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Shippers Balk at Proposed Lockage Fees by Dave Wilkins Capital Press, July 4, 2008

To increase revenue, White House looks to phase out existing diesel tax

A Bush administration proposal to impose lockage fees on commercial barges has hit some rough waters in the Northwest.

The Pacific Northwest Waterways Association - whose members include the Washington Wheat Commission, Washington State Potato Commission, Oregon Wheat Growers League and the Idaho Wheat Commission - is strongly opposed to the idea.

The administration wants to phase out an existing 20-cent-per-gallon diesel tax and replace it with a lockage fee as a means of increasing revenue in the Inland Waterways Trust Fund. The fund helps pay for new construction and rehabilitation projects on the nation's inland waterways system.

Glenn Vanselow, executive director of Pacific Northwest Waterways Association, said lockage fees would be an unfair means of boosting revenue in the fund.

All commercial barges use fuel, but they don't all necessarily transit a lock.

"We're concerned about the fairness of shifting from a fuel-consumption base to a lockage-based fee," he said "We may end up having to carry a heavier burden than other parts of the country."

Barges carrying grain from Lewiston, Idaho, to Portland travel about 360 miles and navigate eight locks along the Columbia-Snake River system.

In the Midwest, barges that move iron ore or coal along the Ohio or Illinois river systems travel a relatively short distance and may not transit any locks along the way, Vanselow said.

The proposed lockage fee could easily double the amount of taxes paid by barges using the Columbia-Snake River system, PNWA officials said.

Under the existing system, a typical four-barge tow moving from Lewiston to Portland pays about $700 to $1,200 in diesel taxes, depending on engine fuel efficiency and other factors, Vanselow said.

Under the lockage fee proposal, the same four-barge tow would pay $2,560 in taxes by 2011.

"At a minimum, it would be a doubling of the tax - and as much as three or four times," he said.

The Columbia-Snake River system is the second-longest river system in the country. Barges carry 10 million to 12 million tons of cargo, valued at nearly $2.5 billion, along the route each year.

At its mid-year meeting June 18-20 in Oregon, the PNWA reiterated its opposition to the lockage fees, but also adopted a policy statement that acknowledges the need for additional funds for improvements to the inland waterways, Vanselow said.

"We'll work with our members and industry to try to assess the needs and find a fair, equitable and reasonable mechanism to increase the user fee," he said.

The administration originally wanted to begin the phase-in of the lockage fees this fall, but that doesn't look like it's going to happen, Vanselow said.

It will be up to the next administration to decide whether to advance the proposal.

"They may carry the proposal forward or they may change it," he said.