October 27, 1977
Page 35597
STATEMENT OF SENATOR HATHAWAY ON DICKEY-LINCOLN HYDROELECTRIC PROJECT
Mr. MUSKIE. Mr. President, yesterday the U.S. Corps of Engineers held its second scheduled hearing on the Dickey-Lincoln hydroelectric project in northern Maine. With the release of the draft environmental impact statement on this major power project, debate on the project within the State has been vigorous. Both Senator HATHAWAY and I have expressed our continued firm support for the project both at the hearing in Fort Kent, Maine, last week, and the hearing in Augusta yesterday.
Senator HATHAWAY has worked carefully with the proposal to build Dickey-Lincoln since it was first authorized in the mid-sixties. His thoughtful comments are valuable to all of us. I ask unanimous consent to print in the RECORD a copy of Senator HATHAWAY's statement from the hearing yesterday, summarizing the substantial need for and benefits of the project, and supplementing many of the points made in the earlier hearing.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
STATEMENT OF SENATOR WILLIAM D. HATHAWAY
Thank you for the opportunity to present some brief remarks before this second hearing on the Dickey-Lincoln Hydroelectric project in Augusta, Maine. Statements were submitted on behalf of myself and Senator Muskie at last week's hearing in Fort Kent, and I would like to supplement some of the points made at that time in support of Dickey-Lincoln.
The Dickey-Lincoln hydroelectric project is now in the final phases of the environmental impact process, and judgment will eventually be made as to whether or not to proceed with construction. There is little doubt that this project has become more controversial than when it was originally authorized in 1965. Our understanding of both environmental and energy resource development has been enlarged considerably over those 12 years. Those two demands — environmental concerns and energy resource development — are often viewed as being in direct conflict with one another. Since 1973 and the Arab oil embargo, we have learned how essential it is to balance these conflicting demands in order to permit orderly economic growth.
That is what the environmental impact process is all about — providing choices which account for environmental values, and which mitigate any adverse impacts on the environment to the extent feasible.
Recent intense coverage of the draft Environmental Impact Statement on Dickey-Lincoln has resulted in a distorted focus only on adverse impacts of the project, both real and imagined, to the detriment of a full discussion of the benefits from the project. I am hopeful that these hearings on the draft will balance the record in that regard and provide the necessary information to ensure that a balanced judgment is made on Dickey-Lincoln, weighing both the benefits and the costs. I continue to feel that the project's benefits are substantial; and that these benefits, when considered with the environmental impacts outlined in the draft EIS, outweigh the costs of the project.
Dickey-Lincoln is first and foremost a power project. The costs of construction allocated to the power benefits of the project amount to 98% of the total costs of the project. Discussion of Dickey-Lincoln needs to be put into the context of our regional and national energy picture.
At present, the United States imports nearly 50% of its oil needs, up from approximately 23% before the 1973 oil embargo. In turn we depend upon oil for nearly 50% of our overall energy conservation. Our national dependency upon the less secure foreign sources of oil has grown steadily as Canada and Western Europe have curtailed their exports in response to their own supply needs. Our vulnerability to severe supply interruptions with potential consequences far outweighing those of 1973-4, has increased rather than declined.
New England and Maine are particularly dependent upon oil and oil imports, as the principal source of energy for the region. While New England receives a share of the benefit of domestically produced price-controlled oil, climate and oil dependency combine to produce some of the highest energy costs in the nation.
Development of Dickey-Lincoln is the development of a native energy resource which can replace the equivalent of 2.3 million barrels of oil per year. At today's world market price that represents nearly $30 million dollars annually which would be available within this country, rather than being exported to the oil producing countries. What will 2.3 million barrels of oil be worth in 25 years? Even now we await the December meeting of the OPEC ministers to decide what the price of oil will be this coming year. Will the increase for this year be 5% or 50%? Is it probable that there will be no increase at all?
Dickey-Lincoln is a clean and renewable alternative source of energy. The waters of the St. John are a fuel resource whose cost will not rise in response to economic and political pressures; the economic cost of a hydroelectric project is in the initial construction. Fuel costs thereafter will be stable, and maintenance relatively simple and inexpensive.
Maine will be a primary recipient of this energy resource, with 44% of the energy allocated for use within the state. The peaking power which will be available in the rest of New England as well as that in Maine represents a minimum of 17% of New England's overall peak power needs in the mid 1980's. Peaking power is necessary to ensure that maximum power demands are met at the time of day or year when the highest demand is put upon the electrical system. It is ordinarily one of the most expensive components of a generating system. Hydroelectric power, however, is one of the more desirable sources of peak energy, with quick startup time, flexibility and cost free fuel supply.
In addition to this peaking power, there will be base load power available to the state of Maine from the project. 100 per cent of the state's projected public power needs can be met in the mid-1980's from Dickey-Lincoln, at costs considerably below other available alternatives.
To give a concrete example of what this amount of energy could represent, Maine's share of the Dickey-Lincoln power — 533 million kilowatt hours — is the amount of energy which could supply over 60,000 average households per year.
As a secure energy resource, Dickey-Lincoln represents economic development for the state of Maine. In the short term — some 7 or 8 years — there will be direct construction jobs from the project. The Corps of Engineers estimates that there will be a peak labor force of some 1900 people, and approximately $100 million in direct payrolls for men and women working on the project. Several millions of dollars of additional economic activity will in turn be generated by such an economic stimulus.
Much has been said about the potential socioeconomic impact of such an infusion of funds and jobs into northern Maine. The draft EIS makes reference to the possibility of increased social problems such as alcoholism and prostitution. This has resulted in fears of a boom and bust cycle which would devastate the cultural and social structure of northern Maine.
Needless to say, this possibility is a very real and compelling concern of those who live in the project area. I think this possibility, however, has been exaggerated. I have heard comparisons made with the Alaska pipeline project. Dickey-Lincoln simply does not compare to the Alaska pipeline either in magnitude or in physical or social setting. The Alaska pipeline involved billions of dollars; the need for a specialized workforce which was imported from all over the world; and the crossing of thousands of miles of frozen tundra in a state in which "wilderness" does not adequately describe the pristine nature of the physical environment. As an aside, I would note here that the pipeline has indeed been built despite these obstacles, and we will soon be receiving the benefit of a new domestic source of oil.
In the case of Dickey-Lincoln, the vast majority of workers will be from the state and 90% of the unskilled positions, and 24% of the skilled positions can be filled from the Aroostook County workforce itself. I would anticipate that nearly all of the workers will come from the New England region.
In fairness, the social, cultural and economic impact of long term unemployment such as that experienced in all of Maine, and more particularly in northern Maine, must be weighed against these more remote possible adverse impacts which might result from raising the economy of the area. To someone who is unemployed, prosperity may indeed be an "adverse" impact which would be welcomed.
The relocation of residents of Allagash and St. Francis is of justified concern, both to the communities involved and the overall communities as a whole. Question has arisen as to the adequacy of present assistance for individuals in obtaining replacement housing. The underlying federal purpose is to ensure that "decent, safe and sanitary" housing is available to those relocated by the project. Should the present level of assistance not be adequate to provide such replacement housing, then additional funds can and would be sought to ensure that the statute's purposes are met.
In terms of the communities as a whole, there is recent precedent for special town relocation assistance which would go beyond the standard relocation authority of the Corps of Engineers. In a 1974 authorization, Congress provided the Corps with authority to work with nonfederal interests to relocate the Town of North Bonneville, Washington to a new townsite when additional construction on the Bonneville dam was to result in flooding of the town. This type of special legislative approach may well be applicable in the case of Dickey-Lincoln. I hope that these hearings will result in a definition of what might be needed in terms of overall community relocation assistance. I would urge the Corps and the people of Allagash and St. Francis to work together developing the needed information so that recommendations in this regard could be considered with the final impact statement.
As a federal project, the economics of Dickey-Lincoln have been extensively analyzed. No other federal programs undergo such a rigorous economic analysis. The traditional cost benefit analysis by the Corps weighs the financial costs and benefits of the project over its 100 year life. A discount factor (or interest rate) is used to bring the costs and benefits of the project into the same time frame, to show their "present worth." This discount factor has been the subject of some controversy, with opponents of the project alleging that it is artificially low, resulting in a more favorable cost benefit ratio than is justified. It should be remembered, however, that the discount factor relates to when benefits and costs occur. The higher the discount factor in general, the greater the emphasis upon more immediate benefits as opposed to benefits which will be forthcoming in the future. With that understanding, it might be suggested that as a matter of policy, no discount rate should be used in weighing the benefits and costs of developing a renewable energy resource, whose worth may be inestimable in future years.
In any case, Dickey-Lincoln has a favorable cost benefit ratio under any of the various economic analyses used by the Corps. The Corps may also do a life cycle analysis of Dickey-Lincoln, comparable to that which has recently been started on the Passamaquoddy tidal project. Under life cycle analysis, Dickey's benefits may be even more substantial.
Further, the public investment in the project is repaid over a 50 year period through the rate schedule. Since nearly all of the costs of the Dickey project are allocable to the generation of hydro power, nearly all of its costs will be repaid. At the same time, those rates will be at or below the current electrical rates for New England.
Current projections for rate increases indicate that these savings will become increasingly substantial in future years. One estimate is that Dickey-Lincoln can save consumers in Maine alone some $12,000,000 annually from the projected power costs for other energy resources. Simply expanded over the 100 year life of the project, that represents a savings of 1.2 billion dollars. That should be compared to the potential economic loss from timber over the life of the project which the draft EIS places at maximum at 311 million dollars.
This is a savings in power costs which is 4 times the maximum estimated potential loss of economic benefit from the inundation of the forested acres.
In addition to power benefits, Dickey-Lincoln also represents permanent flood control for the entire St. John River Valley. The Corps estimates that the average annual flood control benefit of the project, even with completion of a local flood protection dike, to be over $650,000. These are costs which are most immediately borne by residents and businesses of the area, but which the general taxpayer ultimately bears.
The benefits of the project are considerable There are also several points which should be made to place some of the adverse impacts into better perspective. First, as has been noted, many of the adverse impacts can and will be mitigated, such as providing adequate relocation assistance, working to mitigate some of the potential social impacts of the project, and providing for relocation of wildlife affected by the projects, such as the U.S. Fish and Wildlife service has recommended.
Secondly, some of the losses need to be put into a broader context. For example, the loss of forest from the project represents approximately 1/2 of 1% of the state's forested area, and only 2% of that of Aroostook County alone.
The 278 miles of streams and brooks which will be flooded are only 14% of all the streams and brooks in the St. John River basin above the dams. In relationship to all of Maine's streams and rivers, this amount is only a fraction of a percentage point.
That does not reflect the quality of the river, however, and the loss of whitewater canoeing on the river is an unavoidable impact. This loss should be put into perspective too; the river is available for canoeing only a short period of the year; there were only 2,328 canoeing visitor days in 1975; and only 19% of these were from the state of Maine itself.
It has been asked why Maine should develop an energy resource to benefit the rest of New England; perhaps, it is just as fair to ask why we should preserve it so that our wood can be cut for Canadian sawmills, and our river be canoed by a small number of individuals, principally nonresidents.
This is not to imply that there are not major environmental tradeoffs which must be made should Dickey-Lincoln be constructed, nor to downgrade the significance of the choices which present themselves. There is no doubt that a balancing must be made between which energy resources we will develop for the future.
All of our most readily available choices involve environmental risks, ranging from oil spills, to air pollution, to nuclear waste disposal.
The more exotic energy resources are promising but are unlikely to provide any significant energy supplies until well after the turn of the century.
Conservation must continue to be emphasized. But the reality is that Maine's electrical growth rate has increased again from the low of 1975. In the first 9 months of this year alone, Central Maine Power Company estimated its growth at 7.8 percent, well above the 5.4 percent annual rate of growth now projected for New England. Conservation can bring down our rate of growth; it cannot, however, prevent growth in demand itself. Conservation and economic development must also be brought into balance; recession may be an effective conservation tool, but it is clearly not a desirable one.
Dickey-Lincoln at its simplest represents a valuable domestic energy resource, which in turn represents secure and stable economic development and jobs for people. That is the basic context in which the debate on the draft EIS should be placed. Dickey-Lincoln would be the largest single public investment in the future of New England which has ever been made.
It is an investment once made which will not be withdrawn or closed as a result of later policy changes. It is an investment in the future of Maine and of New England. It is an investment in a more prosperous future for Maine's children and grandchildren. It is an investment in energy, jobs, and freedom from devastating floods. It is an investment which involves risks, and which will necessarily involve some irreversible commitments of resources.
It is an investment, most of all, which needs to be viewed in the perspective of our present resource use, and our projected resource needs.
The people of Maine deserve a thoughtful and balanced judgment on whether or not to build Dickey-Lincoln. I am confident that these hearings will contribute to such a judgment and hope that my thoughts have been of assistance in reaching that balance.