Summer vacation is over down here in sunny, hot south Florida. School has started. Yet two weeks ago I was in Colorado, waking up to moose and 27 degrees. Ice on my windshield. How time flies. SO we are off on a new semester, with lots of classes and lots of hope for the future. Good luck to everyone! Back to blogging shortly as I have 3 books I am trying desperately to finish and one new class to finish notes for.
Musing – Sierra magazine reported that 90 companies are responsible for 72 percent of the greenhouse gas emissions in the world,. Among the top 10 are Chevron, ExxonMobil, BP, Shell and ConocoPhillips (1,2, 4, 6 and 9 respectively).
So what does this mean for water and sewer utilities. First, we’d love to stay out of the fray. Water and sewer utilities recognize that they are the “peak” power supply for electric utilities. The means to expand power supplies is made difficult by the rules for capital recovery for power utilities that penalizes peak and redundant power supply construction. It must be used and useful to qualify for a return. Hence NextEra builds inexpensive, small increment renewable wind systems to be made whole and encourages residents to reduce demands so they do not need to build more large scale capacity. That works as long as access to renewables or increases in efficiency are available. The use of federal subsidies encourages the used of new technology but without the subsidies, expect the construction to slow.
The European Union is looking to phase out renewable power subsidies by 2017, which may have fairly significant consequences for the European renewable market. The Koch brothers and the Tea Party operatives they fund through many organizations like the Institute for Energy Research, Americans for Prosperity and the Heritage Foundation, are fighting federal tax credits for wind, while backing tax credits for oil and gas. Why do the Koch brothers keep showing up? Because as we noted in a prior blog – they stand to lose profits if the US depends less on oil and gas IT si a problem with big money interests using that money for self preservation as opposed to progression of technology and ideas.
Think what would have happened 100 years ago if big money was allowed to control progress. And I have just the perfect scenario pitting two sides of my family. My mother’s great uncle made Concord coaches. As long as horse drawn carriages and coaches were the primary transportation options, they made money. OF course many cities and towns found that they spend much of their tax money cleaning up after the horses, one of the all-time yuckiest jobs. Tons of horse poop was cleaned up nightly on the streets on many cities. Images are available on line. Of course there was also the stench, disease, vectors, etc associated with all that poop.
Then came Henry Ford. My Dad’s side of the family were Detroiters. They got jobs in the Ford factories, and made money from services to autoworkers as well. The cities loved having cars – less poop. In fact Henry’s cars worked so well, that very quickly cities didn’t have to pick up poop. And the stench and disease decreased. Of course back then, my mothers’ family did not have the same means to buy influence to prevent Henry Ford from producing cars. My uncle went broke, but America and my father’s family in Detroit, benefitted greatly as a result of the new technology. I think we all benefitted from the automobile. Thankfully the coachmakers didn’t have money.
Using politics and influence to resist new technology seems unAmerican. Using subsidies to encourage is seems far more beneficial to society as long as those subsidies actually benefit society. Subsidies have long been a means for governments to alter consumer and corporate behavior and encourage new technologies. Subsidies for recycling steel, aluminum, glass, paper and other materials remained in place until the technology was cost effective to compete with new materials. Now recovered steel is cheaper than new steel materials. The subsidies had their effect. The same is true with aluminum and glass. Subsidies in the form of grants encouraged water and sewer utilities to upgrade treatment and install pipes to serve new customers. Now those are low interest loans because most of the cost effective connections have been made. It benefitted society.
Subsides have been used for years in the US and Europe to encourage renewable power use. The result is a reduction in renewable costs as more people invested in the technology. Greater supply means lower costs (economy of scale, and, theory of economic supply and demand), and subsides are designed to reduce purchase prices sooner than the market might otherwise. Otherwise most of these industries never get off the ground because they cannot get to cost effective production levels. Stay tuned.
Water limitations are a problem in many areas of the US and the world. Without water, the efficiency of power plants diminishes as the folks in Washington and California have found out when converting to air cooling their facilities. Losses can be 30% of output which makes that investment in upgrading to 40% efficiency, drop back to 30. Not a good investment, unless you have no option. In water limited places in the world, cooling water will limit the ability to use water-intensive coal, nuclear and oil facilities.
Nuclear power has been argued as a green option, but it is green only with respect to carbon production. Nuclear needs copious amount of water to cool the reactor. An while it remains an ongoing option, many are wary after the Japanese experience. There are 6 licenses in the US for nuclear facilities that expire by 2020, and 27 more by 2030. That means over a third of facilities are at their useful life. Creating second generation nuclear plants is a major, challenge at a financial and political level. For the most part China, Russia and India are leading the way with the US a distant 5th in proposed next generation reactors. We just don’t see a lot of nuclear reactors on the US horizon. Why? Renewable and gas.
The power generation picture has changed significantly in 10 years with respect to large increases in wind and gas. Renewables have increased from 2.4 to 6.5% of the market in 10 years (to 266 TWh). Wind has been the largest growth area (to 167 TWh) despite ongoing environmental issues associated with migratory birds, minimum wind speeds, and lobbying against wind projects (like Bill Koch did in Cape Cod) or the tax incentives used for renewables (like the Koch brothers continue to do along with Tea Party members in Texas). Wind energy costs have dropped by 40% in 10 years and today the majority of wind energy components are built in the US as opposed to overseas. The subsidies have made this possible by limited private capital risk. Nolan County, Texas alone produced more wind than the state of California, despite the ongoing lobbying against it in Texas. Texas has the largest “wind” reserves in the US and many in the public see the need to take advantage of the high wind areas like Texas ($25 billion to date, $13 billion proposed), the Rocky Mountains and coastal areas that do not conflict with migratory birds routes, landscape views or property rights issues. The Blackfeet Nation in Montana has long known that wind is a valuable resource on the reservation. Overall the state of Montana has the second largest wind potential behind Texas. But like Texas there is conflict – in Montana from the fracking industry. Note that the upper Rocky Mountains is where NextEra installs many of its wind fields. California has also gotten into the wind market with projects proposed in the Mojave Desert, although eagle conflicts impact those permits. However, uncertainty about the ongoing tax break , caused by inaction in the House, caused new wind projects to drop 92%, with a loss of 30,000 jobs in one year which creates questions about wind power expansion in the near future.
At the smaller level, combined heat and power (CHP) generation is located at 4200 commercial and industrial facilities today. States are interested. The demand is expected to rise to 40 GW by 2020. Solar markets are often local. Some communities provide incentives for residents to put panels on the roofs. Germany did this and now 25% of their power comes from these solar projects. 2% of houses in Arizona have solar on their roofs. In Hawaii, solar power is half the cost of generated power. However local solar has run into the same issue as wind power – this time the Koch brothers-funded American Legislative Exchange Council has encouraged local power utilities in 21 states to challenge laws that permit solar installations of houses as reducing profitability of power investments by those utilities. Others, like FPL still fund such installations creating and interesting conflict in the market.
Gas has replaced coal as the dominant source, both because of less greenhouse gases and because of much higher efficiency in source-power ratios. California, Texas, Florida and New York, among the four largest power demanding states, have seen natural gas use increase significantly in the past 20 years, virtually all at the expense of coal. Fracking has been the primary reason for the expansion of gas. High quality gas can be recovered from areas through horizontal drilling, but only 3-5% of the gas in the foundation is actually removed from the initial frack. Then the returns diminish to about 10-15% of initial withdrawal within 1-3 years, and refracking must occur to increase production. 100% of the gas is unlikely to ever be achievable. Still gas reserves are likely to be producers for some time, although industry experts expect the peak of current fracking technology in 2025, much sooner than some would hope. Despite there being over 2.4 million miles of gas pipelines in the US, the biggest issue with frack gas is pipeline absence in the big fields in Pennsylvania, Ohio and North Dakota. Refineries are starting to crop up in the Midwest and Pennsylvania to address the gas needs – which may reduce the need for longer pipelines and reduce loss (currently 6%).
Fracking is also a boon to the oil industry and the ability to recovery oil from tar sands in Alberta has increased the potential supply. Like gas, the problem is pipelines, but the lack of pipelines is a boon to the railroad industry, particularly in the Bakken Fields in North Dakota where abundant rail is available via BNSF (hence Warren Buffett bought it). Tank car demands are up to meet the 400,000 tank car loads of crude oil transported in 2013. Demands are expected to climb as new generation tank cars are built to minimize risks of hauling crude oil and coal tar sand products. Tight oil recovery is expected to rise through 2019, while a slow decrease is expected thereafter based on current technology. But note the lack of pipelines create a problem in getting the gas from North Dakota to useful markets. It is estimated that $1 billion per year in gas is flared in the Bakken fields alone. Pipelines and rail are needed, but both are controversial
The pipeline solution is varied and many. North American Oil and Gas Pipelines magazine sees a high investment in pipelines by 2020, with decreasing investments through 2035 as gas recovery drops. XL pipeline has dominated smaller pipeline projects designed to bring tar sands oil to refineries in Texas and Louisiana, but there are other spurs and different pipes are planned for different purposes. The obstacles are many – political, environmental, economic through a host of forces that either benefit directly from the pipelines or that benefit from not having the pipelines (think railroads). Of course a couple of recent rail accidents have created more controversy there, but rail is the current solution for many of these remote fields.
I thought I would post an amusing, but thought-provoking blog today. In a recent class of mine we started talking about sentinel species and surrogate contaminants as a means to track public health impacts, or the potential for same, in people. The discussion got into the commonality of wolves, sharks, alligators and snail kites as role players for ecosystem health. In each case the top predator control the other species. The most obvious example is wolves. When returned to Yellowstone National park, the beavers returned. AS opposed to hunting the beavers to extermination, it appears that the lack of predators cause the elk to feed closer to streams, thereby depriving the beavers of the aspens needed for beaver dames. And thus the wetland ponds virtually disappeared as well. A recent Sun Sentinel article noted that the Fish and Wildlife Service has shot an amazing 75,000 coyotes in the US last year! Biologists noted that the coyote has expended into areas that wolves used to inhabit (including Alaska!). They did it because there are no wolves – the wolves did not tolerate that competition. Without the wolves, there is not stopping them or their associated destruction of small animals. We see hardhead catfish, a scourge of coastal fishermen, abundance now that baby shark populations have diminished. The sharks consume the same stuff the catfish to, then move on. The catfish, not so much and OW!!! We change the top predator and the system changes, often irreversibly. Which raises the question about the deadliest predator -us. We’ve moved in everywhere we wanted after eliminating the competition. The question is: Are we wolves, or hardhead catfish?
We are all cognizant of the low grades on infrastructure given annually by ASCE and periodically by USEPA. We spend about 1.8% of our GNP on infrastructure. We used to spend twice that much and it is likely that we need to spend upwards of 2.4% to stay even. Much or our infrastructure is “forgotten” because it is buried. American Water Works Association published a book to highlight his problem – Buried No Longer. But is it helping. In a recent Roads & Bridges article, they noted that the bridge system continues to age faster than the repair rate. The states with more than 15% deficient bridges are mostly Great Plains states, and the northeast. The latter is no surprise because the infrastructure is generally much older in the northeast. What was also interesting was that in a recent American City and County magazine, many of the states that have bridge issues, also have below average trust among the public. And most of the areas with the bridge issues are rural states, like North Dakota and West Virginia. This harkens back to a prior couple blogs when it was noted that poorer, less educated people tend to live rural lifestyles, and lobby for less taxes, yet expect government to be there to resolve crises. Interesting….
Are finance and budget personnel gate-keepers or operations support staff? The answer make a great difference to your operation. Gate keepers slow the process by creating barriers to overcome (think Dilbert). Support staff means they readily acquire the necessary resources to insure smooth operation (not Dilbert). Which do you have?
In the last blog we discussed 10 planning steps for sea level rises. When planning 50-100 years other factors can come into play as well. As a result, to allow flexibility in the analysis due to the range of increases within the different time periods, an approach that uses incremental increases of 1, 2, and 3 feet of SLR is suggested. Hence infrastructure is built to meet milestones, not arbitrary dates lessening the potential for stranded assets.. The increments can work as threshold values in planning considerations in terms of allowing planners the ability to know ahead of time where the next set of vulnerable areas will be to allow a for proactive response approach that can be matched to the observed future sea levels.
But prior to developing infrastructure plans, the local community needs to define an acceptable level of service (LOS) for the community. A level service would indicate how often it is acceptable for flooding to occur in a community on an annual basis. 1% is 4 days per years and for a place like Miami Beach, this is nearly 2 ft NAVD88, well above the mean high tide. The failure to establish an acceptable LOS is often the cause of failure or loss of confidence in a plan at a later point in time. The effects of SLR of the level of service should be used to update the mapping to demonstrate how the level of service changes, so that a long-term LOS can be defined and used for near-term planning.
With the LOS known, the vulnerability assessment is developed using a GIS based map of topography and the groundwater levels associated with wet and dry season water levels. LiDAR is a useful tool that may be available at very high resolution in coastal areas. Topographic maps must be “ground-truthed” by tying it to local benchmarks and transportation plans. USGS groundwater and NOAA tidal data from local monitoring stations to correlate with the groundwater information. Based on the results of these efforts, the GIS-based mapping will provide areas of likely flooding.
GIS map should be updated with layers of information for water mains, sewer mains, canals, catch basins, weirs and stormwater facilities. Updating with critical infrastructure will provide a view of vulnerability of critical infrastructure that will be funded by the public sector. Ultimately policy makers will need more information to prioritize the needed improvements. For example, a major goal may be to reduce Economic Vulnerability. This means identifying where economic activity occurs and potential jobs. At-risk populations, valuable property (tax base) and emergency response may be drivers, which means data from other sources should be added.
The next step is to analyze vulnerability spatially, by overlaying development priorities with expected climate change on GIS maps to identify hotspots where adaptation activities should be focused. This effort includes identification of the critical data gaps which, when filled, will enable more precise identification of at risk infrastructure and predictions of impacts on physical infrastructure and on communities. The final deliverable will include descriptions of the recommended concepts including schematics, cost estimates, and implementation plan.
So why go through all this. Let’s go back to the beginning. It has to do with community confidence in its leaders. Resident look at whether their property will be protected. Businesses look at long-term viability when making decisions about relocating enterprises. The insurance industry, which has traditionally been focused on a one year vision of risk, is beginning to discuss long-term risks and not insuring property rebuild is risk-prone areas. That will affect how bankers look at lending practices, which likely will decrease property values. Hence it is in the community’s interests to develop a planning framework to adapt to sea level rise and protect vulnerable infrastructure through a long-term plan. Plan or….
Last week I went to Boston for the American Water Works Association Annual Conference and Exposition. It is a gathering of thousands of water industry professionals – from operators to university professors to engineers to manufacturers. It is a good group of people and most know a number of people each year. The industry is smaller than one things despite there being over 50,000 community water systems in the United States. All are there to network, which allows them to discuss their issue, learn new ways to approach things, create new contacts and see new equipment and techniques. Over 11,000 registered. Good job to AWWA staff and the folks in New England that local hosts.
At the conference, one of many tasks, beyond meetings and education, was to do a class for public officials on what water and sewer utilities are, how they operate, how to deal with revenues and expenses and regulations. The idea is to help local officials understand the complex utility issues which are often second fiddle to more “surficial” activities like parks, and economic development. The officials get a certificate from AWWA for 12 hours of class time, but the fact that these folks come, spend the time, get involved and can then experience the rest of the program is to be commended. I have been doing these public officials classes since my book came out in 2009. The first two days are always based on the book, but the third day can vary depending on issues in the news and preferences form the public officials group within AWWA. This year the focus was operations and revenues. The responses were positive, and the interaction was very good. And I had a blast as well.
It had been 40 years since AWWA was in Boston for ACE. I have been twice previously – once when I was 7 and we went to the aquarium and once to catch a baseball game at Fenway, while on a 5 game, 4 city, 3 day baseball trip. Boston led off. This time, I was able to spend a day looking at the City. Thanks to my friend Chi Ho Sham who acted as chauffer and tour guide – I expect to repay the gesture whenever he can spend a couple days in S. Florida. Boston as many of you know is the cradle of the American revolution, and visits to the old North Church, Paul Revere’s house, the USS Constitution, several cemeteries and Faneuil Hall. Fascinating. Another trip to come as there is much more to experience than a day.
The moral to the story is that conferences allow us to accomplish many things. We meet new people, hear new things, and if we spend a little time, we can experience how others live or have lived. The history is valuable to us personally.
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