GENERAL ARTICLES

The St. Lawrence Project

KENNETH R. WILSON February 15 1941
GENERAL ARTICLES

The St. Lawrence Project

KENNETH R. WILSON February 15 1941

The St. Lawrence Project

GENERAL ARTICLES

KENNETH R. WILSON

EVERY FEW years Uncle Sam comes up to his Northern fence line and calls across: “Hi, Canada, how about you and me damming up these pesky rapids in the St. Lawrence River?”

Canada usually replies: “Sure, Sam, any time you’re ready we’ll be glad to talk it over.”

But so far the dam, or seaway as it is usually called, has never been built. Heretofore the job has never got past the talking stage; the big dream ships have never yet plied between Montreal and the Great Lakes; several million horsepower of electric energy is still unharnessed.

Last autumn Uncle Sam came back and asked the same old question. This time he had a pretty determined look in his eye. He also had a new reason for doing the St. Lawrence job. The new reason was national defense.

For nearly forty years, off and on, the two neighbors have been discussing joint development of the St. Lawrence. In the past, the talk hinged on navigation—a deepwater seaway. Latterly the St. Lawrence as a power project has come increasingly to the fore. Always there has been a powerful undercurrent of politics.

The talks got really serious in the early ’20’s, when an International Commission recommended a treaty to enlarge and improve the international section of the St. Lawrence Seaway. Ten years later, when Franklin D. Roosevelt first became president, a power and seaway treaty was actually signed at Washington. The treaty failed to pass the U.S. Senate. Again discussions stopped.

In June, 1938, the talks began again. New and important concessions were offered by neighbor Sam to Canada. According to the new plan, the bulk of the expenditure was to be borne by the United States in return for Canada’s earlier enterprise in completing the huge and costly Welland Canal. Canada was going to be allowed ten years or more in which to do her part. Other problems affecting the Great Lakes Basin were to be settled. Ottawa was plainly pleased.

Meanwhile, Mitchell F. Hepburn had become Premier of Ontario. Mr. Hepburn, at that time, didn’t want the St. Lawrence Seaway built. He thought the whole thing a waste of money and quite unnecessary.

This was a bad stumbling block, because the plan involved Ontario as well as the two federal governments. Ontario’s assent was essential, not only to “clear” in respect of power rights, but also to provide the money and mechanism for developing Canada’s share of the 2.200,0C0 horsepower of hydro-electric energy which would be developed along with the 27-foot-deep seaway. Because of Mr. Hepburn’s opposition, negotiations were halted once again.

In October, 1939, one month after the outbreak of war,

Mr. Hepburn announced privately at Ottawa that he had had a change of heart. Not only was he willing to withdraw his opposition, he was eager and anxious to proceed at once with the St. Lawrence Seaway plan. Unknown to Premier Hepburn, Uncle Sam at the same time was again getting ready to broach the subject.

By December official announcement was made that the treaty negotiations were being resumed. Within a few weeks, representatives of each Government had met in Washington and in Ottawa to discuss the new treaty. The discussions continued through into February.

In March, the Dominion election campaign intervened. The plan lay dormant. By early May, President Roosevelt had decided not to continue negotiations any further. Presumably he did not see his way clear to getting a treaty passed by the required two-thirds Senate majority. In September, 1940, the talks started again. Uncle Sam urged this time that the St. Lawrence development was needed as a “defense” measure.

The conversations were confirmed by an exchange of notes in mid-October which agreed on “the desirability of taking immediate steps looking toward the early development of certain portions of the Great Lakes-St. Lawrence basin project.” Reasons given were: “The apprehension in both countries over the possibilities of a power shortage . . . apprehension heightened by the necessity for increased supplies of power in consequence of Canada’s war effort and of the major national defense effort in the United States.” Agreement was reached, as well, that Ontario could develop extra power at Niagara for war needs. A new international committee was formed and $1,000,000 of defense moneys appropriated at once by the U.S. Government for preliminary engineering and other surveys.

Heretofore, powerful U.S. sectional interests, chiefly those concerned with the threat of a new form of subsidized transportation, have said, “Thumbs dowm,”

With Uncle Sam urging national defense as a new reason for action, new life has been injected into the proposals for power and navigation development of the mighty St. Lawrence

when it came to translating seaway talk into action. This time the U.S. rearmament program has brought a powerful new factor into the St. Lawrence controversy. Mr. Roosevelt now talks St. Lawrence turkey as a matter of national defense—an argument used to justify both the power and navigation aspects of the St. Lawrence scheme. This was first apparent in the message sent to a Great Lakes-St. Lawrence Seaway Conference at Detroit in December by President Roosevelt. His message said, in part:

“The United States needs the St. Lawrence Seaway for defense. The United States needs this great landlocked sea as a secure haven in which it will be able to build ships and more ships in order to protect our trade and our shores.

“The United States needs, tremendously needs, the power project which will form a link in the seaway in the International Rapids section of the St. Lawrence River to produce aluminum and more aluminum for the airplane program which will assure command of the air . . . no one who has studied our national defense problems and the international situation can possibly fail to see the need for this project in the defense of the continent ... a new source of cheap power for national defense must be developed immediately.”

Mr. Roosevelt also had an answer at that time for those who contend that the seaway and power project could not be available in time to be of use for anything short of a fiveor ten-years war. He told the Seaway Conference:

“Opponents of the seaway project have pointed out that it takes four years to build this seaway. They know, but fail to mention, that it takes at least that long to build a battleship. They also know that this project will cost the United States less than three battleships and that the power project will be entirely self-liquidating.”

Canada is being offered participation on terms which it is believed will make it attractive to a country heavily involved in war. As well, she is obtaining permission for Ontario to develop additional power at Niagara Falls, immediately, as an aid to relieving power shortage in the vital Southern Ontario industrial section. The experts are guessing that, this time, work on the seaway will be starting by spring.

Behind these momentous happenings is a long and fascinating story. Pick up any good atlas and spot the Strait of Belle Isle. Look east to Liverpool, then west to Fort William. You will see that the distance either way is about the same. The eastward route to Liverpool is across the broad Atlantic. The westward route to Fort William is the Great LakesSt. Lawrence Seaway.

Look next at the public accounts of Canada. You will find, perhaps to your astonishment, that $700,000,000 has been spent to improve and maintain this 2,000mile inland waterway. The money has gone for canals, harbors and various navigation improvements. A smaller but still considerable sum has been spent on this waterway by the United States.

So far. each nation has worked independently. In Canada, public funds have been spent on canals for more than two centuries. Traditionally, it has been accepted national policy to deepen and improve this great natural seaway. The policy has seldom been questioned. Until the 1920’s, immigration and frontier development kept alive the hope of continued expansion. The century was to be Canada’s. Any excess in public expenditure on the seaway would soon be overtaken as the nation grew in stature and wealth.

Thus, by the year 1900, Canada boasted at least a fourteen-foot-deep channel from Lake Superior to Montreal. Below that, much greater depth was available.

In 1919, the United States completed a canal 24 feet in depth on her side of the boundary at Sault Ste. Marie. This outmoded the 19-foot Canadian lock built in 1895. It brought new visions of cheaper, more efficient transportation for the grain growers and those with bulky freights to transport.

By this time Canada had embarked on a great new canal at Welland. The then existing canal had been completed in 1882 to a depth of 12 feet. Subsequently, it was deepened to 14 feet. In 1911-12, a pro-

posal was made to spend $50,000,000 on a new canal, with seven new 800 x 80 foot locks having a depth of from 25 to 35 feet. The canal was to have been completed in 1917, but was delayed on account of the war. It aroused little controversy and much enthusiasm. Sir Wilfrid Laurier supported it by saying that grain would then be able to go through to the ocean vessels at Montreal without fear of competition from Oswego or Buffalo.

The rest of the Welland story is now a matter of history. The project was revised after the war and subsequently enlarged. It was completed in 1932 at a cost not of $50,000,000, but $125,000,000. A further $5,000,000 has been spent on construction and enlargement since then. There are now eight locks of 30-foot depth, with a present minimum depth between the locks of 27 feet.

St. Lawrence Bottleneck

HAVING deepened the channel at Welland and having spent nearly fourscore millions of dollars on deepening the St. Lawrence ship channel below Montreal, there remains but one major obstacle to a deep seaway route—the St. Lawrence bottleneck between Kingston and Montreal.

The distance here is 183 miles. Of this. 115 miles is in international territory. In this channel there are now 47 miles of canals with 22 locks. The navigable depth is still 14 feet. Implicit in national policy was the idea that some day this channel must be enlarged to a 25or 30-foot depth. Without this, the hundreds of millions spent above and below could never be utilized in full measure.

Proposals to develop this part of the seaway jointly with the United States, go back many years. As early as 1914, the United States Government made tentative proposals to Canada for a joint development. The two countries had already, in 1909, created the International joint Waterways Commission to have jurisdiction over boundary waters. Involved also was a request by the Aluminum Company of America to develop power on its own at Massena, N.Y., below Long Sault Island. This caused Canada to raise her voice in protest.

Out of the controversy came a decision, late in 1919, to refer the whole matter of joint development to the International Commission. In January, 1922, this Commission issued its report. It recommended a treaty to enlarge and improve the St. Lawrence Seaway. That was eighteen years ago.

Burdened with post-war problems, Canada was in no hurry to move. Another two years elapsed before engineers were named to continue the enquiry. Further studies and reports were made and finally, in July, 1932, more than ten years after the. original report of the International Joint Commission, a treaty was signed at Washington. The treaty failed to pass the United States Senate. What has happened since has already been outlined.

Power of First Importance

TN THE early days, it was chiefly of

ships and wheat and ore and harbors and ocean vessels that men thought and argued when they discussed the St. Lawrence project. Politically, it is still the navigation argument which is most potent to powerful treaty-making U.S. Senators. But to the experts and to the public at large, it is increasingly apparent that the St. Lawrence Seaway project is no longer primarily a matter of navigation, but of power.

Public and private bodies on both sides of the international boundary have long coveted the vast storehouse of power locked within a 48-mile stretch of the St. Lawrence River bed between Prescott and Cornwall. In that short span, the river falls approximately 85 feet, and there is a latent 2,200,000 h.p. of electrical energy.

The United States has been especially eager to develop this power. Unlike Canada, it has no comparable source of cheap, undeveloped hydro-electric energy adjacent to this highly industrialized area. True, great strides have been made in reducing the cost of power derived from .coal and other fuels, but it is doubtful if there is as yet any economically comparable substitute for electric energy such as is potentially available in the international section of the St. Lawrence River.

Often disputed, this fact deserves some elaboration. Steam plants can be built at low initial cost. They can be built, engineers state, so that fixed charges per horsepower amount to $8 or less. This compares with, say, $12 for a comparable fixed charge per horsepower on the St. Lawrence. These figures are for plants with the low interest and financing charges possible in publicly owned and operated projects such as the St. Lawrence power and seaway development.

But once the hydro plant is built, it can be operated very cheaply even at a very high ‘‘load factor,” the term meaning operation at full capacity for a large proportion of the total hours in any year. On the other hand, the higher the load factor of a steam plant—the nearer it runs to its full annual capacity—the more sharply the cost of coal and other operating charges increases.

A big hydro development such as is envisaged on the St. Lawrence can be run year in and year out at about 85 per cent of its rated capacity. At 85 per cent load factor, it is a probable estimate that power could be delivered "wholesale” from the St. Lawrence to Toronto at about $17 per horsepower. Of this cost, $12 would represent capital and generating costs. The remainder would be costs of delivery, transmission, etc.

This is “cheap” power. It is especially cheap in terms of cost per kilowatt hour for delivery to industry or big commercial

users located at or near the power plant in Eastern Ontario. It can be produced for this price partly because of the inherent economy of power development on the St. Lawrence and partly because of the mutual advantages gained from a combined navigation and power development in the sharing of “joint” costs. This type of power has another advantage common to all hydro developments in Canada, in that it reduces the need for dependence on imported fuel.

Hydro Ideal For Big Industry

A POWER source such as the StEA. Lawrence, which can bear a high load factor cheaply, is therefore ideal for the “base” power load of a community or an industry. It is almost indispensable for huge electro-chemical or metallurgical projects such as aluminum plants, war chemical or explosive developments which can locate near the source of power and must run more or less continuously.

To build a huge oneor two-million horsepower steam plant on the St. Lawrence would not, of course, be economical or efficient. A comparable development would be to suppose the erection, say at Toronto and other big industrial centres in Southern Ontario, of steam plants adjacent to those communities.

Such plants would have definite advantages. They would be more “elastic” to operate, for example, but they would probably be much more costly. The advantage of the low initial cost of the steam plant, $7.50or $8per horsepower for fixedcharges, would be overtaken by higher operating costs. Estimating coal at $4 a ton, competent engineers state that as much as $16.50 per horsepower might be required to pay the cost of fuel and operation if the plant were to run at 85 per cent load factor. This would mean an over-all cost for steam of about $24 a horsepower compared with $17 for St. Lawrence power.

The most economical way to utilize steam plant capacity is to use relatively low load factors, in conjunction with hydro power. Since most power systems have substantially increased power demand in winter, hydro power which is available at a high load factor can carry the “base” load, leaving steam to carry winter “peaks.” On such a basis, total cost of steam-generated power, with coal at $4 a ton, might be reduced to perhaps $15 or even $10 per horsepower. This would be very low load factor power, but it would need to be supplemented by hydro or some other power in order to be commercially saleable.

Power development in Ontario is almost exclusively in the hands of the vast publicly owned Hydro-Electric Power Commission of that province. It is this organization which would fall heir to power developed in the international section of the St. Lawrence River. Ontario Hydro is a unique co-operative enterprise. It boasts assets of more than $400,000,000 and some 660,000 customers. Its main job is to act as a producer and distributor of power for its member communities in Ontario. It also acts as trustee for the province in operating and administering huge provincially owned power enterprises in Northern Ontario. The Commission now generates in its own forty-six stations more than

1.500.000 h.p. in electric energy. To supplement this it purchased last year over

620.000 h.p., mostly from big privately owned producing companies in Quebec Province.

At the end of the year—peak loads for power come always in the dark, busy months in December—its total load reached the highest point in the Commission’s history, something over 2,200,000 h.p. This represents a gain of nearly 40 per cent over 1936. It is just double the load of that in the boom year of 1929.

As wartime needs began to soar, Ontario Hydro’s power reserve began to shrink rapidly. True, there was still some additional unused power available in Quebec, if that province could be persuaded to part with it. And there was also a substantial amount of undevelojied water power elsewhere in the province, exclusive of the St. Lawrence.

But major power developments take years to plan and consummate. Ontario Hydro is concerned not only with anticipated load growth in the next one, two, or three years; it is responsible for an adequate low-cost power supply for the next five, ten, or fifteen years. Ontario Hydro officials openly favor power development on the St. Lawrence. They also argue that the time has come when they must know definitely where and how, not only longterm, but short-term power needs can be met

The Present Plan

HPHE present plan gives an answer to both these questions.

To help Ontario meet immediate needs, the new agreement permits Ontario to divert into the Great Lakes 5,000 cubic feet of water per second from the Ogoki and Long Lac rivers. The Ogoki River now finds its way into James Bay. So does the Long Lac. Diversion of these rivers into Lake Nipigon and the Agusabon River, respectively, and then into the Great Lakes-St. Lawrence system, increases very considerably the potential capacity of various power sites.

By using this extra flow of water at Niagara, Ontario HydnHias been able lo gain at once an extra 70,000 h.p. Eventually, by use of what are called steam stand-by plants, and installation of more efficient equipment, this capacity could be stepped up even further.

The Long Lac diversion, by the way, was built nearly two years ago. Once Ontario got recognition from the United States of Canada’s right to utilize this water in the Great Lakes system—the water is entirely Canadian but enters into international territory at Niagara—it took only a few days to complete the diversion. The Ogoki diversion will require two years to complete, but meanwhile the United States has permitted Canada to withdraw an equivalent amount of water at Niagara in advance of the diversion. As well, Ontario gets assurance that consideration will be given to additional diversion of water by both countries for power purposes at Niagara Falls.

This Niagara problem has been hanging fire for many years. More than ten years ago a treaty was signed between the two countries which would permit withdrawal of an extra ten thousand cubic feet per second, under certain conditions, and which made provision also for an important and necessary scenic control program. This treaty has been gathering dust in a Senate pigeonhole in Washington during those ten years. Now, it has been dusted off and is to be discussed as a further source of additional power at Niagara.

As to the St. Lawrence power program itself, there should be no illusion about its being available in time to aid the war effort. Some optimists think that power can be developed there within from three to four years. Others place the time at five to seven years. By that time, it is to be hoped, the war will be over. But . in the U.S., at least, the vast national defense program will still be under way. As already pointed out, President Roosevelt has bracketed the project with battleships which take at least four years to build.

President Roosevelt, quite obviously, is using the powerful lever of national defense to achieve what has long been close to his heart, namely a huge, publicly owned power development along the St. Lawrence River. On Canada’s part, both the Ontario and Ottawa governments are seizing the opportunity of U.S. willingness, to further a project which they feel eventually must be consummated.

Cost of Program

NO PHASE of the St. Lawrence program is more controversial than cost. Estimates of supposed cost run all the way from $40,000,000 to $1.500.000.000. There are as yet no up-to-date “official estimates. ” Any calculations in recent years have been based on 1926 “unit” prices with rule-ofthumb revision to fit subsequent changes in plan.

Pending new calculations, the present program is estimated to cost in the neighborhood of $325,000.000—based on official 1926 estimates—for work in the international section of the river. This is exclusive of interest costs during construction. Of this total, between $180,000,000 and $200,000,000 is said to be chargeable to power developments and the remainder to the seaway. Of the total chargeable to power, about $50,000,000 ($25,000,000 for each country) represents the cost of generating equipment and other superstructure to be installed or built if, as and when the power actually is needed.

Because of Canada’s past commitments in building the Welland Canal and deepening the lower St. Lawrence channel, and because, eventually, Canada will be obligated to deepen the channel to 27 feet between Cornwall and Montreal, the U.S. is undertaking to construct the international section free of cost to the Dominion, even if the eventual cost greatly exceeds official estimates. The deal would be on a predetermined basis, with the U.S. contribution a definite commitment to complete the international section, no matter what the final out-of-pocket cost. The U.S. undertaking does not include the cost of generating equipment on the Canadian side—about $25,000,000—which would be installed and paid for by the Ontario Hydro if, as and when needed. Nor does it include the cost of rehabilitation, land damage, etc., on the Canadian side, caused by flooding of townsites, farmland and so forth. Perhaps $20,000,000 or $25,000,000 is involved here. This amount would be paid by Canada.

It might be thought from the above figures that Ontario will receive its power development of approximately 1.1 million h.p. at a cost of only $25,000,000. This, of course, is not the case. While Ontario would only be responsible directly for the installation of generating equipment, power superstructures, etc., the province would be obligated to pay to the Dominion Government the cost of substructure, dams, etc., deemed chargeable to power. Although these would be built by the U.S. and turned over, when complete, to Canada, they would then be “purchased” by Ontario from the Dominion at an agreed price, estimated to be in the neighborhood of $65,000,000 to $75,000,000. This is provided for by a separate agreement between Ontario and the Dominion Government.

Assuming the above figure to be approjdmately correct, the Dominion Government would be obligated to pay, say, $20,000,000 or $25,000,000 for rehabilitation work, against which it would receive a “credit” from Ontario of $65.000,000 or $75,000,000 in respect of work done by the United States, but chargeable directly to power. This would leave a net balance in favor of the Dominion Government which could later be applied against the cost of deepening the channel from Cornwall to Montreal.

Since the U.S. is undertaking to meet the cost of development in the international section, there would be virtually no cost to Canada of any interest during construction, nor any liability if the cost exceeded estimates; nor would there be any obligation on the part of Ontario to install and develop power-generating units until such time as the demand arose. On the other hand, there would be an eventual obligation, either direct or implied, that the Dominion Government spend additional sums to deepen certain channels in the upper lakes and also provide 27-foot accommodation at wharves, harbors, etc., throughout the Canadian lakes and connecting channels.

There are many engineers and other competent persons who maintain that the final results will show the official estimates of cost to have been absurdly low. Most of these claims are based on the contention that the cost of similar undertakings has, in the past, greatly exceeded original calculations. Of course, if the United States—as is claimed—is willing to take entire responsibility for the international section, irrespective of eventual cost, Canada' need not be greatly concerned about the extent to which actual costs exceed original estimates. At the moment, the chief concern respecting cost seems to be the fear of rising price levels due to war-inspired inflation.

Strong Factions For, Against

nPHAT the program will meet with opposition is taken for granted. The fact that Washington has drafted an “agreement” is evidence of this. An agreement can be negotiated through Congress by a majority vote; a treaty must pass the Senate by a two thirds majority.

It is this problem of a Senate majority which has proved the chief barrier to earlier St. Lawrence schemes. There has been little support for a seaway among Senators who represent states which border on either ocean, and who see a possible threat in a new and subsidized form of transportation. As well, the seaway has been bitterly opposed by business interests in Buffalo, Cleveland, Erie and other industrial centres, which now do a huge carrier and freight business from inland terminal points.

Private power interests have opposed the seaway in the U.S. because of the belief—under Roosevelt—that the power, if developed, would be turned over to a public body, the New York Power Authority, and produced and possibly marketed in competition with privately owned systems.

The most active St. Lawrence plan booster has been a professional organization founded originally in the U.S. in 1919 and called at that time the Great Lakes-St. Lawrence Tidewater Association. It is now called the National Seaway Council and is supported by various communities and interests who see advantage in a subsidized deep waterway opening through to the Atlantic. In 1924, Western Canada had its own Deep Water Association when the cry of cheaper grain rates was a potent factor in the seaway argument. Of late years there has been r.o militant champion of the waterway in Canada, although propaganda against it is consistently disseminated by power, transport and other interests which believe it would prejudice their own or the national interest.

Canada, as a rule, accepts quietly the intermittent seaway offers from across the border in the belief that having spent $135,000,000 on the Welland Canal as well as scores of millions to deepen and enlarge other parts of the seaway, she must some day deepen the entire channel in order to get any proper “return” on the investment.

There has never been any official justification of the .seaway by Canada on economic grounds, except that it would round out the $700,000,000 “investment” which Canada has already made as a matter of “national policy,” on her inland waterways. If it were not that the United States is pressing the matter and offering to bear the lion’s share of the cost, there would be no disposition on the part of Canada to tackle this project at a time of war emergency.

Yet now the feeling is strengthened—a feeling that for some years has been growing—that eventually the “power” tail will wag the navigation dog and force the St. Lawrence Seaway to be built.