UPDATE 3-Shipping curbs expected on drought-parched Miss. River

Fri Nov 16, 2012 5:16pm EST

* Coast Guard says will likely not close Mississippi River

* Low water expected to trigger restrictions

* Reduced drafts, smaller tow sizes among likely curbs

* River depth below 9 feet would effectively halt shipping (Adds details on Missouri River drought measures, rising grain export prices)

By Karl Plume

Nov 16 (Reuters) - Commercial shipping traffic on a stretch of the Mississippi River will be restricted at some point in the coming weeks due to low water, possibly halting the flow of billions of dollars of goods such as grain and coal, industry and government officials said Friday.

An official closure is unlikely, but the river could become too shallow next month for most commercial vessels to transit a busy section from St. Louis to Cairo, Illinois.

Water levels on that stretch are forecast to drop to nine feet or less by early December as drought conservation measures will reduce the flow of water from the Missouri River and its reservoir system into the Mississippi.

"I don't anticipate a scenario right now where I close the river," said Captain Byron Black, commander for Coast Guard's Upper Mississippi River sector.

The river would only be closed if an incident, such as a fatal accident or a barge sinking, occurred, he said.

"I fully expect, as we have declining water conditions, that there will be times that, without rain, we're going to need to work with our industry partners to figure out what prudent measures we will take to be able to keep commerce flowing safely," Black said.

Those measures could include restrictions on tow sizes or reduced drafts; limiting navigation to one-way; or requiring barge tow boats to use an assist boat as well.

Illinois governor Pat Quinn urged the federal government to take "every possible measure" to maintain the flow of water on the Mississippi and Missouri Rivers to prevent expected restrictions or disruptions to commercial shipping traffic.

Barges can be "light loaded" to reduce their drafts, but most of the tow boats that push the barges up and down the river are unable to operate at depths shallower than nine feet, industry sources said.

"Slowing down or even severing the country's inland waterway superhighway would imperil the shipment of critical cargo for export, significantly delay products for domestic use, threaten manufacturing production and power generation, and negatively impact jobs up and down the river," said Craig Philip, Chief Executive Officer, Ingram Barge Company in. Nashville.

A halt to shipping on the Mississippi in December and January could delay shipments of goods valued at more than $7 billion, impacting exports, manufacturing, power generation and related jobs, according to shipping industry groups.

Some 60 percent of U.S. grain exports are shipped to Gulf Coast export terminals in barges via the Mississippi River and its tributaries.

Grain export prices soared to multimonth highs this week on the threat of a shipping disruption.

Other products including coal, fertilizer, steel and de-icing road salt are also transported on the inland waterway system.

DECLINING WATER LEVELS

There are no shipping restrictions currently in place between St. Louis and Cairo, Illinois but water levels are expected to decline next month as water released from the Missouri's upriver dams is reduced, stemming the flow into the Mississippi.

Water in the Missouri River's six multi-purpose reservoirs was below normal amid the worst U.S. drought in 56 years, prompting the Corps to take the conservation measures.

The U.S. Army Corps of Engineers said it would be able to maintain a nine-foot deep channel on the Mississippi until the river's St. Louis gauge reaches -5 feet, at which point river-bottom rock pinnacles downriver from the gauge pose a risk to navigation for most commercial vessels.

River gauges are not absolute measures of a river's constantly changing depth, but instead are used to monitor river levels over time. A negative gauge reading does not mean the river has run dry.

The St. Louis gauge stood at 0.5 feet on Friday but was forecast to recede to -1.3 feet by next Friday, more than 31 feet below flood stage. Reduced flows from the Missouri, which the Army Corps said could lower water levels from St. Louis to Cairo by several feet, were expected to begin impacting the Mississippi by early December.

The Army Corps' St. Louis district is working on a contract to remove the rock and work could begin around February, said spokesman Michael Petersen.

In the meantime, the Army Corps has created electronic navigation charts to help mariners transit the trouble spots.

Removal of the rock pinnacles would allow vessels to continue operating with nine-foot drafts until the St. Louis river gauge reaches -7 feet, Petersen said. (Reporting by Karl Plume in Chicago; Editing by Gerald E. McCormick, Leslie Gevirtz and Andrew Hay)