[Congressional Record Volume 150, Number 75 (Wednesday, June 2, 2004)]
[Extensions of Remarks]
[Pages E998-E1000]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  SUMMARY OF OUACHITA/BLACK RIVER NAVIGATION SYSTEM FUNDING TESTIMONY

                                 ______
                                 

                             HON. MIKE ROSS

                              of arkansas

                    in the house of representatives

                        Wednesday, June 2, 2004

  Mr. ROSS. Mr. Speaker, I would like to submit the following for the 
Record.

   Summary of Testimony Presented to the Committees on Agriculture, 
   Forestry and Economic Development of the Arkansas Legislature at 
                    Camden, Arkansas, April 29, 2004

 (Prepared by the Arkansas Waterways Commission, 101 E. Capitol, Suite 
                      370, Little Rock, AR 72201)

       This summary provides a digest of testimony presented both 
     verbally and in writing to the Committee on Agriculture, 
     Forestry and Economic Development of the Arkansas 
     Legislature. Although not a verbatim transcript, the summary 
     is intended to faithfully represent the facts, statements and 
     comments made during the hearing.


                          Economic Catastrophe

       Catastrophic job loss and far reaching economic and 
     environmental disruption to south Arkansas and northeast 
     Louisiana will result from failure to fund Corps of 
     Engineers' operations and maintenance of the Ouachita/Black 
     River Navigation System. An approximately $8 million savings 
     to the Army Corps of Engineers would result in a net loss in 
     tax revenue to the federal treasury.
       The above summarizes unanimous consensus of more than two 
     dozen representatives of city, county and state government, 
     business and industry who testified in support of continued 
     funding of the Ouachita/Black River Navigation System during 
     a meeting of the Arkansas Legislature's House and Senate 
     Interim Committees on Agriculture, Forestry & Economic 
     Development, April 29, 2004 in Camden, Ark. The hearing was 
     attended by some 150 interested participants.
       The 336-mile long Ouachita/Black River Navigation System 
     that includes 117 miles in Arkansas, is facing a $8.2 million 
     funding cut in the proposed 2005 budget that begins in 
     October, 2004. The budget proposal of $1.9 million budget for 
     recreation on the system will not only eliminate maintenance 
     on the system's four locks and dams, two of which are in 
     Arkansas, but will prohibit their operation, thus eliminating 
     navigation on the waterway. This also puts many of the other 
     economic, environmental and recreational activities supported 
     by the river system in jeopardy.
       The waterway was targeted for a budget cut because it falls 
     into a category of waterway considered by the federal Office 
     of Management and Budget as ``low-use.'' OMB considers 
     waterways as low-use if cargo shipped on the system is less 
     than 1 billion ton-miles annually. The Ouachita/Black River 
     Navigation system had more than 800 million ton miles of 
     usage in 2001. Other economic factors or benefits of 
     waterways projects are not considered in the ``low use'' 
     definition.
       Representatives from private industry, river associations, 
     municipalities in Arkansas and Louisiana as well as federal 
     and state agencies presented concerns in terms of the 
     industry and economic losses in light of two possible 
     scenarios: if navigation on the system were discontinued or 
     if the navigation pools created by the system locks and dams 
     were not available. Environmental and recreational losses 
     were also addressed.
        A representative from Arkansas Governor Mike Huckabee's 
     office and congressional staff members from the Arkansas 
     delegation presented statements in support of continued 
     funding of the waterway at current levels. Their concerns 
     have been expressed to the President and appropriate 
     committees in the U.S. Congress.
        Consensus emerged on several key points:
        The savings to the federal government by reducing funding 
     on the Ouachita/Black River Navigation System would be far 
     outweighed by the tax revenue lost.
        Reduction in the funding of the river system has much 
     broader consequences than simply the loss of navigation. The 
     river has become a source of economic development, jobs, 
     power and water supply as well as recreation. Considerable 
     investments by private businesses and governments to harness 
     the resources of the river were made with the assurances that 
     it would continue to be available for use.
       Before any decision to close or change the operation of the 
     Ouachita/Black River Navigation System is made, a thorough 
     study should be made to identify long term environmental, 
     social, economic and hydraulic impacts.
       The modern day history of the Ouachita River begins with 
     settlements at Monroe, La. and Camden, Ark. in 1783. More 
     than $700 million was invested in construction of the current 
     four locks and dams.
       Colonel Rick Clapp, commander of the U.S. Army Corps of 
     Engineers, Vicksburg District, said the Vicksburg District is 
     capable of using as much as $18 million annually on the river 
     system for operations, and maintenance. Clapp said the 
     district is evaluating possible reduced operation 
     alternatives if the Ouachita River receives only the $1.9 
     million as proposed in the 2005 budget.
       He anticipated that in that case, the lock gates would be 
     shut and the locks would cease operation on October 1, 2004. 
     The dam gates would be positioned and most of the project 
     staff would be moved or furloughed. Minimum staff would 
     remain for safety and security purposes. Clapp speculated 
     that the 2 budget would be used for these minimum activities 
     and to initiate a study that would identify long term 
     environmental, social, economic and flood control impacts of 
     project closure. No studies have been done on the impact of 
     closing the Ouachita/Black River Navigation System.
       Clapp said that if the project were put into caretaker 
     status, meaning the locks closed and dam gates set with 
     minimal maintenance performed, there could be deterioration 
     on the project that could take significant funds to put it 
     back into operation at a later date.


                           Loss of Navigation

       Closure of the locks on the river system would eliminate 
     navigation and significantly affect the area's industry and 
     economy.
       Denny McConathy, owner of Cross Oil Refining in Smackover, 
     Ark. testified that his company, in business since 1923, uses 
     the river to bring oil via barge from Louisiana and Texas 
     gulf coasts to make products that go into a variety of oils, 
     adhesives, metal working fluids, rubber compounds and other 
     materials.
       Last year the company brought 79 barges of oil up the river 
     and expects to bring up more than 100 barges this year. That 
     oil is valued at more than $68 million. It would take more 
     than 11,000 trucks to transport that volume- a task that 
     would be physically and logistically impossible as well as 
     economically prohibitive.
       Cross Oil has more than 500 customers and projects 2004 
     sales of between $125-150 million. Cross Oil employs 125 
     people, has an annual payroll of $6.5 million and the 
     majority of employees live within 25 miles of the plant. In 
     2003, the company paid property taxes of more then $350,000 
     to Union and Ouachita Counties. Of that, $290,000 funded the 
     Smackover school system and more than $16,000 was paid to the 
     city of Smackover.
       Investments the company has made in its facilities were 
     made with assurances that the Ouachita River would be 
     available for use. Loss of the use of the river threatens the 
     company's existence and the local economy. In 1995 the 
     company invested more than $47 million in the refinery, 
     packaging plant and river terminal and a $2 million expansion 
     of the lube oil packaging plant that is underway 
     with completion expected by July. Local companies 
     performed all the expansion work. In addition, the company 
     has 970 accounts payable vendors, most within 100 miles of 
     the plant, who were paid approximately $100 million in 
     2003.
       ``Cross alone puts more money back into our government in 
     the form of payroll taxes, employee income taxes, income 
     taxes, etc., to more than pay for the costs of maintaining 
     the navigation system,'' McConathy wrote in a letter to the 
     Arkansas Waterways Commission.
       Keith Garrison, executive director of the Arkansas 
     Waterways Commission, said that waterborne transportation has 
     a significant economic impact in Arkansas. A 2002 report by 
     the Mack Blackwell Center for Rural Transportation concluded 
     that waterborne transportation had an $811 million annual 
     economic impact on the state. He emphasized the efficiency of 
     barge transportation, pointing out that one barge can carry 
     the equivalent of 60 semi-trucks or 15 freight cars. It would 
     take an additional 40 million trucks on our nation's highways 
     or 10 million rail cars to carry what is not carried on our 
     inland waterways nationwide, he said.
       Garrison said that cuts in funding to the Corps of 
     Engineers budgets for navigation

[[Page E999]]

     maintenance have been going on for more than 12 years while 
     there have been steadily increasing repair and maintenance 
     needs on our nation's waterways.
       With freight movements predicted to double to 12 billion 
     tons by 2015, the use of the waterways will be even more 
     important. More than 70 percent of freight currently moves by 
     truck. Without increased use of our waterways, the U.S. would 
     have to more than double the interstate highway miles 
     available to meet that demand.
       Paul Revis, executive director of the Ouachita River Valley 
     Association, emphasized that the river's four locks and dams 
     are critical to the operations on the river system. 
     Maintenance work is 20 years behind schedule because of 
     continued budget cuts to the Corps of Engineers. 
     International competitors like Europe, China and Brazil have 
     recognized the value of their inland waterways and are 
     investing more money in them while the U.S. is cutting 
     waterways budgets, making the U.S. less competitive. He said 
     that benefits used for authorizing a project are frequently 
     different from those needed to keep it open, referring to the 
     impact the river has on industry and the economy in the area 
     beyond its intended navigation benefits.
       Doug McNeely of Bunge North America, said his company is 
     part of the world's largest processor of grains and oil 
     seeds. It operates in 19 states on the Mississippi River and 
     its tributaries. Bunge employs 100 people at 13 facilities in 
     Arkansas and 250 people in 14 locations in Louisiana. McNeely 
     manages two grain elevators on the Ouachita River in 
     Louisiana. These elevators purchase soybeans, corn, wheat, 
     and sorghum from 400 local farmers. In a half-century of 
     presence on the river, he said that the use of waterways to 
     move grain has significantly increased farm income. McNeely 
     said any decision by the federal government to abandon its 
     investments in rivers like the Ouachita and Black will be 
     immediately felt in the pocketbooks of local farmers and 
     communities. His company estimates that loss of river 
     transportation for the grain and soybeans shipped by these 
     facilities would add transportation costs and decrease prices 
     paid to farmers by approximately 14 cents per bushel. This 
     could mean a loss to farmers of $1.4 million each year.
       Greg Richardson of the Louisiana Port of Columbia, located 
     about 25 miles south Monroe, La. on the Ouachita River, said 
     public ports in Louisiana contribute $33 billion to state's 
     economy each year and create 270,000 jobs. He said that the 
     volume of tonnage has always been a problem on the Ouachita 
     River system and that this funding battle is fought every 
     year. Richardson emphasized the need to actively fund the 
     river system to make it more user-friendly.
       Ouachita Terminals is working to develop, construct and 
     operate an intermodal/multimodal containerized cargo facility 
     in West Monroe, Louisiana. With the continuance of the 
     Ouachita's nine-foot navigation channel, Ouachita Terminals 
     believes the facility has the potential to bring in enough 
     cargo to end the future concerns over the ton mile criteria 
     used for funding the river system.
       In addition, representatives from Davidson Terminals and 
     Sunshine Oil Company; Tressenderlo Davison Chemical LLC; 
     Louisiana Oil Marketing Association; West Monroe, Louisiana 
     Port; Placid Oil & Refinery; Valero Petroleum; Tensas Basin 
     Levee District; and Petron, Inc. presented oral or 
     written testimony outlining their concerns about the 
     effects that would result from the inability to use the 
     Ouachita River for navigation.


                Expected Job Losses and Increased Costs

       Tressenderlo said it would be a loss of 50 jobs and the 
     jobs associated with $11 million spent on barge use.
       Cross Oil, loss of 125 jobs, revenue to area including 
     money paid in taxes and to outside vendors.
       Estimated $1.4 million loss to farmers resulting from lower 
     prices paid from Bunge.
       Placid Oil, gasoline and fuel manufacturer, said closure of 
     terminal on Black River in Archie, LA would cause prices to 
     rise because oil would have to move by truck, increasing 
     costs by $500 million and wear and tear on roads.
       Velero Energy estimates fuel prices could rise up to 8 
     cents per gallon for consumers around the Monroe, LA area if 
     terminal in Monroe is closed due to loss of navigation on 
     Ouachita River.
       The Tensas Basin Levee District in LA fears loss of 
     navigation will mean bank destabilization, threatening 120 
     miles of flood control levees that would put many towns and 
     citizens in danger with no identifiable source of revenue to 
     fund bank stabilization projects and levee setbacks.


                        Loss of Navigation Pools

       Closing of the Ouachita/Black River Navigation system 
     presents not only a challenge for navigation, but also 
     threatens industry and economic development as well as the 
     economy of south Arkansas and northeast Louisiana. Although 
     the system was built as a navigation project, over its more 
     than 100-year history, the river's resources have been used 
     to provide water to local communities as well as a benefit to 
     industry. Any changes to how the river is operated and 
     maintained has the potential to change the quality and 
     quantity of pools of water formed between the locks. These 
     pools of water have served as the life-blood of many cities 
     and industries. In addition, without the ability to use the 
     waters of the river, restrictions on the use of the ground 
     water of the already-stressed Sparta Aquifer would have to be 
     put into place to insure the area would have a viable water 
     supply in the future.
       Pete Parks, vice chairman of the El Dorado Water and 
     Wastewater Commission and Ken Rudder, vice president of the 
     Union County Water Conservation Board said El Dorado and 
     Union County have invested $6.8 million over the last 5 years 
     to develop the Ouachita River as an alternative water source 
     other than the Sparta Aquifer. The aquifer, which currently 
     provides potable water to areas along the Ouachita River and 
     in Louisiana, is in a critical ground water area. Water from 
     the Sparta Aquifer is being used faster than it can be 
     replenished. The entire project will cost more than $67 
     million and area businesses have invested millions of dollars 
     more in water conservation measures in addition to donations 
     of land and right-of-ways for facilities. In addition, Union 
     County is working on a multi-million project with several 
     area companies to provide treated discharge water back into 
     the Ouachita River. The great pools of water available now 
     allow for dilution. If the water would have to be further 
     treated to meet EPA and ADEQ standards, additional millions 
     of dollars would have to be spent by El Dorado and Union 
     County. This could possibly result in the closure of two El 
     Dorado plants.
       In deciding to use the Ouachita River for its water source, 
     the Union County Water Board explored every other option to 
     come up with a water supply. This included looking at creeks 
     and hollows to build a dam to create a lake for water and it 
     was not possible because the necessary water resources in 
     that part of the state do not exist. The river was the best, 
     most economical and viable source of water.
       Georgia-Pacific Corporation, which operates seven 
     facilities along the river in Arkansas, provides more than $2 
     billion to the economy of Arkansas along with more than 3,200 
     jobs. These plants and jobs would be threatened if Georgia-
     Pacific could not use the Ouachita River for its operations.
       The Arkansas Electric Cooperatives use the Ouachita River 
     to both run a power generating station near Camden and 
     receive the fuel oil used at the facility.
       The plant uses river water for power generation. The pool 
     levels maintained as part of the navigation system are vital 
     for allowing the plant to generate, especially during periods 
     of low river flow and high temperatures, when electrical 
     demand is peak. If the pool level were no longer maintained, 
     the plant may be forced to discontinue operation during these 
     periods due to operational concerns and environmental 
     restraints. This would cause not only an impact on the 
     electrical system in the area, but could result in a loss 
     of jobs and a blow to the local economy.
       Mark Bowles, environmental support manager for Entergy 
     Services, Inc. said two Entergy power plants located in 
     Monroe, LA rely heavily on a dependable water supply from the 
     Ouachita River as cooling water for the power production 
     process. The company's Sterlington plant uses its river 
     intake system to take in approximately 1.5 million gallons of 
     river water per day. Both plants were built along the 
     Ouachita River in the 1950's and early 1960's with the belief 
     that there would be an adequate and dependable supply of 
     water to meet the area's electricity demands. The loss of 
     pool elevation along the Ouachita River would require 
     modifications to the intake facilities that would cost 
     several million dollars at each plant. These costs would be 
     passed along to ratepayers. The loss of minimum river levels 
     would immediately cease operations at both plants and make 
     future operations of these plants at a reasonable cost 
     unlikely. Loss of these plants would impact Entergy's ability 
     to provide low cost power to customers, especially during the 
     peak electricity demand summer months.
       John Terry of the U.S. Geological Survey, testified that 
     the inability to use the water supply of the Ouachita/Black 
     River Navigation System, would further endanger the Sparta 
     Aquifer, the region's ground water supply that is already 
     stressed.
       Todd Fugitt, of the Arkansas Soil and Water Conservation 
     Commission, testified that a budget cut in the operation and 
     maintenance budget of the Ouachita/Black River Navigation 
     Project would force the commission to consider water use 
     permits and associated allocation of water from the river in 
     south Arkansas. Budget cuts to the river system would 
     threaten the growth and sustainable use goals of the surface 
     water and ground water resources of all of southern Arkansas, 
     and would impact Louisiana as well. If water from Ouachita 
     River could not be diverted for use, the Commission would be 
     forced to consider regulation of groundwater to bring areas 
     like Union County within reasonable, sustainable water use 
     scenarios. This would mean a reduction of about 64 percent of 
     the current ground-water use in Union County.
       James Tilley, manager of Camden Water Utilities, said that 
     the city of Camden's only source of potable drinking water 
     has been the pools of water created by the Ouachita/Black 
     River Navigation System. If the river system was closed and 
     the pool elevations change, Tilley said it would be highly 
     likely that there would be periods during the year that 
     Camden would be unable to provide water to its customers. In 
     2003, Camden drew about 900 million gallons of water out of 
     the Ouachita River to supply 6,000 domestic customers and 
     four water associations in the surrounding area. Recently, 
     Camden has spent more than $11 million in upgrades to

[[Page E1000]]

     the water system. The city has no alternative water source.
       In addition, representatives from TECO/Union Power Station; 
     Union County Water Board, El Dorado Chemical/Great Lakes 
     Chemical/Lion Oil; International Paper; and the City of 
     Monroe, LA presented oral or written testimony expressing 
     their concerns about the effects to their businesses or 
     cities if the navigation pools on the Ouachita River were not 
     available for use.


 Expected results of loss of pools on Ouachita/Black River Navigation 
                                 System

       Increased depletion of the Sparta Aquifer resulting in 
     ground water restrictions for areas of south Arkansas and 
     resulting economic impact of those restrictions.
       The loss of millions of dollars already invested to develop 
     the river as a water source for El Dorado and Union County 
     and increased expenses to treat water being returned to river 
     by industrial users to meet EPA and ADEQ standards.
       Potential closure of three electric power plants serving 
     the area along with increased costs to area consumers for 
     electrical power.
       Potential closure of seven paper products facilities 
     located on the Ouachita River and elimination of as many as 
     3,200 jobs.
       Potential loss of water supply for the city of Camden, AR 
     and resulting undetermined costs of studying and developing 
     an alternative water source.


                 Environmental and Recreational Losses

       The precise dollar value of changes to the environmental 
     and recreational climate of to south Arkansas if the 
     Ouachita/Black River Navigation System is closed are 
     difficult to calculate.
       The Arkansas Game and Fish Commission believes the loss of 
     the navigation pool on the Ouachita River would have far 
     reaching environmental and recreational impacts. The river 
     has a high recreational value and attracts hundreds of 
     thousands of visitors each year for fishing, boating, hunting 
     and other recreational activities. These visitors pour 
     millions of recreation dollars into the local economy.
       In Arkansas alone, there are 37 public access areas 
     constructed by the U.S. Army Corps of Engineers, Arkansas 
     Game and Fish Commission and other groups on the Ouachita and 
     Saline Rivers. Changes in the operation of the lock and dam 
     system would make many of the rivers' boat launching sites 
     unusable. These changes will also affect the environmental 
     characteristics of the river and associated wetlands and 
     overflow areas.
       The Arkansas Department of Parks and Tourism reports that 
     in 2003, travelers in the five Arkansas Counties in the Lower 
     Ouachita River Valley spent more than $118 million, 
     generating more than $9 million in tax revenue to state and 
     local governments.


                                Summary

       Closure of the Ouachita/Black River Navigation System would 
     have a profound, far-reaching effect on the economy and 
     environment of south Arkansas and northeast Louisiana. 
     Although the system was built as a navigation project, its 
     economic benefit has gone far beyond its value as a 
     navigation system. The river has become the very life-blood 
     of many cities, industries and recreational pursuits. Its 
     value to the environment and as a water resource supporting 
     the continued growth and economic vitality of south Arkansas 
     and northeast Louisiana is beyond measure. Operation of the 
     navigation project should not be closed, nor should it be 
     changed, without a comprehensive study of the consequences of 
     such actions.

                          ____________________