Earlier this year in its FY07 budget, DHS, in which the U.S. Coast Guard operates, zeroed out any funding for the continuation of Loran. This came after the agency already spent $160 million in major modernization improvements to the system.

BoatU.S. and other groups, including aircraft pilots and commercial fishermen, cried foul since there was no warning to user groups of the sudden cutoff of funds. Even though the Global Positioning System (GPS) now dominates the consumer marine electronics market, there is a strong case to be made for keeping a relatively low-cost, ground-based and jam-proof backup to GPS going. In addition, a developing market of eLoran receivers is showing promise by combining the best attributes of Loran and GPS systems into a very accurate and reliable receiver. Since the GPS signal is relatively weak, there is concern that it's susceptible to jamming, which could present national security problems if it is the sole working navigation system for the U.S. Testing has shown Loran to be virtually jam-proof.

In Congress, the House-Senate Conference Committee placed several eyebrow-raising administrative roadblocks for DHS to overcome before shutting down the system, including requesting the names of officials supporting Loran closure in government agencies, other than the Coast Guard, that would be affected. Also required is a report from the Coast Guard in 180 days including a cost-benefit analysis.

One issue remaining is the cost of modernizing the four stations in Alaska and then staffing and operating them, in addition to the 20 already upgraded stations in the U.S. The Coast Guard reportedly has estimated that cost to be around $350 million, with follow-on operating costs at $35 million per year. Those in the industry estimate the upgrades at closer to $60 million, with operating costs around $12 million. This work would also include adding three new stations, one covering Southern California and two covering the Gulf of Mexico. Once upgraded and automated, Loran stations need very limited staff to run them.

Meanwhile, the Dept. of Transportation commissioned an outside think tank to assemble a panel of experts to conduct an independent assessment of Loran and give recommendations on continuation. That report has not yet been released.