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Economic and dam related articles

Salmon Recovery Effort in Pacific Slowed
by Politics, Economic Concerns

by Cate Montana
Indian Country - October 20(?), 2000

Environmental issues are big buck issues. And salmon recovery along the Columbia and Snake River basins is no exception.

The House of Representatives, for example, recently approved a bill that would provide up to $600 million over the next three years for salmon recovery in five Western states. Washington, Oregon, Idaho, California and Alaska would each get about $100 million, with about $90 million earmarked for Indian tribes.

And this is only the most recent in a long series of appropriations that will, no doubt, stretch out into the far distant future.

Economics drives politics. As swiftly as a river flows, politics and politicians follow after money. And in case anybody has any doubts about the matter, all they have to do is check out the headlines and political rhetoric over dam breaching on the lower Snake River.

Local, state and national political candidates have made a lot of political hay over the issue, jockeying for endorsements and campaign contributions from special interest organizations.

The Washington Farm Bureau Political Action Committee endorses Republican John Carlson for governor over Democrat Gary Locke because farmers need a governor who will be "more aggressive in protecting their interests when it comes to salmon recovery."

State Rep. Shirley Hankins, R-Richland, speaks out to local Latino farm workers about saving the dams and protecting water rights. Sen. Slade Gorton, R-Washington, while championing a wide variety of salmon recovery projects, has bolstered his campaign figures in eastern Washington as an outspoken opponent of dam breaching. And, as chairman of the Senate Subcommittee on Interior Appropriations, he wields the economic power to back up his politics.

On Sept. 21 Gorton attached an amendment to the 2001 Interior Department budget bill that would have barred federal agencies from spending money next year to study how to breach the lower Snake River dams. Republicans later agreed to drop it when the Clinton administration threatened to veto the budget bill unless the measure was removed.

Gorton said the amendment was necessary because Vice President Al Gore has refused to rule out dam removal if he is elected president.

As for Gore, the closest he will come to making a political commitment to dam breaching are vague statements that avoid using either the words dam or breach. As per his June speech in Richland: "Today, I want you to know that I am deeply committed to saving and restoring the salmon of this region. Extinction is not an option nor is massive economic dislocation. I reject both extremes."

And then there is the strong posturing of Texas Gov. George W. Bush. During a Sept. 25 speech in Spokane, the Republican presidential candidate said removing the dams would threaten the farm economy of eastern Washington, and declared if he is elected president that, "The dams will not be breached."

In a political radio ad running in Eastern Washington, Bush uses even stronger language. One message in part states: "Breaching the dams would be a big mistake. The economy and jobs of much of the Northwest depend on the dams that generate this power."

So far politicians have called dam breaching of the lower four Snake dams everything from an "economic disaster" to a "sledgehammer effect" on the local economy of the Pacific Northwest.

Great political rhetoric. But are these calls-to-arms statements true?

Farmers, barge operators and aluminum workers who stand to lose the most argue breaching will devastate the local economy by dropping reservoirs below the level of irrigation intakes, eliminate cheap transportation for grain, wood chips and other commodities and reduce the supply of cheap electricity.

In January 2000 the U.S. Army Corps of Engineers released its Draft Lower Snake River Juvenile Salmon Migration Feasibility Study/Environmental Impact Statement which, among other things, estimates the economic effects of breaching the Ice Harbor, Lower Monumental, Little Goose and Lower Granite dams.

The corps estimates breaching would create 13,400 to 27,007 short-term jobs during the decade of deconstruction and construction. The biggest long-term job gain is 3,126 jobs from improved recreational tourism and handling opportunities.

The largest long-term losses of jobs would occur in irrigated agriculture 2,256 jobs.

Another 1,193 potential losses would occur operating the dams and lock systems on the lower Snake.

Reduced spending caused by increased electricity rates would potentially cause as many as 2,382 lost jobs.

For the 25 counties in southeastern Washington, northeastern Oregon and central Idaho most severely affected by potential breaching, the corps estimates a net loss of 711 long-term jobs, .020 percent of the employment in these counties.

Robert Whitelaw, founder of ECONorthwest, an economics consulting firm and a professor of economics at the University of Oregon, says that, taking into consideration the 4.8 million workers in the states of Washington, Oregon and Idaho, the net loss of jobs would amount to about 1/50th of a 1 percent of all jobs in the Pacific Northwest.

Of course, if you're the one losing your job it doesn't matter how the figures look in the grander scheme of things. But politicians, if they're going to be elected upon the basis of their knowledge and expertise in areas that affect wide populations, should at least understand the broader picture.

Whitelaw points out that figures for lost jobs presented by the corps are nowhere near the 20,000 jobs already lost in the timber industry in the Pacific Northwest in the past 10 years.

"The Gortons and the like are pandering to a very small constituency of stakeholders in the four dams and a relatively large population of folks who don't have the knowledge of this stuff," Whitelaw says.

"Maybe in another region, who hasn't already gone through something like this, it might be plausible or reasonable that they would get suckered by these kind of arguments. But the Pacific Northwest has been through this before.

"We went through it with WPPS (Washington Public Power Supply System). We went through it in a big way with the spotted owl and none of those prophecies of doom played out. The sky didn't fall in either of those cases. And here we've got some of the same arguments. And certainly some of the same analytical mistakes being made."

Whitelaw says one of the worst mistakes the corps made in its economic impact study was freezing the study to a single point in time 1995. The corps' job loss figures are based on the assumption that for the next 100 years no one who lost his or her job will ever work again, period. The corps study also assumes that agriculture and industry is frozen and will not respond to the situation in any way.

"It's just bizarre," Whitelaw says. "You ought to hear my class when they encounter that. At the least your analytical tools and assumptions shouldn't elicit laughter from undergraduates.

"But even if you put that aside and go back to 1975 and watch the agricultural sector over the last 25 years, it turns out ... that the agricultural sector has undergone four contractions or declines, each of which was larger than what the corps predicts as the maximum loss from breaching the dams."

Whitelaw also takes the corps study to task for exaggerating the costs and underestimating the benefits of dam breaching.

The corps estimated increased electrical rate costs at $271 million per year if the four lower Snake River dams are removed from service. But they neglect to point out the average effect that will have on the average consumer.

Studies conducted for the Seattle City Council, which last month went out on a political limb endorsing breaching, estimate that consumers in the Seattle public utilities district would have to shoulder an extra $1 per month on their electrical bills to compensate should the dams be removed.

"It's really hard to argue that in the Northwest, where we have virtually the lowest electric rates in the country and have this incredible booming economy, that this will somehow hamstring us," Whitelaw says. "Come on guys look at the orders of magnitude here."

In the economic sector most hard hit, farmers, the "orders of magnitude" are not earth shattering but they are deeply emotional.

"Almost everyone born and raised in eastern Washington has a relative who worked on Grand Coolee dam," says Scott Bosse, a fish biologist for Idaho Rivers United. "Eastern Washington was an area of scab lands and sage brush desert before Grand Coolee came online and the irrigation projects came. So for those people the dams were a miracle. They brought life to the desert and they brought jobs to people and electricity.

"They view any attempts to reverse that as sacrilege. ... The Farm Bureau and Slade Gordon, they say this is a dominos effect; first these four and then they're coming after yours. They like to use the argument to fan the flames of fear in farmers."

Ken Casavant, professor of agricultural economics at Washington State University and a former member of the Northwest Power Planning Council, has spent a lot of time studying the potential impact breaching the four Snake dams would have on local farmers.

A current member of an independent economic analysis board for the power counsel and one of the official reviewers for the U.S. Army Corps EIS study, he identifies the average impact per bushel of grain.

If barging on the lower Snake was no longer possible, farmers would have to move their grain via truck to the tri-cities area, or move it to a railhead and ship it from there. The average cost increase would be around 10 cents per bushel. For farmers at long distances from services, the cost could go as high as 25 cents per bushel.

"Out here the average farm, I'm going to say, is 1,500 acres," Casavant says. "Average yield is about 80 bushels to the acre. So that's about 120,000 bushels per year that is produced. So we're looking at $12,000 ... up to $20,000.

"If wheat is selling for $4 to $5 per bushel, you have about half a million dollars coming into that farm." (bluefish notes that current wheat prices are around $2.70 per bushel)

But for farmers, any additional cost is one cost too many. Tribes and environmentalists agree that should the four federal dams be breached, the costs incurred should not be shouldered by the local citizens, and that economic mitigation is a must. Both Whitelaw and Casavant agree that federal appropriations should be used to soften the economic impact of losing federal dams on what are, in essence, federal rivers.

The fact that the corps study did not include mitigation is another bone of contention to economists. As is another "analytical mistake" in the study, underestimating "passive-use" benefits such as having a free-flowing stretch of pristine river and an abundant harvest of salmon every year.

The economic impact of having healthy, spiritually vibrant tribes as a result of a rebound in salmon harvests was barely mentioned in the study. But Whitelaw says economists estimate that such passive-use benefits could add up to additional revenues as high of $2.6 billion.

Are any of these figures touched by politicians racing to the November finish line?

No. Economics may drive politics, but politicians present a very narrow view of the figures when it suits them.

Casavant says, at the very least, he wishes politicians such as Sen. Slade Gorton would make clear what figures they are using. Instead of using the "average impact" figures, politicians have the nasty habit of using the worst-case scenario numbers without mentioning the fact they are using extreme examples that are all out of context with the broader economic picture.

Words like "disaster" and "terrible consequences" fall all too easily onto the ears of voters who don't know the difference.

"I haven't seen any numbers that are totally a disaster yet," Casavant says. "Why do they do that? Because it sells them in the Colfax, Washington, and the small rural towns.

"Folks win elections that way. You know it and I know it."

Cate Montana reports from the Pacific Northwest.
Salmon Recovery Effort in Pacific Slowed by Politics, Economic Concerns
Indian Country, October 20(?), 2000

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