News

FOR IMMEDIATE RELEASE

February 16, 2006

New Economic Impact Study Estimates Cost of Personal Watercraft Bans in the National Parks Reaches $2.7 Billion Over the Past Nine Years

As Repeated Scientific Analyses and Rulemakings Reverse PWC Bans, Small Businesses Have Suffered and 3,300+ U.S. Jobs Have Been Lost; Manufacturers Call For Delayed Parks to Stall No Longer

Contact:
Brian Berry, 202-777-3524 or bberry@clsdc.com
Kelly Alderson, 202-777-3542

Analysis of the Economic Impact of the Ban on Use of Personal Watercraft by the National Park Service [PDF]

Miami, FL—A new economic impact study was released today that estimates the total cost to the U.S. economy of personal watercraft (PWC) bans in National Parks has reached an alarming $2.7 billion over the past nine years. This figure includes both the total direct costs to the PWC industry of the bans and also the upstream and downstream costs incurred by all the suppliers and industries that depend on boaters. Fortunately PWC sales are once again climbing since the steep decline in sales in the mid 1990s when rumors began to spread about the possibility of a ban in the national parks. Today, however, some parks still remain needlessly closed and those that have reopened languished for too many years as small businesses suffered and jobs were lost.

This new study, released at a press conference today in Miami, Florida, was conducted by economist Laura Baughman of The Trade Partnership. According to Baughman’s study, personal watercraft bans, and negative publicity associated with the bans, caused sales to plummet since 1995, which in turn has adversely impacted U.S. producers and distributors of PWC, their suppliers, retailers and other businesses that service PWC and their users. The direct cost to the PWC industry totals $1.3 billion over the last nine years, but this number paints only part of the picture. A comprehensive picture of the total economic hit to the U.S. economy must include not only all those industries involved in production, but also those related to utilization of the vessel.

“Personal watercraft bans have cost the U.S. economy approximately $2.7 billion over the past nine years. This economic loss is widespread due to the many sectors of the U.S. economy that support the production of PWC and the tourism industry that supplies boaters,” said Baughman.

In addition to those costs already incurred by the U.S. economy, the study estimates that if the bans are not lifted, future cost to the U.S. economy will continue at a pace of more than $567 million a year. And needless to say, this ongoing economic cost will stifle employment as well. The study reports the employment cost of the bans and the negative publicity around them averages about 3,300 direct and indirect jobs lost across the United States.

“Personal watercraft bans are restraining economic activity on several levels. The lifting of these bans would generate billions of dollars for the U.S. economy and thousands of jobs for Americans,” said Baughman.

The study calculated the economic impact of the PWC bans by using the most recent detailed national input-output (I/O) table published by the Bureau of Economic Analysis (BEA). I/O tables show the level of economic output across the spectrum of U.S. industries associated with given levels of sales – or lost sales – from a particular economic sector. From a benchmark estimated to be the level of sales in 1995, the annual losses of PWC sales experienced from 1995-2004 were calculated, and the resulting annual impacts determined from the I/O table. A similar approached was followed to estimate the related employment effects, using a comparable Bureau of Labor Statistics (BLS) tool for employment analysis.

This new economic impact study comes at a time when the original basis of the bans in the national parks is being heavily scrutinized by manufacturers, small businesses, and the U.S. Congress. A lawsuit brought by an anti-boating group in the late 1990s led to the national parks banning PWC use based on alleged negative environmental impact. These alleged impacts could be challenged on a park-by-park basis through a lengthy process by which PWC technology would be scientifically tested to determine the impact they do or do not have on the local environment, followed by a formal rulemaking. This federally required process is costly to taxpayers and has wasted a lot of time. Since the proposed ban was initiated via a final rule in 2000, 15 national park units have conducted the requisite environmental assessment study and each and every one has come to the same conclusion; PWC present no unique impact and should not be banned on waters that allow other types of motorized boating. Of the 15 park units that have completed the environmental assessment, ten have completed the subsequent rulemaking and all ten of these units have restored PWC use. While the reopening of these parks was welcome news to millions of PWC users, it came in almost every case too late and after a ban had already been enacted.

The final rule in 2000 established a two-year grace period for parks to complete the review and rulemaking after which PWC use would be prohibited in 2002. Although a couple of parks came close, no park completed the process during this grace period. In fact, the U.S. Congress even considered legislation to extend the grace period. Twenty-one park units were identified in the final rule as parks frequented by boaters that could conduct the review to prevent a ban from being enacted. Every other park unit system-wide would prohibit PWC use unless the local superintendent decided independently to conduct the review and rulemaking.

“Few parks completed the review process even a year or two after the ban went into effect,” stated Maureen Healey, Executive Director of the Personal Watercraft Industry Association. “Every environmental assessment to date shows that these bans are baseless yet the National Park Service continues to drag its feet at the expense of small businesses and American jobs. These bans have cost nearly $3 billion and thousands of Americans their livelihood.”

PWC have evolved remarkably since the mid 1990s. “They are among the most environmentally friendly boats on the water,” said Healey. Technology enhancements have made modern PWC up to 90% cleaner and 70% quieter. The vast majority sold today are equipped with four-stroke engines, universally recognized as one of the cleanest engine types. All PWC sold today comply with all applicable state and federal sound and emissions standards. In fact, most models met the EPA’s 2006 requirements years ahead of schedule. According to the National Marine Manufactures Association, there were approximately 1.5 million registered PWC in the United States in 2005.

The U.S. Congress has also grown tired of the delays within the National Park Service to get these rulemakings complete. In May 2005, the House of Representatives Resources Subcommittee on National Parks held an oversight hearing to encourage the National Park Service to expedite the delayed rulemakings, some of which are now five years overdue. A similar hearing is expected this spring.

“I doubt the National Park Service will be quick to dismiss a Congressional inquiry,” Healey continued. “We are only trying to do what is right by the millions of Americans who invested in a personal watercraft as their family boat. The technology should have never been banned in the first place.”

The parks that remain closed are Big Thicket National Reserve (TX), Cape Lookout National Seashore (NC), Curecanti National Recreation Area (CO), Gateway National Recreation Area (NY/NJ), Gulf Islands National Seashore (FL/MS), and Padre Island National Seashore (TX). A timeline illustrating the delays in the review and rulemaking processes in all applicable parks is available at www.pwia.org or upon request.

The economic impact study was conducted by The Trade Partnership, an economic research firm based in Washington, DC. Laura Baughman, President of The Trade Partnership, is an economist who specializes in estimating the economic impacts on the United States of U.S. policies and regulations. She has testified about her research before Congress and various agencies of the federal government. This study was supported by the Personal Watercraft Industry Association (PWIA). PWIA represents the four manufacturers of personal watercraft. PWIA advocates for responsible regulations and fair judgment as to whether or not PWC should be allowed back into U.S. National Parks. Model legislation and other information on personal watercraft can be viewed at www.pwia.org.