Funding America’s Inland Waterway System During the Green Transition

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Published Mar 23, 2022 9:55 PM by Harry Valentine

At present, taxes from diesel fuel consumed by towboats that push and navigate barge tows provides the basis of funding that sustains operation of the American inland water system. While the Secretary of Transportation seeks to encourage expanded commercial domestic transportation that is free from carbon emissions, new developments in battery technology offers the possibility of future electric barge propulsion without carbon emissions, along inland waterways. The Department of Transportation will need to address future funding for the inland waterway system with a tax structure that covers alternative propulsion.

Funding the Waterways

The American inland waterway system involves the operation of multiple navigation locks that require maintenance, upkeep and staffing, which all requires funding. While taxes from diesel fuel contribute to the operation of infrastructure along the waterway system, the future prospect of any of battery-electric, hydrogen fuel cell or LNG propulsion requires that the Department of Transportation develop strategies to assure future funding of America’s navigable inland waterway system.

Numerous sectors of America’s economy depend on efficient, reliable and cost-competitive commercial transportation. Main commercial railway freight corridors are approaching capacity limits, while available capacity is possible along the inland waterway system to move massive volumes of bulk freight and containers. Future economic development will likely increase the number of containers moving domestically and between American and overseas terminals. As waterways take on greater importance, there may be future need to lengthen navigation locks interior length from 1200-ft to 1500-ft and perhaps longer to provide for America’s future domestic commercial transportation needs.

Future Funding

Over a century ago, America’s early inland waterway system made a transition in propulsion from animal drawn river barges to steam-powered boats that burnt either wood or coal. During later years, the inland waterway industry switch from steam-powered boats to diesel-powered boats that push and navigate coupled assemblies of barges. Recent advances in alternative propulsion technology now open the door for segments of America’s inland water system to switch from diesel fuel to a technology like electric power. A diesel tug of 3,200 HP can consume up to 5,500 US gallons of fuel in 24 hours, costing about $17,000 at current prices.

A battery-electric boat of 2,400kW (3,200 HP) running for 24 hours (57,000k-hr) and recharging on off-peak electric power at 6 cents per kW-hr would incur an energy cost of $3,500 to $4,300 per charge. While the initial cost of some battery technologies would be high, some battery technologies could offer over 20 years of useable service. Collecting tax on electric power to fund the waterway system would be problematic. An alternative method would involve some form of the user-pay system that prevails in the railroad and truck transport industries.

User Pay

Advances in electric storage technology offer the future option of electrical propulsion along the inland waterway system, with a potential for electrical storage and propulsion offering cost savings over diesel fuel cost presently paid for by users. The Department of Transportation would likely need to revise revenue collection methods that would sustain the operation of a future inland waterway transportation system that operates with minimal carbon emissions. America’s inland waterway system has greater potential to increase future freight carrying capacity measured in volumes and tonnage than the railroads, to the benefit of America’s long-term economic future.

Replacing diesel towboats with battery-electric towboats would require the Department of Transportation to collect future tax revenue and data independently of towboat diesel fuel consumption. The Department would need to evaluate collecting revenue at the start of the trip when barges are loaded by shippers.


America needs to invest in redeveloping the transportation infrastructure. Investing in redeveloping America’s navigable inland waterway system would provide a high rate of return on investment, as it would increase system carrying capacity beyond capacity increase for freight railway or commercial roadway transportation. The introduction of an alternative energy that displaces diesel fuel in waterway propulsion requires the development of an alternative strategy by which to collect the revenue required to sustain and operate a future American inland waterway transportation system that would play a more significant role in America’s economic future.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.