The wrangling over the Savannah Harbor Expansion Project (SHEP) continues.
The public comment period on the Corps of Engineers’ final reports (the General Re-evaluation Report and the Environmental Impact Statement) ended just yesterday, but it seems pretty clear that the Corps will not back off from its authorization to deepen the long Savannah River channel to 47 feet. That’s 5 feet deeper than the current depth of 42 feet, but it’s a foot less than the 48 feet that the Georgia Ports Authority originally sought — and 3 feet shallower than other East Coast ports will likely be after planned projects are completed.
There’s considerable resistance to SHEP from South Carolina politicians (with the notable exception of Governor Nikki Haley), but it remains unclear whether those objections — some of which seem well-founded and some of which are completely irrational — could possibly trump the Corps’ approval.
And expect a lot more wrangling over funding. Despite repeated insistence that the federal government should cover most of the $653 million cost, Governor Deal said in April that Georgia “will accommodate accordingly” if the federal funds don’t come through. If I’m working on the federal budget, that sure sounds to me like Georgia can pay for this line item on its own.
My guess it that all of these debates would be playing out differently if there were better understanding of the Corps’ economic analysis.
A few key points from that exhaustive analysis:
- Whether the harbor is deepened or not, the amount of cargo passing through the Georgia ports will increase at the same rate until landside capacity is maxed out in about two decades.
- If the harbor is deepened, the same amount of cargo will be carried by fewer and, on average, larger ships that will spend less time waiting for favorable tides, will be more fully loaded, and will be able to move more efficiently through the long river channel.
- If the harbor is deepened to 47 feet, there will be an annual benefit of $174 million to the nation as a whole because of the savings in private transportation spending.
- The Corps did not study the benefits of SHEP as part of a broader national strategy, but clearly the analysis points to increased cargo in coming years at all East Coast ports and the subsequent need to increase capacity and improve infrastructure pretty much everywhere.
Even after so much study and discussion, it’s obvious that many local and state leaders (esp. those in South Carolina) do not understand — or have simply decided to reject — these key conclusions.
How will that $174 million per year in savings actually be felt in the broader national economy?
Well, if the ports will transport the same amount of cargo either way, then the benefits will probably not be felt in increased employment for those who are actually lugging the cargo around.
The Corps specifically mentions the likelihood of cheaper consumer goods here in the U.S. (even cheaper imports?), but we might also see more competitive exports. We might see higher wages and higher profits for manufacturers — but those might accrue in other countries in addition to the U.S.
A small portion of that $174 million might be eaten away by potentially higher fees for larger vessels once the newly-expanded Panama Canal opens in 2014 (the fee structure has not been set and remains a huge wild card).
In terms of the regional Savannah economy, the best rationale for deepening might be that manufacturers would be more likely to settle here or to expand if shipping costs are reduced. That’s just conjecture at this point, although fairly compelling.
At the same time, there are serious environmental issues — ones that have many Savannahians across the political spectrum deeply concerned despite the united front of political and business leaders. The final plan has nearly $300 million in environmental mitigation, but there are still some big question marks about the full impacts of additional saltwater intrusion, of changes to fish habitats, and of other known impacts of further dredging.
When people raise legitimate questions about deepening, the response is often a true but illogical one: “Georgia’s deepwater ports support 352,146 full- and part-time jobs across the state.”
I’ve seen no reason to doubt that assertion, which is based on a study by the Selig Center for Economic Growth at UGA’s Terry College of Business. I’ve also seen no reason to think that any of those jobs would be imperiled if the Savannah River remains at its current depth.
There are strong arguments for a deeper harbor, but the do-or-die rhetoric from proponents has obscured relevant issues and spawned irrational fears.
Georgians deserve a reasoned discussion of SHEP rather than the constant hyperhole — that’s especially true if Georgia taxpayers are going to be asked to foot the entire bill.