Mr. Chairman, we commend you for calling this hearing on the Army Corps of Engineers' civil works program and, more particularly, whether it has sufficient funding and the high-level public policy priority it needs and deserves to respond to pressing navigational and other water resources needs. Since colonial times, waterborne commerce has stimulated the economic growth and vitality of this great Nation. Inland waterways foster trade and commerce within our borders, and the coastal and Great Lakes ports are America's gateways to the global marketplace. A modern, world-class, well-maintained port and waterways system is essential to the United States continuing its role as a world leader in trade and, even more importantly, in maintaining our economic competitiveness and national security.
The ports and waterways infrastructure is vital to our Nation's economy, environment, and quality of life. Waterways provide the most inexpensive, energy-efficient mode of transportation, and they are the lifelines to foreign markets. As the importance of international trade grows, so does the value of waterborne commerce to our country and its future. This is the motivation for the U.S. Department of Transportation's far-sighted "marine transportation system" initiative that pulls 17 Federal agencies and 31 waterway-related organizations in the private sector together with the objective of transforming the U.S. marine transportation system into "the world's most technologically advanced, safe, secure, efficient, effective, accessible, globally competitive, dynamic and environmentally responsible system for moving goods and people." The Army Corps of Engineers' central mission of maintaining Federal shallow- and deep-draft navigational channels is critical to our ability to meet DOT's overall goal.
In my testimony today, I will discuss the following principal points:
-- The importance of the navigational mission of the Army Corps of Engineers to the national well-being, and the relevance of investments in the ports and waterways infrastructure to today's public policy objectives.
-- The critical need to address the Nation's huge backlog of Congressionally authorized water resources projects and to reverse the growing volume of deferred maintenance which threatens the integrity of numerous projects.
-- The urgency of assuring adequate funding for the navigation program despite so many competing demands within the civil works budget for new and perhaps deserving missions, which threaten essential investment in ports and waterways infrastructure.
The Importance of the Navigational Mission of the Army Corps of Engineers
Improving and maintaining navigational channels and waterways is one of the oldest programs of the United States government, starting in 1789 with the construction of lighthouses to guide sailing vessels into safe harbors. In 1824, the Corps of Engineers was authorized to begin clearing snags to facilitate navigation on the Ohio and Mississippi Rivers. Following World War I and for the next 30 years, the Federal government itself operated a demonstration bargeline on the inland waterways system to encourage efficient waterborne commerce. At present, the Corps of Engineers maintains 12,000 miles of mainstem inland waterways, 627 shallow-draft ports and 299 deep-draft ports. The resulting transportation system safely and efficiently handles more than 2.34 billion tons of domestic and foreign commerce annually, almost equally divided between the shallow- and deep-draft segments.
Foreign trade is an increasingly significant part of the U.S. economy, currently accounting for over 30 percent of our Gross Domestic product. Our exports and imports are projected to increase in value from $664 billion in 1998 to $1.6 trillion in 2010. In fact, the volume of cargo is expected to double over the next 20 years. More than 13.1 million U.S. jobs now depend on waterborne commerce and the number is expected to grow as world trade increases. Trade pacts with other countries could escalate this intense exchange of commerce. Currently, more than 95 percent of U.S. overseas trade by volume passes through U.S. ports. With the huge increases in trade expected in the next few years, our navigation infrastructure must be in place, in top-notch shape, and able to cope with soaring demands.
Our water highways are national assets that serve a broad range of economic and strategic interests. The navigation system links countless communities throughout the Nation to the world marketplace, enabling us to create export opportunities for many small businesses as well as for the products of our mills, mines, forests and farms. Efficient ports and waterways also allow the delivery of imported goods more inexpensively to consumers across the Nation. However, the benefits of increased international trade will be realized only if we continue to maintain and modernize the navigation infrastructure.
In addition, the waterways play an increasingly critical role in our Nation's defense. That role was never more apparent that during the loadouts of military cargo and personnel during Operation Desert Shield/Desert Storm. The huge build-up of U.S. forces in and around the Persian Gulf would have been impossible without the up-to-date facilities and strong support afforded by America's ports. More than 50 ports have agreements with the Federal government to provide ready access for national emergency purposes. With the ever-present military threats about the globe, the U.S. military depends on our ports as bases of operations to ensure that our men and women serving overseas are properly supplied.
Ports and inland waterways serve broad multi-state needs. The foreign trade activities of each state are supported by a variety of ports both within and, more often, outside the state. On average, each state relies on between 13 to 15 ports to handle 95 percent of its imports and exports. The goods from 27 states leave the country through the ports in Louisiana alone. Mid-western grain supplies the Pacific rim market through ports in the Pacific Northwest. Imported crude oil refined in New Jersey and Pennsylvania reaches consumers on the entire East Coast, from Maine to Florida. Great Lakes ports supply steel and other products to Midwestern industrial centers. Ports on the West Coast handle goods such as cars, computers and clothing, which are destined for consumers throughout the country, including Rocky Mountain and Desert Southwest states not generally associated with the water transportation system.
Economic Benefits of the Inland Waterways System
The inland system of navigable rivers and waterways helps to drive American dominance of the global economy of the 21st Century. Almost every conceivable commodity goes to market or reaches consumers along the extensive inland waterway network:
-- Farmers from the Canadian border of Minnesota to the Mississippi Delta rely on the Mississippi River system to get their corn, wheat and soybeans to feed lots, processing plants and store shelves, both here and abroad. A whopping 56 percent of U.S. grain exports go through the Port of New Orleans and neighboring Lower Mississippi River ports each year. That means money in the pockets of farm families the length and breadth of the Mississippi River and its tributaries. And this also explains why Louisiana ports are the state's most important economic resource.
-- The Ohio River is a "kilowatt highway." The quickest and most cost-effective way to move coal from the mines to a power plant's boilers is by river barge. It's little wonder that coal accounts for 58 percent of the total traffic on the Ohio River system and is critical to the economy of the Ohio Valley and the Nation as a whole. Without the electric power reserves of the Ohio Valley, America would see its economic expansion short-circuited.
-- The Nation's freight transportation network relies heavily on the inland waterways. Petroleum products make up 20 percent of all the commodities moving on the rivers, some 125 million tons of crude oil, diesel fuel, JP4 jet fuel, gasoline, heavy fuel oils and asphalt. No other mode is as efficient in moving massive quantities of fuels, farm crops, forestry products, industrial chemicals, and manufactured goods. True, barges are slow but they are very efficient, particularly in the movement of heavy-loading and/or price-sensitive commodities.
Environmental Benefits of Waterways Transportation
Waterways efficiently convey large volumes of bulk commodities over long distances with minimal disruption to the environment. Waterways in the United States, including the Great Lakes, move about 16 percent of all intercity freight. Because of the buoyancy of water itself, far less fuel is required to transport a ton of waterborne commerce. Typically, one gallon of fuel can move one ton of cargo approximately 514 miles by barge, equivalent to the distance from Pittsburgh to Louisville. That same one gallon of fuel will move cargo only::
-- 59 miles by truck, equivalent to the distance from Washington, D.C., to the Delmarva Peninsula, or
-- 202 miles by rail, equivalent to the distance from Toledo to Cincinnati.
The fuel efficiency of waterborne transport means nearly 10 times less emissions than if that same cargo were carried by truck, and two-and-a-half times fewer emissions than if the cargo were moved by rail. Waterways transportation means cleaner air for all Americans.
Safety benefits. Highway safety is of increasing concern to a growing number of Americans. Every year, hundreds of motorists are killed in accidents at unguarded rail crossings. More thousands are killed or injured in accidents involving passenger vehicles and long-haul semi-trailer trucks. Millions of man-hours are lost each year as motorists sit on jammed Interstate highways backed up by semi-trailer rollovers, collisions and other accidents.
The toll in deaths, injuries and lost productivity would be exponentially greater were it not for the Nation's inland waterway system. One 1,500-ton barge can carry 52,500 bushels of grain or 433,000 gallons of petroleum products. That's equivalent to:
-- 15 jumbo rail hoppers, or
-- 57 semi-trailer trucks.
The scope of waterways' contributions to reducing congestion on the Nation's highways and rail networks is even more evident when the large carrying capacity of barge tows is taken into account. Each 15-barge tow, which is typical on the Upper Mississippi River, is approximately 1/4 mile in length and replaces:
-- 225 jumbo rail hoppers in 2-1/4 unit trains stretching 2-3/4 miles in length, or
-- 879 semi-trailer trucks. Assuming 150 feet between trucks, it would take a nearly 35-mile-long convoy of trucks, stretching in a solid line from Washington, D.C., to Baltimore, to haul the commodities carried by one 15-barge tow.
Waterways help reduce traffic congestion and contribute to highway safety, benefitting every American motorist.
Quality of life. Lastly, but not insignificantly, waterways serve to enhance America's quality of life. The construction of locks, dams and impoundments on the river system in the first three-quarters of the 20th Century was driven as much by flood control as by navigation. The floods that ravaged the Midwest in 1993 and North Dakota's Red River just three years ago were a frighteningly common occurrence on the Nation's rivers in the early part of this century. Hundreds of lives were lost, hundreds of thousands left homeless, and millions of dollars in property damage were inflicted in the floods of:
-- 1913 on the Ohio and its tributaries.
-- 1927 on the Lower Mississippi.
-- 1937 on the main stem of the Ohio.
-- 1943 on the Missouri and its tributaries.
-- 1951 on the main stem of the Missouri.
The construction of locks and dams created a reservoir system which became a mecca for recreational boating and sport-fishing throughout America's river valleys. Flood protection allowed industries to locate in interior regions, and the availability of waterway transportation allowed these plants to obtain their raw materials from much more distant locations and to reach more far-flung markets than would otherwise have been possible. This process allowed for the dispersal of industries away from fragile, overcrowded coastal regions and thus help revive the economies of thousands of inland cities and towns. The result is an improved quality of life for millions of Americans.
Inadequate Funding Leading to Intolerable Civil Works Backlog
In terms of real dollars, the amount of funding provided for the Corps of Engineers' civil works mission has declined dramatically in recent years. There was very little change, in fact, from the funding level in FY 1994 to that in FY 2000. In FY 1994, $3.97 billion was appropriated for civil works. By FY 2000, the total had increased to $4.14 billion a growth of only $170 million in real dollars. When you consider inflation, plus the transfer of the $140 million-a-year Formerly Utilized Sites (FUSRAP) program from the Department of Energy to the Corps of Engineers, the amount of funding available for civil works has dropped substantially.
In comparing funding for traditional Corps missions, such as the construction-general account, there is relatively no change between FY 1994 and FY 2000. In FY 1994, $1.38 billion was appropriated for construction-general as compared with $1.4 billion in FY 2000. The President's budget requests in those years are, unfortunately, also closely aligned $1.2 billion in FY 1994 and $1.23 billion in FY 2000. As a matter of fact, since 1965, the civil works budget has continually become a smaller percentage of both the total Federal government budget and the Gross Domestic Product. Since 1955, civil works appropriations have not exceeded 1.1 percent of the Federal budget. Currently, it represents about 0.2 percent of all Federal outlays.
These situations have conspired to create an incredible backlog of Corps of Engineers' civil works projects in all categories. The navigation function, particularly on the inland system, has been acutely affected. The disparity between the amount provided for these types of projects and the amount needed to keep the program on track is continuing to grow. According to some estimates, the backlog of construction projects on the Corps of Engineers' plate amounts to at least $27 billion, not counting those authorized in the 1999 Water Resources Development Act (WRDA). In addition, deferred maintenance of inland navigation projects is approaching the half-billion dollar mark, increasing by some $100 million or more annually.
All the while, the locks and dams and other capital stock are aging and deteriorating. Forty percent of all the lock chambers on the fuel-taxed inland waterways system have already exceeded their original 50-year design lives. Construction of new locks with additional capacity and major rehabilitation of older locks is essential to maintain the efficiency of the system. The 1986 WRDA authorized eight new or replacement navigation locks. Through 1998, six additional lock-and-dam replacements and 10 major rehabilitations were authorized. The need for these modernizations is evident. However, the limitation on the civil works program in terms of constant dollars will doubtless lead to further traffic delays and increased expenditures.
Strengthening the Federal Partnership
Ports and waterways rely on the Army Corps of Engineers to operate and maintain the system to facilitate trade and commerce, maintain U.S. competitiveness, and augment national defense. The Corps of Engineers is the only agency which has the expertise to assess and address current and future infrastructure needs. Through a fuel tax, bargelines pay one-half of the cost of constructing new or replacement locks and of undertaking major rehabilitations. To improve deep-draft channels, ports must enter into specified cost-sharing arrangements. So the navigation program is really a Federal-state-private sector partnership. Because of this partner-ship, the Corps of Engineers must be diligent in improving the timeliness of its project planning and decision-making processes so that we do not fall further behind in meeting the rapidly mounting navigation infrastructure needs.
Over the years, the Corps of Engineers has been directed to undertake more and more missions, including environmental restoration as well as FUSRAP. Pending proposals would thrust the Corps more directly into such areas as water supply, wastewater infrastructure, brownfields, etc. All are worthy programs, and the Corps would seem to be ably equipped to tackle these new assignments. However, we are concerned that these expansions may come at the expense of traditional Corps missions, such as navigation.
Environmental restoration is a rapidly growing program, but it is the responsibility of several Federal agencies, many of which have this goal as a central mission. We encourage the Committee to investigate methods of funding the Corps of Engineers' work in these new areas, as important and popular as they may be, in ways which do not take funds away the traditional missions whose benefits can be measured in dollars-and-cents returns to the American economy. For example, in the Superfund program, funding for the Corps of Engineers' work is transferred from the Environmental Protection Agency's budget. By using more pass-throughs, Congress may eliminate some of the pressures on the Corps of Engineers' budget and ensure that funding to pay for environmental restoration and other new initiatives does not reduce funds available for such vitally significant endeavors as the navigation program.
Addressing Navigation Needs of the 21st Century
The Federal government, through the Army Corps of Engineers, provides only in-channel navigation improvements. Port authorities along the coasts, the Great Lakes and inland waterways spend billions of public non-Federal dollars in providing and maintaining the landside infrastructure that allows goods to be transferred between water and land modes. It is this Federal/non-Federal partnership which makes the navigation system work. The functions of the Corps of Engineers are two-fold managing maintenance and providing improvements in Federal navigation channels that support U.S. domestic and international trade and enhance national defense.
In spite of the huge construction backlog, new projects are needed to allow our ports to continue to dock new, larger and deeper-draft containerships and other vessels which are joining the world merchant fleet. On the inland waterways system, several needed lock replacements are pending on the Ohio River system, and agricultural producers in the Upper Midwest must have efficient waterway access to seaports to compete with South America which is pouring billions into its transportation infrastructure. American farmers' principal navigation artery, the Upper Mississippi Waterway, is over 60 years old but its modernization is now mired in controversy over its economic feasibility.
Predicting how much traffic will move on a waterway over the next half-century is a rough guess at best. In many cases, the Corps of Engineers' estimates have been overly conservative. Before its construction, for instance, the agency predicted the Gulf Intracoastal Waterway would move 5 to 7 million tons annually, but it actually carried 113.6 million tons in 1998! Despite reports to the contrary, the Red River Waterway's tonnage is ahead of official projections, and just this month a 64-barge convoy moved the Indiana National Guard's military equipment half-way up the Red River for training exercises at Fort Polk, Louisiana.
With regard to the Upper Mississippi modernization project, let me quote from the venerable Prairie Farmer: "The Federal government, through its current farm policy, expects American farmers to get more income from the global marketplace. Our competitiveness is linked to our ability to efficiently transport products from farm to market, wherever that market may be. To maintain this advantage, we must have viable, efficient transportation systems. Currently, the per-ton cost for transporting grain in the United States is lower than in other countries. But we'll lose that advantage as other countries gain the ability to transport at lower costs. We have allowed our river transportation infrastructure to deteriorate, jeopardizing our position in world markets. And despite the recent scandal at the Corps, the time for study is over. We must push forward on river infrastructure improvements -- now."
Thank you for the opportunity to testify today. To ensure that our Nation maintains its international competitiveness, it is presently more important than ever to commit the necessary funding to provide a world-class water transportation system, to consider this investment as a high-priority public policy objective vital to America's national growth and prosperity, and to ensure that navigation continues to be a central mission of the Army Corps of Engineers.
Thank you.