Panama Canal Expansion Fueling Port Upgrades; Some U.S. Ports Burdened by Security, Environmental Regulations

Panama Canal set to double capacity by 2015

The Panama Canal is expanding, with its capacity set to double by 2015, with the canal being able to handle ships nearly a third larger the current 965 foot long "Panamax." This means ports serving the canal, all up and down the Atlantic and Pacific, are scrambling to handle the new demand. The Miami Herald reports:

The race for deep water is fierce. Buenaventura [in Colombia] currently feeds much of the traffic to the shallower port in Guayaquil, Ecuador. But Buenaventura is facing competition from Balboa, in Panama, which is emerging as the Latin American leader of transshipment and expects to see its business double after the expansion.

The Bahamas is working with Hutchison Port Holdings to stake its claim as the most modern container facility in the English-speaking Caribbean. With a depth of 52 feet, the Freeport Container Port can already accommodate post-Panamax ships…

But both the port of Jacksonville and Miami are hoping to take a bite out of Bahamian business.

PortMiami is also hoping to undercut Freeport and regain some of the transshipment business that it lost after the terrorist attacks of Sept. 11, 2001, when new security regulations strangled business.

Despite the onerous security regulations, as recently as two years ago only 20 percent of cargo was screened for bombs, and the Obama Administration missed a deadline this summer to begin scanning all cargo for radioactive material.

In South Carolina, meanwhile, upgrades to the Port of Charleston, a larger port than Miami's, have been hampered by federal regulations that last year pushed the completion date out to 2024. The president promised this summer to expedite the work.

And now there's a legal fight over which government agency has the authority to issue which permits in the Panama-related expansion of the Savannah River shipping channel, pitting Georgia against South Carolina and South Carolina against the feds:

But environmental groups in both states have sued, saying the U.S. Army Corps of Engineers needs a South Carolina pollution permit for the project because the dredging will remove toxic cadmium and deposit it on the South Carolina shore…

The state Supreme Court last month invalidated a federal clean water certification that had been issued by the state Department of Health and Environmental Control. The court ruled the state's Savannah River Maritime Commission, not DHEC, had authority over river activities.

When the environmental groups sued over the state pollution permit the U.S. Army Corps of Engineers and the Georgia ports argued that no permit was needed because the water quality certification had already been issued…  the corps has told Congress it now wants an exemption from the requirement that the state certify the project.

The corps has sent letters to Vice President Joe Biden, House Speaker John Boehner and eight other Washington lawmakers saying the project should be allowed to bypass environmental review by South Carolina.

And here's a reminder no country can "outcompete" another despite the president's belief to the contrary.