Dredging the Delaware River ship channel, a multimillion-dollar project delayed for over a decade by environmental opposition, lawsuits and permitting disputes, has edged closer to reality. This month, the federal government set aside another $16.9 million for the dredging and President Obama is asking for more in the new federal budget.
The project, which backers say will allow ports in Delaware, Pennsylvania and New Jersey to compete for business in an era of bigger cargo ships, would deepen a 102-mile stretch of the Delaware River and Bay from 40 to 45 feet, putting the terminals on an equal footing with other major East Coast ports that can take the bigger vessels.
Seventeen miles of the channel south of Claymont have already been deepened and supporters expect more dredging to be done near Philadelphia this summer. But the project could be halted if the Third Circuit Court of Appeals rules in favor of a suit brought by environmentalists and the State of New Jersey, who argue the work will damage the environment and fail to bring promised economic benefits.
Delaware’s two U.S. senators welcomed the Feb. 8 announcement from the U.S. Army Corps of Engineers that it had received $16.9 million to deepen the shipping channel.
“This project will have a significant, positive impact on Delaware and the region,” said Sen. Tom Carper, in a statement. “Investments like this one are critical to the long-term development of the Port of Wilmington and Delaware.”
Sen. Chris Coons agreed.
“Deepening the Delaware River will bring enormous benefits to our state and has the potential to create tens of thousands of jobs in our region,” Coons said in a statement. “It will help ensure the Port of Wilmington remains competitive as the Panama Canal expands, and will provide long-term security for the port as it works to leverage private investment.”
President Obama’s budget proposal includes another $31 million for the dredging. Including work already completed, the multi-year project is expected to cost approximately $300 million in state and federal funds.
The dredging is also backed by Governor Jack Markell, who joined with the state’s Congressional delegation last September and requested more money for the work from the U.S. Army Corps of Engineers, the agency handling the project.
State quits lawsuit
Markell’s administration had previously joined a lawsuit against the Army Corps, arguing the project failed to meet state permitting requirements. The suit, in which the state joined with five environmental groups, failed in federal district court early in 2011. The other plaintiffs appealed, but the state withdrew, saying it did not want to put further resources into the case.
But the decision to abandon the legal challenge did not mean the administration changed its position about the benefits of the deepening project, said Brian Selander, a spokesman for Gov. Markell.
“There were compelling and competing arguments being made both for and against dredging before the project started,” Selander wrote in an email to DFM News. “Our argument before the courts centered not on the potential value of the project but around the need for it to adhere to state processes. The court ruled that dredging should go ahead without that additional environmental study or state process.”
Alan Levin, director of the Delaware Economic Development Office, acknowledged that, as a supporter of the deepening project, he had been at odds with his fellow cabinet member, Collin O'Mara, Gov. Markell’s Secretary of the Department of Natural Resources and Environmental Control. But, Levin said, the courts "took it out of our hands."
Legal advice overruled?
According to Maya van Rossum of Delaware Riverkeeper, one of five environmental groups suing to block the project, the state withdrew after the Markell administration overruled objections from the Delaware Attorney General’s office.
Lawyers for the attorney general argued that giving in on the issue of the state’s permitting authority created a dangerous precedent that ran contrary to the intent of the federal Clean Water Act, which is based on joint federal and state authority for such projects, van Rossum said.
“The attorneys argued that once that legal authority is stopped, it’s very difficult for them to ever get that back,” she said.
Justin Miller, a spokesman for the Attorney General's office, said the department would neither confirm nor deny van Rossum's account because the information was privileged.
Critics question costs, benefits
Opponents of the project argue that dredging will do ecological and economic harm to oyster beds; damage wetlands; hurt local populations of horseshoe crabs that provide food for migrating shorebirds and blood for medical researchers, and threaten the
already-endangered Atlantic sturgeon.
“The deepening is not needed,” said van Rossum. “It’s a likely economic loser.”
In January, Delaware Riverkeeper renewed its attack on the plan, saying the Army Corps “cooked the books” by falsely claiming that deepening the channel would reduce the cost of bringing seaborne goods to the Philadelphia-area market.
The group argues that trucking goods to local customers from ports that can take smaller ships would be less expensive than the cost of the dredging project. It challenges the Army Corps’ economic analysis that benefits will outweigh costs by 1.64 to 1, and says the true ratio is around 1 to 1.
“The Corps’ economic analysis deserves to be on a Chinese menu under twice-cooked pork,” said Steve Ellis, vice president of Taxpayers for Common Sense, a non-partisan federal budget watchdog group, in a statement. “The new report is being used to justify renewed funding for a project that doesn’t meet the federal government’s basic criteria for ensuring tax dollars are invested only in those projects that will generate clear economic value for the country.”
Ed Voigt, a spokesman for the Army Corps in Philadelphia, acknowledged the project’s benefits/costs ratio is lower than the 2.5 to 1 recommended by the White House’s Office of Management and Budget for projects that seek federal funding. But he said the OMB number is a guideline rather than a rule.
“Most projects will be 2.5 or more,” Voigt said. “There’s always going to be some that aren’t.”
Legal challenges could stop work
The Army Corps is likely to begin work on the next section, between Penn’s Landing in Philadelphia and Essington, in the summer, according to Dennis Rochford, President of the Maritime Exchange for the Delaware River and Bay, a non-profit trade association that promotes trade in the river’s port complex in Delaware, Pennsylvania and New Jersey.
But resumption will depend on the Third Circuit’s decision, which Rochford – a board member of Delaware First Media – said he expects within weeks.
Delaware U.S. District Court Judge Sue Robinson ruled in early 2011 that the deepening project entailed maintenance rather than expansion, so the Army Corps was not required to seek a state permit for the work, as claimed by the plaintiffs. She determined that the state had no basis on which to prevent the dredging.
Following legal defeats in Delaware and New Jersey, the five environmental groups plus the State of New Jersey took their challenge to the Third Circuit Court of Appeals, which heard oral arguments in January.
Jane Davenport, senior attorney with Delaware Riverkeeper, said that, whoever prevails at the Third Circuit, the case is likely to be appealed to the U.S. Supreme Court.
Davenport said the high court may decide it wants to settle disputes over two sections of the Clean Water Act: whether the Army Corps is granted a waiver on the analysis of dredging spoils disposal and whether the Corps has to obtain a state dredging permit.
If the high court takes the case, it could prove decisive for other port-deepening projects up and down the East Coast, Davenport said.
A powerful economic driver
According to the Maritime Exchange, the Delaware River port complex contributes $6 billion to the regional economy. Its benefits include 75,000 jobs, $1.5 billion a year in wages and salaries, and $150 million a year in state and local taxes.
Opening up the Delaware channel to larger ships will also allow local ports to compete for new business, and will encourage private investment in port infrastructure such as a planned new container terminal in Philadelphia and improvements to the Port of Wilmington, Rochford said.
“If we don’t deepen our channel, we are going to lose business to those other ports,” he said.
Levin, Delaware’s economic development director, agreed. The Port of Wilmington has great potential because it is within five hours' drive of 35 percent of the U.S. population, he noted, but if it can't take larger ships, "those shippers will find other places to go.”
Rochford said the new federal money shows that local ports will be able to host the new generation of cargo carriers, especially those sailing through the expanded Panama Canal, where the biggest cargo carriers are known as Panamax ships.
“This funding sends a message to the global transportation community that Delaware River ports are not only competitive but ready, willing and able to do business in a post-Panamax ship world,” Rochford said.
