[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/
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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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