1. Regional Economic Impact Study of the McClellan-Kerr Arkansas River Navigation System (MKARNS)
445 mile navigation system
Located in Ok & AR
originating from the Tulsa Port of Catoosa and flowing in the southeast direction through Arkansas to the Mississippi River.
Heather Nachtmann, Ph.D.
Director, Maritime Transportation Research and Education Center and Mack-Blackwell Transportation Center
Associate Dean for Research, College of Engineering
Professor, Department of Industrial Engineering
July 28, 2016
SOURCE: OKLADOT

2. MKARNS connects the heartland of America to the global supply chain.
The inland waterways system includes 12,000 miles of commercially navigable channels with over 200 lock chambers
38 states connected to inland waterway system
99% of overseas trade by volume (62% by value)
U.S. ports handle
$5.5 billion worth of goods every day
2.5 billion tons of cargo every year
NIW carry the equivalent of about 51 million truck trips each year.
SOURCE: USACE

3. A series of 18 lock and dam systems maintain navigation through the MKARNS’ 420 foot drop in elevation.
420 foot drop in elevation from the Port of Catoosa to the Mississippi River.

4. 1 barge = 58 large semi-trucks or 15 railcars.
1 barge tow = 9 to 15 barges.

5. More than 120,000 railcars or 450,000 semi-trucks would be needed to transport MKARNS’ annual tonnage.
12 million tons
In 2013, the total tonnage throughout the entire MKARNS was approximately 12.1 million tons.
On land, 120,781 railcars or 483,121 semi-trucks would be needed to transport an equivalent tonnage (USACE, 2014).
In 2013, sand gravel and rock, chemical fertilizers, iron and steel, wheat, and petroleum products had the highest share of tonnage transported on the MKARNS

6. MKARNS is a multi-beneficiary, complex system.
multi-beneficiary system
hydropower energy generation,
USACE O&M expenditures,
private sector investment expenditures,
port activities,
shippers’ activities,
transportation cost savings, and
recreation benefits

7. We recently completed a multi-state, multi-institute, multi-disciplinary regional economic impact study of the MKARNS.
Investigators
Sponsored by

8. Indirect&Induced Impacts
Input-output models account for the interdependencies between industries within national or regional economies.
Data Collection
Direct Impacts
Indirect&Induced Impacts
Total Impacts

9. We implemented a multiregional variable input-output model developed by Robinson, et al. (2014)

10. We consider Hydropower Energy Generation impacts.
These facilities are Dam 2, Murray, Whillock, Ellis, Dardanelle, and Ozark in Arkansas and Robert S. Kerr and Webber Falls in Oklahoma.
Calculated the plant size needed to replace the established hydropower energy generation facilities.
we annualized the capital, fixed O&M, and variable operations and maintenance costs for the energy generation decision alternatives and adjusted these values for the study year based on the time value of money
calculated direct economic impacts associated with hydropower and advanced combined cycle energy generation alternatives are multiplied by the MKARNS MRSAM multipliers to calculate total (direct, indirect, and induced) economic impacts.

11. We consider USACE Operations and Maintenance Expenditure impacts.

12. We consider Private Sector Investments impacts.
private capital expenditure data
multiplied the total private sector investment values with the water transportation capital expenditures by commodity values to calculate the direct impacts.

13. We consider Port Activities impacts.
obtained port expenditures data (USACE, 2011) which were multiplied by the commodity flow values between the study regions
We classified the commodities as either liquid bulk or dry bulk and other (USACE, 2011).
Next, we multiplied the discounted and annualized port activity costs by type of cargo per ton data (Robinson et al., 2014) with the calculated commodity flow data to measure the direct economic impacts associated with the port activities.
Finally, we utilized the MRSAM multipliers to calculate the economic impacts.

14. We consider Shippers’ Activities impacts.
utilized the cargo handling cost data for each commodity (USACE, 2011) and
multiplied these costs with their commodity flows data using the origin data to attribute these costs.
multiplied the calculated direct impacts with the MRSAM multipliers.

15. We consider transportation cost savings impacts.
obtained commodity flow data between the individual study regions by commodity (Waterborne Commerce Statistics Center, 2011)
annualized net present value of MKARNS water transportation savings data
savings/commodity value ratios for every arc between the study regions.
Last, we multiplied the savings/commodity value ratios with the MRSAM multipliers

16. We consider Recreation impacts.
recreation visitation data from the Arkansas and Oklahoma segments were obtained (
number of day and overnight visitors were estimated (
associated recreation expenditures were calculated for both day and overnight visitors to estimate the direct economic impacts.
MRSAM multipliers were used to calculate total economic impacts

17. The multiregional social accounting matrix model utilizes multipliers account for regional economic impacts of the MKARNS.
The total MKARNS economic impacts are calculated as the sum of the following activities’ impacts:
Hydropower Energy Generation (Section 4.1)
The USACE O&M Expenditures (Section 4.2)
Private Sector Investment Expenditures (Section 4.3)
Port Activities (Section 4.4)
Shippers’ Activities (Section 4.5)
Transportation Cost Savings (Section 4.6)
Recreation Benefits (Section 4.7)

18. Port Activities, Shippers’ Activities, and Transportation Cost Savings are the largest contributors to Sales impacts.  
Here we report the total direct and indirect impacts on Sales revenue if the MKARNS was no longer in operation. Sales is defined as the revenue generated by firms whose operations are affected by the MKARNS.
The total MKARNS impact on Sales is $8.525 billion nationwide. On its own, the Arkansas segment of the MKARNS nationally contributes $4.535 billion, and while the Oklahoma MKARNS segment nationally contributes $4.077 billion. The combined impact is slightly less than the two segment impacts combined due to shared freight benefits.
Examining the MKARNS Sales impact results, we observe Port Activities ($2,904 million), Shippers’ Activities ($1,775 million), and Transportation Cost Savings ($1,615 million) are the largest contributors to Sales impacts.

19. The MKARNS is responsible for more than $1
The MKARNS is responsible for more than $1.6B in Sales impacts in Arkansas alone. 
$8,525M

20. Employment impacts in US and OK are primarily due to Port Activities; Recreation is the primary employment impact factor in AR.
55,872
33,695
22,761
Employment impacts are the jobs created directly by MKARNS activities due to purchases from businesses and individuals’ local expenditures.
The total impact on Employment of the MKARNS is 55,872 jobs nationwide. On its own, the Arkansas segment of the MKARNS nationally contributes 33,695 jobs, and while the Oklahoma MKARNS segment nationally contributes 22,761 jobs. The combined impact is slightly less than the two segment impacts combined due to shared freight benefits.
The largest component of the entire MKARNS and MKARNS Oklahoma segment employment impacts are due to port activities (18,070 and 8,969 jobs respectively). The largest employment impact component of the MKARNS Arkansas segment is due to recreation (11,429 jobs).

21. A third of MKARNS employment impacts are jobs located in AR.
55,872
33,695
18,715 jobs in AR from MKARNS
Majority from MKARNS Arkansas – 18,566

22. Port Activities and Transportation Cost Savings are the largest contributors to Business Tax impacts.
$289M
$168M
$125M
We investigated the direct and indirect impacts of MKARNS operations on Business Taxes including taxes on sales, property, and production.
The total nationwide impact of the entire MKARNS operations on Business Taxes is $289 million. On its own, the Arkansas segment of the MKARNS nationally contributes $168 million, and while the Oklahoma MKARNS segment nationally contributes $125 million. The combined impact is slightly less than the two segment impacts combined due to shared freight benefits.
Examining the MKARNS Business Tax impacts, we observe Port Activities and Transportation Cost Savings are the largest contributors to Business Tax impacts.

23. The majority (54%) of business tax impacts are outside of the region; $64M in AR business taxes are generated from MKARNS operations.
$289M
$168M

24. Tax impacts of $289 million 55,872 jobs $8.5 billion in sales impacts
As much freight as 221,896 trucks
or 57,693 railcars
445 navigable miles
Tax impacts of $289 million
55,872 jobs
$8.5 billion in sales impacts
ACKNOWLEDGEMENTS
This project was funded by the Arkansas State Highway and Transportation Department through the Mack-Blackwell Transportation Center. The work was conducted in conjunction with the Arkansas Waterways Commission, Oklahoma Department of Transportation, and the University of Arkansas at Little Rock. This material is based upon work supported as a match project for the U.S. Department of Transportation under Grant Award Number DTRT13-G-UTC50.
DISCLAIMER
The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein. This document is disseminated under the sponsorship of the U.S. Department of Transportation’s University Transportation Centers Program, in the interest of information exchange. The U.S. Government assumes no liability for the contents or use thereof.