A New Tool for Estimating and Simulating Economic Impacts of

Dredging Activity New, Increased and Reduced Dredging

Drs. Yue Cui and Ed Mahoney, Michigan State University and Dr. Wen–Huei Chang, Institute of Water Resources, USACE

Functions of the New Tool

1. Simulate the “economic effects” of new, increased, decreased or the stoppage of dredging 2. Estimates direct and secondary impacts: sales, employment and income 3. Estimates direct and “stemming –from” impacts 4. Enables users to identify and assess impacts for very specific economic impact areas

Tool is being Modeled After the USACE’s RECONS Model and Other Web-based

Economic Impact Tools Designed By MSU

1. Regional Economic System (RECONS) provides accurate and defensible estimates of local job creation and retention and other economic measures such as value added, income and sales 2. RECONS allows the USACE to evaluate direct investment spending associated with the annual Civil Work budget of the eight business lines managed by the USACE. 3. RECONS also enables users to evaluate the economic contribution of industries and activities that are dependent on or benefit from USACE programs and infrastructure; these downstream effects are termed “stemming from effects.”

RECONS Approach – USACE Project Work Activities Economic Impacts

Business Line Contracted Project Work

Activities

Expenditure by Work Activities

Navigation, Hydropower, Environmental, Flood Risk, Emergency Management,

Regulatory, Recreation, Water Storage

Dredging, Lock Construction, Levee Repair, Investigations

Spending Profiles and IMPLAN Industry Data

Labor, Materials, Equipment, Fuel, Services and Other Expenditures

Impact Areas and Multipliers

Economic Impacts

Direct, Indirect and Induced Effects Measured as Jobs, Earnings, Output (Sales), and Valued

Added (GDP)

IMPLAN Industry Multipliers (Region, State, Nation)

Economic Impacts of Dredging

1. Economic Impacts of Dredging Related Spending

2.1 Commercial Use of Dredged Materials 2.2 Beneficial Re-use of Dredged Materials

3. Stemming From Economic Impacts 3.1 Enhanced Shipping Capacity 3.2 Cruise Ships 3.3 Marinas 3.4 Commercial Fishing

Dredging Proposal and Definition of Economic Impact Area

2 Define and Describe

Economic Impact Area

1. Describe Dredging Project

Including Alternative Scales and Requirements

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3. DESCRIBE DREDGING ACTIVITIES

PREPARATION INVESTIGATION ACQUIRE LAND

PERMITS

DREDGING SITE TYPE OF WATERBODY

GEOGRAPHY

TYPE OF DREDGE MATERIAL

SAND, GRAVEL,CLAY, MUD,

CONTAMINATION

AMOUNT OF MATERIAL TO BE

REMOVED Yards of Material

4. $$$

Budget(Cost) Breakdown:

Labor Real Estate Materials Supplies

Fuel Per Diem

DREDGING METHOD HOPPER, PIPELINE,

MECHANICAL

LOCATION & ACQUISITION OF PLACEMENT SITE

RENTAL PURCHASE

PLACEMENT METHOD OPEN-WATER

CONFINED DISPOSAL BENEFICAL RE-USE

Direct Dredging Spending : Items and Amounts

-

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Dredging Budget(Cost) Breakdown:

Labor Real Estate Materials Supplies

Fuel Per Diem

5.

Estimate Costs/Spending Across Different (IMPLAN)Industr

ies

6. Calculate and

Apply Multipliers and LPCs

for Economic Impact

Area

7. Estimate Direct &

Secondary [Indirect –Induced] Economic Impacts

Direct Dredging Spending : Economic Impacts

The USACE’s RECONS Economic Impact

Assessment of Dredging Project

The USACE’s RECONS Economic Impact

Assessment of Dredging Project

Dredging Proposal and Definition of Economic Impact Area

Dredging Proposal and Definition of Economic Impact Area

The USACE’s RECONS Economic Impact

Assessment of Dredging Project

The USACE’s RECONS Economic Impact

Assessment of Dredging Project

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STEMMING FROM EFFECTS

OF DREDGING

CHANNEL IMPROVEMENT

COMMERICAL SHIPPING

RECREATIONAL BOATING MARINAS & ACCESS

CRUISE SHIPS HARBORS & ACCESS

COMMERCIAL FISHING HARBOR & ACCESS

BENEFICIAL USES OF DREDGE MTERIALS

COMMERCIAL SALE OF DREDGE MATERIAL

USE OF MATERIALS BEACH

HABITAT RESTORATION

Stemming-From Economic Impacts of Dredging

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BENEFICIAL RE-USES OF

DREDGE MATERIALS

COMMERCIAL SALE OF DREDGE MATERIAL

RE-USEUSE OF MATERIALS

Capping a landfill or brownfield Transforming dredged material into lightweight aggregates Reclaiming lands impaired by sand, gravel, and coal mining Manufacturing bricks and blocks and construction aggregates Creating fill for construction projects

Wetland creation and restoration Creating wildlife habitat Levee maintenance Landfill daily cover

Beneficial Uses of Dredge Materials

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CHANNEL IMPROVEMENT

COMMERICAL SHIPPING

RECREATIONAL BOATING

MARINAS & ACCESS

CRUISE SHIPS HARBORS &

ACCESS

COMMERCIAL FISHING HARBOR &

ACCESS

Stemming-From Economic Impacts of Dredging

The USACE’s RECONS Newly Enhanced (Stemming From Effects)

Port Model

The model allows users to estimate the stemming from effects of port industries based on a modified version of Port Kit consist of the following:

1. Definition of Port locations and impact areas 2. Mapping of RIMSII industries to IMPLAN industries; extracting relevant industry economic multipliers derived from IMPLAN 3. Port default expenditures by sector for cargo 4. Identify cargo tonnage 5. Modal shares and distance for inland movements

RECONS: Port Model

Choose Type of Impact – Origin and/or Destination

Impacts

The Impact Region, Multi-State Region, and Nation

Choose Impact Area

18 Cost Profiles for Shipper Rates Shipper Rates IMPLAN Sector (No.) WW line-haul Waterborne transport (334) Assessorial W Trans support svcs (338)

Calculate Multiplier Effects Direct Sales * Multipliers and

Ratios

Jobs, Income, Value Added, Sales for

Waterway Industries

Identify Tons Shipped by Commodity

Calculate Direct Impacts Shipper Rates * Tons Shipped

RECONS: Newly Enhanced Port Model

Cargo Volume by Shipping Type

Per Unit Expenditure by Type of Cargo

Inflation-adjusted Port Kit default values for

labor, materials, equipment, fuel, services

Industry Multipliers

Economic Contribution

Direct, Indirect and Induced Effects

Measured as Jobs, Earnings, Output

(Sales), and Valued Added (GDP)

IMPLAN Industry Multipliers

(Region, State, Nation)

Identify Port And Associated Impact

Area

Modal Share & Distance of Inland Movements

Percent Rail, Short/Long Distance Truck, Barge,

Air (FAF2)

RECONS User Input -- Cargo Forecast (Port

Data/Research)

Total Expenditure

Cargo Volume by Shipping Type and Commodity Type

Total Expenditure by Each Type of Commodity

Economic Contribution by

Each Type of Commodity

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping

The RECONS port module estimates the economic contribution of cargo shipments within ports for various types of cargo (for example, dry bulk, automobiles, containers, etc.).

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping 1. The cost elements associated with the port include port services, cargo handling, fuel service, vessel and crew supplies, cargo storage, cargo packing and unpacking, crew leave and finally, inland transport costs.

2. The costs were then aggregated by IMPLAN sector for each type of cargo to summarize the costs for the various types of cargo by type of cost, with the appropriate IMPLAN industry.

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping

The USACE’s RECONS Economic Impact

Assessment of Ports and Shipping

The USACE’s RECONS Economic Impact

Impact Assessment of Marinas

The USACE’s RECONS Economic Impact

Impact Assessment of Marinas

The USACE’s RECONS Economic Impact

Impact Assessment of Marinas

The USACE’s RECONS Economic Impact

Impact Assessment of Marinas

The USACE’s RECONS Economic Impact

Impact Assessment of Marinas