Positive, negative financial impacts of dam removal 

By LEE JUILLERAT 

H&N Regional Editor

January 25, 2012

     Information in the draft overview report on Klamath Dam removal studies released Tuesday by the federal Department of the Interior breaks down projected economic impacts if four Klamath River dams are removed. The revenue increases illustrate the difference between keeping the dams in place and removing the dams.

   Positive impacts

   Summaries, in 2012 dollars, of the beneficial impacts include:

   • Irrigated agriculture: Increased water supplies during dry and drought years under dam removal and KBRA implementation would increase gross farm revenues, with economic benefits in one of every 10 years. The increase in net revenue would be $29.89 million over the 50-year period of analysis (2012-2061).  

   • Refuge recreation: Dam removal and KBRA implementation would increase waterfowl numbers and hunter visits to refuges with a $4.3 million increase of net revenue over 50 years.

   • Non-use values (public sentiment): Residents whose livelihoods were not directly connected to the Klamath River Basin were surveyed. The survey included those from the 12-county Klamath River Basin, the rest of Oregon and California, and the U.S. The majority of respondents indicated they were willing to pay for ecosystem restoration.

   In all three areas surveyed, the majority of respondents expressed concern about the decline of Chinook salmon and steelhead that return to the Klamath River and the extinction of Klamath Basin fish species.  

   They also agreed solutions should include dam removal, water sharing agreements and restoration.

   Dennis Lynch, program manager for the Klamath Secretarial Determination Process, said economists identified $15.6 billion in non-use benefits. Lynch said the figure was based on the percentage of respondents who said they are willing to fund restoration efforts even though they will not directly benefit or likely even visit the Klamath River Basin.

   He expressed surprise at the high percentage of favorable responses and said economists used those figures to reach the $15.6 billion figure.

   • Commercial fishing: Troll harvest of Klamath Chinook salmon would increase 43 percent from 2012 to 2061 with dam removal. The increase in annual net revenue with removal would   be $7.3 million a year and $134.5 million over 50 years.

   • In-river sport fishing: Dam removal would increase fish harvests for salmon, steelhead, redband trout and recreational sucker.

   The economic value of an 8 percent Klamath Chinook salmon increase was estimated at $126,000 a year. Prospects for restoring recreational sucker fisheries appear limited with or without dam removal. Figures for likely increases in steelhead and redband/rainbow trout were not quantified.

   • Ocean sport fishing: Ocean recreational harvest of Klamath Chinook salmon is expected to increase by 43 percent with dam removal, which would result in an average annual net revenue increase of $2.7 million.  

   Negative impacts

   Dam removal would result in economic losses to some users.

   The impacts, in 2012 dollars, include:

   • Hydropower: The four dams would generate an average of 895,847 megawatt hours of electricity annually if left in place and if efficiency upgrades are completed. If removed, the dams would operate until 2019. The average savings from not operating and not maintaining the dams is estimated at $289.2 million from 2012 to 2061. When subtracted from profits of operating the dams, the estimated value of lost hydropower economic benefits over the 50-year period is $1.32 billion.  

   • Whitewater boating: Whitewater boating activity on the upper Klamath River would decrease with dam removal because of the dependence of water releases from the J.C. Boyle Dam for flows. Without those releases, studies predict a 47 percent decline in the number of acceptable days for boating on the Hell’s Corner Reach section from May through September, a loss of $6.1 million over 50 years.

   • Reservoir recreation: The use of reservoirs for flat-water boating, fishing and other uses would be lost, a reduction of 2.03 million total recreation days and loss of $35.4 million over the 50-year period.