External Reviews of the Upper Mississippi RiverIllinois Waterway Navigation Feasibility Study

1
External Reviews of the Upper Mississippi
River-Illinois Waterway Navigation Feasibility
Study
2
NAS Traffic Scenarios Too Optimistic

• The traffic scenario that most closely
  replicates the conditions of the past two
  decades is a steady decline over the next few
  decades. (p. 37)
•   The Corps barge traffic scenarios are
  seriously flawed and the Corps should develop
  credible forecasts. (p. 37)
• Scenarios are flawed by the incorporation of
  highly uncertain forecasts for non-grain
  movements. (p. 37)

3
NAS Economic Models Flawed

• Models Tow Cost Model cannot be used to
  accurately estimate the benefits of reducing
  congestion and the Essence model is currently
  incapable of providing a credible estimate of
  the benefits of lock extension (p. 7-8).

4
NAS Exhaust Congestion Management

• Implementing some nonstructural measures for
  managing waterway congestion would decrease
  congestion, lowering shipping costs, and using
  the existing waterway more efficiently. (p. 45)
• Because the costs of implementing nonstructural
  measures are small, and because some have
  positive net benefits, implementation of these
  measures should be of the highest priority. (p.
  45)
• The Failure to consider an evaluate . . .
  potentially beneficial nonstructural measures for
  better managing waterway traffic undermines the
  conclusion and recommendations regarding proposed
  structural improvements. (p. 45)

5
NAS Rehabilitation Completed

• Major rehabilitation has been completed on 21
  locks in the last decade (p.33).
• the committee found no evidence that the
  navigation system as a whole is deteriorating, or
  that capacity is declining over time. (p.33)
• The life of a lock and dam can be extended for 50
  years with periodic rehabilitation. (p. 33)

6
NAS Conclusions

•   The economic feasibility for any of the
  navigation alternatives has therefore not been
  demonstrated. (p. 8)     
• The economic justification of proposed lock
  extensions on the UMR-IWW has not been
  established. (p. 56)
• Grain shipment scenarios, taken together, appear
  to be biased in the direction of future growth
  (p. 56)

7
Congressional Research Service

• Agriculture as a Source of Barge Demand on the
  Upper Mississippi and Illinois Rivers Background
  and Issue (May 2004)

8
CRS Traffic Trends
9
CRSDomestic Demand Growing

• Farmers face strong demand from domestic users,
  including livestock, food processing and ethanol.
  (p. 12 and Fig. 5)
• Strong growth in domestic use limits growth in
  exportable supplies (p. 13).
• Shifts in international demand, increasing
  competition from South America, trade agreements
  and disputes have changed routes to export
  markets (p. 13)

10
CRSNAFTA Exports Growing

• Japan, South Korea and Taiwan increase beef
  imports, reduce corn imports.(p. 14)
• NAFTA dramatically expands rail shipments to
  Canada and Mexico (p. 16)
• Corn exports to Mexico have more than doubled (p.
  16), and rails share of growth shipments to
  Mexico has doubled (p. 17)
• Canada and Mexico accounted for 19 of corn
  exports between 2000 and 2003, up from 6 between
  1989 and 1993. (p. 17)

11
CRS Rail to NW Growing

• Race to Asia Overland routes to major west coast
  ports are increasingly more attractive than
  exports via the Mississippi. (p 17)
• Growth in Chinese soybean demand has spurred the
  growth of rail shipments from the Northern Plains
  to the Pacific Northwest. (p. 17)
• Genetic advances and 100-car shuttle trains to
  PNW (p. 18)

12
CRS Farm Growth Rate Projections (Table 4)
13
CRS Conclusions

• There appears to be substantial potential for
  future agriculture-related barge demand to fall
  far short of investment proponents expectation.
  (p. 25) (emphasis added).

14
CRS Conclusions

• The trend of the past five years suggests that
  domestic consumption, driven by growth in meat
  and dairy products, as well as increasing ethanol
  production, will continue to capture an important
  share of total use. The introduction of a
  renewable fuels standard, as proposed in pending
  energy legislation, could accelerate this
  process. (p. 24)

15
CRS Conclusions

• Growing trade with neighboring NAFTA partners
  and longer-term prospects for increased trade
  with East Asia suggest that alternative trade
  routes such as rail to Pacific Northwest ports,
  or rail and/or truck to Canada and Mexico are
  likely to garner an important share of future US
  corn exports. (p. 24)