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Study: Costs of Delaware River deepening may outweigh benefits
An economic analysis of the Army Corps of Engineers' Delaware River deepening project finds the returns could be mere pennies on the dollar.
Study: Costs of Delaware River deepening may outweigh benefits
The deepening of the Delaware River shipping channel is a $300 million project that could bring increased traffic to the Port of Philadelphia. Either that, or it's a hell of a boondoggle. A new economic analysis of the Army Corps of Engineers dredging project by a University of Maryland professor suggests it's the latter.
University of Maryland's Robert Stearns' analysis of the numbers (which come from a May 2011 review by the Army Corps that was unearthed only by a Freedom of Information Act request by the Delaware Riverkeeper Network) finds that the benefits may not equal $1.60 per dollar spent, as a 2004 review found, or even $1.10 per dollar spent, as the 2011 review concluded. In fact, he argues the benefits have been "over-inflated to the point where you can't justify the project at all." That's partly because of the closure of oil refineries like the one at Marcus Hook, which was expected to benefit from the deepening. Stearns also found it suspiciously convenient that the Army Corps now expects the bulk of the benefit to come from the import of produce from the East Coast of South America. "Crude oil no longer generated all these savings," he says, "so the Corps had to find another product to say the deepening is worth doing from an economic perspective. So the product they found was shipping in fruits and vegetables."
Further, the Corps calculated savings on shipping produce based on the notion that large container ships would go to New York, then truck produce south to Philly, rather than the much less expensive option of sending smaller ships directly to Philadelphia ports.
There are more obvious problems, according to Steve Ellis of Taxpayers for Common Sense: He notes that one reason that has been used to defend dredging is that Philly needs to keep up with New York, Baltimore and other ports, which are dredged to 50 feet deep. "The fact of he matter is even after this project is done and we spent $300 million, they'll still be behind. It will still be a 45-foot channel. No one is talking about making it a 50-foot channel," he says. "The economic analysis deserves to be on a Chinese menu under twice-cooked pork."
Currently, the Riverkeeper and others are suing the Army Corps in an effort to get an updated environmental impact study completed. Meanwhile, despite the best efforts of Sen. Pat Toomey, federal funding for the next stretch project hasn't materialized — so Pennsylvania, thanks to a $15 million investment from Gov. Corbett, has been footing the bill.
Wow! And Sunoco sold off their refineries? That is after buying off the competition. Unbelievable.— hapedaze
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