Breaching the lower Snake River dams and restoring the river would not come cheap. The cost could exceed a billion dollars. (The value of wild salmon make that expense worthwhile, I argued in the first article of this series.) But making whole the irrigators and grain barging companies that are the principal beneficiaries of the dams would be surprisingly affordable. In some cases, paying them for their losses would cost less than continuing to operate the dams as at present.
In some cases, paying them for their losses would cost less than continuing to operate the dams as at present.
You would not guess it from the words of conservative political leaders along the Snake, though. When in late July, the consulting firm ECONorthwest (ECONW) released its study on the economic tradeoffs of removing the dams on the lower Snake River, US Reps. Cathy McMorris Rodgers and Dan Newhouse, both Republicans from Eastern Washington, immediately branded the report “a slap in the face of our state’s agricultural economy” adding that “billions of dollars in infrastructure improvements that would be needed for irrigation and transportation hardly come across as a ‘public benefit.’”
The ECONW study took a bean counter’s approach to weighing the pros and cons of dam removal. In the case of agriculture, it showed that the increased costs to irrigators and grain growers are surprisingly modest. Let’s take them in turn.
Irrigation after the Dams
Using water permit data from the Department of Ecology, ECONW identified 41 surface water diversions and 84 groundwater wells that could be affected by the drop in water levels if the dams were removed. In total, just 125 water sources out of 230,000 statewide permits managed by Ecology would be affected. Policymakers could choose to engineer water replacement solutions at no cost to the irrigators using those sources (rather than consider alternative water sources, compensate irrigators financially, invest in water conservation, or let irrigators suffer some from restoring the river—after all, water rights do not entitle anyone to massive federally subsidized dams).
But an irrigation specialist estimated that it would cost $148 million to plan, permit and replace the 41 diversions at the new water level after the dams were breached and $12 million extra to deepen or replace the 84 wells. These combined costs are about 12 percent of the estimated costs of removing the dams—not small numbers but certainly within the range of mitigation costs that have been part of other large public projects.
Grain hauling after the Dams
Downriver grain shipment makes up the majority of barge traffic on the lower Snake River. Grain growers have recently averaged annual shipments of about 2.2 million tons per year downriver. If the dams were breached, those grain shipments would either travel by truck to Pasco for barge loading or travel by train to Portland. The shift from barge to truck or train would increase costs for some grain growers. To estimate how much more they would pay, ECONW analyzed the average annual barge loadings at the ports along the Snake River and reallocated them to trucks or trains given the relative costs for each mode.
Using local data on the costs per ton-mile to move grain by barge, train, and truck, ECONW estimated that growers would pay an additional $6.2 million per year in shipping costs. Remarkably, the annual budget for operating the locks at the four dams is $21 million per year; the federal government spends one dollar operating the locks so grain shippers can save 30 cents on shipping. Better to pay the grain growers the 30 cents directly and let federal taxpayers keep the remainder.
If grain growers were forced to absorb higher shipping costs, the increase looks small in the context of the regional grain market. The average annual market value of Washington’s wheat and barley crops for the last ten years is $862 million. A $6.2 million increase in transportation for those who barge their grain represents an average cost increase that is less than one percent of the region’s grain revenues.
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In the last 10 years, the revenue per acre of wheat has an average year to year variation of more than 20 percent as crop yields and prices swing in response to weather and market forces. Any cost increase matters to farmers and the increased shipping costs would fall more heavily on some than others, but policymakers should understand that shifts in transportation costs on the order of one percent are just one star in a broad constellation of forces that determine planting choices and profitability.
Given the alternatives for moving grain from the Palouse, wheat and barley would still find their way to market without barges on the lower Snake River. If the federal subsidy for barging shifts to trucks and trains, growers’ transportation costs need not increase at all.
All told, on the most generous assumptions, holding irrigators and grain haulers harmless and applying the savings from ending lock operations would cost roughly $80 million or about 7% of the cost of removing the dams. In spite of the howls of protest over the ECONW report, the face of agriculture in Eastern Washington would go unmarred if the dams came down.
Next time: Breaching the Snake River dams and restoring the river would add jobs, not subtract them.