|
Items in cart [0] |
Questions? Call 888-624-8373 |
| ||||||||||||
| [ Top of Page ] [ Home ] [ Contact Us ] [ Help ] [ The National Academies Home ] | ||
Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 22
2
Findings and Recommendations
SPATIAL PRICE MODEL AND ESSENCE
The report from the Phase I committee stated that neither the Septem-
ber 2000 form of the spatial price model nor the results of the ESSENCE
model should be used in the feasibility study (NRC, 2001~. That review
recommended structural changes in the ESSENCE model and the incorpo-
ration of empirically determined coefficients of the elasticity of waterway
traffic demand. More generally, the Phase I committee report advocated
the development of a suitable spatial price model. In response, the Corps
stated that further development of the spatial price model should occur but
"in a research and development setting outside the study process" (USAGE,
2003b, p. 1~.
This committee did not explore the details of the Tow Cost Model;
however, the TCM is not widely accepted by economics experts, or even by
the Corps, as a useful tool for modeling water transportation demand for
grain. Furthermore, the decision to adopt the Tow Cost Model contradicts
advice about demand modeling provided in the NRC Phase I report by an
independent group asked for advice in improving the study's economic
analyses.
The Corps proposes that national economic development (NED)
benefits from navigation improvements will be estimated from the Tow
22
OCR for page 23
Findings and Recommendations
23
Cost Model and, alternatively, from the ESSENCE model, using two differ-
ent but arbitrary values for the N coefficient (elasticity of demand for wa-
terway transport). No supporting data have been presented to indicate why
these are in fact lower and upper bounds or what might be the best esti-
mates of N. Furthermore, the ESSENCE model, in its original form,
adopts a functional form that should be regarded as a highly simplified ap-
proximation. When used outside a narrow range, it yields implausible re-
sults. The nature of the current application across time and space stretches
that simplified specification beyond the range in which it might be a useful
approximation. Few of the Phase I committee's key recommendations for
enhancing the value and credibility of the ESSENCE model have been im-
plemented, and this committee finds the absence of a spatial price model
unacceptable. There is no useful role for the ESSENCE model in the
restructured feasibility study.
The Corps is to be commended for initiating the development of a spa-
tial price model. This committee, however, finds that the steps taken in the
restructured feasibility study represent inadequate responses to the NRC
Phase I report. Model development efforts have not adopted, for example,
. . . . . . . . . . .
tea lStlC assumptions regarc ~mg spatial variation in gram proc suction anc ~
shipping costs, the range of ports that might be accessed by regional grain
producers, domestic processing demands and the location of these de-
mands, or global grain supplies and demands. The restructured study also
assumes that the division of grain exports among available ports will not
change, which is an unlikely assumption. As lock congestion builds on the
U.S. inland waterway system, domestic markets and alternative ports and
toutings become increasingly feasible and likely. For example, overland
grain exports to Mexico may increase as lock congestion builds, as may rail
shipments to Pacific Northwest ports or shipments to domestic markets
now served by Mississippi River basin grain production. Moreover, since
80 percent of U.S. corn production is consumed domestically, some dimen-
sion of this demand should be explicitly modeled. With some improve-
ments and adjustments, existing spatial grain models could be adapted to
give superior insight to the approaches currently considered by the Corps.
Appendix A identifies and discusses key factors that should be included in
the development of a credible spatial price Codeless. Appendix A also de-
scribes a transportation demand model developed for the Panama Canal
OCR for page 24
24 Upper Mississippi-Illinois ~aterlYay Restretched Feasibility Study: Interim Report
(see Fuller et al., 1999~. This committee has not sufficiently studied the
Panama Canal transportation demand model to be able to recommend it
specifically for use in the UMR-IW~T study; however, it is a fully developed
model that goes a long way toward incorporating the elements of a full spa-
tial equilibrium model, and it merits investigation by the Corps.
If the Corps develops its own spatial price model, this development
could proceed in clearly defined modules. One module should forecast the
amount of grain grown in the upper Midwest, which will be a function of
the cost of growing grain and other commodities compared to prices at
which grains and alternative commodities could be sold. Another module
should examine grain production in other grain-producing regions around
the world (especially Argentina and Brazil) and associated prices. Another
module should focus on world demand for grain, which is a function of
population, income, domestic production, and global market prices of meat
for import. Appendix A lists additional factors that should be included in a
credible spatial price model of UMR-IWW transportation demand. If
these types of improvements and adjustments are to be made and incorpo-
rated into the feasibility study, the current schedule for study completion
will have to be relaxed.
Demand Forecasts
The Corps should be commended for applying a scenario approach to
forecasting future waterway traffic demand. The Corps contracted with
Sparks Companies, Inc., of Memphis, Tennessee, to provide a report de-
picting a range of future economic scenarios and resulting demand for
barge transportation (Sparks Companies, 2002~. Drawing from the Sparks
study, the Corps is using Eve scenarios of future grain exports. Four of the
Eve scenarios assume substantial increases in exports, and the fifth assumes
little to no change in current levels.
After exhibiting increasing trends from 1950 to 1980, U.S. grain exports
have since shown almost no growth (USDA, various dates). There is little
compelling evidence for a substantial increase in world demand for U.S.
grain exports over the next decade or two. Indeed, several factors could
contribute to declining grain exports. For example, there is an increasing
tendency among Asian nations to import U.S. meat products directly, rather
OCR for page 25
Findings and Recommendations
25
than to import grain for feed in their own nations. Further, South Ameri-
can nations such as Brazil are increasing domestic soybean production lev-
els, which could reduce global grain market demands for U.S. exports. Yet
despite nearly 25 years of essentially stable U.S. grain export levels, four of
the live scenarios in the feasibility study assume substantial increases in ex-
port levels. Given the relatively flat level of exports over the past two dec-
ades, the committee views the projected increases in four of Eve scenarios
with some skepticism. Forecasts of increases in U.S. grain exports
should present explanations for likely export trends after 2003 that are
consistent with history and with expert opinion on likely future con-
ditions in global grain markets. The committee looks forward to dis-
cussing the assumptions, methods, and projections with the Corps' consult-
ant at our next meeting.
MANAGING WATERWAY CONGESTION
The Phase I committee report urged the Corps to conduct a "compre-
hensive review and assessment of nonstructural options for improving traf-
f~c management" (NRC, 2001~. The Corps then requested the Volpe Na-
tional Transportation Systems Center to evaluate a number of traffic man-
agement measures. In addition, the Corps conducted its own analysis of
congestion fees (to be implemented through a lockage fee). This commit-
tee commends the Corps for seriously considering a lock usage fee, even
though existing legislation prohibits implementation of such a scheme.
Economic incentives, including lock usage fees, should produce net eco-
nomic benefits. However, a true congestion fee is a contingentiee that is lev-
ied only at times of congestion and only on tows that contribute to conges-
tion. Although implementing such a fee is admittedly not a simple matter,
the resulting benefits should be greater than those obtained from a simple
lock usage fee of comparable magnitude.
At the committee's September 2003 briefings, it was stated that other
traffic scheduling alternatives had been analyzed by the Volpe National
Transportation Systems Center and were found infeasible. The report from
the Volpe group was not available to this committee at its September 2003
meeting, and details were not provided at that briefing. The committee
OCR for page 26
26 Upper M'ssissippi-Illino's Waterway Restretched Feasibility Study: Interim Reporl
subsequently received the Volpe report (Dyer et al., 2003), which it looks
forwarding to discussing with the authors. In addition to a congestion fee,
the Corps should evaluate other nonstructural measures for improving traf-
f~c management, such as tradable arrival slots and industry self-help sys-
tems.
The Corps' feasibility study maintains that the "without-project" condi-
tion will include continued use only of the current traffic management sys-
tem (mainly a "first come, first served" system). This is contrary to findings
of the 2001 NRC report, which stated that the benefits of proposed lock
extensions to the existing system cannot be evaluated fully until the existing
system is operated more efficiently and recommended that the Corps apply
a wider range of options for managing congestion. Like the report from
the Phase I committee, this report also finds that meaningful planning of
lock extensions must await the time when the existing system is operated at
reasonably full efficiency and that the without-project condition should in-
clude traffic management measures that achieve more effective operational
efficiency of the existing system. Moreover, because improved waterway
traffic management should shorten the idle time of tows at locks and be-
tween locks, such measures could also reduce environmental impacts such
as fish entrainment and increased turbidity.
This committee appreciates the challenges of implementing such
measures. Developing and implementing an effective nonstructural traffic
management systems on the UMR-IWW will not be simple, quick, or in-
expensive, and it will clearly entail both progress and setbacks and will re-
quire time and resources. The time required to implement and evaluate a
nonstructural schemers) suggests that a relaxation of the current feasibility
study schedule is in order. Technologies for establishing such a system are
available and hold promise for reducing the costs of congestion. The
Corps should proceed as soon as practicable toward developing and
implementing a nonstructural system to help alleviate waterway traf-
fic congestion.
OCR for page 27
Findings and Recommendations
27
INTEGRATED SYSTEMS PLANNING
River Ecology
The initial feasibility study for the UMR-IWW had a narrow focus with
regard to environmental concerns and issues of environmental sustainabil-
ity. The restructured study is assuming a broader focus on these issues, and
the committee commends the Corps for broadening the scope to deal not
only with the ecological impacts of lock extensions and other measures for
enhancing navigation, but also with the ecological impacts of baseline op-
erations of the existing system of locks and dams and navigation pools.
Indeed, the Corps' Interim Report (USAGE, 2002, p. 18) acknowledges that
economic and ecological needs should be of equal priority. A broad, holis-
tic perspective is also necessary because of the significant implications of
Mississippi River water quality and sediment transport for downstream re-
gions in and along the Gulf of Mexico. The Corps should thus, to the
maximum extent feasible, consider factors such as water quality, flood dam-
age reduction, and sediment transport in order to reflect a more holistic
approach to dealing with the diverse management issues in the UMR-IWW.
The Interim Report (USAGE, 2002) describes many management alter-
natives that the Corps is considering not only to mitigate effects of pro-
posed navigation system expansion, but also to repair environmental dam-
ages caused by the existing system of locks and dams and navigation pools.
Nonetheless, there may be problems in achieving the environmental goals
because as that report noted, "ecosystem restoration is not a specifically
authorized purpose of the 9-Foot Channel Navigation Project" (USAGE,
2002~. Congressional action may thus be necessary and appropriate for
expanding the purposes of the UMR-IW~t to include environmental sus-
tainability.
A general observation is that the Corps' analysis regarding river ecology
is less advanced than its navigation studies, due largely to the relatively re-
cent broadening of the feasibility study to better evaluate and integrate eco-
logical concerns. The committee's comments on these aspects of the study
are similarly less specific than its comments on the economics of waterway
transportation.
OCR for page 28
28 Upper M'ssissippi-Illinois ~aterlYay Restretched Feasibility Study: Interim Report
Adaptive Management
The recommendations from the Phase I committee included a proposal
that the Corps implement adaptive management principles within the feasi-
bility study. The Phase I committee was concerned with the "adaptive miti-
gation" strategy discussed in the feasibility study, which the committee
found "inconsistent with the principles of adaptive management articulated
in the natural resources management literature" (NRC, 2001, p. 7~. In re-
sponding to the NRC (2001) report, the Corps' background summary
(USAGE, 2003a) stated that the "mitigation plan will incorporate the prin-
ciples of adaptive management." This committee regards that assurance as
a positive sign but awaits further evidence of progress.
Adaptive management does not apply solely to mitigation, as some sec-
tions of Corps reports imply. The approach is equally valuable in planning
ecosystem restoration activities (see following section) and in planning and
implementing structural and nonstructural solutions to waterway conges-
tion. Furthermore, adaptive approaches should aid in developing strategies
for large, unanticipated events such as floods. This is especially important
in the UMR-IWW context because floods have long posed management
challenges along the UMR-IW~T. Flood problems could also be affected by
regional changes in climate patterns. An adaptive management approach
should help the Corps better understand how to adjust to future changes,
and the Corps should consider the possibility of changes such as long-term
changes in climate. The adaptive management approach can also help focus
attention on nonstructural solutions that avoid, in the words of the Phase I
committee, "the trap of irreversibility."
Many of the environmental restoration, mitigation, and environmental
enhancement actions proposed for the Upper Mississippi reflect a collabo-
rative effort between the Corps and the U.S. Fish and Wildlife Service.
Many of the ongoing ecological investigations reflect current techniques
and current ecological understanding. Although the approaches are under-
stood, the probabilities regarding implementation and resulting ecological
outcomes are uncertain. Moreover, the Corps has had only marginal suc-
cess in gaining support from the administration and Congress for ecological
projects of such magnitude. Given these conditions, it is appropriate that
this effort be conducted within an adaptive management framework, A1-
though this framework is described in the Corps' 2002 Interim Report only
OCR for page 29
Findings and Recommendations
29
in the context of mitigation, it features prominently in the draft 2003 report
(Lubinski and Barko, 2003) from an environmental science panel formed by
the Corps as part of the feasibility study and espoused by the authors as
"the overarching theme of future integrated efforts for management of the
UMR-IW~T" (p. 1~. Such an adaptive approach will involve carefully and
openly crafting experiments, closely monitoring results, and consulting both
stakeholders and program objectives to adjust plans accordingly. It will also
require the involvement of stakeholders, an organizational structure to
oversee the efforts, and a fiscal commitment to support the activities.
The Corps' Interim Report and the 2003 draft science panel report de-
scribe some processes that might be amenable to adaptive management
(e.g., the Corps has undertaken some limited experimentation in the draw-
down of Pool 8 to improve ecological conditions), but they also note po-
tential difficulties. Given the extent of this effort and the probable need
for adaptation in progress, the adaptive management paradigm would none-
theless seem ideal. Recent National Research Council reports on the Mis-
souri River ecosystem (NRC, 2002) and on Glen Canyon Dam operations
(NRC, 1999) describe the use of such adaptive management processes in
more detail. The Corps should implement adaptive management con-
cepts and approaches throughout all aspects of the planning process.
Trade-offs
On a river system used as intensively as the UMR-IWW, enjoyment of
the system's benefits by one user or sector typically has effects on other
users or other sectors. For example, increases in towboat traffic will have
negative effects on fish and river ecology; the drawdown of navigation
pools is good for river ecology, but these actions can expose sandbars and
mudflats, which can be bad for boaters. As a result, management decisions
that enhance benefits for one sector without diminishing benefits for an-
other (so called win-win scenarios) are likely to be small in number and ex-
tent in comparison with more contentious scenarios that involve trade-
offs with winners and losers between users and sectors. Many of these
latter types of scenarios are underpinned by fundamental differences in
values and perceptions, yet traditional planning approaches offer little more
OCR for page 30
30 Upper M'ssissippi-Illinois Waterway Restr~c~red Feasibility Study: Interim Reporl
than analytical results for solution. Better guidance from Congress and the
administration on how to prioritize river uses and to weigh major trade-offs
would be useful to the Corps, which is limited in its ability to allocate fed-
eral resources among competing objectives and users.
Even in the absence of new guidance, some things can be done to fa-
cilitate trade-offs between users of the benefits from the Mississippi and
Illinois Rivers. Some aspects of environmental restoration are amenable to
quant~cat~on and monetization, such as instances In which restoration ob-
viates the necessity of costly mitigation or where the public may exhibit
measurable willingness to pay for the improvement. In the latter case, re-
vealed preference methods, such as the travel cost method or hedonic price
analysis, may be employed in specific instances. Stated preference methods,
such as contingent valuation analysis, can be applied in most if not all in-
stances. There is a rich literature on these topics, with hundreds of pub-
lished texts and papers, including some published by the Corps. Although
these approaches may be partial in coverage or subject to some error, there
are instances in which even partial information is sufficient to resolve a
trade-off. However, the committee is not aware of any environmental
valuation studies being performed in conjunction with the feasibility study,
so the Corps may be left with only qualitative approaches at its disposal.
DECISIONS, IMPLEMENTATION, AND INSTITUTIONS
Timing
The Corps is on an aggressive timetable for finishing its feasibility
study, especially in regard to its ability to consider this committee's recom-
mendations, the bulk of which may be issued only months before a
"Chief's Report" is scheduled (November 2004~. Not only does the current
schedule provide the Corps with a short amount of time to respond to the
present and subsequent reports from this committee in general, but imple-
mentation of this report's recommendations cannot be adequately com-
pleted on the current feasibility study schedule. Although the committee is
prepared to conduct its review and provide advice to the Corps with due
speed, and likewise respects the need to move forward with the feasibility
study, the study schedule should allow adequate time for credible analysis to
OCR for page 31
Findings and Recommendations
31
be conducted and concluded. The Corps should extend its schedule for
completing the feasibility study and issuing a Chief's Report.
Prioritization and Sequencing
In the September 2003 discussions with this committee, Corps staff
members outlined progress on an environmental restoration plan, devel-
oped in collaboration with federal and state partners. This progress is
commendable and addresses the Phase I committee report recommenda-
tion that the Corps recognize that "environmental concerns have become a
core issue in the operation of inland waterways systems" and therefore
should "adapt its planning, engineering design, operations, and analysis ac-
cordingly" <(NRC, 2001~.
During the September 2003 briefing, the Corps presented a map of a
representative navigation reach that displayed the proposed restoration pro-
jects developed by the Corps and its partners. Virtually every square meter
of the reach was identified as needing some type of rehabilitation, and it
became obvious that some criteria and a process will be essential for priori-
tizing and sequencing these projects. One such criterion might be to give
priority to projects that would restore natural processes, with the expecta-
tion of triggering self-repair and self-maintenance over large areas at rela-
tively modest cost. For example, operating dams to restore a more natural
flood pattern (spring flood followed by stable, low water levels during the
summer growing season) would build on successes already achieved in pool
drawdown experiments. The compaction and drying of sediments, and the
recovery of vegetation itself, then would help stabilize the banks and bot-
toms of backwaters, and the plants might fulfill their functions of taking up
nutrients and providing food and shelter for wildlife. Priority might also be
given to projects that meet multiple objectives, including (as suggested
above) flood damage reduction. For example, flood easements or outright
buyouts of selected levee districts might reduce future flood damages and
flood heights, reduce the time during floods when the river has to be closed
to navigation, and provide fish and wildlife habitat. A fundamental princi-
ple of adaptive management is evaluating the outcomes of management
actions (evaluation builds upon and draws lessons from data gathered from
OCR for page 32
32 Upper M'ssissippi-Illino's Waterway R~str~c~red Feasibility Study: Interim Report
monitoring programs). Since the Corps intends to implement the feasibility
study with an adaptive management approach, outcomes of early restora-
tion projects should be evaluated carefully. The results of these evaluations
will be useful in determining the costs and benefits associated with different
restoration approaches. Priority should be given to restoration projects
that aim to restore natural processes and those that aim to achieve
multiple objectives.
The sequencing of projects should also be considered. For example,
restoration of more natural hydrology throughout an entire navigation pool
might restore vegetation in some areas without restoration projects or
might require less expenditure on levees and pumps to promote favorable
water levels within constructed floodplain impoundments. In this case, it
might be useful to modify dam and pool operations before constructing or
renovating wildlife management areas within the floodplain.
Cost Sharing and Funding
In addition to prioritization and sequencing, there are important issues
related to funding and cost sharing. Several speakers at the committee's
September 2003 meeting cited a previous history of Corps, administration,
and congressional failure to concurrently fund navigation improvements
and ecological protection and recovery. The general concern was that navi-
gation projects are completed but the related environmental nrolects are
funded at low levels or not at au.
The best environmental plan (under the
new dual-track planning process) will be of little use if it is not imple-
mented. Suggestions for securing funding for ecosystem restoration in the
UMR-IWW include a program similar to the Land and Water Conservation
Fund or a trust fund similar to the Inland Waterways Trust Fund. The
Corps has identified the potentially high costs of implementing proposed
restoration and adaptive management efforts as part of the feasibility study.
In order to maintain the study's credibility and ensure integration across
sectors, it is important that efforts to enhance environmental benefits be
carried out concurrently with efforts to improve navigation.
There is less federal land along the Mississippi River in the downstream
states (e.g., Missouri and Illinois) than in the upper basin. Floodplains in
Iowa, Illinois, and Missouri are mainly privately held, whereas much of the
OCR for page 33
Findings and Recommendations
33
Mississippi River floodplain in Minnesota and Wisconsin is part of the U.S.
federal Upper Mississippi River Fish and Wildlife Refuge system. On fed-
eral lands, the federal share of restoration projects is 100 percent; on private
lands, however, local sponsors are responsible for part of the costs. In the
basin's downstream states, most of the restoration projects will thus require
local sponsors to provide 35 percent of the planning and construction costs
and all of the long-term maintenance. Some observers have called for
changes in cost-sharing arrangements to ensure that worthy restoration pro-
jects in the downstream states receive similar consideration as restoration
projects in the upper basin.
Construction costs for extension of the locks and associated environ-
mental mitigation are funded with 50 percent of the construction and envi-
ronmental mitigation costs coming from the Inland Waterway Trust Fund
and the remaining 50 percent from congressional appropriations. In con-
trast, environmental restoration components of the project generally re-
quire non-federal cost sharing:
· Environmental Management Program projects as authorized by the
Water Resources Development Act of 1986 and amended in the WRDA of
1990 and 1999 provide 100 percent federal funding for EMP projects on
National Wildlife Refuge lands and 65 percent federal, 35 percent non-
federal funding for projects not located on federal lands.
For modification of structures and operations of water resources
projects to improve the quality of the environment under Section 1135 of
the WRDA of 1986, the cost sharing is 75 percent federal, 25 percent non-
federal.
For aquatic ecosystem restoration and protection projects devel-
oped under Section 206 of the WRDA of 1996, the cost sharing is 65 per-
cent federal, 35 percent non-federal.
For projects under Section 204 of the WRDA of 1992 for the
protection, restoration, and creation of aquatic and ecologically related
habitat in conjunction with the dredging of authorized navigation projects,
incremental costs of the beneficial use of dredged material for habitat crea-
tion are shared 75 percent of the costs are borne by the federal govern-
ment, and 25 percent are borne by a non-federal sponsor.
OCR for page 34
34 Upper M'ssissippi-Illino's Waterway Rtstr~c~red Feasibility Study: Interim Report
Furthermore, there may be limited or no federal funding available to
implement nonstructural measures because the Corps lacks the necessary
authority to implement and/or fund such measures. This is an analytical
concern because if proposed restoration projects are not implemented, the
results from analyses assuming that these projects will be implemented (and
will deliver benefits) will be discredited in proportion to the extent that the
projects are not funded. The Corps should identify instances in which
federal cost-sharing rules are likely to restrict or preclude implemen-
tation of environmental restoration projects and nonstructural meas-
ures.
ENGINEERING
Construction Cost Contingency
The Phase I committee report (NRC, 2001) recommended that the
Corps increase its standard contingency factor from 20 to 25 percent be-
cause of the uncertainty associated with cost estimates for lock extensions.
In its background summary response (USAGE, 2003b), the Corps stated:
"Jacobs Engineering, an independent engineering firm, reviewed represen-
tative large-scale cost estimates developed in the original study. The review
validated that the estimates developed for lock construction alternatives are
reasonable." In response to this committee's September 2003 request for
the Jacobs Engineering report, the Corps indicated that the report was still
being drafted. It will be necessary to obtain and review this report before
this committee can comment on the Corps response.
Lock and Dam Rehabilitation
The NRC (2001) Phase I committee report recommended: "If new
waterway traffic demand forecasts are developed, it will be important to
revisit the rehabilitation costs analysis to ensure consistency with the revised
traffic demand forecasts." The Corps background summary response
(USAGE, 2003b) does not reply to this recommendation. This committee
OCR for page 35
Findings and Recommendations
35
requests that th C
e orps respond to this recommendation from the NRC
OCR for page 36
Representative terms from entire chapter:
adaptive management
