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Analytical Methods and Approaches for Water Resources Project Planning ANALYTICAL METHODS AND APPROACHES FOR WATER RESOURCES PROJECT PLANNING Panel on Methods and Techniques of Project Analysis Committee to Assess the U.S. Army Corps of Engineers Methods of Analysis and Peer Review for Water Resources Project Planning Water Science and Technology Board Ocean Studies Board Division on Earth and Life Studies NATIONAL ACADEMY OF SCIENCES THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu
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Analytical Methods and Approaches for Water Resources Project Planning THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the governing board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. Support for this project was provided by the U.S. Army Corps of Engineers under contract no. DACW72-01-C-0001. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for the project. International Standard Book Number 0-309-09182-9 (Book) International Standard Book Number 0-309-53128-4 (PDF) Analytical Methods and Approaches for Water Resources Project Planning is available from the National Academies Press, 500 Fifth Street, N.W. Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. Cover design by Van Nguyen, the National Academies Press. Photo courtesy of the Missouri Historical Society. Photo as cited in Shallat, T. Structures in the Stream. Copyright 2004 by the National Academy of Sciences. All rights reserved. Printed in the United States of America.
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Analytical Methods and Approaches for Water Resources Project Planning THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievement of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice-chair, respectively, of the National Research Council. www.national-academies.org
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Analytical Methods and Approaches for Water Resources Project Planning COMMITTEE TO ASSESS THE U.S. ARMY CORPS OF ENGINEERS METHODS OF ANALYSIS AND PEER REVIEW FOR WATER RESOURCES PROJECT PLANNING PANEL ON METHODS AND TECHNIQUES OF PROJECT ANALYSIS* GREGORY B. BAECHER, Chair, University of Maryland, College Park JOHN B. BRADEN, University of Illinois, Urbana-Champaign DAVID L. GALAT, University of Missouri, Columbia GERALD E. GALLOWAY, Titan Corporation, Fairfax, Virginia ROBERT G. HEALY, Duke University, Durham, North Carolina EDWIN E. HERRICKS, University of Illinois, Urbana-Champaign CATHERINE L. KLING, Iowa State University, Ames LINDA A. MALONE, College of William and Mary, Williamsburg, Virginia RAM MOHAN, Blasland, Bouck & Lee, Inc., Annapolis, Maryland MAX J. PFEFFER, Cornell University, Ithaca, New York DOUG PLASENCIA, AMEC, Phoenix, Arizona DENISE J. REED, University of New Orleans, Louisiana JAN A. VELTROP, Consultant, Skokie, Illinois National Research Council Staff JEFFREY W. JACOBS, Study Director ELLEN A. DE GUZMAN, Research Associate * The Panel on Methods and Techniques of Project Analysis was one of four panels, operating under the auspices of a coordinating committee that was convened by the National Academies’ Water Science and Technology Board (lead) and Ocean Studies Board to carry out studies mandated in the Water Resources Development Act of 2000. The members of the two boards and the panels are listed in Appendix F.
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Analytical Methods and Approaches for Water Resources Project Planning Foreword In the early 1800s the U.S. Congress first asked the U.S. Army Corps of Engineers (which was created in 1775) to improve navigation on our waterways. From that beginning, the Corps began a program of public works that has reshaped virtually all of the nation’s river basins and coastal areas. Today we share in the benefits of those works: a reliable water transportation network, harbors that help link our economy to global markets, previously flood-prone land that is productive for urban and agricultural uses, hydroelectric power, and widely used recreational facilities. Now, at the beginning of the twenty-first century, the Corps’ program is under intense scrutiny. Traditional constituencies press the Corps to complete projects that have been planned for many years and campaign for new projects to serve traditional flood control and navigation purposes. At the same time, environmental and taxpayer groups express concerns about these projects in Congress and in the courts. Some of these groups have exposed technical errors in analyses that have been used to justify projects. For these critics, the Corps’ water project development program must be reformed and the budget reduced or redirected. Some of these same groups are pressing the administration, Congress, and the agency itself toward a new Corps mission, broadly described as environmental restoration. However, the concept of restoration awaits more precise definition, and the science of ecosystem restoration is in its infancy. Nevertheless, it is clear that restoration is a call for water resources management that accommodates and benefits from, rather than controls, annual and multiyear variability in the patterns and timing of river flows and the extremes of flood and drought. Meanwhile, the Corps is affected by a general trend in all federal agencies toward smaller budgets and staffs. As demands for reform mount, the Corps’ current staffing and organization may have to be reconfigured to provide improved and more credible planning reports. As a result of this national debate over the Corps’ programs and the quality of its planning studies, the U.S. Congress in Section 216 of the
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Analytical Methods and Approaches for Water Resources Project Planning 2000 Water Resources Development Act, requested that the National Academies conduct a study of procedures for reviewing the Corps’ planning studies. In addition, Congress requested a review of the “methods of analysis” used in Corps water resources planning. In response to this request, the Water Science and Technology Board of the National Academies’ National Research Council (NRC), in collaboration with the NRC’s Ocean Studies Board, appointed four study panels to assess (1) peer review, (2) planning methods, (3) river basin and coastal systems planning, and (4) resource stewardship and adaptive management, along with a coordinating committee to follow these panels’ progress and to write a synthesis report. Our study panels and coordinating committee held several meetings over the course of the study period beginning in 2001. We spoke with dozens of Corps of Engineers personnel, visited several Corps projects, and heard from different groups with interests in Corps projects. We came away with an appreciation for the dedication of Corps personnel and the complications and challenges they face in trying to be responsive to local project sponsors and the nation’s taxpayers. This is not the first study of the Corps by the National Academies. However, past studies were often focused on specific projects or on particular planning aspects. The reports in this series address the agency’s programs in a wider context. Because we appreciate the importance of the U.S. Congress and the sitting administration in directing Corps programs, many of our recommendations are directed to them. The Corps has a long history of serving the nation and is one of our oldest and most recognized federal agencies, but it is today at an important crossroads. The nation, through the administration and Congress, must help the agency chart its way for the next century. Leonard Shabman Chair, Coordinating Committee
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Analytical Methods and Approaches for Water Resources Project Planning Preface The U.S. Army Corps of Engineers has been the leading federal agency for inland navigation improvement, flood protection, coastal works, and other aspects of U.S. water resources management essentially since the founding of the republic. The Corps has gone through several phases in its extensive history. During the early twentieth century, there was a focus on enhancing navigability of the nation’s rivers. Following the devastating 1927 Mississippi River floods, better management of flood risks was a high priority. During the middle of the twentieth century, concepts of multi-purpose projects and river basin planning were viewed as central means for promoting economic development, among other goals. The close of the twentieth century saw the Corps becoming involved in ecosystem restoration projects, such as the Everglades restoration project. Specific water-related events and disasters, such as the 1993 Mississippi and Missouri River floods, resulted in policy challenges and reconsiderations of national water management strategies. Through its history, the Corps’ mission has been to carry out the federal interest as manifest in congressional direction, and in so doing, to evaluate potential water resources projects against the backdrop of national goals. Reviews of Corps of Engineers project analysis and evaluation must consider this long history of project development, the complex relations of the Corps to other federal agencies with water resources management duties, historical controversies that have attended the Corps’ execution of its missions, and the breadth of water resources activities and projects overseen by the Corps. Our study panel was not the first group to review Corps of Engineers and federal water resources roles and planning procedures. Previous statements on federal water planning were issued by, for example, the National Resources Committee (1938), the Hoover Commission (1949), the Cooke Commission (1950), the Kerr Committee of the Senate (1959), and the National Water Commission (1968 and 1973), and by previous committees of National Research Council (e.g., NRC, 1999). Although specific planning techniques and larger national priorities shifted through the course of these studies, several overarching
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Analytical Methods and Approaches for Water Resources Project Planning themes stand out: the importance of the executive and congressional branches in providing clear policy direction, the importance of clarifying the respective roles of the various federal and state agencies involved in water resources planning, the importance of financial and economic decision criteria in planning, and the importance of sound technical bases of economic and engineering evaluation. These issues remain important in today’s national water resources planning context. Our panel’s task was to review Corps planning techniques as embodied in the federal Principles and Guidelines and in the Corps own planning guidance. In our discussions, it soon became evident that comprehensive evaluation of these topics had to be framed by the setting in which planning decisions are made. These contextual issues include national water resource policy guidance for federal agency decision making, multi-agency and federal-state cooperation, accounting for multi-attribute outcomes in project evaluations, roles of local stakeholders in federally-sponsored projects, and accommodation of risk and uncertainty in project planning. Water resources project planning by the Corps of Engineers does not occur in a vacuum. The Corps depends on clear guidance from the Congress, and the Corps must work in partnership with local stakeholders to help understand and uphold the federal interest in water project planning and investments. Our panel is grateful to the many representatives of the U.S. Army Corps of Engineers, both in Washington and in the Districts, who offered information and insights during the course of this study. James Johnson and Harry Kitch from Corps Headquarters provided important historical and analytical insights into Corps planning procedures. Former Assistant Secretary of the Army for Civil Works, Dominic Izzo, shared his views on Corps missions, structure, and strategies with our panel. David Moser and Eugene Stakhiv of the Institute for Water Resources outlined for us the new directions in economic analysis being developed for future Corps projects. Other Corps of Engineers military and civilian staff members who spoke with us include Colonel Robert Ball, Buddy Arnold, Robert Lindner, Ed McNally, Marsha Mose, and Susan Smith. Several other Corps staff members, including several from the Corps St. Paul District who hosted a field trip along the Mississippi River in St. Paul, graciously shared their time and insights. We also thank Steve Fitzgerald and John Williams, who spoke with us at our first meeting and shared their perspectives as a local Corps project sponsor and as an independent analyst of Corps methods, respectively. We are similarly grateful to many members of the public and to representatives of professional and
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Analytical Methods and Approaches for Water Resources Project Planning public policy organizations who generously spent time meeting with the committee or who provided us with documents for our consideration. The collective input of these individuals and organizations was critical to our group’s education. The panel, and particularly the panel chairman, are grateful to the NRC staff for its dedication and diligence in organizing the committee’s activities and in helping bring this report to fruition. Our work would not have been possible without the excellent staff of the Water Science and Technology Board. Stephen Parker, Director of the Board, provided advice and direction for the overarching “Section 216” studies. Jeffrey Jacobs, Senior Staff Officer of the Board, spent many days and weekends crafting the sometimes less-than-splendid prose of the members and committee chairman into a concise and articulate form. They were ably assisted by Ellen de Guzman, Research Associate at the Water Science and Technology Board, who deftly handled administrative details for meetings and supported all phases of report preparation, including editorial and graphics work. Leonard Shabman, Chairman of the Coordinating Committee for the Section 216 Studies, also merits special mention, as he provided an abundance of constructive and tactful advice and suggestions and served as a continuing source of insight for the panel’s deliberations. The report was reviewed in draft form by individuals chosen for diversity of perspective and technical expertise in accordance with the procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We thank the following for their review of this report: Charles Howe, University of Colorado (ret.); David Kennedy, California Department of Water Resources (ret.); Jon Kusler, Association of State Floodplain Managers; Walter Lynn, Cornell University (ret.); David Moreau, University of North Carolina; Herbert Ward, Rice University; and Douglas Woolley, Radford University. Although these reviewers provided many constructive comments and suggestions, they were not asked to endorse the conclusions or the recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Leo Eisel of Brown and Caldwell and by Richard Conway (retired) of Union Carbide Corporation. Appointed by
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Analytical Methods and Approaches for Water Resources Project Planning the National Research Council, they were responsible for ensuring that an independent examination of the report was carefully carried out in accordance with NRC institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the NRC. The Corps of Engineers has a long history of leadership in the development and application of analytical methods for water project planning. As federal roles in water management, budgetary priorities, and social preferences all change, the Corps’ roles and methods for planning and managing water resources will have to similarly adjust. The Corps of Engineers is responsible for controlling and managing a substantial portion of the nation’s hydrologic and related resources. The nation needs a competent and modern Corps of Engineers if these resources are to be managed by sound planning methods and to meet current and future national water management priorities. We offer our report in the spirit of helping the Corps—with support from our elected leaders—to meet these important challenges. Gregory B. Baecher Chairman
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Analytical Methods and Approaches for Water Resources Project Planning Contents EXECUTIVE SUMMARY 1 1 CORPS OF ENGINEERS MISSIONS, PROJECTS, AND PLANNING 11 Introduction 11 Corps of Engineers Project Planning Methods and Guidance 13 Corps of Engineers Missions: Historical, Contemporary, Future 15 Report Overview 16 2 FEDERAL WATER RESOURCES PLANNING OBJECTIVES AND GUIDANCE 17 Federal Interest in Water 17 Contemporary Project Planning and Guidance 22 Participants in Water Resources Decision and Policy Making 26 Commentary 35 3 ASSESSING BENEFITS AND COSTS OF CORPS PROJECTS 38 Federal Water Resources Planning and Evaluation 38 Benefit-Cost Analysis in Water Project Planning 39 State of Corps Practice: Current Economic Approaches 49 Corps Missions and Methods 53 Other Issues 67 Commentary 70 4 STAKEHOLDER PARTICIPATION 73 Roles in Decision Making 74 Stakeholder Participation Approaches 79 State of Corps Practices 81
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Analytical Methods and Approaches for Water Resources Project Planning Committee Commentary 85 5 ENGINEERING 87 Methods and Techniques 90 Commentary 96 6 A NEW NATIONAL WATER MANAGEMENT FRAMEWORK 98 Changes in the Federal Water Policy Framework 100 7 REVISING THE CORPS OF ENGINEERS PLANNING STUDIES 109 Benefit-Cost Analysis and Feasibility Studies 109 Review of Projects and Planning Studies 110 Stakeholder Participation 113 Summary Document for Corps Planning Studies 113 Engineering Methods 114 Independent Review 115 8 EPILOGUE 117 REFERENCES 119 APPENDIXES A Water Resources Development Act of 2000 129 B Corps Division and Districts 132 C Office of Management and Budget Guidance on Nonmarket Valuation Techniques 134 D Analysis of Nonstructural Flood Damage Reduction 136 E Army Corps of Engineers Planning Center of Expertise 138 F Rosters 142 G Biographical Information of Panel Members and Staff 147