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

Page ii GAO- 02- 803 Oregon Inlet Jetty Project

Page iii GAO- 02- 803 Oregon Inlet Jetty Project

Page 1 GAO- 02- 803 Oregon Inlet Jetty Project United States General
Accounting Office

Washington, D. C. 20548 Page 1 GAO- 02- 803 Oregon Inlet Jetty Project

A

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Appendix I

Page 46 GAO- 02- 803 Oregon Inlet Jetty Project

Appendix II

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

Page 47 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 48 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 49 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 50 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 51 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 52 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 53 GAO- 02- 803 Oregon Inlet Jetty Project

Page 54 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 56 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 57 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 58 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 59 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 60 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 61 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 62 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 63 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 64 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 65 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 66 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 67 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 68 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 69 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 70 GAO- 02- 803 Oregon Inlet Jetty Project

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 V

Page 76 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 79 GAO- 02- 803 Oregon Inlet Jetty Project

Appendix VII Comments from the Department of the Interior

Page 80 GAO- 02- 803 Oregon Inlet Jetty Project

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

Page 86 GAO- 02- 803 Oregon Inlet Jetty Project

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Appendix IX

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