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- The Union Canal Tunnel is located north of the city of Lebanon on Tunnel Hill Road. The tunnel is the oldest transportation tunnel in the nation. It was built during the canal era and blasted through limestone. Two team started on oppostie sides of the hill and met in the middle. When the teams met they were less than 2 inches off from a perfect meeting. The Lebanon County historical society restored the tunnel. In spring the county host Union Canal Days. The tunnel park is the site of various activities. Canal boat rides are offered through the tunnel (for a fee). The site of the tunnel is the summit of the Union Canal. The summit leaked badly. A pumping station was built in nearby North Annville Township. A dam was built and through a system of aqueducts and the pumping station, built at the Union Water Works, water was pumped to the summit.