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Commentary: Expose the hidden costs of river transportation

This article first appeared in the St. Louis Beacon, Feb. 27, 2013 - The devastating effects of the U.S. drought on the inland waterways navigation system have attracted much news coverage, with considerable emphasis placed on the contributions of river transportation to the national economy. Benefits alleged by favored interests have been featured without scrutiny or critical counterpoint, and the costs and negative impacts of the system have been routinely ignored.

First and foremost, the original cost of the inland waterways system was entirely born by the U.S. taxpayer, mostly via allocations mandated by the Rivers and Harbors Act and its successors. Up to 1965, at least $15 billion in today’s dollars was spent for that infrastructure, including locks and dams, on the Mississippi River from St. Louis to the Twin Cities. Costs continue to this day, for example, an additional $2 billion was subsequently spent on Melvin Price Lock and Dam and Lock 27 alone.

In 1978 the Inland Waterways Revenue Act created the Inland Waterways Trust Fund, which collects a fuel tax to support one-half the cost of new construction and major rehabilitation of existing infrastructure. Since that time only about $500 million from the trust fund has been used on the Upper Mississippi River. Note that the tax collected, 20 cents a gallon, is far lower than the 36 cents of federal plus state tax paid for gasoline by the Missouri motorist.

Second, the barge industry has never contributed to the cost of operating and maintaining the inland waterways system - in fact, Congress has barred any such contribution.  On the Upper Mississippi River alone, the federal government annually spends at least $150 million for dredging the 9-foot navigation channel, building and maintaining river structures below St. Louis, and operating and maintaining the numerous locks and dams above St. Louis. The total operational and maintenance cost since the system was completed is conservatively estimated, in today’s dollars, at $7 billion.

Third, the taxpayer also bears the entire cost of restoring the environmental damage caused by the original construction and the day-to-day operation of the inland waterways system. As of 2012, about $430 million has been spent through the Upper Mississippi River Restoration Environmental Management Program. Unfortunately, this outlay represents only a small fraction of the cost estimated by professional conservationists to restore the river to a healthy state, which would be at least $20 billion.

Fourth, the public has lost many valuable ecosystem services since the locks, dams and channel structures were constructed on the Upper Mississippi River. Healthy natural habitats provide – for free -- flood storage, water supply, water purification, food and fiber production, nutrient cycling and soil formation. Estimates are that each acre of functioning wetlands and floodplains can provide benefits worth between $8,000 and $10,000 each year to U.S. citizens.  At least 45,000 acres of habitat within the floodplain were flooded after construction of the dams and levees. Over the 70 years the system has been in operation, this formula says the public has been deprived of at least $10 billion in free ecosystem services.

Finally, numerous studies show that in-channel navigation structures have greatly magnified the frequency and severity of floods, with flood levels typically being 10 feet higher than they were a century ago. In denial of this obvious harm, the U.S. Army Corps promotes flawed flood-frequency calculations that grossly underestimate risk. These encourage new floodplain developments that aggravate this risk even as they further isolate the river from its floodplain. The annual economic damages from this vicious cycle amount to billions.

Another potential cost, currently being pushed to Congress by navigation interests, would reduce the requirement that industry provide a 50 percent cost share for major projects via the Inland Waterways Trust Fund. Industry hopes to reduce its pitifully small contribution even further, by increasing the taxpayer’s annual burden by about $200 million to achieve the following: 

1. The entire cost of rehabilitating locks would be removed from industry’s obligation, for all projects that cost less than $100 million. No lock rehabilitation project has ever cost more than $100 million, so this proposal would effectively reduce industry's contribution to zero. 

2. Industry’s obligation to pay half of any project cost overrun would be eliminated;

3. Industry’s responsibility to contribute half the cost of rehabilitating navigation dams would be removed, when the only purpose of these structures was to enable the construction of barge locks.

When the costs and benefits for the UMR inland waterways navigation system are realistically evaluated, the value of the system to the public becomes questionable.

We would like to see an objective, comprehensive study performed on the value of this system to the nation. The oft-cited, promotional material provided by the barge companies, large agri-businesses and the U.S. Army Corps is highly unreliable, owing to obvious and longstanding conflicts of interest. As the Waterways Council recently stated, ”We just can’t keep doing things the way we’ve been doing them.”

We wholeheartedly agree. We suggest that the GAO is ideally situated to provide such an independent, comprehensive review, one that is greatly needed at a time when all federal expenditures are being scrutinized.

Brad Walker is rivers sustainability director of the Missouri Coalition for the Environment. Bob Criss is a professor in the department of earth and planetary studies at Washington University.