Will Oil by Rail Force Grain Onto the Barges?

Been thinking’ about this for awhile, then Cory Heidelbergers blog today motivated me to write: http://madvilletimes.com/2014/11/brainstorm-put-backlogged-grain-on-missouri-river-barges/

Here in the grain belt, it’s the talk of every coffee shop: The grain elevators are full, they’re even dumping the bumper crop on the ground, with little rail relief in sight. Massive elevators that are required by contract to load a hundred plus car grain train in 24 hours wait weeks for said grain train to arrive. So some coffee fueled creative thinking has been happening in those coffee shops. Last spring some Farmers Union members I know were talking about trucking their grain 250 miles northeast to the Port of Duluth on the St.Lawrence Seaway. This summer I heard Farm Bureau members hinting that as a potential state legislator I should support allowing them to use double trailers to haul their grain across the state to barge ports like Winona on the Mississippi… I said “maybe”. And today, South Dakota blogger Cory Heidelberger ( http://www.madvilletimes.com ) discussed the potential of shipping grain via the Missouri. Makes sense… isn’t the Missouri, at least theoretically, a navigable waterway as far upriver as Sioux City, a good hundred miles closer to my local mega-elevator than Duluth or Winona?

A bit of research revealed that the last barge tow left Sioux Falls over a decade ago… The “navigable river” status has mostly been a tool to get more favorable rates out of the railroads serving the Missouri River ports, so there’s been little need to actually run a barge “tow” on the river. And given the lack of traffic, floods, and fluctuating water levels that fed a running battle between downstream shipping interests and upstream tourism interests whose reservoirs were drained to flood the downriver channel to the nine foot minimum, there was little motivation to test the viability of barge tows all the way up to Sioux Falls…

Until this summer, when a plant just downriver from Sioux City needed new equipment too big and heavy to move by road or rail, and a barge and towboat came to the rescue. As I write, a closed “riverboat casino” is being towed downriver to be scrapped… So the Missouri is still relatively navigable from Sioux City downriver to the Mississippi and the Port of New Orleans. The river will be freezing soon, but if someone’s really desperate next spring they can probably get their grain out via New Orleans. But given that most of the grain we export is headed west to Asia, a water route the long way round rather than a rail haul to west coast ports is a more attractive shipping route. Until the new Panama Canal locks open…

Canal and lock dimensions tend to determine the size of ships, to the point where a whole class of “Panamax” ships exists- ships built as big as the canal’s century old locks can handle. With the new locks soon to be completed, a whole new class of “New Panamax” ships with over twice the capacity of the old “Panamax” ships will be able to take the Panama Canal shortcut to Asia. And ready they are, with several Gulf ports already upgraded to handle the bigger ships, and the bigger ships now comprising over half the available capacity… Heck, I don’t think they built a single “(old) Panamax” ship last year!

As they say, “This changes everything”… There’s a reason the proposed Keystone XL pipeline from the oil sands of western Canada ends at the “New Panamax” ready Port of Houston! And while much of the container freight from Asia to the midwest will still follow the faster rail routes inland, grain is in no such hurry. Given that barge transport is usually a bit cheaper than rail (towboats use one locomotive sized engine to move a 15 barge “tow” that would require two trains and six locomotives to move by rail), the slightly longer river route to Port of New Orleans is in no way a deal killer… Especially if the railroads routes out of the grain belt continue to be congested.

Anybody wanna bet on when the first barge “tow” leaves Sioux City?


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