Lower Snake River Dam Bypass Economic Impact Q & A

Tue, 11/02/1999

Lower Snake River Dam Bypass Economic Impact Q & A

Lower Snake River Dam Bypass Economic Impact Q & A


11/3/1999 --  --  Q. What's the bottom line?

The study conducted by the U.S. Army Corps of Engineers' Drawdown Regional Economic Workgroup (DREW) concludes that bypassing the four Lower Snake dams would create at least 4,700 long-term and over 24,000 short-term jobs (short-term being the nine-year construction phase), meanwhile eliminating about 6,200 long-term jobs. However, DREW's study failed to incorporate a number of key economic factors - including benefits to area tribes, commercial fishing, recreation and quality of life, as well as the elimination some $10 million in taxpayer-funded subsidies paid annually to dam beneficiaries - all of which make the positive economic and employment impacts far higher than DREW's predictions. The ECONorthwest study discusses those and other impacts DREW missed, and provides a complete, integrated regional picture of the impacts of the bypass. Their results indicate that the bypass will generate large and widespread positive economic and employment impacts, and that the Pacific Northwest economy will actually benefit in the long run by removing the four Lower Snake dams.

Q: What will happen to the local economies?

The majority of businesses, workers, families, and communities will not be adversely affected. In fact, many local retailers and other businesses will see increased revenues resulting from bypass construction over the nine-year construction period. Some retailers will also see significant increases in sales over a larger period of time. Over the long term, local economies will become less dependent on industries that are currently dwindling, allowing them to grow at a rate similar to national trends. Additionally, a free-flowing Lower Snake River will provide a massive boost to area economies through improvements in quality of life, recreation, tourism, transportation, services and other industries. Economists have long maintained that a key factor in attracting high-level, higher-paying industries is the natural environment surrounding an area and the quality-of-life opportunities it offers. An undammed Lower Snake River would be hard to beat.

Q: Won't thousands of workers in local industries supported by the dams lose their jobs if the dams are bypassed?

There is no question that bypassing the dams will displace some workers. There is also no question that the evolving economy will displace many of these workers regardless of what happens to the dams. Resource-intensive industries supported by the dams have not protected their workers from shrinking job opportunities. According to DREW, bypassing the dams will result in job losses. ECONorthwest's study finds that DREW overestimates the number of jobs negatively affected. As important, however, ECONorthwest finds that DREW underestimates the number of jobs that will be created by the bypass. ECONorthwest's study also describes ways to help those negatively affected by the bypass through various training and job-assistance programs.

Q: Won't the region experience skyrocketing utility rates when it loses the dams?

No. The four dams on the lower Snake River supply only 3.5 percent of the electric resources in the Pacific Northwest. Currently, the region enjoys some of the cheapest electric power in the nation. DREW estimates the bypass will cause an average monthly increase between $1.07 and $5.30 per household for only those households that currently get power from these dams. Customers of utilities purchasing no power from the Bonneville Power Administration - about 60 percent of the region - would see little or no change in rates resulting from bypass. But even for those ratepayers seeing increases, Northwest power rates would remain among the nation's lowest. For those on fixed incomes and irrigated agricultural customers, affordable steps can be taken to offset the increased electricity costs.

Q: Who will pay for the bypass?

Currently, hydroelectric rate-payers are paying for 90 percent of the $479 million outstanding debt owed to the U.S. Treasury on the four Lower Snake dams, with U.S. taxpayers paying the remaining 10 percent. Congress could apply costs of the bypass on the same scale, or it could apply the costs to U.S. taxpayers as a whole. The elimination of the annual $10 million in taxpayer-paid subsidies to dam beneficiaries would also lighten the burden significantly. It is important to note that the extinction of Snake River spring and summer chinook and many other stocks of endangered salmon in the region would open U.S. taxpayers to lawsuits in the billions of dollars from Indian tribes guaranteed fishing rights by court-tested treaties. A study commissioned by Trout Unlimited, released in July, found that extinction of Snake River spring and summer chinook could come as soon as 2017, unless remedial actions are taken soon.

Q: Won't hundreds of irrigated farms disappear?

No. Bypassing these dams could mean loss of irrigation water to 13 farming operations covering 37,000 acres. DREW should explore the feasibility of addressing any negative impacts on those operations resulting from dam bypass. Options may include investments in new irrigation infrastructure, low-cost loans to improve existing groundwater access, modification of irrigation practices, altered crop selection, or buying farms outright.

Q: What will happen to the Port of Lewiston, Idaho?

While some firms and workers will be adversely affected as the barge terminus shifts from Lewiston to the Tri-Cities, most should face minimal impacts. Decreases in barge traffic on the lower Snake River brought about through bypassing the dams will result in increases in traffic - and revenue - elsewhere. Tax credits and other incentives could be provided to industries and workers choosing to relocate to Tri-Cities. Workers in Lewiston and throughout the Lower Snake region will benefit from thousands of new jobs created by necessary improvements to the transportation infrastructure, as well as the new jobs in other sectors resulting from a free-flowing Lower Snake River.

Q. What is ECONorthwest, and who is Ed Whitelaw?

ECONorthwest is the Pacific Northwest's largest and most respected economic consulting firm. Trout Unlimited and Earthjustice Legal Defense Fund commissioned ECONothwest to conduct this study. Its founder and president, Ed Whitelaw, has been a professor of economics at the University of Oregon since 1967. Mr. Whitelaw specializes in resource and environmental economics, and has testified before administrative, legislative congressional and judicial bodies on a wide variety of economic issues.

His various published analyses and testimony before congressional committees in the early 1990s regarding the regional economic impacts of Endangered Species Act protection of the northern spotted owl proved accurate, in that the widely predicted economic collapse of the region did not, in fact, result. Despite an overall reduction of Pacific Northwest timber harvests of 47 percent between 1988 and 1996, overall employment in the region rose 27 percent.

Q. Senator Slade Gorton (R-WA) has referred to another study showing Lower Snake River dam bypass is feasible and affordable as " . . . more voodoo economics from another D.C.-based special interest group which takes great pleasure in telling the people and families of the Northwest how to live their lives." Is that what he'll say about this study?

More than likely. But the fact is that this study is a Northwest study conducted by an Oregon firm (ECONorthwest), authored by a University of Oregon professor (Ed Whitelaw) and co-sponsored in part by Trout Unlimited which has over 8,000 Pacific Northwest members and EarthJustice Legal Defense Fund's Seattle office. And as for Sen. Gorton's claim that outsiders are telling the people of the Northwest how to live their lives, we would point to a recent Oregonian poll of Oregon residents that showed the decline of salmon populations was their #1 environmental concern. The poll also showed that 60 percent of residents believe fish should come before commerce in managing the Columbia River system (which includes the Lower Snake dams), and that 40 percent approve of some dam removal to save fish.

Date: 11/3/1999


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