U.S. Senate Committee on Environment & Public Works
U.S. Senate Committee on Environment & Public Works
Hearing Statements
Date:   03/31/2004
Statement of Scott Faber
Water Resources Specialist
Environmental Defense
Washington, DC
U.S. Army Corps of Engineers role in the nation’s water resource needs in the 21st century

Thank you for the opportunity to testify. My name is Scott Faber and I am a water resources specialist for Environmental Defense.

Environmental Defense supports reforms that would ensure that future civil works projects constructed by the U.S. Army Corps of Engineers are economically sound, and that the environmental impacts of future projects are fully mitigated. We strongly support S. 2188, introduced last month by Senators McCain, Feingold and Daschle, and will not support a Water Resources Development Act of 2004 that does not include long overdue reforms. Today, I would like to focus on three reforms: peer review, modern planning principles, and mitigation.

The Corps of Engineers has a critical role to play in the development, management, protection and restoration of America’s rivers, lakes, bays and coastlines. Many Corps projects have provided significant economic benefits to the nation by protecting our cities from floods and hurricanes, providing reliable waterborne commerce, and by providing sufficiently deep ports to promote trade. Unfortunately, too many projects have failed to provide as many benefits as predicted.

In the last three years, the General Accounting Office, the Army’s own Inspector General, the National Academy of Sciences, and independent experts have found that proposed projects with costs totaling more than $3 billion are based on inflated estimates of benefits, underestimates of costs and environmental impacts, or both. In one case, the GAO found that the benefits of a river deepening project had been overestimated by 300 percent. In a second case, the GAO found that the Corps had overestimated the number of commercial vessels that would use an inlet. Most recently, the GAO found that the Corps overestimated the number of homes that would be protected by a California flood control project, and dramatically underestimated project costs. In addition, the Army’s own Inspector General concluded that Corps officials intentionally exaggerated the benefits of longer locks on the Mississippi and Illinois rivers. An independent expert concluded that the Corps’ proposal to build the Yazoo Backwater Pumping Plant overestimated agricultural benefits by $144 million and would, according to EPA, drain and damage almost 10 times as many wetlands as were estimated by the Corps.

These miscalculations and mistakes have significant costs beyond their impact on the Corps’ reputation and credibility.

First, billions of dollars have been spent on civil works projects that have failed to provide the promised return on investment. Only two of 14 waterway projects constructed since World War II for which data is available have attracted as much commercial traffic as predicted. For example, the Corps predicted in 1982 that 123.2 million tons of commercial traffic would flow through Lock and Dam 26 on the Mississippi River by 1998. Actual traffic flows were 73.7 million tons, or 60 percent of the Corps’ prediction. The Corps predicted in 1978 that traffic on the Gulf Intracoastal Waterway would reach 82.7 million tons when the agency recommended replacement of Vermillion Lock. Actual traffic, including non-commercial traffic, was only 37.6 million tons in 1998, or 46 percent of the Corps' prediction.

Second, waterways with little or no traffic consume a disproportionate and growing share of waterway maintenance funds. While successful waterways like the Mississippi and Ohio face growing maintenance backlogs, 29 percent of annual maintenance spending is used to maintain waterways that host little more than 2 percent of commercial waterway traffic. For example, the Corps spends about $5 million annually to operate and maintain the Apalachicola-Chattahoochee-Flint waterway even though barges on the waterway carry only about 20,000 tons of commercial traffic. By contrast, barges on the Ohio River annually carry 57.5 million tons of commercial traffic.

Third, civil works projects destroy the islands, wetlands, side channels, and other habitats that aquatic life need to survive, resulting in the extinction of some species and the decline of many more species, including commercially important species like salmon. But, the environmental impacts of these projects are rarely mitigated. The Corps has proposed mitigation for only 31 percent of the projects authorized for construction since 1986, according to the GAO. Even when mitigation is completed, the Corps frequently replaces wetlands, floodplain forests and other valuable habitats with fewer acres of less valuable habitat. For example, a Corps plan to dredge over 100 miles of the Big Sunflower River will damage 3,631 acres of wetlands. But, proposed mitigation is limited to planting tree seedlings on only 1,912 acres of agricultural lands.

These problems are well documented, and have invited criticism from a wide array of interests, ranging from the National Taxpayers Union to the New York Times. The Army’s IG and four separate panels of the National Academy of Sciences have now called for reforms, including independent peer review. Even the Corps’ leadership, in testimony to Congress and elsewhere, recognizes that the agency’s ability to evaluate the benefits and costs of future projects must be improved.

Environmental Defense believes that the reforms included in S. 2188 will ensure that future studies are based on sound science and economics. We also believe that these reforms will restore trust in Corps feasibility studies by ensuring that credible economic tools are used to evaluate proposed projects, that studies proposing controversial projects or costly projects are peer reviewed, and by ensuring that the environmental impacts of proposed projects are fully mitigated. We further believe that the Corps should accelerate efforts to repair the historic damage done to America’s great rivers, lakes and bays by dams, levees and other civil works projects that were not subject to modern mitigation requirements.

In particular, we believe peer review provides significant benefits. As the National Academy of Sciences noted in 1999, “peer review can improve both the technical quality of projects . . . and the credibility of the decision-making process.” Reviews would also identify or deter mistakes that could ultimately add to the cost and time of feasibility studies.

To be successful, peer reviews must have four features.

First, peer reviews must be truly independent. In particular, the office that appoints reviewers must be located outside the Corps, reviewers must have no financial relationship with the Corps, and reviewers must determine the scope of review. According to the National Academy of Sciences, the “independence of peer reviewers makes them more effective than internal reviewers because experts who are newly exposed to a project often can recognize technical strengths and weaknesses, and can suggest ways to improve the project that may have been overlooked by those close to it.” In addition, external experts “often can be more open, frank, and challenging to the status quo than internal reviewers, who may feel constrained by organizational concerns.”

Second, peer reviews must not delay Corps studies. We propose that peer review overlap with public review, and propose that reviewers assess the same draft feasibility studies, reevaluation reports, and environmental impact statements that are subject to public review. Reviews of feasibility studies that have already begun should be subject to peer review if a draft study or report has not been issued on the date of enactment.

Third, the threshold for peer review must be predictable. As the NAS noted, “peer review program managers must have a systemic and credible approach for selecting which projects . . . are reviewed by the peer review program.” Accordingly, we urge the committee to adopt four triggers for review: projects that cost more than $25 million; a request for review by the governor of an affected state; a request for review by the head of a federal agency charged with reviewing the project; and, a determination by the Secretary of the Army that there is a significant public dispute concerning scope, impact, or cost-benefit analysis of the project.

Finally, we believe the Corps should be required to respond the report of a peer review panel, and provide a written response providing a rationale for any panel recommendations that have not been adopted.

We also believe that the Corps must employ economic tools that fairly assess the benefits and costs of proposed projects.

As a recent panel of the NAS noted, the Corps continues to use economic tools that overestimate future river traffic, and that overestimate how many shippers will use waterways when the cost of shipping by barge increases. The Corps also continues to ignore or improperly evaluate less costly alternatives to large civil works projects. A recent NAS panel urged the Corps to consider alternatives to longer locks on the Mississippi and Illinois rivers, including traffic scheduling and helper boats, which could reduce a 90-minute lockage by 20 minutes or more and which would cost less than $50 million annually to operate. But, the Corps has largely ignored alternatives to the $2.3 billion lock expansion project even though river traffic has been flat since 1980 and has actually declined in recent years.

In combination, peer review and the use of credible economic tools will ensure that future projects will return significant benefits to the public.

This is especially important in light of the $41 billion backlog of active civil works projects already authorized for construction. In recent years, Congress has appropriated less than $2 billion annually for the construction of new projects. Authorizing questionable new construction projects would delay the construction of more urgently needed projects. For example, building seven new locks and extending the length of five existing locks on the Mississippi and Illinois rivers would cost approximately $191 million annually, and would not be completed until 2035. Rather than adding questionable projects to the growing backlog of authorized projects, Congress should instead reduce the backlog of authorized projects, as proposed in S. 2188.

When a project is clearly necessary and cost-justified, the Corps should fully mitigate the environmental impacts of a project.

We believe successful mitigation has four features.

First, mitigation projects should replace each acre of habitat with an equivalent or superior acre of habitat. Second, mitigation projects should not only restore each acre of habitat, but should also restore the hydrologic processes that have been impacted by project construction. Third, mitigation plans should have specific ecological success criteria, a detailed mitigation plan, and a detailed description of the lands to be acquired. Fourth, mitigation should be completed concurrently unless that is physically impossible. In those rare cases when concurrent mitigation is physically impossible, the Corps should complete mitigation by the end of the subsequent fiscal year. A mitigation tracking system should be established to ensure that mitigation is completed and is successful.

Finally, we strongly support efforts to ensure that working rivers like the Mississippi remain living rivers as well. Building dams and levees destroyed millions of acres of wetlands and other habitats and robbed rivers like the Mississippi of the ability to build new side channels and wetlands. Far more than fish and wildlife is at stake. Millions of Americans depend upon the health of resources like the Mississippi, Columbia, and the Chesapeake for their economic livelihood. For example, recreation on the Mississippi River generates more than $1 billion in annual spending which supports more than 30,000 jobs.

Although the Fish and Wildlife Coordination Act of 1958 directed the U.S. Fish and Wildlife Service to propose mitigation for civil works projects, mitigation was not required until passage of the Water Resources Development Act of 1986. Consequently, the environmental impacts caused by the construction and operation of the vast majority of civil works projects have not been mitigated. If we do nothing to reverse the decline of degraded resources like the Mississippi, millions of jobs will be lost and scores of species will face extinction. In many cases, the Corps is the only federal agency with the jurisdiction and expertise needed to restore lost habitats.

As the Committee develops the Water Resources Development Act of 2004, we urge you to include reforms that will ensure that future civil works projects are economically sound, and that the impacts of future projects are fully mitigated. We further urge you to accelerate Corps efforts to reverse the decline of America’s great rivers, lakes and bays.

Thank you for the opportunity to testify.