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Corps Clears Water Release, Snubs Mississippi Shippers

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Feb. 8 (Bloomberg) -- The U.S. Army Corps of Engineers approved diverting surplus water from a Missouri River reservoir in December, a day before telling the Senate’s No. 2 Democrat the water was unavailable to keep the drought-stricken Mississippi River open to shipping.

The Corps on Dec. 5 agreed to let a unit of a company that provides water for hydraulic fracturing withdraw from Lake Sakakawea in North Dakota, the Army said in a statement yesterday. The next day it told Senator Richard Durbin, an Illinois Democrat, that the Missouri River was off limits to aid navigation on the downstream waterway.

“Water, water everywhere, but not a drop for navigation,” Mike Toohey, president of the Waterways Council Inc., an Arlington, Virginia-based group that represents shippers and ports including barge operators on the Mississippi River, said today in an e-mailed statement.

The water conflict, caused by the worst drought 70 years, has pitted officials in states along the two rivers against each other as low water threatened to shut the Mississippi, the busiest U.S. inland waterway, to commercial barge traffic.

Shippers including Archer-Daniels-Midland Co. of Decatur, Illinois, use the river to float an estimated $2.8 billion worth of cargo, including grain, coal and fertilizer, during a typical January, according to the American Waterways Operators, which also is based in Arlington, Virginia.

Operator Uncertainty

Barge traffic jams have created uncertainty for operators as far south as Louisiana. Companies including AEP River Operations LLC, a unit of American Electric Power Co. of Columbus, Ohio, and American Commercial Lines Inc. of Jeffersonville, Indiana, have idled boats because of the slowdown.

As the crisis unfolded late last year, lawmakers led by Durbin asked the Corps to analyze whether increased flows from the Missouri River, which joins the Mississippi at St. Louis, could be used to aid the ailing waterway.

There would be “significant negative effects” on the Missouri River system by increasing the flow, including depleting drinking water supplies, loss of marine-wildlife habitat and higher bills for hydropower users, Jo-Ellen Darcy, the Army’s assistant secretary for civil works, said in a Dec. 6 letter to Durbin.

A spokeswoman for Durbin said she needed more information on the Corps’ decision before commenting.

The day before, however, the Corps’ Omaha district was notified that Darcy approved the discharge for International Western Inc. under a provision of law that permits “the withdrawal of surplus water from Corps reservoirs on a short-term basis,” according to a statement from the agency.

Select Energy

International Western is part of Houston-based Select Energy Services LLC, which provides water for hydraulic fracturing, or fracking, the process that injects a watery mix into underground rock to extract oil and natural gas from shale rock. Dustin Childers, a Select Energy spokesman, said in a phone interview he didn’t immediately know how water from the lake will be used.

Under a five-year “surplus water agreement” signed Feb. 6, International Western will remove 1.6 billion gallons from a site on the lake in western North Dakota for industrial purposes, according to Monique Farmer, a spokeswoman for the Corps in Omaha, Nebraska. The water, originally intended for irrigation, wasn’t needed for crops and can be diverted for another authorized use, she said.

The Corps said it is limited by law to certain permitted uses of the Missouri’s water.

“We aren’t congressionally authorized to operate the Missouri River solely for the benefit of the Mississippi River,” Farmer said in a phone interview.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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