1. Presented to The First Hemispheric Convention On Port Environmental Protection 21-24 July, 2009 Foz do Iguaçu - Paraná - Brasil Presented to The First Hemispheric Convention On Port Environmental Protection 21-24 July, 2009 Foz do Iguaçu - Paraná - Brasil Lillian Almodovar Senior Manager and Deputy Director Institute for Water Resources U.S. Army Corps of Engineers Lillian Almodovar Senior Manager and Deputy Director Institute for Water Resources U.S. Army Corps of Engineers

2. National Challenge: Marine Transportation System  Value of all foreign trade represents nearly 30% of nation’s GDP (vs 13% in 1970)  Overseas waterborne trade  95% of overseas trade by volume  75% of overseas trade by value  16 million direct jobs  About $2.3 trillion in economic activity  System nearing capacity until current downturn  Cargo volumes still projected to double by 2025-30  Already a generation behind in channel design – but West Coast in better shape  Capacity constraints increase transportation costs, pollution, congestion

3. U.S. Ports: Vital to Trade …and to Our National Economy Million Tons Over 100 50 - 100 25 - 50 10 - 25 Houston Corpus Christi S. Louisiana New Orleans Baton Rouge Texas City Lake Charles Plaquemines Tampa New York/NJ Valdez Long Beach Beaumont Lower Delaware River (9 harbors) Duluth/Superior Los Angeles Port Arthur St. Louis Portland Seattle Freeport Huntington Richmond Oakland Tacoma Boston Hampton Roads Port Everglades Jacksonville Memphis Detroit Cleveland Savannah Charleston Indiana Hbr Cincinnati Portland Two Harbors Anacortes Honolulu Chicago Pittsburgh Baltimore Pascagoula 53 harbors – coastal, inland, Great Lakes - handled over 10 million tons each in 2007… Toledo Mobile Matagorda Kalama Barbers Pt Nearly 12,000 Miles 9 ft & Over 196 Lock Sites / 242 Chambers Moving Over 600 Million Tons About 2/3rds Cost of Rail and 1/10 Cost of Truck Inland Waterway System:

4. Forecast Total World Container Trade 2000 - 2024  Doubled from 60 million TEUs in 2000 to about 120 million in 2008  Slight decline forecast in 2009  Renewed growth to about 260 million TEUs by 2024  That is down 40 million TEU from earlier forecasts Source: IHS Global Insight, Inc. Dec 08 Million TEUs Decline from Previous forecast

5. Forecast Top 5 Container Exporters 2000 - 2024  And China accounts for 1/3 rd of this trade… (But exports down 20% from earlier forecasts) Source: IHS Global Insight, Inc. Dec 08

6. Top 20 Container Ports by TEUs

7. Forecast Asia Container Trade with North America: 2000 - 2024  Asia-North America eastbound flows over 13 million TEU in 2007  May fall by 10% in ’08-09  Projected to reach over 30 million TEU by 2024  Despite current downturn, will be huge challenge for U.S. ports to handle projected volume Source: IHS Global Insight, Inc. Dec 08

8. U.S. Harbor Deepening Challenges Future Trade Volumes and Vessels  Study Process: The difficult and lengthy process to study, design, authorize and appropriate funds for channel improvements;  Funding: The uncertainties associated with the annual federal appropriation process for projects underway;  Dredging: The escalating costs of dredging and dredged material placement, and associated environmental mitigation activities; and  Handling Facilities and Space: The need for vastly expanded cargo handling facilities and improved intermodal connections, coupled with limitations on port expansion and encroachment of other land uses on port facilities.

9. SEA LEVEL Pre-1970 1,700 TEU <10 Containers Wide 1970-1980 2,305 TEU 10-11 Containers Wide 1985 3,220 TEU 11-13 Containers Wide 1986-2000 4,848 TEU 13-17 Containers Wide 2000-2005 8,600+ TEU 17-22 Containers Wide Ever Larger Containerships Driving Need for Ever Deeper Channels > 14m 12.8-14m 11.6- 12.8m 10m <9m

10. Deep Draft Challenges: Mega-ships EMMA MAERSK 11,000 (14,000?) TEUs S Class 6800 TEU S Class 6800 TEU L Class 14,000 TEU L Class 14,000 TEU Source: Journal of Commerce August 2006, Marine Log December 2006, TranSystems 2007  “M/S Emma Maersk” christened Aug 2006  Capacity could be as high as 14,000 TEUs  LOA of 397 m  Beam of 56 m  Draft 15.5 m  170,974 gt  Speed 25.5 knots

11. Pacific Coast 4.5 3.8 14.0 Atlantic Coast 7.4 5.1 17.7 Depth-Constrained Containership Calls in 2020, with and without Planned Harbor Projects (in thousands of ship calls) Gulf Coast 1.11.6 2.5 Construction / Design Funds Study Funds Under Construction/ Study for Additional Improvements Authorized – Funds Pending As of 2009:

12. Meeting the Challenge: Key Harbor Improvement Projects Funded in 09 Houston/ Galveston Mobile New York/NJ Los Angeles Main Channel Oakland 50-ft Boston Port Everglades Indiana Hbr Sault Ste Marie (Soo Locks) (multiple projects) Wilmington Savannah (2 projects) Great Lakes System Study Corpus Christi (Main Chnl & LaQuinta Chnl) Delaware River Texas City SF Bay to Stockton Columbia R James River St. Paul Hbr Maalaea Freeport Iberia Anchorage Unalaska Searsport  33 harbor improvements in ’09 appropriation/ARRA  $468 million federal  Long-term investment of over $5.6 billion Yakutat Brazos Island Hbr Sabine- Neches Portsmouth Elizabeth R MiamiHomer Construction / Design Funds Study Funds Under Construction/ Study for Additional Improvements Authorized – Funds Pending Sacramento Jacksonville Norfolk Harbor Sitka Tampa Burlington Valdez Seward Barbers Pt Hilo Redwood City Poplar Is. (Balt) Long Beach Canaveral Bucks Hbr Bass Hb Akutan

13. Principal US Harbor Improvements Funded in 2009* * Includes 2-year ARRA funding.

14. Major Port Improvement Environmental Mitigation Initiatives  Environmental Sustainability Goals & Policies Meet the needs of the present without compromising the quality of life of future generations. Maintain economic growth while producing an absolute minimum of pollution, repairing environmental damages of the past, producing less waste, and extending opportunities to live in a pleasant and healthy environment. Meet human needs by maintaining a balance between development, social equality, ecology, and economics. Demand systematic considerations of environmental impact, energy use, natural resources, economy, and quality of life. Has optimal benefit only when addressed at the inception of a project, and throughout the entire life cycle of a project -- from concept to planning, to programming, design, construction, and ownership.

15. Elizabeth Port Authority Marine Terminal Kill Van Kull Channel Arthur Kill Channel Newark Bay Upper New York Bay New York & New Jersey 50-Ft (15.2m) Harbor Deepening Project by Increment  Authorized WRDA 2000  50-foot (15.2m) channels to four container terminals (5.3m TEUs in 07)  53-foot (16.2m) Ambrose (entrance) Channel  Kill Van Kull Channel – 50 ft  Parts of Newark Bay Channels - 50 ft  Arthur Kill Channel – 50 ft  Port Jersey Channel and the Bay Ridge Channel - ft  Estimated Cost: $1.6 billion  About 70% complete

16. Major Port Improvement Environmental Mitigation Initiatives  New York & New Jersey Harbor: Reestablish attributes of a natural, functioning, and self- regulating ecosystem; Comprehensively restore the New York and New Jersey Harbor to become a world-class harbor estuary; Improve sediment quality, water quality and enhance habitat within the Harbor Estuary; Preserve and restore wetlands and rivers, protecting public drinking water, create habitats for endangered wildlife, and cleanup hazardous material from residential communities.

17. Houston- Galveston 45-foot (13.7m) Deepening Project  Entrance Channel and Houston Ship Channel sections completed in 05 (53 miles/86km)  Construction of “Barge Lanes”  Numerous beneficial use sites  Galveston Channel being completed (ARRA)  $782 million ($541 federal / $241 local)  Over 200 million tons of cargo annually (1.8m TEUs in 07) Galveston Channel Reach Entrance Channel Reach Bay Reach: Houston Ship Channel Bayou Reach Bird I. Bolivar Marsh Berm Mid-Bay Marsh Alexander Island Lost L.

18. Major Port Improvement Environmental Mitigation Initiatives  Houston-Galveston Navigation Improvement Project Included Many Environmental Initiatives: 118 acres of oyster reef in mid-Galveston Bay near the Houston Ship Channel; Other shallow water habitat areas created for birds, fish and other species Dredged material used to create an island for bird habitat which quickly attracted users; Levees were built to create confined dredge material disposal areas that will eventually be marsh grass; A portion of eroded Red Fish Island is being reconstructed.

19. Oakland 50-Ft (15.2m) Deepening  Handled 2.4 m TEUs in 2007  5 th largest container handling port in U.S. (just passed by Savannah)  50-ft (15.2m) Deepening Underway  Auth WRDA 99  13 mcy dredge material removal, including: 7 mcy for shallow draft habitat 2.6 mcy for tidal wetlands restoration  Total Cost: $408 million ($225m Federal)  Will be 100% complete with FY09-10 ARRA funds  About $700 million in port facility expansions underway associated with channel deepening

20. Deepen & Widen Inner Harbor Turning Basin (2) Deepen Inner Harbor Channel (2) Deepen Entrance & Outer Harbor Channel Construct Middle Harbor Complete Outer Harbor Deepening & Turning Basin Dike Construction Deepen Inner Harbor Channel (1) OAKLAND HARBOR DEEPENING TO 50 FEET (15.2M) Complete Underway in 09 FY09-10 ARRA Turning Basin (1)

21. Major Port Improvement Environmental Mitigation Initiatives  Oakland Harbor 45 and 50-foot Channels: Sonoma Baylands: This completed project restored tidal salt marsh habitat on a 348 ‑ acre-diked hayfield on the north shore of San Pablo Bay utilizing 1.7 million cubic yards of dredge material from Oakland Harbor. After the dredge material was consolidated, tidal action was reintroduced. Montezuma Wetlands: Dredged material is being used for restoration and habitat creation at this upland site. Hamilton Army Airfield: The project site is located on San Pablo Bay and includes 988 acres of a former military airfield and an adjacent site. The levee-protected site has subsided below the elevation of surrounding properties, including the tidal wetlands immediately adjacent to the Bay. This wetlands restoration project provides beneficial reuse of dredge material from Oakland and San Francisco Bay. The California State Coastal Conservancy is the non- Federal sponsor.

22. Uncertainties Impact Harbor Investment Decisions  Future trade growth rate  Future vessel fleet – and where will they call?  Panama Canal expansion – implications for vessel routings  Use of Transhipment Hubs – Bahamas? Caribbean?  Stimulus funds accelerate some projects, but then funding uncertain  Future funding levels may be constrained by growing federal deficit

23. Development of transhipment ports in the Caribbean and Bahamas may affect size and number of vessels calling US East and Gulf coasts

24.  Canal traffic nearly 60% containerized cargo  Forecast to grow from 3.2m TEUs in 2007 to 7.4m TEUs in 2015  New locks 1400’ x 180’ x 60’  Designed to accommodate 12,600 TEU vessel with max draft of 50’  How will this change fleet calling US ports?  Canal traffic nearly 60% containerized cargo  Forecast to grow from 3.2m TEUs in 2007 to 7.4m TEUs in 2015  New locks 1400’ x 180’ x 60’  Designed to accommodate 12,600 TEU vessel with max draft of 50’  How will this change fleet calling US ports?

25. A Way Forward  Reliable funding stream to complete ongoing projects and ensure completion of associated environmental mitigation and restoration actions;  Work with various government agencies, NGOs and stakeholders toward consensus on how to move forward on critical improvements;  Streamline study, design and authorization process;  Improve analytical tools to better assess future trade routes and vessel fleets; and  Work with state and local port authorities to move quickly to add cargo handling facilities and improve intermodal connections in an environmentally sustainable manner.  Reliable funding stream to complete ongoing projects and ensure completion of associated environmental mitigation and restoration actions;  Work with various government agencies, NGOs and stakeholders toward consensus on how to move forward on critical improvements;  Streamline study, design and authorization process;  Improve analytical tools to better assess future trade routes and vessel fleets; and  Work with state and local port authorities to move quickly to add cargo handling facilities and improve intermodal connections in an environmentally sustainable manner.