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Final Report IMPACT OF CANADIAN ECONOMIC DEVELOPMENT ON NORTHERN MONTANA HIGHWAYS FHWA/MT-10-001/8197 Final Report prepared for THE STATE OF MONTANA DEPARTMENT OF TRANSPORTATION in cooperation with THE U.S. DEPARTMENT OF TRANSPORTATION FEDERAL HIGHWAY ADMINISTRATION April 2010 prepared by Daniel Hodge Khalid Bekka Jon Lee Jonny Abedrabbo Geoff Parkins Fred Kramer HDR|Decision Economics Silver Spring, Maryland RESEARCH PROGRAMS You are free to copy, distribute, display, and perform the work; make derivative works; make commercial use of the work under the condition that you give the original author and sponsor credit. For any reuse or distribution, you must make clear to others the license terms of this work. Any of these conditions can be waived if you get permission from the sponsor. Your fair use and other rights are in no way affected by the above. Impact of Canadian Economic Development on Northern Montana Highways Prepared for The State of Montana Department of Transportation Prepared by HDR | Decision Economics 8403 Colesville Road, Suite 910 Silver Spring, MD 20910 April 2010 TECHNICAL REPORT DOCUMENTATION PAGE 1. Report No. FHWA/MT-10-001/8197 2. Government Accession No. 3. Recipient's Catalog No. 4. Title and Subtitle 5. Report Date April, 2010 Impact of Canadian Economic Development on Northern Montana Highways 6. Performing Organization Code HDR | Decision Economics 7. Author(s) 8. Performing Organization Report No. Daniel Hodge, Khalid Bekka, Jon Lee, Johnny Abedrabbo, Geoff Parkins, Fred Kramer 9. Performing Organization Name and Address 10. Work Unit No. HDR | Decision Economics 8403 Colesville Road, Suite 910 11. Contract or Grant No. Silver Spring, MD 20910 8197 12. Sponsoring Agency Name and Address 13. Type of Report and Period Covered Research Programs Final Report Montana Department of Transportation November 2008 to February 2010 2701 Prospect Avenue PO Box 201001 14. Sponsoring Agency Code 5401 Helena MT 59620-1001 15. Supplementary Notes Research performed in cooperation with the Montana Department of Transportation and the US Department of Transportation, Federal Highway Administration. This report can be found at http://www.mdt.mt.gov/research/docs/research_proj/canada_impact_nhwy/final_report.pdf 16. Abstract Recent economic development in the Canadian provinces of Alberta and Saskatchewan is generating changes in commercial traffic across border crossings into Montana and along associated north-south highway corridors. Most notably, oil and gas exploration, generation and refinement in Canada tend to lead to a wide mix of auto, truck, and pipeline activity across the Montana-Canada border. This report covers Phase I of a potential two-phase study where Phase I is an assessment of current and future economic conditions and an estimate of related commercial vehicle traffic growth with and without expanded port operations. Phase II, if warranted, would identify highway impacts of the future traffic and necessary improvements along the highway corridors leading to the ports. This research study focused on examining current and future economic conditions to estimate future commercial traffic growth at the border crossings and connecting north-south highways in Montana. In addition, the research assessed the impacts of expanding port of entry operating hours and estimates induced and re-distributed traffic volumes. Key elements of the study included: 1) literature review of regional economic and transportation studies, and similar border crossing analyses; 2) assessment of current traffic and infrastructure conditions, and border crossing policies and security; 3) evaluation of existing economic conditions and projections of future industry growth; and 4) forecasts of future traffic volumes at Montana border crossings and connecting highways. The research employed a risk analysis to account for future uncertainties in key driving factors and industry growth trends, thus producing a range of likely future traffic volumes by facility. The study findings indicate that historical border crossing traffic volumes vary significantly depending on factors such as oil prices, and the value of the Canadian dollar. Further, traffic volumes, other than at Sweet Grass, are relatively low and well-below capacity. The current economic recession and expected gradual recovery means flat to modest growth in the near-term. There is some potential for stronger long-term traffic growth due to anticipated expansion in the energy industries and the potential for expanded port operations. 17. Key Words 18. Distribution Statement Economic Development, Border Crossing, Forecasting, Trade Unrestricted. This document is available through the National Flows, Traffic Volumes Technical Information Service, Springfield, VA 21161. 19. Security Classif. (of this report) 20. Security Classif. (of 21. No. of Pages 270 22. Price Unclassified this page) Unclassified HDR|Decision Economics ii Disclaimer Statement This document is disseminated under the sponsorship of the Montana Department of Transportation (MDT) and the United States Department of Transportation (USDOT) in the interest of information exchange. The State of Montana and the United States Government assume no liability of its contents or use thereof. The contents of this report reflect the views of the authors, who are responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official policies of the MDT or the USDOT. The State of Montana and the United States Government do not endorse products of manufacturers. Trademarks or manufacturers’ names appear herein only because they are considered essential to the object of this document. This report does not constitute a standard, specification, or regulation. Alternative Format Statement The MDT attempts to provide reasonable accommodations for any known disability that may interfere with a person participating in any service, program, or activity of the Department. Alternative accessible formats of this document will be provided upon request. For further information, call (406)444-7693 or TTY (406)444-7696. Acknowledgements The consultant team wishes to acknowledge the contributions and guidance of many individuals and their organizations for the development and completion of this research project. The research was directed by a technical panel composed of public and private sector stakeholders: 1. Craig Abernathy, Montana Department of Transportation (Research Project Manager) 2. Hal Fossum, Montana Department of Transportation (Chair of Technical Panel) 3. Jerry Stephens, Research Director, Western Transportation Institute 4. Craig Erickson, Director of Infrastructure Services, Bear Paw Development Corporation 5. Duane Kurokawa, Great Northern Development Corporation 6. Mark Cole, Dick Irvin, Inc., and Montana Motor Carriers Association 7. Tod Kasten, Regional Development Officer, Montana Department of Commerce 8. Randy Hanson, Regional Development Officer, Montana Department of Commerce 9. Anne Booth, formerly Executive Director, PhillCo Economic Growth Council, Inc. HDR|Decision Economics iii 10. Eileen Pankratz, Montana Department of Transportation, Motor Carrier Services Division 11. Bob Burkhardt, Federal Highway Administration 12. Zia Kazimi, Montana Department of Transportation The study was managed by Craig Abernathy, Research Programs Manager, and Hal Fossum, Chair of the Technical Panel. The consultant team conducted dozens of interviews with economic development officials, business owners, local and state elected officials, and other stakeholders. Due to the informal nature of some of these communications (e.g., telephone conversations, e-mail exchanges, chance encounters at presentations, etc.), it is not possible to acknowledge all those who gave their insights and offered assistance over the course of the past year. HDR|Decision Economics iv TABLE OF CONTENTS EXECUTIVE SUMMARY .............................................................................................................................. 1 GROWTH AND THE ROLE OF TRADE .............................................................................................................. 1 TRADE AND FREIGHT MOVEMENT ................................................................................................................. 3 STUDY GOALS AND CHARACTERISTICS ......................................................................................................... 3 STUDY FINDINGS ......................................................................................................................................... 5 Existing Conditions ............................................................................................................................... 5 Economic, Trade and Commercial Traffic Forecasts ........................................................................... 6 Key Challenges to Growth in Traffic Volumes ...................................................................................... 8 Research Conclusions and Next Steps ................................................................................................ 9 1 INTRODUCTION AND BACKGROUND............................................................................................ 11 1.1 GOALS AND OBJECTIVES .............................................................................................................. 11 1.2 OVERVIEW OF APPROACH ...........................................................................................................
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