Water ControlFederal Markets Session 2014 ACEC Annual Convention

Water Control-Federal Markets Session 2014 ACEC Annual Convention, Washington, DC April 29, 2014 BUILDING STRONG® 1

Agenda 1. The Nature Conservancy Overview 2. Strategic Situation 3. TNC’s Water Infrastructure Priority 4. America’s Watershed Initiative ► America’s Watershed Report Card 5. Communities of Practice 6. Questions and Discussion BUILDING STRONG 2 ® 2

The Nature Conservancy (TNC) and TNC is the largest water NGO in the world • $50 Million+ of water rights transactions • $2 Billion mobilized for source water protection • Over 38, 000 square miles of blue conservation • 400+ staff focused on freshwater…

A scarce resource… BUILDING STRONG® 4

What does the World Economic Forum say is the highest global risk in terms of both impact and likelihood? Not nuclear war… Not cyber attacks… Not major financial collapse… But WATER CRISIS! BUILDING STRONG® 5

Drought Burns Livestock Industry Disaster Declared in 26 States as Drought Sears in U. S. Iowa crop losses soar past $1 billion Drought pushes Mississippi river water levels to historic low Worst drought in decades could affect U. S. energy markets U. S. Drought Persisting Seen BUILDING STRONG® as Threat to Corn, Soybeans 6 6

How the world solves its problems today… Global annual expenditure water, 2010 Total ~$ 500 billion 1 500 bn Operating expenditures, ~$300 billion Capital expenditures, ~$200 billion Source: EDA, University of Wisconsin, Milwaukee • Water Resources Infrastructure, $20 billion • Desalination, $15 billion • Drinking Water, $60 billion • Waste Water, $80 billion • Industrial, $15 billion

Global Infrastructure Investment as Percentage of GDP 8. 5 3. 9 3. 6 3. 3 2. 6 1. 8 In di nd a id us dl tri e al Ea iz Ea ed s ta st er nd n Af Eu ric ro a pe /E Eu ur as ro ia pe an U ni U on ni te d St at La es tin Am er ic a 4. 7 M O th e r. I Ja pa C hi n 5 na 9 8 7 6 5 4 3 2 1 0 Source: Mc. Kinsey Global Institute/Mc. Kinsey Infrastructure Practice, January 2013 BUILDING STRONG® 8

Total Public Spending on Infrastructure (1956 -2007, in 2009 Dollars) O&M Spending Capital Spending Total Capital Total Operations and Maintenance (O&M) Water Resources Capital Spending Water Resources O&M Spending 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 ($B) 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 Source: CBO Study, “Public Spending on Transportation and Water Infrastructure”, November 2010 Water Transportation & Resources Capital Water Transportation & Resources O&M

USACE Program Trends FY 01 -16 Program (Budget Authority) ($M) 60, 000 FY 08 49, 331 50, 000 44, 311 12, 092 Total USACE 40, 504 40, 000 36, 432 8, 510 FY 03 8, 440 32, 795 9, 899 31, 731 9, 452 27, 991 8, 447 26, 940 8, 320 23, 905 22, 279 19, 158 19, 384 30, 319 31, 948 9, 390 30, 817 27, 999 26, 736 8, 433 22, 896 FY 15 8, 028 24, 648 22, 291 22, 558 20, 771 6, 928 18, 725 18, 620 Military 15, 458 17, 720 23, 047 6, 860 30, 000 6, 821 20, 291 20, 000 16, 187 13, 470 10, 648 10, 944 Civil 10, 000 0 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Fiscal Year FY 13 Constant $ (Apr 13) Military = MILCON, RDT&E, Reimb, OCO, ARRA Civil = Direct+Reimb, FY 05 -13 Incl Supplemental

USACE Civil Works Backlog [Construction] Billions $70 $60 $50 $40 $30 $20 $10 $0 $60 B Backlog Projects by Business Line Shore Environmental Protection, 10% Infrastructure, 5% $1. 5 B Construction Funds (annual) Environmental USACE Backlog 20% Flood Damage Reduction, 35% Navigation Ports, 20% Navigation Inland, 5%

USACE Operations & Maintenance Backlog ?

The Future • Desired End State: Nation has resilient, reliable and sustainable infrastructure that assures our national and economic security. • Transparency, Communication and Shared Responsibility are keys to ensuring that we can meet the Nation’s infrastructure challenges. BUILDING STRONG®

Partnering to advance our Water Infrastructure Priority Nation’s Waterways Strategies • Shape Policy (e. g. , WRDA) • [Help] tell the [USACE] Story • Build the Partnership (e. g. , AWI) • Demonstrate Success • Help [USACE] transform the Civil Works process (by 2020)partner with stake • Continue. Outcomes to [help USACE] 1. Systems Approach to Watershed Management and Budgeting • Double the National investment in Water Resources Infrastructure (to $10 holders, industry and beneficiaries of the systems bil/year) • Develop alternative financing strategies to attract $100 mil in private capital • [Help] Facilitate a Watershed approach 2. Existing USACE Water Resources Infrastructure optimized as • Help the multipurpose projects, to include environmental benefits Nation prioritize efforts and projects (Target: 50%) 3. New Federal investments in Water Resources Infrastructure incorporate natural infrastructure components (Target: 80%) 4. Transparent Facility Management/Asset Management BUILDING approach STRONG® to managing national water infrastructure 14

Water Infrastructure Priority Focus on a National Scale §Initial Steps: 1. Determine where the Federal investment is actually going by watershed (2 and 4 digit HUC) 2. Categorize by Business Line (e. g. , Navigation, Flood and Coastal Storm Damage Reduction, Environmental Protection and Restoration, Hydropower, Recreation, Water Supply) and type of funding (Planning, Construction and O&M) 3. Analyze the actual funding level vs. requirements 4. Develop findings and draw conclusions 5. Inform National dialogue 6. Make policy recommendations or suggestions BUILDING STRONG 15 ® 15

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Hydrologic Unit Codes (HUCs) What is a Watershed? Name Level Digits Average Size # of HUCs Example Name (Square Miles) (Approx) Region 1 2 177, 560 21 Upper Miss Riv Subregion 2 4 16, 800 222 Illinois River Basin 3 6 10, 596 370 Mackinaw Subbasin 4 8 700 2, 200 Mackinaw Watershed 5 10 227 (40 -250 K acres) 22, 000 Upper Mackinaw Subwatershed 6 12 40 (10 -40 K acres) 160, 000 Bray Creek BUILDING STRONG® Federal budget focus is above the line 17

Agenda BUILDING STRONG® 18

Environment Recreation Navigation Energy & Industry Water. Supply Water Agriculture Flood Protection Diverse Sectors Water Resource Region Report Cards (Relationship to the ASCE Report Card? ) BUILDING STRONG® 19

TNC Operational Foundation Build an Enduring Capability and Influence NAFW Community of Practice (Co. P) North America Team Demonstration Projects Thru Co. Ps Local Project Delivery Teams Outcomes Shapes Policy 1/21/2014 Influences When Reinforces Navigation Aquatic Ecosystems Water Mgmt & Control Multi-Purpose Reservoirs Stream Connectivity Hydropower Governance Water Supply? National/Global Water Quality? Replicated At Scale Multi-State Watersheds Co. P – Community of Practice BUILDING STRONG® 20

Questions & Discussion BUILDING STRONG 21 ® 21