______________________________________________________________________ Grays Harbor, Washington Navigation Improvement Project General Investigation Feasibility Study FINAL Limited Reevaluation Report Prepared by: U.S. Army Corps of Engineers Seattle District June 2014 Grays Harbor, Washington, Navigation Improvement Project Feasibility Study Final Limited Reevaluation Report June 2014 Executive Summary This Limited Reevaluation Report (LRR) and attached appendices document the U.S. Army Corps of Engineers (Corps) reevaluation of the economic justification of authorized depths and potential environmental impacts of deepening the federal deep-draft navigation channel in Grays Harbor, Washington from the currently maintained depth of -36 feet mean lower low water (MLLW) to the full legislatively authorized project depth of -38 feet MLLW. Congress authorized the Grays Harbor, Washington, Navigation Improvement Project (NIP) in the Water Resources Development Act (WRDA) of 1986, Public Law 99-662. This reevaluation focused on two alternatives that would deepen approximately 14.5 miles of the 27.5-mile federal navigation channel, along with a No Action alternative. Channel deepening would occur from the South Reach upstream to Cow Point Reach adjacent to the Port of Grays Harbor Terminal 4. The recommended plan, based on the economic and environmental analyses conducted for this reevaluation, is Alternative 3: Deepen Channel to -38 feet MLLW. Alternative 3 maximizes net benefits (average annual benefits less average annual cost) and is the plan that maximizes net benefits for National Economic Development (NED). This is the federal recommended plan. The depth in the recommended plan is the original legislatively authorized project depth and no additional congressional authorization would be required to implement the recommended pan. The Grays Harbor NIP is located 50 miles west of Olympia on the southwest coast of Washington. Grays Harbor is approximately 110 miles south of the entrance to the Strait of Juan de Fuca and 45 miles north of the mouth of the Columbia River. The cities of Aberdeen, Hoquiam, Ocean Shores, and Westport are located within Grays Harbor. The segment of the channel that was evaluated for deepening is from South Reach upstream to Cow Point Reach. The 1986 authorization provided for deepening the navigation channel to a project depth of -38 feet MLLW. Post-authorization engineering, environmental and economic studies, reflected in a General Design Memorandum (GDM) of February 1989 resulted in a justified channel depth of - 36 feet MLLW from the bar to Cow Point and -32 MLLW feet from Cow Point to Cosmopolis (economic analysis was based on timber industry and log vessels that, at that time, did not need -38 ft MLLW.) The Corps deepened the channel in 1990, in accordance with the 1989 GDM. This is the current depth of annual maintenance dredging. The reevaluation documented in this LRR and appendices focused on the following problem: As a result of the current channel depth of -36 feet MLLW, and narrow tidal windows, deep draft vessels calling at Grays Harbor have to be partially loaded or experience tidal delays due to insufficient channel depth. The purpose of the economic analysis in this study is to estimate the NED benefits associated with harbor improvements, specifically channel deepening, that are designed to allow for more efficient navigation in Grays Harbor by the existing and projected future deep-draft vessel fleet over the 50 year period of analysis. The Corps economist determines the current vessel fleet composition then projects the future one based on numerous Grays Harbor, Washington, Navigation Improvement Project Feasibility Study Final Limited Reevaluation Report June 2014 factors such as projected commodity flows, commerce, current fleet, port capacity and limitation. The purpose of the environmental analysis in this study is to assess the potential environmental impacts of channel deepening. This final LRR includes a net benefit analysis. The attached final supplemental environmental impact analysis (SEIS) (Appendix C) includes a full environmental evaluation of potential impacts from deepening the existing channel. Elements of the environmental evaluation are summarized in the LRR. The National Environmental Policy Act (NEPA) document for this study is a SEIS that supplements the 1982 EIS prepared during the NIP feasibility study and a 1989 SEIS. Non-Federal Sponsor: The Port of Grays Harbor, Washington (Port) is the non-federal sponsor of this study. The Port sponsored the 1982 feasibility study. The Port includes four marine terminals, supported by large, paved, secured cargo yards; an on-dock rail system and more than 104,000 sq ft of on-dock covered storage. Historically, Port business focused on timber, with diversification away from timber starting in 2007. Port growth since 2007 includes over $200M in private investments. Based on 2012 data, approximately 1.9M short tons moved through Grays Harbor; approximately 96% were exports going mostly to Asia. Main commodities include barge and bulk liquid, agricultural processing and autos. Alternatives Evaluated: For this reevaluation, the project delivery team (PDT), which included Corps representatives from Seattle District (NWS) and Port representatives, evaluated the following three alternatives to address the study objectives and identify a plan that is technically feasible, economically justified and is environmentally acceptable (see Section 5 for detailed descriptions): • Alternative 1: No Action (Continue Current Channel maintenance to -36 Feet MLLW) • Alternative 2: Deepen Channel to -37 Feet MLLW • Alternative 3: Deepen Channel to -38 Feet MLLW Economic Analysis: The economic feasibility and justification of the recommended plan for this study were determined by comparing the future without-project condition under the No Action Alternative to the future with-project condition under the two action alternatives. This involved comparing the average annual costs and benefits during the 50-year period of analysis. The plan that maximizes net benefits (benefits less cost) is the plan that maximizes net benefits for National Economic Development (NED). This plan is the federal recommended plan. The plan that maximizes NED benefits, based on this economic analysis, is Alternative 3: Deepen Channel to -38 feet MLLW. Transportation cost savings were calculated using the HarborSym model, a planning-level simulation designed to assist in the economic analysis of coastal harbors using data such as port layout, vessel calls and transit rules to calculate vessel interactions within the harbor. (The terms ‘vessel transit’ and ‘vessel call’ appear throughout the tables and the text of the entire report. For purposes of this report a transit can be interpreted as an individual arrival or departure, and a call can be interpreted as a cycle (arrival and departure).) The table below documents this comparison. (Note: For the economic analysis, the No Action Alternative – as a baseline for comparison - does not have a benefit to cost ratio i Grays Harbor, Washington, Navigation Improvement Project Feasibility Study Final Limited Reevaluation Report June 2014 associated with it). However, the depth of the No Action Alternative (i.e. -36 ft MLLW) does have a BCR based on the 1989 GDM. These 1989 numbers are reflected here under No Action.) NED Analysis Summary Alternative 2 Alternative 3 Deepen channel to -37 Deepen channel to -38 ft MLLW ft MLLW Average Annual Benefits $3,661,000 $7,142,000 Average Annual Cost $751,000 $1,382,000 NED Benefits $2,910,000 $5,760,000 Benefit to Cost Ratio 4.9 5.2 Environmental Analysis: For the environmental analysis, the Corps analyzed project-related effects of the three alternatives. The environmental consequences analyses presented in the SEIS determined that the effects of the proposed action on the quality of the human environment, over and above the effects of continuing execution of the present management regime of annual maintenance dredging as evaluated in prior NEPA documentation, would be minor. Alternative 3 would have a slightly greater effect on the natural environment compared to Alternative 2 because the navigation channel would be dredged to a greater depth. Alternative 3 would remove a greater volume of material during the initial deepening of the channel, which could have potentially greater effects on invertebrates, fish and wildlife, and water quality. In addition, Alternative 3 would require the use of two clamshell dredges during dredging of the inner channel reaches, compared to the use of one clamshell dredge under Alternative 2, to allow for a larger volume of material to be dredged during the same in-water work window. The use of two dredges as opposed to one would result in a greater effect on air quality, noise, artificial lighting, and greenhouse gas (GHG) emissions. Alternative 3, however, would also have a greater benefit to the human environment compared to Alternative 2. Deepening the navigation channel would alleviate tidal delays and light loading of the current vessel fleet, which is currently caused by insufficient channel depths at all tidal stages. Because Alternative 3 would be deepening the navigation channel to its legislatively authorized depth of –38 feet MLLW, compared to –37 feet MLLW under Alternative 2, greater benefits would be achieved under Alternative 3, such as increasing the Port’s efficiency to transport goods in and out of the harbor. Implementation: Implementation