Maj. Gen. John Peabody, P.E., USA
Deputy Commanding General, Civil & Emergency Operations, HQ USACE
TME: With your experience as Commander of three USACE Divisions (Pacific Ocean, Great Lakes & Ohio River, and Mississippi Valley) what are your top goals for the USACE Civil Works Program?
PEABODY:I believe every person has an obligation to try to leave a positive legacy of improvement, in both the professional development of the full potential of our people and teams, as well as in the way the institution operates. Therefore, my over-arching goals are to build high-functioning Civil Works and Emergency Operations teams, and to improve the delivery of Civil Works and Emergency functions for the American people. Everything starts with investing in people. I intend to redouble our effort to “build the bench,” of technically competent, experienced, credentialed professionals in all of our disciplines. In addition to building a strong bench of well qualified professionals, the other trick is to understand the key challenges that confront USACE’s purposes, and then to shape actions that enable effective change and improvement.
For many years the efforts of my predecessors and many great leaders throughout USACE have clearly defined our key challenges, which in my view, boils down to one simple fact: the Corps is responsible for more missions, functions and infrastructure than the nation can properly resource with our current federal funding model. To make matters worse, much of our infrastructure is well past its design life and is deteriorating at an accelerating rate just as the nation is facing serious fiscal challenges. Many other countries are making enormous investments in infrastructure that will leave the United States at a major competitive disadvantage if we do nothing. China’s current five-year plan, for example, is to invest $32 billion USD in navigation infrastructure along the Yangtze River. This is more than three-times what the Corps invests in navigation infrastructure over a five-year period for the entire United States.
The framework we developed to address this is Civil Works Transformation (CWT), which has four major pillars: Planning Modernization, Budget Development Transformation, Infrastructure Strategy, and Methods of Delivery. CWT is a truly great foundation to organize our efforts, and we all owe a debt of thanks to my predecessor, Maj. Gen. Michael Walsh, USA (Ret.), along with our Director of Civil Works, Steven Stockton, who formulated and has aggressively championed CWT. I am currently in the “Seek to Understand” phase, discussing the impacts and effects of CWT with our senior leaders at both HQ and the field, and gathering ideas for how we might adjust some aspects to improve on it.
In general, I believe we need to apply a lifecycle approach to the transformation, energize actions and accelerate progress in moving CWT initiatives from planning to execution, focus on delivering on the commitments we make, modifying the inadequate resource model we currently apply, and focus organizational energy on improving our business processes. None of this can be done by the Corps alone—but we are blessed with strong relationships with hundreds of partners and stakeholders across the nation and in Washington who can help us in many ways. We need to continue and improve our engagement with the American people so there is a clearer understanding of the benefits of sound water resource investments, and all understand the role such investments play in addressing water resource challenges.
Congress has been engaging USACE leaders on our transformation efforts and is currently conferencing over the first Water Resources Development Act (WRDA) bill in six years. We also see leaders, including the president and vice president, talking more about our infrastructure challenges.
With regard to Emergency Operations, we have several objectives in our Campaign Plan that are designed to improve the effectiveness of our support to federal, interagency authorities, and state and local authorities during disasters. During my short eight-year tenure in the Corps we have seen multiple record flood events, most notably the 2011 great flood on the lower Mississippi River, and two massive storms, Katrina and Sandy. These events illustrated the incredible value of effective infrastructure investments. More than $230 billion in damages were prevented in the great Mississippi River flood, with the nation’s investments providing a 44-to-1 return-on-investments, and saving more than $180 billion in damages in Louisiana alone. Although well-designed infrastructure investments make the decisive difference in many disasters, we know we cannot afford to invest in all scenarios, and that disaster response will always be required.
TME: Compared to other issues facing the nation, water resources infrastructure hasn’t received much attention. It’s an old adage that “you don’t think about the water ‘til the well runs dry.” How would you correct this?
Peabody: I am not sure anybody can “correct” what I believe is human nature—to ignore serious perils until they are already upon us. We have seen this repeatedly throughout our history, whether it was the threat of war in 1941 or 2001, or the threat from a major hurricane to New Orleans, which finally hit with brutal effect in 2005. Once the most critical water resource challenges are addressed, like channeling the enormous energy of the Mississippi River watershed to sustain navigation and prevent flood damages, people tend to take for granted the infrastructure successes that the Corps built out over the last century. As a result, today the vast majority of our citizens generally believe that the natural hazards that dominated—and just as frequently destroyed—the lives of our ancestors have all been solved by the water resource infrastructure the Corps has built. This is unfortunately not the case.
As I alluded to earlier, the Mississippi River and Tributaries (MR&T) Project is really a massive multi-generational program with an astonishing 44-to-1 return on investment, preventing an amazing $630 billion in damages, the vast majority of which are accrued in one state alone: Louisiana. The vision of Gen. Edgar Jadwin, the Chief of Engineers who in 1928 proposed the MR&T Project, proved prophetic during the Great Flood of 2011, followed the very next year by a historic drought, both of which garnered intense national attention.
The natural temptation might be to "declare victory" and assume that the vision has been achieved. But the truth is that “victory” over nature’s power to destroy is never achieved, but merely ameliorated. Another even greater flood incorporating different meteorological conditions is almost certainly lurking somewhere in our future, against which we must challenge ourselves to imagine and prepare. We must also remember that we came perilously closer to catastrophic failure at multiple points along the MR&T system than is commonly realized.
The abundant natural waterways of the American interior remain the envy of the world, but the same can no longer be said for our infrastructure. Our ports and navigation locks, levees and dams, highways and bridges, railroads and tunnels—they all suffer from prolonged under-investment, deferred maintenance and a failure to upgrade and modernize capacity to keep pace with global trends. Having built out the greatest transportation infrastructure in the world, and then benefiting from its consequences for decades, we became accustomed to its enormous benefits and allowed ourselves to be lulled into assuming this advantage would always endure. While the rest of the world has forged ahead in building infrastructure capable of efficiently moving vast quantities of waterborne cargo in recent years, the United States has fallen increasingly behind due to its failure to continue its investment.
To answer the question, I think we can and must communicate and warn clearly what and where the most serious risks are to the American people’s lives and livelihoods, economic activity and prosperity, and ecological health and sustainability. I consider it an almost sacred obligation for water resource professionals in the Corps to understand and convey in detail and with clarity the value of the water resource infrastructure we are responsible to manage. To be effective, this must done in simple, clear ways that are so convincing that they compel collective national, but not necessarily federal, action that effectively addresses the most critical issues.
TME: The nation’s waterways and harbors have been USACE’s responsibility since 1824. How are they doing and what else needs to be done?
PEABODY: The short answer is that our waterways and harbors are slowly but inexorably deteriorating. We must make hard decisions about which aspects to sustain and which to terminate, and we need to explore cost-saving measures and alternative resource methods. The traditional federal investment model is unsustainable and is almost certain not to improve given the nation’s fiscal challenges.
The Mississippi and Ohio Rivers and the Illinois Waterway, the busiest avenues for commercial traffic on inland waterways, all have expansive lock systems, most of which were constructed in the early to middle part of the 20th century, with a design life of 50 years. The average age of our locks is over 60 years old; some are even beyond 100 years, and still in operation. We even have two locks in our inventory that opened in 1839. It’s a tribute to the dedication and ingenuity of our Operation and Maintenance professionals that these aged, and often deteriorated structures continue to operate, but there is a limit to how much life we can stretch with the system. Unplanned delays due to mechanical breakdowns have been on the rise since the last century, and we have experienced a number of catastrophic failures over the last decade with major impacts to navigation.
Under current policy, the cost of maintaining aging infrastructure on the Mississippi and Ohio Rivers and the Illinois Waterway for example falls to the federal government. But funding for major construction and rehabilitation projects on inland waterways is split equally between federally appropriated funds and funds from the Inland Waterways Trust Fund (IWTF), which currently secures revenue through a 20-cent/gal tax on commercial barge operators’ fuel. The tax rate has remained the same since the mid-1990s, and the fund’s assets began declining in 2002 and fell rapidly starting in 2005 as vessels became more fuel efficient while expenses increased as the system aged. Moreover, some projects exceeded their budgets, further straining the trust fund.
It is hard for older infrastructure to accommodate modern barges. This often causes longer passage times, which could contribute to increased transportation costs for goods. According to the American Society of Civil Engineers, costs attributed to delays reached $33 billion in 2010 and are projected to reach $49 billion by 2020. Road and rail provide alternative transportation modes, but road and rail freight traffic is projected to continue to accelerate. Since a single 15 barge tow is equivalent to roughly 1,000 trucks—or more than 200 rail cars—shifting traffic from rivers to road or rail will increase congestion on these transportation routes. Waterways remain the least expensive mode of long-distance transport for freight, with operating costs of roughly 2 cents/T-mi compared to under 4 cents/T-mi per ton-mile for rail and slightly less than 18 cents/T-mi for trucks. This increased cost likely will be passed on to the consumer, and since a significant portion of the freight traveling on waterways is destined for export, this could affect global commodity prices, especially for staple agriculture products like corn and soybeans.
Port and harbor maintenance also is funded through the Harbor Maintenance Trust Fund (HMTF), which receives money from a tax on imports and domestically traded goods. Unlike IWTF, HMTF has a surplus and funds are used for port maintenance, such as dredging to maintain port depths, and not for new construction. These challenges drive our Investment Strategy element of CWT. They are great examples of the compelling need for a true lifecycle approach to infrastructure management.
TME: USACE Institute for Water Resources (IWR) recently published the report, “Potential and Implementation of Alternative Funding and Finance of the USACE Civil Works Mission.” Does this report chart a path forward to address the gap between requirements and funding and if so, will Congress be receptive to legislation required to implement it?
PEABODY: USACE’s current federal budget resourcing method is unsustainable over the long term, so we have to make changes. In the words of former Army Chief of Staff Gen. George Casey, we must “reduce requirements and eliminate redundancies.” The Corps must challenge its assumptions and ways of operating, and ensure we are optimizing our resources within our authorities. But simultaneously, we must explore alternative resourcing methodologies outside the traditional funding model.
We are working on two primary areas: financing with existing authorities, and financing with new authorities. We have performed an initial assessment of 300 projects where such approaches could be used. We plan to identify projects that would provide best value and also develop strategies to quickly achieve completed agreements for contributed funds options.
As part of the Infrastructure Investment Strategy, we crafted a WRDA proposal to establish a Special Experimental Program (SEP) authority for Water Resource projects (case studies) to explore financing pilot projects that require additional authority. Variants of this proposal were included in the Senate and House versions of WRDA. This would be very similar to the authority that has been effective in accomplishing surface transportation projects with public-private partnership deals. Our strategy also includes developing case studies to demonstrate how a Water Resources SEP would enable alternative financing to support discussions with the Office of Management and Budget. For pilot projects requiring enabling SEP authority, we anticipate a WRDA authorization in FY2014 and initiation of pilot projects in FY2015.
Other alternative funding mechanisms we are assessing include contributed, advanced and accelerated funds for various purposes and activities; customer contributions for hydropower; administrative fees for permit processing; real estate land use agreements whereby other federal or non-federal agencies agree to construct and/or manage project assets such as the Challenge Partnership Program that relates to the management of environmental resources and recreational sites; and related types of “outgrant” agreements, leases, easements, licenses and permits. Our goal is to have contributed funds pilots across USACE, using already approved agreements as a guide in developing draft model agreements that can be implemented nationally.
TME: With the recent revision of the Principles and Standards (P&S) for Water Resources Projects, how is USACE faring in recommending and having environmental projects authorized and funded?
PEABODY:Let me caveat that by pointing out that legislation was passed in 2012 with a prohibition that directs USACE against working on the new P&S. The FY2013 Continuing Resolution also contains this prohibition. Therefore, we are still required to follow the 1983 Principles & Guidelines (P&G), which emphasize National Economic Development in evaluating potential water resources work. Projects and studies continue to be funded based on these P&G and our Environmental Operating Principles.
That being said, the new P&S would enable us to respond to the ethos that the country has embraced over the past 40 years by promoting ecological and social benefits to an equal standing with economic benefits. In the end, humans cannot control nature; but we can influence how it evolves, and more importantly, how we adjust. I saw this firsthand on the Louisiana Gulf Coast. The Corps is closely collaborating with a host of partners, especially the State of Louisiana, to advance scientific understanding to a point where we might be able to effectively address some aspects of coastal subsidence. Louisiana’s coastline represents one of the world’s great estuaries, an enormous fishing industry, and is America’s energy coast for gas and oil productivity as well as a transshipment point for energy products to move inland along the Mississippi. So Louisiana’s coast provides enormous benefits the new P&S would recognize and allow us to work on to address impacts to all interests that benefit from the Mississippi River, whether influenced by navigation, flooding, fisheries, property rights, land or industrial development, environmental factors, or other considerations.
TME: CWT calls for a 3x3x3 approach. Yet after Katrina, USACE promoted “system-wide or river basin planning,” which requires a more comprehensive approach. How will USACE reconcile the two approaches?
PEABODY: The time it takes to move Civil Works projects from conception to completion has been a major challenge for decades. We are serious about improving our delivery process and condensing the time it takes to complete studies by transforming our study process and culture. The “3x3x3” rule is an effort to fix timeliness and responsiveness, and in the process to let project sponsors know what they are signing on to when they sign a study cost sharing agreement with us. But this is only one aspect of Planning Transformation. USACE must modernize its study management processes to remain a relevant provider of solutions to address the nation’s water resources challenges. We are committed to “3x3x3,” even applying it where we can to “legacy studies,” some of which have been going on for a decade or more at a cost of $40-plus million. This effort is so popular that both chambers of Congress have provisions that address planning transformation in their WRDA bills.
However, it is essential to recognize that not everything can be constrained by the “3x3x3” template. We should think of it as the general rule, but, for certain large and complex problems, one that can be applied with some flexibility.
The reality is that some of our study authorities involve exceedingly complex watershed and other multi-purpose studies that may require time and funds to complete beyond the three years and $3 million under the rule. These, though, are generally the exception rather than the norm.
For most study purposes, a well-conceived project scope that includes clear risk analysis and a streamlined process for complex watersheds can be accomplished within the “3x3x3” rule. To achieve this, we must continue to instill a disciplined culture change to develop and recommend investments that are timely, cost effective and provide the highest rate of return for this nation. I hope to fully implement planning transformation, and deliver even more studies for investment consideration in the future under planning modernization.
TME: How do you see SAME supporting the Civil Works mission in the future?
PEABODY: In my first assignment as a platoon leader in the 518th Engineer Company in Panama, during my in-processing interview with my company commander, Maj. Fritz, he congratulated me for “volunteering” to be the SAME Panama Post Treasurer. I learned a lot about civic organizations in general and SAME in particular from that experience, and was gratified to assume the role of Regional Vice President from our current SAME President, Gary Engle, in Hawaii in 2007.
The bedrock of the Corps’ ability to accomplish its missions and provide benefits for the nation is its engineering expertise and its ability to build partnerships and working relationships. The commercial architect-engineer community carries out the majority of our design work. The construction contracting community does practically all of our construction. In recent years, USACE has moved increasingly toward design-build, furthering our reliance on industry. By enabling interaction between the Corps and industry, SAME has performed a tremendous service by fostering that spirit of partnership.
SAME also serves as a forum for professionals to share ideas, hone their expertise, and improve how and what we deliver for the nation. The thoughtful, candid deliberations on a host of challenging issues brought up at SAME gatherings have helped ensure we always made the best possible decisions with the information available to carry out our legal and ethical obligations—doing the right things for the right reasons at all times. As Ronald Reagan remarked in one of his last public speeches at the Citadel in 1992, the relentless application of the principles of duty, honor, integrity, discipline, and self-sacrifice, in the end, makes the decisive difference in life.
TME: Looking back at your recently completed command in the Mississippi Valley Division, to what would you point with the most pride?
PEABODY:Well, really everything is done as a team, and those of us lucky enough to be leaders are just temporary stewards of the organizations we lead. So I am most proud of the teamwork with a host of partners. It was a special privilege to serve with the Mississippi River Commission for five years, culminating as the President of the Commission for two. I was a part of all of the Commission’s work, including a large number of recommendations and Statements during that time.
Our partnerships with other federal agencies like the Fish and Wildlife Service, National Oceanic and Atmospheric Administration, Environmental Protection Agency, state and local authorities, and a large host of non-governmental organizations (NGOs) enhances the Corps ability to properly understand complex issues and apply scientifically-based solutions to complex challenges.
Certainly the flood of 2011 and drought of 2012 were two such challenges. We pulled together as a team with the backing of the entire Corps and our stakeholders. Advancing the Hurricane Storm Damage Risk Reduction System (HSDRRS) in greater New Orleans was a great success, and one that has several components still on-going. Out of the destruction of the never-finished Hurricane Protection System wreaked by Hurricane Katrina in 2005, the Corps deliberately examined, studiously learned and carefully applied all lessons to deliver HSDRRS. Exactly seven years to the day following Hurricane Katrina, Hurricane Isaac tested HSDRRS, with dramatically successful results. That the Corps could deliver on time and in less than seven years what we could not in over 40 years is a testament to the USACE's design, program management and construction prowess when fully funded up front, and enabled by alternative environmental arrangements, as well as the intense scientific and sociological inquiry into Hurricane Katrina impacts and decision-making.
But it is the longer-term challenges to develop those scientifically-based solutions to complex issues that I think are the most important. While they garner less press attention, they matter the most in the long run. Gen. Jadwin’s vision for the Mississippi River is a great example of this. It took 85 years, $14 billion in investment, intensive studies and modifications over generations, but in 2011 the greatest flood in the recorded history of the Mississippi River bore out the prophetic wisdom of his vision. Similarly, today the challenge of developing sustainable solutions to Louisiana’s Gulf Coast land loss is a major challenge. USACE’s Hydrodynamic and Delta Management Studies are essential elements to develop the understanding of the complex variables of the river’s sediment budget and hydrodynamics so that we can harness its energy to help address this issue is one of the challenges of our age.
It is my hope that many efforts with the state of Louisiana, our federal partners, various academic entities and NGOs have helped develop a foundation that will enable us to advance these studies to develop an effective vision some day.
TME: What would you like to see achieved by the end of your tenure?
PEABODY: Balanced and sustainable Civil Works and Emergency Operations systems and programs is what we must achieve. We must apply a lifecycle approach to the transformation; energize actions and accelerate progress in moving CWT initiatives from planning to execution; focus on delivering on the commitments we make; modify the inadequate resource model we currently apply; and focus organizational energy on improving our business processes.
My challenge is to figure out how to develop those ideas into actions. I have a lot of faith we can craft solutions that ensure our water resources infrastructure meets the growing needs of industry, communities and the public, and prepares us for uncertain demands in the future.
[article first published in the January-February 2014 issue of TME]
Maj. Gen. John Peabody, P.E., USA, became the Deputy Commanding General for Civil and Emergency Operations, HQ USACE, in October 2013. He previously served as Commander of three USACE Divisions—Pacific Ocean, Great Lakes & Ohio River, and most recently, Mississippi Valley. Gen. Peabody also served five years on the Mississippi River Commission, culminating as its 36th President. Gen. Peabody is a 1980 graduate of the U.S. Military Academy and holds master’s degrees in Strategic Studies from the Army War College and in Public Administration from Harvard University.