    Oregon Inlet Jetty Project: Environmental and Economic Concerns
    Need to Be Resolved (30-SEP-02, GAO-02-803).

    Oregon Inlet is the primary route to the ocean for hundreds of
    commercial and recreational fishing vessels operating in the
    Outer Banks region of North Carolina. However, the inlet
    experiences more high winds, strong tides, and shifting sand than
    any other inlet on the coast of the United States. This
    high-energy environment often creates sand bars and large
    breaking waves at the inlet's entrance to the ocean, commonly
    known as the ocean bar. These conditions, especially when
    combined with the severe storms that frequent the area, can swamp
    a boat or run it aground, imperiling both life and property.
    During the past 19 years, the Army Corps of Engineers has had
    difficulty maintaining the ocean bar navigation channel at Oregon
    Inlet at its authorized 14-foot depth. Specifically, from 1983
    through 1994, the Corps spent on average $4.1 million per year
    dredging the channel, but was only able to maintain the
    authorized 14-foot depth on average 23 percent of the time. After
    1994, the Corps spent an average of $2 million per year, but the
    percentage of time the channel depth was maintained at its
    authorized depth declined to 15 percent. The Corps' most recent
    economic analysis of the proposed Oregon Inlet jetty project,
    issued in 2001, has several limitations, and as a result, does
    not provide a reliable basis for deciding whether to proceed with
    the project. Of the eight completed jetty projects constructed
    similarly to the proposed Oregon Inlet jetty project, two are
    generally performing as planned. Of the six other similar
    projects, three have required more dredging and higher
    maintenance costs than expected, and two have had their weirs
    closed. In designing the proposed Oregon Inlet jetty project, the
    Corps' Wilmington District Office applied lessons learned from
    the construction of similar jetty projects and from internal
    Corps guidance. Both the Department of Commerce and the
    Department of the Interior support the goal of providing a safe
    navigation channel through Oregon Inlet for commercial and
    recreational fishing vessels. However, both departments support a
    dredging-only approach to achieve that goal in an environmentally
    acceptable manner.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-02-803
        ACCNO:   A05174
      TITLE:     Oregon Inlet Jetty Project: Environmental and Economic
    Concerns Need to Be Resolved
         DATE:   09/30/2002
      SUBJECT:   Best practices
    	     Coastal zone management
    	     Comparative analysis
    	     Cost analysis
    	     Economic analysis
    	     Environmental policies
    	     Inland waterways
    	     Army Corps of Engineers Oregon Inlet
    	     Jetty Project

    	     Oregon Inlet (NC)

    Oregon Inlet Jetty Project: Environmental and Economic Concerns
    Need to Be Resolved (30-SEP-02, GAO-02-803).

    Oregon Inlet is the primary route to the ocean for hundreds of
    commercial and recreational fishing vessels operating in the
    Outer Banks region of North Carolina. However, the inlet
    experiences more high winds, strong tides, and shifting sand than
    any other inlet on the coast of the United States. This
    high-energy environment often creates sand bars and large
    breaking waves at the inlet's entrance to the ocean, commonly
    known as the ocean bar. These conditions, especially when
    combined with the severe storms that frequent the area, can swamp
    a boat or run it aground, imperiling both life and property.
    During the past 19 years, the Army Corps of Engineers has had
    difficulty maintaining the ocean bar navigation channel at Oregon
    Inlet at its authorized 14-foot depth. Specifically, from 1983
    through 1994, the Corps spent on average $4.1 million per year
    dredging the channel, but was only able to maintain the
    authorized 14-foot depth on average 23 percent of the time. After
    1994, the Corps spent an average of $2 million per year, but the
    percentage of time the channel depth was maintained at its
    authorized depth declined to 15 percent. The Corps' most recent
    economic analysis of the proposed Oregon Inlet jetty project,
    issued in 2001, has several limitations, and as a result, does
    not provide a reliable basis for deciding whether to proceed with
    the project. Of the eight completed jetty projects constructed
    similarly to the proposed Oregon Inlet jetty project, two are
    generally performing as planned. Of the six other similar
    projects, three have required more dredging and higher
    maintenance costs than expected, and two have had their weirs
    closed. In designing the proposed Oregon Inlet jetty project, the
    Corps' Wilmington District Office applied lessons learned from
    the construction of similar jetty projects and from internal
    Corps guidance. Both the Department of Commerce and the
    Department of the Interior support the goal of providing a safe
    navigation channel through Oregon Inlet for commercial and
    recreational fishing vessels. However, both departments support a
    dredging-only approach to achieve that goal in an environmentally
    acceptable manner.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-02-803
        ACCNO:   A05174
      TITLE:     Oregon Inlet Jetty Project: Environmental and Economic
    Concerns Need to Be Resolved
         DATE:   09/30/2002
      SUBJECT:   Cost analysis
    	     Economic analysis
    	     Environmental policies
    	     Coastal zone management
    	     Best practices
    	     Inland waterways
    	     Comparative analysis
    	     Oregon Inlet (NC)
    	     Army Corps of Engineers Oregon Inlet
    	     Jetty Project

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    GAO-02-803

                                           A

    Letter

    September 30, 2002 The Honorable Max Baucus United States Senate The
    Honorable John Edwards United States Senate

    Oregon Inlet is the primary route to the ocean for hundreds of commercial
    and recreational fishing vessels operating in the Outer Banks region of
    North Carolina. However, the inlet experiences more high winds, strong
    tides, and shifting sand than any other inlet on the Atlantic coast of the
    United States. This high- energy environment often creates sand bars and
    large breaking waves at the inlet*s entrance to the ocean, commonly known
    as the ocean bar. These conditions, especially when combined with the
    severe storms that frequent the area, can swamp a boat or run it aground,
    imperiling both life and property. According to the U. S. Army Corps of
    Engineers and U. S. Coast Guard data, over the 40- year period 1961
    through 2001, hazardous conditions in the inlet were a factor in 25 deaths
    and the loss of 22 vessels.

    In 1950, in an attempt to improve navigation at Oregon Inlet, the Congress
    authorized the Corps to dredge a channel in the inlet* called the ocean
    bar navigation channel* to a depth of 14 feet. 1 From 1960 through 2001,
    the Corps* Wilmington District Office, which is responsible for
    maintaining the ocean bar navigation channel at Oregon Inlet, spent about
    $108 million dredging this channel. 2 Additional efforts to improve the
    safety of the channel are conducted by the U. S. Coast Guard, which is
    responsible for, among other things, maintaining the navigation aids that
    help guide vessels

    through the inlet. In 1970, in an effort to stabilize Oregon Inlet and in
    response to local concerns that a deeper channel was needed to accommodate
    fishing vessels and commercial traffic, the Congress authorized the
    construction of dual rock jetties and a 20- foot- deep ocean

    bar navigation channel for Oregon Inlet. 3 Since this authorization, the
    Corps has completed and updated numerous economic and environmental

    1 P. L. 81- 516, the River and Harbor Act of 1950, authorized the project,
    officially titled the Manteo (Shallowbag) Bay, North Carolina, project. 2
    All dollars in this report are 1997 dollars unless otherwise noted.

    3 P. L. 91- 611, River and Harbor and Flood Control Acts of 1970.

    analyses to determine if construction of the project is justified. In the
    latest update of its economic analysis, completed in 2001, the Corps
    estimated that the project would yield annualized net benefits of about
    $7.2 million

    over 50 years, largely from savings that were projected to be attained
    from reduced operating costs for commercial fishing vessels and increased
    activity by recreational boaters. Annualized costs were estimated at about
    $4.5 million. As a result, annual net benefits (benefits minus costs) for
    the proposed jetty project were estimated at $2.7 million. However,
    although the Corps and others have completed many studies over the last 30
    years,

    the Congress has never appropriated funds specifically to construct the
    project. During this period there have been major disagreements among
    federal, state, and local governmental entities, including the Departments
    of Commerce and Interior, as well as among environmental, fishing, and
    recreational groups, about whether the project is economically justified
    and whether it would harm the environment by, among other things,
    increasing beach erosion and restricting the migration of fish larvae from

    the ocean to the sounds inside the inlet, where the larvae develop into
    fish. You asked us to review several issues related to the Corps* Oregon
    Inlet jetty project. Specifically, we agreed to (1) assess federal efforts
    to maintain the ocean bar navigation channel in Oregon Inlet, (2) assess
    the extent to which the Corps* 2001 economic analysis of the jetty project
    is useful for decision making, (3) provide information on the performance
    of similar jetty projects, that is, those constructed with dual jetties
    and a low section called a weir, 4 (4) determine whether the Corps*
    Wilmington District Office applied lessons learned from similar jetty
    projects in its design of the Oregon Inlet jetty project, and (5) identify
    and discuss concerns raised by the Departments of Commerce and Interior
    about development of the jetty project.

    Results in Brief During the past 19 years, the Corps has had difficulty
    maintaining the ocean bar navigation channel at Oregon Inlet at its
    authorized 14- foot depth. Specifically, from 1983 through 1994, the Corps
    spent on average about $4.1

    million per year dredging the channel, but was only able to maintain the
    authorized 14- foot depth on average about 23 percent of the time. After
    1994, the Corps spent an average of about $2 million per year, but the

    4 A weir is a section of a jetty that is lower than the rest of the
    structure. The weir is typically designed to allow water and sand to flow
    over it when the water level is greater than low tide.

    percentage of time the channel depth was maintained at its authorized
    depth declined to about 15 percent. According to a 2001 engineering and
    design document issued by the Corps, its dredging efforts at Oregon Inlet
    have not provided a safe and navigable ocean bar navigation channel, and
    hazardous navigation conditions at the inlet will continue to cause the
    loss of human life and injuries as well as vessel losses and damages.
    Wilmington District Office officials said that the high- energy
    environment

    and storms associated with Oregon Inlet have often thwarted the Corps*
    plans and depleted its funding for dredging the inlet. In addition, the
    district has sometimes had to reallocate funds that were earmarked for
    dredging Oregon Inlet to other district projects in response to
    emergencies caused by the frequency and magnitude of area storms. Further,
    because of the Corps* limited dredging and the inlets high- energy
    environment, the Coast Guard has been unable to maintain and properly
    position its navigation buoys for the channel, which further increases the
    risk of damage to vessels and injuries to people.

    The Corps* most recent economic analysis of the proposed Oregon Inlet
    jetty project, issued in 2001, has several limitations, and as a result,
    does not provide a reliable basis for deciding whether to proceed with the
    project. For example, the Corps relied on outdated data to estimate the
    benefits to large commercial fishing vessels (trawlers). More recent data
    indicates that trawlers currently use the inlet far less than the Corps
    estimated in its economic analysis. On the other hand, the Corps did not
    analyze the potential benefits the proposed jetty project may provide to
    smaller commercial fishing vessels. However, because these smaller vessels
    have shallower drafts than trawlers, the extent to which they might
    benefit from the jetty project is uncertain. The analysis also did not
    account for the economic value of the lives that might be saved by the
    jetty project, which could understate benefits; it also overstated the
    cost of the current dredging program, and it used an overly optimistic
    assumption concerning future dredging needs that would tend to understate
    the cost of the jetty project. We did not assess the net effects of all
    the limitations we found with the economic analysis because obtaining the
    necessary data would require an inordinate amount of time and expense.
    These limitations, however, can result in either overstated or understated
    estimated benefits and costs.

    Of the eight completed jetty projects constructed similarly to the
    proposed Oregon Inlet jetty project, two are generally performing as
    planned. Of the six other similar projects, three have required more
    dredging and higher maintenance costs than expected, and two have had
    their weirs closed*

    one because the responsible Corps* District did not accurately determine
    the direction of sand movement and constructed the weir on the wrong
    jetty, and the other because of problems with the instability of the
    channel and with boaters using the weir as a shortcut, creating a safety
    hazard.

    According to the Corps, the problems at these five projects stemmed from
    inaccurate information on sand movement when the projects were initially
    designed. At the sixth project, more sand has accumulated in the
    navigation channel than expected, but this occurred because the Corps did
    not fully construct the area designed to collect sand deposits. As a
    result, according to the Corps, the navigation channel has been available
    at its authorized depth only about 20 percent of the time.

    In designing the proposed Oregon Inlet jetty project, the Corps*
    Wilmington District Office applied lessons learned from the construction
    of similar jetty projects and from internal Corps guidance. For example,
    the Wilmington District staff stated that from its construction and
    management of the Masonboro Inlet jetty project in North Carolina* one of
    two similar jetty projects that are generally performing as planned* it
    learned about the need for dual jetties, the proper length of a weir, and
    the effect of erosion on jetties. District staff stated that from internal
    Corps guidance they learned about, among other things, the importance of
    having accurate

    information on sand movement in designing the proposed Oregon Inlet jetty
    project. Nonetheless, the Corps stated that because each jetty project is
    designed for a unique environment, lessons learned from similar projects
    would not predict all aspects of the performance of the Oregon Inlet
    project. For example, the Corps incorporated a weir into the design of
    Oregon Inlet*s northern jetty to allow fish larvae that migrate near the
    ocean shoreline to travel over the jetty, through the inlet, and into the
    sound. None of the eight similar jetty projects with weirs were designed
    to provide for fish larvae migration. Both the Department of Commerce and
    the Department of the Interior

    support the goal of providing a safe navigation channel through Oregon
    Inlet for commercial and recreational fishing vessels. However, both
    departments support a dredging- only approach to achieve that goal in an
    environmentally acceptable manner. Commerce, which manages marine
    resources, including fisheries, and Interior, which manages the federally
    owned land upon which the jetties would be built, have raised several
    environmental concerns about the construction of the Oregon Inlet jetty
    project. For example, Commerce believes that constructing the project will
    cause unacceptable harm to commercial and recreational fishery resources
    by limiting the ability of fish larvae to reach habitat necessary for

    their development. Commerce is also concerned that the jetties will
    significantly alter sand movement in the vicinity of Oregon Inlet and
    damage beaches, dunes, beds of submerged aquatic vegetation, salt marshes,
    shallow water habitats, and other aquatic sites and resources. Interior
    believes that the jetties will increase beach erosion, especially on the
    south side of the inlet, and that the project*s sand bypassing system
    could harm coastline habitat and wildlife by depositing large quantities
    of sand onto Interior*s land each year without allowing sufficient time
    for recovery of the ecosystem. For these and other reasons, Interior has
    maintained that constructing the jetties is not consistent with the
    missions of its National Park Service (NPS), which manages the Cape
    Hatteras National Seashore to the north and south of Oregon Inlet, and
    Fish and Wildlife Service (FWS), which manages the Pea Island National
    Wildlife

    Refuge to the south of the inlet, and has denied the Corps the permits
    needed to build the jetties on Interior*s lands. To address the concerns
    of Commerce and Interior, the Corps revised its original jetty design to

    shorten the length of the jetties and incorporate a weir, which it
    believes will mitigate the concerns about fish larvae migration. The weir
    is also intended to facilitate the collection of sand, which the Corps
    plans to transport to adjacent beaches to address erosion. However, both
    Commerce and Interior have stated these actions will not achieve the

    desired results. In October 2001, because Commerce, Interior, and the
    Corps were unable to reach agreement on these issues, Commerce referred
    the matter to the Council on Environmental Quality* an entity established
    by the National Environmental Policy Act to resolve interagency
    disagreements concerning major federal actions that might cause negative
    environmental effects. Interior has also asked the council to consider its

    concerns. The Corps does not believe it should spend additional public
    resources to develop the project until it has assurances that the
    environmental issues will be favorably resolved.

    Lacking resolution of environmental concerns from the council and
    construction permits from Interior, we agree with the Corps that it should
    not pursue further development of the Oregon Inlet jetty project. If,
    however, both of these issues are favorably resolved, we are recommending
    that in order to have a reliable economic basis for deciding whether to
    proceed with the project, the Secretary of the Army direct the Corps to
    prepare a new and comprehensive economic analysis of the project*s costs
    and benefits that would provide the more current and complete information
    needed to justify construction of the project. In commenting on a draft of
    this report, the Departments of the Army, Commerce, and Interior generally
    agreed with our findings and

    recommendations. The Department of Transportation did not comment on our
    overall findings and recommendations, but offered specific technical
    comments.

    Background The Corps* mission is both military and civilian and involves
    providing quality, responsive engineering services to the nation. The
    Corps*

    involvement in civil engineering projects, such as the proposed Oregon
    Inlet jetty project, comes under the auspices of the Director of Civil
    Works and falls into four broad categories: water infrastructure,
    environmental management and restoration, response to natural or man- made
    disasters, and engineering and technical services. The Corps is organized
    geographically into eight divisions and 41 districts that are responsible
    for implementing individual projects. The Corps* Wilmington, North
    Carolina,

    District Office, part of the South Atlantic Division, is responsible for
    maintaining a safe and navigable waterway at Oregon Inlet. Appendix I
    provides a description of the Corps* process for developing a water
    resource project. Oregon Inlet provides the only access to the Atlantic
    Ocean from inland

    waters located between Rudee Inlet in Virginia Beach, Virginia, about 85
    miles to the north of Oregon Inlet, and Hatteras Inlet in Hatteras, North
    Carolina, about 45 miles to the south. Oregon Inlet is located in the
    Outer Banks, a string of barrier islands along the coast of North
    Carolina. According to a study of Outer Banks sediment and inlet dynamics,
    these barrier islands and their migrating inlets consist of dynamic
    sedimentary deposits, which, left to nature, constantly move and change
    under the influence of waves, currents, and the change in sea level.
    Overall, these islands are slowly moving toward the mainland at an average
    rate of about 4.5 feet per year. In addition, along the ocean side of the
    Outer Banks, the sands flow predominantly toward the south. For this
    reason, the islands and Oregon Inlet naturally move in a southerly
    direction. At least a dozen separate inlets have naturally opened and
    closed along the Outer Banks* coastline over the three centuries that
    preceded the formation of Oregon Inlet. 5 Currently, there are three
    inlets along the Outer Banks: Oregon Inlet, Hatteras Inlet, and Ocracoke
    Inlet. Figure 1 shows the location of Oregon

    Inlet and its surrounding features. 5 *The Outer Banks of North Carolina:
    Budget of Sediment and Inlet Dynamics Along a Migrating Barrier System* by
    Douglas L. Inman and Robert Dolan, Journal of Coastal Research, Spring
    1989, Charlottesville, Virginia.

    Figure 1: Oregon Inlet*s Location Along the North Carolina and Virginia
    Coastlines

    Source: Corps* Wilmington District Office.

    Oregon Inlet experiences a combination of more high winds, strong tides,
    storms, and shifting sand than any other inlet along the Atlantic coast of
    the United States. These high- energy conditions often create hazards for
    vessels attempting to pass through the inlet to or from the ocean. Vessels
    making this passage use the ocean bar navigation channel, which extends
    from a point about 1,500 feet inside the Herbert C. Bonner Bridge
    (commonly known as the Bonner Bridge) to a point in the ocean called the
    ocean bar, about 10,000 feet outside the bridge. 6 At the ocean bar, sand
    naturally accumulates and waves break on the surface because of the
    shallow water. Nonetheless, hundreds of vessels pass through the inlet
    each year. In 1999 through 2001, according to North Carolina Division of
    Marine Fisheries data, on average, about 311 commercial fishing vessels
    used Oregon Inlet a total of about 3, 900 times each year to access the
    ocean. During this period, commercial fishing vessels using the inlet
    landed more than 18 million pounds of fish at seafood dealers that operate
    inside the inlet.

    The North Carolina Department of Transportation is currently evaluating
    preliminary plans for constructing a bridge that would replace the Bonner
    Bridge. The new bridge would be located farther west than the current
    bridge and may make landfall several miles farther south than the current
    bridge, possibly bypassing the Pea Island National Wildlife Refuge.
    According to a state engineer, the proposed elevated portion of the new

    bridge would be 5,000 feet long, which would allow the natural migration
    of Oregon Inlet to the south and also permit the navigation channel to be
    moved as conditions dictate. The proposed completion date for the new
    bridge is 2010. Figure 2 provides an aerial view of Oregon Inlet.

    6 The Herbert C. Bonner Bridge transverses Oregon Inlet and carries a
    highway that connects Bodie Island on the north side of the inlet to Pea
    Island on the south.

    Figure 2: Aerial View of Oregon Inlet on September 18, 2001

    Source: Adapted from a Corps* Wilmington District Office photo mosaic.

    The safety and navigability of Oregon Inlet has been the subject of a
    series of engineering, economic, and environmental studies by the Corps*
    Wilmington District Office. In the 1960s, local officials and other
    interested parties told the Corps that the original 14- foot navigation
    channel authorized by the Congress in 1950 was not adequate because it was
    not deep enough to accommodate larger vessels and existing dredging was
    not sufficient to provide a stable channel at its authorized dimensions.
    Subsequently, the House and Senate Public Works Committees asked the Corps
    to study whether any modifications of the Oregon Inlet project were
    advisable. Based on this work, the Corps made recommendations that led the
    Congress to authorize the dual rock jetties and a 20- foot navigation
    channel for Oregon Inlet in 1970. The authorization increased the depth of
    the ocean bar navigation channel from 14 feet to 20 feet, in part to
    accommodate the use of larger, deep- draft commercial fishing vessels that
    were expected to use the inlet in the future. 7 Between the 1970
    authorization and September 30, 2001, the Corps*

    Wilmington District Office has spent about $10 million (current dollars)
    designing the project and studying whether it was economically and
    environmentally sound before construction could begin. These studies

    have included at least four updates of the district*s economic analyses
    and four environmental impact statements, as well as various redesigns of
    the project. According to the Corps, it has also made a substantial effort
    to coordinate its efforts with other interested agencies. For example, the
    Corps stated that it has worked with the Department of Commerce*s National
    Marine Fisheries Service and the North Carolina Division of

    Marine Fisheries to develop data on fish catch and associated use of the
    inlet by commercial fishing vessels. The Corps also participated in a
    joint task force with the Department of the Interior in 1991 to determine
    the effect of the jetties and the project*s proposed sand bypass system on
    the adjacent shoreline. In response to concerns raised by the task force,
    the Corps revised the proposed project by, among other things, reducing
    the length of the jetties and incorporating a weir to facilitate sand
    bypass and fish larvae migration. On September 21, 2001, the Corps issued
    Supplement No. 2 General Design Memorandum (GDM) and Final Supplement III
    Environmental Impact Statement (EIS), which state that the dual jetties 7
    Draft is the distance between the water level on a loaded vessel and its
    keel (bottom). The

    channel depth is determined by the loaded draft of a typical vessel as
    well as by factors including wave action and the extent to which the
    vessel *squats* in the water when it is underway due to propeller action.

    and the 20- foot navigation channel are economically justified and
    environmentally acceptable. The Corps document also found that current
    dredging efforts at Oregon Inlet have not provided a safe and navigable
    ocean bar navigation channel and concluded that hazardous navigation
    conditions at the inlet will continue to cause injuries and the loss of
    human life as well as vessel damages and losses. However, as of September
    2002,

    the Congress had not appropriated funds to construct the jetty project.
    Despite the many studies and modifications to the project that the Corps
    has made over the last 30 years, the Department of Commerce, the
    Department of the Interior, various environmental groups such as the
    Biodiversity Legal Foundation, and other interested parties such as the
    North Carolina Saltwater Fishing Club, do not believe their concerns have
    been adequately addressed by the Corps* analysis, and they have continued
    to oppose the project. In general, these entities contend that the Corps*

    economic analysis is unsound and that the jetty project will cause
    significant beach erosion and impede migration of fish larvae to habitat
    in the sound, potentially leading to a significant reduction in the
    overall fish supply. Further, these entities state that other factors,
    such as navigational errors, may contribute to the potential for loss of
    life at the inlet, a risk that would not be reduced by construction of the
    jetties. Commerce and Interior also anticipate that the project will have
    adverse impacts to designated Essential Fish Habitat in the immediate area
    of Oregon Inlet that is required by fish for spawning, breeding, feeding,
    or growing to maturity. 8 However, the jetty project is strongly supported
    by the state of North Carolina and the local commercial and recreational
    fishing industry, which contend that the project is needed to ensure safe
    passage for vessels

    through the inlet, particularly larger, deep- draft commercial fishing
    vessels. Although the U. S. Coast Guard has not taken an official position
    on the project, it is directly involved in issues concerning Oregon Inlet.
    The Coast Guard is responsible for maintaining the buoys and markers used
    to guide vessels through the ocean bar navigation channel and other
    channels in the sounds on the inside of the inlet. Coast Guard units
    located in Hatteras, North Carolina, and Portsmouth, Virginia, maintain
    the navigation aids at

    Oregon Inlet. In addition, the Coast Guard Station Oregon Inlet is
    responsible for, among other things, search and rescue and boating safety

    8 Identification of Essential Fish Habitat and requirements concerning its
    coordination and management are contained in the Magnuson- Stevens Fishery
    Conservation and Management Act, as amended by the Sustainable Fisheries
    Act of 1996 (P. L. 104- 297).

    in coastal waters and sounds from the Virginia- North Carolina border to
    approximately Hatteras Island, North Carolina.

    Figure 3 shows the Corps* current design for the proposed jetty project.
    The project includes construction of dual rock jetties about 3,000 feet
    apart. The north jetty would be approximately 10,000 feet long; the south

    jetty would extend about 3,500 feet beyond the Pea Island terminal groin,
    for a total length of about 6,600 feet. The terminal groin is a rock
    structure that was completed in 1991 to protect the southern end of the
    Bonner Bridge by stabilizing and restoring the tip of Pea Island. At the
    time, the erosion of Pea Island was threatening the southern end of the
    Bonner Bridge. The project also incorporates a weir in the north jetty
    that is designed to serve two basic purposes: 1) to facilitate sand
    bypassing from a deposition basin to adjacent beaches and 2) to aid fish
    larvae migration from the ocean past the jetties, through the inlet, and
    into the sound. A detailed chronology of significant events related to the
    development of the Oregon Inlet jetty project is provided in appendix II.

    Figure 3: The Corps* Proposed Design for the Oregon Inlet Jetty Project as
    of September 2001

    Source: Adapted from Supplement No. 2 General Design Memorandum, Manteo
    (Shallowbag) Bay, North Carolina, Corps* Wilmington District, September
    2001. The map is based on May 26, 1996, aerial photography.

    Corps Generally Has The Corps has had difficulty maintaining Oregon
    Inlet*s ocean bar

    Not Maintained the navigation channel at its authorized depth of 14 feet.
    According to officials

    in the Corps Wilmington District Office, from August 1983 through March
    Oregon Inlet Ocean Bar 1994 the 14- foot depth was maintained about 23
    percent of the time. 9 Navigation Channel at

    During this period, the Corps spent an average of about $4.1 million Its
    Authorized Depth

    annually to dredge the channel. In recent years, however, expenditures on
    dredging the channel have declined to an average of about $2 million
    annually, and the Corps has been able to maintain the channel*s authorized
    14- foot depth only about 15 percent of the time. According to Wilmington
    District officials, the district has not been able to maintain the
    channel*s authorized depth because the inlets* high- energy environment
    constantly moves sand back into the navigation channel and because funding
    limitations restrict the amount of dredging that can be performed.
    Officials said that the district does not get all of the funds it requests
    and often has to reallocate funds that are earmarked for dredging Oregon
    Inlet to respond to emergencies elsewhere in the district. The Corps*
    limited dredging and the high- energy environment of the inlet also affect
    the Coast Guard*s ability to adequately maintain buoys that are supposed
    to mark the ocean bar navigation channel for vessels using Oregon Inlet.
    In fact, navigation

    charts for Oregon Inlet do not display the location of navigation aids,
    such as buoys, because they are frequently moved by the Coast Guard due to
    continuously shifting sand and by severe storms. These conditions increase
    the risk of danger to vessels and injuries to people.

    The Inlet*s Environment and Oregon Inlet experiences more high winds,
    strong tides, and shifting sand

    the Corps Limited than any other inlet on the Atlantic coast of the United
    States. This highenergy

    Resources Have Hindered environment is magnified by a high incidence of
    storms, particularly

    Dredging of the Ocean Bar those from the northeast (called nor*easters)
    during the fall and winter

    months. For example, between 1990 and 1998, the Oregon Inlet area was
    Navigation Channel

    affected by more than 100 significant storms, some of them hurricanes.
    Storms heighten ocean waves and increase sand movement in the inlet. Based
    on Corps studies, an average of about 2.1 million cubic yards of sand move
    in and around Oregon Inlet each year. 10 In comparison, annual sand 9 The
    Corps calculates the percentage by periodically surveying the depth of the
    channel. If any portion is less than the authorized depth of 14 feet, the
    channel is considered unavailable.

    10 The Corps* estimate of sand movement is for the period 1956 through
    1975 as presented in its September 2001 GDM on the jetty project.

    movement for the two jettied inlets closest to the Oregon Inlet is about
    471,000 cubic yards for Rudee Inlet in Virginia and about 700,000 cubic
    yards for Masonboro Inlet in North Carolina. In addition to causing
    massive sand movement each year, district officials

    noted that the frequency and severity of storms at Oregon Inlet
    significantly affect the district*s budget and dredging plans.
    Specifically, according to district officials, their budget and dredging
    plans are prepared 18 to 24 months in advance of the actual work. However,
    predicting storms that far into the future is impossible, and, for this
    reason, yearly budgets and dredging plans often differ significantly from
    actual needs. As a result, the district has often had to reallocate funds
    among its projects to meet immediate needs and is not able to perform all
    planned activities for Oregon Inlet, such as dredging. Figure 4
    illustrates fluctuations in funding requested, approved, and expended to
    dredge the ocean bar navigation channel.

    Figure 4: Funding Requested, Approved, and Expended for Dredging the
    Oregon Inlet Ocean Bar Navigation Channel, Fiscal Years 1990 through 2001

    Note: Amounts are expressed in 1997 constant dollars. Source: GAO analysis
    of data provided by the Corps of Engineers* Wilmington District Office.

    As shown in figure 4, in some years from 1990 through 2001, the district
    did not spend all of the funds that had been approved for dredging the
    ocean bar navigation channel; in other years, it spent more. For example,
    for 6 of

    the 12 years, the district received approval to spend about $22.5 million,
    but spent about $10.8 million, or about $11.7 million less than the
    approved amount. In those years the district reallocated the $11.7 million
    budgeted for dredging the Oregon Inlet ocean bar navigation channel to
    address other higher- priority emergency needs in the district. For
    example, in fiscal year 1999, reallocated funds were used to remove sand
    bars and debris that were causing hazardous navigation conditions in the
    Atlantic Intracoastal Waterway. These hazards had unexpectedly accumulated
    after a severe storm. Conversely, in the other 6 years, the district spent
    more funds than were initially approved for dredging the ocean bar
    navigation channel. Specifically, the district spent about $25.4 million,
    or about $6.5 million more than the $18.9 million that had been initially
    approved during those years. For example, in fiscal year 1991, the
    district received approval for about $4.7 million to dredge the channel,
    but spent about $7.0 million, which it obtained by reallocating funds from
    other projects within the

    district. District Office officials explained that in many of these years
    the district experienced several hurricanes and other storms that
    necessitated redirecting funds from some projects to perform emergency
    work on other projects.

    Wilmington District Office officials said that another reason they often
    need to reallocate funds is because they do not receive all of the funding
    that they request. Although district officials noted that getting
    requested funding would not ensure that the ocean bar navigation channel
    was always maintained at the authorized depth of 14 feet, it would ensure
    that the authorized depth was maintained more often and would also reduce
    the amount of funds that the district has to reallocate among its projects
    during emergencies. For example, between fiscal years 1990 and 2001, the
    district requested about $55 million for dredging the ocean bar channel
    and obtained approval to spend about $41 million, or 75 percent of what it
    requested.

    For the most part, as shown in figure 4, the district has significantly
    reduced the amount of funds it has requested and spent on dredging the
    ocean bar navigation channel over the last few years. During this period
    there has also been a notable decline in the Corps* ability to maintain
    the

    channel*s 14- foot depth. Specifically, between August 1983 and March
    1994, when the Corps spent an average of about $4.1 million per year
    dredging the channel, it was able to maintain the authorized 14- foot
    depth about 23

    percent of the time. However, between March 1994 and October 2001, the
    Corps has only maintained the channel at its authorized depth about 15
    percent of the time. District officials explained that in the late 1980s
    and early 1990s, the district needed to dredge a large volume of sand that
    had accumulated in the navigation channel around the Bonner Bridge. Due to
    the location of this sand and the Corps* desire to place it on Pea Island
    to prevent erosion, the district used a pipeline dredge to remove the
    sand. Generally, a pipeline dredge is significantly more expensive to
    operate than

    other types of dredges because of the cost to set up the pipeline that
    transports the removed sand to a new location. By the end of 1995, the
    Corps had successfully removed the sand affecting the navigation channel
    and deposited it on Pea Island. As a result, according to district
    officials,

    the district reduced its funding requests for 1996 through 2001 because it
    did not expect to use an expensive pipeline dredge to remove that much
    sand again during that period. However, during that time, there was a
    reduction in the Corps* ability to maintain the ocean bar navigation
    channel at its authorized depth. District officials also said that their
    budget requests have never included

    the total amount of funds needed to maintain the ocean bar navigation
    channel at its authorized depth 100 percent of the time. District
    officials stated that in the past they could not justify spending the time
    and money needed to prepare a request for such an amount because there was
    little likelihood that the amount would be received. However, district
    officials stated that in their fiscal year 2003 budget request they
    included a request for $10.9 million, which is an amount they believe is
    needed to maintain the channel at 14 feet 100 percent of the time.

    Oregon Inlet*s High- Energy The Coast Guard is responsible for maintaining
    the buoys that mark the

    Environment and the Corps* Oregon Inlet channel. Coast Guard officials
    said that they have difficulty

    Limited Dredging Have Also maintaining the buoys marking the location of
    deep water in the ocean bar

    Reduced the Coast Guard*s navigation channel because the high- energy
    conditions in the inlet cause

    large amounts of sand to move in and out of the channel. This sand Ability
    to Properly Mark the

    movement often changes the location of deep water and, when combined Ocean
    Bar Navigation

    with the Corps* limited dredging, results in sand accumulation around the
    Channel

    buoys. According to the Coast Guard, when sand accumulates on the channel
    side of the buoys to a depth that approaches the draft of a buoy tender,
    it becomes difficult and sometimes impossible to relocate the buoys to
    mark deeper water. For example, on October 30, 2001, the Coast Guard asked
    the Corps to provide a vessel to relocate 6 of the 13 buoys that were

    located in the inlet at that time. The Corps vessel could operate in
    shallower water and had the lift capability to relocate the buoys.

    In addition, as part of an ongoing waterway analysis and management
    program, the Fifth Coast Guard District reported on November 14, 2001,
    that the buoys in Oregon Inlet are always moving due to storms. The report

    states that after every large storm, several buoys at Oregon Inlet are
    either damaged, moved, or both, and it is difficult to maintain and keep
    these buoys in the proper location because of limited Coast Guard
    resources. According to the commanding officer of one of the Coast Guard
    vessels that services Oregon Inlet, there is no easy way to provide a
    reliable navigational aid system in Oregon Inlet. The commanding officer
    said that over the years buoys have been added and removed in attempts to
    properly mark the navigation channel, but the location of deep water
    changes regularly. The commanding officer also said that the north side of
    the channel is almost impossible to mark reliably because sand regularly
    shifts into and out of the channel as Bodie Island moves south, creating a
    constant navigational hazard.

    The buoys that mark the deep water of the ocean bar navigation channel are
    frequently moved and are therefore not charted. According to Coast Guard
    officials, vessel operators who are not aware of the shifting sand
    conditions are susceptible to running their vessels aground. As a result,
    the

    Coast Guard suggests that vessel operators call its Coast Guard Station
    Oregon Inlet to obtain the most recent navigation data before attempting
    to traverse the ocean bar navigation channel.

    Corps* Economic We identified several limitations in the Corps* economic
    analysis that

    Analysis for the undermine its usefulness for assessing whether the Corps*
    preferred

    alternative of a dual jetty project with a 20- foot navigation channel is
    Proposed Oregon Inlet

    economically justified. For example, the analysis overstated the benefits
    to Jetty Project Has

    large commercial fishing vessels (trawlers) based on their current fishing
    Several Limitations

    activities, but did not analyze the potential benefits the proposed jetty
    project may provide to smaller commercial fishing vessels. However, That
    Undermine Its because these smaller vessels have shallower drafts than
    trawlers, the

    Usefulness extent to which they might benefit from the jetty project is
    uncertain. The

    analysis also did not account for the economic value of the lives that
    might be saved by the jetty project, which could result in understated
    benefits; it also overstated the cost of the current dredging program and
    used an overly optimistic assumption concerning future dredging needs that
    would tend to understate the cost of the jetty project. (See app. IV for
    more

    details on these and other limitations to the economic analysis.) We did
    not assess the effects of all these limitations on the net benefits of the
    Corps* economic analysis because obtaining the necessary data would
    require an inordinate amount of time and expense. As a result, we cannot
    say what

    the net effect of addressing all the limitations would be on the net
    benefits and the benefit- cost ratio of the Corps* preferred jetty project
    alternative.

    Corps Estimate of Benefits The Corps estimated that the recommended jetty
    project would generate

    to Commercial Fishing about $2 million in annualized benefits by reducing
    the operating costs of

    Vessels Is Based on commercial fishing vessels. The Corps anticipates that
    the recommended Outdated and Incomplete

    project would reduce these costs by alleviating hazardous conditions in
    Oregon Inlet that sometimes force the vessels, especially trawlers, to
    Data

    detour to more distant inlets or ports. The Corps based its benefit
    estimate on the savings that would occur if the number of detoured trips
    and their related operating costs were reduced. In estimating operating
    cost savings, the Corps included savings in *fixed* operating costs, which
    it defined as including, among other things, depreciation charges on the
    vessel, insurance, interest on loans, and taxes.

    In calculating the estimated benefit, the Corps relied on data provided in
    a 1987 consultant*s report that studied the number of trips taken by
    trawlers during the mid- 1980s. 11 However, these data do not reflect the
    fewer trips taken by trawlers in recent years. Further, the Corps
    overstated the operating costs savings that trawlers would likely achieve
    by including all the fixed- costs portions of their hourly operating
    costs. The appropriate measure of savings is variable costs (costs that
    vary with the length of fishing trips) that would be saved by reducing the
    number of detoured trips. This would include the cost of such items as
    fuel and oil but not such items as taxes and insurance, which likely would
    remain the same whether or not the jetty project is built.

    In addition, by relying on the consultant*s study, the Corps excluded from
    its analysis the trips taken by smaller (shorter than 55 feet) commercial
    fishing vessels. These vessels were excluded because the consultant*s
    study did not assess the effect of inlet conditions on the operating costs
    of smaller fishing vessels.

    11 A Reassessment of the Economic Feasibility of the Oregon Inlet Project,

    Kearney/ Centaur, a Division of A. T. Kearney, Inc., prepared for the
    Corps of Engineers, July 1987.

    As shown in table 1, according to data from the North Carolina Division of
    Marine Fisheries, about 97 trawlers averaged 679 trips through Oregon
    Inlet from 1999 through 2001. 12 By contrast, the consultant*s 1987 study

    found that about 234 trawlers averaged about 4,500 trips through Oregon
    Inlet from 1984 through 1986. Both the state*s data and the 1987
    consultant*s study suggest that the number of smaller commercial fishing
    vessels using the inlet has significantly increased since the mid- 1980s.
    State officials indicated, however, that because the state and the
    consultant

    used different methods to collect the data* the state*s data are based on
    a census of commercial fish landings and the consultant*s data were based
    primarily on interviews of selected seafood dealers and trawler captains*
    the state*s data and the consultant*s data may not be fully comparable. 13
    We attempted to verify the data used by the consultant, but the Corps no
    longer

    has the supporting documentation for the study. Nonetheless, any
    assessment of the effect of the proposed jetty project on commercial
    fishing activities should be based on current commercial fishing trip
    data,

    which the state has collected through its trip ticket program. As a
    result, the Corps* reliance on the consultant*s 1987 study calls into
    question the usefulness of the Corps* estimate of the benefits of the
    jetty project to commercial fishing vessels.

    12 Data for 1999 through 2001 include landings made by both in- state and
    out- of- state vessels to seafood dealers in Dare, Hyde, Pamlico, and
    Beaufort Counties. According to state officials, trawlers using specified
    gear that land ocean- caught fish in these counties are assumed to pass
    through Oregon Inlet. Trips made by North Carolina vessels to land fish in
    other states are not included. Data for smaller vessels exclude fish that
    were landed in Hatteras (Dare County) because these landings are assumed
    to have been made using Hatteras Inlet

    13 Under the North Carolina trip ticket program, which was begun in 1994,
    seafood dealers are required to report certain information about
    commercial fish landings, including the landing vessel*s identification,
    the species of fish caught, and the type of fishing gear used.

    Table 1: Estimated Average Number of Annual Trips Made by Commercial
    Fishing Vessels through Oregon Inlet, for the Periods 1984- 1986 and 1999-
    2001 Trawl ers a Smaller vessels b

    Number of Number of Annual

    trips Landings

    Annual trips

    Landings Time period Number trips

    detoured (million lbs) Number trips detoured (million lbs)

    1994- 1986 c 234 4, 498 1, 896 15 25 - 30 d d 2.8 1999- 2001 e 97 679 d
    8.6 214 3, 249 d 9.8

    a Vessels that are at least 55 feet long b Vessels that are shorter than
    55 feet

    c Source: 1987 Kearney/ Centaur study d Not available e Source: North
    Carolina Division of Marine Fisheries. According to an official with the
    North Carolina Division of Marine Fisheries, the change in trawler trips
    likely reflects changes in federal and

    state limits on the fish harvest. For example, in 1992, several management
    measures--- including a moratorium on the issuance of new licenses for
    fishing and a 13- inch limit on the size of fish that can be harvested---
    were implemented to reduce over- fishing of flounder, a fish species
    traditionally caught by trawlers operating out of Oregon Inlet. During the
    mid- 1980s, before these resource management measures were imposed, about
    7.7 million pounds of flounder were landed annually through Oregon Inlet.
    By

    contrast, from 1999 through 2001, about 2.2 million pounds were landed
    annually through Oregon Inlet. According to Commerce, the size of the
    commercial fleet has declined due to a vessel reduction program
    implemented by the South Atlantic Fishery Management Council.

    Corps officials said that they relied on the methodology of the
    consultant*s 1987 report because they considered it *independent,* and
    that even though the trips by smaller vessels were not explicitly included
    in the analysis, the difficulties experienced by the trawlers were
    indicative of all commercial fishing vessels. In addition, the officials
    said that the recent trawler trip activity reflects, at least in part, a
    decrease in the reliability of

    the channel due to the lack of adequate operation and maintenance funds.
    They also said that the deeper channel provided by the proposed jetty
    project might attract other trawler operators to relocate to the Oregon
    Inlet area. However, the Corps* assumption about the total hours delayed
    by inlet conditions is based on trawler trips, and it is not appropriate
    to apply the potential savings to smaller vessels without corroborating
    evidence

    that they, too, are affected in the same way as trawlers. In addition,
    while the decrease in trawler traffic may reflect a number of factors,
    including fishery management measures and a decrease in the reliability of
    the 14- foot channel, the Corps* analysis is not useful for assessing
    these factors because it relies on data from the mid- 1980s that do not
    reflect current commercial fishing vessel traffic, the fisheries
    management measures that have been put in place since the mid- 1980s, or
    changes in the reliability of

    the channel. To illustrate how using the more recent trawler trip data
    would affect the Corps commercial benefits estimate, we adjusted the
    Corps* analysis to account for the number of fishing trips that trawlers
    have recently taken. We also adjusted the Corps analysis to exclude
    certain fixed vessel costs.

    Based on these adjustments, we found that the annualized commercial
    fishing benefits would be reduced by about 90 percent, from about $2
    million to $194,000. However, accounting for the effect of the proposed
    jetty project on smaller fishing vessels could increase this adjusted
    estimate of the benefits to commercial fishing vessels. Because these
    smaller vessels have a shallower draft than trawlers, they may not be as
    affected by the sand accumulations in the ocean bar navigation channel
    that can be hazardous to trawlers. For this reason, the extent to which
    smaller vessels might benefit from the jetty project is uncertain. We
    could not assess the effect of the proposed jetty project on the smaller
    commercial fishing vessels because there are insufficient data on the
    extent to which these vessels are delayed by conditions in the inlet.

    Corps* Estimate of Benefits The Corps did not incorporate the economic
    value of the lives that might be

    Did Not Incorporate the saved by the jetty project into its net benefit
    estimates. Consequently, to Economic Value of

    the extent that the jetty project reduces accidental deaths, accounting
    for Accidental Deaths That

    the economic value of the lives saved could increase the benefits estimate
    Might be Prevented by the

    (all other factors being the same). Federal guidance on water project
    analysis does not require that the economic value of the lives that might
    be Proposed Jetty Project saved by a project be included in the estimate
    of net benefits. Nonetheless, it is standard economic practice to
    incorporate this economic value into the benefits estimate so that
    decision makers can assess the full range of benefits that might be
    generated by a federal investment or regulation. For example, in assessing
    the benefits of safety improvements that reduce the risk of premature
    death, the Department of Transportation uses an

    estimate of the *value of a statistical life,* which is $3 million per
    averted death (2002 dollars). 14

    Corps officials said that their policy is to quantify the number of lives
    that might be saved by a project but not to estimate their economic value,
    because procedures for estimating the economic value of a life are not

    included in federal guidelines for analyzing water projects, and the Corps
    prefers that the project be assessed without the influence of the economic
    benefits attributable to lives saved. The officials said that they do
    consider the potential life- saving issues along with other factors, such
    as the benefitcost ratio, in deciding whether to recommend that a project
    be implemented. Nonetheless, an alternative approach that does not require

    valuation but explicitly considers lives saved can be useful for assessing
    whether projects that have negative net benefits (that is, *net costs*
    when costs exceed benefits or the benefit- cost ratio is less than 1) may
    still be

    worth implementing. Under this approach, the net costs (exclusive of lives
    saved) are divided by the number of lives saved, and the estimate can be
    compared with other federal investments to ascertain whether the

    proposed project*s estimate of net cost per life saved is comparable to
    that achieved by other federal investments or regulations.

    The Corps estimated 14 accidental deaths would be prevented by the
    project. However, the Corps* analysis assumes that all prior vessel
    accidents that included deaths would be prevented by the jetty project and
    does not clearly control for factors that would be present with or without

    the jetty project. For example, Corps officials told us that under some
    weather conditions the inlet would be hazardous even with the recommended
    20- foot channel and dual jetties in place. Further, the Corps did not
    control for factors that include changes in type of vessel traffic,
    operator experience, and vessel safety technology, all of which will

    continue to play a role in the number of accidents and deaths in the inlet
    with or without the jetty project. In commenting on a draft of this
    report, the Departments of Commerce and Interior noted that the economic
    costs

    of the potential effect of the jetties on accidental deaths, vessel
    damage, and personal injuries resulting from the construction of the
    jetties are not incorporated in the analysis.

    14 The value of a statistical life is derived from studies of individuals*
    willingness to pay for small reductions in the risk of dying. The estimate
    represents the value of the reduction in risk to a population and not the
    value of any identifiable individual.

    Corps* Estimate of Project Using costs for dredging that the Wilmington
    District incurred from fiscal

    Cost Does Not Include More years 1983 through 1996, the Corps* economic
    analysis estimated that the

    Recent Data on Lower annualized cost of the current 14- foot dredging
    program is about $8.4

    Expenditures and Uses an million. The $8.4 million includes $6. 5 million
    in average annual operation

    and maintenance (O& M) expenditures and about $1.9 million in other Overly
    Optimistic

    costs. 15 In contrast, the Corps estimated that the proposed jetty project
    Assumption on Future

    would cost $12.9 million ($ 6.1 million in O& M costs and $6.8 million in
    Dredging Needs

    other costs). 16 To determine the incremental or *net cost* that would be
    associated with implementing the jetty project alternative, the Corps
    appropriately subtracted the annualized cost of the current dredging
    program ($ 8.4 million) from the annualized cost of the proposed jetty

    project ($ 12.9 million). Based on this analysis, the Corps determined
    that implementing the jetty project alternative would cost $4.5 million
    more annually than the Corps spends on the current dredging program.

    The Corps* $6.5 million O& M cost estimate for the current dredging
    program is based on expenditures from fiscal years 1983 through 1996.
    However, for fiscal years 1997 through 2001, the Corps spent only about

    $3.9 million per year on dredging. By updating the Corps* expenditure data
    through fiscal year 2001, we found that the Corps* annualized estimate of
    the current dredging program would be reduced from $8.4 million to $7.4
    million. 17 Consequently, the net costs of the jetty project would
    increase from $4.5 to about $5.5 million. Corps officials agreed that
    dredging expenditures have declined to about $3.9 million annually in
    recent years for the reasons cited earlier in this report.

    In addition, in estimating the cost of the jetty project, the Corps
    excluded $945,000 that it spent from 1983 through 2001 dredging in Pamlico
    Sound, which is not part of the ocean bar navigation channel. The Corps
    excluded this cost because it assumed that dredging this area in Pamlico
    Sound 15 The $1.9 million represents the annualized amount, at 7. 125
    percent interest, of dredging

    costs during the 4- year period required to construct the jetty project.
    16 The $6.8 million is the annualized value of the jetty project*s
    construction costs. 17 The Corps made some computational errors in
    calculating the O& M costs for the current dredging program. Specifically,
    the Corps excluded $799,285 in costs that it had incurred dredging the
    ocean bar navigation channel in 1990, which it had inadvertently
    identified as an interior channel dredging expense. In addition, the Corps
    mistakenly double- counted $876, 472 of costs incurred in 1991 to dredge
    the ocean bar navigation channel. We corrected for these two errors that
    essentially offset each other. Corps officials agreed with this
    correction.

    would not be required as part of the recommended jetty project. Corps
    officials said that the source of the sand in this area is the ocean and,
    based on their best engineering judgment, this area will naturally flush
    itself after the jetties are built; therefore, this dredging cost will no
    longer be incurred.

    However, several coastal engineers and geologists familiar with the Corps*
    proposed jetty project told us that the jetties would not eliminate
    dredging this area of the sound. In general, they believe that whether the
    source of the sand is the ocean or rivers that drain into the sound, the
    man- made channel will fill back in with the sand adjacent to it and
    require dredging.

    As a result, there is uncertainty about whether the Corps will continue to
    dredge this area. Nonetheless, if the Corps does have to dredge this area,
    then the cost of the jetty project would be higher than the Corps
    estimated in its economic analysis (all other factors being the same).

    Performance of Similar Corps district officials identified eight jetty
    projects located on the Atlantic

    Jetty Projects Has Ocean and Gulf of Mexico coastlines that are similar to
    the proposed

    Oregon Inlet project in that they incorporate dual jetties and a weir.
    Been Mixed

    According to data provided by the Corps, two of these jetty projects, both
    south of Oregon Inlet on the Atlantic coast, are generally performing as
    planned, and six others are not. Two projects are considered by the Corps
    to be performing as planned because the Corps has not had to dredge the
    project*s navigation channel more than originally predicted. For the six
    jetty projects that are not performing as planned, one has a navigation
    channel that is frequently not at its authorized depth, three have
    required more dredging and higher dredging costs than expected, 18 and two
    have had their weirs closed. According to Corps officials responsible for
    these

    six jetties, a key factor in why these jetties have not performed as
    planned was inaccurate information on sand movement when the projects were
    initially designed. According to the Corps and other experts, good
    estimates of sand movement are essential to successfully designing a weir
    jetty project that will facilitate the bypass of sand to adjacent beaches
    while ensuring the availability of a navigation channel with minimum
    dredging costs. Table 2 summarizes the performance of the eight dual jetty
    projects that incorporate weirs.

    18 Even with the additional dredging, for one of the three projects the
    channel has been available less than the expected amount of time.

    Table 2: Performance of the Eight Jetty Projects Incorporating Weirs
    Generally More dredging than Poor channel performing as Jetty project
    Location planned Weir closed availability

    planned

    Murrells Inlet, SC Atlantic Ocean Coast X Colorado River, TX Gulf of
    Mexico Coast X X Ponce DeLeon, FL Atlantic Ocean Coast X St. Lucie, FL
    Atlantic Ocean Coast X Perdido Pass, AL Gulf of Mexico

    Coast X East Pass, FL Gulf of Mexico

    Coast X Rudee, VA Atlantic Ocean Coast X

    Masonboro, NC Atlantic Ocean Coast X Source: GAO analysis of Corps data.

    Two Projects Are Currently According to the Corps* Charleston District
    staff, which is responsible for

    Performing As Planned the Murrells Inlet jetty project, the project has
    performed as expected

    because maintenance dredging of the navigation channel, which was planned
    for every 3 years, has only been needed once since the jetty project was
    built. That dredging occurred in 1988, and additional dredging is planned
    for 2002. District staff said the channel through the inlet has been kept
    open primarily by the flushing action of currents flowing through the
    jetties and has had lower maintenance costs than expected.

    The Corps* Wilmington District staff, which is responsible for the jetty
    project at the Masonboro Inlet, said the project is considered to be
    performing as planned currently because they have only had to dredge the
    project*s sand deposition basin every 3 or 4 years, which is less than the
    planned frequency of once a year. However, the Masonboro Inlet project was
    originally constructed in 1966 as a single jetty with a weir on the north
    side of the inlet, which did not perform effectively. The 1,000- foot weir
    was the first structure of its type to be constructed in the United
    States. Tides and current undermined the jetty because the inlet*s channel
    continued to migrate. As a result, the Corps repaired the first jetty and,
    in 1980,

    constructed a second jetty on the south side of the inlet, which
    stabilized the locations of the channel and the sand deposition basin.
    After the south jetty was built, however, sand that the Corps predicted
    would accumulate

    in the deposition basin instead began accumulating at the south end of
    Wrightsville Beach. This sand eventually formed a spit and required
    vessels entering the inlet to make a sharp turn in strong crosscurrents in
    order to stay in the navigation channel. 19 However, by using the sand
    spit as an extended deposition area, the Wilmington District has only had
    to dredge

    the deposition area every 3 or 4 years. According to district officials,
    this is also enough dredging to keep the spit from further encroaching
    into the navigation channel, which is otherwise kept open by the currents
    and tides passing between the jetties. (See fig. 5 for photographs of the
    Masonboro Inlet weir.)

    19 A spit is a narrow point of land or sand mass extending from the shore.

    Figure 5: The Weir in the North Jetty at Masonboro Inlet, North Carolina

    The picture on the left shows that high tide covers the weir, while the
    picture at the right shows that the weir is exposed at low tide. The
    weir*s elevation is 2.16 feet above mean low water measured at the inlet.

    Source: GAO.

    Six Projects Are Not Performing Project managers provided the following
    specific details about four jetty

    As Planned projects, including the jetty project that has incurred
    expected dredging

    costs, but whose navigation channel is frequently not maintained at its

    authorized depth, and the performance of the three jetty projects that
    have incurred higher than expected dredging costs.

     At St. Lucie Inlet, Florida, the Jacksonville District was performing
    the amount of dredging expected, but more sand accumulated in the
    navigation channel than was anticipated because the Corps did not complete
    construction of the deposition basin that was to collect the sand that
    passes over the weir. As a result, since the jetty project was
    constructed, the Corps has been able to maintain the navigation channel at
    its authorized depth of 16 feet only about 20 percent of the time. Plans
    are under way to complete construction of the deposition basin. The
    Jacksonville District believes that construction of the deposition

    basin, as well as other modifications to the jetty project, will help
    maintain the channel at its authorized depth 100 percent of the time.

     For the jetty project at Rudee Inlet built by the City of Virginia
    Beach, Virginia, officials said they expected to dredge 100,000 cubic
    yards of material annually. However, according to the city staff, actual
    dredging at the inlet has averaged 300,000 cubic yards annually because
    more sand than expected has flowed over the weir. Although the project has

    required more dredging than planned, a consultant for the city of Virginia
    Beach states that even with higher dredging costs, the expenditures are
    justified, because the inlet provides many recreational and commercial
    benefits.

     For the jetty project at Perdido Pass (inlet) in Alabama, the Corps*
    Mobile District said that this project was designed for the Corps to
    dredge about 100,000 cubic yards of material annually; however, to keep
    the navigation channel at its authorized depth, the Corps has actually had
    to dredge about 361,000 cubic yards of material every 2 to 3 years.

     For the jetty project at the Colorado River Inlet in Texas, the Corps*
    Galveston District expected to dredge about 536, 000 cubic yards of sand
    every 2 years, or an average of 268,000 cubic yards annually. However, the
    actual amount of material dredged annually was about 680,000 cubic

    yards, or about two and a half times what was planned. The need for this
    additional dredging occurred because the amount of sand flowing over the
    weir has been greater than expected, and the sand has tended to be
    deposited in the navigation channel rather than in the project*s
    deposition basin. (See fig. 5 below for a photo of this project.) Despite
    the extra dredging, the Corps* Galveston District reported that the
    channel was available at its authorized depth only about 30 percent of

    the time. The need for more dredging than planned has caused the
    responsible Corps districts to incur additional maintenance costs. For
    example, the Galveston District has spent about $1.9 million annually for
    dredging the Colorado Inlet, more than four times the $425,000 that it
    planned to spend for annual dredging when the project was designed.

    Figure 6: The Dual Jetty Project at Colorado River Inlet, Texas

    The east jetty is on the right and contains the weir, which is paralleled
    by a fishing walkway. More sand than expected has passed over the weir and
    been deposited in the channel, as indicated by the narrowing of the river
    in this view.

    Source: The Corps of Engineers* Galveston District.

    The Corps districts had to close the weirs for two of the jetty projects
    because they did not work as planned. Specifically, in 1985, at the East
    Pass, Florida, jetty project, the Mobile District decided to fill in the
    weir that was built in 1969 because the east side of the weir was eroding,
    and only a limited amount of sand was accumulating in the deposition
    basin. The problem arose because the predominant direction of the sand
    flow was

    opposite to what the Corps expected when the jetty project was designed.
    In 1985, after the Corps determined that the weir was constructed on the
    wrong jetty, it closed the weir. In another case, in 1984, the Corps*
    Jacksonville District closed the weir at Ponce DeLeon Inlet, Florida,
    because the weir was believed to be causing erosion problems north of the
    inlet and instability in the inlet*s navigation channel. In addition, the
    weir caused safety concerns because boaters were attempting to cross over
    it to go to and from the ocean, instead of using the navigation channel.
    Appendix VI provides a comparison of the proposed Oregon Inlet jetty

    project to similar completed jetty projects. Corps Applied Lessons

    Corps officials at the Wilmington District Office stated that in designing
    the Learned from Similar Oregon Inlet jetty project, they applied lessons
    learned from the construction and management of similar jetty projects and
    from internal Jetty Projects in

    Corps guidance. Specifically, from experiences gained in designing,
    Designing the Oregon constructing and managing the Masonboro Inlet jetty
    project in North Inlet Jetty Project, but Carolina, Wilmington District
    officials stated that they learned:

    Information on Fish  how to construct dual jetties to avoid problems with
    channel migration

    Larvae Migration Is Not and to ensure that sand accumulates in the
    intended area,

    Available  how to determine the proper length of the weir section, and

     how to design jetties to prevent the structures from being undermined or
    weakened by erosion.

    In addition to the lessons learned from this actual experience, Wilmington
    District officials stated that they used the Corps* internal guidance on
    the design of jetty projects, which is based on lessons learned from other
    Corps projects. Specifically, this guidance emphasizes the importance of
    having accurate information on sand movement in designing a sand bypass

    system such as the one proposed for the Oregon Inlet jetty project.
    Following this guidance, the district used 20 years of data on sand
    movement in designing the sand bypass system for the Oregon Inlet jetty

    project.

    Although the Corps used these lessons in designing the Oregon Inlet jetty
    project, there are still some uncertainties about whether the project will
    perform as planned. For example, although the Wilmington District used
    measurements of sand movement taken over the 20- year period, these data
    were obtained from 1956 through 1975 and are now more than 25 years old.
    More recent data on sand movement at Oregon Inlet are available for the
    period from 1976 through 2001; however, the Wilmington District has not

    updated its estimates because it believes that the new data would not
    change its existing estimates significantly. Because this updated data was
    not included in the economic analysis, it is uncertain what effect the
    more recent data would have on the Corps* estimate of sand movement and
    dredging costs.

    Another issue related to sand movement is the accuracy of the models used
    to make these estimates. Although the Corps used some of the best models
    available to estimate sand movement at Oregon Inlet, Corps officials
    acknowledged that these models are imprecise and generate results that
    could vary by as much as plus or minus 40 percent. This variation could

    affect the actual dredging and sand bypassing costs that would be incurred
    if the jetty project were built. To provide for this uncertainty, the
    Corps included additional dredging costs of about $288,000 annually in its
    economic analysis.

    Another uncertainty relates to the impact of the proposed jetty project on
    the migration of fish larvae. Although none of the similar jetty projects
    with weirs were designed to facilitate fish larvae migration, the Corps
    believes that incorporating a weir into the Oregon Inlet jetty project
    will minimize the impact of the project on fish larvae. However, fisheries
    experts stated that there are no definitive data on how any jetty
    projects, with or without weirs, affect fish larvae migration. Commerce
    and Interior

    Both the Department of Commerce and the Department of the Interior Remain
    Concerned

    support the goal of providing a safe navigation channel through the Oregon
    Inlet for commercial and recreational fishing vessels. However, both That
    the Oregon Inlet

    departments support a dredging- only approach to achieve that goal in an
    Jetty Project Will Harm

    environmentally acceptable manner and have raised several concerns the
    Environment

    about the Corps* plans for stabilizing the inlet with jetties. Commerce
    believes that the Corps* environmental impact statement (EIS) for the
    project is flawed and that the preferred jetty alternative would cause
    unacceptable environmental harm to commercial and recreational

    fishery resources. Specifically, Commerce*s National Oceanic and
    Atmospheric Administration (NOAA), which is mandated to manage the
    nation*s living marine resources, believes that the Corps* jetty project
    would eliminate or degrade significant areas of highly productive fishery
    habitat, thereby reducing fishery resources. According to NOAA, such
    habitat is vital for the development of many marine species, including
    shrimp, red drum, summer flounder, and bluefish, which are found in the
    Outer Banks. NOAA maintains that the jetties would alter the near- shore
    currents and reduce successful movement of fish larvae, small juvenile
    fish, and invertebrates, which are dependent on the currents to carry them
    into

    the sheltered estuaries of the Albemarle and northern Pamlico Sounds.
    According to NOAA, this is a particular concern for the economically
    valuable fish that spawn offshore in the fall and winter, such as
    flounder. While raising these concerns, NOAA recognizes that current data
    on fish larvae migration are not sufficient to quantify the impact that
    the proposed Oregon Inlet jetties would have on fish larvae migration.
    However, NOAA points out that there are no studies or data available on
    how weirs or jetties in general affect fish larvae migration, and it
    believes that constructing the jetties without this information is an
    unacceptable risk. Commerce also noted that without construction of the
    jetties, the safety record of vessels

    using Oregon Inlet has increased dramatically over the past 20 years.
    Interior, which manages the federally owned land on which the proposed
    jetties would be constructed, has long opposed the project. 20 Interior*s
    National Park Service manages the Cape Hatteras National Seashore, where
    the proposed northern jetty would be built, and Interior*s Fish and

    Wildlife Service manages the Pea Island National Wildlife Refuge, where
    the proposed southern jetty would be built. 21 Since the Corps first
    prepared an EIS for the project in 1979, both of these agencies have
    consistently raised concerns that the proposed jetties will adversely
    affect fish and wildlife habitat. In general, Interior has expressed the
    following concerns:

     The jetties will increase beach erosion. Interior stated that if the
    jetties are built, erosion and accretion patterns will be modified both
    north and 20 In 1992, the Secretary of the Interior issued two conditional
    permits to the Corps for use of

    Interior lands for jetty construction contingent on completion of project
    plans and environmental studies. These conditional permits were rescinded
    in 1993.

    21 Pea Island National Wildlife Refuge is within the boundary of the Cape
    Hatteras National Seashore.

    south of the inlet, which in turn will increase overwash of the islands,
    especially during storms. This overwash will harm valuable wildlife
    habitat, as well as plants and vegetation that provide food for waterfowl
    and other migratory birds. Interior also stated that this erosion could
    exceed the Corps* estimates and create a further real threat of additional
    construction on Interior land to save the jetties. Finally, Interior
    stated that the increased erosion would also threaten the infrastructure
    at and adjacent to Oregon Inlet, including state highway 12. Interior
    noted that the design of the Bonner Bridge requires the inlet*s navigation
    channel

    to remain fixed under a single span of the bridge. However, the proposed
    replacement bridge currently being considered by the state has a proposed
    elevated portion 5,000 feet long that would allow the navigation channel
    to be moved as conditions dictate. According to Interior, this would
    eliminate the need for the jetties and an existing rock structure (known
    as the terminal groin) that was built to protect

    the southern end of the Bonner Bridge. Interior stated that under the
    terms of the permit it granted to the state to construct the terminal
    groin, the structure would probably be removed once the new bridge is
    constructed.

     The sand bypass system that was designed to mitigate the adverse effects
    of beach erosion will permanently alter existing shoreline habitat and
    disrupt shorebird nesting, resting, and feeding areas on a temporary,
    seasonal, or permanent basis. For example, Interior states that each sand
    bypass will harm invertebrate animals (small clams, worms, and

    crabs) that inhabit the shoreline and provide a valuable food source for
    shorebirds and fish. Interior stated that over the years frequent sand
    bypassing of large volumes might permanently eliminate these food sources
    and produce severe long- term adverse impacts on breeding, migrating, and
    over- wintering shorebirds. Among these birds are the

    Great Lakes piping plover population, which is federally listed as
    endangered, and the Atlantic/ Canada coast piping plover population, which
    is federally listed as threatened. There is also concern that the
    perpetual placements of incompatible sands will diminish successful
    nesting by the threatened loggerhead sea turtle and green sea turtle.
    Nesting takes place south of the inlet on the refuge, which is an area
    expected to experience the greatest erosion due to the jetties and
    therefore would require the most sand placement. In addition, the trapping
    and bypassing of the sand will not allow the sand to naturally migrate
    into Pamlico Sound, which could have and adverse effect on intertidal
    marshes, sandflats, mudflats, and submerged aquatic

    vegetation, all of which are important fish and wildlife habitat.

     The weir will not function as planned. Interior stated that the Corps
    has not provided interested agencies with its analysis, studies, or other
    data that would support how the weir will perform and notes that the
    proposed weir design has not been field- tested. Interior also expressed
    concern that the Corps* planning has not adequately considered the impact
    of the Dare County beach replenishment project on the weir. Specifically,
    according to Interior, the project will take, on average, over

    one million cubic yards of sand from the ocean and place it on the beaches
    north of Oregon Inlet each year. The movement of this additional sand from
    the northern beaches southward toward Oregon Inlet would increase the
    likelihood of the weir becoming landlocked, which in turn would allow sand
    to pass around the north jetty and into the ocean bar navigation channel.
    This would increase the possibility

    that considerable supplemental dredging would be required and/ or that the
    Corps may ultimately be required to build longer jetties, as originally
    planned. These actions would significantly increase the cost of the jetty
    project. Interior also said that if the weir were to become landlocked, it
    would nullify the expected benefit of facilitating the migration of fish

    larvae.  Construction of the jetties will diminish much of the public*s
    recreational use of the Bodie Island spit, which, according to Interior,
    is

    contrary to one of the legislative purposes of the Cape Hatteras National
    Seashore. Interior stated that the construction of the north jetty on land
    of the Cape Hatteras National Seashore would block access to a large
    portion of the spit currently used for recreational activities such as
    fishing, and a large section of the spit would be dredged away or used as
    the site of the proposed sand deposition basin.

     The jetty project may not significantly reduce the loss of life at
    Oregon Inlet. Interior points to data which shows that, in some cases, the
    loss of life is not due to conditions at the inlet but rather to such
    factors as alcohol consumption, unfamiliarity with the inlet, navigational
    errors, and the lack of life vests and survival suits. According to
    Interior, these factors would not be corrected by construction of the
    jetties. Interior also raised concerns that the construction of hard
    structures would introduce a new risk to vessels traveling through Oregon
    Inlet, based on accident data from other jettied inlets.

    For these and other reasons, NPS does not support the construction of the
    proposed jetty project. NPS stated that the jetty project is not
    consistent with its mission of protecting, and it might actually impair,
    the resources

    and values of the Cape Hatteras National Seashore. Further, in May 1982,
    the Fish and Wildlife Service issued a formal determination that the
    proposed jetty project was not compatible with the purposes of the Pea
    Island National Wildlife Refuge, which was established to manage, protect,
    and restore migratory birds and other wildlife.

    In addition, in commenting on a draft of the Corps* August 2001 final EIS,
    the Environmental Protection Agency (EPA) expressed objections to the EIS
    that are similar to the concerns of Commerce and Interior. Specifically,
    in an October 19, 2001, memorandum to the Corps, EPA stated that it
    continues to have objections to the proposed jetty project. These include
    concerns about

     the potential long- term impacts of the project on a regionally
    important commercial fishery resource, especially disruptions to larval
    fish transport, which EPA believes will be difficult, if not impossible,
    to

    address;  the adequacy of the Corps* proposed mitigation, including
    whether there

    will be sufficient sand available at critical periods to make the proposed
    sand management plan function as anticipated in preventing projectinduced
    erosion of Bodie and Pea Islands;

     the need for the project because of uncertainties associated with
    whether the presumed safety benefits will be fully realized; and

     the assumed economic benefits due to professional disagreements
    regarding the assumptions used in the project justification.

    EPA believes that the project would result in significant environmental
    impacts that should be avoided in order to ensure adequate protection of
    the environment and that these significant issues must be addressed more
    thoroughly in future deliberations on this project and in the Corps*
    Record of Decision. The Corps asserts that in its final EIS it adequately
    addressed the concerns raised by Commerce and Interior. Specifically, the
    Corps said that it

    shortened the length of the jetties and incorporated a weir in the north
    jetty and a sand bypassing system to address the concerns raised about
    fish larvae migration and beach erosion. Furthermore, the Corps stated
    that it plans to monitor whether these actions will work and determine
    whether additional adverse impacts result from constructing the jetties.
    If so, the

    project will require further mitigation. However, neither Commerce nor
    Interior believes that the Corps* proposed actions would satisfy their
    concerns.

    Because of this impasse, in accordance with regulations under the National
    Environmental Policy Act, on October 16, 2001, Commerce formally referred
    its concerns about the adequacy of the Corps* EIS to the Council on
    Environmental Quality (CEQ) for its consideration and action. The referral
    process permits federal agencies to bring to CEQ interagency disagreements
    concerning proposed major federal actions that might cause unsatisfactory
    environmental effects. Although Interior did not formally refer its
    concerns to CEQ, it sent a letter to CEQ on November 15, 2001, asking the
    council to consider whether the Corps* final EIS adequately addressed
    Interior*s environmental concerns.

    CEQ may take one or more of several actions, including (1) concluding that
    the process of referral and response successfully resolved the problem;
    (2) initiating discussions with the agencies with the objective of
    mediation; (3) holding public meetings or hearings to obtain additional
    views and information; (4) determining that the issue is not of national
    importance and requesting the lead and referring agencies to pursue their
    own decision processes; (5) determining that the issue should be further
    negotiated by the lead and referring agencies and that the issue is not
    appropriate for CEQ*s consideration until one or more heads of the
    agencies report to CEQ that the agencies* disagreements are
    irreconcilable; (6) publishing its findings and recommendations,
    including, where appropriate, a finding that the submitted evidence does
    not support the position of an agency; and (7) submitting, where
    appropriate, the referral and response, together with CEQ*s
    recommendation, to the President for action. CEQ has initiated discussions
    with Commerce, Interior, and the Corps, and it held a public

    hearing on this issue in December 2001. CEQ is in the process of
    completing its assessment and has not established a date for announcing a
    final decision.

    The Corps does not plan to issue its Record of Decision on the project
    until CEQ and GAO issue their final reports. However, the Corps stated
    that until these environmental concerns are resolved and Interior
    indicates it is willing to grant the Corps the permits needed to build the
    project on the federally owned land managed by Interior, the Corps does
    not intend to spend additional public resources to further study the
    economics of the jetty project for improving the safety and navigability
    of Oregon Inlet.

    In the meantime, the Corps dredged the Oregon Inlet in 2001 in accordance
    with existing NPS and FWS special use permits. In preparation for the
    Corps* 2002 dredging effort, according to Interior, NPS and FWS assisted
    the Corps in the preparation of an environmental assessment. Based on the
    cooperatively prepared environmental assessment, NPS issued a finding of
    no significant impact and no impairment to park resources and values. NPS
    then issued a special use permit for the 2002 dredging program, which,
    according to Interior, includes a 400- foot wide channel that will require

    dredging away part of the Bodie Island spit. FWS, likewise, issued the
    Corps a special use permit for disposal of dredge material on refuge lands
    during the Corps* 2002 dredging effort. FWS*s permit allows the Corps to
    deposit about 1 to 2 million cubic yards of dredge spoil on the oceanfront
    beaches of the Pea Island National Wildlife Refuge. According to the NPS
    special use permit, the dredging operation would also eliminate
    approximately 4 acres of wetlands, for which compensatory mitigation will
    be provided by the Corps in the form of enhanced wetlands habitat for
    migratory shorebirds elsewhere on the Bodie Island spit. The Corps* 2002
    dredging effort is currently underway.

    Conclusions The Corps states that it has not been able to maintain Oregon
    Inlet*s ocean bar navigation channel at its authorized depth because of
    the inlet*s highenergy

    conditions, especially during storms, and because of funding limitations.
    While it is difficult, if not impossible, to predict the frequency and
    magnitude of storms that impact on the district*s ability to dredge the
    channel, the district has not requested all of the funds it believes are
    needed to adequately perform the dredging. Beginning in fiscal year 2003,
    the district has decided to request the full amount of funds it believes
    will allow it to maintain the channel more reliably.

    Although the inlet remains potentially hazardous, we believe that the
    Corps* economic analysis does not provide a reliable basis for deciding
    whether to proceed with the jetty project. We found significant problems
    with the analysis, including a reliance on outdated and incomplete data,
    the use of unsupported assumptions, and a lack of accounting for risk and
    uncertainty in key variables that could significantly affect the project*s
    benefits and costs. In addition to these economic concerns, the
    Departments of Commerce and the Interior do not believe that the Corps has
    adequately mitigated for environmental concerns, including the project*s
    impact on fish larvae migration, beach erosion, and wildlife habitat.
    Commerce has formally referred its concerns to the Council on
    Environmental Quality for resolution. Interior, which also asked the

    council to consider its environmental concerns, has been unwilling to
    grant the Corps the permits needed to construct the project on Interior*s
    lands. For this reason, the Corps does not believe it should spend
    additional public resources reassessing the project*s economic analysis
    until it has assurances that this issue will be favorably resolved. We
    share the Corps* view that it would not be prudent to spend funds
    reassessing the economics of the project until the council resolves the
    project*s environmental concerns and there is some assurance that the
    Corps will receive the permits needed to build the project.

    Recommendations for Lacking resolution of environmental concerns from the
    Council on Executive Action

    Environmental Quality and construction permits from the Department of the
    Interior, we agree with the Corps that it should not pursue further
    development of the Oregon Inlet jetty project. However, if CEQ favorably
    resolves the environmental issues regarding the proposed jetty project and
    the Corps receives assurance that it can obtain the permits from Interior
    that it needs to build the project, in order to have a reliable basis for

    determining whether the project is economically justified, we recommend
    that the Secretary of the Army direct the Corps of Engineers to  prepare
    a new and comprehensive economic analysis of the navigation project*s
    costs and benefits that incorporates updated and complete

    data and corrects all errors in calculations and assumptions;  obtain the
    information, where possible, that is needed to address the

    uncertainties* such as the extent to which the jetty project could affect
    the activities of all commercial vessels and the extent to which areas
    outside the ocean bar navigation channel could require dredging* that
    could significantly affect project benefits and costs; and

     submit the revised analysis to the Congress for its use in considering
    future appropriations requests for the project.

    Agency Comments and We provided a copy of our draft report to the
    Secretaries of the Army,

    Our Evaluation Commerce, Transportation, and the Interior, for review and
    comment. Overall, the Army, Commerce, and Interior generally agreed with
    our

    findings and the recommendations of the report. The Department of
    Transportation did not comment on our overall findings and
    recommendations, but offered specific technical comments.

    More specifically, the Assistant Secretary of the Army (Civil Works)
    stated that the Department concurs with our finding that the Corps has not
    been able to maintain a safe navigation channel because of the inlet*s
    highenergy environment and the cost of channel dredging. The Assistant
    Secretary also agrees with GAO*s conclusion and recommendation that a new
    economic analysis of the project is needed to address project
    uncertainties and provide a reliable basis for deciding whether to proceed
    with the project. However, the Assistant Secretary also agreed that it
    would not be prudent to expend additional public funds to conduct an
    economic reanalysis until CEQ resolves the environmental concerns about

    the project and Interior provides assurances that permits needed to
    construct the project will be granted. In addition, the Assistant
    Secretary concurred with the information GAO provided on the performance
    of eight similar jetty projects, their limitations, and the reasons for
    those limitations, and that the information was useful in designing the
    jetty project. Finally, the Assistant Secretary stated that the Corps
    continues to believe that it has made project design changes and taken
    adequate mitigation measures to accommodate Commerce*s and Interior*s
    concerns

    and that the jetty project is needed to safely accommodate the large
    trawlers that currently operate through the inlet. The Assistant Secretary
    stated that GAO*s discussion of concerns raised by the other agencies
    repeats concerns raised in earlier comments and in the CEQ referral.
    Accordingly, the Assistant Secretary enclosed a copy of the Corps*
    response to CEQ. This document is not included with the Assistant

    Secretary*s letter in the report but is available on the Web at http://
    www. whitehouse. gov/ ceq/ referrals. html.

    The Department of the Interior generally agreed with our findings, stating
    that the report is an objective and thorough analysis of a complicated
    project with over three decades of development. It also agreed with our
    recommendations, stating that they are consistent with the departmental
    position and comments over the past 10 years. The department also provided
    clarifications on several technical points, which have been included in
    the report as appropriate.

    The Department of Commerce noted that the report was thorough, and it
    concurred with our findings and recommendations, specifically that
    considerable revision of the Corps* economic and other analyses are needed
    before the feasibility and environmental effects of building jetties can
    be determined. The department also offered several specific comments,
    which we incorporated, as appropriate, in the report.

    The Department of Transportation*s U. S. Coast Guard provided oral
    comments on the draft report. Specifically, the Chief, Waterways
    Management Section, District 5, Portsmouth, Virginia, noted that neither
    the GAO report nor the Corps* economic analysis captured the Coast Guard*s
    costs to maintain the navigation aids at Oregon Inlet with or without
    jetties. The official stated that the service the Coast Guard provides is
    not free, and that costs should be considered in the Corps* economic
    analysis of the project. The Chief also noted that during the past 3
    years, the primary buoy- servicing vessel the Coast Guard uses at Oregon
    Inlet has increased in length from 157 feet to 175 feet, and its draft has
    increased from 7 to 9 feet. The Chief stated that this buoy tender may be
    the deepest- draft vessel using Oregon Inlet, and the Corps should
    consider the Coast Guard*s operational needs in its design of a navigation
    channel. Otherwise, it will become prudent for the Coast Guard to stop
    servicing

    aids to navigation in Oregon Inlet. We agree that it would be important
    for the Corps to assess the Coast Guard*s costs of maintaining the inlet*s
    buoys, with or without the jetties, when updating its economic analysis.
    We also agree that it is important for the Corps to do sufficient dredging
    to allow Coast Guard vessels access to the buoys for maintenance.

    The full text of the comments provided by the Army, Interior, and Commerce
    are included as appendixes VI, VII, and VIII, respectively, in this
    report.

    Scope and To assess federal efforts to maintain the authorized depth at
    Oregon Inlet*s

    Methodology ocean bar navigation channel, we reviewed documents provided
    by the

    Corps* Wilmington District on the frequency and amount of dredging
    accomplished since 1960. We discussed this dredging history with district
    officials to better understand when and why dredging occurred and the
    types of dredges used to maintain the channel. We also reviewed Corps
    documents that discuss the dredging history of Oregon Inlet and show the
    percentage of time that the district has maintained the channel*s
    authorized depth. We also discussed with district officials any
    circumstances that would affect the district*s ability to dredge the
    channel more frequently and thus maintain the authorized depth more
    consistently. We also reviewed, analyzed, and discussed the district*s
    budget and planning documents for fiscal years 1990 through 2001 to
    ascertain the funding that had been requested, approved, and expended for
    dredging the ocean bar channel at Oregon Inlet. We also discussed and
    obtained information from the Coast Guard regarding its maintenance of the
    navigation buoys at Oregon Inlet to learn of any impediments to its
    efforts.

    To assess the extent to which the Corps* 2001 economic analysis is useful
    for decision making, we compared the Corps* economic methods and
    assumptions with standard principles of economic analysis, including
    whether the analysis considered reasonable alternatives, quantified and
    monetized all major categories of benefits and costs, measured benefits
    and costs relative to a baseline, used data based on current economic
    conditions, and accounted for risk and uncertainty associated with key
    assumptions and data. In addition, we compared the Corps* survey methods
    with standard principles for sampling populations and developing

    and conducting surveys. We focused our review on the Corps* estimates of
    dredging and jetty costs and on the estimated benefits that had the
    greatest impact on the Corps* benefit- cost ratio (commercial fishing,
    recreational boating, vessel losses and damages, accidental deaths
    averted, and land preservation). We discussed the benefit- cost analysis
    with Corps officials and, where possible, we collected supporting
    documentation from which to verify the Corps* analysis. In addition, we
    reviewed agency and public comments about the Corps* economic analysis.
    Moreover, we collected updated information pertaining to the various
    categories of benefits and costs to ascertain if conditions had changed
    that would alter the results of the Corps* analysis. For example, to
    verify Corps and consultant data on

    lives lost, vessels lost, and damage at Oregon Inlet and to develop new
    data, we obtained information from Coast Guard records to determine which
    cases were likely attributable to Oregon Inlet conditions. More details of
    our work on the components of the economic analysis are contained in
    appendix IV.

    To obtain information on the performance of similar jetty projects, we
    obtained data from Corps researchers and Corps district offices on jetty
    projects at coastal inlets with design features similar to those planned
    for Oregon Inlet, mainly dual jetties and incorporated weirs. We
    identified eight similar jetty projects* seven built by the Corps and one
    built by the City of Virginia Beach, Virginia, for which the Corps
    maintains the navigation channel. The eight projects are under the
    jurisdiction of six Corps districts: Jacksonville, Florida; Mobile,
    Alabama; Wilmington, North Carolina; Galveston, Texas; Charleston, South
    Carolina; and Norfolk, Virginia. To collect information on how these
    similar jetty projects have

    performed, we developed a structured interview document that included a
    standard list of questions about each jetty*s physical features, purpose,
    and performance characteristics, such as the operation of the weir and its
    impacts on dredging and beach erosion. We then interviewed staff
    responsible for the projects to obtain answers to the questions. We did
    not verify the answers that district officials provided.

    To determine whether the Corps* Wilmington District applied lessons
    learned from similar jetty projects in its design of the Oregon Inlet
    jetty project, we interviewed its engineering staff about the information
    they used in developing designs for the proposed Oregon Inlet jetties.
    Wilmington staff said they relied in part on lessons learned from the

    operations of the jetty project at Masonboro Inlet, North Carolina, in
    designing the project for Oregon Inlet. The staff also identified the
    Corps* internal guidance as helping with the design. We discussed the
    lessons learned with the staff and reviewed Corps planning and engineering
    documents to verify that the lessons had been applied. We also discussed
    with Wilmington District staff, other federal agency officials, and
    academic experts (1) the accuracy of estimates of sand transport used in
    designing the jetty project and (2) the potential for applying lessons
    learned from one jetty project to another.

    To identify concerns raised by the Departments of Commerce and the
    Interior about the development of the jetty project, we reviewed comments
    on the Corps* EIS and design documents and documents developed by Commerce
    and Interior that discussed their concerns. We discussed the

    concerns with officials in these departments to better understand the
    issues. We also met with Wilmington District staff and other project
    proponents, such as North Carolina state government officials and fishing
    industry representatives, and discussed the departments* concerns with
    them in order to determine the proponents* views of these concerns and to
    learn of any planned or completed mitigating actions. We also reviewed the
    Department of Commerce*s referral and Department of the Interior*s letter
    and supporting materials sent to the Council on Environmental Quality
    citing their objections to the Corps* EIS. We also discussed many of the
    environmental issues with various opponents of the project, such as
    environmental groups and some academic experts, in order to better
    understand the issues and their views.

    We conducted our work between March 2001 and September 2002 in accordance
    with generally accepted government auditing standards. As arranged with
    your offices, unless you publicly announce the contents of this report
    earlier, we plan no further distribution until 30 days from the report
    date. At that time, we will send copies of this report to the Secretaries
    of Defense, Commerce, and the Interior; the Director, Office of Management
    and Budget; and other interested parties. We also will make

    copies available to others upon request. In addition, the report will be

    available at no charge on the GAO Web site at http:// www. gao. gov. If
    you or your staffs have any questions, please call me at (202) 512- 3841.
    Key contributors to this report are listed in appendix IX.

    (Ms.) Gary L. Jones Director, Natural Resources

    and Environment

    Appendi xes The Corps* Process for Developing Water

    Appendi x I

    Resource Projects Generally, the Corps becomes involved in a water
    resource project when the local community perceives a need and contacts
    the Corps for technical assistance. If the Corps does not have the
    statutory authority required to study the project, the Congress must
    provide authorization. Generally, this begins with local officials
    contacting their congressional delegation. After receiving authorization,
    generally through a committee resolution or legislation, and an
    appropriation, a Corps district office conducts a preliminary
    (reconnaissance) study on how the problem could be addressed and whether
    further study is warranted. If further study is warranted, the Corps
    typically seeks agreement from the local sponsor to share costs for a
    feasibility study. The Congress may

    appropriate funds for the feasibility study, including an economic
    analysis, which is conducted by the Corps district office. The feasibility
    report makes recommendations on whether the project is worth pursuing and
    how the water resource problem should be addressed. In conjunction with
    the feasibility study, the Corps must also perform the appropriate

    environmental study under the requirements of the National Environmental
    Policy Act. After public comments on the environmental study are
    considered, the Chief of Engineers transmits the final versions of the
    environmental and feasibility reports to the Congress through the
    Assistant Secretary of the Army for Civil Works and the Office of
    Management and Budget. As long as appropriations are available, the Corps
    will also prepare a preconstruction engineering and design report, which
    is provided to the authorizing committees. The Congress may authorize the
    construction of the project in a Water Resources Development Act or other
    legislation.

    Project construction will occur once the authorized project is included in
    the President*s budget and the Congress appropriates the federal share of
    funds to start the project. Upon appropriation of needed funds, and before

    construction can begin, the Secretary of the Army and nonfederal sponsors
    generally sign a formal project cooperation agreement. The Corps district
    office completes the necessary engineering and design work to develop
    plans and specifications for construction. Private contractors managed by
    the Corps do the construction work.

    Chronology of Significant Events for the

    Appendi x II

    Oregon Inlet Jetty Project, 1950 through 2002 Date Event

    05/ 17/ 50 P. L. 81- 516, The River and Harbor Act of 1950 authorized the
    Corps to dredge the ocean bar navigation channel to a depth of 14 feet.

    04/ 17/ 63 Committee on Public Works of the U. S. Senate adopts a
    resolution to initiate a study of the Oregon Inlet Jetty Project.

    09/ 26/ 63 Committee on Public Works of the U. S. House of Representatives
    adopts a resolution to initiate a study of the Oregon Inlet Jetty Project.

    04/ 30/ 69 Corps submits a favorable report to the Secretary of the Army.
    03/ 18/ 70 Secretary of the Army submits the Corps* report to the Congress

    recommending that the ocean bar navigation channel be deepened from 14
    feet to 20 feet, stabilizing Oregon Inlet with jetties, providing a means
    for bypassing sand across the inlet, and creating a 15- acre harbor at
    Wanchese. The benefit- cost ratio is estimated to be 1.4.

    12/ 31/ 70 The River and Harbor Act of 1970, Public Law 91- 611, Section
    101, authorizes the Oregon Inlet Jetty Project.

    04/ 15/ 77 Corps releases drafts of the Phase I General Design Memorandum
    (GDM)* Plan Formulation and Environmental Impact Statement (EIS) for the
    project, supporting the basic plan authorized by the Congress.

    06/ 17/ 77 Department of the Interior comments on the Phase I GDM and
    Draft EIS state that the principal issues involve jetty construction and
    impacts on fish larvae migration. The comments state that the proposed
    project would

    result in significant impacts on parklands and that documents do not
    adequately address sand bypassing.

    07/ 29/ 77 Corps publishes Phase I of the GDM* Plan Formulation. 12/ 78
    Contract is awarded by North Carolina to enlarge the harbor at Wanchese.
    05/ 02/ 79 Interior meets with the Corps to inform it of the need for
    special use

    permits for construction on Interior lands. The Corps agrees to prepare a
    supplement to the Final Environment Impact Statement.

    07/ 12/ 79 The Corps sends a letter to the Fish and Wildlife Service (FWS)
    Regional Director outlining right- of- way needs for construction,
    operation, and maintenance of the jetty project and requesting a
    Cooperative Use Agreement for placement of jetties on Pea Island National
    Wildlife Refuge.

    08/ 03/ 79 The NPS initiates formation of a Coastal Advisory Committee,
    which would be known as the Inman Panel. 22 Later that month the panel
    issues a report outlining the deficiencies in the Corps* proposal and
    concluding that the project would adversely affect the shoreline
    environment.

    09/ 21/ 79 The Corps distributes a draft of a Supplement to the Final EIS
    to federal agencies, which is later designated as Supplement I. The
    purpose of the supplement is to discuss refinement of project features,
    correct errors in the earlier EIS, and address environmental concerns.

    12/ 03/ 79 Interior provides comments to the Corps on the draft Supplement
    to the Final EIS, stating that Interior is not *in accord with the current
    project design.* The primary concerns of Interior are that (1) the jetties
    would accelerate already high rates of erosion near the inlet and (2) the
    jetties would alter normal longshore sand transport and likely cause
    *serious

    erosion problems well beyond the project area.* 08/ 07/ 80 The Inman Panel
    releases a second report entitled Potential Effects of the

    Proposed Oregon Inlet Jetties on Shore Processes Along the Outer Banks of
    North Carolina.

    09/ 80 The Corps publishes the Phase II GDM* Project Design. 09/ 09/ 80
    Interior informs the Corps that neither the National Park Service nor the

    FWS finds the jetties consistent with the purpose for which land under its
    jurisdiction was established. DOI declines to issue permits for the
    jetties and remains opposed to the project.

    12/ 03/ 80 The Corps provides Interior with the Phase II GDM. The document
    provides revised details on the design and construction of the dual jetty
    project and a sand bypassing plan.

    22 This panel was named for the first chairman, Dr. Douglas Inman, a
    coastal oceanographer with the Scripps Institution of Oceanography.

    12/ 28/ 80 An Interior memo outlines serious environmental concerns
    regarding the construction of the jetties, for example, accelerated beach
    erosion and blockage of larval fish passage, and expresses doubts about
    the success of a Corps sand bypassing program. Interior supports a
    dredging- only alternative.

    03/ 81 North Carolina completes construction of the harbor at Wanchese and
    a seafood industrial park.

    07/ 06/ 81 Interior Secretary denies permits for the jetty project and
    states that this decision is based on the project*s incompatibility with
    use of NPS and FWS lands. The Secretary directs the FWS and NPS to work
    with the Corps to develop an alternative to the jetties.

    11/ 24/ 81 The Assistant Secretary of the Army (Civil Works) asks Interior
    for a decision on the Corps* request for permits to use FWS land and the
    transfer of jurisdiction of land from the NPS.

    12/ 17/ 81 Interior requests that the Corps examine the feasibility of the
    dredging- only alternative and that the analysis of a dredging- only
    alternative be completed before the Corps pursues the option of jetty
    construction.

    12/ 22/ 81 The Assistant Secretary of the Army (Civil Works) authorizes
    the Corps to undertake a comprehensive evaluation of a dredging- only
    alternative recommended by Interior.

    05/ 11/ 82 The Corps holds a scoping meeting and announces its intention
    to prepare a second supplement to the Final EIS in order to evaluate the
    dredging- only alternative recommended by Interior and to design changes
    for the jetties.

    04/ 01/ 83 The Corps releases its report on the DOI dredging- only plan.
    The report, entitled Feasibility Study, Dredging/ Near- Shore Disposal
    Plan, Oregon Inlet, North Carolina, concludes that Interior*s dredging-
    only alternative is *functionally infeasible* because it would produce
    *catastrophic and unacceptable* beach erosion.

    04/ 21/ 83 Interior Secretary meets with the Assistant Secretary of the
    Army (Civil Works), the North Carolina governor, and the state*s
    congressional delegation. Interior Secretary reiterates that the agency is
    unable to issue special use permits for jetty construction on its land.

    06/ 14/ 83 Bills are introduced in the Congress (H. R. 3288 and S. 1471)
    to authorize the transfer of land from Interior to the Corps for
    construction of the jetty project. Neither bill passes.

    09/ 83 The Corps publishes Supplement I to the Phase II General Design
    Memorandum addressing jetty spacing, structural design, hydraulic
    stability, subsurface analysis, sand bypassing, and a reanalysis of
    navigation channel dimensions.

    02/ 84 The Corps publishes an economic analysis of the project as directed
    by the Assistant Secretary of the Army (Civil Works) to update an earlier
    analysis.

    08/ 13/ 84 The Corps issues a draft of Supplement II to the Final EIS. The
    document states that the dredging- only alternative with near- shore
    disposal has been evaluated and found unacceptable. The preferred
    alternative is the dual jetty project with design modifications.

    11/ 14/ 84 Interior*s comments on the draft Supplement II to the Final EIS
    note that (1) the dredging- only alternative is not adequately addressed,
    (2) the project would accelerate erosion on Pea Island, and (3) the
    project may be referred to the Council on Environmental Quality.

    12/ 05/ 84 An Office of Management and Budget (OMB) letter to the Corps
    states concern that project costs will substantially exceed benefits and
    that significant adverse environmental impacts could add to total project
    costs. OMB requests an independent analysis.

    05/ 85 The Corps issues final Supplement II to the Final EIS finding the
    dredgingonly alternative unacceptable and making the jetties the preferred
    alternative of the Corps.

    08/ 14/ 85 Interior comments on the Final Supplement II to the Final EIS
    stating that, overall, Interior is still opposed to the jetties and
    supports a dredging- only alternative.

    07/ 87 The Kearney/ Centaur Company releases A Reassessment of the
    Economic Feasibility of the Oregon Inlet Project. This detailed evaluation
    of project economics by a consultant hired by the Corps at OMB*s request
    concludes that project costs would exceed benefits.

    04/ 88 The state of North Carolina submits a report responding to the
    economic analysis by Kearney/ Centaur. 06/ 20/ 89 FWS issues a right- of-
    way permit to the North Carolina Department of

    Transportation for constructing a terminal groin 23 on the north end of
    Pea Island National Wildlife Refuge to protect the bridge over Oregon
    Inlet. Two days later, the Corps issues permits for construction.

    11/ 89 North Carolina awards a contract for construction of the terminal
    groin to reduce erosion at north end of Pea Island and protect Bonner
    Bridge using the Corps* design for a 3,125- foot structure with the same
    dimensions and same location as the landward section of the proposed south
    jetty.

    07/ 90 The Corps releases its third economic analysis of project, entitled
    1990 Update of 1984 Economic Analysis. This report shows lower initial
    construction costs due to the separate construction of the terminal groin.

    12/ 90 The Secretary of the Interior sends a letter to the Secretary of
    the Army providing criteria the Corps needs to meet to obtain Interior*s
    approval of the project. The criteria include (1) approval of the project
    by the Office of Management and Budget; (2) assurance that the project is
    legal and compatible with the park and refuge; and (3) assurance that the
    project*s environmental impacts are assessed and found acceptable.

    01/ 91 A joint Interior and Corps committee is formed to develop an
    acceptable sand management plan.

    03/ 91 Construction of the terminal groin on Pea Island is completed. 12/
    31/ 91 The joint Interior* Corps committee releases a report evaluating
    their

    differences over the scientific and engineering aspects of the jetty
    project. A report by Interior consultants, issued on the same date to the
    Secretary of the Interior, concludes that the jetties would have
    significant unavoidable large- scale impacts on the inlet and the adjacent
    barrier islands and discusses the ecological implications of project,
    including the impact on fish larvae migration.

    23 The terminal groin at Oregon Inlet is a rock structure built
    perpendicular to the shoreline to protect the southern end of the Bonner
    Bridge by preventing the erosion of land on Pea Island, into which the
    bridge is anchored.

    10/ 28/ 92 The Interior Secretary issues two conditional permits to the
    Corps for use of Interior lands for jetty construction, contingent on
    completion of project plans and environmental studies.

    01/ 28/ 93 U. S. Senator Jesse Helms introduces S. 192, a bill that would
    require the Corps to carry out the construction and operation of the jetty
    and sand transfer system regardless of the final Interior position. The
    bill also would

    exempt the project from any permit requirements, including those issued by
    Interior.

    06/ 15/ 93 A new Interior Secretary rescinds the conditional permits that
    would have allowed the Corps to use Interior lands for the construction of
    the Oregon Inlet jetties. The Secretary states that Interior would revisit
    this decision when environmental studies on the project have been
    completed.

    10/ 94 The Corps initiates coordination with Interior on the design of a
    sand management plan for the Oregon Inlet Project. 01/ 31/ 95 U. S.
    Representative Walter Jones introduces H. R. 758 entitled the *Oregon

    Inlet Protection Act of 1995.* The bill would require the Corps to carry
    out construction and operation of the jetties project. The bill would
    allow the Corps to designate the land required for the project and notify
    the Interior Secretary of the designation.

    07/ 95 The Corps releases a Feature Design Memorandum on the sand
    management plan that recommends a sand bypassing system that will emulate
    natural shoreline processes when the jetties are in place.

    07/ 18/ 96 The Senate Subcommittee on Parks, Preservation, and Recreation
    holds a hearing on S. 988, a bill directing Interior to transfer
    administrative jurisdiction over certain land to the Secretary of the Army
    to facilitate construction of the jetties and the sand transfer system.
    Interior opposes the bill because of its impact on park and refuge land.
    The Assistant Secretary of the Army (Civil Works) testifies that studies
    must be completed before construction of the project can begin, and that
    it would be premature for the Corps to accept jurisdiction of the land
    required for construction. The bill is not passed.

    01/ 04/ 99 The Corps releases drafts of Supplement No. 2 to the GDM and
    Supplement III to the project EIS. In the EIS, the Corps* preferred
    alternative is construction of the dual jetty project and implementation
    of a sand

    management plan. In the GDM, the Corps proposes a new jetty design that
    shortens each jetty by approximately 1,000 feet, eliminates the
    sandblocking central barrier within each jetty, and adds a 1,000- foot
    weir section in the north jetty over which sand is expected to move into a
    60- acre deposition basin.

    03/ 04/ 99 The National Marine Fisheries Service*s (NMFS) comments on the
    January 1999 EIS state that *the potential for significant and adverse
    long- term impacts to nationally important living marine resources is such
    that the NMFS has no recourse but to recommend that the jetties not be
    built.*

    03/ 22/ 99 Interior*s comments note deficiencies in Supplement III to the
    EIS and reiterate that project goals could and should be met with a
    dredging- only program rather than the dual jetty. The comments state that
    Interior will consider referring the jetty project to the Council on
    Environmental Quality.

    05/ 09/ 00 U. S. Senator Jesse Helms attaches a rider (the Oregon Inlet,
    North Carolina, Flood Control Improvements) to the fiscal year 2001
    Agriculture Appropriations Bill that would have transferred the land to
    build the jetties from the jurisdiction of Interior to the Corps.

    07/ 12/ 01 FWS provides the Corps with a Final Fish and Wildlife
    Coordination Act report for the project. The report recommends that (1)
    the Corps abandon plans for a dual jetty project due to the magnitude of
    environmental

    consequences and (2) the Corps develop a dredging- only program to achieve
    project goals.

    09/ 01 The Corps releases final versions of Supplement No. 2 to the GDM
    and Supplement III to the project EIS. The Corps* preferred alternative
    remains construction of the dual jetty project and implementation of a
    sand management plan.

    10/ 16/ 01 Commerce refers the project to the Council on Environmental
    Quality (CEQ), stating that the project*s construction would cause
    unacceptable environmental harm to commercial and recreational fishery
    resources.

    12/ 12/ 01 CEQ holds a public meeting in Manteo, North Carolina, on the
    dual jetty and weir system project, receives briefings from involved
    agencies, and visits the site of the proposed project.

    04/ 8/ 02 The Corps issues an Environmental Assessment for maintenance of
    the channel that includes dredging a 600- foot wider channel on the north
    side of the inlet, removing 26 acres of Bodie Island, and placing the
    dredged material on Pea Island. The assessment and draft Finding of No
    Significant Impact are released for a 30- day public comment period. 05/
    02 Interior submits comments on the Environmental Assessment for the

    channel maintenance, recommending that a 400- foot wider channel be
    selected as the preferred alternative in order to minimize ecological
    impacts.

    07/ 02 Interior issues two Special Use Permits* one by NPS and one by FWS*
    to the Corps to construct a wider channel on the north side of the inlet,
    which would remove over 400 feet of the Bodie Island barrier spit within
    the Cape Hatteras National Seashore and deposit the 1 to 2 million cubic
    yards of

    dredge spoil on the oceanfront beaches of Pea Island. The construction
    would eliminate approximately 4 acres of wetlands, for which compensatory
    mitigation will be provided in the form of enhanced wetland habitat for
    migratory shorebirds elsewhere on the Bodie Island spit.

    Approved Oregon Inlet Dredging Operations

    Appendi x III

    That Were Not Performed As shown in table 3, for some of the fiscal years
    from 1990 through 2001, the Wilmington District Office did not perform
    numerous approved dredging operations in the Oregon Inlet ocean bar
    navigation channel and, as a result, did not remove thousands of cubic
    yards of sand from the

    channel. The District Office did not perform these operations because the
    funds were used on other, higher priorities within the district.

    Table 3: Approved Oregon Inlet Dredging Operations That Were Not Performed
    for Some of the Fiscal Years from 1990 through 2001

    Fiscal Approved

    Cubic yards of sand year Operations not performed funding planned for
    removal

    1990 Dredge channel with two Corps side- cast dredges $860,000 Not
    available Dredge channel with a hopper dredge $845,000 Not available 1994
    Dredge channel with two Corps side- cast dredges $1,239,000 Not available

    Dredge channel with a hopper dredge $2,809,000 Not available 1996 Dredge
    channel with two hopper dredges $1,848,000 622,216 1998 Dredge channel
    with a Corps side- cast dredge $664,000 601,067

    Dredge channel with a hopper dredge $929,000 362,279 1999 Dredge channel
    with a Corps side- cast dredge $506,000 418,958

    Dredge channel with a hopper dredge $949,000 164,629 2000 Dredge channel
    with three Corps side- cast dredges $813,000 663,215

    Dredge channel with a hopper dredge $201,000 187,984

    Tot al $11,664,000 3, 020,348 a

    Note: Costs are expressed in constant 1997 dollars and reflect unspent
    amounts for dredging the ocean bar channel. In addition, there were some
    years when the Corps spent more funds than were made available for
    dredging but the quantity dredged was 1,889,504 cubic yards less than was

    planned. Totals may not add due to rounding. a Actual total exceeds the
    amount shown because data from some years were not available.

    Source: GAO analysis of data provided by the Corps* Wilmington District
    Office.

    Review of Corps* Economic Analysis of the

    Appendi x IV

    Proposed Oregon Inlet Jetty Project This appendix reviews the Corps*
    analysis of the benefits and costs of the recommended jetty project for
    Oregon Inlet. In general, the Corps* analysis has limitations that
    undermine its usefulness for assessing the economic tradeoffs between the
    current 14- foot dredging program and the Corps* preferred alternative of
    a jetty system with a 20- foot navigation channel. Specifically, the
    Corps* analysis (1) failed to consider intermediate channel

    depths between 14 feet and 20 feet, (2) used outdated data to estimate the
    benefits to trawlers and did not account for the effects of the proposed
    jetty project on smaller commercial fishing vessels, (3) used some
    incorrect and outdated data to estimate vessel losses and damages, (4)

    used questionable survey and sampling techniques to estimate recreational
    benefits, (5) did not value land protected from erosion according to
    federal guidelines, and (6) did not fully account for risk and uncertainty
    in key variables used in the analysis. In addition, we also identified
    other limitations, including the fact that the Corps did not account for
    the economic value of the lives that might be saved by the jetty project;
    in addition, its estimate of project cost does not include more recent
    expenditures and is based on an overly optimistic assumption. These latter
    limitations are discussed in the report.

    The Corps Did Not Consider In conducting its economic analysis, the Corps
    considered three

    Alternative Channel Depths alternatives: (1) dredging a 20- foot channel
    in the spring, (2) dredging a 20-

    between 14 Feet and 20 Feet foot channel in the fall, and (3) constructing
    dual rock jetties with a sand bypassing system, along with a 20- foot
    channel. The Corps did not analyze

    intermediate channel depths between the current 14 feet and the authorized
    20 feet. As shown in table 4, the Corps estimated the benefits and costs
    associated with three 20- foot channel alternatives* including the
    proposed jetty project* relative to the current 14- foot dredging program.
    Based on this analysis, the Corps determined that the proposed jetty
    project would provide greater net benefits and a higher benefit- cost
    ratio

    than either the current program or the other two 20- foot alternatives.
    Corps officials said they considered only alternatives that would achieve
    the 20- foot channel depth because analyses the Corps conducted in 1970
    and again in 1984 demonstrated that the 20- foot channel was needed to
    reliably enable the existing fleet, including 75- foot commercial fishing

    vessels, to pass safely through the ocean bar navigation channel. The
    Corps* 1970 analysis, which served as the basis for the congressional
    authorization in 1970, found that that a 20- foot channel would be
    economically superior to other channel depths (including 14 feet) because

    it would accommodate existing trawlers and attract some additional
    trawlers and, therefore, result in the plan that has the greatest net
    benefits.

    However, federal guidance for evaluating water resource plans such as the
    proposed Oregon Inlet jetty project states that alternative plans should
    not be limited to those that the Corps could implement under existing
    authorities. Alternative plans should be formulated in a systematic matter
    to ensure that all reasonable alternatives are evaluated. 24 In addition,
    according to the state of North Carolina, trawlers used the inlet far less
    frequently than smaller, shallower- draft vessels from 1999 through 2001.
    For example, of the approximately 3,900 average annual commercial fishing
    trips through the inlet from 1999 through 2001, 83 percent were by smaller
    commercial fishing vessels. 25 Because these vessels have a shallower
    draft, they may not be as dependent as trawlers upon the deeper channel
    depths. 26 Moreover, although the smaller vessels might benefit from an
    increase in the current 14- foot channel depth, the economically optimal
    depth, taking into account all vessels (commercial and recreational)
    currently using Oregon Inlet, may be less than 20 feet. Consequently, by
    not including an analysis of the benefits and costs of intermediate
    channel depths, the Corps* analysis is less useful for decision making
    because it does not clearly demonstrate that the 20- foot channel depth is
    economically superior to other depths.

    24 Economic and Environmental Principles and Guidelines for Water and
    Related Land Resources Implementation Studies, U. S. Water Resources
    Council, 1983. 25 Based on the state of North Carolina*s commercial fish
    landings trip ticket program. 26 According to the state of North Carolina,
    the smaller vessels averaged about 35 feet in length and trawlers averaged
    about 73 feet. Vessels that are 35 feet in length have a draft of
    approximately 4 to 5 feet.

    Table 4: Comparison of Estimated Annual Benefits and Costs of Alternatives
    for Achieving a 20- Foot- Deep Navigation Channel for Oregon Inlet

    Alternatives for achieving 20- foot- deep channel Dredging

    Dredging Categories of impacts in fall in spring Jetty project

    Increased benefits Reduced operating costs of commercial fishing vessels
    $2, 011,000 $2, 011,000 $2,011, 000

    Value of increased recreational boating trips $3, 367,000 $3, 367,000
    $3,367, 000

    Reduced costs associated with reduced vessel losses and damages $552,000
    $552,000 $552, 000

    Erosion protection $0 $0 $1,000, 000 Value of other categories a $307,000
    $307,000 $307, 000 Accidental deaths prevented (over 50 years) 14 14 14

    Total increased benefits $6, 237,000 $6, 237,000 $7,237, 000 Increased
    costs Construction and maintenance $10, 601,400 $8, 148,400 $4,520, 000

    Net benefits (increased benefits minus increased costs) -$ 4, 364,400 -$
    1,911,400 $2,717, 000

    Benefit- cost ratio (increased benefits divided by increased costs) 0.59
    0. 77 1.6

    a Includes categories such as charter boat income and reduced maintenance
    of navigation aids. Source: U. S. Army Corps of Engineers 2001 General
    Design Memorandum.

    Corps* Analysis of Benefits In its 2001 General Design Memorandum, the
    Corps determined that the

    to Commercial Fishing proposed jetty project would generate about $2
    million in annualized

    Vessels Relied on Outdated commercial fishing benefits. To derive this
    estimate, the Corps relied

    Trip Data and Excluded primarily on a 1987 consultant*s study of trawler
    trips taken in the mid1980s.

    That study determined that 234 trawlers were forced to detour to Certain
    Vessels

    alternative inlets or ports on average about 42 percent of the time,
    adding about 14 hours to the length of their fishing trips. Thus, the
    study estimated that trawlers lost about 27,163 hours detouring to
    alternative inlets. Assuming that the proposed jetty project would save
    commercial fishing vessels these hours, the Corps multiplied the hours by
    an estimate of the hourly cost to operate a commercial fishing vessel ($
    80. 21, including fixed and variable operating costs) to estimate the
    value of the time savings as $2,179,000. The Corps divided $2,179,000 by
    the 17.9 million pounds of fish estimated to have been landed through
    Oregon Inlet by all commercial

    vessels in the mid- 1980s to obtain the per- pound savings of 12.2 cents.
    The

    Corps then applied the per- pound savings to two different estimates of
    long- term fish harvests: one based on projections developed by the
    National Marine Fisheries Service and one based on projections developed
    by the state of North Carolina. In addition, the Corps conducted an
    uncertainty analysis on each projection to incorporate variability in
    natural fish populations and the effectiveness of management plans. Based
    on the two projections and the uncertainty analysis, the Corps estimated
    that from 16,758,000 to 23,313,000 pounds of fish could be available for
    harvest annually over the 50- year life of the jetty project. Multiplying
    these projections by the per- pound savings of about 12.2 cents, the Corps
    estimated that annualized benefits of the proposed jetty project would
    range from $2,011,000 to $2,798,000.

    However, recent data from the state of North Carolina Division of Marine
    Fisheries commercial fishing trip ticket program suggest that trawlers are
    taking fewer trips than they did in the mid- 1980s. Moreover, trawlers
    would not likely save the fixed- costs portion of their hourly operating
    costs even if the proposed jetty project were built. 27 To illustrate how
    the Corps* benefit estimate would change using the more recent trawler
    trip data, we adjusted the Corps* commercial fishing vessel benefits
    analysis to account for trawler trips taken from 1999 through 2001. In
    addition, we adjusted the Corps* analysis to exclude the fixed costs that
    would not likely be affected by the proposed jetty project. After making
    these adjustments, we found

    that the Corps estimate of commercial benefits would be reduced by about
    90 percent. Nonetheless, the Corps* analysis excludes smaller commercial
    fishing vessels; including these vessels could increase this adjusted

    estimate of benefits. 27 Since the Corps assumes no change in the fish
    harvest, the appropriate measure of savings is the marginal cost of the
    resources, such as fuel and oil, which would be saved by the proposed
    project.

    For example, according to data obtained from the state of North Carolina,
    vessels 55 feet or longer (defined by the Corps as trawlers) averaged 679
    trips through the inlet from 1999 through 2001. 28 Based on these trips
    and the 1987 consultant*s estimate of the fraction (0.42) of trips delayed
    and the average length of the delay (14 hours), trawlers might have been
    delayed by about 4,000 hours annually over this period. Multiplying the
    hours delayed (4,000) by the Corps* hourly operating cost for a trawler
    (about $68.00 per hour, exclusive of fixed costs) gives an estimated
    potential annual savings of about $272,000. Dividing the annual savings ($
    272,000) by the average number of pounds landed by trawlers through Oregon
    Inlet from 1999 through 2001 (8.6 million pounds or 39 percent of the
    total commercial landings) provides potential savings of about 3 cents per
    pound. We applied the fraction (0.39) of trawler catch to the Corps* two
    projections of

    future fish harvests to obtain an estimate of the pounds of fish that
    trawlers would be expected to harvest based on current data. For example,
    based on the current harvest data and the long- term projections developed
    by the Corps, trawlers might harvest from about 6,500,000 pounds to
    9,100,000 pounds of fish annually. We multiplied the two estimates of the
    trawler harvest by 3 cents to obtain the estimate of annual operating cost
    savings. We then estimated the present value and annualized over the 50-
    year period using the Corps* discount rate of 7.125 percent. Thus,
    adjusting the Corps*

    analysis in this way generates annualized benefits ranging from about
    $194, 000 to $270, 000, or about 90 percent less than the Corps estimated.
    29

    The Corps used two other methods to verify the analysis conducted using
    the consultant*s 1987 study. First, the 2001 GDM refers to a 1990 Corps
    economic analysis that found commercial fishing vessels were delayed by
    17,666 hours because of Oregon Inlet conditions, incurring additional
    costs of 11.4 cents per pound to land fish. However, the Corps estimate is
    not

    28 We used the period 1999 through 2001 because state officials said their
    vessel licensing data from before 1999 are less reliable. Vessel licenses
    were used to identify the county out of which each vessel operated in
    order to match the counties represented in the consultant*s 1987 study.
    Nonetheless, regardless of the vessels* operating ports, landings data by
    type of

    fishing gear also suggest trawler trips have declined relative to the
    consultant*s estimate from the mid- 1980s. For example, for landings made
    in Dare, Hyde, Pamlico, and Beaufort Counties from 1994 through 1995,
    vessels using trawl gear landed about 9.3 million pounds of fish on 561
    trips, while vessels using gill nets landed about 16.3 million pounds of
    fish on about 5,200 trips (including trips via Hatteras Inlet). Vessels
    using gill nets are generally smaller than trawlers.

    29 For the adjusted analysis, we assumed no change in the fraction of
    total trips forced to other inlets or ports or in the average length of
    time a vessel is delayed. Using alternative values for these assumptions
    would change the estimated benefits.

    based on the number of trips or landings made by trawlers in recent years.
    Second, based on a 1995 study by a consultant, the Corps assumed that 56
    full- time vessels were forced to detour eight trips per year. In
    addition, the Corps assumed that other vessels would use Oregon Inlet if
    the jetty project were built. For example, the Corps assumed that 100
    additional part- time and/ or transient vessels would use Oregon Inlet to
    land fish and another 100 vessels would use Oregon Inlet seeking a harbor
    of refuge during storms. However, the Corps could not provide us with the
    documentation to verify the number of full- time vessels, total trips
    taken, trips detoured, number of transient vessels using the inlet, or the
    number of vessels that might seek refuge during storms.

    Accounting for the effect of the proposed jetty project on smaller fishing
    vessels could increase this adjusted estimate of the benefits to
    commercial fishing vessels. Nonetheless, because these smaller vessels
    have a shallower draft than trawlers, they may not be as affected by the
    sand

    accumulations in the ocean bar navigation channel that can be hazardous to
    trawlers. For this reason, the extent to which smaller vessels might
    benefit from the jetty project is uncertain. In addition, to the extent
    that trawlers relocate from other fishing ports (for example, Norfolk) to
    Wanchese, North Carolina, as a result of the jetty project, estimated
    benefits to trawlers could be higher (after netting out transfers between
    the two regions). Moreover, to the extent that trawler captains are
    detoured or delayed more or less often than we assumed, the estimated
    benefits could be higher or lower. Several trawler captains told us that
    there are fewer detours available to them than in the past. According to
    these captains, the

    Ocracoke Inlet and the Atlantic Intracoastal Waterway from Norfolk,
    Virginia, to Wanchese, North Carolina, are too shallow for trawlers to use
    as a way to avoid passing through Oregon Inlet. These captains said that

    instead of traveling to alternative inlets or ports, they often wait for
    high tide at Oregon Inlet in order to increase the distance between the
    keel of their vessel and the channel bottom. By waiting for high tide,
    vessels might

    be delayed less time per trip than is assumed in either the Corps*
    analysis or this adjusted analysis. However, no comprehensive data are
    available with which to verify the average length of time vessels are
    currently delayed or to evaluate the effects of conditions in Oregon Inlet
    on the operating efficiency of the current trawler fleet or smaller
    commercial fishing vessels.

    Corps* Estimate of Vessel The Corps estimated that the recommended jetty
    project would generate Losses and Damages Is

    annualized benefits of $552,000*$ 160,000 in reduced vessel losses and
    Based on Unsupported

    $392, 000 in reduced damages to commercial fishing vessels. The Corps
    Assumptions and Outdated

    anticipates that the jetty project would generate these benefits by
    reducing the high waves and sand accumulations in the inlet that
    contribute to vessel Data

    losses and accidents. However, the Corps* estimate has limitations that
    raise questions about its reliability.

    The first limitation is that the Corps* analysis assumes that all prior
    accidents would be prevented by the jetty project and does not clearly
    control for factors that would be present with or without the jetty
    project. For example, Corps officials told us that under some weather
    conditions the inlet would be hazardous even with the recommended 20- foot
    channel and dual jetties in place. Further, factors the Corps did not
    control for include changes in type of vessel traffic, operator
    experience, and vessel safety technology, all of which will continue to
    play a role in the number of

    accidents in the inlet, with or without the jetty project. For example, as
    mentioned earlier, the number of trips by trawlers between 1999 and 2001
    is 85 percent less than the number of trips taken in the mid- 1980s, and
    the Corps* analysis does not reflect this change.

    Second, the Corps estimate of $160, 000 in annualized benefits from
    reduced vessel losses is based on outdated data, some of which are
    incorrect and some of which we could not verify. The GDM states that the
    Corps* estimates of vessel losses and damages evolved from prior studies
    and the analyses of two consultants* reports. With regard to vessel
    losses, a consultant*s report completed in 1987 attributed the loss of 21
    vessels between 1961 and 1986 to conditions in Oregon Inlet. 30 The Corps
    used this information to estimate vessel losses in its 1990 economic
    analysis. 31 Subsequently, a 1995 consultant*s report estimated that the
    jetty project

    would prevent the loss of 14 vessels during the 50- year life of the
    project. 32 This report updated data in prior studies, including the 1990
    economic update by the Corps, and made adjustments because of reductions
    in the number of large fishing vessels using the inlet. However, unlike
    the 1987 30 The Kearney/ Centaur report, cited earlier.

    31 1990 Update of 1984 Economic Analysis: Manteo (Shallowbag) Bay Project,
    North Carolina by the Corps of Engineers* Wilmington District, July 1990.
    32 An Assessment of the Regional Economic Benefits of the Oregon Inlet
    Stabilization Project by the Horizon Planning Group, Wilmington, NC,
    January 1995.

    consultant*s report, the 1995 consultant*s report did not identify
    specific vessels lost or explain its basis for arriving at its estimate of
    14 vessels. For its 2001 economic analysis, the Corps relied on the 1995
    consultant*s report that assumed the 20- foot channel and dual jetties
    would prevent the estimated loss of 14 vessels.

    We asked the Corps to provide us with the supporting documentation behind
    two previous economic analyses completed in 1987 and 1990. Corps officials
    could not provide this information, stating that the data may

    have been lost or discarded when the office relocated. The 1987 consultant
    report did, however, list the names of the vessels lost between 1961 and
    1986 that it attributed to conditions in Oregon Inlet. Accordingly, we
    asked the Coast Guard for any available accident investigation reports
    regarding these vessels. The Coast Guard had no records for 12 of the 21
    vessels that the consultant report listed as lost. As shown in table 5, of
    the nine accident investigation reports we reviewed, six of the losses
    were probably attributable to inlet conditions. Of the three losses that
    we found not attributable to the inlet, two occurred at locations other
    than Oregon Inlet and one was caused by mechanical failure. Because we
    found that three of nine vessel losses* 33 percent* were not attributable
    to the inlet, we have concerns about the overall accuracy of the data in
    the report. Since it is unclear how information from the Kearney/ Centaur
    report was used in updating the estimates of vessel losses for the Horizon
    Group report and the estimates of vessel losses in Corps* latest economic
    analysis, we cannot determine the exact impact of the errors from the 1987
    report on the Corps* estimate.

    Table 5: Summary of Information in U. S. Coast Guard Investigation Files
    on Vessel Losses at Oregon Inlet, 1961 through 1986 Vessel name and
    Estimated value of Was the accident

    Value of the loss in Date of the

    identification Location of the lost vessel and

    caused by Oregon constant 1997

    accident number accident

    contents Inlet conditions?

    dollars

    10/ 13/ 77 M/ V Tosco, The 7 th span south of

    $100, 000 for the Yes 505450 the center of Bonner

    vessel Bridge at Oregon Inlet.

    $9, 000 for the fish catch

    $246, 830 11/ 01/ 77 F/ V Miss Chievious

    Not specific, assumed $40,000 for the Yes

    Too, 582529 to occur in Oregon Inlet vessel or Pamlico Sound as

    the vessel was entering to find safe moorage.

    $90, 580 02/ 09/ 79 F/ V Dolphin, 258728 The vessel sank in the $40,000
    for the No. The accident did Atlantic Ocean 9 miles

    vessel not occur in Oregon southeast of Hatteras

    $2, 000 for the fish Inlet. Inlet.

    catch a

    08/ 25/ 79 F/ V Ole Ugly, 265219 After departing through $250, 000 for the

    No. The accident did Ocracoke Inlet, the vessel not occur in Oregon vessel
    sank in the

    Inlet. Atlantic Ocean.

    a 12/ 31/ 81 F/ V Coral Breeze,

    At Oregon Inlet*s ocean $170, 000 for the Yes 543963 bar. vessel

    $6, 500 for the fish catch

    $288, 493 12/ 07/ 81 F/ V Lady Phyllis,

    The vessel hit the $4, 000 for the vessel No. Inlet conditions 618355
    Bonner Bridge. were calm. Incident

    was caused by mechanical failure. a 12/ 12/ 82 F/ V Lois Joyce,

    In the Oregon Inlet $850, 000 for the

    Yes 605933 channel 150 feet

    vessel outside buoy number 4. $1,307, 894

    12/ 04/ 85 F/ V Elizabeth Within Oregon Inlet $150, 000 for the

    Yes Christine, 277218 longitude and latitude vessel coordinates.

    $207, 526 06/ 22/ 86 F/ V Marlina, 249132 Within Oregon Inlet

    $35,000 for the Yes longitude and latitude vessel coordinates.

    $47, 374

    Total $2,188, 697

    a Not calculated because the accident was not caused by Oregon Inlet
    conditions. Source: Case files retrieved by Marine Casualty Investigation
    Division and printouts of electronic marine casualty reports from the Data
    Administration Division, U. S. Coast Guard.

    Moreover, based on our review of more current Coast Guard records, from
    1986 through 2001, we identified the loss of four vessels that were likely
    attributable to inlet conditions. These are listed in table 6. Therefore,
    based on our review of the Coast Guard reports that were located on past

    cases and by updating this data using more current records, we identified
    10 vessel losses that occurred because of inlet conditions between 1977
    and 2001. The total value of these 10 vessels is about $2.4 million, or
    roughly $96, 000 per year over that 24- year period, which is 40 percent
    less

    than the Corps* estimate of $160,000 per year in annualized benefits. 33

    Table 6: Listing of Vessel Losses and Deaths Attributed to Conditions at
    Oregon Inlet, June 28, 1986, through November 27, 2001 Value of the loss
    in Date of the

    Vessel name and/ or Vessel

    Number of Value of the loss

    constant 1997 incident identification number Type of vessel length deaths
    reported

    dollars

    01/ 13/ 89 NC8559AS Fishing 30 0 $30,500 $37, 341 12/ 30/ 92 High Liner,
    D620483 Fishing 28 0 $50,320 $55, 855 11/ 20/ 96 NC9186BK Recreational 17
    1 0 0 05/ 06/ 00 Little Fly Fisherman,

    Recreational D287083 40 0 $130,000 $123, 821 11/ 27/ 01 a NC9367DA
    Recreational 16 1 $8,500 $7, 934

    Tot al 2 $219,320 $224, 951

    a While we reviewed U. S. Coast Guard records from June 28, 1986, through
    September 30, 2001, we included a fatal accident that occurred in November
    2001. Source: U. S. Coast Guard and North Carolina Wildlife Resources
    Commission.

    33 This calculation includes only the vessels listed as lost by the Corps
    consultant that we could verify and vessels identified as lost in our
    review of more recent Coast Guard records. Also, complete records were not
    available on state registered recreational boat accidents to determine how
    many were lost during the period we reviewed. The 1987 consultant

    apparently did not review such records when identifying vessel losses.

    The third limitation we identified to the Corps* analysis involves the
    estimated annualized benefits of $392,000 in reduced vessel damages if the
    jetty project is built. Again, the Corps relied partly on data developed
    in the 1987 consultant*s study. 34 To estimate the value of damages to
    vessels, the consultant interviewed vessel captains and marine repair
    yards and determined that the average annual damage per vessel due to
    inlet

    conditions was about $7,000. The Corps then multiplied this figure by the
    number of full- time commercial fishing vessels that it estimated were
    using the inlet, which it determined to be 56 full- time vessels, to
    arrive at $392, 000 in reduced vessel damages. In its estimate, the Corps
    assumed that all trawlers using the inlet would sustain damages each year.
    The Corps could not provide documentation for this assumption. In
    contrast, as shown in table 7, our analysis of Coast Guard data over this
    period

    showed that only 10 commercial fishing vessels 55 feet and longer reported
    damages, which totaled on average about $1,700 per year.

    34 1987 Kearney/ Centaur study, cited earlier.

    Table 7: Listing of Vessel Damages Attributed to Conditions at Oregon
    Inlet between June 28, 1986, and September 30, 2001 Value of the

    Value of the damage Date of the

    Vessel name and/ or Vessel Number of

    damage in constant 1997

    incident identification number Type of vessel length injuries reported

    dollars

    07/ 04/ 86 Northerly Island, D664129 Dredge 194 0 $75,000 $101, 516 10/
    14/ 86 Capt. Weddell, D654888 Fishing 74 0 0 0 06/ 12/ 87 God*s Mercy,
    D561112 Fishing 77 0 0 0 04/ 04/ 88 Schweizer, CG010063 Dredge 133 0
    $40,000 $50, 832 05/ 05/ 88 Kokina, D585863 Fishing 72 0 0 0 05/ 26/ 88
    Boss Lady, D505741 Fishing 82 0 $15,000 $19, 062 04/ 15/ 89 Mermentau,
    D643740 Dredge 197 0 0 0 10/ 26/ 90 Northerly Island, D664129 Dredge 194 0
    $6,500,000 $7,658, 772 09/ 07/ 92 Uncloudy Day, D950979 Fishing 55 0
    $3,000 $3, 330 01/ 13/ 94 Louise, MS4131AP Fishing NA 0 0 0 04/ 27/ 94
    Lucky Thirteen, D606275 Fishing 65 0 0 0 07/ 22/ 94 Gallant Fox, D567254
    Fishing 72 0 $1, 000 $1, 062 04/ 07/ 95 Portugal, D608405 Fishing 74 0 0 0
    10/ 08/ 95 Hoosier State, D581970 Tug 43 0 0 0 12/ 07/ 95 Clayton Reed,
    D683286 Fishing 45 0 $6, 000 $6, 236 12/ 11/ 95 Atchafalaya, D630005
    Dredge 197 0 0 0 06/ 03/ 97 Hooker, D592896 Passenger 46 1 0 0 11/ 02/ 99
    War Cry, D614462 Recreational 76 0 0 0 12/ 31/ 99 Capt. Malc, D607993
    Fishing 81 0 $300 $292 02/ 22/ 00 Adrien Rose, D538410 Fishing 46 0 0 0
    02/ 20/ 01 Snoopy II, D563195 Fishing 52 0 $500 $467 05/ 30/ 01 C-
    Venture, D539167 Fishing 73 0 $1, 500 $1, 400

    Tot al $6,642,300

    $7,842, 969 Average loss per year (15 years) $301,923 $356, 499

    Total for 10 fishing vessels 55* and over $20,800

    $25, 146 Average loss per year (15 years) $1, 387 $1, 676

    Source: Electronic marine casualty reports from the Data Administration
    Division, U. S. Coast Guard.

    Finally, the Corps* analysis assessed damages to trawlers only and
    excluded potential damages to other vessels. Our analysis of Coast Guard
    records on reported incidents for all vessels from 1986 through 2001
    showed that conditions in Oregon Inlet caused damages totaling about $7.8

    million, or about $520,000 per year over that 15- year period, which is 25
    percent more than the Corps estimate of $392,000 per year in annualized

    benefits. 35 However, most of the total damages*$ 7.7 million* were
    attributable to one accident involving a dredge, which, torn from its
    anchor by a storm, struck and caused the collapse of a part of the bridge
    that spans Oregon Inlet. If the dredge accident were removed from the
    calculation, the average damages over the 15- year period would be about
    $12,000 per year, or nearly 98 percent less than the Corps* estimate.
    Although we could verify some of the earlier estimates of vessel losses
    and

    damages and were able to provide more current data from a review of
    accident reports, the extent to which past deaths and vessel losses and
    damages might have been prevented by the Corps* proposed jetty project is
    not known. Consequently, we did not revise the Corps* estimate of benefits
    to include this more recent data.

    Corps Did Not Clearly In addition to not incorporating the economic value
    of the lives that might Explain How It Derived Its

    be saved by the proposed jetty project in its estimate of benefits, the
    Corps Estimate Of Lives That

    did not clearly explain how it estimated that 14 lives might be saved over
    Might Be Saved by the

    the 50- year life of the project. Corps* Wilmington District Office
    officials Proposed Jetty Project

    told us that they used their own studies and the 1987 Kearney/ Centaur
    report as the basis for estimating that 14 lives might be saved by the
    project. The Kearney/ Centaur report identified that 20 lives were lost
    with an associated loss of 21 vessels in Oregon Inlet from 1961 through
    1986. We attempted to get data from the Corps that would document the 20
    lost lives,

    but the Corps had not retained the supporting documentation for the
    Kearney/ Centaur report. As a result, we asked the Coast Guard to provide
    any accident reports that it had relative to the vessel losses and 20 lost
    lives identified in the Kearney/ Centaur report. The Coast Guard could
    only

    provide information on nine of the lost vessels. Based on our review of
    the nine cases, we found that the Kearney/ Centaur report excluded four
    deaths resulting from a 1977 vessel loss even though information in the
    Coast Guard accident report implicated inlet conditions in the loss. In
    addition, we found that one death included in the Kearney/ Centaur report
    did not occur in Oregon Inlet. Moreover, based on our review of more
    current Coast Guard records from 1986 through 2001 (see table 6 above), we
    identified two deaths* one in 1996 and the other in 2001* that were
    attributable to inlet conditions. Both of these accidents involved small

    recreational boats. Consequently, based on our review, we found that at 35
    Our estimate of damages is based on reported incidents and does not
    include any damages that were not reported to the Coast Guard.

    least six deaths were attributable to conditions in Oregon Inlet over the
    25- year period from 1977 through 2001, which is slightly less than the
    Corps estimate over a comparable period. However, whether these accidental
    deaths would have been prevented by the jetty project is uncertain. As
    mentioned above, the Corps* analysis assumed that all prior vessel
    accidents that included deaths would be prevented by the jetty project
    without clearly controlling for factors that would be present with or
    without the jetty project. For example, Corps officials told us that under
    some weather conditions the inlet would be hazardous even with the
    recommended 20- foot channel and dual jetties in place.

    Corps Relied on Outdated The Corps estimated that the jetty project
    alternative would generate about

    Data Collected with $3.4 million dollars in annualized benefits for
    recreational boaters by

    Questionable Survey and reducing high waves and sand accumulation in the
    ocean bar navigation Sampling Techniques to

    channel, thus allowing for more trips. This estimate includes an estimated
    Estimate Recreational

    $2.8 million in benefits for private recreational boats, with the
    remaining benefits for anglers on charter and party boats. We could not
    verify the Benefits

    Corps* estimates because it did not retain supporting documentation, and
    independently calculating the estimates would require an inordinate amount
    of time and resources. However, based on our review of the Corps* approach
    and methodology used in developing the estimates, we have identified three
    limitations that raise questions about the reliability and usefulness of
    the estimated benefits. First, the Corps* original data collection effort,
    conducted in 1983, used a

    survey instrument that may have biased the boaters* responses in favor of
    the jetty project. For example, to estimate the additional trips that
    private recreational boaters might be willing to take if the jetty project
    were constructed, the Corps mailed a survey to 3,876 registered owners of
    recreational power and sail boats at least 19 feet long who were likely to
    have used Oregon Inlet in 1983. The Corps received 1,044 usable responses
    36 and from them concluded that private recreational boaters would
    increase their average annual use of the inlet from 8.59 trips through the
    Inlet per year to 19.34 trips per year if the jetties were built. The
    cover

    36 In 1983, the Corps reported using 1,094 responses and a response rate
    of 46 percent. In 2001, the Corps reported using 1,044 responses, stating
    that 176 surveys were undeliverable and 681 others were considered *not
    usable.* The Corps deemed a response *not usable* if the respondent no
    longer owned a boat, the boat was not used in the ocean, or because the
    information provided was *invalid* or appeared duplicative. The 2001
    General Design Memorandum does not project the survey results to the
    entire population of respondents.

    letter accompanying the mail survey included the following introduction to
    the topic, stating that *despite 22 years of intensive maintenance
    dredging, the Corps has been able to maintain the channel depth only 25
    percent of the time and has never been able to maintain the 400- foot
    channel width* and that *numerous groundings, vessel losses, personal
    injuries, and deaths have occurred.* In addition, the survey instrument
    asked respondents to estimate the number of days per year they *currently
    use* Oregon Inlet and the number of days per year they *would use Oregon
    Inlet if it were stabilized with dual jetties and a deeper, more reliable
    channel.* The wording implied that the channel would be safely passable
    all of the time if the jetty project were built, which is not the case.
    Corps officials acknowledge that even with the jetty project there will be
    periods when weather conditions will make the inlet impassable.

    Concerning the estimated use of the inlet, a 1987 consultant*s report
    noted that some survey responses seemed too extreme to be credible. For
    example, on average, respondents indicated they currently used the inlet
    11 days each year. However, a number of respondents indicated a
    substantially higher use, with the highest reported estimate being 250
    days per year. To address this concern in its most recent economic
    analysis, the Corps calculated new estimates using only responses that
    indicated a use of 60 days or less. This resulted in the Corps excluding
    23 responses that were above this number. However, the 60- day threshold
    was arbitrary, and it neither accounts for the possibility that some
    responses above the threshold may be legitimate nor addresses the problem
    that responses below the threshold may have also been subject to biased
    wording. While the overall estimated benefits are lower than they would be
    if all responses were included, we could not determine the reasonableness
    of these estimates. The Corps does not believe the surveys contained bias.
    They said that the Office of Management and Budget (OMB) approved the
    surveys and that the wording *deeper, more reliable channel* would be an
    accurate description of the channel with the implementation of the jetty
    project. Both the Paperwork Reduction Act and OMB*s process for reviewing
    surveys have changed since 1983. However, the OMB official who currently
    reviews Corps surveys told us that the current OMB

    approval process does not ensure that a survey instrument is free from
    bias, although the reviewer may suggest changes if he or she detects bias,
    along with any other editorial comments. Because OMB does not keep records
    beyond 10 years, we could not determine the nature and extent of OMB*s
    comments concerning the Corps* 1983 surveys.

    Second, the Corps* 2001 economic analysis of recreational benefits relied
    on survey data from 1983 and 1984. These data are outdated and may not
    reflect the economic value that today*s boaters would place on any
    additional trips they would be able to take if the jetty project were
    built.

    The demand for recreational fishing is dependent upon factors such as the
    current cost (for example, expenses and time incurred in traveling to the
    site) and the current availability of substitute fishing sites and other
    recreational opportunities. 37 For its most recent analysis, the Corps
    updated the original survey data by increasing the results by the rate of
    growth in regional tourism and visitation from 1984 through 1995. The
    Corps then used the updated survey data as a starting point for projecting
    recreational demand another 50 years into the future* the life of the
    jetty

    project* to 2051. However, changes in tourism and visitation primarily
    reflect changes in population rather than changes in relative prices or
    substitute recreational opportunities. Consequently, the reliability of
    the

    Corps* recreational demand projections is questionable. Corps officials
    acknowledged that their recreational benefit estimates are based on
    outdated data but said they had not received funding to update the data.
    In addition, they believe that recreational activity has increased at
    Oregon Inlet and that using data that are more current would not change
    estimated recreational benefits of the jetty project. Nonetheless, the
    Corps does not have current data on the economic value that recreational
    boaters would attribute to the jetty project alternative to support its
    contention.

    Third, in estimating the economic value of the additional fishing trips,
    the Corps used data collected from anglers on private boats and charter
    boats during three 1- week periods in August, September, and October of
    1983. The Corps used these data to estimate that the average value of a
    fishing trip was $22.56 per person per day. However, both the number of
    fishing trips and the type of catch vary considerably over the year. The
    3- month period during which the data were collected is the highest- use
    period for

    recreational fishing. The value of a fishing trip, according to those
    fishing in August, September, and October, may differ from the value
    assigned by those fishing during other months because the number of boats
    and anglers

    varies by season, as does the type of fish caught and the severity of
    weather and sand accumulation in the inlet. Therefore, since data were
    gathered

    37 The Corps used a *travel cost* model to estimate the value of the
    additional trips. This is a technique for approximating the value that
    recreationists would be willing to pay for the use of a site, based on
    factors such as the expenses and value of the time required to travel to
    the site.

    only from anglers during the peak recreational season, the Corps* estimate
    of the value of a fishing trip may not be a reasonable representation of
    the value of such a trip for the entire fishing season. Furthermore, there
    was

    no update of these data in the Corps* most recent economic analysis. Corps
    officials said that since most fishing trips occur during the months of
    August, September, and October, values for those months would be weighted
    most heavily, even if data from additional months were collected, and that
    there was no reason to believe that trips in other months would be less
    valuable. For example, they said charter boat fishing rates are the same
    in other months as they are in the highest- use months. Nonetheless, the
    Corps did not incorporate the value of the additional trips that
    recreational anglers fishing in lower- use months might be willing to take
    if the proposed jetty project were built. The value of the additional
    trips during lower- use months could be lower or higher than the value in
    higheruse months for several reasons, including the type of fish that are
    available, the weather, and the particular preferences of the angler.

    Corps* Approach to Valuing The Corps estimated that the proposed jetty
    project would yield about

    Benefits Associated with $1 million in annualized benefits by preventing
    the erosion of beaches to

    Reduced Erosion Is the north and south of Oregon Inlet. Because the
    protected land to the

    Inconsistent with Federal north of the inlet is part of the national
    seashore and to the south of the

    Guidelines inlet is part of a national wildlife refuge, the benefits
    derived from the jetty

    project would be the recreational opportunities generated from the public
    use of the protected land. However, the Corps used valuation techniques
    that are not consistent with federal guidelines for valuing recreational
    benefits. As a result, the reliability of the Corps* estimate of $1
    million for erosion prevention is questionable and thus less useful
    because it does not reflect the value of the land as it is currently used
    for recreation and as wildlife habitat.

    Federal guidance states that benefits arising from a project that
    generates recreational opportunities should be measured in terms of the
    willingness of users to pay for the recreational opportunity. For example,
    the fees users are willing to pay to visit a site and any unpaid value 38
    enjoyed by the recreationist can be used to measure benefits. Although the
    Corps*

    38 This unpaid value is called *consumers* surplus* and is a standard
    measure of the net benefit derived from purchasing a good or service.
    Since the protected land is publicly provided and no fees are charged to
    enter the site, the value of the land can be estimated using indirect
    means such as the travel cost model.

    economic analysis states that the protected land could be valued in terms
    of its use for recreation, the Corps chose not to do so because an earlier
    consultant*s report 39 found drawbacks with an approach that based the
    value of the land on the willingness to pay for recreational
    opportunities. In particular, the consultant*s report states that the land
    has a *uniqueness

    value* to the nation that would not be captured by techniques based on
    recreational visitation. As a result, the Corps did not use willingness to
    pay for recreational opportunities to calculate the value of the land.
    However, although the Corps agreed with the consultant*s argument, neither
    of the

    two valuation methods used by the Corps measured the uniqueness value of
    the land. 40 The Corps used two different methods to derive two separate
    estimates of the benefits associated with the land that would be
    *protected* by the jetty project. Under one method, the Corps assumed that
    the jetty project would protect 5 acres of land per year from natural
    erosion. To determine the benefits, the Corps used the per- acre cost of
    bypassing sand (about $200,000) instead of the land*s value for
    recreational use. This method is inconsistent with federal guidelines,
    because the cost of preventing the erosion does not reflect willingness to
    pay for recreational use of the land. As a result, we could not determine
    whether the Corps* estimate overstates

    or understates the value of the land for recreational use. Under the
    second method, the Corps assumed that the jetty project would prevent
    erosion of 9.5 acres from nearby beaches each year, or roughly twice as
    much land as would be protected under the first method. District officials
    said they used the market value of local, private, undeveloped, non-
    erodible, oceanfront property as a way to reflect the land*s opportunity

    cost* the value of the land in its alternative best use* to initially
    value the protected land at about $426,000 per acre. However, because the
    protected land is erodible, the Corps reduced that value by 75 percent to
    make the land worth about $107,000 per acre. Under this method, the total
    value of the protected land was estimated to be roughly $1 million.
    However, Corps officials did not have documentation supporting the basis
    for reducing the value of the protected land by 75 percent. Moreover,
    since the land being protected is public land, it is not likely that the
    land will be sold for private

    39 The Kearney/ Centaur report, cited earlier. 40 Economic techniques that
    measure total economic value could assess whether the acres saved would
    add to the uniqueness value of the national seashore and the wildlife
    refuge (use and non- use values).

    use. Further, this approach does not consider the land*s use for
    recreation and is, therefore, inconsistent with federal guidelines for
    estimating recreational benefits. As a result, it fails to provide
    decision makers with reliable information regarding these potential
    benefits.

    Corps officials said that their guidelines for conducting economic
    analysis allow the benefits of environmental protection projects to be
    judged equal to their costs, which is why the Corps used the cost of
    bypassing sand as the value of the land. Nonetheless, as mentioned above,
    the cost the Corps derived is not based on a measure of the willingness to
    pay, and, as a result, the extent to which the Corps* estimated benefits
    approximate the value of the land for recreation purposes is not known.

    The Corps Did Not Account In developing its estimate of the benefits and
    costs of the jetty project

    for Risk and Uncertainty alternative, the Corps did not fully account for
    the extent to which the net

    Associated with All Key benefit estimates would be affected by the risk
    and uncertainty associated

    with potential measurement errors and variability in the underlying data
    Variables and assumptions. 41 The economic analysis did account for some
    risk and uncertainty for some

    variables. For example, in developing its estimate of the operating costs
    that trawlers would save in harvesting fish if the jetty project were
    built, the Corps adjusted its estimates to reflect the year- to- year
    variability in fish populations. In addition, in developing its estimate
    of the cost to construct the jetty project and operate the sand bypassing
    system, the Corps increased its estimate by about 15 percent to account
    for unforeseen events that might increase construction costs. The Corps
    also included additional costs for sand bypassing to ensure that
    neighboring beaches do not erode at a greater rate than anticipated.

    However, the Corps did not assess the effect of risk and uncertainty for
    other key data and assumptions on the net benefit estimates. For example,
    the Corps used single or *point* estimates for the amount of sand
    estimated to pass over the weir; the trips and operating cost savings for
    commercial 41 Federal guidance for water resources planning states that
    the effect of the risk and

    uncertainty should be examined. Risk reflects situations where potential
    outcomes can be described using reasonably well- known probability
    distributions. Uncertainty reflects situations where potential outcomes
    cannot be described in objectively known probability distributions.

    fishing vessels; the additional trips that recreational boaters might
    take; the extent to which the jetty project might prevent vessel losses,
    damages, and accidental deaths; and the amount of dredging that might be
    required in the interior channels even with the proposed jetty project in
    place. For example, the amount of sand that is expected to pass over the
    weir and be used to reduce erosion on neighboring beaches is subject to
    some uncertainty because of errors inherent in modeling sand transport as
    well as variability in the frequency of storms and in ocean currents. By
    not fully assessing the effect of uncertainty, a decision maker might not
    be aware of the extent to which the net benefit estimates might change if
    the underlying assumptions deviate from the values assumed by the Corps.

    Comparison of the Proposed Oregon Inlet Jetty Project to Similar Completed
    Jetty

    Appendi x V

    Projects Table 8 compares key characteristics of the proposed Oregon Inlet
    jetty project to other similar jetty projects located on coastal inlets of
    the Atlantic Ocean and Gulf Coast of the United States.

    Table 8: Key Characteristics of the Proposed Oregon Inlet Jetty Project
    and Similar Completed Jetty Projects Proposed for Ponce Key Oregon
    Murrells

    Colorado DeLeon,

    St. Lucie, Perdido East Rudee, Masonboro, Characteristics: Inlet, NC
    Inlet, SC River, TX

    FL FL Pass, AL Pass, FL VA NC Number of jetties 2 22 22 22 2 2

    Location of first

    North side North side

    East side North side North side

    East side East side

    North side North side of

    jetty of inlet of inlet of inlet of inlet of inlet of inlet of inlet of
    inlet inlet

    Year completed Proposed 1979 1990 1971 1982 1969 1969 1968 1966

    Length in feet 10, 020 3,455 3,500 4, 200 3, 975 1, 800 1, 220 765 3,650

    Location of second

    South side South side West side

    South side South side West side

    West side South side

    South side of

    jetty of inlet of inlet of inlet of inlet of inlet of inlet of inlet of
    inlet inlet

    Year completed Proposed 1980 1990 1969 1982 1969 1969 1968 1980

    Length in feet 6,575 3, 319 2,900 2, 700 1, 000 1, 800 3, 400 815 3,450

    Typical tidal prism a 2,810.0 580.0 1. 7 509. 0 5. 2 435. 6 1, 620.0 16. 6
    680.0

    (in millions of cubic feet)

    Sediment transport, in cubic yards, as viewed from land Left 611,000
    54,000 0 348, 000 72, 600 130, 000 65, 000 378,000 200,000

    Right 1,473,000 186,000 600, 000 363, 000 130,000 65,000 130,000 93, 000
    500,000

    Net 862,000 132,000 600, 000 15,000 57,400 65,000 65,000 285,000 300,000

    Weir location North jetty North jetty East jetty North jetty North jetty
    East jetty West jetty South jetty North jetty

    Weir length in feet 1,000 1, 880 1,000 Formerly 900 1, 000 Formerly

    475 1, 000 1,800 1,000 Weir elevation in 1.5 2. 2 0.74 Closed 0 -0.5
    Closed 2.15 2.16

    feet above mean low water Left 611,000 54,000 0 348, 000 72, 600 130, 000
    65, 000 378,000 200,000

    Right 1,473,000 186,000 600, 000 363, 000 130,000 65,000 130,000 93, 000
    500,000

    After jetties,

    N/ A 1 70 10 or less 80 0 20 7 to 8 Less than 5

    percentage of time channel less than authorized depth

    a Tidal prism is the volume of water flowing in or out of an estuary
    between high and low tides. Source: GAO interviews with officials
    responsible for the projects.

    Appendi x VI Comments from the Department of the Army

    Comments from the Department of the

    Appendi x VII Interior

    Comments from the Department of

    Appendi x VIII Commerce

    Appendi x IX

    GAO Contact and Staff Acknowledgments GAO Contact (Ms.) Gary L. Jones
    (202) 512- 3841 Staff

    In addition, Tim Guinane, Roy Judy, Ken McDowell, Cynthia Norris, Anne
    Acknowledgments

    Rhodes- Kline, John Scott, Amy Webbink, and Jim Yeager made key
    contributions to this report.

    (360049)

    Report to Congressional Requesters

    September 2002 OREGON INLET JETTY PROJECT Environmental and Economic
    Concerns Still Need to Be Resolved

    GAO- 02- 803

    Letter 1 Results in Brief 2 Background 6 Corps Generally Has Not
    Maintained the Oregon Inlet Ocean Bar

    Navigation Channel at Its Authorized Depth 14 Corps* Economic Analysis for
    the Proposed Oregon Inlet Jetty

    Project Has Several Limitations That Undermine Its Usefulness 18
    Performance of Similar Jetty Projects Has Been Mixed 25 Corps Applied
    Lessons Learned from Similar Jetty Projects in Designing the Oregon Inlet
    Jetty Project, but Information on Fish

    Larvae Migration Is Not Available 31 Commerce and Interior Remain
    Concerned That the Oregon Inlet

    Jetty Project Will Harm the Environment 32 Conclusions 38 Recommendations
    for Executive Action 39 Agency Comments and Our Evaluation 39 Scope and
    Methodology 41

    Appendixes

    Appendix I: The Corps* Process for Developing Water Resource Projects 45

    Appendix II: Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002 46

    Appendix III: Approved Oregon Inlet Dredging Operations That Were Not
    Performed 54

    Appendix IV: Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project 55

    Appendix V: Comparison of the Proposed Oregon Inlet Jetty Project to
    Similar Completed Jetty Projects 75

    Appendix VI: Comments from the Department of the Army 76

    Appendix VII: Comments from the Department of the Interior 78

    Appendix VIII: Comments from the Department of Commerce 82

    Appendix IX: GAO Contact and Staff Acknowledgments 87 GAO Contact 87 Staff
    Acknowledgments 87

    Tables Table 1: Estimated Average Number of Annual Trips Made by
    Commercial Fishing Vessels through Oregon Inlet, for the

    Periods 1984- 1986 and 1999- 2001 21 Table 2: Performance of the Eight
    Jetty Projects Incorporating

    Weirs 26 Table 3: Approved Oregon Inlet Dredging Operations That Were

    Not Performed for Some of the Fiscal Years from 1990 through 2001 54 Table
    4: Comparison of Estimated Annual Benefits and Costs of

    Alternatives for Achieving a 20- Foot- Deep Navigation Channel for Oregon
    Inlet 57 Table 5: Summary of Information in U. S. Coast Guard

    Investigation Files on Vessel Losses at Oregon Inlet, 1961 through 1986 63
    Table 6: Listing of Vessel Losses and Deaths Attributed to

    Conditions at Oregon Inlet, June 28, 1986, through November 27, 2001 64
    Table 7: Listing of Vessel Damages Attributed to Conditions

    at Oregon Inlet between June 28, 1986, and September 30, 2001 66 Table 8:
    Key Characteristics of the Proposed Oregon Inlet Jetty

    Project and Similar Completed Jetty Projects 75 Figures Figure 1: Oregon
    Inlet*s Location Along the North Carolina and

    Virginia Coastlines 7 Figure 2: Aerial View of Oregon Inlet on September
    18, 2001 9 Figure 3: The Corps* Proposed Design for the Oregon Inlet Jetty
    Project as of September 2001 13

    Figure 4: Funding Requested, Approved, and Expended for Dredging the
    Oregon Inlet Ocean Bar Navigation Channel, Fiscal Years 1990 through 2001
    15 Figure 5: The Weir in the North Jetty at Masonboro Inlet, North

    Carolina 28 Figure 6: The Dual Jetty Project at Colorado River Inlet,
    Texas 30

    Abbreviations

    CEQ Council on Environmental Quality DOI Department of the Interior EIS
    Environmental Impact Statement FWS Fish and Wildlife Service GAO General
    Accounting Office GDM General Design Memorandum NMFS National Marine
    Fisheries Service NOAA National Oceanographic and Atmospheric
    Administration NPS National Park Service OMB Office of Management and
    Budget

    a

    GAO United States General Accounting Office

    Page i GAO- 02- 803 Oregon Inlet Jetty Project

    Contents

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    Appendix I

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    Appendix II

    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix II Chronology of Significant Events for the Oregon Inlet Jetty
    Project, 1950 through 2002

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    Appendix III

    Page 55 GAO- 02- 803 Oregon Inlet Jetty Project

    Appendix IV

    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Appendix IV Review of Corps* Economic Analysis of the Proposed Oregon
    Inlet Jetty Project

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    Inlet Jetty Project

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    Inlet Jetty Project

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    Inlet Jetty Project

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    Inlet Jetty Project

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    Inlet Jetty Project

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    Appendix V

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    Appendix VI

    Appendix VI Comments from the Department of the Army

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    Appendix VII

    Appendix VII Comments from the Department of the Interior

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    Appendix VII Comments from the Department of the Interior

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    Appendix VII Comments from the Department of the Interior

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    Appendix VIII

    Appendix VIII Comments from the Department of Commerce

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    Appendix VIII Comments from the Department of Commerce

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    Appendix VIII Comments from the Department of Commerce

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    Appendix VIII Comments from the Department of Commerce

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    Appendix IX

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