Thursday, September 29, 2011

129,000 jobs for Delta Tunnel?

Delta tunnel could bring 129K jobs

Alex Breitler
Drilling large tunnels to divert water around the Delta would create more than 129,000 jobs, almost all of them during the seven-year construction period, according to a recent analysis.
The report by a University of California, Berkeley, economist does not examine how the peripheral canal or tunnel plan might create or destroy jobs in other ways, such as the proposed conversion of tens of thousands of acres of Delta farmland to wetland habitat.
It is not the full cost-benefit analysis that some observers have called for before the Bay Delta Conservation Plan is put into action.
"BDCP is an extremely complex activity with all kinds of economic impacts," economist David Sunding said while presenting the findings at a public meeting earlier this week. "This is not a complete analysis of all the economic impacts of BDCP. This is just an assessment of the employment impacts of building a tunnel. That's it - that's all it is."
That caveat aside, agencies that rely on water pumped out of the Delta praised the jobs estimate Wednesday. Those agencies have already spent $150 million planning for a canal or tunnel, and will have to convince their ratepayers that the potentially $12 billion project is worth it.
Terry Erlewine, general manager of the State Water Contractors, said that beyond the long-term economic benefit of protecting the state's water supply, the jobs report shows "clear immediate benefits."
"Investing in new conveyance will put tens of thousands of Californians back to work during the seven-year construction phase," he said. "These jobs are greatly needed, considering more than 2 million Californians are unemployed."
Any multibillion-dollar project will create jobs, said Jeff Michael, an economist with the University of the Pacific. Equally important is how many jobs a pricey canal or tunnel might destroy as water rates increase, leaving residents with less money to spend on goods and services.
"You really need a cost-benefit analysis that looks at the whole picture to determine what the best strategy is," Michael said.
He is heavily involved in studying the other side of the coin - the economic impact on the Delta if a canal or tunnel is built. Michael is leading the Delta Protection Commission's effort to write an economic sustainability plan; the current draft does not enumerate job losses, but estimates a $20 million-to-$65 million annual decrease in Delta agriculture.
That study, too, is limited. No study has looked at the issue comprehensively from all angles, Michael said.
For that reason, some Delta advocates question whether the most recent jobs estimate means anything.
"(The report) talks about employment, but not the unemployment that will occur when agricultural acres, which have farm workers and the farmers and their families themselves, have been put out of work," said Melinda Terry, manager of the North Delta Water Agency.
Jerry Meral, California's deputy resources secretary, confirmed that work on a more comprehensive analysis is just getting started.
Sunding's analysis considers both a large and small tunnel. His estimates include not only direct construction jobs, but also indirect jobs such as the production of steel and concrete. His report also assumes jobs will be created as workers with new jobs spend their earnings.
Of the 129,000-plus jobs, more than 50,000 would be in San Joaquin County, more than 30,000 in Sacramento County and more than 6,900 in Contra Costa County, with the remainder elsewhere in California.

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