Regional Economy

All about the Regional Economy follows or skip down to re-imagining the future.

It has been over 40 years since the last of the four lower Snake River dams was completed and the promise of an “Inland Empire” was to be finally realized.

This dream has never come to fruition.

The Army Corps flooded 20,000 acres of a once vibrant agricultural valley, flush with vineyards, orchards, villages, and tons of salmon to support tribes and farmers alike, per capita income in the reservoir area has been on the decline since 1980, four years after the construction camp closed. The number of small and mid-size farms capable of supporting a household also continues to decline. Small towns never boomed beyond the construction heydays, many now suffering from empty properties and youth flight to the cities. Lewiston, Idaho, stuck behind high levees prone to over-topping, has experienced growth rates less than half the rest of Idaho. The promise of significant savings for farmers shipping wheat by subsidized barging on the lower Snake never materialized. The publicly owned Port of Lewiston, in spite of significant taxpayer investments, is virtually out of the barging business. In short, in-spite of all the rosy projections, nothing but economic morbidity has occurred in this part of the region.

recreation

In the years before the lower Snake River was stilled by dams, people congregated on its beaches, fished from riverbanks, and camped and hunted in the river bottom. They rafted more than 50 rapids that once surged at up to 180,000 cubic feet per second through the remote, arid canyon–rapids with names like Log Cabin, Little Pine Tree and Haunted House.

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When all four dams on the lower Snake River were completed in 1975, all of the free-flowing, river-related recreational benefits were gone and replaced with big, silent reservoirs with sterile shorelines. What was once a canyon where people floated, hiked, camped and hunted was transformed into a deserted place where few ever bother to go. What was once a booming recreation economy in towns like Lewiston, Clarkston, Riggins, Salmon and Stanley was transformed into a taxpayer-subsidized system of dams and locks of little–and decreasing–interest even to the farmers who use it. 

 

salmon fishing

In 2001, the Idaho Department of Fish and Game calculated the direct spending benefit of its constituents who bought salmon and steelhead tags in a rare year of decent salmon returns to the state: $46 million, with $10 million of that in the rural riverside town of Riggins alone.

Other studies place the figures higher still. An April 2003 study by Boise-based Ben Johnson Associates, Inc. places direct and indirect angler spending in Idaho during the 2001 fishing season at $89.9 million. The same economic think tank did a follow-up report in 2005 to estimate the potential economic impact of restored salmon and steelhead runs throughout Idaho and determined direct and indirect angler spending could generate $544 million annually.

By contrast, the 1999 Corps report valued “general recreation” on a free-flowing Snake at a paltry $5.9 million to $31 million. Improved fishing, both in the Snake and its hundreds of miles of wilderness tributaries, was to be worth a maximum of $4.5 million.

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This economic contribution will support and generate jobs, tax revenue, and boost incomes. The economic models clearly show that this economic activity will contribute to nearly 150 industry sectors, many of which are not directly related to the recreation industry. What is not captured by this analysis are the up-river and down-river economic effects of a free-flowing river.

A free-flowing Lower Snake River would increase tourism in Lewiston, making it a more attractive city to live in as incomes grow.

Should a greater number of salmon return to spawn upstream, Idaho would likely have increased opportunities for recreational fishing.

Down-river, the effects may be even greater. Wildlife viewing generated the most consumer expenditures in Washington State in 2014. Whale watching, centered on the Southern Resident Killer Whales, provides an immense value to the state through wildlife viewing opportunities. The Southern Resident Orcas rely on salmon for food. While it may be difficult to predict the mortality of these whales over time if wild and hatchery Snake Chinook fall below current levels, the orcas’ diminishing numbers will certainly have an impact on viewership and economic benefits that are now running at about $60 million per year in Washington. Given the status of the Snake River stocks outlined in the Salmon Update/Reevaluation White Paper, a crashing population of wild/natural/hatchery Chinook could lead to starvation given that 70-80% of the Southern Residents’ diet is Chinook. It should also be noted that the [2015] birth of nine calves would require at least 30,000 more Chinook per year that, under the current system, must come from commercial or sport fisheries.

Breaching the dams will increase recreation expenditures in the six counties adjacent to the lower Snake River by at least $400 million annually. This will support between 3,000 and 4,000 jobs in the surrounding counties.

Reference Regional Economic Dev Summary, Reevaluation, Lower Snake Dams Earth Economics 2.22.2016 

 

irrigation

The ’02 FR/EIS provided an estimate of $291 million to modify the irrigation system as a result of draw-down of Ice Harbor pool.  This was twice the assessed value of the farmland.  As such, the conclusion was that these 14 farmers (roughly) would be bought out, no doubt leading to their antagonistic view toward breaching.  However, it was known at the time the $291 million was very speculative and based on faulty assumptions, but again, corrections were not made for the lack of more study funds and time.   In recent months water supply engineers have recalculated the cost of pump and pipe modifications and found that in current year dollars it would cost $19 million.  Because available pipe and pump sizes inevitably lead to larger system capacities, these modifications will allow for the irrigation of an additional 5,000 to 7,000 acres, further driving up farm employment and income not accounted for in the original 02 FE/EIS.  The $19 million should be part of the breach cost.

navigation

The economic effects for shifting to rail was assumed to cost $27 million on annual average basis if commodities were shipped by rail.  However, the 2002 FFR/EIS itself showed sufficient evidence to conclude virtually no economic effect by shifting to rail, yet this conclusion was not drawn due to a lack of funds to recalculate the BCR based on input from navigation economists contracted and to field-verify the original calculations generated via models.  Since then (and largely driven by the fact that in most cases there was little difference between barge and rail rates), several significant strides were taken that have already shifted all petroleum shipments and 30-40% of the grain to rail shipments.  Farmer Co-ops built two 100-car unit train grain loaders in the lower Snake Region and are building a third only a few miles from the river; the rail lines along the lower Snake River have been upgraded to class 1 and 2 standards allowing more economical shipments from Lewiston to barge loading facilities on the Columbia or grain terminals in Portland Oregon; the State of Washington’s “Grain Train” has grown  from a small shuttle service of 30 cars to over 110 and have upgraded most of their rail lines.  

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It is noteworthy that this shuttle service delivers most of the grain to a loading facility built after 2002 on the Columbia River that loads it onto barges.  Because pro-dam advocates often state, albeit erroneously, that barge traffic has not declined on the Columbia/Snake system, this shift from the lower Snake to the Columbia gets ignored.  From an economic standpoint, the Snake projects are separate from the Columbia.  Similarly, petroleum shipments through the lower Snake navigation leg have ceased even though there is a viable and growing terminal at river mile 1 on the lower Snake, but it is not affected by breaching.  These improvements have all been market driven and show that the conclusions drawn in the 2001 FR/EIS were wrong, even though data in the report showed otherwise.  This analysis has all been updated by my work (Jim Waddell) and that of EarthEconomics.

There are however, further improvements which could be made to expedite the transfer of the remaining grain shipments to rail.  These are: a $29 million repair/upgrade of the rail line between Dayton and Prescot, WA, owned by the Port of Columbia; rail siding improvements and handling facilities at grain elevators and perhaps a unit train loading facility along this line, $5-37 million; upgrade of 2-miles of rail line in Idaho to the Lewis and Clark Grain Terminal and expansion of siding and handling facilities, $5-32 million.  Total improvements range from $40 to $98 million.  Now that these mitigation cost are known, they should be included in the total cost of breaching.

 

digging into the numbers

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In the final draft of its 2002 study on breaching the four lower Snake River dams, the U.S. Army Corps of Engineers assigned to a dam breaching scenario a net recreation benefit of $71 million per year. This grossly understated estimate–lower than the Corps’ own contractors determined–was called into question even as the study was published.

As noted in a December 2000 Washington Post series examining corrupt cost benefit analyses performed by the Corps, the very economists hired for the study had actually estimated recreation benefits would range from $82 million to $509 million a year, with a midpoint of $196 million per year.

So where did the Corps’ $71 million figure come from? How could the agency justify such a gross understatement of the economic bounty a free-flowing lower Snake River would provide?

Part of the oversight may have been due to a lack of data, which became available seven years later. In 2006, the Outdoor Industry Association published the first comprehensive valuation of outdoor recreation in the U.S. According to its estimate, this sector of the economy is worth $646 billion annually. Western States’ disproportional share of the total is $256 billion annually, generating $31 billion in taxes and directly employing 2.3 million people.

Other regional and local analyses have followed. The National Park Service estimates non-motorized boating in the Grand Canyon generates $83 million annually and nearly 600 jobs. In 2007, according to the Colorado guides and packers association, river rafting in that state was worth $153 million. In the same year, fishing, jet boating, kayaking and rafting on the remote, 34-mile wilderness segment of the Rogue River in Oregon was worth $30 million.

None of these numbers cited above take into account the enormous economic impact a restored salmon and steelhead fishery would have on the Snake River and communities upstream in Idaho and eastern Oregon.

 

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re-imagining the future

A free-flowing Lower Snake River would increase tourism in Lewiston, making it a more attractive city to live in as incomes grow, increased opportunities for recreational fishing and wildlife viewing. And whale watching, centered on the Southern Resident Killer Whales, will continue to bring immense value to the state through wildlife viewing opportunities.

Returning the Snake to a free flowing river will generate thriving commercial, sport and tribal fisheries and help sustain an ecosystem that depends on salmon. Recreation opportunities will increase dramatically and create jobs that directly benefit local economies. The four lower Snake River dams stand in the way of this future.

There will be increased economic activity within the counties and legislative districts surrounding the Lower Snake River in southeast Washington. The large influx of visitors in Year 1 will have expenditures of $500 million and will generate nearly $400 million in economic contribution.

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Working to breach Lower Snake River dams to save millions of tax dollars annually, bring wealth & jobs to a region and restore salmon runs which will increase prey availability for southern resident orcas.