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energy

FOLLOW THE MONEY

May 16, 2014
Climate, communciations, economy, energy, engineering, Environment, finance, fracking, funding, infrastructure, management, renewable power, Revenues, Uncategorized, utilities, Water Funding
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A week ago the new National Climate Assessment came out.  It basically says things we already expected – temperatures are warmer, there will be more droughts, less rainfall, less available water, more intense storms and sea level rise.  What the study did in its 800+ pages was outline examples of climate change phenomena that are already occurring including flooded streets in coastal areas, severe weather (Colorado, New Jersey), and changes in the arctic air currents that may be affecting northeastern and Midwestern winter storm frequency.  All things that those who have been around for a while and have been even minimally observant have already noticed for themselves.  What was also not surprising was the vitriol on the internet about how this assessment was a “fascist plot” perpetrated by a variety of people to impose some yet undetermined regulations on “patriotic Americans.”  And then Senator Marco Rubio comes out this week and says he does not believe it is possible for people to cause climate change.  No facts, just belief.  In Florida.  In Miami.  Wow…

Those who live in coastal areas, earn their living in agriculture, manage water utilities relying on water supplies, and drought planners know the truth.  Denying that the climate is changing simply ignores reality and delays the ability to respond to its impacts.  I realize that those impacts might be 20 or 40 or more years out, but planning is needed because we expect our infrastructure, factories, hoses and economies to last longer than that.  Science says change is occurring.  We can argue why and how fast, but the reality is that there is change and there are many people that will confront he need to adapt to the situation sooner than later (like us the Fort Lauderdale/Miami area!).  So why deny climate change?

As we noted in a prior blog, there are several reasons, but many involved business issues.  So follow the money. Let’s start with the Koch brothers.  The Koch brothers manage Koch Industries, the second largest privately owned company in the United States revenues exceeding $100 billion/year.  Many Americans have no idea who they are but they are billionaires who have made their living in the oil business – their father Fred C. Koch developed a new the method for the refining of heavy oil into gasoline.  They rely on oil to maintain their wealth and are politically active with conservative organizations including the Heritage Foundation and the Cato Institute, FreedomWorks and Americans for Prosperity, all organizations the dismiss any impact of man on climate change.  Why?  Well one of the tenets of dealing with climate change is to reduce carbon dioxide emissions which means less reliance on fossil fuels – oil.  Whoops – that would be a problem for the Koch brothers because if they say “sure climate change is a problem,” well then that would mean that their entire business model and their wealth is a contributor to climate change, which means they are the “bad guys.”  Can’t have that.  So following the money tells you that we can’t make our money with oil and support climate change.

Let’s look at the other side.  Those acknowledging climate change are fully supportive of renewables, which in theory will help climate change by reducing carbon dioxide.  But the concept of renewables though is fraught with the problem that few of these technologies are ripe for wide-scale implementation.  For example natural gas vehicles or natural gas/hybrids are doable, but where do you buy the natural gas for the vehicle?  The technology and distribution networks is 10 or more years out at best and of course if you are in the oil business, why would you be interested in installing the natural gas fuel pumps?  So technology and need do not match when you follow the money.

How about the Keystone pipeline that would bring oil and gas from these remote areas to refineries in Texas and the Gulf of Mexico states.  You can guess the Koch brothers are in favor of the pipeline as they will benefit.  So are most oil and gas entities.  There are many environmentalists and other opposed to the pipeline because of impacts on water supplies (and other issues).  But the railroads are making money by hailing oil and gas from Canada and the Dakotas.  Guess which side the railroads are on?  The pipeline would take business away from the railroads.  Follow the money. 

Let’s look at our industry.  In the utility business, there is a lot of money with the telephone, power, cable and other utilities.  These private entities, although regulated, make huge sums of money for their investors.  You can follow that money. 

So who supports water and sewer utilities?  We do!  We supply over 85% of Americans.  But why do we have so much trouble getting funding when 85% of people would benefit.  One would think that given how many people we support, we have the money, but we are primarily not-for-profit entities, so we don’t make money for anyone.  You can’t follow that money because there is no money.  That tells us more about the difficulties we have in securing funding that anything.    

Fixing it is a little bigger challenge because our representatives and constituents do not understand the financial investment they have in our industry.  Their public health and economies are linked to water and sewer.  Our services make these other enterprises doable but there is no direct monetary connection to facilitate lobbying on our behalf.  I am not sure how to fix this, but we need a better marketing strategy for our services.  That’s one thing we know.

 

Fracking and Water – Do They Mix?

April 14, 2014
energy, engineering, fracking, Leadership, local government, management, renewable power, sustainability, Uncategorized
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Let’s start with the basic premise of this conversation – fracking is here to stay!  It doesn’t matter how many petitions you get in the mail, fracking is going to continue because the potential for gas production from fracking and the potential to fundamentally change our energy future, near or long-term, far outweighs the risk or economic and security disruptions from abandoning fracking efforts.  It looks like there is a lot of trapped gas, even if the well exponentially decay production in the first three years, although many well can be recovered by refracking.  It is an issue that residents and utilities need to accept.  The question is really how to assess the risks to water supplies from fracking and what is what can we do about it?

There are a number of immediate regulatory issues that should be pursued, none of which Vikram Rao (2010) suggests are truly deal killers.  They start with the disclosure of the fracking fluids, which for most legitimate companies that are fracking are relatively benign (and do not include diesel fuel).  Baseline and ongoing monitoring of formations above the extraction zones, and especially in water production zones is needed.  Research on water quality treatment solutions is needed because t may be impossible to completely eliminate escaping gas is needed.  Requirements to improve and verify well construction and cementing of formation is needed in all states (they are not now) and recycling frack water and brine should be pursued to avoid impacts on streams and wastewater plants, which limits the loss of water due to fracking operation and the potential for contamination of surface water bodies.  It will be important to push for these types of regulations in states like Ohio and West Virginia that need jobs and are likely places for fracking to occur, but they are also likely places where there will be political pushback that is afraid of discouraging job investments, but in reality this is unfounded.  The gas is there, so the fracking will follow. The question is will the states implement needed regulations to protect the public.

More interesting will be the ancillary issues associated with gas and wet gas.  A lot of by products come from wet gas, like polyethylene which can be used as stock for a host of plastics.  “Crakers” are chemical processing plants that are needed to separate the methane and other products.  Where will those facilities be located, is an issue.  Right now they are on the Gulf coast, which does not help the Midwest.  Do we really need to ship the gas to Louisiana for processing or do we locate facilities where the gas and byproducts are needed (in the Midwest)?  The Midwest is a prime candidate for cracker location, which will create both jobs as well as potential exports.  Also stripping the gas impurities like ethane, DEM and others needs to occur.

So what do utilities need to look at the potential impacts on their water supplies and monitor.  If the states will not make the fracking industry do it, we need to.  Finding a problem from fracking after the fact is not helpful.  We need to look at potential competition for water supplies, which is in part why recycling frack water brine is needed.  Eliminating highly salty brine from going to a treatment plant or a water supply are imperatives.  Sharing solutions to help treat some of these wastes may be useful – something we can help the industry with is treating water.

We also need to look at the processing plants.  We need to be looking at the impact of these facilities in light of water and sewer demands (and limitations). Wet gas facilities will require water as will plastics and chemical plants. Historically a lot of these facilities were in the Midwest and the research and skill sets may still be present.  How can these industries can be merged into current water/sewer scenarios without adverse impacts.  Communities will compete for these facilities, but good decisions may dictate that vying is not the best way to locate a plant. 

But there is another impact to utilities and that affects green technologies. The cost of gas is low and looks like it will remain low in the near future.  Low gas prices mean that renewable solutions like solar and wind will be less attractive, especially if federal subsidies disappear.  Wind is the largest addition to the power generation profile in the last 5 years, while many oil facilities changed to gas.  Cheap gas may frustrate efforts to create distributed power options at water and wastewater treatment plants throughout the country which can directly benefit utilities, not just where fracking occurs. So we need to be cognizant of these cost issues as well.  And you thought the fracking discussion might not affect you….