JULY 2007: FEATURE
From left: Coos Bay port officials Martin Callery,
Dan Smith, Brady Scott and Kaddy McKeown at the port
site.
Photo by Jon
Meyers
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OREGON'S PORTS: Possibilities and problems
Connecting the dots
It won’t be easy, but Oregon’s coastal ports are in
a position to play a major role in the next wave of local and
international shipping.
By Abraham Hyatt
Tiny, quiet and often economically depressed, Oregon’s
coastal ports have spent the last few decades slipping into a
sleepy obscurity. No fish. No timber. No money.
But they’re far from forgotten. Hundreds of miles
from Oregon, the nation’s largest ports are running out
of space for the millions of shipping containers that arrive
each year. Major highways already have run out of room for more
trucks.
And so little ports along the Oregon coast are attracting
attention. Last year the Danish company A.P. Moller-Maersk
— one of the largest container-shipping firms in the
world — began talking with the Port of Coos Bay about
building an international shipping terminal that would handle
volume similar to ports like Seattle, Tacoma and Oakland.
The price tag is estimated between $300 million and $700
million.
Coos Bay is the only harbor on the West Coast of the United
States that can be made deep enough for that size of a project.
(Two locations in British Columbia and Mexico are the only
others in western North America.)
However, Oregon’s other coastal ports aren’t being
ignored. Officials at the state’s community development
agency want to see smaller coastal ports grow to a point where
they can accommodate the type of local shipping that could take
trucks off highways, thereby easing congestion and improving
air quality.
The state doesn’t have the research or numbers to show
exactly what kind of impacts little ports could make on
transportation needs. And the reality is that it’s going
to take a lot of money to make anything happen. The Coos Bay
project (which was awaiting a Senate vote in mid-June) —
would provide $60 million for preparatory channel-deepening
work. And little ports, some of which are bogged down by
multi-million dollar debt loads and political infighting, can
only dream about the kind of money they’d need to expand
infrastructure.
Regardless of where funding comes from — either from the
private sector or state and local agencies —
Oregon’s coastal ports are poised to join an
interconnected transportation web that extends beyond the major
ports and freeways and into the smallest corners of the
coast.
TEUs in 2006
Coos Bay would be a comparatively small port; at most it
would handle 2 million TEUs (one TEU equals one 20-foot
container) a year. But as major ports reach maximum
capacity, it would play a crucial role in relieving
pressure.
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SHORT-SEA SHIPPING, using coastal and inland waterways to move
commercial goods via barge or ship, is a hot topic in
transportation circles these days. It takes trucks off already
overloaded highways and improves air quality. Not surprisingly,
the federal Maritime Administration loves the practice and has
been pushing to expand it beyond the few places it’s
already used, like the Mississippi, the Gulf of Mexico and, in
limited amounts, on the Columbia River.
Oregon state officials are also very interested for one simple
reason: Multiple estimates show both ports and major highways
running out of room in the next two decades, creating an
economic ripple effect around the nation. “From a
transportation perspective, we see the economic benefits when
short-sea shipping kicks in. The larger state interest is on
transportation because that’s what’s going to eat
everyone’s lunch eight to 10 years from now,” says
Dave Harlan, manager of ports and public policy with the
state’s Oregon Economic and Community Development
Department.
Harlan and others say ports such as Brookings and Astoria
could very well be a part of a short-sea shipping
transportation web. That could be an economic godsend to the
ports. In 2002, Brookings took out state loans to build several
ill-conceived projects that port officials hoped would buoy the
commercial fishing industry, which brings in about 3.2 million
pounds of fish and crabs to the port each year. There was never
enough business to keep those facilities running. Now
they’re shuttered and the port is struggling to make
payments on the $7.5 million it owes.
In Astoria, legal bills and environmental fines stemming from
a bungled dredging project in 2005 have decimated the
port’s savings, with millions of dollars more in
outstanding debts awaiting it in the coming years. Controversy
over its financial affairs, the dredging project and the
port’s approval of a liquefied natural gas facility has
mired the port in acrimonious political debate. The
port’s executive director was fired earlier this year. In
a May election, voters replaced half of the port’s
commissioners.
So where do those ports stand on short-sea shipping? In
Astoria, recently elected commissioner Kathy Sanders says that
it’s crucial for the port to be planning how local
shipping is going to affect the port. But outgoing president
Don McDaniel thinks the port doesn’t have enough land to
build the necessary facilities.
In Brookings, port executive director Dave Scott worries about
the cost associated with deepening the channel and improving
the jetties. “But as problems with roads increase and the
price of fuel increases,” he admits, “anything
becomes possible.”
The answer to how to fund shipping projects appears to be
interconnected with some of the woes that ports have faced.
According to Harlan, over the past 20 years small ports have
been left to themselves by the state. “Our concern is
that the business model for ports is a little broken,” he
says.
To fix the broken parts, Harlan wants to have all ports create
a formalized business plan. He doesn’t have a lot of
specifics for that plan. But the goal would be twofold: force
some ports to address their own outstanding financial
questions, and give the state a clear picture of which port
needs what kind of money, thereby allowing it to prioritize
freight mobility projects.
International Port of Coos Bay terminal by the numbers
4,528: estimated
number of statewide jobs that would be created by the
project
$210 million:
estimated annual payroll for those jobs
22.5 million:
number of TEUs (one TEU equals one 20-foot container)
handled by West Coast U.S. ports in 2006
2 million: Coos
Bay’s eventual annual TEU capacity
14 feet: how much
the Coos Bay channel needs to be deepened
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CONTAINERS, RAILROADS, BARGES, HIGHWAYS: It’s an
interlocking web that touches every one Oregon’s 22 river
and coastal ports. So how much local shipping could coastal
ports handle?
Guy Alvis, the ports program specialist who works alongside
Harlan at OECDD, says the state doesn’t have the numbers
that would show that. A research proposal to study short-sea
shipping that the development division submitted to the
department of transportation this year wasn’t accepted.
However, the two agencies are planning to work on a statewide
ports study, says Harlan. There is no set timeline when that
will happen.
Studies of how ports fit into the larger picture will provide
direction for the future, but more than that is needed, says
Alvis. He compares Washington state, where he says
transportation officials, ports and the state have a strong
working relationship, to Oregon, where he says there
isn’t an efficient way to coordinate the transportation
system.
“It’s going to take some time for other agencies
to take [short-sea shipping] seriously. Other people [in the
state] are confused about what we’re trying to do. But
there’s a great need to get freight off the
highways,” he says.
RIGHT NOW, COOS BAY’S BIGGEST need is money, as much as
$60 million from the state. It’s not an exaggeration to
say that the port — whose fortunes have long been tied to
the rise and fall of exports such as timber, seafood, coal and
nickel ore — is poised to become a big shot in the
Pacific Rim shipping world. That’s because many West
Coast ports will reach maximum capacity in the next two
decades.
The port and the Danish company Maersk are working to turn 300
acres on the north end of the bay into a terminal that could
accept the world’s largest container shipping vessels,
handle millions of containers a year, create thousands of local
jobs and bring millions of dollars to the state economy. (The
ships are far too large to navigate the Columbia River, so the
project isn’t seen as a competitor of the Port of
Portland.)
The $60 million would be used for two things: purchasing the
land and deepening and widening the channel in the bay.
It’s part of a Senate bill introduced by state Sen.
Joanne Verger (D-Coos Bay). As of mid-June, the bill still
hadn’t been voted on by the Senate.
After that work is finished in the next two to three years,
says Martin Callery, director of communications and freight
mobility at the port, his agency will play a limited role,
aside from some additional planning work; they won’t
build or operate the terminal or coordinate transportation
between Coos Bay and the outside world.
Those transportation needs are where the Coos Bay project
suddenly runs head-on into the interconnected needs of the West
Coast’s railroad system. Between 90% and 95% of all
containers will go by rail to Eugene, and from there to the
outside world. How will nearly 2 million containers a year
affect existing rail traffic?
Port executive director Jeff Bishop says that because of their
hands-off role, they’re not involved in any
transportation discussions. He thinks that trains will only
pass through Eugene on their way to the Midwest.
But he predicts that Central Oregon and Pacific Railroad would
be willing to spend the money to upgrade the railway lines that
would be used.
“Look at the economics of an intermodal gateway. Most of
the revenue stream goes to the railroads. It’s very
profitable. I think there’s enough volume to justify the
investment,” he says.
Maybe it’s because it’s his harbor the project
will call home, but Bishop doesn’t sound too concerned
about possible congestion, railway or funding problems. He
thinks the project still would be built even if the state
doesn’t come through with the $60 million.
The port will look for federal funds, or even take another
stab at state money. One thing is for sure: Coos Bay will never
go back to being a sleepy little harbor.
As Callery puts it, the days of small ports serving small
regional areas have passed.
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