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Washington Waterworld

May 1, 1997

Hollywood isn't the only institution that funds multi-million dollar, water-related fiascos. Washington has been in on the act for years. Two of the bureaucratic vehicles charged with constructing many of these water projects - Army Corps of Engineers and the Bureau of Reclamation - have gobbled up many more dollars on pointless projects than a dozen of Kevin Costner's Waterworlds ever could.

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One of the last big water projects struggling for justification is the Animas-La Plata project near Durango, Colorado. This Bureau of Reclamation (BuRec) project would suck roughly one-fourth to one half of the water out of the Animas River at Durango and pump it 500 feet upwards to the yet-to-be-constructed Ridges Basin Reservoir. Some of that water would be pumped up an additional 200 feet to be used by irrigators.

The project ostensibly fulfills a water rights agreement with the Southern Ute tribe. All told, the project would consist of three dams, three pumping plants, 30 miles of canals, three miles of tunnel and 125 miles of pipeline.

All this adds up to huge costs with very few benefits. The Interior Department Inspector General reported in 1994 that the project was "not economically justified." The construction costs alone are estimated to be $710 million, up from a BuRec estimation of $450 million just a few years ago. The bureau itself admits that the project will return 36 cents for every dollar invested.

Some of the major costs of the project start kicking in only after the project goes online. According to the BuRec, the water pumps would consume power at the rate typical for a city of 60,000 people. It would deliver almost three times more water to Durango than they need, but the residents would be obligated to pay for it.

Some operating costs are not so manifest due to the rosy outlook BuRec paints with respect to groups receiving the water. The project is a mixed blessing. Those not blessed would be the Southern Ute tribe for which this project is partly designed.

The Utes would be receiving municipal water on which they must pay interest for the non-federal portion of the construction costs, saddling them with a multi-million dollar debt. The problem is compounded by weak demand for the expensive water and laws that retard efficient marketing.

Animas-La Plata would provide subsidized water to high altitude farmers growing low-value feed crops. The cost of delivery to these farmers would total $5,200 per acre. The farmers would only have to pay back $300 (six percent) of the capital costs of providing the water. Add the costs of subsidized electricity for the water pumps and loss of public power revenue from downstream hydropower generation (due to less water coming from the Animas) and you have a monster of a liability. BuRec admits that even if the project were built for free, the costs would exceed the benefits because of operating costs and the effects on downstream water users.

Not to be outdone in waste and uselessness, the Army Corps of Engineers has an impressive lineup of projects screaming for de-authorization. The Mississippi River Gulf Outlet (MRGO) and the Channel to Red Bluff are two examples of projects that were billed as economic winners, but cost taxpayers plenty of money.

The MRGO project was completed 30 years ago to provide a shortcut to vessels travelling from the Gulf of Mexico to the port of New Orleans. The promised economic development along the 76 mile channel in poverty-stricken St. Bernard Parish has yet to materialize. What the MRGO has delivered is an $8-plus million yearly maintenance plan for commercial and recreational waterborne traffic. The nearly $1 billion price tag for the less than two large container ships a day that use the channel is baffling, especially considering that the channel only shaved 37 miles off the original route.

Worse, the MRGO has created numerous environmental problems. The rate of bank erosion is estimated at 15 feet per year. The increased salinity of the water is wiping out the brackish marshes and cypress forests - over 4,200 acres thus far - beyond the 27,000 acres of land lost during construction. Erosion threatens to break through into Lake Borgne and harm the oyster and marine fisheries. The Corps has estimated that in order to address some of the worst erosion problems it would cost $1.13-$3.19 million per mile.

The Channel to Red Bluff, Texas, Riverine Disposal Plan project is another example of the disconnect between market reality and bureaucratic planning. The channel is located along the Lavaca River, north of Corpus Christi. The 20-mile channel was completed 30 years ago in the hopes of luring industry and development to the area. In fact, Raymond Butler, Vice President of Operations of Dixie Carriers, Inc., a barge company, stated in 1993 that the channel was "unusable by any form of commercial barge traffic." The Texas Parks and Wildlife Department insists that besides sport and recreational interests, they were "not aware of a single user of this Federal navigational channel." Yet periodic dredging costing millions of dollars continues.

Federal fervor for new water projects is slowing. Money is shifting to smaller projects, operation and maintenance, and environmental enhancement projects. But fewer big water projects does not equate to a slimmer Corps. In what may indicate a gigantic redirection of the Corps' jurisdiction and expansion in resources, the Corps is subsidizing water projects traditionally funded and administered at the local level.

One project billed as a "pilot program" for the Corps by Congressman Bud Shuster (R-PA) started out with a $17 million authorization in 1992. The funds were for "design and construction assistance for water related environmental infrastructure and resource protection and development" including "projects for waste water treatment and related facilities, water supply, storage, treatment, and distribution facilities, and surface water resource protection and development." What does this mean? The money was used to build sewer lines to housing projects.

During the short life of this program, its paltry $17 million grew to $50 million in the fiscal year 1996 (FY96), and $80 million in FY97. Similar "pilot programs" totaling $67.5 million are authorized in Kentucky, West Virginia, and New York, as well as in 13 additional counties in Pennsylvania.

Stopping the flood of wasteful water spending is long overdue. A sensible first step might be to get the Corps and BuRec out of the project funding and building business. If industry or environmentalists insist on a project, allow them to build it, sans subsidies. This would have tanked most past projects meant to aid industry and irrigators since so many are financial losers. In the brave new world of no subsidies, industry would abandon unprofitable routes or suffer the consequences.


   


 

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