The Poe’s going to go, people are saying. A new report confirms that if it does, the economy’s in trouble.
A replacement for the largest of the Soo Locks has been a hot issue lately. With the 2016 shipping season now underway, the issue has been raised again. The ‘Poe,’ a 1,200-foot-long channel, and its fellow locks are going on 50 years of use, and have seen more closures and repairs in recent years. Shipping companies, manufacturers, and politicians are all agitating to see a new Poe-sized lock built, and for good reason.
The Duluth News Tribune reported on March 16th that “a U.S. Department of Homeland Security report indicates a six-month shutdown of the Poe Lock in Sault Ste. Marie, Mich., if one occurred, would plunge the nation into recession, closing factories and mines, halting auto and appliance production in the U.S. for most of a year and result in the loss of some 11 million jobs across the nation.” The report was obtained via the Detroit Free Press through the Freedom of Information Act.
The figure only covers damages to the U.S. economy. There is no available information on how it would affect the Canadian economy, but a closure would likely do immense damage north of the border as well.
Though Congress authorized a second lock to be built about 30 years ago, no construction has yet been undertaken. The Obama administration granted $1.35 million last year to do a cost-benefit study of finally building a new Poe-sized lock. However, the study could take years to complete, and the total construction process is estimated at a decade. The project would need about $580 million to complete.
The Duluth News Tribune article summarizes the domino-effect of a closure of the Poe lock, noting that the Homeland Security report deems it “the Achilles’ heel of the North American industrial economy.” Effects would be wide-spread for the U.S., Canada, and Mexico. Here are a few speculations from the report:
- “Iron ore mining would virtually stop and production of steel-related items — from cars and construction and equipment, to railcars and appliances — would halt, with millions losing work until the problem was resolved and work recommenced”
- “When the lock reopened, it would take months for mines and mills to return to full capacity […] And during the intervening period, unemployment would skyrocket, rising nearly 6 percent across the nation and even more in the Midwest, topping 20 percent in Michigan and Indiana.”
- “Any plans to react [to a closure]— by using trucks or rail, for instance, to move iron ore — would almost certainly fail.”
- “Without any redundancies or contingencies built into the system […] any long-term closure during the shipping season would almost inevitably lead to “a severe recession.”
The Homeland Security report’s authors didn’t make any recommendations, but mentioned that a new lock may not solve the problem immediately either, since construction could take many years to complete.
Political interests are pushing ahead regardless. The Conference of Great Lakes and St. Lawrence Governors and Premiers had a minor blurb in their April 2016 Compass Newsletter touting growing support for the new Soo lock. The article reports that the Conference is developing a Governors’ and Premier’s Regional Strategy, which aims to double maritime trade in the Great Lakes, shrink the industry’s environmental impact, and provide support to the Great Lakes regions’ industrial core. Among the Initiative’s recommendations is advocacy effort among provincial and state leaders for the new Poe-sized lock.