Short sea trade corridor across Lake Ontario under development between Oshawa and Somerset, NY

Somerset, New York may not be a familiar name to Oshawa residents but its coal-powered generating station, which operated from 1984 to 2020, sure was a familiar sight for generations of citizens. The 625-foot smoke stack could be seen directly across the 37-mile expanse of the lake on clear days.

The small town on the lake’s southern shore will be back in the Oshawa spotlight in the coming years after the Hamilton Oshawa Port Authority (HOPA) announced an agreement with an affiliate of Beowulf Electricity & Data Inc, the American owner of an 1,800-acre site where the coal plant once sat to create a bi-national, low-emission, short sea trade corridor.

Beowulf will launch a multimodal shipping terminal on the site and the new partnership will forge connections between the Port of Oshawa and the new port in Somerset by creating a new two-way trade route.

“The creation of a new port-to-port connection with our most important trade partner clearly makes economic and environmental sense,” said HOPA Ports CEO Ian Hamilton. “Southern Ontario is struggling to keep up with the demand on its highways; the economic cost of congestion in the greater Toronto-Hamilton area is estimated to be up to $6 billion annually. Both regional economies will benefit from a cleaner, faster and more efficient maritime trade corridor.”

The two parties pledged to enhance the current $494 billion annual US-Canadian trade partnership by creating the new shipping route that will “significantly reduce” border congestion from truck traffic, as well as carbon emissions by introducing a marine transportation option.

Hamilton noted that marine transportation is already the most environmentally efficient mode of transportation per tonne-mile, adding that the short distance between the two ports sets the stage for future opportunities to explore the use of alternative-fuel vessels powered by everything from biofuel and hydrogen to fuel cells and even wind-assisted propulsion to offer potential for ship applications.

The Somerset site has been undergoing redevelopment since the closure of the coal plant four years ago and is transitioning to a new economic engine for Niagara County and western New York. Making use of its existing energy infrastructure and nearby access to hydropower, a portion of the site is now home to the Lake Mariner Data facility, a high-tech campus focused on supporting various computational applications, including bitcoin mining, artificial intelligence and high-performance computing.

The former Somerset coal plant in upstate New York

“Somerset’s promising future has long been anchored in its advantageous location along the shores of Lake Ontario, bolstered by valuable energy infrastructure and the exceptional quality of our local workforce,” said Beowulf CEO Paul Prager. “We are thrilled that HOPA has recognized these same qualities and sought to partner with us on this transportation project.”

Work will begin immediately on a detailed market analysis of the cargoes currently moving cross-border by truck. The study will develop the economic benefits of a new marine service, including transportation cost savings and greenhouse gas emission reductions. While technical and market studies on a future Port of Somerset get underway Beowulf will work with HOPA and stakeholders in both countries (including local, state, provincial and federal officials, regulatory agencies and business groups, among others) to develop a public project plan and schedule for the Port of Somerset development, including  short-, mid- and long-term milestones and deliverables as well as potential management options for a new port.

A traffic study on potential port scenarios at Somerset will also be part of the public process.

Based on projected trade demand, the Port of Somerset would eventually create hundreds of direct and indirect jobs in Niagara County and the Greater Buffalo-Rochester area, including stevedores, warehouse employees, freight forwarders, dockworkers, crane operators, vessel agents, dredging contractors, marine pilots, truck drivers and shipyard workers among others. The development will help New York State transition the site of its last operating coal plant into a new economic and regional trade hub with a vastly improved carbon emissions profile.

“Niagara County’s location as a border community with Canada has always been a major focus of our efforts to drive economic growth and opportunity, and today’s announcement will unlock that potential and result in significant investment in our region,” said Becky Wydysh, who chairs the Niagara County Legislature. “The fact the port would be sited at the former Somerset coal plant is a tremendous reuse of that property and needed in a community that took a big hit in the loss of revenue and jobs when the coal plant closed.”

The partnership also enhances the Port of Oshawa and Durham Region’s role as a key connection point for Canada-US trade, supporting regional economic development priorities in manufacturing, agrifood and others.

“This strategic partnership will be instrumental in strengthening Canada’s supply chain and trade corridors. A new port-to-port connection that offers a more streamlined movement of goods in and out of Ontario through the Port of Oshawa will reduce environmental impacts from road transportation and unlock greater supply chain efficiency for local businesses in Durham Region – helping our goods get to where they need to go,” said Durham Region Chair John Henry.

Oshawa Mayor Dan Carter said he was “excited” to see the partnership launch, saying the deal strengthens the city’s position as the eastern gateway to the Greater Toronto Hamilton Area. “This partnership and a new marine trade route will establish Oshawa as a key connection point for Canada-US trade and bring with it numerous opportunities and investments.”

Tito-Dante Marimpietri, who chairs Oshawa’s Economic and Development Services committee and is Vice-Chair of the Region’s Public Works committee, is in agreement. “We welcome this exciting and vital economic development initiative as an intelligent means to further support our collective industrial priorities in high-tech resources, manufacturing, agrifood and most essentially assist in creating hundreds more indirect jobs associated with the harbour communities of Somerset, USA and Oshawa, Canada.”

The Memo of Understanding between the new partners outlines the goals for the new Port of Somerset including:

• Lower carbon emissions from reduced dependency on truck traffic
• Sustainable carbon practices
• Enhanced supply chain resilience
• Versatile infrastructure with diverse cargo
• Year-round operation
• Redevelopment and future brownfields growth opportunities
• Strategic investment and growth in Niagara County and upstate New York

HOPA Ports is the largest port authority in Ontario, operating port and marine assets in Hamilton, Oshawa and Niagara. The Canadian Urban Institute’s recipient for Brownfield Project of the Year in 2023, HOPA oversees more than 1,600 acres and 180-plus tenant companies, with 40,000 jobs connected to the cargo that passes through its integrated ports.