Flying Carp Threaten Bond Ratings, Great Lakes Fish
Written by Bloomberg News   
Tuesday, 05 January 2010 16:23

William Contos has piloted barges on the Chicago canal connecting the Mississippi River to the Great Lakes for a quarter century, hauling salt that melts ice off the city’s roads and coal that feeds its power plants.  Denny Grinold also depends on the water, running a charter salmon-fishing outfit in Grand Haven, Michigan. Both men’s livelihood is at risk from the Asian carp, a non-native fish that threatens to enter Lake Michigan through the canal.

Fifty members of Congress, including several from Illinois, sent a letter to President Barack Obama’s administration today urging it to consider closing the canal’s locks. Contos and other opponents say that would imperil shipping jobs, air quality and the waterway’s century-old role of keeping sewage out of Chicago’s drinking water.
If Asian carp reach Lake Michigan and thrive, it could hurt the region’s $7.09 billion sport fishing industry and bond ratings for the communities that rely on Michigan’s $16.3 billion tourism industry.

“This is one of the unfortunate cases where there is no simple solution that’s not harmful to someone,” said Hugh MacIsaac, who holds a research chair in invasive species at the University of Windsor in Windsor, Ontario. “The shipping industry would be adversely affected.”

The carp grow as big as 4 feet (1.2 meters) and 100 pounds (45 kilograms), and consume “vast amounts of food,” according to the U.S. Environmental Protection Agency. That would rob native species of the plankton they feed on, it said.

“There is real concern it could hurt the salmon population,” said Grinold, 67, who runs about 110 trips from July through September on his boat, the Old Grin.

Devaluing Vacation Homes
The loss of sport fishing or boating could undermine bond ratings in towns that rely on tourism for a portion of their tax base, according to rating company analysts.
Grand Haven, a city of about 10,500 people on Lake Michigan’s eastern shore, is rated AA by S&P, partly because of the “high value captured by vacation properties and second rental homes,” Scott Garrigan, a credit analyst at Standard & Poor’s in Chicago, wrote in a Sept. 30 update for the rating on its limited-tax general obligation bonds. If Asian carp affect the economic base, ratings could be affected as well, he said in a separate interview.

Sport fishing’s impact on the Great Lakes states -- Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin -- totaled $7.09 billion in 2006, according to a report by the Alexandria, Virginia-based American Sportfishing Association.

Perch Supply
If carp spill from the Chicago Sanitary and Ship Canal and spread through the Great Lakes, they could hurt commercial fishing in Lake Erie, said Donna Cansfield, Ontario’s natural resources minister.

“The world’s largest freshwater fishery is Lake Erie --and that perch goes primarily to the U.S.,” Cansfield said in an interview. “It’s a billion-dollar industry.”
It’s not clear that carp would flourish in the Great Lakes, the University of Windsor’s MacIsaac said. The fish thrive in long rivers, so the threat might be limited to the mouths of rivers emptying into the lakes.

“If we do find out that the carp can achieve high abundance in the Great Lakes, it’s too late to turn back the clock,” MacIsaac said. “The only way to keep that from happening is to shut off the waterway.”

Alternate Routes
Shipping advocates dispute that. Carp could enter the lakes from the river system at other sites, especially during flooding, said Lynn Muench, senior vice president of regional advocacy for the American Waterways Operators, the Arlington, Virginia-based trade group that includes barge operators.
The Obama administration on Dec. 14 granted $13 million to fight the carp migration. Most of the money is earmarked for blocking other possible routes into Lake Michigan.

About 173 million tons of material was shipped via the Great Lakes in 2006, the most recent data available. That saved $3.6 billion in shipping costs compared with rail or trucks, the U.S. Army Corps of Engineers said in a report released in January.

About 16.9 million tons moves on the canal. That includes coal from southern Illinois to Edison International power plants in Chicago, iron ore from the Gulf of Mexico to steel plants in Chicago and northwest Indiana, and road salt from Louisiana mines to Chicago and Milwaukee, said Del Wilkins, vice president of operations and business development for New Orleans-based Canal Barge Co.

Steel Shipments
ArcelorMittal, the world’s largest steelmaker based in Luxembourg, and Irving, Texas-based Exxon Mobil Corp., the biggest U.S. oil company, move goods along the canal, Wilkins said.  “It would be the end of this industry up here” if the waterway is closed, said Contos, 47, who works for Wilkins.  Shifting barge cargo to rail cars or trucks also would boost greenhouse gas emissions, according to a study done for the National Waterways Foundation, an industry-funded group that supports research. Barges produce 19.3 tons of carbon dioxide per million ton-miles, less than the 26.9 tons for rail and 71.6 for trucks, the study showed.

The carp were imported from Asia to the Mississippi delta region to cleanse fish ponds and sewage lagoons, but escaped into the Mississippi River and have been moving north since the 1970s, according to the EPA.

Airborne Fish
Boat vibrations cause the fish to leap as high as 10 feet into the air, said Pam Thiel, a biologist at the U.S. Fish and Wildlife Service. “If you put these crazy fish flying out all over the place on that lake, it’s not just the fishing industry that would suffer,” said Pat McGinnis, Grand Haven’s city manager. “The boating public would be less interested in this part of the country, too.”

Michigan already spends $150 million a year to scrape zebra mussels off water intake pipes and $15 million a year to control sea lamprey, said Kelley Smith, chief of fisheries for the Michigan Department of Natural Resources.  The last thing Michigan needs is another invasive species, said Grinold, who serves as a spokesman for the Michigan Charter Boat Association. Its members serve about 240,000 customers a year.

Corps Solutions
The Corps of Engineers is exploring all options to control the carp, said Lynn Whalen, a spokeswoman.
The Corps oversees the electric barriers that were installed southwest of Chicago to prevent the carp from reaching Lake Michigan. Whalen said lawyers are trying to determine which agency holds ultimate authority over closing the locks.

“People realize the damage it can do to all the lakes,” Chicago Mayor Richard Daley said of the carp. Nonetheless, he said shutting the canal requires more study.
“It’s important for the quality of life, important for recreation, economic development, water usage, everything,” Daley said last week at a news conference on shoreline protection.

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Mario Parker in Chicago at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Hugo Miller in Toronto at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

 
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