Greenfire Consulting DEIS Comments

Karyn Moskowitz
Christine Glaser
GreenFire Consulting Group, LLC
Commenting for Kentucky Heartwood
917 W. Sixth Street
Bloomington, IL 47401

January 24, 2007

Kentucky Transportation Cabinet
PO Box 780
Somerset, KY 42502

Attn: Mr. Joe Cox, Current Project Manager-I-66
(note: as of 8/07, Mr. David Beatty will be the new I-66 Project Manager)

Dear Mr. Cox,

Below please see our comments on the proposed I-66, Somerset to London segment. Thank you for this consideration of our comments.

Karyn Moskowitz, MBA
Christine Glaser, PhD
GreenFire Consulting Group, LLC
Commenting for Kentucky Heartwood

Our first comment is one of format, rather than content. The electronic version of the DEIS does not allow any copying of text from the document. This makes it extremely inconvenient for us to comment on the document, as our common practice is to copy a paragraph from the document into our comments and then respond to it. Also, the horizontal layout makes it extremely cumbersome to read on the computer screen. Please change this on the FEIS.

The main economic arguments being used by the Kentucky Transportation Cabinet to justify I-66 are that the proposed interstate will:

1. Reduce accidents;
2. Bring new economic growth;
3. Improve the quality of life for corridor residents by increasing access to nearby towns and cities;
4. Increase earnings, jobs and income, and population as a result of time and cost savings; and that,
5. The area will benifit from more economic growth and increased use of “underutilized resources.”

1. The DEIS purports that the new interstate will reduce accidents. Reducing accidents is a good thing. However, does putting hundreds of million dollars of taxpayer money into Interstate I-66 achieve the “biggest bag for the bucks”? That is, does it achieve the highest possible reduction of accidents compared to other possible uses of the money?
– What is the comparable reduction in accidents for putting money into the improvement of local roads?
– Is there potential for reducing accidents by making intersections between KY 80 and cross traffic safer by improving them?
– Could KY 80 be made safer by adding shoulder width and lane width? What would be the cost/benefit ratio with regard to accidents compared to building I-66?
– What are the reasons for high accident rates? (S 1.4. and 2.4.2). Accidents happen for all kinds of reasons, including speeding, alcohol, drugs, distraction (eating while driving, speaking on a cell phone), wildlife crossing, and vehicle malfunction (tires exploding, brakes failing). How many of the accidents happening on KY 80 could really have been avoided if it had been a limited access road?
– I-66 will allow higher speed. Isn’t higher speed often associated with more (severe) accidents? So while elimination of intersections may reduce the frequency of accidents, by how much would the accident rate increase because of higher speed?

2. From 1.3.3: The DEIS states that the economic benefits from I-66 will include a 5.9-7.9 percent increase of employment for 20 years after completion of the highway, 30 percent of which will be manufacturing. Personal earnings will see a 6.4-8.7 percent increase from 2005-2025. This personal earnings increase falls within the period of highway construction.

What growth rates might be expected from other growth enticing measures like increased educational opportunities? Many researchers, including Calvin Kent and Paul Hamilton of Marshall University in West Virginia have shown that investment in human capital, especially early childhood education, is one of the most important investments a community can make to improve future economic conditions. How does the cost/benefit of these measures compare with that of building a new interstate highway? Has a NPV calculation been done to help the public and policy makers make a decision between highway building and increasing educational opportunities (or building human capital)? 2.9. in the DEIS states interstate construction willl work with educational attainment to improve economic development. Have these two approaches been considered separately? We find it very surprising and perhaps irresponsible to attempt to commit hundreds of millions of dollars to a project without analyzing alternative means of achieving the same goal.

We understand that the building of Interstate 66 will bring jobs and income to the workers who build the road (and the heads of companies that contribute to the political campaigns of the politicians pushing this road). However, this is not sustainable, but rather, like building KY 80, temporary employment. After this road is complete, then will we have to plan another road to employ people? Are there jobs we can create that will provide employment to local residents without causing so much damage to the environment and local economy?

3. From 2.3.4, KY 80 is described as a two-lane highway with a very good level of service (LOS) rating (B) in 1998. It is projected that it will deteriorate by 2030 to a D rating based on increased traffic (see 2.3.7 and Table 2.3.7-1). Annual average daily traffic  (AADT) values between these years more than double. Is this consistent with population growth expectations? Where do these projections come from? We often find DEIS authors relying on “black box” calculations that are hidden from the public. How can the public reasonably believe these calculations if we cannot see how they were derived?

4. KY 80 is supposedly a road with substantial geometrics, insufficient passing lanes and shoulder/land width. How will building I-66 help this?

5. S.3.1 says the land use will be redirected towards interchanges. How much of the new development just replaces existing development? Have the private costs of moving been considered in the benefit/cost analysis (in addition to moving the businesses that are actually in the highway right of way)? Studies have been done (Moskowitz, K., 2002. “Change is inevitable, highways are not”) that show that big box retail outlets recently located in Morehead, Kentucky shift income rather than increasing it. In addition, they often lead to lowering the hourly wages, and export income out of the community. Has the community made a conscious decision that they want this type of development? Yes, big box retail development at interchanges is becoming more and more prevalent in Kentucky, but it is not inevitable. As we will show below, with Peak Oil considerations, it may in fact be the wrong way to go.

6. S.3.3 says that Shopville will be divided by I-66. Will a connection be provided? If not what are the costs to the residents and the businesses? How does this inability to access what they had previously been able to access affect their quality of life?

7. On Page 3-10 Table 3.2.5.-2 “Impacts on Natural Environment”, and in S.3.4., there is an admission of environmental effects on karst, terrestrial, aquatic wetland habitat, endangered species and others. Have these losses been quantified? Added to the benefit cost analysis? The DEIS states that they are difficult to calculate, but, in fact, many economists, including some who work at agencies in the Federal Government, regularly calculate the benefits that these habitats bring to community residents. According to NEPA, the fact that this is “difficult” should not stand in the way of doing it.

NEPA Sec. 102 [42 USC Paragraph 4332].

The Congress authorizes and directs that, to the fullest extent possible; (1) the policies, regulations, and public laws of the United States shall be interpreted and administered in accordance with the policies set forth in this Act, and (2) all agencies of the Federal Government shall–
(A) utilize a systematic, interdisciplinary approach which will insure the integrated use of the natural and social sciences and the environmental design arts in planning and decisionmaking which may have an impact on man’s environment.
(B) identify and develop methods and procedures, in consuiltation with the Council on Environmental Quality established by title II of this Act, which will insure that presently unquantified environmental amenities and values may be given appropriate consideration in decisionmaking along with economic and technical considerations;

The Daniel Boone National Forest plays an integral role in providing ecosystem services, such as water purification and filtration, carbon sequestration, soil productivity and other services. Indeed, water was one of the main concerns that prompted the protection of lands that later became the Daniel Boone National Forest.

Many researchers around the world, including Forest Service and other government employees have attempted to place a value on these services. The literature is full of studies such as damage cost avoided, replacement cost, and substitute cost methods that attempt to value ecosystem services. One of the best sources of information is found online at . The DEIS have essentially ignored placing any value on these services and how I-66 will affect their efficiency.

Ecosystem services is not a new concept. According to Columbia University’s Geoffrey Heal, at a Keynote address on the “Economics of Ecosystem Services,” in 2004, the concept of ecosystem valuation dates back to Hicks in the 1930’s.

Returning to the issue of ecosystem services, Dr. Heal commented that ecosystem services are frequently public goods (such as those he had mentioned previously, climate stabilization, pollination, etc.). Furthermore, he stated that “a great majority of them are non-market goods, so when it comes to valuing them, this raises some questions, but questions that are faily conventional in the field of environmental economics-questions which are, in fact, the lifeblood of environmental economics.” He pointed out one aspect of ecosystem services which is “certainly rather distinctive, and that’s that there is frequently a considerable amount of uncertainty about the functional relationship between the state of an ecosystem and the services that it provides.”

Switching to a discussion of the “National Academy of Sciences report (the National Research Council report) and how it addresses some of these things,” Dr. Heal said that the report starts off by “classifying the various ways in which ecosystems and ecosystem services can have value.” He described this as a “conventional classification into use and non-use values, with a sub-classification of the use values into direct and indirect values” and added that “there’s a two-way classification which is central to the report. One is a classification  of the types of values that ecosystems can have. The second, obviously, is a classification of how you can go about valuing them.” Emphasizing that this is all fairly standard economics, he identified the optional ways to value them: “with revealed-preference techniques, with stated-preference techniques, or with some combination of the two.” He added that in writing the report, he and others spent some time “trying to work out when one or the other is more appropriate and which of the various techniques is more appropriate for which particular types of services.” He also stated that “the discussion of these issues in the report does address some of the issues raised by the NOAA Blue Ribbon Commission on Contingent Valuation and some of the critics of the CV approaches there. I don’t think we have anything enormously original to say about that, but I think there’s quite a clear integration of the literature on that within that section of the report.”

Dr. Heal identified one of the key questions that they focused on in the report is “how the services provided by an ecosystem (i.e., the services provided by natural capital) change as the ecosystems are impacted by human activity.” He presented the example of how the extent of mangrove swamps and other types of coastal wetlands affect the productivity of offshore fisheries and identified pertinent questions as “What exactly of coastal wetlands affect fisheries and on what sort of timescale?” As another example, he brought up an issue that he has been involved with: New York City’s decision to conserve the Catskill’s watershed. The primary question they have dealt with here is: “How does the extent of a watershed and the nature of the vegetation in that watershed affect the watershed’s ability to provide ecosystem services?” He identified the two “critical ecosystem services” that most watersheds provide as water purification and stabilization of stream flow and said, “If you’re thinking about the conservation of a threatened watershed becuase of the value of those services, then it’s actually quite important to have some understanding how different ways of using that watershed and different levels of human impact on that watershed will affect the provision of those services.” Ideally, he said, you’re looking for some kind of functinal relationship between the state of the watershed and the services it provides.

Dr. Heal went on to say that “we don’t have to answer that type of question if all we want to do is to value the current services of ecosystems, but if we want to value changes in the services that result from extended human activity, or from policy intervention, then we do have to answer these sorts of questions about what’s the nature of the link from the physical characteristics of an ecosystem  and the extent of the ecosystem and the human intervention in the ecosystem through to the services that it provides.” For emphasis, he repeated, “If we want to value the change in natural capital which comes from the destruction or the conservation of a system like a watershed or a wetland, then we have to be able to answer those types of questions.” He went on to state that “the biggest challenge that we face here is linking changes in the bio-geo-chemical state of an ecosystem to a change in the service flow,” and he said that the NAS report pushes quite hard for more of the integrated economic and ecological modeling that is required to address this.

On April 21, 2005 The Economist Magazine published a report called, “Are you being served?” Environmental entries are starting to appear on the balance sheet. Perhaps soon, the best things in life will not be free.” In this article the author is talking about the deforestation happening around the Panama Canal, and efforts to reforest. He notes that: “A deforested, grass-covered watershed would release far more water in total than a forested one, he admits, but that water would arrive in useless surges rather than as a useful steady stream. A forested watershed makes a lot more sense.” He goes on to say:

“Another problem caused by deforestation is that it allows more sediment and nutrients to flow into the canal. Sediment clogs the channel directly. Nutrients do so indirectly, by stimulating the growth of waterweeds. Both phenomena require regular, and expensive dredging. More trees would ameliorate these difficulties, trappiung sediments and nutrients as well as regulating the supply of fresh water. Planting forests around the Panama Canal would thus have the same effect as building vast reservoirs and filtration beds.”

“Viewed this way, any scheme to reforest the canal’s watershed is, in fact, an investment in infrastructure.”

The report goes on to say that World Bank projects in countries such as Croatia are using NPV, IRR, and cost-benefit calculations to prioritize reforestation projects on the coast, using the categories landscape, hunting, wood production, and erosion protection. Consistently, the benefits of “landscape” outweighs all other categories and makes reforestation project benefits outweigh the costs.

Columbia University? The World Bank? The Economist? These are hardly “treehuggers,” but are, in fact, “conservative” universities, think tanks and magazines that are admired by many.

The question we have for the Kentucky Transportation Cabinet and the FHWA is this: If these institutions can and do use economics to value ecosystem services in order to prioritize projects and contrast costs and benefits, why then, can’t the Kentucky Transportation Cabinet and the FHWA do the same? Instead of coy statements about how impossible it is to do, these agencies need to enter the 21st Century and utilize these tools. Indeed, NEPA regulations absolutely demand this of federal agencies.

8. From the DEIS, (2.7.7.) we believe that the Kentucky Transportation Cabinet associates an increase in quality of life with faster road access (reduced travel time) to parks, offices and universities/colleges. While we acknowledge that faster road access might make some citizens happy, will it necessarily contribute to an increase of the quality of life factors, such as knowing that no part of the Daniel Boone National Forest will be destroyed and gone from the national forest system due to a road, a sense of living in a rural area without the fast pace of a highway, etc., etc. Why haven’t these things been considered in the DEIS?

9. 2.7.10 and 2.7.11 talk about the studies that link highway construction with employment levels. Building Highway KY 80 seems to have been instrumental in raising employment rates in Pulaski County from 1980 to 1990, but since 1990 unemployment figures have not kept on improving. However, since LOS of KY 80 is still good, there may be other factors at work here that keep employment down, that cannot be remedied with a  highway. What might they be?

10. 2.7.11 A statement is also made that overall travel time to places of employment has not been reduced with KY 80, implying that the new I-66 might do the trick. However, how can we expect a reduction in average travel time? It is a fact that a new, better road can save time for those who previously used the old one. But it will also induce new travel and commuting. People who live farther away and did not use the old roads, now find that commuting time becomes acceptable because of the new road. But this induced travel time raises the travel time again, no matter how many new roads are built.

11. 2.7.12 To say that a certain number of manufacturing jobs has been located within a certain distance of a new highway is not very informative, and doesn’t provide any scientific proof of how much of a factor highways were in the location decisions. Other, undisclosed factors may also have been much more important. How many jobs were actually created alltogether by new plants both close to and far away from highways? How many of them were not close to new highways? What attracted them there?

12. 2.7.12 Only 57 percent of ARC funding goes into roadways. Where is the other 43 percent spent? What kinds of projects other than building an interstate might have been adeqaute for Pulaski County or surrounding counties? For example, a lack of good planning and zoning could be a major hindrance for development. What kind of economic growth and development might result from ARC funding to enhance the capacity of communities to provide good planning and zoning?

13. 2.7.15 says that Pulaski County draws workers from surrounding counties. How would that short stretch of I-66 help the workers in surrounding counties using local roads to get to their workplaces in Pulaski? This may be a real concern since this is a rural area where many employees live far from the route of the new proposed highway on rugged country roads. Money could be spent making their local commute safer and faster. What is the benefit/cost comparison of spending money on local roads to make them safer and faster for all county residents vs. spending money on I-66, which may only be used by people living fairly close to the new facility? Considering the substantial amount of money being spent studying and possibly building this short stretch of I-66, we think it is not only reasonable, but imperative that these alternatives be addressed.

14. 4.3.1 There is an industrial park and a technology park already being planned without the interstate in place. Why then is the KY Transportation Cabinet saying that the Interstate is needed for economic development?

15. In 2.17.17-1, the DEIS talks about attracting tourism from regions far away.  It goes on to say that Interstate access makes tourism more attractive. Pulaski County supposedly generates only 2 percent of the state’s tourism revenue and employment. But earlier in the DEIS the stated goal is to attract more manufacturing. How would that make the county more attractive for tourists? What are people looking for in Pulaski and surrounding counties? What factors besides a highway could attract more people here?

Brown County State Park in Indiana is about 20 miles from I-65, on a two-lane hoighway. However, this is one of the most heavily visited tourism sites in Indiana, especially during fall foliage season. A lack of an interstate does not keep tourists away. Indeed, area economic development leaders have vigorously opposed any highway building near this tourist mecca for fear of losing tourists. Lake Monroe is another tourist destination in southern Indiana that is not on an Interstate. Is the traffic noise of an interstate conducive to tourism? Where are the studies and proof that building an interstate will bring more tourists to the region, as opposed to other less destructive and expensive measures, such as advertising?

16. We see on page 4.3.4 that the project area counties have both experienced economic growth in the years 2001 to the present. We also see that unemployment rates, since 2004, have started a downward trend, and that one of the counties, Pulaski, has about the same level of unemployment as the state average. We even read that two manufacturing plants have located in the area. Houseboat manufacturing seems to be a cluster in Somerset. And all without an interstate highway. What caused the unemployment rate to go down? What attracted the new manufacturing plants? Maybe something could be learned from studying this situation about important growth factors for the region, since obviously it was not a new interstate that attracted these plants or lowered the unemployment rate. It seems to us that this area already has the right building blocks in place for economic development.

17. Something not considered in the DEIS: Peaking oil production. “Over the past century, world economic development has been fundamentally shaped by the availability of abundant, low-cost oil. Previous energy transitions (wood to coal, coal to oil, etc.) were gradual and evolutionary; oil peaking will be abrupt and revolutionary. The world has never faced a problem like this. Without massive  mitigation at least a decade before the fact, the problem will be pervasive and long lasting.
Oil peaking represents a liquid fuels problem, not an “energy crisis” in the sense that term has been used. Accordingly, mitigation of declining world oil production must be narrowly focused, at least in the near-term.”

Both road construction costs and vehicle operating costs could be raised considerably when fossil fuels increase in price as oil becomes less available, which could happen in a few years. As far as we could see, the DEIS completely ignores this crucial issue.

What price for liquid fuels is assumed in the DEIS projections of road construction costs, travel demands, and vehicle operating costs?

Scenarios of how communities, states and countries could mitigate the risks from reduced availability of liquid fuels are laid out in a government-sponsored report by Robert L. Hirsch et. al., Peaking World Oil Production: Imapacts, Mitigation, & Risk Management, February, 2005.

Building a new interstate highway cannot be considered a mitigation measure.

How wise is a plan to attract more long distance traffic (for tourism) or to provide access to large manufacturing centers in the Midwest etc., when Peak Oil is likely to lead to a restructuring of the economy leading to reduction in long distance transport, and may encourage more clustered patterns of development with close access to work/schools, etc., compared to the sprawl patterns facilitated by cheap oil?

Likewise, public transportation may become more important/energy efficient/cost efficient than individualized transportation. Why hasn’t this been considered more in the DEIS?

18. Global warming. Experts are in agreement that global climate change is already happening. Transportation contributes in a major way to the accumulation of greenhouse gases in the atmosphere. Many states, including California, and many communities, have decided to cap and to reduce their greenhouse gas emissions. The DEIS does not include global warming concerns, which is a major and inexcusable omission, since no substantial reduction in greenhouse gases could be expected without changes in land use and in the transportation infrastructure.

Author: kick66

Alliance against the wasteful I-66 construction in Kentucky.

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