Ch. 7— The Effects of ttie 404 Program • 163 



13. American Petroleum Institute representative before 

 NACOAA meeting, December 1981. Some industry asso- 

 ciation staffers also have suggested that the time at which 

 the permit process can be said to begin should be pushed 

 back to the preapplication consultation stage, not so much 

 to include this time in statutory limits on processing, but 

 to give a better sense of the total length of time spent by 

 industries in processing. 



14. As far as overzdl percentages are concerned, the inclusion 

 or exclusion of EIS permits makes an insignificant dif- 

 ference as so few EISs are required by the Corps: 47 in 

 fiscal year 1980, including non-404 permits. 



IVVR estimates of the percentage of permits delayed 

 were 36.3, 24.7, and 29.8 percent, respectively, for com- 

 mercial, private, and governmental permits. However, 

 these estimates are inaccurate, even if RIA figures on 

 which IVVR based its estimates are correct. IWR used the 

 total number of permits, including denials and withdraw- 

 als, in its percentages, but the RIA survey only calculated 

 the number of issued permits that were delayed. 



15. The IWR did not write down the calculations it performed 

 to arrive at its estimate; therefore, it is impossible to 

 validate the figure of $1 .6 billion. Many unproven assump- 

 tions were employed (e.g., projects costing $50 million and 

 under were postulated to take 1 year to complete and be 

 one-third complete at 120 days; projects over $50 million 

 were to take twice as long). Heavy reliance was placed 

 on the small, nonrandom sample of 114 cases described 

 earlier (footnote 13), e.g., to derive median cost figures. 



Problems with the IWR methodology are exemplified 

 in the use of one key piece of data. To determine the costs 

 of projects subject to delay and to apply calculations of 

 delay costs for different types of projects, IWR employed 

 an RIA table giving percentages of how many projects fall 

 into different categories of dollar cost (e.g. , it was estimated 

 that 46 percent of all projects are under $25,000; 17 per- 

 cent from $25,000 to $100,000). This table may be inac- 

 curate. It was based on estimates from Corps personnel 

 from each district who were not asked to supply hard data 

 justifying estimates. The question generating the table was 

 worded such that respondents were asked to estimate proj- 

 ects according to their "potential economic impacts on 



your region and/or nation," a far different basis than proj- 

 ect cost alone. In addition, each district was treated equally 

 for the purpose of calculating mean percentages for each 

 category. However, as detailed earlier, districts are far 

 from equal in the number of permits they handle. This 

 disparity would not be serious if districts had responded 

 in similar ways to this question. However, districts had 

 widely varying estimates. For example, for the first cate- 

 gory of project value, very few districts gave an estimate 

 close to the 46-percent figure used by IWR; many gave 

 estimates of over 75 percent or under 20 percent. Com- 

 pounding the problems of using this table, IWR divided 

 the cost categories of the table into commercial, individ- 

 ual, and government permits, although the RIA data gave 

 no basis for doing so. (See IWR pp. 161-166 and RIA.) 

 16. It is very difficult to foUow the methodology IWR used 

 in calculating opportunity costs. Evidently, estimates of 

 the cost of modifications, the amount of yardage of fill 

 denied by districts, and increased costs in placement of 

 fill were factored into IWR calculations. Some IWR as- 

 sumptions on these items are questionable. As discussed 

 earlier, IWR assumed, without a justification given, that 

 the cost of modifications equals the amount of benefits from 

 technology transfer (see footnote 4). IWR estimated that 

 an average of 4 million yd' of fill are requested annually 

 by applicants in each district and that reductions of 33 per- 

 cent of this figure are achieved by each district. The 33- 

 percent figure, while higher than the average of estimates 

 given by districts to OTA, is not unreasonable. However, 

 the figure of 4 million yd' is extremely high. Of the nine 

 districts giving figures to the OTA Corps survey of cubic 

 yardage of fill requested and approved — in five cases, 

 listing totals for 1980-82 year to date, and in at least one 

 case, combining dredged with fiU material — only one dis- 

 trict estimated that as much as 4 million yd' was requested. 

 The average amount requested per district was 1 . 5 million 

 yd'. Rather than eliminating 1.32 million yd', as can be 

 derived from the IWR figures (33 percent of 4 million), 

 all but one of the districts giving yardage figures estimated 

 that they removed 500,000 yd' or less. This indicates that 

 IWR estimates of opportunity costs may be high. 



