    [House Hearing, 108 Congress]
    [From the U.S. Government Publishing Office]

                                                       S. Hrg. 102-000

       ENDANGERED SPECIES ACT'S IMPACT ON SMALL BUSINESSES AND FARMERS

    =======================================================================

                                 FIELD HEARING

                                   before the

          SUBCOMMITTEE ON RURAL ENTERPRISES, AGRICULTURE, & TECHNOLOGY

                                     of the

                          COMMITTEE ON SMALL BUSINESS
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                   __________

                       WASHINGTON, DC, FEBRUARY 23, 2004

                                   __________

                               Serial No. 108-54

                                   __________

             Printed for the use of the Committee on Small Business

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     house

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    93-892                 WASHINGTON : 2004
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                          COMMITTEE ON SMALL BUSINESS

                     DONALD A. MANZULLO, Illinois, Chairman

    ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
    Chairman                             JUANITA MILLENDER-McDONALD,
    SUE KELLY, New York                    California
    STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
    PATRICK J. TOOMEY, Pennsylvania      FRANK BALLANCE, North Carolina
    JIM DeMINT, South Carolina           ENI FALEOMAVAEGA, American Samoa
    SAM GRAVES, Missouri                 DONNA CHRISTENSEN, Virgin Islands
    EDWARD SCHROCK, Virginia             DANNY DAVIS, Illinois
    TODD AKIN, Missouri                  GRACE NAPOLITANO, California
    SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVEDO-VILA, Puerto Rico
    BILL SHUSTER, Pennsylvania           ED CASE, Hawaii
    MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
    TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
    JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
    JEB BRADLEY, New Hampshire           MICHAEL MICHAUD, Maine
    BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
    CHRIS CHOCOLA, Indiana               BRAD MILLER, North Carolina
    STEVE KING, Iowa                     [VACANCY]
    THADDEUS McCOTTER, Michigan

             J. Matthew Szymanski, Chief of Staff and Chief Counsel

                         Phil Eskeland, Policy Director

                      Michael Day, Minority Staff Director

         SUBCOMMITTEE ON RURAL ENTERPRISES, AGRICULTURE AND TECHNOLOGY

    SAM GRAVES, Missouri, Chairman       FRANK BALLANCE, North Carolina
    BILL SHUSTER, Pennsylvania           DONNA CHRISTENSEN, Virgin Islands
    SUE KELLY, New York                  ED CASE, Hawaii
    SHELLEY MOORE CAPITO, West Virginia  MICHAEL MICHAUD, Maine
    MARILYN MUSGRAVE, Colorado           BRAD MILLER, North Carolina
    PATRICK TOOMEY, Pennsylvania

                       Piper Largent, Professional Staff

                                      (ii)

                                C O N T E N T S

                                  ----------

                                   Witnesses

                                                                       Page
    Hargrave, Ms. Rosemary, Missouri River Management Annual Review
      and Update.....................................................     5
    Hall, Mr. Dale, U.S. Fish and Wildlife Service...................     6
    Wells, Mr. Mike, Missouri Department of Natural Resources........     9
    Keith, Mr. Kevin, Missouri Department of Transportation..........    12
    Hurst, Mr. Blake, Missouri Farm Bureau...........................    25
    DeShon, Mr. Dick, St. Joseph Regional Port Authority.............    29
    Smith, Mr. Chad, Nebraska Chapter of American Rivers.............    30
    Davis, Mr. Paul, Interstate Marine Terminals, Inc................    32
    Hanson, Mr. Bruce, MFA, Inc......................................    34

                                    Appendix

    Opening statements:
        Graves, Hon. Sam.............................................    43
        Blunt, Hon. Roy..............................................    45
        Gibbons, Hon. Jim............................................    47
    Prepared statements:
        Wells, Mr. Mike, Missouri Department of Natural Resources....    49
        Keith, Mr. Kevin, Missouri Department of Transportation......    60
        Davis, Mr. Paul, Interstate Marine Terminals, Inc............    64
        Smith, Mr. Chad, Nebraska Chapter of American Rivers.........    66
        Hanson, Mr. Bruce, MFA, Inc..................................    84
        Hurst, Mr. Blake, Missouri Farm Bureau.......................    86
        Hall, Mr. Dale, U.S. Fish and Wildlife Service...............    89

                                     (iii)

      THE ENDANGERED SPECIES ACT'S IMPACT ON SMALL BUSINESSES AND FARMERS

                                  ----------

                           MONDAY, FEBRUARY 23, 2004

                      House of Representatives,
    Subcommittee on Rural Enterprises, Agriculture, and
                                            Technology,
                                   Committee on Small Business,
                                                       Washington, D.C.
        The Subcommittee met, pursuant to call, at 9:30 a.m., at
    the St. Joseph Riverfront Hotel, 102 South 3rd Street, St.
    Joseph, Missouri, Hon. Sam Graves presiding.
        Present: Representatives Graves, Blunt, and Gibbons.
        Chairman Graves. We'll bring this hearing to order. I want
    to thank everybody for turning out today. I know this is a very
    important issue.
        This is the Subcommittee on Rural Enterprises, Agriculture
    and Technology, the Small Business Committee, and we're going
    to be examining the estimated impact of the Endangered Species
    Act as it's having on small businesses and farmers.
        I'm going to give my opening statement and then turn to
    Representative Blunt and Representative Gibbons to give theirs,
    but I would like to very much thank them for being here. Our
    neighbor to the south, Representative Blunt, is very, very
    interested in this issue. They have a stake in this issue too.
    Representative Jim Gibbons from Nevada has joined us today. He
    is the Vice Chairman of the Resources Committee. They have
    legislative jurisdiction over this particular issue, and I very
    much appreciate both of you being here today.
        When the Endangered Species Act was passed in 1973, there
    were 109 species listed as endangered, such as the bald eagle.
    Today there are over 1,200 species listed as endangered, with
    250 more considered candidates for ESA listing, and another
    4,000 species that are designated as species of concern. I'm
    certain that when legislation was passed 30 years ago, no one
    could have foreseen because of the interior least tern, the
    piping plover, and the pallid sturgeon, the commerce of the
    Missouri River would effectively cease to exist. This will
    cause a major disruption for all of those who depend on the
    river for their livelihood.
        When the U.S. Fish and Wildlife Service came out with their
    December 16, 2003, Biological Opinion, it stated the area trade
    on the river needed a mandated spring rise and split navigation
    season.
        The decision will have a large impact on people and
    businesses that rely on the river for day-to-day operations.
    Annual retail economic benefits from the Missouri River
    commerce are estimated at between $75 and $200 million a year.
    The Army Corps of Engineers estimates economic losses of at
    least $7 million to commercial navigation and train terminals
    as a result of flow decline below minimum navigation service
    levels. Already the prospect of summer lows caused two major
    shippers on the Missouri River to cancel their operation. This
    creates many problems for our farmers that utilize barge
    traffic to ship their goods at the cheapest rate. This
    financial burden is just another problem facing farmers in
    Missouri who continue to face season after season of drought.
    Any additional expenses are detrimental to their survival. The
    farmers themselves are becoming endangered species with only
    two percent of the population taking on this important
    enterprise. Barge traffic along the Missouri River also
    provides a safer and cleaner mode to transport goods. It takes
    the trucks off already beaten roads, reduces congestion, and
    limits the amount of exhaust in our atmosphere. Additionally,
    man-made river flows may increase the risk of flooding or
    create drainage problems along the Missouri River and its
    tributaries.
        Our government should be doing what it can to prevent
    flooding along the river, not exacerbate it. Further inland,
    several main customers, rural and urban, depend on the Missouri
    River to supply their water and electricity in the heat of
    summer and the dead of winter. This is of particular concern
    with summer lows that may adversely affect the ability of
    utilities to meet the electricity needs of their customers
    during critical electrical demands. Still others yet rely on
    the river for the most basic needs of drinking water. Just like
    here in St. Joe.
        In my view the Fish and Wildlife Service has not taken into
    account the very basic negative disruptions the submitted
    biological survey will afflict on people and their lives, as
    well as the local economy. While we should do everything we can
    to protect all of God's creatures, we shouldn't place animals
    or the lives of animals over the lives of human beings.
        (Chairman Graves' statement may be found in the appendix.]
        And now I'm going to turn to Representative Blunt for his
    opening statement.
        Mr. Blunt. Mr. Chairman, thank you for holding this hearing
    and special thanks to our friend, Congressman Gibbons from
    Nevada who came all the way here to talk about this act and the
    impact it's having on our state and share with us his knowledge
    as Vice Chairman of the Resources Committee the impact it has
    had on other places.
        The Endangered Species Act is an example of the danger of
    unintended consequences. What began as a well-intentioned
    effort to protect the environment and our wildlife has had a
    profound impact on business in the State of Missouri and across
    the nation. Since the law's enactment, the list of endangered
    species has grown with each year, yet even in instances where
    the threat of extinction has been removed, it remains very
    difficult to remove a species from the list.
        I'm looking forward to a productive discussion of ways
    Congress can address the effects this law is having on families
    and businesses here on the Missouri River and across the
    country.
        Over-zealous environmental policy or misinterpreted
    environmental regulations can and do profoundly affect
    businesses and jobs at a time when we're working hard to get
    our economy back on track and create a job for every American
    who wants one. It's worth examining what roadblocks the federal
    government has unintentionally created. I think we're here
    today because the ESA needs another look. Chairman Graves has
    called for this hearing because the ESA is now being used to
    disrupt and even prevent commerce along the Missouri River,
    affecting the livelihood of transportation providers, shippers,
    and farmers, as well as the communities that they live in and
    create job opportunities in.
        For example, the Fish and Wildlife Service is recommending
    that the flow of the Missouri River be changed to accommodate
    the habitat of both the piping plover and the pallid sturgeon.
    Such a move will dramatically alter commerce on the Missouri
    River and hurt the hundreds of people who depend on the river
    to make their living.
        We should also strive to strike a delicate balance between
    people and nature. However, to drastically alter the flow of
    the river, increase the possibility of flooding, put many
    companies out of business, cut jobs, and perhaps even create
    electrical power and drinking water shortages doesn't make much
    sense to me.
        I think your efforts, Chairman Graves, and the efforts of
    this staff to seek input and call attention to the problems
    here are well-founded. I'm glad to be able to join you today,
    and thank you for letting me be here. I look forward to the
    testimony of these great panels that you've put together.
        [Representative Blunt's statement may be found in the
    appendix.]
        Chairman Graves. Mr. Gibbons.
        Mr. Gibbons. Well, hopefully they can hear me. First I want
    to thank you, Chairman Graves, for inviting me to attend this
    hearing, and I want to congratulate Missouri. Missouri. I've
    learned how to pronounce it now that I've been here so long.
    Most people don't pronounce Nevada correctly. They say Nevada--
    it's Nevada--but I want to congratulate the people of Missouri
    for electing two wonderful representatives of Congress who
    stand up for the rights of people like you sitting in this
    audience who understand the issues, who are not timid about
    speaking up and trying to set the course straight.
        Although I'm not a member of this Committee, the future of
    the Endangered Species Act, of course, remains at issue for me
    as the Vice Chairman of the Full Resource Committee which
    continues to study the law in an effort to find ways to protect
    both species and the people and their rights.
        Originally this law was well-intended; intended to preserve
    species that were going into extinction, like the grizzly bear
    and the bald eagle. However, after decades of languishing
    without modernization, we have found that now it is used as a
    tool of abuse. A tool by some groups to stop and prohibit both
    people and efforts to have a living or to create a working
    environment that allows for them to succeed.
        The one aspect of the Endangered Species Act that
    especially concerns me is they give the federal government
    carte blanche over private property without the responsibility
    of compensating the owners for either loss or denial of use or
    financial loss as a result of that denial. Now, this is nothing
    more than a governmental taking which is prohibited by the
    Fifth Amendment of the Constitution, and let me explain that
    nearly 80 percent of the listed species depend on private
    property for their habitat.
        If landowners provide suitable habitat for the endangered
    species, they run the risk of their property being subject to
    severe governmental regulations or an outright restriction of
    the use of enjoyment which just recently was determined to be
    an incremental government taking in recent court cases.
    Unfortunately, the interpretation and implementation of the ESA
    has instilled a fear and resentment in law-abiding citizens
    from ever participating in the ESA.
        The endangered species are now seen by most private
    property owners as a burden on them, when they should be
    actually celebrating the fact that there is an endangered
    species there.
        Now, Aldo Leopold, an environmental philosopher, once said,
    and I'll quote: ``Conservation will ultimately boil down to
    rewarding the private landowner who can serve the public
    interest,'' end quote.
        So Ladies and Gentlemen, only when protection of private
    property rights does not conflict with environmental protection
    will we have the best guarantee of environmental protection.
    After all, who can be expected to be a better steward of the
    land than he or she who owns it, and if the Endangered Species
    Act are valuable because--or the endangered species are
    valuable because they are rare, they should be viewed as an
    asset for a landowner, not a liability. Yet that unfortunately
    is the case we have today.
        The ESA needs to be reformed in a way that will force the
    Fish and Wildlife Service to work with the private landowner
    instead of bullying them. When a Fish and Wildlife agent shows
    up at the door of a citizen's farm or ranch or other property,
    they should be holding a check instead of a gun. We should be
    compensating the landowners for their remarkable stewardship,
    not punishing them. There are many aspects of this intrusive
    law yet to be scrutinized, but I will end my comments with
    simply saying this: By reducing the amount of federal land use
    control, people will be able to manage their land for the good
    of the species without worrying that the Feds will come in and
    mandate that all activity must cease on their property.
        So again, Mr. Chairman, I want to thank you for inviting me
    here today. I look forward to hearing testimony of the panel,
    and I look forward to working with you and Mr. Blunt on this
    very important issue. Thank you.
        [Representative Gibbon's statement may be found in the
    appendix.]
        Chairman Graves. Thank you. All the statements of the
    witnesses and the Members will be placed in the record in their
    entirety, just so everybody knows. We've got two panels today.
    We're going to start with the first panel, and then we will
    seat the second panel after they are finished. We will do the
    first panel, then have questions, and I'd ask that you try to
    limit your opening statements to five minutes, if you can.
        We're going to start out with Rose Hargrave, and Rose is
    representing the U.S. Army Corps of Engineers today, and she's
    representing specifically the Civil Works and Management Chief
    of the Missouri Water Basin Water Management; is that correct?
    Did I get that right?
        Ms. Hargrave. That's correct.
        Chairman Graves. A long-winded title, but I appreciate you
    being here today and I look forward to your testimony.

    STATEMENT OF ROSEMARY HARGRAVE, PROJECT MANAGER, MISSOURI RIVER
                  MANAGEMENT ANNUAL REVIEW AND UPDATE

        Ms. Hargrave. Mr. Chairman and Members of the Subcommittee,
    I'm here today, Gentlemen, to testify on behalf of Lawrence
    Cieslik, who is our Director of Civil Works for the Missouri
    River and Chief of Missouri River Basin and Water Management.
        My name is Rosemary Hargrave, and I'm the Project Manager
    for the Missouri River Master Manual Review and Update. I'm
    honored to be here today to testify on behalf of the Endangered
    Species Act's impact on small business and farmers.
        The Missouri River Mainstem Reservoir System consists of
    six dam and reservoir projects. These projects were constructed
    and are operated and maintained by the Corps of Engineers on
    the Missouri River. They're operated for the Congressionally-
    authorized purposes of flood control, navigation, irrigation,
    hydropower, water supply, water quality, recreation, and fish
    and wildlife habitat. To achieve these multiple benefits, the
    projects are operated as an integrated system.
        The Missouri River Master Water Control Manual was first
    published in 1960 and subsequently revised during the 1970s. It
    presents the water control and operational objectives for the
    integrated operation of the Missouri River Mainstem Reservoir
    System. In 1989 the Corps reinitiated a review of the Master
    Manual in consideration of other laws and regulations,
    including the Endangered Species Act, the National
    Environmental Policy Act, and the President's Council on
    Environmental Quality Regulations pursuant to NEPA.
        In accordance with the Endangered Species Act, the Corps
    must ensure in consultation with the U.S. Fish and Wildlife
    Service that any action carried out by the Corps is not likely
    to jeopardize the continued existence of any federally-listed
    threatened or endangered species or result in the destruction
    or adverse modification of their critical habitats.
        The species of interest in regard to these projects are the
    pallid sturgeon, which is endangered, the interior least tern,
    which is endangered, and the piping plover, which is
    threatened.
        The Corps entered into formal consultation with the U.S.
    Fish and Wildlife Service which culminated in a U.S. Fish and
    Wildlife Service Missouri River Biological Opinion issued in
    November of 2000. The 2000 BIOP concluded that the Corps'
    proposed action jeopardized the continued existence of the
    listed pallid sturgeon, piping plover, and interior least tern,
    and the U.S. Fish and Wildlife Service recommended a reasonable
    and prudent alternative to avoid jeopardy.
        On November 3rd, 2003, the Corps requested reinitiation of
    formal consultation. The request for reinitiation was based on
    the existence of new information regarding the effects of
    Mainstem reservoir operations on the species, as well as the
    new critical habitat designation for one of the listed species.
        The Corps' description of this information and of the
    proposed action was set forth in a detailed biological
    assessment which accompanied the request to reinitiate the
    consultation.
        On December 16th, 2003, and in response to the Corps'
    request for the reinitiation of consultation, the Service
    issued an amendment to its 2000 BIOP. The 2003 amended BIOP
    includes a reasonable and prudent alternative for the Corps'
    proposed operations that according to the Fish and Wildlife
    Service, if implemented, would avoid jeopardizing the continued
    existence of the endangered pallid sturgeon.
        The reasonable and prudent alternative recommends
    operations that were not proposed in the Corps' biological
    assessment. The RPA presented in the 2000 amended BIOP calls
    for a low summer release from the Mainstem Reservoir System and
    includes the provision that this low summer release may be
    modified in consultation with the U.S. Fish and Wildlife
    Service if 1,200 acres of shallow water habitat for the
    endangered pallid sturgeon are constructed in the river reaches
    between Sioux City, Iowa, and Omaha, Nebraska.
        The Corps is currently working with the Fish and Wildlife
    Service to determine if plans for near-term shallow water
    habitat are sufficient to meet the intent of the 2003 amended
    BIOP, therefore allowing the Corps to operate for all
    Congressionally-authorized purposes this year. The 2003 amended
    BIOP also called for a spring rise but allows a two-year study
    to determine if the magnitude along with the frequency and
    duration of that spring rise will ensure the continued
    existence of the pallid sturgeon.
        Thank you for providing me the opportunity to present this
    testimony to you, and that concludes my testimony, and I'll
    take any questions later.
        Chairman Graves. Okay. We will go through all of them first
    and then take questions. Thank you very much.
        Dale Hall is with us today, and Dale is the Regional
    Director of the U.S. Fish and Wildlife Service. I appreciate
    you being here, and I look forward to your testimony.

       STATEMENT OF DALE HALL, REGIONAL DIRECTOR, U.S. FISH AND
                            WILDLIFE SERVICE

        Mr. Hall. Mr. Chairman and Members of the Subcommittee, I
    thank you for the opportunity to provide testimony regarding
    the U.S. Fish and Wildlife Service's recent amendment to our
    2000 biological opinion on the Army Corps of Engineers'
    operation of the Missouri River. I am Dale Hall, Director of
    the Service's Southwest Region headquartered in Albuquerque,
    New Mexico.
        The Service is the primary federal agency responsible for
    conserving, protecting and enhancing fish, wildlife and plants
    and their habitats for the continued benefit of the American
    people. Part of this responsibility includes implementing the
    Endangered Species Act. Under Section 7 of the Endangered
    Species Act, federal agencies must, in consultation with the
    Service, ensure that activities they authorize, fund or carry
    out are not likely to jeopardize the existence of an endangered
    or threatened species, nor result in the adverse modification
    of critical habitat. In cases where the service determines that
    the proposed action will jeopardize the species, it must issue
    a biological opinion offering reasonable and prudent
    alternatives that provide suggested modifications to the
    project to avoid jeopardy to the species.
        In 2000 the Service provided the Corps with a biological
    opinion on the operation of the dams on the Missouri River.
    That opinion determined that the Corps' proposed operations
    would jeopardize the existence of three listed species: The
    threatened piping plover and the endangered interior least tern
    and pallid sturgeon. The Service's 2000 biological opinion
    provided the Corps with RPAs that would avoid jeopardy to those
    species.
        In 2003 the Corps requested to reinitiate consultation
    based on new mortality data for terns and plovers, designation
    of critical habitat for plovers in 2002, and new information
    regarding flow enhancement. Specifically, the Corps proposed to
    remove the requirements for a spring rise and low summer flows
    from Gavin's Point Dam.
        A team of Service experts, along with two technical experts
    from the U.S. Geological Survey, reviewed the most recent
    scientific data and signed an amended biological opinion on
    December 16, 2003.
        In reviewing the most recent scientific information, the
    team determined that the status of both piping plovers and
    interior least terns on the river has been improving in recent
    years. Piping plover numbers have increased by 460 percent
    within the Missouri River basin since 1997, and pair counts now
    exceed the recovery goals. The number of adult least terns has
    increased since the 2000 biological opinion, and the current
    estimate of more than 12,000 interior least terns nationwide
    exceeds the goal of 7,000, although the goal of 2,100 terns for
    the Missouri River itself has not been met.
        The status of the pallid sturgeon, however, has not
    improved, and the species continues to be of significant
    concern to Service biologists. Over the next two years, the
    Corps has the opportunity to evaluate several measures that are
    expected to benefit the sturgeon in particular, including the
    feasibility of a temperature control device at Ft. Peck.
        After reviewing the recent data, the team accepted many
    elements of the Corps' proposal and developed an amended
    opinion that retains the vast majority of the measures included
    in the 2000 biological opinion but incorporates the Corps-
    proposed performance-based approach. This approach gives the
    Corps greater flexibility to manage the river while providing
    equal or greater conservation benefits to piping plover,
    interior least tern, and pallid sturgeon. The team concurred
    that the Corps' proposed approach would continue to avoid
    jeopardy to the piping plover and least tern but could not
    concur that jeopardy would be avoided for the pallid sturgeon.
        The amended biological opinion includes an aggressive
    watershed approach, habitat creation and restoration, test
    rises along the river, and an adaptive management and
    monitoring program. The opinion includes specific measures to
    address spawning cues and habitat improvement for sturgeon.
    This comprehensive approach builds on measures endorsed by the
    National Academy of Science when it conducted its review of the
    Missouri River science in 2000.
        During the consultation process, the Service worked with
    the Corps to develop RPAs, Reasonable Prudent Alternatives,
    that are consistent with the intended purpose of the Corps'
    action and are economically and technically feasible but yet
    would avoid the likelihood of jeopardizing the continued
    existence of listed species or resulting in the destruction or
    adverse modification of critical habitat.
        Specifically, the 2003 amendment to the 2000 biological
    opinion accepts several Corps substitutions to the 2000
    reasonable prudent alternatives that will, in our opinion,
    continue to avoid jeopardy for the piping plover and interior
    least tern. In addition, the new RPA elements were identified
    to avoid jeopardy for the pallid sturgeon. These RPAs direct
    the Corps to construct sandbar habitat in the manner that will
    benefit the needs of piping plovers and interior least terns;
    before 2006 complete studies to determine the appropriate flow
    out of Gavin's Point Dam to achieve a bimodal spring spawning
    cue pulse and summer habitat flow, impediments to achieving
    this flow regime and mitigation measures for these impediments,
    for the 2004 annual operating period, implement a summer
    habitat flow at or below 25,000 cubic feet per second out of
    Gavin's Point Dam during the month of July or otherwise provide
    a sufficient shallow water habitat for the pallid sturgeon and
    implement the amendment's flow management plan, which includes
    two spring spawning cue pulses and a summer flow; and if the
    Corps is unable to develop a flow management plan by 2006, then
    there is a prescription for a spring rise, a second spring rise
    of 40,000 cfs.
        Since the issuance of the amended biological opinion, the
    Service has met with the Corps numerous times to answer
    questions regarding the opinion and to assist the Corps in
    implementing the opinion's RPAs. Within the framework of the
    amended biological opinion, these RPAs provide considerable
    flexibility to the Corps regarding how and where specific
    measures are undertaken, including opportunities to develop
    appropriate management steps before prescribed measures would
    be required in 2006.
        We are also currently working with the Corps to determine
    if plans for near-term shallow water habitat are sufficient to
    meet the intent of the amended biological opinion, therefore
    allowing the Corps to operate for all Congressionally-
    authorized programs this summer. Consequently, we expect to
    continue to work closely with the Corps through the 2004
    operation and as they implement the opinion in the future.
        In sum, the service conducted a thorough review of all the
    information available since the 2000 biological opinion and
    determined that the Corps' proposed operations would jeopardize
    the continued existence of the pallid sturgeon. The Service has
    concurred with many RPA element substitutions offered by the
    Corps and recommended several others to avoid jeopardy to the
    piping plovers, interior least terns and pallid sturgeon that
    should allow the Corps and stakeholders along the river
    flexibility to implement the amended biological opinion.
        Mr. Chairman, this concludes my prepared statement. I would
    also like to recognize that I have Charles Scott, a field
    supervisor for the Missouri operations office, here with me as
    well. We will be happy to answer questions at the appropriate
    time.
        [Mr. Hall's statement may be found in the appendix.]
        Chairman Graves. Thank you, Mr. Hall. Next we have Mike
    Wells, who is the Chief of Water Resources with the Missouri
    Department of Natural Resources. I appreciate you being here.

      STATEMENT OF MIKE WELLS, CHIEF OF WATER RESOURCES, MISSOURI
                    DEPARTMENT OF NATURAL RESOURCES

        Mr. Wells. Thank you. Good morning, Mr. Chairman.
        Again, my name is Mike Wells. I am Chief of Water Resources
    for the State of Missouri. I'd like to thank Congressman Graves
    for having this hearing today and for inviting me to give
    testimony on this very important issue. My position is located
    within the Missouri Department of Natural Resources, which is
    the agency that has statutory responsibility for the state's
    water resources. I represent the state in all interstate water
    issues.
        Let me begin by saying that the State of Missouri is truly
    concerned about protecting endangered species and natural
    habitat along our rivers. In fact, we were one of the earliest
    proponents for increasing funding for habitat restoration
    projects along the Missouri,a position we continue to support.
    We simply take issue with some of the ways that the Endangered
    Species Act is being applied to the management of the Missouri
    River. We strongly believe that there are common-sense ways to
    protect the species without harming citizens who rely upon the
    Missouri River for their many uses.
        The Missouri River is a vital resource to the state of
    Missouri, providing drinking water to over two million of our
    citizens, cooling water for our utilities, water to support
    navigation, unique recreational opportunities, and valuable
    fish and wildlife habitat. We are concerned that changes in the
    management of the Missouri River, that some have characterized
    as necessary to comply with the Endangered Species Act, would
    be adverse to many of these uses.
        In December 2003 the U.S. Fish and Wildlife Service
    released an amended biological opinion that included very
    specific summer low flows of 25,000 cubic feet per second below
    Gavin's Point Dam on the Missouri River, purportedly to protect
    three threatened and endangered species. The reduced summer
    flow required in this opinion will eliminate navigation as a
    viable transportation mode, thereby eliminating jobs of those
    depending upon the river commerce for their livelihoods and
    increasing costs to farmers. These summer low flows will also
    increase the costs to Missourians for electricity and drinking
    water.
        Under the auspices of protecting endangered species, flows
    were restricted to levels that resulted in record low summer
    flows the past two years. In the spring of 2002, in an attempt
    to conserve water in the midst of a drought, the U.S. Army
    Corps of Engineers elected to only release the minimum amount
    of water necessary to support navigation. As tributary inflows
    began to decrease, it became apparent in early July that
    releases from Gavin's Point Dam would need to be increased in
    order to support navigation. It was at that time that the U.S.
    Fish and Wildlife Service reversed course and decided not to
    allow piping plovers and interior least terns to be moved, a
    practice that had been successfully utilized in the past.
        Because of this, the Corps was prevented from increasing
    releases above 25,500 cubic feet per second to meet the needs
    of downstream users. By July 5th flows were so low that
    navigation on the Missouri River was halted. During this period
    of time, the Missouri River had the lowest recorded summer low
    flows since the Missouri River reservoir system was put in
    operation in the 1950s.
        The following impacts were felt by Missourians due to the
    summer low flows that year: Transportation costs for farmers
    and others were increased because navigation was not supported
    on the Missouri River for almost two months; water levels at
    Kansas City were 1.5 feet below the minimum needed to support
    navigation; river temperatures exceeded the state water quality
    standards for eight days; drinking water facilities, including
    Kansas City and St. Louis, had taste and odor problems and
    additional pumping andtreatment costs; power plants that use
    the river for cooling had generating capacity reduced; River
    Barge Excursions, Inc., canceled a riverboat trip from St.
    Louis to Sioux City, Iowa, due to low flows; river contracts
    with vendors along the river had to be canceled, impacting
    local economies up and down the river. The company estimated it
    lost $1 million.
        Again, in the summer of 2003, a court order requiring the
    Corps to comply with the Service's controversial November 2000
    biological opinion caused releases to a minimum of 25,000 cubic
    feet per second during the months of July and August and at one
    point for three days in mid-August reduced all the way to
    21,000 cubic feet per second.
        As a result, again new record-low flows for the summer
    months were established in this period. Due to the summer low
    flows, navigation was not supported for approximately 40 days,
    drinking water utilities again experienced taste and odor
    problems, and increased treatment and pumping costs, problems
    throughout the river system.
        Not only does reduced flows impact Missouri River uses, it
    can also impact the Mississippi as we saw in 2003 when the low
    flows on the Missouri River contributed to barge groundings and
    suspension of navigation on the Mississippi River near St.
    Louis. At the same time the low water trough from the Missouri
    River reached the Mississippi River, navigators began to
    experience groundings and the U.S. Coast Guard closed the
    Mississippi River to navigation for several days. At that time
    the Missouri River was supplying almost 60 percent of the flow
    to the Mississippi River at St. Louis.
        Despite the economic harm inflicted on Missourians in the
    past two years, the summer low water flows mandated by the
    Service's recent biological opinion for the next two years are
    virtually identical to those we experienced in 2002 and 2003.
        In addition to summer low flows, the opinion also mandates
    a man-made spring rise of up to 20,000 cubic feet per second to
    as much as 40,000 cubic feet per second that would put Missouri
    communities and river-bottom farmers at greater risk of
    flooding. The Missouri River is free-flowing for over 800 miles
    below Gavin's Point Dam to the confluence of the Mississippi
    River with over 550 of these miles being within the state of
    Missouri. Water released from Gavin's Point Dam can take from
    10 to 12 days to travel this distance. Even with low river
    stages, an increase in releases from Gavin's Point Dam can
    increase the river flows in the state of Missouri. As you know,
    springtime can be very wet in Missouri, and the Missouri River
    is prone to sudden rises. Once water is released from Gavin's
    Point Dam, it cannot be retrieved.
        In May of 2002 the conditions on the lower Missouri River
    would have been ideal for what we call a man-made spring rise.
    In other words, the river stages were low. In mid-May, the
    Missouri River rose over 17 feet in less than three days at
    Boonville. If an additional 20,000 cubic feet per second of
    water had been released from Gavin's Point Dam, the spring rise
    as prescribed by the Service's opinion would have reached
    Boonville at the same time as the flood peak, adding an
    additional 1.3 feet to the flood height.
        An examination of historical flow data at Boonville shows
    that for the April through July period each year, over 75
    percent of the time we exceed flood stage during that period of
    time. This shows that Missouri already experiences a spring
    rise in most years without additional water being released out
    of Gavin's Point Dam.
        Our greatest concern is that the Endangered Species Act is
    once again being administered in a very prescriptive manner.
    The Service has mandated actions based on questionable science
    with little or no regard for the significant adverse
    environmental and economic consequences of this action. The
    Service is mandating actions with disregard for the many other
    uses of the resource.
        The Service's actions are based on a dated analysis of less
    than 30 river miles that have changed significantly since last
    surveyed and are likely not representative of the river as a
    whole.
        As another example of poor scientific reasoning behind the
    Service's opinion, the Service has promoted the summer low flow
    on the Missouri River as mimicking the natural hydrograph. Yet
    the low flow period the Service is mandating in the month of
    July was actually the second highest month under the natural
    river condition. With a mean flow of about 54,000 cubic foot
    per second, this is twice what is being prescribed by the
    Service.
        Limiting the flows to 25,000 cubic feet per second during
    July would provide less than one half of the natural hydrograph
    immediately below Gavin's Point Dam with no clear benefit but
    causing obvious pain to those who depend on the river.
        The Missouri Department of Natural Resources and
    Conservation have championed a summer flow regime that we
    believe will benefit the fish and wildlife of the Missouri
    River while supporting all the other uses. This plan suppresses
    evacuation of excess water when possible during August and
    September when flows were historically low. It proposes
    providing a flow of 41,000 cubic feet per second at Kansas City
    in six out of ten years. This flow level supports full-service
    navigation and is adequate to support water supply and power
    plant cooling. We believe that this is a common-sense plan that
    provides additional habitat for the species while protecting
    the other uses of the river.
        The recent National Academy of Science report suggests that
    we seek ``low hanging fruit'' by focusing habitat development
    on the lower Missouri River where we already have a plan that
    allows habitat to develop and take advantage of this situation.
        In the recent opinion the summer low flows are used to
    create shallow water habitat for the species. However, physical
    habitat restoration projects can be accomplished that take
    advantage of existing flows, thereby making drastic flow
    changes unnecessary. In the areas of the Missouri River where
    physical habitat improvements have been made, shallow water
    habitat is available across a wide range of flows. We just
    visited with the U.S. Geological Survey recently to look at
    some of the data on it. This means that flows that are
    beneficial for drinking water supply, power generation, and
    navigation can also meet the habitat needs of endangered
    species.
        Let me reiterate that the State of Missouri is truly
    concerned about protecting endangered species and natural
    habitat along our rivers, but we believe that there are common-
    sense ways to protect the species without harming our citizens
    who rely on the Missouri River for all other beneficial uses.
        Again, thank you for the opportunity to testify before this
    Committee. I would be glad to answer any questions.
        [Mr. Wells' statement may be found in the appendix]
        Chairman Graves. Thank you, Mr. Wells. We will next hear
    from Kevin Keith, who is the Chief Engineer for the Missouri
    Department of Transportation. I appreciate you being here. I
    look forward to your testimony.

     STATEMENT OF KEVIN KEITH, CHIEF ENGINEER, MISSOURI DEPARTMENT
                           OF TRANSPORTATION

        Mr. Keith. Mr. Chairman, thank you. I am Kevin Keith, Chief
    Engineer for the Missouri Department of Transportation. I'm
    going to give you a little different perspective on this issue.
    I'm not a scientist, I'm not an environmental expert, and as
    such, it's not my place to talk about the environmental impact
    of reduced flow on the Missouri River. I really don't know
    whether changing the river's flow will help or hurt endangered
    species. I do know that lower flows on the Missouri River will
    essentially extinct transportation as it is.
        The Missouri River is controlled by a series of dams that
    form several pools for the intended purposes of flood control
    and navigation as mandated by Congress more than 50 years ago.
    The U.S. Army Corps of Engineers manages flows in the Missouri
    River through the operation of six large reservoirs located on
    the main stem of the river.
        Approximately half of Missourians get their drinking water
    from the Missouri River. The system is designed to provide
    downstream flows to support an eight-month navigation season on
    the Missouri River which runs from April 1 to December 1. Under
    normal conditions, flows are released from Gavin's Point Dam in
    South Dakota to support a nine-foot-deep navigation channel.
        The benefits of supporting navigation go far beyond the
    navigation industry itself. If flows are adequate to support
    navigation, then all other downstream users have ample water to
    meet their needs. Downstream interests have built
    infrastructure and made business decisions based on the system
    providing reliable flows throughout the year, especially during
    periods of water shortages. The Missouri River system is
    designed to hold water in reserve for release during droughts.
        Under the authority of the Endangered Species Act, the U.S.
    Fish and Wildlife Service has mandated that releases from
    Gavin's Point Dam be limited to 25,000 cubic feet per second
    from mid-June until the end of August each year starting in
    2004. This will not support navigation on the Missouri River.
        To better understand the effect of this decision, one needs
    to understand how the navigators operate on the Missouri River.
    When the navigation season opens in April, loaded barges move
    up the river to their destination. This begins a cycle of
    loaded barges moving up and down the river until they move off
    the river in late November or December. Only a few specialized
    barges, such as asphalt carriers, move empty on the river. Most
    carry one load up the river, off-load, and pick up a new load
    for the return trip.
        Few businesses could survive economically if allowed to
    only work eight months of the year, which is what we have now
    on the Missouri River. Now the Fish and Wildlife Service is
    asking the barge industry to pull off the river for an
    additional two months each year. Adding to the burden, these
    two months fall in the middle of the industry's busiest season
    and impact our ability to move our agricultural products, which
    is probably the most important navigational element on the
    river.
        If the Fish and Wildlife Service is allowed to mandate
    flows lower than what is needed to reliably operate on the
    Missouri River, then one of the Congressionally-authorized
    purposes, navigation, has been eliminated from the Missouri
    River. No question about that.
        As I said earlier, I'm not a scientist. I know
    transportation. I am the Chief Engineer of the Missouri
    Department of Transportation. It is my job to give Missourians
    the best transportation system I can.
        I know that transportation has an enormous impact on our
    state's economy; whether it's airborne or waterborne
    transportation, roadway or rail, it affects every Missourian's
    quality of life every day. Here are what I see as the economic
    impacts of reduced water flows on our river.
        Higher transportation costs will be passed on to consumers.
    Inland waterway transportation provides competitive shipping
    rates, keeping truck and rail costs low.
        Interruptions in the navigation during peak season in 2002
    and 2003 caused drastic reduction in tonnage moved by barge.
    Two major shippers, MEMCO Barge and Blaske, have already
    decided not to ship on the Missouri River in 2004. They did not
    feel confident they could predict transportation costs.
        Facilities are no longer investing in capital improvements
    at docks but instead are looking at adding investments to
    facilitate the use of other modes. The long-range effect of
    this shift will be less competitive shipping rates as rail and
    trucking companies no longer have to compete with the more
    economical barge transport.
        What happens on the Missouri River affects the Mississippi
    River. Continued low flows on the Missouri River also affect
    the Mississippi, the nation's major inland navigational river.
    At times the Missouri River supplies as much as 60 percent of
    the Mississippi River flow.
        The past two years have shown us how lowering the Missouri
    affects the Mississippi. The Mississippi River was closed just
    south of St. Louis for a short time because it was too low for
    safe navigation. The Mississippi River was closed. The
    bottleneck effect from the confluence of the Missouri River to
    the confluence of the Ohio River makes this an issue for every
    state that ships on the Mississippi. It costs the industry
    approximately $8,000 per day for each barge that is waiting for
    river levels to rise.
        Every river barge that cannot travel on the Missouri or
    Mississippi Rivers results in 15 more rail cars on a rail
    system that is already straining at or near capacity. Every
    river barge that cannot travel on our great river results in 60
    trucks on our aging highway system. That's one barge. On the
    Mississippi River, the average tow moves approximately 15
    barges. The loss of one tow with its barges would put 225 rail
    cars or 900 trucks on our already strained alternate systems.
    Multiply that by the number of river trips, and you start
    getting a sense of the magnitude of the problem.
        Here's another example from right here in St. Joseph.
    Recently the state invested almost a million dollars in a dock
    here, with a local match of $350,000 from the local community.
    The dock was completed in June 2002. Without doubt, the St. Joe
    port has the newest, and with its additional infrastructure,
    one of the best docks in Missouri. In its first year, 2002,
    almost 17,000 tons moved across the dock. During this past
    navigational season, the port operator had scheduled five
    barges to off-load at the terminal. The first arrived late due
    to the low flows that opened the season. The other four were
    never delivered. There was virtually no navigation north of
    Kansas City in 2003. Very little even made it to Kansas City.
    In 2003 that one barge, with its load of 1,165 tons, was the
    only freight moved across the St. Joe dock.
        I know transportation. I know we need our waterborne system
    to become more robust. We cannot take advantage of our state's
    position and natural assets if our waterways cannot be used. I
    thank you for letting me provide this point of view.
        [Mr. Keith's statement may be found in the appendix]
        Chairman Graves. Thank you. We will now have questions, and
    I'll start out, and just kind of background just a little bit
    to give you a sense of what my district or how this river
    impacts my district, my district starts along the river at the
    Iowa, Missouri and Nebraska borders, that area up there, and it
    comes down through St. Joe, down through Kansas City, then cuts
    across the state, still on the southern side of my district,
    all the way over to the bridge that's going into Columbia.
    That's the end of my district, a tremendous amount of
    riverfront area. Anything happens, I hear from small
    businesses. This affects my district and districts that are
    rising and falling.
        You know, any time that the river is messed with, we hear
    from small businesses, we hear a lot from water treatment
    facilities. St. Joe has a huge impact whenever the river gets
    too low. Cooling for power plants is a huge issue. We need that
    water for cooling; and then one of the issues when the river is
    running too high is what's being worried about is the
    artificial spring rise affects interior drainage, and we've
    heard very little so far about interior drainage. I think we
    may hear a little bit later. But when the river runs high,
    everything backs up all the way down the river for miles
    inland, and you can't take your water back off. It backs up in
    your fields, it floods, and many people think that the
    bottomlands are flooded just along the Missouri River. It is
    every other tributary along the river that water backs up into.
        I have personal experience with that working in plantings
    of fields, and my question is, and I guess it is probably more
    directed to Mr. Hall--and maybe Ms. Hargrave would like to
    comment--but is that taken into account whenever we look at
    something like this, when you put out the biological changes,
    you effectively change the management of the river. You force
    the Corps of Engineers to come up with a new Master Manual. I
    mean, is that taken into account or is it just about that
    species? Or is it just about that wildlife that is impacted?
    Does anyone take a look at the economic impact that this will
    have on individuals in the community?
        Mr. Hall. Well, I think that there's probably a two-part
    answer to that. The first answer is that the Endangered Species
    Act doesn't give us a whole lot of latitude to do an economic
    analysis. It is strictly designed in the biology. So the first
    question we have to answer is whether or not a species, an
    action taken will jeopardize or not jeopardize a species, and
    once we get to that point, then we do everything we possibly
    can to look at what kinds of impact might occur as a result of
    what we're saying. But we can never cross the line to where we
    couldn't support the science there, the biological science that
    goes along with it.
        In this particular case, in the spring rise that you're
    talking about, we did understand and accept the science is not
    clear on what's needed for the species. We know that in big
    river systems throughout the world that the species adapt to
    cues for the reproductive cycle, but we don't know in the
    Missouri River--I don't think anyone does--exactly what level
    that is; and for that reason we tried to build in some
    flexibility, and the reasonable prudent alternative for the
    pallid sturgeon for the spring rise says that the Corps should
    undertake a feasibility study over the next two years to try
    and determine how to meet the objectives, the biological
    objectives that we would all like to see done for the species
    and at the same time take into account the different kinds of
    impacts that might take place and try to address those in the
    process. And the biological opinion says that if that doesn't
    happen, then in two years, in March of 2006, then we have put
    in what we think is a starting point for analysis for what flow
    should be, and that is a 16,000 cubic feet per second rise
    above that spring condition and flow that would come down at
    roughly 40,000 cubic feet per second.
        But I do want to emphasize that we neither have the
    expertise nor, frankly, the legal authority to do an economic
    analysis. We are directed to do a biological analysis, but we
    did try and interject as much understanding of the
    ramifications to other users of the river as possible. But our
    expertise is in the biological realm, and we've tried to build
    in some ability for the Corps who has much better expertise in
    that area to look at that over the next two years.
        Ms. Hargrave. From the Corps' perspective, our review, of
    course, is much broader than that. In addition to the
    environmental and biological considerations, we also have to
    take into account the economic impacts as well, and we've tried
    to analyze those impacts through the Natural Environmental
    Policy Act process in our environmental impact statement. So we
    do look broader.
        Chairman Graves. The thing that bothers me about the
    statement that was made with taking a look again, you know,
    doing a feasibility study having these effects concerns me a
    great deal, and that's essentially what you're saying, isn't
    it?
        Mr. Hall. No, for the spring rise there is no required
    spring rise until 2006. That's the two-year. The summer flow is
    a different question about habitat. But for the spring rise and
    the backup flooding that you're talking about, there is a two-
    year waiting period for the Corps to be able to look at things
    and come up with how working with stakeholders and others along
    the river can come up with a proposal to accomplish the same
    thing. So the spring rise doesn't start immediately.
        Chairman Graves. Would you say the same thing about the low
    flow, when it is to start essentially?
        Mr. Hall. Okay. The summer flow has a different rationale
    behind it. The summer habitat flow, first of all--Maybe what
    would be good here, if I could, is just highlight what I
    consider to be the four major differences between the 2000
    opinion and the 2003 opinion.
        The 2000 biological opinion required for the spring rise
    only to happen one out of every three years but required a
    20,000 cubic feet per second increase over the navigation flows
    which would put it 50 to 54,000 somewhere. With this biological
    opinion we do recommend that it happens every year but at a
    lower level, after the two-year period you look at for the
    spring and the study is done, but we only recommended a 16,000
    increase over the March condition inflows which is the flows
    that they put in the condition, the next step after the winter
    flows that the Corps is going to do anyway to buffer the man-
    made-prepared channels and the habitat out there.
        The second difference is the summer flows. In 2000 the
    biological opinion found jeopardy for three species and the
    flows were predominantly summer flows, were predominantly for
    the birds. The Corps came to us--there still is shallow habitat
    for the fish, but the Corps proposed to do that mechanically,
    and we could--and we said okay, you can do that mechanically,
    and the summer flows were then 90 plus stage. They had to
    basically wait until the nesting birds were finished before
    they could raise them, and the 2000 opinion was at 21,000 cubic
    feet per second.
        Since we were able to only have focus on the fish because
    there was no jeopardy for the birds or the jeopardy was
    continued to be avoided, then we looked at the information and
    felt that the flows could accomplish the shallow water habitat,
    and shallow water habitat did agree to definition, is habitat
    that is five feet or less in depth and has two and a half cubic
    feet per second of flow rates.
        So you are basically talking about the side channel types
    of habitat, and because of the way the river has been modified
    and constrained movement of water for other purposes one would
    expect to happen on a project, a lot of the historic shelter
    habitat has been made unavailable, and the Corps proposed to
    create physically the 1,200 acres that are at Sioux City
    between Sioux City, and the Platte, and we agreed that that
    should be done.
        But there's a really dire circumstance here right now for
    the species.We have only a few hundred fish left in the river
    that are what we call heritage fish, the fish that are--that
    have spawned in the past and have been there. The scientists
    that look at this fish tell us that they will become
    reproductively senile or die within the next ten to 12, 14
    years. I think the prediction was by 2018, they would be gone.
    These are long-lived fish but they're reaching that point, and
    when you have a low number of fish and then you also have a
    spawning frequency that is only every three to five years for a
    female, then the possibilities of hanging on to those fish get
    less and less.
        So the shallow water habitat is very important on an annual
    basis so that every chance for the young to live--and they are
    not living. We have every scientific evidence that the larvae,
    the document spawning, we found the larval fish at the earliest
    stages but we don't find any kind of recruitment; we don't find
    them to be living or to be recruiting in the population, and
    the science leaves us to believe that's because they don't have
    a nursery habitat.
        The Missouri River below Gavin's Point is very much like an
    hourglass from a biological perspective. When you get below
    Gavin's Point, there's some pretty good habitat for the fish.
    So if you look at the hourglass coming down, there's pretty
    good habitat there, nursery habitat, good kinds of quality. But
    then you get down to Sioux City, and between Sioux City and the
    mouth of the Platte, it constricts and becomes more of a
    channel process, and then after the mouth of the Platte, it
    opens up again and there's some pretty good habitat down below
    there.
        But the science leads us to believe that any fish that are
    being spawned between Gavin's Point and the mouth--and excuse
    me, Sioux City, that the flows coming out are sort of blowing
    them on through.
        You have to understand a larval fish is probably three to
    five, seven millimeters in length, has no swimming ability,
    it's basically drifting. Nature has allowed it to impasse. It's
    evolved to where the eggs are laid, the larvae are then drifted
    over into these nursery habitats, which one would expect to
    happen, and those are not there now.
        So the reason for the shallow water habitat to continue in
    the summer at 25,000--and it's not through the summer, they run
    it down for seven days to July 1st, 30 days at 25,000, and then
    up for seven to get back to the normal level, whatever the
    Corps wants to operate it at--is to try and give those fish a
    chance where the shallow water habitat is today.
        Now, the opinion says that if you create the new shallow
    water habitat--and the Corps is working on that--then that's
    what we're after. The flow is not the big issue in the summer.
    We're after shallow water habitat. We're after what's good for
    the fish. So when the habitat is created and if they need
    higher flows to reach that habitat, then that's fine, and I
    think that's what the Corps is working toward.
        But we are, frankly, in a pretty serious situation with the
    fish, and I'll reiterate the lower numbers of adults, the
    spawning frequency is three to five years, and we have not been
    able to document any kind of recruitment, and the literature
    simply leads us to believe that there have not been
    recruitments.
        Those are two of the four.The third one is that there's a
    strong stakeholder process involved in the Corps' proposal that
    we really like. They proposed a Missouri River recovery
    position Committee, and we think that's the way things should
    work, to get all of the interests along the river to sit down
    at a table together to talk about how to approach this
    particular issue where everyone can be heard and everyone can
    be listened to. It's just as important that people be listened
    to as someone being able to speak, and so we think that this is
    a real important process that the Corps has proposed to be part
    of this, and the difference between the 2000 and 2003 period is
    the administration's commitment.
        In 2000 there was basically no commitment from the
    Administration to move forward and try to solve this problem.
    This Administration--and I'm first, let me say I'm a career
    employee, I'm not a political appointee; I'll just say this as
    a fact--This Administration has throughout 2004 appropriations
    and throughout the President's 2005 budget request--if you add
    those two together, is trying to bring a hundred million
    dollars into this basin to try and help work with this problem
    to fix it and have people have the resources to be able to come
    up with solutions.
        And I think those are the four big differences, and I hope
    I haven't gone too long in answering your question about the
    shallow water habitat or put too much in there, but that's--we
    just feel like if we give every opportunity to these fish,
    since we're not seeing any recruitment, is a very serious
    issue.
        Chairman Graves. I don't want to dominate all the
    questions. I'm going to turn to Representative Blunt, but I
    will say I have a real problem with the statement that you--one
    of the statements you made when you said we're after what's
    good for the fish. That red flags super quick to me, and I know
    it's not necessarily you, it's the philosophy with the Fish and
    Wildlife Service, but that did bother me a great deal
        Mr. Hall. I guess I'm not sure that--what I was trying to
    say is that the law requires us to take an approach--we can
    work with the public, and we do, and we want to--just as Mr.
    Gibbons commented a while ago, we have instituted private lands
    programs because we agree the plight of the landowners is the
    source for real implementation of the Endangered Species Act.
        But what I was trying to say and possibly didn't say it
    very well is that the law only gives us certain latitudes, but
    the first test of anything we do, we must pass, is that the
    species is--that the action will not lead to jeopardy of the
    species. We don't have any choice there. That's the first
    question that we have to answer, and anything that we do after
    that has to always stay above that bar, and we don't have any
    legal authority to do anything different or we would be in
    violation of the law itself.
        Chairman Graves. Representative?
        Mr. Blunt. I'll try to ask a brief question and maybe get
    brief answers, not that your answer, Mr. Hall, didn't require a
    long time, but it certainly took a long time.
        One, did I understand you right, Mr. Hall, that you're
    satisfied with the Corps' proposal that affects the two birds?
        Mr. Hall. Yes, sir.
        Mr. Blunt. So literally this gets down to what are we going
    to do about the pallid sturgeon?
        Mr. Hall. Yes, sir.
        Mr. Blunt. That is your main concern now based on what the
    Corps would like to do. You have the challenge of navigation
    and flood control and you're concerned that this bill doesn't
    adequately deal with the pallid sturgeon.
        Mr. Hall. Yes, sir.
        Mr. Blunt. Are you also saying that you don't have any
    authority to consider, once you consider that a species is in
    danger of extinction, you don't have any authority to consider
    anything else when you come up with your RAP in terms of
    economic impact or the drinking water problems, the power
    problems, the problems Mr. Wells talked about?
        Mr. Hall. We don't have the authority under the ESA to have
    those supersede the biological ramifications.
        Mr. Blunt. I'm not blaming you for that, either. Part of
    what we're talking about here and part of what Mr. Gibbons and
    his Committee have been talking about for some time--I know Mr.
    Graves is supporting that, as I am--is it's time to look at the
    Endangered Species Act and the theory if you don't like the
    Act, all you've got to do is carry it out.
        What you're telling us is what lead you to that decision is
    the species is endangered. It wouldn't really matter if Mike
    Wells says look, if you want to save the species and eliminate
    the drinking water for the people in Kansas City, Jefferson
    City and St. Louis, you can't consider that under the current
    law.
        Mr. Hall. The Fish and Wildlife Service would have to say,
    would have to come up with whatever answer. The Corps could
    raise that and ask the Endangered Species Subcommittee to look
    at that--otherwise known as the God Squad--but we don't have an
    answer for that, no, sir.
        Mr. Blunt. What authority does the God Squad have?
        Mr. Hall. Under the Endangered Species Act, we have a----
    --.
        Mr. Blunt. Frankly, I never thought I'd be able to ask that
    question.
        Mr. Hall. Under the Endangered Species Act, when a jeopardy
    opinion is found to which there is no reasonable and prudent
    alternative--and that might be one, when you have drinking
    water shut off, you know, the health and human safety was
    involved--the agency taking the action has the ability to
    petition the Secretary of the Interior to form what is known
    under the law as a danger Committee. It's historically been
    called a God Squad because you have to decide to let a species
    go extinct.
        The members of the Cabinet that come together, the
    Secretary of the Interior oversees the Committee, and it's only
    happened a couple of times, two or three times in history. But
    Mr. Baker, Senator Baker put in the law after the snail order
    issue down in Kansas City, but to come back to answering for
    me, the Fish and Wildlife Service does not have that kind of
    authority under the law, you're right.
        Mr. Blunt. Is the Missouri River today, is this the only
    habitat for the pallid sturgeon?
        Mr. Hall. The pallid sturgeon, actually the range is
    throughout Missouri, through Mississippi and into the Chapel
    River Basin.
        Mr. Blunt. Do they have problems in all of those areas or
    only in Missouri?
        Mr. Hall. There are different kinds of problems in each
    area. In Louisiana we have some problems with hibernization.
    Other sturgeon species in the Mississippi, we have a problem
    with a mixture of that, but we don't have a lot of research,
    other than to say it is being looked at, as to why that's
    happening. Most research has been done on the Missouri because
    of the impact that is raised over the navigation and the other
    issues here.
        Mr. Blunt. Are you doing anything in the Mississippi or
    Louisiana areas to evaluate viability of the sturgeon?
        Mr. Hall. I think research is being done on what's needed.
        Mr. Blunt. You don't have any current action you're working
    on?
        Mr. Hall. I'm not aware of any.
        Mr. Blunt. The only place to assure the pallid sturgeon
    survive, it's only on the Missouri? So we're down to one fish
    in one location?
        Mr. Hall. Yes, sir, we're down to the Missouri.
        Mr. Blunt. That's what I thought.
        Ms. Hargrave, do you have the 12,000 or 1,200 acres, 1,200
    acres that you're suggesting would be needed to create a future
    potential spawning area? Does the Corps own that land? Does it
    control that land? Is it preparing to buy that land? Tell me
    just a little bit about that.
        Ms. Hargrave. The Corps has a very aggressive habitat
    program. We do it through willing sellers. We don't use
    condemnation. What we are proposing to the Fish and Wildlife
    Service now is that the Corps be allowed to look beyond that
    Sioux City to Omaha reach. We believe that there's scientific
    information available, including long-term studies which would
    justify looking at the entire region from Sioux City to the
    mouth of the Osage River. The Corps could get 1,200 acres in
    that reach.
        We've also committed to the Fish and Wildlife Service that
    we will focus on the Sioux City to Omaha reach. We probably
    can't get 1,200 this year, but by 2005, funding available, we
    would have 1,200 acres in place in the Sioux City to Omaha
    reach.
        Mr. Blunt. But you don't have it yet, but you think you
    could buy it?
        Ms. Hargrave. You've got it.
        Mr. Blunt. Mr. Keith, you mentioned--you and I both will
    stipulate that we're not experts on these environmental
    issues--but you are an expert on transportation. Is it your
    sense that if you take the barge traffic off the river for two
    years, what are the odds of you getting the barge traffic back,
    you know, assuming this two-year period, if you think of
    something that allows it to continue, to have the navigation,
    or if you decide that that's not the problem, what are the odds
    ofthe barge traffic coming back and what's the impact to the
    various barge facilities and ports during the two years of
    inactivity; what's the impact there?
        Mr. Keith. Well, I think it's two things. Two years maybe
    you can get barge traffic back because you still have the
    investment in facilities and they won't have determined whether
    or not they are usable or not, but this is absolutely dependent
    on having an eight-month navigation season that they can come
    back, they can come back to. Eight months on the Missouri
    River, quite frankly, is not the best navigation the way it's
    been managed in the past, so the additional low flows just
    simply make it economically infeasible to do transportation on
    it.
        The bigger issue that it has to do with is whether we're
    going to maintain the navigation channel for eight months. If
    someone could say that's absolutely going to happen in two
    years from now, I think economically transportation would
    respond to that and use it, but if it stays uncertain and they
    go away and that certainty is not held up, they won't come
    back.
        Mr. Blunt. I would assume there's some time period, a
    relatively prudent period where they don't come back.
        Mr. Keith. Yes.
        Mr. Blunt. Mr. Wells, I drank the Missouri River water at
    Jefferson City, my daughter drank it for the same eight years,
    it didn't seem to hurt me very much. But what was the financial
    impact or the other impact when you had just the low water in
    2002 and three in the drinking water system?
        Mr. Wells. Just an example, they had to put an auxiliary
    pump to go out in the river to get more water. The river flow
    was not much lower than what the flows were during some of the
    winter months but we have less demand in the winter, obviously,
    on the water so they had to put an additional pump in, and then
    you've got organic materials and stuff that causes additional
    treatment costs to be placed. We've had some low water this
    winter. There's several different reasons. Had a guy call me
    the other day, lived in Jefferson City. Called me and said the
    river is too low out here, we've got to get it up to a certain
    level, and I can taste it, tastes bad. Just the organic
    material that they have------.
        Mr. Blunt.--involved.
        Mr. Wells. Yeah. They're pulling out, and the reason is, I
    would say, pollution, pollution, pollution. We don't say that
    at DNR, but that's part of it. If you have less flow, you've
    got contaminants, stuff is more concentrated. We checked and
    Kansas City and St. Louis had an additional increased cost in
    pumping. Obviously when the river is low, you've got to raise
    more water for the additional pumping facilities, and the
    treatment to remove the taste and odor cost is in addition.
        Mr. Blunt. I'm like my two colleagues, I like to be
    outdoors, I love the outdoors. I want to do our best to take
    care of it. I've got a grandson in Jefferson City that uses
    that water, one in Kansas City that uses that water, and the
    truth is they're both a lot more important to me than the
    pallid sturgeon.
        At the very least we ought to give Mr. Hall and his group
    the authority to consider those factors as they look at other
    things. Thank you.
        Mr. Gibbons. Thank you very much, Mr. Chairman.
        Let me ask of Ms. Hargrave, the 1,200-acre shallow water
    habitat area you're talking about, is that a single body of
    land that you're looking at or is it a separate, can it be in
    smaller groups of areas along the corridor?
        Ms. Hargrave. Right, because it's acquired from willing
    sellers, you know, obviously that's what it is. It's more of a
    patchwork wherever we can get the land and develop it along the
    river.
        Mr. Gibbons. So instead of a large shallow water basin
    area, you're not talking about 1,200 collective acres, you're
    talking about----
        Ms. Hargrave. Exactly.
        Mr. Gibbons[continuing]Approximately 1,200 acres spread out
    over this whole region.
        Ms. Hargrave. Yes.
        Mr. Gibbons. Do you believe that that will answer the
    question about habitat needed to allow for recovery of the
    pallid sturgeon?
        Ms. Hargrave. Just maybe a little background here, and I
    won't go too long. The habitat gain, the shallow water habitat
    gain from going from minimum service to navigation, which is
    what the Corps would like to revise it to because we are in a
    drought, to 25,000 cfs, which is what is in the biological
    opinion, is about 30 acres of habitat.
        The 1,200 acres comes from an analysis that the Corps did
    in our biological assessment in November where we looked at the
    whole reach of the river from Sioux City, Iowa, to the mouth of
    the Osage River and estimated there were 1,200 acres lost due
    to our operation of the system. So what we are proposing and
    for this year, is to get 1,200 acres in that whole reach, but
    we also will focus on that shorter reach from Sioux City to
    Omaha and get 1,200 acres there by next year.
        Mr. Gibbons. Mr. Hall, what's the Fish and Wildlife's
    opinion of this 1,200 acres? Are you ready to approve it?
        Mr. Hall. We're ready to--we're on-going working with the
    Corps to answer the kinds of questions that Ms. Hargrave has
    just brought up about looking at the entire reach of the river
    based on the level of drift. I mean, those are the situations
    that we're talking about right now.
        Mr. Gibbons. So what I hear you say is the people living in
    this--who are alive in this audience today may not be see the
    end result of this any time soon?
        Mr. Hall. I don't know the answer to that.
        Mr. Gibbons. Let me ask, when you talk about scientists and
    the study of fish and you give reference to these scientists,
    are these Fish and Wildlife scientists that are giving you this
    information?
        Mr. Hall. They are--they are a conglomerate of scientists,
    starting with the National Academy of Science, that have done
    an independent review. They have literature citations from up
    and down. Frankly, the Fish and Wildlife Service scientists are
    probably the smallest number or the most least representative.
        Mr. Gibbons. You are relying principally on outside
    scientific efforts to formulate your opinions?
        Mr. Hall. Yes, sir.
        Mr. Gibbons. Is all of this science that you're relying on
    peer review?
        Mr. Hall. Yes, sir.
        Mr. Gibbons. All right. Now, does the high temperature
    reflect the recovery of the sturgeon? The water temperature?
        Mr. Hall. High temperature can end the early life stages of
    the fish.
        Mr. Gibbons. So when the water level is low, the high
    temperature part of the time is not conducive to the recovery
    of the endangered species?
        Mr. Hall. It depends on the stage of their life development
    at that time. Obviously they're developing, and this habitat is
    five feet or less in depth. That's how they have historically
    developed.
        Mr. Gibbons. What about total dissolved solids?
        Mr. Hall. Total dissolved solids and turbidity are both
    questions that may be positive or may be negative for the fish,
    the Big Muddy, as the river has historically been known, in
    that the pallid sturgeon in particular is not a site feeder or
    a site developer. It is developed in turbid environments. We
    are not ready to say it has to have it, but we certainly have
    questions about that.
        Mr. Gibbons. What is the Fish and Wildlife Service doing
    for artificially increasing the numbers here besides changing
    the water level? What about artificial spawning? What about
    taking these fish and putting them and growing them and raising
    them and putting them back in the river? What are you doing
    there?
        Mr. Hall. Over the past, starting in 1994, we've devoted
    some of our hatchery work to doing that, and over a ten-year
    period we have stocked 40,000 pallid sturgeon, and they are the
    hope, frankly, for the future, but until they reach--and I'll
    point out again, they're long-lived species; the males don't
    even become sexually mature until seven to ten years, the
    females ten to 15 years. So we have not even reached the point
    yet--This year will be the first time we will even see that
    first few fish that we stocked, to find out if they will
    respond and spawn and become members of the wild, and that's a
    question that we're hopeful about but it's going to take a
    while to know that.
        Mr. Gibbons. Mr. Wells, briefly, do flow rates change the
    carrying capacity for the river, whether it's circus barge, et
    cetera? I know Mr. Keith talked about a nine-foot channel. Is
    that the depth that you're talking about or is that the width?
        Mr. Keith. Nine foot is the depth.
        Mr. Gibbons. The depth. So the minimum depth amount to
    float a barge, roughly?
        Mr. Wells. Actually you can go lower. The nine foot is the
    authorized channel. It's nine foot deep, 300 foot wide, I
    believe is an authorized channel; therefore what we call full-
    service navigation, and navigation pretty well needs that to
    make it an economically viable transportation mode or avenue.
    When we're in a drought condition like we are now, flows are
    reduced in the river down to an eight-foot channel which
    produces about a seven-and-a-half-foot draft. If you heard me
    say last year we were actually a foot and a half below that, so
    we have about a six-foot channel in certain parts of the river
    around Kansas City. So that's obviously not that full. You can
    partially load barges but barges with reduced amounts of volume
    have difficulty to even operate at all. We had a couple of
    groundings, we had a couple of barges that were still trying to
    operate at the low flows. So it was very dangerous as well.
        Mr. Gibbons. The reason I ask, because as I say, I come
    from the state of Nevada, and the rivers out there would
    probably make a wet sponge. We don't get anywhere near what
    Missouri does, but my concern is, of course, when they also
    talk about carrying capacity--in other words, the water is so
    bad you get solids, et cetera, et cetera--and when you lower
    the capacity down so it puts all the water into narrower or a
    smaller channel, upstream it is higher; it's carried downstream
    which fills in your channel throughout that period of time.
        What efforts or cost does a lower flow rate have on the
    carrying capacity of the river, simply your costs to keep the
    channel full?
        Mr. Wells. I'm not sure I can answer that from the
    standpoint--the one thing that we did recognize the summer
    before that, as I mentioned in my testimony where I said we are
    in a similar state on the river as far as temperature. When you
    have the lower flows, you don't have the same capacity. You
    have several power plants that use this water for cooling, and
    so what we experienced in the lower part of the river is we had
    eight days that we exceeded--the state water quality standards
    for temperature in the river, which exceeded 90 degrees. That's
    the state water quality standard. We know when the river water
    is above 90 degrees, we're having some environmental problems
    there.
        So, in fact, we actually issued a notice of violation to
    the Corps of Engineers from our department in 2002 for
    violating the state's water policy standards for allowing the
    river to be that low, because we have the infrastructure
    already on the river and we had some cooling--some power plants
    that cut back their cooling water, lost their efficiency when
    the river was that low. So that's a real concern of ours when
    we get that low that we've got that problem.
        Mr. Gibbons. Mr. Chairman, I know you've got another panel
    and a time crunch, so I'll cut my questions short.
        Chairman Graves. Thank you, Mr. Gibbons. Our time is
    running a little short, unfortunately. I wish we had all day to
    ask questions.
        I do have one more quickly which I don't completely
    understand, but it seems that the Corps of Engineers and the
    Fish and Wildlife Service are using different sciences and
    coming to different conclusions and you both have to comply
    with the law. Am I wrong in thinking that if--go ahead.
        Ms. Hargrave. The Corps has done our very best engineering
    and biological analysis of this issue, and in our biological
    assessment that we gave to the Service in November, we put
    forth what we thought was a very sound proposal for addressing
    the endangered species, you know, on the Missouri River.
    Obviously--and Dale can respond to this--the Service came back
    and didn't agree with or think that the Corps' actions relative
    to the pallid sturgeon were enough.
        Mr. Hall. And I think that that's what consultation is all
    about is if you use consultation, and we had lots of very
    positive discussions. I can't say enough about how good the
    relationship with the Corps and the Fish and Wildlife Service
    professional relationship is, our staffs with each other. But
    then again, there can be different opinions as to what the
    science says and what it doesn't say, but we don't get to
    dodge, we have to make a decision and give our opinion.
        Chairman Graves. Thank you all. I appreciate it. We will
    briefly take just a minute and seat the second panel, and I
    appreciate you being here.
        Chairman Graves. We're running just a little bit behind and
    we will just go ahead and get started. I know we have a couple
    witnesses on the second panel who are going to have to leave
    due to other engagements, but I appreciate everybody being
    here, and we're going to start right off with Mr. Blake Hurst,
    a farmer from northwest Missouri who also serves as the Vice
    President of the Missouri Farm Bureau Federation, who is going
    to be testifying. Thanks, Mr. Hurst.

    STATEMENT OF BLAKE HURST, FARMER, VICE PRESIDENT OF FARM BUREAU

        Mr. Hurst. Mr. Chairman, thank you for conducting this
    morning's hearing. Your interest and leadership on the issue of
    endangered species reform is much appreciated. For too long
    Congress has ignored flaws in the Act and been unwilling to
    stand up to political threats from environmental organizations.
    We can only hope that a majority of members of Congress will
    soon come to understand the Act's deficiencies and support
    much-needed reform.
        To put it bluntly, the ESA is broken and in need of major
    repair. The goal of the Act remains important:The preservation
    of endangered species. However, it has evolved into the weapon
    of choice for those who believe landowners cannot manage
    without greater regulation or a court order
        Today the federal biologists have the power to impose
    prescriptive management plans and extort money from Congress
    without regard to those who actually own or make their living
    on the land. While we believe it is possible to focus on
    increasing the population of threatened and endangered species
    without prescriptive management edicts and the associated
    economic impacts, this view is not shared by the U.S. Fish and
    Wildlife Service.
        In Missouri we have firsthand experience with species
    listed as threatened and endangered by the federal government.
    In recent years we have dealt with the Topeka shiner, the
    Indiana bat, the piping plover, the interior least tern, and
    the pallid sturgeon. In each case, there was no attempt to work
    with landowners prior to listing. In the case of the Indiana
    bat, federal permits to remove a log jam were delayed, not
    because the species populated the area, but rather because the
    bat might someday decide to come into the area.
        Management of the Missouri River is a good example of how
    the Endangered Species Act can be abused. What started with a
    drought in the upper basin has evolved into a 14-year water war
    encompassing state agencies, federal courtrooms, Congress and
    even the White House. While you are very familiar with this
    issue, suffice it to say, the Missouri Farm Bureau and many
    other organizations are profoundly disappointed with the
    biological opinion issued recently by the U.S. Fish and
    Wildlife Service. If landownership means control over use of
    the land, it may very well be that the largest landowner in the
    state of Missouri is the pallid sturgeon. Perhaps we should
    tell the county collector so the property taxes can be sent to
    the right place.
        The proposed Master Manual is scheduled to be released
    later this week, and it appears the Missouri landowners will
    get to experience aspring pulse, which could also be called a
    prescribed flood; low summer flows, which exacerbate
    reliability problems for navigators; adaptive management, which
    is a license to experiment on private property; and countless
    acres of mitigation, otherwise known as land acquisition.
        Make no mistake, these measures will come at the expense
    offarmers who will be subjected to greater risk of flooding,
    lower prices for their grain and higher fertilizer
    costs;municipalities that will be forced to extend intakes to
    provide public drinking water; utilities that rely on flows to
    cool water used for power generation; the environment as
    shipments are moved off the river to truck and rail; and
    Missouri River flows which are at times dependent upon flows
    from the Missouri River.
        In the end consumers will likely pay more for water and
    electricity. Farmers will pay more for fertilizer and receive
    less for their grain. And everybody will be subjected to a
    greater risk of flooding, and public agencies will use taxpayer
    dollars to add to their already huge inventory of public
    property.
        The U.S. Fish and Wildlife Service is using the Endangered
    Species Act to prescribe these measures for the pallid
    sturgeon. ``adaptive management'' is the term used to describe
    the process under which the Missouri River will now be managed.
    ``experiment'' is a fitting definition of adaptive management
    as biologists are given carte blanche authority to use private
    land along the Missouri River as a laboratory. At this point
    there is no way of knowing if any of these prescriptive
    measures will work. The prevailing attitude is, ``Let's just
    give it a try, and if it doesn't work, we will try something
    else.''
        Mr. Chairman, there are many ways in which the Endangered
    Species Act can be improved, and I offer the following
    suggestions:
        The U.S. Fish and Wildlife Service should concentrate on
    working with landowners prior to a proposed listing. Missouri's
    1/10th cent soils and park tax has been successful because of
    its focus on voluntary, incentive-based conservation practices.
    Working with landowners when a species is in decline provides
    opportunities for actions that could prevent the need for a
    listing.
        The economic impacts associated with a listing must be
    taken into account prior to the designation of critical
    habitat. It is very important that all parties understand the
    economic impacts associated with both a listing and subsequent
    biological opinion.
        There must be increased transparency throughout the
    jeopardy process. Currently there is little public oversight or
    review of the management requirements issued by the U.S. Fish
    and Wildlife Service.
        There must be new checks that prevent species management by
    judicial mandate. While the ability to seek judicial review is
    important, shopping for a sympathetic judge must stop.
        The entire concept of adaptive management must be reviewed.
    Changes are warranted that prevent private lands from becoming
    laboratories subject to moving goalposts set by biologists
    devoid of common sense.
        Prescribed management practices must focus first on
    publicly-owned land. Expansion beyond land in public ownership
    should only occur when it is deemed essential to the
    preservation of a species.
        Land acquisition must be tied directly to the preservation
    of an endangered species. The Act must not be used as an excuse
    for acquiring large parcels of land to add already vast federal
    inventory.
        In conclusion, we commend your efforts to call attention to
    the ESA's impact on farmers and small businesses. As a farmer
    yourself, you understand the effects that biological
    experiments will have on the people who farm and live along the
    Missouri. They're your neighbors and they most certainly didn't
    ask to be guinea pigs in an experiment designed a long ways
    from the floodplain, by a scientist whose salary is guaranteed
    no matter how that experiment turns out.
        Deficiencies in the Act must be addressed to create a
    climate under which landowners are viewed as the solution and
    not the problem. While cooperation is the key, litigation has
    become the tool of choice. Perhaps Senator Bond put it best
    when he said those involved need some adult supervision.
        Thank you, Mr. Chairman.
        [Mr. Hurst's statement may be found in the appendix.]
        Chairman Graves. Mr. Hurst, do you have to leave?
        Mr. Hurst. Yes.
        Chairman Graves. Does anybody have any questions for him
    before he leaves?
        Mr. Blunt. Blake, thanks for being here today. I just want
    to say I think particularly the points you made in re-looking
    at this Act are valid points; the fact that this Act was
    written in a way that you can't consider the economical impact,
    as you pointed out. Also, what are your concerns just--talk a
    little bit more about your concerns about excessive land
    acquisition.
        Mr. Hurst. I think that sometimes the Endangered Species
    Act is sort of a wedge--at home we call it pry bar--that the
    federal government uses to expand their inventories of land,
    and I thought it was interesting that the first panel mentioned
    that well, the flow didn't matter so much as long as we have
    enough land available. In other words, it's obvious to me that
    there was a compromise available, and the only thing, the only
    reason for that compromise, I guess, is farmers along the river
    that kind of enjoy what they're doing and want to keep doing
    it.
        Mr. Blunt. What impact do you see with the levee system in
    what you refer to, I think appropriately, as a prescribed
    flood?
        Mr. Hurst. Obviously there's pressure on the levees when
    the water is high, and again, the points made earlier this
    morning about a ten-day trip from when the water is released
    into the river and when it gets to St. Louis is very apt. We
    can have tremendous floods come through Missouri in the spring
    that raises the river, and all the other associated process,
    and one of the other things that concern--you talk about levee
    systems--one of the other things that concerns us about federal
    acquisition of land along the bottom is that levee districts
    are a cooperative effort, and one of the largest owners in the
    levee district is the federal government, and their interests
    are exact opposite of the farmers involved in that levee
    district. Then you have some conflict that's inevitable.
        Mr. Blunt. I maybe should have asked this question of Ms.
    Hargrave, but I wonder if the idea of adding the 1,200 acres,
    if that involves any breaching of the current levee system and
    appropriate accommodation for that. Would you mind, Mr.
    Chairman, if she just answers that?
        Ms. Hargrave. Right, I don't believe that we're looking at
    any--in terms of the federal levee system--that we are
    involving any impact to the federal levee system. I will say
    this: One of the things that we are looking at is widening the
    river and substantially setting back some levees. Now, that
    will absolutely have to be done in conjunction with the
    property owners and in conjunction with the levee districts.
        Mr. Blunt. That was part of the entire plan to acquire the
    land. You wouldn't assume there would be any burden on the
    neighboring landowners when you did that?
        Ms. Hargrave. Oh, I don't think there's any doubt that if
    we acquire a lot of land, there is going to be an impact on the
    tax base of those levee districts. I mean, there's no question.
        Mr. Gibbons. Mr. Hurst, you obviously seems to be a
    gentleman of impeccable common sense. Perhaps we need to have
    more like you in control of some of the decisions that are made
    with regard to these issues.
        My question is, and just I almost know the answer and I
    think the public knows the answer to this question, but do you
    think the farmer or rancher or property owner along the river
    would be better off in controlling the lands with the help of
    the government rather than giving it up to the government to
    control?
        Mr. Hurst. Well, I'm kind of happy to live in my small
    community that's dependent on farmers shopping there. We farm
    along the Missouri River or one of the tributaries, and I like
    my life and I'd like to maintain it; and what happens, it's
    always--whenever government talks about adding more land to the
    inventory, it's always from willing sellers. But folks who
    might not have been willing 20 years ago are now faced with a
    prescribed spring flood, they're faced with higher prices for
    their fertilizer because navigation's stopped, they are facing
    more danger if they happen to live in the bottom. So what might
    not have been a willing seller 20 years ago may be today, and
    if these rules get more in favor of the wildlife and less in
    favor of the farmers, then these people who today are not
    willing to sell may be willing to sell and in 20 more years. So
    that willing sell always kind of gives me the willies
    sometimes.
        Mr. Gibbons. If you want to see a real challenge when you
    talk about federally-owned, federally-managed property in the
    state, you should come to Nevada. Nevada has 89 percent of its
    geographical area that is owned and managed by the federal
    government. Running a state on 11 percent private property, you
    will understand the impact on any private property about the
    Endangered Species Act. Thank you for coming.
        Chairman Graves. I have one question, and I'm going to ask
    this of all the panel, too, but just real quick, how does it
    feel to have the needs or life of the pallid sturgeon fish over
    your own?
        Mr. Hurst. Well, I mean, to somebody living where I do it
    seems crazy. That's how I put it. It seems like a crazy thing
    to do, but I guess that's where we are.
        Chairman Graves. Thank you.
        No. 2, Mr. DeShon, who is the Chairman of the St. Joe
    Regional Port Authority. I appreciate you being here and I look
    forward to your testimony.

     STATEMENT OF DICK DeSHON, CHAIRMAN, ST. JOSEPH REGIONAL PORT
                               AUTHORITY

        Mr. DeShon. Mr. Chairman, I want to thank you for bringing
    this meeting to St. Joseph, Missouri, to discuss the economic
    impact the Endangered Species Act has had on small business in
    northwest Missouri and northeastern Kansas. I would like, for
    the benefit of our visitors today, to tell you that just a few
    hundred feet to the west on April 3rd, 1860, the first Pony
    Express rider was taken across on a ferry on his way to
    California to deliver mail. Now, every Pony Express rider that
    came back from California also got on that river to get back to
    St. Joseph.
        My point would be that the river was more reliable as a
    form of transportation in 1860 and 1861 than it is today,
    because we're not ever sure whether we're going to have water
    in that river or not.
        I'm chairman of the St. Joseph Regional Port Authority, and
    we were created in 1988 by the City of St. Joseph, Buchanan
    County, State of Missouri, to spur economic development, create
    jobs and share as a transportation advocate for manufacturing
    companies, farmers, and agribusiness.
        Now, I'm going to try to be very brief because we're short
    of time, but we've taken the lead in the redevelopment of the
    stockyards industrial park. In the next couple years we're
    going to have a new pork processing plant there that's going to
    be state-of-the-art, corporate headquarters, thousands of new
    jobs. We also built a new road in the stockyards area, Bluff
    View Road. We are between Ag Processing and Aquila, and we've
    opened up barge facilities, as Mr. Keith told you, on the
    Missouri River in the spring of 2002. This barge facility was
    built at the intersection of Missouri Highway 36 and Interstate
    229 and on a main line of the Union Pacific Railroad. Now, if
    we had any water in the Missouri River, we could truly be a
    competitive transportation advocate.
        This area is a major producer of corn, soybeans and wheat,
    all of which could be shipped by barge. Now, we don't always
    ship it by barge because we don't always have a market. The
    market for grain is very competitive, but today, even if we
    could ship a thousand barges to China or anyplace in the world,
    we would not be able to ship it on the river.
        I'm sure you also know that we use thousands of tons of
    fertilizer in this area, all of which could be shipped into St.
    Joseph by barge. Now, what you may not know is that we have
    four companies in this area that use 150 to 2,000 tons of
    processed wire rod, all of which can be shipped by barge, and
    that is the most economical way to ship it.
        During our first year of operation we unloaded 16 barges of
    steel coil wire. Each barge takes 60 to 75 trailers off of
    Missouri highways, and I can tell you we need to relieve our
    Missouri highways. If we could haul all the wire by barge, we
    could take 7,500 trucks off the highway. Besides the wear and
    tear, I'd like to consider the pollution that has been moved
    from our cities and towns when we ship on the river.
        Now, we intended to quadruple the barges for 2003 but we
    ended up with an unreliable water source, as Mr. Keith pointed
    out. The barges refused to even consider shipping on the
    Missouri River because they didn't want their barges caught.
    We've been advised that MEMCO Barge Line will halt operations
    on the Missouri River in 2004, and the owner of Blaske Marine
    in Alton, Illinois, said the chances were slim he would be
    bringing barges to this city. That could cost up to a thousand
    jobs.
        Why is this a devastating situation? The first reason is we
    remove a competitive form of transportation from our market.
    One of our fertilizer dealers, a full barge, docks in St.
    Louis. He is forced to unload the barges into hopper cars and
    then ship to St. Joseph. This doubles his transportation costs
    which is eventually put back on to the farmer unit.
        The second reason is that in St. Joseph we have a 200-acre
    brownfield industrial park that we believe that we can develop
    if we have a viable barge facility. Our port authority is the
    anchor for that industrial park. I can't tell you how many jobs
    that we weren't successfully able to create in St. Joe in the
    last five years when we were unable to provide land that could
    be developed.
        The third reason we need to increase the Missouri River
    flow is we are the biggest feeder for the Mississippi River.
    The Mississippi would not be the river it is today without
    water from the Missouri. We have a very short history but we
    will never realize the potential we think we should have if we
    can't depend upon the Missouri River.
        The Endangered Species Act has closed our barge facility
    for the 2004 season. No one in their right mind will take a
    chance of getting caught on the Missouri with a loaded barge.
        Now, it would make a better story for the press if I could
    tell you that we were going to be bankrupt in a year or two,
    but I am not going to give the press that benefit because we
    will be here, we will survive, because we think that this group
    that we're speaking to today will eventually see that we can do
    something about bringing some sensibility to the Endangered
    Species Act. We just don't have enough water on the Missouri
    River today. Hopefully we will be able to evolve from that.
        Chairman Graves. Thank you, Mr. DeShon. Next is Mr. Chad
    Smith, who is the Director of the Nebraska Chapter of American
    Rivers. Thank you for being here. I look forward to your
    testimony.

    STATEMENT OF CHAD SMITH, DIRECTOR, NEBRASKA CHAPTER OF AMERICAN
                                 RIVERS

        Mr. Smith. Thank you, Mr. Chairman, Mr. Blunt, Mr. Gibbons.
    I very much appreciate the opportunity to be here today and
    testify on the Endangered Species Act and its role on the
    Missouri River.
        My name is Chad Smith. I'm the Director of the Nebraska
    Field Office for American Rivers, and I have also done work on
    the Missouri. I come before you as a life-long Nebraskan,
    hunter, angler and conservationist. I grew up and spent a lot
    of my time on the Platte River in central Nebraska. I grew up
    there duck hunting and cat fishing with my dad, and those
    experiences have grown into a passion--you could probably more
    accurately describe it as an obsession--with hunting and
    fishing that stands to this day.
        As a hunter and angler, I spend a good deal of money every
    year on licenses, gear, travel and other recreation-related
    expenditures, money that flows into the local communities and
    small businesses that support hunting and fishing. Thousands
    upon thousands of other Americans do this every year as well,
    making hunting, fishing, and other outdoor recreational
    pursuits a multi-billion dollar industry in the United States.
        In all cases the expenditure of those dollars and the
    viability of the small businesses that cater to recreation and
    tourism depend on one common thread: a healthy environment.
    Outdoor recreation and tourism is largely centered on places
    that attract people to them, be they rivers, plains, forests,
    or mountains. In the case of the Missouri River, an immense
    opportunity to tap into that economic potential is being
    squandered. The health of the Missouri River is in dire
    straits, and the river is simply not the destination of choice
    of most people in the Missouri River basin. Most have turned
    their backs on the Missouri, and it is not living up to its
    economic potential or providing the kind of quality of life
    benefits that we should expect from a big river system.
        Often the Endangered Species Act is invoked as a tool of
    last resort to prevent the continued decline in health of a
    natural system like the Missouri River. The focus is often on
    one or a few species, and those species receive much of the
    attention in the public policy debate. But endangered and
    threatened species are mere indicators of greater problems in
    an ecosystem and reflect that management changes are necessary
    to help not just particular endangered species, but ultimately
    all the native species that inhabit the ecosystem and the
    people that depend on the ecosystem system as well.
        Over the past 15 years the Army Corps of Engineers has
    spent millions of taxpayer dollars analyzing these potential
    changes in the operation of six large main stem dams on the
    Missouri River. This process is part and parcel of the Corps'
    attempt to update and revise the Missouri River Master Manual
    which is the guidebook, as you know, that the Corps uses to
    operate the river's federal dams. As a part of that analysis,
    the Corps has evaluated dam reform options that incorporate
    more natural flows on the Missouri.
        Natural flow restoration has been called for by an
    independent panel of the Natural Academy of Sciences, the U.S.
    Fish and Wildlife Service, and all of the fish and wildlife
    management agencies from the states in the Missouri River
    basin. The Corps itself has found that restoring more natural
    flows to the Missouri River will actually result in an annual
    net economic benefit to at least $8.8 million for the basin.
    Corps studies also show that we can do that and achieve this
    economic benefit without ceasing navigation on the lower
    Missouri, improving navigation on the Mississippi, without
    unduly impacting floodplain farmers along the river and
    ensuring that everyone gets their power and their water.
        Further, the economic options presented by a Missouri River
    that once again looks and acts like a river are endless. By
    making the Missouri River a destination for hunters, anglers,
    boaters, campers, hikers and families, communities up and down
    the river can tap into limitless economic possibilities that
    are associated with outdoor recreation and tourism. Coupled
    with on-going agricultural practices in the floodplain and
    other traditional uses of the river, the Missouri River can
    truly become an economic engine for this entire basin.
        On the Missouri, as in so many cases, the Endangered
    Species Act can be a tool to not just ensure a species avoids
    extirpation. The Endangered Species Act is ultimately a tool to
    help us to realize ways to better manage natural systems, link
    them more directly with our economic prosperity, and ensure we
    leave a lasting legacy for future generations. The acrimony
    that has followed the Master Manual revision process on the
    Missouri River is unfortunate and largely unnecessary. We now
    need to focus on how to deal with potential impacts of flow
    restoration, ensure no single person or group is unfairly given
    the burden of management changes, and begin implementing a new
    vision for the Missouri River and the valley through which it
    flows.The Endangered Species Act is but one tool to help us
    toward that end. Thank you.
        [Mr. Smith's statement may be found in the appendix.]
        Chairman Graves. Thank you, Mr. Smith. We will now hear
    from Paul Davis, who has come to us from Interstate Marine
    Terminals, Incorporated. I appreciate you being here.

         STATEMENT OF PAUL DAVIS, INTERSTATE MARINE TERMINALS,
                          BOONVILLE, MISSOURI

        Mr. Davis. Good morning, Mr. Chairman, and thank you for
    allowing me the opportunity to share some comments with you
    regarding the impact of the Endangered Species Act on
    commercial navigation on the Missouri River.
        I am Paul Davis, the owner of a family-owned barge
    terminal, located on the Missouri River at Boonville, Missouri.
    Founded in 1971, Interstate Marine Terminals ships and receives
    bulk commodities, primarily fertilizer, feed, grain, and salt
    by barge, truck and rail. We are also partners with the Howard
    Cooper Regional Port Authority, which is the only state-funded
    public use barge-docking facility on the Missouri River between
    St. Louis and Kansas City. Our company distributes products to
    some 250 wholesale customers in a 150-mile radius of Boonville.
    I have worked at our terminal in Boonville since 1974.
        In July 2003, a federal judge ordered the U.S. Army Corps
    of Engineers to reduce Missouri River flows. The court order
    was in response to arguments by conservation groups that high
    flows on the lower portions of the river threaten the least
    tern, piping plover and pallid sturgeon, which must be
    protected by the Endangered Species Act. As a result of the
    court-ordered stoppage of navigation on the Missouri River, the
    primary barge-towing carriers canceled much of the fall 2003
    service to facilities such as mine. Prior to the stoppage, I
    had anticipated delivery of 25,000 tons of fertilizer and grain
    outbound shipments for the fall of 2003. Eighteen of the 19
    barges were canceled because of the stoppage.
        As a result, my facility only received 1,300 tons by barge
    of the planned 25,000 tons in the fall of 2003. The other
    23,700 tons was moved by truck and/or rail, with additional
    freight costs of $15 per ton average. $15 per ton additional
    freight adds approximately nine percent to the average cost of
    fertilizer at Boonville, resulting in extra costs in fall 2003
    estimated at $355,000. This extra cost of doing business is
    ultimately passed on to farmers in higher fertilizer costs and
    to consumers in higher food costs.
        Additional costs are incurred as freight is diverted from
    barges to trucks in the form of additional wear and tear on
    highways, more pollution from truck fuel burning, and more
    tires going into landfills.
        In addition to the negative economic impact experienced by
    my business last fall, which can be quantitatively measured,
    the long-term effect of the 15-year struggle over the river
    flow has been to cause shippers to seek alternate freight modes
    rather than to constantly deal with the uncertain future of
    Missouri River navigation. Due to the minimum service summer
    flows, my company is handling reduced barge tonnage in highway
    salt, molasses, and grain. With the reduced flows, the lower
    barge drafts have made products uncompetitive in my market
    area.
        Due to the uncertain future of Missouri River navigation, I
    have observed neither construction of new facilities nor
    expansion of existing facilities on the lower river for many
    years. In 1988, when the Corps commenced the Missouri River
    Master Manual review process, the Corps predicted that the
    review would be completed in three years. And yet, 15 years
    later we find ourselves no closer to a solution that everyone
    can live with than we were when the review began.
        Just last week I had a phone conversation with a manager in
    a company that produces a product I am interested in bringing
    in to mid-Missouri for distribution. When I told the man that I
    owned a barge terminal on the Missouri River, he was silent for
    a moment and then asked, ``Isn't that the river that might not
    have any barges in the future? Are you sure that we could even
    ship our product to you?'' And then he went on to say, ``I'll
    get back to you in a couple of weeks.'' everyone in this room
    that's in business knows what that means.
        I am sure that any number of companies that might normally
    be interested in expanding into the Missouri market will not do
    so as long as the cloud of uncertainty caused by the ESA issue
    remains.
        There is currently much debate in the United States
    regarding the outsourcing of jobs to offshore locations such as
    India and China. In our increasingly global economy, an open
    marketplace will invariably seek out lower costs of production.
    One way to help prevent the additional job loss, in my opinion,
    would be for the United States to seriously re-examine the
    Endangered Species Act. The ESA was passed over 30 years ago in
    a show of bipartisan good intentions to help animals on the
    brink of extinction. But since that time environmental groups
    have hijacked the Act, turning it into a bludgeon by which they
    can enforce their vision of a development-free America. The
    ESA's capricious and uneven enforcement only underscores the
    utter bankruptcy of the law. The government spends so much of
    its time and money defending itself from specious litigation,
    mostly by environmental groups, that there's little time left
    to actually devote to flora or fauna.
        Currently the ESA provides only penalties against non-
    compliant property owners and developers. The natural reaction
    to the threat of penalty is that some property owners remove or
    diminish habitat, rather than enhance, in an effort to prevent
    endangered species from habituating on their property in the
    first place. Well, Gentlemen, this is exactly opposite of the
    intention of the ESA. And I suggest rather than just penalizing
    those in non-compliance, the government should develop an
    incentive-based approach that rewards landowners with
    endangered species habitat enhancement. If this is not done, I
    believe endangered species recovery will continue to be a
    divisive issue that further erodes our ability to compete in
    the global economy.
        Thank you.
        [Mr. Davis' statement may be found in the appendix]
        Chairman Graves. Thank you, Mr. Davis. Now we will hear
    from Bruce Hanson with MFA.

    STATEMENT OF BRUCE HANSON, VICE PRESIDENT OF TRANSPORTATION AND
                    DISTRIBUTION, MFA, INCORPORATED

        Mr. Hanson. Thank you, Mr. Chairman. I appreciate the
    opportunity to be here this morning.
        My name is Bruce Hanson. I am vice president of
    transportation and distribution for MFA, Incorporated. MFA is a
    regional agricultural cooperative serving 45,000 members in
    several Midwestern states. I am here to testify on the impact
    the Endangered Species Act has on our farmer owners and the
    agricultural economy at the current time.
        Farmers pay retail prices for their inputs and sell their
    output at wholesale prices. They also pay the freight both
    ways. Transportation costs dictate market access and profits.
    Reliability and consistency is critical. For the past two
    years, and apparently this coming season, the Missouri River
    has been and will be neither.
        MFA has facilities to receive fertilizer and ship grain on
    the Arkansas, Mississippi, and Missouri Rivers. We move over
    ten million bushels of grain and 500,000 tons of fertilizer via
    the river system. We calculated the following impact to our
    members based on our tonnage moved on the Missouri River. One
    8'6'' draft barge holds on average 1,500 tons. That's
    equivalent to 15 rail cars or 60 trucks. Railroads are at
    capacity. We have averaged 15- to 30-day delays in receiving
    rail cars since November, and our highways and bridges are in
    need of major repair and are congested.
        The Gulf Coast export market is the primary destination for
    the Missouri River grain. The Gulf market does not take single
    rail car shipments, only unit trains. Further, grain basis
    values are often highest during the late spring and summer
    months. Therefore, without reliable river transport, this
    market is shut out to our farmers. Using actual rates published
    in Union Pacific Railroad's tariff, the freight from Kansas
    City to the Louisiana gulf in 75-car unit trains is 52 cents
    per bushel. By comparison, a normal barge rate from Kansas City
    to the Louisiana gulf is 38 cents per bushel.
        Based on MFA's Missouri River volume, this will cost us and
    our producers over $750,000 in lost grain values due to market
    access, timing and freight costs. MFA has a fertilizer facility
    at Brunswick, Missouri. Over two-thirds of our inbound
    fertilizer normally moves via water. None will this season. The
    economic impact of shifting to higher cost, less
    environmentally friendly modes is $1.1 million. Mr. Chairman,
    that's almost $2 million historically.
        Newly developed research has indicated that the preliminary
    cost to Missouri agriculture due to the inability to use the
    Missouri River transportation is over $22 million.
        I have to ask, ``Where is the common sense?'' closing a
    major navigable waterway for experiments is illogical. Less
    than 25 percent of the river is tern and plover habitat.
    Alternative means of creating habitat exist. On the Platte
    River, islands and sand pits produce over seven times as many
    birds at half the cost. Approximately half of the adult plovers
    nest above the Gavin's Point Dam. Where is the common sense?
        The pallid sturgeon's range is from Montana to Louisiana.
    We heard a little bit about that this morning. Yet some propose
    to restore habitat where sturgeon haven't been found in six
    years, perhaps at the detriment to locations where they do
    exist. Where is the common sense? We have 200 native natural
    sturgeon in the river I heard this morning. That means there's
    maybe 50 breeding pairs a year, and we're going to shut down a
    major navigational system. Let's not forget the introduction of
    non-native, predatory fish for sport that eat young sturgeon.
    Where is the common sense in that?
        I believe that most people are environmentalists. However,
    some are radical fanatics who are anti-growth, anti-progress,
    anti-anything. Look at the debate on our lock-and-dam system on
    the Mississippi and Illinois Rivers. Decades and millions of
    dollars have been spent on studies and environmental mitigation
    without much progress. Meanwhile, foreign competitors continue
    to invest and modernize their waterways to this country's
    economic detriment.
        It is time to remove the protective skirt that these groups
    hide behind called the Endangered Species Act. It is time to
    get down to real business. Reform the Endangered Species Act to
    operate this country for people and prosperity. That is common
    sense. Thank you.
        [Mr. Hanson's statement may be found in the appendix.]
        Chairman Graves. Thank you all. We will now have questions.
    We will try to keep our answers as brief as possible so we can
    get back on schedule. I know everybody has schedules to keep. I
    do have a question for Mr. Smith.
        When you talk about the Endangered Species Act, it seems
    more instead of a danger zone it's what you can use the
    Endangered Species Act to achieve. In another comment I think
    you said, ``a river that looks and acts more like a major
    river.'' can you tell me what--that baffles me. Can you tell me
    what your ideal impression of a river should look like?
        Mr. Smith. Well, I don't think there really is any ideal
    that any one person has. It depends a lot on what the input in
    the river is. This river out here is a ditch, and the rest of
    it upstream is pooled underneath large reservoirs. It's not the
    Missouri River that evolved over time.
        Now, I don't, or our organization doesn't support turning
    everything back to the way it was originally, but to be able to
    get people out there and enjoy something that's not deadly
    dangerous to children when they want to get out there to swim,
    that attracts fish and wildlife so people can get out there and
    bird watch and hunt and fish, we need to try and bring back
    some of the characteristics of the river.
        The heartbeat of any major river system is its natural
    flow. Again, we're not going to go back to the pre-dam
    unregulated flow, but we can bring back small pieces of that
    heartbeat and try to get the function of the river working
    again.
        In terms of the form, I've heard them talk about several
    times today there's a lot of effort underway right now today
    with sellers and others to try to cooperate with landowners to
    try to get the river spread out in a few places, have some side
    channels, some wetlands, some backwaters, the kind of habitat
    that got lost in the channel of the river. That's not only for
    fish and wildlife; that's where someone who wants to hunt and
    fish, that's where we would go to hunt and fish.
        So just trying to get away from thinking of the Missouri as
    a commercial artery that people largely ignore; and I've found
    that to be the case as I've traveled up and down this basin for
    six years now. Getting the river away from that image and
    getting people to think of it as an asset is going to require
    some effort on the form and the function, not turning back to
    the provision of what it was that caused it, but trying to get
    it to actually be a system of delivery out there.
        Chairman Graves. What is your group looking for? For a
    commercial route?
        Mr. Smith. They were, and we made an attempt to try to make
    a commercial route, but it's been a failure in large part as a
    route for a long time; and I still firmly believe you can
    continue to have navigation in some way on this river but also
    do something for this river that brings people back to it, and
    I don't think it's something that's not a need or situation. I
    think you have the impediment right now you can focus on this
    endangered species stuff and that is very real and felt
    antagonism towards, and we need to focus on how do we get over
    some of these failures. We don't have the navigators bearing
    the burden, we don't have the farmers bearing the burden, but
    people need to realize there is a process out there.
        Chairman Graves. Give me a sense for our children swimming
    out there and bringing the people back. Even Lewis and Clark,
    you know, according to the journal, one of them even says he
    dipped a cup down in the river and you pull it up and it's full
    of mud and half of it's water. What's taking the river back to
    that? I don't want my kids to be swimming in it. For that
    matter, even the mosquitos are a huge problem for getting back
    to that. You know, if we have the pools and backwater stuff,
    that's going to have insects there. I just don't, I absolutely
    just do not see--I do not see the rationale behind going to
    that, which I don't believe will--you know, is going to
    accomplish anything at the expense of all these lives that
    we're going to affect. It baffles me that we are at that point.
        Mr. Smith. Well, we can come to an agreement, I think,
    about what the river can mean for a wide variety of people, and
    I really believe that it is a false choice to say that a
    healthy environment does not equal a healthy economy. I think
    those two things go hand in hand, and helping the environment
    doesn't mean taking things back to the way they were in 1804,
    but we have a lot of information that we've gained over the
    past hundred years of doing science in this country on the
    Missouri. There's any number of scientific studies that talk
    about the need for having flow recreation and habitat
    restoration to a measured degree, and I firmly believe that we
    can take some of those small steps forward and bring some of
    this river back and not drop jobs down the river and, in fact,
    creating more jobs and make this river truly an economic engine
    for this basin. But I think people think it is that now but
    it's not, but it could be.
        Chairman Graves. Mr. Blunt?
        Mr. Blunt. Mr. DeShon, the port authority, do you own any
    facilities? Does the port authority manage any facilities?
        Mr. DeShon. Yes, we have a 13-acre site where our new barge
    facility is built now.
        Mr. Blunt. It's a new barge facility?
        Mr. DeShon. New barge facility.
        Mr. Blunt. How much of an investment was made in it?
        Mr. DeShon. About a million and a half dollars.
        Mr. Blunt. And essentially that new facility won't be used
    in the next year or two?
        Mr. DeShon. Not in barges. It's interesting that you ask
    that, now I can tell you, we will bring in the steel now, it's
    going to come from Canada. It will not come from Houston, and
    so that affects our balance-in-trade, and that's unfortunate
    because I prefer to buy steel in the United States.
        Mr. Blunt. And the steel will come in by?
        Mr. DeShon. Railroad.
        Mr. Blunt. By railroad.
        Mr. DeShon. Or truck.
        Mr. Blunt. Mr. Davis, you mentioned the fertilizer costs.
    In answer to the fertilizer costs that Mr. Hanson mentioned,
    the enhanced, the added transportation costs, doesn't that
    create a competitive problem for us because just because we
    have extra costs on this part of the river, that doesn't mean
    the price is going to go up where that grain is ultimately
    sold, does it?
        Mr. Davis. That's the essence of the economic negative
    impact on the farmers is that that does not. In fact, the
    farmer cannot pass on those costs. They take the direct hit.
    They are going to get the same price for their grain as the
    Gulf or wherever, but the transportation costs increase so
    they're the ones that are impacted. Similarly on fertilizer.
    They have extra costs in fertilizer, particularly cost of
    production. They're not getting paid any more for their
    product.
        Mr. Blunt. You've been in business a long time now. What do
    you see over the last couple of decades? Give us a comparison
    of where you see the future today compared to where you did 20
    years ago when you were looking at the traffic and the barge
    situation you were looking at there.
        Mr. Davis. Well, I'll say this: Being a family business, if
    we had known 30 years ago that we would be sitting here today
    talking to these issues, we never would have invested in the
    first place, but there was a need for a facility like ours
    because the railroad service was already in a declining mode,
    and we just filled a market need which continues to be there
    today.
        Before, in the late '80s we were doing up to 100,000 tons a
    year through our facility. Due to the uncertainty of this
    debate over the river flows and no confidence in the expansion,
    and it's like the death of a thousand paper cuts. We're lucky
    to do 40,000 tons a year now just because all of our market has
    been nervous for a long time, they're finding alternate methods
    of shipping. So it's just been a gradual decline, and this year
    no towing, in essence, on the river.
        I can remember when I first started there were eight or ten
    tow companies on the river and it was a very viable industry.
    It's not that the market isn't there for it. It's just when
    there's the uncertainty, people's instinct is to find other
    ways to do business.
        Mr. Blunt. Mr. Hanson, you talked about the importance of
    having a unit train, a dedicated train. You sell grain,
    obviously, to off-loading and other considerations. I guess
    your point is it's a lot harder to fill up that dedicated train
    at a one-barge location than it would have been to fill up a
    six-state and a 32 or a 30 car.
        Mr. Hanson. That's correct, and also there are not unit
    train stations along this part of the Missouri River. They're
    all smaller, 10, 15, 3, 4, 6 car shipping locations, so the
    fact of even having that option would require the investment
    of, you know, millions of dollars.
        Mr. Blunt. So without barge traffic how do you get the best
    market.
        Mr. Hanson. Well, you go to your second or third best
    market and you go by truck.
        Mr. Blunt. That's what I thought. That's what I thought.
        Just one question, Mr. Smith. Do you take litigation that
    you believe are primary litigants and do some litigation on
    this issue?
        Mr. Smith. Yes.
        Mr. Blunt. And you mentioned that the Endangered Species
    Act is offered as a tool of last resort. Do you think that's
    why the Act was created?
        Mr. Smith. Well, I certainly think for some of the species
    it is a tool of last resort when nothing else has worked and
    they are getting some extra protection. If that doesn't happen,
    that's pretty important. In terms of--we've all known the
    public policy, and I'll speak specifically to the Missouri
    River. Me personally, my organization, other conservation
    groups I work with throughout the basin, most of my time in the
    past six years has been spent on the road giving presentations,
    talking to civic groups, going to meetings, working, trying to
    work cooperatively with the Corps of Engineers, elected
    officials, whoever will listen to try to find a way to avoid
    litigation and get rid of this endangered species issue and
    implement a vision for the future and get it working, and it
    simply has never happened.
        The Corps of Engineers, as everyone says here, as everyone
    knows, has been working on this for 15 years and they keep
    putting out the same plan after the same plan, and we're not
    getting to the heart of the matter. I don't want to be involved
    in litigation. It costs me a huge amount of time and effort to
    be involved in that. It's not a perfect solution. It's
    extremely complicated. I'm wasting my time dealing with
    attorneys and briefs and litigation when I could be out trying
    to work with people and figure out a way to do this, but
    frankly, we get to a place where you have a species like the
    pallid sturgeon that's about extinct when there's an indicator
    that there are some things seriously wrong on the river system
    like the Missouri.
        This is the kind of thing we get left to and, you know, I
    think a lot of the problems with the Endangered Species Act
    maybe aren't necessarily in the language of the Act itself but
    are problems with perception and implementation that we're all
    a part of, and I think we need to be much more focused on
    recovery. We need to be focused on solution building. I mean, I
    think it would be a great idea to invest in making sure that
    there were unit train stations, that we don't have to--maybe we
    need to help deal with the power plants to deal with water
    issues. Maybe we need to invest in pumping structures for
    farmers who are having the most considered drainage problems.
        That's where we need to be on this: How do we fix these
    problems and do it so that those people can continue to operate
    and make a living and do business but so that other people can
    get out and take advantage of the Missouri, too, and so they
    can do better things for their communities. I think we focus
    too much time--I frankly I don't even care about the threatened
    and endangered species. My concern is the fact that they are an
    indicator there is something seriously wrong on this river.
        When my daughter grows up, she may not be able to get out
    and enjoy the Missouri River at all. That's something I'm not
    going to allow to stand, and we need to focus away from the
    individual species and think more about how do we fix problems
    and how do we make things work for people.
        Mr. Blunt. Are you aware of your expenses as part of the
    litigation, your group?
        Mr. Smith. Yes.
        Mr. Blunt. What percentage of your budget goes to
    litigation?
        Mr. Smith. Our lawyers are working pro bono.
        Mr. Gibbons. Thank you very much, Mr. Chairman. I know the
    time is short. I'll try to keep my questions brief. I only have
    really one question, and it goes to Mr. Smith.
        As a representative of the bringing rivers to life,
    American Rivers Organization, you speak for that group?
        Mr. Smith. Uh-huh.
        Mr. Gibbons. After listening to literally every one of the
    other people who came before this Committee this morning, does
    your Committee accept the concept or will you endorse the
    concept that the Endangered Species Act has to be modernized
    for the 21st Century?
        Mr. Smith. I think in terms of implementation it probably
    does. I'm not an expert on the language and I'm not a lawyer so
    I----
        Mr. Gibbons. Let me just paraphrase------.
        Mr. Smith[continuing] Okay.
        Mr. Gibbons.--with you because I think it's very simple.
    What I hear Mr. Davis saying is barge traffic being low due low
    water added freight costs, is going to add to both the cost of
    products that are going to be brought up here, it's going to
    add to the pollution, air pollution, landfill pollution, it's
    going to add to the loss of competition, the loss of
    businesses, loss of jobs in this area. And you take that and
    add that to the fact that there have been 1,250 species listed
    on the Endangered Species Act and 15 or so have been recovered
    throughout all of that time frame, billions of dollars have
    been spent on the Endangered Species Act, most of which have
    been in bullet-proofing acts for losses to that organization
    before, and most of the dollars are spent in defending
    litigation rather than on the recovery. Because 15 out of 1,260
    species is not what I call a good result, and in fact, it's
    been in existence for nearly three decades.
        So you would think, like most of the people here think,
    that this Endangered Species Act has to be made so that it
    accommodates, as you would say, the economy and the
    environment, and all of us would agree. We're not here to say
    that we need to do away with the Endangered Species Act
        Mr. Smith. Yes.
        Mr. Gibbons. We want to modernize it so that we can handle
    some of these issues that were brought up by your organization;
    and you speak for them, you're the pulse of that organization.
    Would you say that it needs to be modernized?
        Mr. Smith. I think in the implementation it does. You know,
    I just--I'm not going to give a definitive answer on if there's
    language in the Act that needs to be changed because I think--
    and I think the Missouri is a great thing. I think the
    Endangered Species Act needs to be focused on recovery of
    species that we have a better result than 15 out of 1,200 and
    also that we deal with issues of the economy.
        Mr. Gibbons. If we don't change the structure of the law,
    courts will continue to interpret the law the way they have in
    the past which has resulted in nearly a bankruptcy that
    everybody that's come here as a witness today complained about.
        Mr. Smith. Right, I understand.
        Mr. Gibbons. So it's my belief and the way I believe this
    ESA should be amended is that there ought to be some
    accommodations for these people. There ought to be indemnity
    for people operating on the river in low water, so if there's
    something that occurs that isn't the result of their act but
    due to the Bureau of Reclamation or whomever, lowering the
    water on the river--or, in fact, what about the idea that there
    ought to be accountability and responsibility for disaffected
    environmental groups that bring litigation on the ESA as a tool
    to stop and block any kind of progress?
        There ought to be some sort of accountability and
    responsibility. For example, if their frivolous lawsuit is lost
    in court that they pay for the damages that they caused by
    bringing a frivolous lawsuit.
        Those are just simple modernizations that we can do that
    would make it workable, what would take it out of the court's
    hands, put it into the hands of the people who are going to
    better utilize both the resources and the protected species.
    These are things that I think that the American public is
    expecting of us, and these are the kinds of things that we're
    going to work toward, and that's all I have to say. Thank you.
        Chairman Graves. First I have a question before I close,
    one further question, and I'll direct it to Dick--Chad, you can
    you can answer too, if you want--but each one of you, how do
    you feel about the pallid sturgeon being put--the survival of
    the pallid sturgeon being put over your own survival in the
    port authority?
        Mr. DeShon. Well, it's--it's kind of like buildings we have
    in this city. We're obviously not going to save every old
    historic building. I'd like to but we're not. We're in another
    century of worry, and you know, I get very concerned when Mr.
    Smith talks about the river being turned into a natural flow.
    Does that mean he wants to take all of our levees out, does
    that mean we go out and tear the dams out? I'm not sure what
    that really means, but that would be returning the river to its
    natural flow. We have a river out here a mile wide. We have no
    control, and I, you know, I think it's a much bigger issue than
    returning to its natural flow.
        Mr. Smith. Well, let me say one thing. Certainly anybody
    that has followed this issue for the last several years knows
    that we're not advocating removing levees and taking out dams
    and that sort of thing. I believe it's inaccurate to
    characterize this as putting the pallid sturgeon above people.
        I think we can have the pallid sturgeon, we can have the
    transportation, we can have hunting and fishing, and we can
    have a river that works for this basin, and that's our vision
    and we hope other people have that too.
        Chairman Graves. Mr. Davis?
        Mr. Davis. I think it's exactly about putting the pallid
    sturgeon above people. I've lived and enjoyed living along the
    Missouri River almost as long as a lot of people in this room,
    and I'm personally offended when it's referred to as a ditch.
        It's interesting that a number of years ago in the middle
    of this process there were public hearings from St. Joe and
    farther north, but I attended public hearings sponsored by the
    Corps from St. Joe, Jeff City, St. Louis, Memphis, and it went
    on down to New Orleans, and the overwhelming reaction by the
    farmers at those hearings right in this room, I believe, about
    the so-called spring-rise concept, the farmers filled this
    room. It was so violently opposed to that concept that the
    Corps of Engineers--and I've always had the utmost respect for
    them--graciously acknowledged that they had not considered the
    economic impact of backed-up interior drainage if there was a
    spring rise; and they said we will go back and we will consider
    that.That took five years for the Corps to look at it again.
        In my perception--and I've been watching this since day
    one--in that interim period up unto that point the economics
    were being looked at, in my opinion, it was an equal balance of
    the ESA, but along came the focus on the pallid sturgeon and
    all of a sudden the tide turned against us, and it's been that
    way ever since. So I think its political totally behind, hiding
    behind ESA and using, as I say, a bludgeon.
        I'll make a final comment in terms of your question about
    how I feel about the pallid sturgeon. The same way I feel about
    us sending dollars overseas when we have lots of needs for
    money being spent on poor people in the South or in the ghettos
    or whatever. We have real needs here and yet we're sending
    money overseas.
        Nobody's offering me a lifeline on this issue, and I'm here
    feeling pretty endangered myself. You know, ultimately God
    created a wonderful world, but there's a lot of survival on
    sustenance, and here it is survival of the fittest, and nobody
    is offering me any lifeline on survival of the fittest like we
    are on the pallid sturgeon. Thank you.
        Mr. Hanson. Well, first I'd like to say there's vision and
    then there's reality. One you have to deal with; the other you
    can think about.
        Number two, I think the Endangered Species Act is used
    exactly as a tool to force issues in litigation and get
    sympathetic ears and make decisions that are whatever side you
    want to make them on. It's not being used for a lot else. I
    don't think anybody out here wants to see people or species go
    extinct. I certainly don't want to see people go extinct. Fish
    don't pay taxes. You know, I don't know if there's
    reincarnation, but I know I damn sure don't want to come back
    as a pallid sturgeon because that doesn't sound like a lot of
    fun.
        So I would say this: If we need to do things for historic
    habitat for species, let's do those things. If we need to put
    them in a zoo, in a breeding, in an aquarium, whatever format
    we need to to learn, to study them to help them reproduce,
    fine, let's do that. We've got 200 fish that we're worried
    about. We've released 40,000? I mean, where's reality?
        Chairman Graves. Thank you all for being here. I'll offer
    this information. We will put the legislation together to make
    changes to the Endangered Species Act and bring it a little bit
    more into reality. We will be able to take some of these
    factors into account when making these decisions and move away
    from using the law to put fish ahead of people.
        We appreciate Mr. Blunt being here today, and Mr. Gibbons,
    we're going to be working with the Chairman, Vice Chairman of
    the Resources Committee on this legislation, and I look forward
    to doing that, and finally, we in Washington appreciate you
    being here and we'll be taking our findings and putting them
    into the legislation.
        I do want to say for the record that we invited people both
    pro and con, such as the Sierra Club and others, who declined
    to testify.
        I appreciate everyone who was here today. Thank you for
    your testimony. Thank you very much. This meeting is adjourned.
        [Whereupon, at 12:06 p.m., the Subcommittee was adjourned.]
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