Corps of Engineers Water Resources Infrastructure Deterioration, Investment, or Divestment? (2013) / Chapter Skim
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Pages 33-83
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From page 33... ...
3 Corps of Engineers Water Resources Infrastructure and Mission Areas The U.S. Army Corps of Engineers constructed, operates, and maintains a vast water resources infrastructure across the United States that includes dams, levees, and coastal barriers for flood risk management, locks and dams for inland navigation, ports and harbors, and hydropower generation facilities.
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From page 34... ...
34 Corps of Engineers Water Resources Infrastructure Corps of Engineers maintenance responsibilities do not apply to all water infrastructure the agency has built, and maintenance duties for many portions of Corps-built water infrastructure have been turned over to state and local entities. This especially has been the case with many levees and other flood protection structures that have been built by the Corps, then subsequently turned over to levee districts or municipalities that assume OMR responsibilities.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 35 erating facilities have a direct base of paying customers (although in most cases the revenues do not come back to the Corps)
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36 Corps of Engineers Water Resources Infrastructure chambers. Figure 3-1 shows the scope of the Corps-maintained inland waterways system.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 37 by the Corps of Engineers. Some portions of the Atlantic and Gulf Intracoastal Waterways, however, are operated and maintained by the states they border.
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38 Corps of Engineers Water Resources Infrastructure FIGURE 3-2 Major U.S. Ports and Harbors.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 39 BOX 3-1 PARTNERSHIPS FOR WATER RESOURCES INFRASTRUCTURE: PORT OF BALTIMORE The Port of Baltimore is among the busiest deep-water ports in the United States. Commerce in 2011 totaled 37.8 million tons of cargo valued at $51.4 billion (MPA, 2012a)
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40 Corps of Engineers Water Resources Infrastructure BOX 3-2 PARTNERSHIPS FOR WATER RESOURCES INFRASTRUCTURE: PORT OF MIAMI The Port of Miami, managed by Miami-Dade County, is a man-made waterway in Biscayne Bay that was initially dredged in the early twentieth century. It was significantly expanded into a deep channel waterway and a man-made island during the 1960s and 1970s.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 41 ments. In the past, the inland navigation system enjoyed more consistent federal support for maintenance and repair of its facilities.
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42 Corps of Engineers Water Resources Infrastructure BOX 3-3 OPERATIONS, MAINTENANCE, CONSTRUCTION, AND MAJOR REHABILITATION COSTS ON THE INLAND WATERWAYS Two pieces of legislation are largely responsible for the current framework of inland waterways financing: the Inland Waterways Revenue Act of 1978 and the Water Resources Development Act of 1986. These laws together established a fuel tax on commercial barges, cost-share requirements for inland waterway projects, and a trust fund to hold these revenues and fund construction (Stern, 2012)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 43 FIGURE 3-3 Federal Inland Waterway Projects: Financing Trends. SOURCE: Stern, 2012.
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44 Corps of Engineers Water Resources Infrastructure BOX 3-4 OLMSTEAD LOCKS AND DAM The Olmstead locks and dam project will replace 1920s-era Locks and Dams 52 and 53, the first two on the Ohio River above the confluence with the Mississippi River. These two aged facilities handle about 90 million tons of cargo annually, the highest cargo tonnage in the entire inland waterways system.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 45 Both the IWTF and HMTF face concerns about the need for higher revenues and expenditures in the future. In the case of the IWTF, the Inland Waterways Users Board (IWUB)
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46 Corps of Engineers Water Resources Infrastructure passage of post-Panamax ships, at a cost to the port authority of $1.3 billion (PANY & NJ, 2011)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 47 Much of this navigation infrastructure is nearing the end of (or has exceeded) its design life and is in various states of disrepair.
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48 Corps of Engineers Water Resources Infrastructure A company that controlled commercial navigation would find itself making decisions that affected not only navigation, but also municipal water supply, recreation, irrigation, flood dam age reduction, and environmental quality. Privatization would not work well unless the controlling firms faced the proper incentives regarding each possible use of the waterway.
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From page 49... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 49 laws, such as the National Environmental Policy Act. Dam decommissioning is typically considered in instances where a dam's original purposes and values have diminished or greatly changed over time, and where a dam may inhibit values such as enhanced fish passage or downstream transport of sediment resources (see Box 3-5)
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50 Corps of Engineers Water Resources Infrastructure BOX 3-5 VALUES OF FREE-FLOWING RIVERS In setting investment priorities for Corps infrastructure, the potential ecological benefits of removing a dam and restoring a pre-disturbance flow regime are today often integral to the necessary discussions. Hundreds of dams across the United States have been removed in the past 20-30 years.
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From page 51... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 51 plains and coastal wetlands renews sediment lost through erosion and maintains the high productivity of these ecosystems, as de-scribed in the "flood pulse" concept. In turn, floodplain ecosystems attenuate floods, decreasing the magnitude of peak flows downstream, and coastal wetlands protect coastal communities from storm surges.
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From page 52... ...
52 Corps of Engineers Water Resources Infrastructure BOX 3-6 DEFUNDING BUT NO PATH TO DECOMMISSIONING: LOWER ALLEGHENY RIVER LOCKS AND DAMS 5-9 The locks and dams in the Lower Allegheny River provide a good example of inland waterways infrastructure for which the original commercial justification is no longer present and federal funding for major rehabilitation has declined, but for which there is no legislated authority for the Corps of Engineers to decommission and remove the infrastructure. The Lower Allegheny River once served as an important corridor for moving oil and timber from northwestern and central Pennsylvania to Pittsburgh and markets beyond and for supplying and moving product from some metal manufacturing plants.
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From page 53... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 53 alternatives for shipment of commodities, fertilizer, aggregate, and other goods, especially in combination with rail infrastructure. Economic Efficiency and Future Infrastructure Investments The level of funding available to repair and upgrade the entire U.S.
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54 Corps of Engineers Water Resources Infrastructure Wherever the important benefits of a public-sector freight-related project are the direct benefits that users of the facilities receive in the form of reduced transportation and logistics costs, users should pay the costs. x Finance provisions in public-sector programs are a major determinant of performance, affecting both the quality of investment decisions and the efficiency of operations.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 55 FIGURE 3-4 Fuel tax receipts relative to O&M expenditures (units in ton-miles)
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56 Corps of Engineers Water Resources Infrastructure disproportionately increase the costs of barge transport and decrease the volume of barge traffic (Dunham, 2000; Stern, 2012)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 57 BOX 3-7 BENEFICIARY PAYS PRINCIPLE Unlike private goods that can be purchased at a market price, public goods such as national defense, highways, street lights, or a flood control dam, do not have an explicit market where prices are determined. With no market price, private suppliers would not be willing to provide the good because there is no way to recoup the costs.
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58 Corps of Engineers Water Resources Infrastructure "transmission planning and cost allocation requirement for public utilities to promote more these reforms is the policy objective "that the costs of transmission solutions chosen to meet regional transmission needs are allocated fairly to those who receive the benefits from them" (FERC, 2011)
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From page 59... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 59 Partnerships with States There are opportunities for partnership of the federal government with states in sharing the costs of the inland waterways system. In the past, the role for state and local governments was to serve as the local sponsor for federal projects.
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60 Corps of Engineers Water Resources Infrastructure BOX 3-8 FLORIDA INLAND NAVIGATION DISTRICT An example of alternative funding mechanisms for operation and maintenance of inland waterways is the Florida Inland Navigation District (FIND)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 61 floods. Flood risks can be also mitigated by many ‘nonstructural' factors, including measures such as building codes, flood insurance, and zoning.
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62 Corps of Engineers Water Resources Infrastructure Infrastructure Status Dams The Corps of Engineers today owns and operates approximately 700 dams. These dams range in size and purpose from large multipurpose projects to waterways navigation dams.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 63 technical aspects of existing levees, to who has the authority to ensure levees are adequately designed, constructed, and maintained, to responsibilities for the consequences when levees overtop or fail. The complex levee ownership and maintenance issues in the Sacramento District provide a good example (see Box 3-9)
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From page 64... ...
64 Corps of Engineers Water Resources Infrastructure BOX 3-9 SACRAMENTO-SAN JOAQUIN DELTA LEVEE SYSTEM: RISKS AND REHABILITATION California's Central Valley, one of the nation's highly productive agricultural regions, is drained by the Sacramento River flowing from the north and the San Joaquin River flowing from the south. These rivers converge in the Sacramento-San Joaquin Delta before flowing to Suisun Bay and eventually to the San Francisco Bay and the Pacific Ocean.
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From page 65... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 65 degrading because limitations of original design, decreased capacity of flow channels from sedimentation, subsidence, sea level rise, and inadequate maintenance practices. There have been many Delta levee breaches, and there is great concern about multiple levee failures in the event of an earthquake or large storm.
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66 Corps of Engineers Water Resources Infrastructure responsibility. The tens of thousands of miles of other levees across the nation are owned by and are the responsibility of local governments, member organizations (e.g., special levee districts)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 67 BOX 3-10 COMMUNITY COMPREHENSIVE APPROACHES TO MANAGING FLOOD RISK Past federal top-down approaches to manage flood risk typically promoted structural measures like levees or dams. Furthermore, prior to passage of the 1986 Water Resources Development Act and a new set of cost-sharing criteria, structural projects built by the Corps were 100 percent federally funded, which made them a favored solution for communities.
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68 Corps of Engineers Water Resources Infrastructure factory policies invariably take years, or decades, to develop and thus require sustained community leadership. These approaches generally enjoy strong citizen support in the long run, as they tend to be economically viable, improve public safety, make the community more resilient in the face of disasters, reduce threats of flood losses to structures, and are compatible and beneficial to local aquatic and riverine ecosystems.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 69 x Protecting floodplain occupants against floods, x Aiding them when they suffer flood losses, and x Then encouraging more intensive use of the nation's floodplains. Although national floodplain development decisions have generally favored a stronger reliance on civil engineering works than Gilbert White and others might have advised, the dwindling of federal resources available for structural options will cause more states and communities to consider less expensive flood-risk management strategies.
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70 Corps of Engineers Water Resources Infrastructure FIGURE 3-6 Shared Flood Risk Management: "Buying Down Risk." SOURCE: Riley, 2008. more accurately inventory, evaluate, and classify the roughly 14,000 miles of federal levees.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 71 ing, land use practices, building codes, and other "nonstructural" approaches. Federal investments in flood protection structures will be enhanced to the extent that local land use policies behind levees are designed to limit residual risks in leveed areas.
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From page 72... ...
72 Corps of Engineers Water Resources Infrastructure flood risk management that is less expensive, puts fewer lives and less property at risk from floods, and provides greater environmental benefits and contributes to community resilience and sustainability. They also provide opportunities for the Corps of Engineers to transition from its previous leadership role, primarily through civil works construction, to being a leading federal partner in flood risk management via more technical support and collaboration with states and communities.
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From page 73... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 73 al issues at play that limit the Crops' ability to access revenue generated at most of its power facilities, with those of the Bonneville Power Administration being a notable exception. The Corps hydropower program also is affected by pressures to reallocate reservoir storage to non-power uses.
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74 Corps of Engineers Water Resources Infrastructure FIGURE 3-7 Total hours of forced outages over all Corps hydropower projects for 19992008.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 75 In 2009, the Corps initiated a Hydropower Modernization Initiative (HMI) , which is using risk assessment and net present benefit methods to identify the most pressing investment needs for hydropower rehabilitation efforts, and the potential for energy generation increases at particular facilities (Sale, 2010)
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76 Corps of Engineers Water Resources Infrastructure 2012e)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 77 The Privatization path would focus on finding non-federal sources of funding and, where possible, transferring hydro power assets from the federal to the private sector. This strate gy is .
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78 Corps of Engineers Water Resources Infrastructure projects, equipment replacement and rehabilitation needs will have to come from direct funding by Corps hydropower customers. New legislation will be needed to enable this, such as (Sale, 2010)
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Corps of Engineers Water Resources Infrastructure and Mission Areas 79 The Flood Control Act of 1944 specified that the Corps and the PMAs produce and sell power "at the lowest possible rates to consumers consistent with sound business practices." As discussed in Sale (2010) , the Corps' responsibility to use sound business practices in managing its hydropower program provides ample justification for incorporating the funding needs for replacement of aging equipment into customer rates for federal hydropower.
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80 Corps of Engineers Water Resources Infrastructure Corps of Engineers water resources infrastructure responsibilities, including navigation, flood risk management, and ecosystem restoration, differ significantly in terms of enabling legislation, taxation and revenue sources, clients, and relations with the private sector. The Corps faces challenges in its OMR duties given that its roles, partnerships, and successes in addressing OMR in one mission area often are not transferred easily to other areas or activities.
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From page 81... ...
Corps of Engineers Water Resources Infrastructure and Mission Areas 81 Flood Risk Management Reductions in resources available for construction of federal flood control works present opportunities for expanded implementation of nonstructural flood risk management options that are more efficient and less costly and provide greater environmental benefits. Many of these strategies have been used successfully for years, in many parts of the country.
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82 Corps of Engineers Water Resources Infrastructure Increasing strains placed on the Corps today by decaying infrastructure and associated fiscal challenges demand a systematic approach to asset management. To its credit, the Corps has begun an asset management initiative.
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Corps of Engineers Water Resources Infrastructure and Mission Areas 83 ture investments should be made according to a set of principles that help ensure sustained contributions to economic development. Future OMR investments should be guided by a more coherent set of principles that include strong reliance on economics of infrastructure investment.
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