized by Congress, to start construction using the ports’ own money and get repaid later if Congress agrees.

Photographer: Derek Wallbank/Bloomberg

Tired of waiting and worried those bigger ships will bypass it for deeper waters, Port Everglades is willing to risk up to $181 million of its own money to front harbor-deepening costs the U.S. government would otherwise cover. Close

Tired of waiting and worried those bigger ships will bypass it for deeper waters, Port... Read More

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Photographer: Derek Wallbank/Bloomberg

Tired of waiting and worried those bigger ships will bypass it for deeper waters, Port Everglades is willing to risk up to $181 million of its own money to front harbor-deepening costs the U.S. government would otherwise cover.

Nightmare Scenario

Port Everglades is “kind of the most egregious example, but there certainly are other ports that are waiting,” said Jennifer Krell Davis, Florida Ports Council spokeswoman.

Its nightmare scenario sits in Beaumont, Texas, where the Corps signed off on a plan to deepen the Sabine Neches Waterway shortly after the last federal water bill authorized projects, in 2007. The Texas-Louisiana Gulf of Mexico coast project has waited so long that natural gas terminals initially planned to help the U.S. import gas now are being built to export it.

The Port Everglades dredging plan is projected to cost about $313 million, $181 million of which the federal government is supposed to cover. If Port Everglades has to front that money while Congress is mired in water-bill debates, Cernak says,“It’s not the perfect solution but it’s something we can live with.” He adds: “Waiting another seven years for another law to come down isn’t really a model of efficiency.”

Port Everglades, a quick taxicab ride from Fort Lauderdale-Hollywood International Airport, is among the largest U.S. entry points for such items as fruit and oil. Cernak likes to say that the underwear you’re wearing probably at some point was unloaded from a freighter in the harbor.

Post-Panamax

In the almost 90 years since the Panama Canal first connected the Pacific Ocean with the Atlantic, the shipping industry in the Americas has taken on the dimensions of the channel that historian David McCullough chronicled as “The Path Between the Seas.” AP Moeller-Maersk (MAERSKB) and MSC ships built to squeeze through it became known as “Panamax” vessels.

As Panama nears completion of a major canal widening, shipping companies are running a new class of post-Panamax vessels. Port Everglades saw its first in 2006.

Post-Panamax freighters can’t arrive fully loaded because they’ll scrape the bottom of the port’s 42-foot-deep entrance channel through the “Gold Coast’s” white sand beaches.

Panama has pressured lawmakers to find a solution for ports like Port Everglades, Northeast Florida’s Jacksonville port and others whose Corps reviews won’t be finished before a new water infrastructure bill is completed later this year.

From 1986 to 2000, a water-resources bill was enacted about every 2.3 years. That’s no longer true: The last water infrastructure bill was passed in 2007.

‘Left Behind’

“Any port that does not have the ability to dredge to 48 or 50 feet is going to be left behind,” said Representative Debbie Wasserman Schultz, a Florida Democrat whose district includes part of Port Everglades.

Under current law, federal funds can be issued for dredging, flood control, environmental restoration and other projects only if Congress specifically authorizes it -- and then, in a separate bill, votes to spend the money on it.

The House and Senate passed different water bills in 2013. They’re trying to reconcile them into one measure, H.R. 3080, that could be enacted as soon as March. The provision offering relief for Port Everglades is in the House’s plan, not the Senate’s.

House Transportation Chairman Bill Shuster, a Pennsylvania Republican, spent much of last year insisting that automatic approval of Corps-backed projects -- a plan the Senate included in its bill to steer around a congressional ban against special local projects known as “earmarks” -- is wrong. It offered President Barack Obama too much power, Shuster said.

Workaround Plan

Port officials and sympathetic lawmakers devised their plan as a workaround. It would allow them to be reimbursed for work once the Corps has completed its review -- currently, they can use their own money without ability to recoup costs. The House approved it on a voice vote, and passed the bill 417-3.

“It can save several years,” said Jim Walker, director of navigation policy and legislation for the American Association of Port Authorities.

At Port Everglades, mariners navigate around the limitations of a major harbor in need of modernization.

Assistant Harbor-master Shawn McCann, stationed at an observatory tower midport, wears Miami Marlins gear as he coaches ship captains past the port’s “knuckle.”

The knuckle is a kink in the Intracoastal Waterway, 161 yards at its narrowest point, between docks on the west and protected mangroves on the east which, along with a state park and beaches, form a barrier between the port and ocean.

Cruise Ships

From his high perch, McCann once was able to see past the mangroves and beaches, where ships waited two miles offshore for clearance to enter the port’s entry channel. Now Royal Caribbean Cruises Ltd. (RCL)’s gleaming white Liberty of the Seas, only the third-largest cruise ship based here, blocks his view.

Liberty of the Seas is as wide as a post-Panamax freighter, 185 feet at its beam, with a rock-climbing wall, mini-golf course and surfing simulator on its top decks. The ship that docks here weekly is so big that only the most experienced harbor pilots can move freighters past it.

When a Panamax-class ship is passing, “it gets so tight that the tugs worry about being pinched,” McCann said, adding that larger ships are stuck waiting until Liberty leaves. “Pilot rules are two post-Panamaxes can’t pass.”

Under its expansion plan, Port Everglades would straighten out part of the knuckle, allowing two large container ships to pass and opening at least one more berth to cruise ships that don’t use it because operators don’t want to get stuck there.

Miami’s Example

Ports are looking toward the Port of Miami as an example, Walker says. After receiving authorization in the 2007 water bill, Miami used state and local funds to begin dredging to 50-foot depths, bypassing the congressional appropriations process.

“We just couldn’t afford to wait,” said Paula Musto, spokeswoman for the port.

Allowing Port Everglades to advance work without waiting for congressional approval has two benefits, advocates say.

The first is “the federal government’s not going to be an impediment, not going to put the brakes on federal projects down in Florida,” said Doug Callaway, federal affairs director for the state. “The second is to get an expectation that we’re going to get reimbursed for the projects that we’re doing.”

Ports have provided a rare place for bipartisanship for a Congress on pace to pass fewer bills than in any year since World War II. Increased dredging has been championed by Tea Party Republicans who say infrastructure spending is one of the few interstate-commerce actions the Constitution permits.

Obama’s Push

Obama has touted dredging in his State of the Union address as well as during a tour of ports including Miami’s and Jacksonville’s. The Jacksonville Port Authority wants to deepen its channel along the St. Johns River to at least 47 feet from 40 to take fully loaded post-Panamax ships.

“In a couple of years, new super tankers are going to start coming through the Panama Canal,” Obama said in July 2013, during a tour of the Port of Jacksonville. “We want those super tankers coming here to Jacksonville.”

Like Port Everglades, Jacksonville’s Army Corps review probably won’t be finished until after a water bill is enacted. Without some catch-up provision, it’ll have to wait, too.

“Why should the federal government be an impediment to the states and local partners working on their own?” said Callaway, Florida’s chief lobbyist. “We know Jaxport and Port Everglades are going to be authorized. It’s not a matter of if, it’s simply a matter of when.”

“Why should the federal government stop progress on Jaxport and Port Everglades,” he said, “simply because their reports got done a couple of months after” a bill passed.

Shuster says he wants to return to two-year authorizations, starting by passing the bill under consideration and then another by 2016.

Cernak says he can’t wait any more.

“Those ships come into port now, albeit they come in light-loaded,” Cernak said. “We need to accommodate that.”

To contact the reporter on this story: Derek Wallbank in Fort Lauderdale, Florida at dwallbank@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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