10 words or fewer edition:
Jobs will go where our values take them.
The geography of jobs: Smart policies are good but oil is better
"Take the five or so states with fastest-growing oil production -- ND, TX, OK, CO, NM -- and draw their post-crash job performance against the rest of the country. This is the picture you get. Except for New Mexico, the four top oil-growth states fell lower and have climbed higher than the rest of the country."
We can transform coal miners into a green energy workforce.
Transition to clean energy can include a future for coal miners of today
"This is the kind of scenario that should play out more and more as we gradually wean our nation off fossil fuels. We can facilitate an orderly transition to clean energy with a revenue-neutral tax on carbon. And if we give that revenue back to households, consumers will have the extra income needed to pay for any increased costs associated with the carbon tax. A number of conservatives — George Shultz, Art Laffer and Greg Mankiw — have expressed support for this market-based solution."
Fix a farm bill to favor fruits and fitter Americans.
The fate of our farms
"The Union of Concerned Scientists estimates we’d avoid up to 127,000 heart disease deaths annually if Americans ate the USDA’s recommended amounts of fruits and vegetables — and those juicy strawberries, tangy blueberries, and succulent tomatoes you’ve savored this summer generally aren’t subsidized."
Regulate the harmful, incentivize the necessary, reward the exceptional.
Smarter food: Does big farming mean bad farming?
"As a young man, Thompson was, as so many of us were, an idealist. He describes challenging his father’s patience with his big plans to transition the farm to organic growing practices. But when he took over, he began to understand that success in agriculture is about finding a balance between economic and environmental sustainability."
It is no longer a matter of if, only when.
Sustainable living: Chicago's first certified passive house
"The benefits of Certified Passive Homes are low energy cost, premier comfort, better indoor air quality and resistance to noise—in terms of indoor to outdoor noise, but also indoor mechanical systems and durability. Durability is an aspect often overlooked with Passive House. Over 95% of buildings fail due to moisture. Based on the requirements of Passive House, these risks are almost eliminated. Moist air cannot travel into to the wall cavity to condense on the back of colder drywall in the summer due to the air tightness."
Happy Friday!
Friday, August 30, 2013
Thursday, August 29, 2013
Residential electricity use continues to climb despite our best efforts
A recent post in the Today in Energy section of eia.gov discussing increases in air conditioning usage, especially in the South region, got me thinking about our overall electricity usage in this country. Compared with 1980, refrigerators use less than half the electricity, as do home central air conditioning systems, and light bulbs use - in some cases - less than one-third the electricity as their older counterparts. Combine this with newer homes replacing older ones, swapping more efficient homes for less efficient ones, and we should find ourselves in the middle of an energy reduction bonanza.
But, we do not.
Even though our average US home uses less electricity per square foot than its counterpart in the late 1990s, our total residential electricity usage has climbed at a consistent rate since 1980 of between 16 billion kWh and 20 billion kWh per year. Even if we assume that this rate will continue to drop over the coming decades, if that decline happens no faster than over the past 30 years, we will continue to increase electricity usage in the nation for the better part of the next century. Why is that?
Because there are more of us, taking up more space, trying to stay cooler, and consuming more entertainment.
Thirty years ago, the dominant energy needs in a house were heating and lighting. Lighting energy needs have dropped, as has electricity needed for refrigerators, but the amount of electricity for air conditioning has risen significantly. Additionally, we have added televisions, computers, and other electronic diversions to our households. Combine this with a twenty-percent increase in the average home size over the past thirty years, and an increase in population of over thirty-five percent, and we have the perfect storm for cyclical increases in electricity use for year to come.
Even as we add renewable sources of electricity at ever increasing rates, these additions do little to stop increased demand for fossil-fuel-generated electricity. The only way to get these increases under control, and reverse them before they spiral out of control, is to get innovative with our approach to electricity usage. This includes, at a minimum:
But, we do not.
Even though our average US home uses less electricity per square foot than its counterpart in the late 1990s, our total residential electricity usage has climbed at a consistent rate since 1980 of between 16 billion kWh and 20 billion kWh per year. Even if we assume that this rate will continue to drop over the coming decades, if that decline happens no faster than over the past 30 years, we will continue to increase electricity usage in the nation for the better part of the next century. Why is that?
Because there are more of us, taking up more space, trying to stay cooler, and consuming more entertainment.
Thirty years ago, the dominant energy needs in a house were heating and lighting. Lighting energy needs have dropped, as has electricity needed for refrigerators, but the amount of electricity for air conditioning has risen significantly. Additionally, we have added televisions, computers, and other electronic diversions to our households. Combine this with a twenty-percent increase in the average home size over the past thirty years, and an increase in population of over thirty-five percent, and we have the perfect storm for cyclical increases in electricity use for year to come.
Even as we add renewable sources of electricity at ever increasing rates, these additions do little to stop increased demand for fossil-fuel-generated electricity. The only way to get these increases under control, and reverse them before they spiral out of control, is to get innovative with our approach to electricity usage. This includes, at a minimum:
- Working with utilities to use residential and community solar (in South and near-South regions) and geoexchange (in more temperate climate zones) to provide air conditioning. Cooling needs coincide with days of sun, and in the South, where sun shines nearly year-round, adding solar to every house with AC with enough capacity to supply the AC will take that load increase off the grid. In the next band of climate zones to the north, air conditioning demand drops, but so does solar access. At the same time, heating needs climb, so geoexchange systems allow for heat from the summer to be stored below ground and pumped back out in the winter to save on heating requirements as well. In all cases, since the utility benefits most from the reduced infrastructure needs, and is in the best position to provide financing and maintenance, it makes sense for those institutions to install and manage the new systems.
- Finding ways to live as high a quality of life as we do now in less space. The generation of Americans currently in their 20s and early 30s have already slowed the trend toward moving away from urban areas toward more "spacious" suburban ones. The financial benefit of ditching the car in favor of public transportation or walking, the close proximity to amenities and culture, and the reduced commutes have stemmed - possibly only temporarily - the growth in housing. Unless someone wants to suggest population controls (and I am not ready to), we will have more people and more housing, and if housing size does not reverse its annual growth rate of 1-2% per year, we will have to more than match that rate to see any appreciable difference.
- Getting outside. Although more efficient electronics, with more cloud-based services (and greener cloud computing and data center facilities) will have moderate effects on electricity usage, the most efficient TV is the one not turned on. Ditch the extra TV, the second game console, and the subwoofer, and make a commitment to spending even two hours a week outside not using in-home entertainment. Since 1950, time spent in social activities and volunteering has dropped by over 75%, while entertainment time has skyrocketed. If we do not reverse the trend, then we commit ourselves to an ever-increasing reliance on electricity - and whatever consequences may come from it.
Electricity generation, dominated by the use of fossil fuels, poses a threat to our health and safety. Although we have made strides in efficiency of equipment, we have not made great strides in our taste for energy-driven lifestyles. We must understand that small, incremental improvements do not decrease overall usage, they merely slow the growth. With populations rising, and the threat of home size continuing to increase, we have only a small window before our electricity use spirals out of control.
We know how to solve it...we only lack the motivation.
From eia.gov, residential energy survey
1980 81.6 million households (227.22) consumed 9,100 kWh per year (3,268 per capita)
in an average of 1,646 sf (5.53 kWh/sf)...total of 742,560 million kWh.
1997 101.5 million households (266.49) consumed 10,219 kWh per year (3,892 per capita)
in an average of 1,750 sf (5.84 kWh/sf)...total of 1,037,228 million kWh.
2009 113.6 million households (308.75) consumed 11,320 kWh per year (4,165 per capita)
in an average of 1,970 sf (5.75 kWh/sf)...total of 1,285,952 million kWh.
in an average of 1,646 sf (5.53 kWh/sf)...total of 742,560 million kWh.
1997 101.5 million households (266.49) consumed 10,219 kWh per year (3,892 per capita)
in an average of 1,750 sf (5.84 kWh/sf)...total of 1,037,228 million kWh.
2009 113.6 million households (308.75) consumed 11,320 kWh per year (4,165 per capita)
in an average of 1,970 sf (5.75 kWh/sf)...total of 1,285,952 million kWh.
Wednesday, August 28, 2013
Flashes: August 28, 2013
Back to School Edition
(EUI is energy use intensity or kBtu per square foot per year...0 EUI or less means the building is net-zero.)
(EUI is energy use intensity or kBtu per square foot per year...0 EUI or less means the building is net-zero.)
Next?
Enjoy the journey!
*Note: PS 62 is a budget, and not an actual construction cost, and includes demolition.
Tuesday, August 27, 2013
The driverless car will make our lives better, unless we are too dumb to accept it.
How many of you long for the day of the iceman delivering the valuable service we needed to keep our food fresh in the icebox? How about the rabbit-ear antennae for your television? The hand-crank washing machine? The rotary dial phone?
Anyone?
This coming April, I will take my son to the Secretary of State facility near my home for his driving test and his driver's license. He will be the third of my four children to pass this rite....and I hope he only needs it to get into bars in a couple of years. And I hope that my now three-year-old daughter never has to do it. The era of the driverless car is rapidly approaching, and as long as we do not mess it up, it will be a marked improvement over today.
Nissan announced today that it plans to have an "autonomous driving system" available across multiple cars in its fleet by 2020. This ups the ante on Audi and Toyota who have both started development of driverless cars, but have made no formal commitment to when and how many. Nissan previously promised a zero-emissions car by 2010, and delivered the Leaf as an all-electric option. The track record suggests that they will deliver, and with Google developing technology for its use in maintaining its Street View, expect more auto makers to follow.
The only thing that can derail this bright future is our own desire to have the freedom to break the law and do stupid stuff.
The driverless car can deliver fewer accidents, and will eliminate those accidents caused by distracted driving completely. The driverless car will render DUI/DWI convictions a thing of the past, and the fatalities from DUI/DWI non-existent. Traffic jams will decline sharply. Road rage will go the way of the Wild West. With advancing technology in vehicle design, matched with the optimization of electricity storage and delivery systems, these cars will drive smarter and more fuel efficiently, blowing away the 54 MPG CAFE standard currently targeted for 2025. (Current human-driven electric vehicles get an equivalent of 119 MPG.) We will eliminate almost 40,000 deaths per year, decrease the stress on millions of drivers, and improve air quality.
Yet, there will be those with loud voices trying to stop the government from taking away their freedom.
This is not driven by the government, though, and it really is not taking away our freedom. Insurance companies and consumers are pushing for it. The technology is there and available. Yes, we will no longer be able to choose to speed when we are late. We will no longer be able to chase after that person that cut us off. We will no longer be able to cut the wrong way down a one-way street to avoid traffic. But the question is, does taking away the freedom to do something dangerous, and that threatens the life of another, really taking away freedom. What about the gained freedom of families who will never have to worry about a loved one dying in a DUI/DWI accident, or those families who will never lose another loved one to jail time for those accidents? What about the freedom to read the paper, be entertained, or talk to friends (safely!) while riding in our car? What about the additional time we get back from reduced traffic jams? What about the freedom to shift money from car insurance payments to something that adds value to our lives? The development of technology always carries tradeoffs, but in this case the lives saved, freedoms gained, and economic value delivered more than offset the freedoms lost.
Someone will raise the alarm that the technology necessary to truly allow driverless cars to function will make us targets for computer espionage whereby a teenager with a good smartphone could hijack our car. There is no question that the development of the technology will require several safeguards on the communication systems that predict and avoid accidents. But it's been 23 years since Col. Stuart took over a plane's navigation system in Die Hard 2, and even the most well-funded terrorist networks in the world have yet to duplicate that feat. Taking control of a driverless car's control system will be the most expensive way to make an attempt on someone's life.
The move to the driverless car is too many years in the waiting, and by 2030, we will wonder how we ever tolerated vehicles we had to drive all day. We will entertain ourselves by going to a local roadway open specifically to human-driven vehicles and whet our appetite for those good ole days every once in a while (I personally will love to get behind the wheel of a manual Mini Cooper and drive it around for an hour or two). We may even get to the point where we tire of having the car sitting in the driveway wasting our money and buy the car as a service when we need it instead of paying to have it average less than the speed of a bicycle (given all the time it spends parked). That will further reduce the cost to us, and the space we need to occupy.
We sit on the cusp of this great revolution in transportation...if we are smart enough to embrace it.
Anyone?
This coming April, I will take my son to the Secretary of State facility near my home for his driving test and his driver's license. He will be the third of my four children to pass this rite....and I hope he only needs it to get into bars in a couple of years. And I hope that my now three-year-old daughter never has to do it. The era of the driverless car is rapidly approaching, and as long as we do not mess it up, it will be a marked improvement over today.
Nissan announced today that it plans to have an "autonomous driving system" available across multiple cars in its fleet by 2020. This ups the ante on Audi and Toyota who have both started development of driverless cars, but have made no formal commitment to when and how many. Nissan previously promised a zero-emissions car by 2010, and delivered the Leaf as an all-electric option. The track record suggests that they will deliver, and with Google developing technology for its use in maintaining its Street View, expect more auto makers to follow.
The only thing that can derail this bright future is our own desire to have the freedom to break the law and do stupid stuff.
The driverless car can deliver fewer accidents, and will eliminate those accidents caused by distracted driving completely. The driverless car will render DUI/DWI convictions a thing of the past, and the fatalities from DUI/DWI non-existent. Traffic jams will decline sharply. Road rage will go the way of the Wild West. With advancing technology in vehicle design, matched with the optimization of electricity storage and delivery systems, these cars will drive smarter and more fuel efficiently, blowing away the 54 MPG CAFE standard currently targeted for 2025. (Current human-driven electric vehicles get an equivalent of 119 MPG.) We will eliminate almost 40,000 deaths per year, decrease the stress on millions of drivers, and improve air quality.
Yet, there will be those with loud voices trying to stop the government from taking away their freedom.
This is not driven by the government, though, and it really is not taking away our freedom. Insurance companies and consumers are pushing for it. The technology is there and available. Yes, we will no longer be able to choose to speed when we are late. We will no longer be able to chase after that person that cut us off. We will no longer be able to cut the wrong way down a one-way street to avoid traffic. But the question is, does taking away the freedom to do something dangerous, and that threatens the life of another, really taking away freedom. What about the gained freedom of families who will never have to worry about a loved one dying in a DUI/DWI accident, or those families who will never lose another loved one to jail time for those accidents? What about the freedom to read the paper, be entertained, or talk to friends (safely!) while riding in our car? What about the additional time we get back from reduced traffic jams? What about the freedom to shift money from car insurance payments to something that adds value to our lives? The development of technology always carries tradeoffs, but in this case the lives saved, freedoms gained, and economic value delivered more than offset the freedoms lost.
Someone will raise the alarm that the technology necessary to truly allow driverless cars to function will make us targets for computer espionage whereby a teenager with a good smartphone could hijack our car. There is no question that the development of the technology will require several safeguards on the communication systems that predict and avoid accidents. But it's been 23 years since Col. Stuart took over a plane's navigation system in Die Hard 2, and even the most well-funded terrorist networks in the world have yet to duplicate that feat. Taking control of a driverless car's control system will be the most expensive way to make an attempt on someone's life.
The move to the driverless car is too many years in the waiting, and by 2030, we will wonder how we ever tolerated vehicles we had to drive all day. We will entertain ourselves by going to a local roadway open specifically to human-driven vehicles and whet our appetite for those good ole days every once in a while (I personally will love to get behind the wheel of a manual Mini Cooper and drive it around for an hour or two). We may even get to the point where we tire of having the car sitting in the driveway wasting our money and buy the car as a service when we need it instead of paying to have it average less than the speed of a bicycle (given all the time it spends parked). That will further reduce the cost to us, and the space we need to occupy.
We sit on the cusp of this great revolution in transportation...if we are smart enough to embrace it.
Monday, August 26, 2013
Since your life depends on it, what do you choose?
The neighbor's dog barks a little extra loudly and wakes you from that awesome dream...the one where you were playing shortstop for the White Sox during the World Series...right before you were coming up to bat in the bottom of the ninth. Your disappointment only lasts until the sun blinds you and you realize it's time to stumble to the bathroom and get your day started. After the morning ritual, you flush the toilet, but nothing happens. You curse your old house, and vow to figure it out after you've showered and dressed. Once in the shower, you realize that the toilet is not alone. The shower refuses to work as well, you scramble to get your robe on and start scrambling around the house to find out what's going on. After visiting fixture after fixture, it dawns on you that not a one has any water available. Grabbing your cell, you start to dial the number for the city to complain, meanwhile as you look out front to see if there's a break in the main at the street, you notice all your neighbors out on their front lawns with their cellphones. You walk outside, and in a scene reminiscent of The Day After, the streets are filled with zombie-like people in various states of dress all sharing the same horrific thought...
We are out of water.
Sound like the pitch for the next B-movie attempt at the apocalypse? More accurately, it is a dramatization of what people in Barnhart, Texas experienced this year. After years of drought, expanding population, growth of ranching, and then the descent of the fracking industry on the county, the water supplies could no longer support the population. It is the beginning of the "nightmare scenario" for those who see water as the most critical resource of the 21st century. First small rural towns that rely on wells and sub-terrainian aquifers...then farming towns and suburban areas not connected to city water supplies....then finally the cities. We developed our American infrastructure - the foundation of our quality of life - during a time when energy and water were (mostly) plentiful, and saw them as tools on which to build further advances in that quality of life (the desert Southwest being the exception). As these last two years have shown, food, energy, and water coexist as competitors, and not mutually exclusive building blocks. As populations grow and urbanize, we place greater and greater strains on the limited resources available to us. Up to now, we have always been able to fall back on energy (in the form of transportation, pipelines, or manufacturing) to overcome natural limits. However, the time when we no longer can do that rapidly approaches.
One in seven people on our planet do not have access to fresh water, and over two in seven do not have access to sanitation. Throughout history, we sought to increase access to water, energy, and food through development and nation building. We thought that bringing people to the quality of life we enjoy in the West would deliver them from lives of struggle to lives of plenty, but now we see that we contribute to the problem of resource scarcity, not only jeopardizing those who have access to little, but threatening those on the margin of our own society. If we do not act quickly and decisively, we could find ourselves in a spiral from which we may not recover.
To give the problem some perspective, imagine an area of about 4.5 million people living on about 4,500 square miles and mixed among rural farmers, small town folk, suburbanites, and city dwellers. They share a water source and reservoir that holds 412 billion gallons of water to supply the region. That source gets replenished from a river basin 721 square miles in size and at a rate of nearly 600 million gallons per day. The area gets about 45 inches of rainfall a year, which provides an average daily available recharge of about 1.5 billion gallons. As long as withdrawls do not exceed the replenish rate, the source and reservoir remain stable and the community need focus solely on pollution prevention. In a year, each year these folks would, on average, need:
25,500 gallons of water per year for personal health (70 gallons per person per day)
440,000 gallons of water for dietary needs (assuming avg meat consumption...510k if heavy meat)
Meaning that for just health and food, the area would need a little over 2 trillion gallons of water or about 5.8 billion gallons per day. That well exceeds the 1.5 billion gallons of average daily recharge, so at that rate of consumption for just health and nourishment, the reservoir would be drained in about 100 days. In order to prevent the devastating loss of water from happening, the food sources for the community must be shipped outside the community to an area of far lesser density where the water is available only for crop and feed source growth. But this adds another source of stress on the water availability, because each gallon of gasoline used to truck or transport food from another area to the people of the area in question uses 80 gallons of water. This turns out to be a small tradeoff - depending on the transportation source - as only about 2% of the energy needed to produce, process and deliver food goes to transportation, but this means we still need more water to satisfy just these 4.5 million people.
With the consumption rate back under our average daily replenish rate (315 million vs. 600 million), we have new opportunities to use water to our advantage. The average household uses about 50 gallons per day for watering lawns and decorative plants, which increases our total consumption from 315 million to about 365 million. Next, we look to add our typical electricity usage at our homes, so that we can power our lights, cooling, and entertainment systems. At about 2.0 gallons per kWh, and a per capita electricity usage of 36 kWh per person, we end up needing 324 million gallons per day to supply our electricity needs. This, again, puts us over our total, meaning we must extend our electricity generation outside the watershed (or area that includes the system of rivers, streams and water features that supply our water) in order to keep from eventually draining the reservoir. That electricity generation number assumes that the fuel development and power plant generation simply withdraw the water and return it - unpolluted - to the watershed. One of the dangers of mining for oil and natural gas using fracking technologies is that they do not restore the water to the watershed.
We can see the trend, as we add new resources to our lives, we need to extend the area we consider "ours" in order to have access to these resources, with water as a limiting factor. As populations grow, with world and US population looking to increase by almost a third in the next forty years, these areas we identify as necessary to our quality of life will continue to overlap. In the extreme cases, like Texas where the average rainfall is significantly less than that of our example, and where industry like ranching draws significantly more than other forms of industry, the population feels the pinch today. Unless we start making smarter choices, the problems will not remain confined to small towns in Texas, but will expand greatly. We have a couple of simple changes we can make over the next decade that will greatly reduce the stress on our water supplies.
1. Reduce our need for energy
Citizens of the US consume energy at a rate nearly twice that of developed countries like Japan, UK, and Germany. Making that reduction not only reduces demand and cost of energy, but it significantly reduces the stress on water.
2. Revamp our policies on food
This takes the form of two complementary paths: reduce consumption, and eliminate subsidies for water intensive crops. Cotton and corn require many times the water of fruits and vegetables, and high meat-based diets require even more. It may seem "un-American" to suggest lowering the meat and corn we take in, but not only does it significantly drop our water needs, it improves our overall health. Both of these have positive economic impacts as well.
3. Change our relationship with outdoor plants
The movement to native plants has already taken root (pun intended), but getting the country - especially the suburban population - past the "manicured blue-grass lawn" will take some convincing. The alternating day watering schedule is already a staple of most communities, but water prices have not yet climbed to the point where the market will act. Given the manipulation we have seen in energy markets over the years to keep prices artificially low, we may not see that pricing signal until it is too late. If communities can step up to the challenge and develop beautiful landscaping with water needs that fall within the average rainfall, people will change over based upon common sense frugality.
4. Use more naturally occurring water
Adding onto the point about landscaping, the limits of our example come from the replenish rates of our watershed. It assumes that we do not capture any of the rain that naturally falls outside those direct watersheds...a good assumption since for the most part, we do not. What if we used some of that (in this case 45 inches per year) to flush toilets, wash our clothes, wash our dishes? We may not be at the point where urban dwellers need rainwater purifiers to supply their drinking water, but if everything but drinking water could come from the naturally occurring source, our withdrawls would fall accordingly.
None of these options requires the development of currently-unknown technologies, nor the sacrifice of quality of life. They simply require that we think of water as a resource with limits, and that we overcome those limits not with energy, but with thought. The more we extend the area that needs to be exclusively "ours" to survive, the more tentative we make our existence. By shrinking that area closer and closer to the area we occupy, we create a resilient, and high quality, life that the world can and should emulate.
We are out of water.
Sound like the pitch for the next B-movie attempt at the apocalypse? More accurately, it is a dramatization of what people in Barnhart, Texas experienced this year. After years of drought, expanding population, growth of ranching, and then the descent of the fracking industry on the county, the water supplies could no longer support the population. It is the beginning of the "nightmare scenario" for those who see water as the most critical resource of the 21st century. First small rural towns that rely on wells and sub-terrainian aquifers...then farming towns and suburban areas not connected to city water supplies....then finally the cities. We developed our American infrastructure - the foundation of our quality of life - during a time when energy and water were (mostly) plentiful, and saw them as tools on which to build further advances in that quality of life (the desert Southwest being the exception). As these last two years have shown, food, energy, and water coexist as competitors, and not mutually exclusive building blocks. As populations grow and urbanize, we place greater and greater strains on the limited resources available to us. Up to now, we have always been able to fall back on energy (in the form of transportation, pipelines, or manufacturing) to overcome natural limits. However, the time when we no longer can do that rapidly approaches.
One in seven people on our planet do not have access to fresh water, and over two in seven do not have access to sanitation. Throughout history, we sought to increase access to water, energy, and food through development and nation building. We thought that bringing people to the quality of life we enjoy in the West would deliver them from lives of struggle to lives of plenty, but now we see that we contribute to the problem of resource scarcity, not only jeopardizing those who have access to little, but threatening those on the margin of our own society. If we do not act quickly and decisively, we could find ourselves in a spiral from which we may not recover.
To give the problem some perspective, imagine an area of about 4.5 million people living on about 4,500 square miles and mixed among rural farmers, small town folk, suburbanites, and city dwellers. They share a water source and reservoir that holds 412 billion gallons of water to supply the region. That source gets replenished from a river basin 721 square miles in size and at a rate of nearly 600 million gallons per day. The area gets about 45 inches of rainfall a year, which provides an average daily available recharge of about 1.5 billion gallons. As long as withdrawls do not exceed the replenish rate, the source and reservoir remain stable and the community need focus solely on pollution prevention. In a year, each year these folks would, on average, need:
25,500 gallons of water per year for personal health (70 gallons per person per day)
440,000 gallons of water for dietary needs (assuming avg meat consumption...510k if heavy meat)
Meaning that for just health and food, the area would need a little over 2 trillion gallons of water or about 5.8 billion gallons per day. That well exceeds the 1.5 billion gallons of average daily recharge, so at that rate of consumption for just health and nourishment, the reservoir would be drained in about 100 days. In order to prevent the devastating loss of water from happening, the food sources for the community must be shipped outside the community to an area of far lesser density where the water is available only for crop and feed source growth. But this adds another source of stress on the water availability, because each gallon of gasoline used to truck or transport food from another area to the people of the area in question uses 80 gallons of water. This turns out to be a small tradeoff - depending on the transportation source - as only about 2% of the energy needed to produce, process and deliver food goes to transportation, but this means we still need more water to satisfy just these 4.5 million people.
With the consumption rate back under our average daily replenish rate (315 million vs. 600 million), we have new opportunities to use water to our advantage. The average household uses about 50 gallons per day for watering lawns and decorative plants, which increases our total consumption from 315 million to about 365 million. Next, we look to add our typical electricity usage at our homes, so that we can power our lights, cooling, and entertainment systems. At about 2.0 gallons per kWh, and a per capita electricity usage of 36 kWh per person, we end up needing 324 million gallons per day to supply our electricity needs. This, again, puts us over our total, meaning we must extend our electricity generation outside the watershed (or area that includes the system of rivers, streams and water features that supply our water) in order to keep from eventually draining the reservoir. That electricity generation number assumes that the fuel development and power plant generation simply withdraw the water and return it - unpolluted - to the watershed. One of the dangers of mining for oil and natural gas using fracking technologies is that they do not restore the water to the watershed.
We can see the trend, as we add new resources to our lives, we need to extend the area we consider "ours" in order to have access to these resources, with water as a limiting factor. As populations grow, with world and US population looking to increase by almost a third in the next forty years, these areas we identify as necessary to our quality of life will continue to overlap. In the extreme cases, like Texas where the average rainfall is significantly less than that of our example, and where industry like ranching draws significantly more than other forms of industry, the population feels the pinch today. Unless we start making smarter choices, the problems will not remain confined to small towns in Texas, but will expand greatly. We have a couple of simple changes we can make over the next decade that will greatly reduce the stress on our water supplies.
1. Reduce our need for energy
Citizens of the US consume energy at a rate nearly twice that of developed countries like Japan, UK, and Germany. Making that reduction not only reduces demand and cost of energy, but it significantly reduces the stress on water.
2. Revamp our policies on food
This takes the form of two complementary paths: reduce consumption, and eliminate subsidies for water intensive crops. Cotton and corn require many times the water of fruits and vegetables, and high meat-based diets require even more. It may seem "un-American" to suggest lowering the meat and corn we take in, but not only does it significantly drop our water needs, it improves our overall health. Both of these have positive economic impacts as well.
3. Change our relationship with outdoor plants
The movement to native plants has already taken root (pun intended), but getting the country - especially the suburban population - past the "manicured blue-grass lawn" will take some convincing. The alternating day watering schedule is already a staple of most communities, but water prices have not yet climbed to the point where the market will act. Given the manipulation we have seen in energy markets over the years to keep prices artificially low, we may not see that pricing signal until it is too late. If communities can step up to the challenge and develop beautiful landscaping with water needs that fall within the average rainfall, people will change over based upon common sense frugality.
4. Use more naturally occurring water
Adding onto the point about landscaping, the limits of our example come from the replenish rates of our watershed. It assumes that we do not capture any of the rain that naturally falls outside those direct watersheds...a good assumption since for the most part, we do not. What if we used some of that (in this case 45 inches per year) to flush toilets, wash our clothes, wash our dishes? We may not be at the point where urban dwellers need rainwater purifiers to supply their drinking water, but if everything but drinking water could come from the naturally occurring source, our withdrawls would fall accordingly.
None of these options requires the development of currently-unknown technologies, nor the sacrifice of quality of life. They simply require that we think of water as a resource with limits, and that we overcome those limits not with energy, but with thought. The more we extend the area that needs to be exclusively "ours" to survive, the more tentative we make our existence. By shrinking that area closer and closer to the area we occupy, we create a resilient, and high quality, life that the world can and should emulate.
Friday, August 23, 2013
Friday Five: August 23, 2013
See if you can figure out the thread among this week's stories. (Hint: It's not corporate-bashing or treehuggery...) We rely so heavily on the argument that our actions must "make economic sense", but have no recourse when the marketplace that sets prices in our economy gets corrupted. It's hard enough to get us to align our economy with our priorities without having also to deal with manipulation.
California to get $750 million dollars in energy crisis settlement
"Although California grid operators still must contend with market manipulation, the difference is 'things are much better today,' said Frank Lindh, the PUC's general counsel. State and federal regulators now "are much more aggressive about policing than they were in 2000 and 2001.
'That was the Wild West. Today it's not so rampant.'
In the just-settled case, British Columbia Hydroelectric's subsidiary, Powerex Inc., allegedly gamed the California energy market. Harris said it purchased and exported to Canada huge quantities of electricity and then sold it back to California with extreme price markups."
It is interesting to note that even in a marketplace that still favors the incumbency of fossil-fuel-generated electricity, we see the point on the horizon in which solar-generated electricity reaches market parity. If we have the courage to remove the permanent subsidies for fossil fuels from the marketplace, and include all the costs of burning fossil fuels for electricity in the price of fossil-fuel-generated electricity, then that point on the horizon will move significantly closer.
Charting the fall of solar prices
"If solar prices do continue to fall quickly, the technology will come ever closer to its moment of glory: (hazily defined, so-called) grid parity. This is when solar can really be called 'cheap' -- grid parity comes when solar is less expensive than fossil fuels, even without subsidies. (That fossil fuels receive several types of subsidies, in particular a free pass for carbon dioxide emissions remains a sore spot for solar advocates in the debate about subsidies.)"
We already know that we have reached price parity for wind-generated electricity, and that those states that made the early investment have reaped the double benefit of price stability and job growth in the wind manufacturing industry.
ACORE: The American energy markets want more wind power
"A major Midwest power producer, Xcel Energy, is voluntarily adding 750 MW of wind to their portfolio, citing competitive costs that are actually lower than natural gas and will save customers $590 million in fuel expenses over 20 years. Other businesses, like Wal-Mart and Google are adding solar PV to their facilities, with the goal of powering their operations with 100% renewable energy. And just before recess Congress passed a rare bipartisan bill that cuts regulations to encourage hydropower retrofits, expected to create 700,000 new jobs nationwide through 2025. These investments will pay major dividends tomorrow and for generations."
Even with all we have accomplished here over the past five years, and through the third worst economic downturn in the last hundred years, we still lag several other nations in our approach to sustainable business. If this showed a list created by Greenpeace or Amnesty International, it would still be important, but not nearly as poignant as noting it comes from an investment company that sees the relationship between a country's approach to sustainable business and environment and the country's risk profile as an investment. We are reaching the point where investors will see little value in "throwing good money after bad" by investing in countries that have economic and physical infrastructure that depends on polluting and life-damaging technologies.
Sweden named 'most sustainable country in the world'
"A report from the Swiss investment group RobecoSAM launched late last week ranked 59 countries on a broad range of environmental and social governance issues such as carbon emissions, social cohesion and civil liberties.
The report was designed to provide investors with deeper insight of issues that could affect a country's credit rating but are not usually considered by traditional sovereign ratings, such as climate change."
It is respectable for my Chicago to end up in the top 20 of cities worldwide in terms of economic development, although it is more than a bit disappointing that it ranks 6th among metro areas in the US, and that our country only has 3 of the top 10. It does, however, reflect what we all know: that we have so much more that we can do.
Seattle ranked #2 among global cities for economic development
"Researchers scored 61 global cities on a wide range of criteria which were divided into four categories: talent, technology, tolerance, and quality of place. Seattle was one of just eight cities to receive an A grade, and our overall score of 87.5 was second only to Ottawa-Gatineau, Canada."
Happy Friday!
California to get $750 million dollars in energy crisis settlement
"Although California grid operators still must contend with market manipulation, the difference is 'things are much better today,' said Frank Lindh, the PUC's general counsel. State and federal regulators now "are much more aggressive about policing than they were in 2000 and 2001.
'That was the Wild West. Today it's not so rampant.'
In the just-settled case, British Columbia Hydroelectric's subsidiary, Powerex Inc., allegedly gamed the California energy market. Harris said it purchased and exported to Canada huge quantities of electricity and then sold it back to California with extreme price markups."
It is interesting to note that even in a marketplace that still favors the incumbency of fossil-fuel-generated electricity, we see the point on the horizon in which solar-generated electricity reaches market parity. If we have the courage to remove the permanent subsidies for fossil fuels from the marketplace, and include all the costs of burning fossil fuels for electricity in the price of fossil-fuel-generated electricity, then that point on the horizon will move significantly closer.
Charting the fall of solar prices
"If solar prices do continue to fall quickly, the technology will come ever closer to its moment of glory: (hazily defined, so-called) grid parity. This is when solar can really be called 'cheap' -- grid parity comes when solar is less expensive than fossil fuels, even without subsidies. (That fossil fuels receive several types of subsidies, in particular a free pass for carbon dioxide emissions remains a sore spot for solar advocates in the debate about subsidies.)"
We already know that we have reached price parity for wind-generated electricity, and that those states that made the early investment have reaped the double benefit of price stability and job growth in the wind manufacturing industry.
ACORE: The American energy markets want more wind power
"A major Midwest power producer, Xcel Energy, is voluntarily adding 750 MW of wind to their portfolio, citing competitive costs that are actually lower than natural gas and will save customers $590 million in fuel expenses over 20 years. Other businesses, like Wal-Mart and Google are adding solar PV to their facilities, with the goal of powering their operations with 100% renewable energy. And just before recess Congress passed a rare bipartisan bill that cuts regulations to encourage hydropower retrofits, expected to create 700,000 new jobs nationwide through 2025. These investments will pay major dividends tomorrow and for generations."
Even with all we have accomplished here over the past five years, and through the third worst economic downturn in the last hundred years, we still lag several other nations in our approach to sustainable business. If this showed a list created by Greenpeace or Amnesty International, it would still be important, but not nearly as poignant as noting it comes from an investment company that sees the relationship between a country's approach to sustainable business and environment and the country's risk profile as an investment. We are reaching the point where investors will see little value in "throwing good money after bad" by investing in countries that have economic and physical infrastructure that depends on polluting and life-damaging technologies.
Sweden named 'most sustainable country in the world'
"A report from the Swiss investment group RobecoSAM launched late last week ranked 59 countries on a broad range of environmental and social governance issues such as carbon emissions, social cohesion and civil liberties.
The report was designed to provide investors with deeper insight of issues that could affect a country's credit rating but are not usually considered by traditional sovereign ratings, such as climate change."
It is respectable for my Chicago to end up in the top 20 of cities worldwide in terms of economic development, although it is more than a bit disappointing that it ranks 6th among metro areas in the US, and that our country only has 3 of the top 10. It does, however, reflect what we all know: that we have so much more that we can do.
Seattle ranked #2 among global cities for economic development
"Researchers scored 61 global cities on a wide range of criteria which were divided into four categories: talent, technology, tolerance, and quality of place. Seattle was one of just eight cities to receive an A grade, and our overall score of 87.5 was second only to Ottawa-Gatineau, Canada."
Happy Friday!
Thursday, August 22, 2013
The value of regular reminders
Each year, I start off the students in my building systems class with a TED talk by Alex Steffen about the opportunities for our urban areas over the next forty years. It is always a great reminder to me that we know what needs to be done, and simply need to make sure that our economy and our priorities match our goals. If we want nine to ten billion people to live on a planet that can support their needs, then we cannot have our cities of the future building on our cities of the present. They must improve upon them. Even in our own country, we have much on which we can improve. The following chart shows the energy required to provide the average American quality of life compared with the rest of the world, and with other developed countries that have the same or higher quality of life.
Alex Steffen offers context for the solution.
Wednesday, August 21, 2013
Flashes: August 21, 2013
Whenever I get asked what I do for a living (thankfully my kids are too old to care or too young to know to ask), I never know what to say. Today, I finally have somewhat of an answer to the question told through four websites.
1. http://www.josephclair.com
I try to use my innate ability for public speaking and communication to inspire others to improve quality of life for all:
2. http://www.prairielab.com
With great luck throughout my career, I have found some partners who want to develop and deliver great education content to working professionals:
2. http://www.ecologyandeconomy.org
With the help of some amazing friends and family, I am trying to bring what I have learned at large organizations and bring the best ideas to root at the community level.
4. http://ipro.iit.edu/project-listings/current-projects#Fall2013_497-01
And to keep myself enthused about the opportunities, I still work with students...mentoring them on how to approach and solve problems on the community scale.
Indivdually, none of them are really a living...but taken together, they start to make a life.
Enjoy the journey!
1. http://www.josephclair.com
I try to use my innate ability for public speaking and communication to inspire others to improve quality of life for all:
2. http://www.prairielab.com
With great luck throughout my career, I have found some partners who want to develop and deliver great education content to working professionals:
2. http://www.ecologyandeconomy.org
With the help of some amazing friends and family, I am trying to bring what I have learned at large organizations and bring the best ideas to root at the community level.
4. http://ipro.iit.edu/project-listings/current-projects#Fall2013_497-01
And to keep myself enthused about the opportunities, I still work with students...mentoring them on how to approach and solve problems on the community scale.
Indivdually, none of them are really a living...but taken together, they start to make a life.
Enjoy the journey!
Tuesday, August 20, 2013
Sometimes it takes a community to solve a wicked problem
In all realms of human achievement, we celebrate the one individual, rising against the odds to save us/lead us/protect us. Some call it the "great man theory", college basketball fans call it the "Danny Manning factor", and previous generations celebrated those "titans of industry" who single-handedly forged America out of nothing. The truth about these myths and celebrations holds that it takes many more than the one individual to accomplish almost anything of value to us as a people. Especially as the scale and severity of our problems challenges our traditional beliefs in how to survive and thrive, we need to look not for that individual savior, but for more effective paths to solutions. It is the path of cooperative problem solving that we are investigating at IIT, experimenting with a cluster of student project teams working on related problems within a theme.
For the better part of two decades, IIT has had an interprofessional project program (IPRO) in which students across disciplines join together around a topic to solve a problem. This kind of interdisciplinary thinking already dodges the stoic "lone wolf problem solver" theme, promoting cooperation among a group to reach a goal normally unattainable by the individual. Sometimes, however, this format still promotes an atmosphere in which an individual or small band can drive a team toward a particular solution, even when faced with equally meritorious options. Additionally, the program associated with these teams had begun to focus on the competition among them, highlighting those judged to have accomplished the most or performed the best. Although competition for resources forms the basis for a modern working economy, competition in the idea setting sometimes led to more conservative solutions than innovative ones. With this in mind, we have set down a new path, and one that we hope will both promote innovation, and introduce the students to an arena more common in the marketplace of ideas.
By introducing a cluster model to problem solving, we hope to take advantage of a broader information and knowledge base to promote idea development and actualization at a faster pace and with greater efficacy. Traditionally, teams of five to fifteen would work with a faculty mentor (and sometimes an outside sponsor) to solve a problem posed by the mentor. In the cluster model, as many as fifty students will work in a themed area (our area focuses on solutions for community-level problems), divided into as many as five to ten teams. The students will receive problem "prompts" - broad ideas based upon previously known issues - then divide into these areas. Once divided, they will further develop the problem statement and eventually the solution within their smaller teams, but at the same time, they will remain connected to the larger cluster. Through project updates, team liaisons, and resource sharing (the resources not only include space and mentors, but presentations from outside experts and access to existing communities) the cluster will act as a loosely organized cooperative. In addition, the concept of community will extend beyond the borders of the country, with several teams establishing working relationships with experts and teams working in Turkey and Mexico.
There can be no doubt that one individual idea can change the world. We are banking on the concept that one individual idea - created in a setting where collaboration sparks ideas, and honed by effective challenging and questioning - holds even greater promise to accomplish that change. And that several ideas, all realized in concert, and examined together, can take us further.
We shall see, but the odds are in our favor.
For the better part of two decades, IIT has had an interprofessional project program (IPRO) in which students across disciplines join together around a topic to solve a problem. This kind of interdisciplinary thinking already dodges the stoic "lone wolf problem solver" theme, promoting cooperation among a group to reach a goal normally unattainable by the individual. Sometimes, however, this format still promotes an atmosphere in which an individual or small band can drive a team toward a particular solution, even when faced with equally meritorious options. Additionally, the program associated with these teams had begun to focus on the competition among them, highlighting those judged to have accomplished the most or performed the best. Although competition for resources forms the basis for a modern working economy, competition in the idea setting sometimes led to more conservative solutions than innovative ones. With this in mind, we have set down a new path, and one that we hope will both promote innovation, and introduce the students to an arena more common in the marketplace of ideas.
By introducing a cluster model to problem solving, we hope to take advantage of a broader information and knowledge base to promote idea development and actualization at a faster pace and with greater efficacy. Traditionally, teams of five to fifteen would work with a faculty mentor (and sometimes an outside sponsor) to solve a problem posed by the mentor. In the cluster model, as many as fifty students will work in a themed area (our area focuses on solutions for community-level problems), divided into as many as five to ten teams. The students will receive problem "prompts" - broad ideas based upon previously known issues - then divide into these areas. Once divided, they will further develop the problem statement and eventually the solution within their smaller teams, but at the same time, they will remain connected to the larger cluster. Through project updates, team liaisons, and resource sharing (the resources not only include space and mentors, but presentations from outside experts and access to existing communities) the cluster will act as a loosely organized cooperative. In addition, the concept of community will extend beyond the borders of the country, with several teams establishing working relationships with experts and teams working in Turkey and Mexico.
There can be no doubt that one individual idea can change the world. We are banking on the concept that one individual idea - created in a setting where collaboration sparks ideas, and honed by effective challenging and questioning - holds even greater promise to accomplish that change. And that several ideas, all realized in concert, and examined together, can take us further.
We shall see, but the odds are in our favor.
Monday, August 19, 2013
On the whole, we have a lot of information, but not enough knowledge about science
The interpretation of the story of the Tower of Babel, for me, has always missed the point. Although we hear in Genesis that the people of the world were building a tower to the heavens, and God disbursed them and effectively created the different languages of the world so that they could never coordinate in this manner again. (Esperanto be damned!) This focus on language has distracted from the larger issue of technology...that all the nations of the world could agree upon a technology, or have enough understanding of it to blend them all together seamlessly, stands as the greater accomplishment. (Just ask anyone who flew United Airlines after they merged with Continental and decided to use Continental's older, incompatible ticketing system.) The accomplishment in Babel was not just the information, or the ability to communicate it, but the real knowledge that manifested in the ability to apply thought into technology. For the thousands of years since the mythical Tower of Babel, we have pushed the boundaries again in terms of communication and information - even agreeing on a new universal language of mathematics - but have not even come close to such an accomplishment because of one simple fact. People know less about science and technology than they ever have.
With my children and I returning to school this week, I may have my antennae a little more tuned to all things school than normal, but I have seen much written lately about the opportunities available to increase access to math and science education for younger students. Recent posts in an excellent blog about computer science and technology written by Dr. Ray Klump from Lewis University discuss camps for kids as young as three in coding and engineering. I also recently came across a related piece in the LA Times discussing a course in entrepreneurship for high schoolers in LA. The existence of all these extra-curricular forms of experience-based education (which forms the core of science and technology learning) highlights the loss of real science education throughout our formal learning process. Perhaps it would be more accurate to say we have experienced the stagnation of science education in our formal learning process, and the increased specialization of real knowledge of science. Kids still learn about the hydrologic cycle and the parts of a plant, but has basic education included discussions of MRI technology and semiconductors at inspirational ages. Those "real science" problems we leave to the experts...the few who can survive high school geometry and chemistry without heavy doses of anxiety medication.
One need look no further than the declining number of students pursuing science and technology as a field of study (not just percentages of population and enrollees, but total number declining) over the past forty years, while overall college participation has increased steadily over this same time period. Meanwhile, the almost complete obliteration of shop courses in high schools has removed the natural science outlet for those that did not want the more "bookish" form of study. Fifty years ago, not only did we naturally do more science on our own through unscheduled play and exploration, but as we progressed in education, we had many alternatives to create an understanding of science and technology as it is applied to our lives. If I did not want to study physics or chemistry, I could still take an auto shop class, or carpentry shop to gain knowledge about how to apply science. I also had the option to take a cooking class, or pottery, some other hands-on class that would increase my understanding of the world in which I lived. It's no surprise that with the explosion of complexity in the applied sciences, we have seen a corresponding decrease in the overall knowledge of science and how it affects our lives.
This loss of true knowledge comes at a time when we all need so desperately to understand science. In an era when scientists and engineers hold places of esteem in our society nearing that of the military, understanding the greatest modern threat to human existence comes down to whether or not the science as explained makes sense to us all. Having abdicated our responsibility to understand nature, and the science behind her many processes, we are left to a question of trust instead of a question of knowledge. If someone began running around the streets yelling, "Gravity is failing! We will all be sucked out into space!", we have enough common understanding to know that is not true. However, do we have enough understanding to know whether 350 parts per million of carbon dioxide in the atmosphere is enough, or whether a growth study for corn yields in the Amazon applies to Iowa, or whether water flows causing eutrophication have man-made origins or natural ones? Given the tenor and substance of our global debate, my current assessment is we do not.
As a great piece by Jurgen Mittelstrass points out, we have an explosion of information, but not necessarily one of knowledge. Having all the information in the world in front of someone does not inherently make them more productive, or guarantee that they will come to the right solution. The knowledge to sift through the information and find the kernel that leads to an improved quality of life comes from a commitment to a lifetime of experiential learning. This makes it easier for those who do have the background and experience to build, maintain, and repair items, but it does not create a society of "do-it-yourself" computer, appliance, and home system repair technicians. We have created a cultural need for more and more of these specialists as we become less and less able to maintain our own houses and equipment. As Samuel Arbesman points out in his piece on "big data" in the Washington Post, even the new levels of data processing that are making analyses of large data sets easier will not provide answers if a learned population does not ask the right questions.
When my grandfather was going to school, and then into the navy, there was a premium on hands-on technology education (what we sometimes call vocational education) for both college-bound and non-college-bound students. Coming out, he became a stationary building engineer, and on the side he would work on houses. Even though my father did not pursue a similar path (he became a history/social studies teacher and principal), he still had the ability to frame walls, hunt down electrical problems, and service gas heaters. During both of their careers, there was a healthy level of respect among those who were college-educated or union-trained recognizing that they were two sides of the same technology. Contributing to the polarization of society - and the vilification of the union employee - is less and less appreciation for the scientific understanding they possess. When more of society understood - and frankly revered - science, it was easier to appreciate the hard work and skills of another.
We have reached a critical point in our understanding of education and its role in society. Should we focus only on a bare-bones education, allowing those who can afford it to have access to a greater breadth of knowledge? Or should we, at even the earliest of ages, return to a more hands-on understanding of how our world works? Would doing so mean that we focus less on some of what remains in our educational system - reading comprehension and basic math - or can we find a way to use one to reinforce the other?
I have no firm answers right now, only a challenge. If those who can afford it are sending their children to camps to work on coding, and engineering, and entrepreneurship....then maybe we should be finding ways to give everybody the opportunity. Our life, quite frankly, depends on it.
With my children and I returning to school this week, I may have my antennae a little more tuned to all things school than normal, but I have seen much written lately about the opportunities available to increase access to math and science education for younger students. Recent posts in an excellent blog about computer science and technology written by Dr. Ray Klump from Lewis University discuss camps for kids as young as three in coding and engineering. I also recently came across a related piece in the LA Times discussing a course in entrepreneurship for high schoolers in LA. The existence of all these extra-curricular forms of experience-based education (which forms the core of science and technology learning) highlights the loss of real science education throughout our formal learning process. Perhaps it would be more accurate to say we have experienced the stagnation of science education in our formal learning process, and the increased specialization of real knowledge of science. Kids still learn about the hydrologic cycle and the parts of a plant, but has basic education included discussions of MRI technology and semiconductors at inspirational ages. Those "real science" problems we leave to the experts...the few who can survive high school geometry and chemistry without heavy doses of anxiety medication.
One need look no further than the declining number of students pursuing science and technology as a field of study (not just percentages of population and enrollees, but total number declining) over the past forty years, while overall college participation has increased steadily over this same time period. Meanwhile, the almost complete obliteration of shop courses in high schools has removed the natural science outlet for those that did not want the more "bookish" form of study. Fifty years ago, not only did we naturally do more science on our own through unscheduled play and exploration, but as we progressed in education, we had many alternatives to create an understanding of science and technology as it is applied to our lives. If I did not want to study physics or chemistry, I could still take an auto shop class, or carpentry shop to gain knowledge about how to apply science. I also had the option to take a cooking class, or pottery, some other hands-on class that would increase my understanding of the world in which I lived. It's no surprise that with the explosion of complexity in the applied sciences, we have seen a corresponding decrease in the overall knowledge of science and how it affects our lives.
This loss of true knowledge comes at a time when we all need so desperately to understand science. In an era when scientists and engineers hold places of esteem in our society nearing that of the military, understanding the greatest modern threat to human existence comes down to whether or not the science as explained makes sense to us all. Having abdicated our responsibility to understand nature, and the science behind her many processes, we are left to a question of trust instead of a question of knowledge. If someone began running around the streets yelling, "Gravity is failing! We will all be sucked out into space!", we have enough common understanding to know that is not true. However, do we have enough understanding to know whether 350 parts per million of carbon dioxide in the atmosphere is enough, or whether a growth study for corn yields in the Amazon applies to Iowa, or whether water flows causing eutrophication have man-made origins or natural ones? Given the tenor and substance of our global debate, my current assessment is we do not.
As a great piece by Jurgen Mittelstrass points out, we have an explosion of information, but not necessarily one of knowledge. Having all the information in the world in front of someone does not inherently make them more productive, or guarantee that they will come to the right solution. The knowledge to sift through the information and find the kernel that leads to an improved quality of life comes from a commitment to a lifetime of experiential learning. This makes it easier for those who do have the background and experience to build, maintain, and repair items, but it does not create a society of "do-it-yourself" computer, appliance, and home system repair technicians. We have created a cultural need for more and more of these specialists as we become less and less able to maintain our own houses and equipment. As Samuel Arbesman points out in his piece on "big data" in the Washington Post, even the new levels of data processing that are making analyses of large data sets easier will not provide answers if a learned population does not ask the right questions.
When my grandfather was going to school, and then into the navy, there was a premium on hands-on technology education (what we sometimes call vocational education) for both college-bound and non-college-bound students. Coming out, he became a stationary building engineer, and on the side he would work on houses. Even though my father did not pursue a similar path (he became a history/social studies teacher and principal), he still had the ability to frame walls, hunt down electrical problems, and service gas heaters. During both of their careers, there was a healthy level of respect among those who were college-educated or union-trained recognizing that they were two sides of the same technology. Contributing to the polarization of society - and the vilification of the union employee - is less and less appreciation for the scientific understanding they possess. When more of society understood - and frankly revered - science, it was easier to appreciate the hard work and skills of another.
We have reached a critical point in our understanding of education and its role in society. Should we focus only on a bare-bones education, allowing those who can afford it to have access to a greater breadth of knowledge? Or should we, at even the earliest of ages, return to a more hands-on understanding of how our world works? Would doing so mean that we focus less on some of what remains in our educational system - reading comprehension and basic math - or can we find a way to use one to reinforce the other?
I have no firm answers right now, only a challenge. If those who can afford it are sending their children to camps to work on coding, and engineering, and entrepreneurship....then maybe we should be finding ways to give everybody the opportunity. Our life, quite frankly, depends on it.
Friday, August 16, 2013
Friday Five: August 16, 2013
A lesson in solving wicked problems: invent something that can solve multiple problems at the same time while providing a bridge to solve more. A Japanese inventor and his company have developed a machine that uses 1 kWh of electricity (worth about $0.10 - $0.15 in the US) and 1 gallon of water (worth about $0.0015 in the US) to turn 1 kg of plastic packaging and material (worth about $1.50) into 1 liter of oil (worth about $2.50). So if you paid nothing to the consumer to recycle their plastic, you could produce a product for just over 15 cents and sell it to urban markets for $2.50 per liter. You then avoid the costs of transporting the product, the emissions associated with current heating methods for recycling, and provide a steady source of oil that can help ease the transition to a fossil fuel-less future. All this, and the potential for residential or community-scale enterprise. Although I am no fan of compromise on continuing the use of fossil fuels, it is hard not to love this idea. (Add to it the fact that if implemented on a national scale, it could drastically lower the price of oil and still allow the process to make money...SOLD!)
Plastic to oil fantastic
"'If we burn the plastic, we generate toxins and a large amount of CO2. If we convert it into oil, we save CO2 and at the same time increase people’s awareness about the value of plastic garbage.'"
The fact that three of the top twenty sit near or on the largest freshwater reserve in the world should raise eyebrows. The number of cities in California and Florida on this list should raise alarm bells. The fact that it's a list of cities should not have prevented the authors of the study from listing the State of New Mexico in its entirety. We have more than enough water on the planet to support the projected population, but people do not always live where the water is, and localized issues are going to present major problems going forward...especially as sea levels rise and pollute freshwater aquifers with salinated water.
Could these 20 cities run out of water
"Unlike many other analysis, this study incorporated both local rainfall and the availability of stored and imported water – what the authors called 'hydraulic' sources. These sources include man-made reservoirs and aqueducts that can transport water from one drainage basin to another. The study also accounted for natural variability in rainfall and water availability to classify each urban area as low, medium, or high in vulnerability."
I am one of the first to confess my enjoyment of smartphones and small-computer technology, and my corresponding ambivalence to the energy use that supports it. My house is hyper-efficient relative to electricity use, so I do not notice - or pay for - much of the electricity that makes my devices possible. (Including the electricity that makes my blog available for viewing or updating 24/7/365.) As the efficiency of our heating, cooling, and refrigeration equipment has dropped significantly over the past two decades, we retain high rates of electricity use because of this device proliferation, and the energy needed to support cloud data centers. With development of infrastructure in an era of cheap electricity, there is no incentive to make things cheaper.
Your iPhone uses more electricity than your fridge
"The global digital economy, also known as the ICT system (information-communications-technologies), sucks up as much electricity today as it took to illuminate the entire planet in 1985. The average iPhone requires more power per year than the average refrigerator. It’s like you’re walking around all day with a fridge’s worth of electricity in your pocket (but no hummus!)."
Even with this growing energy consumption by our personal devices, we still need to prioritize improving our homes. Thankfully, the market rewards transparency, efficiency, and renewable energy. Especially for those that have the ability to take advantage of historically low costs of capital, the investments in energy technology and efficiency will pay huge dividends in reclaimed value.
Study finds solar panels increase home values
Unlocking the value of an energy efficient home
"The premium ranged from $3.90 to $6.40 per watt of capacity, but tended most often to be about $5.50 per watt. This, the study said, 'corresponds to a home sales price premium of approximately $17,000 for a relatively new 3,100-watt PV system (the average size of PV systems in the study).'"
Unfortunately, the market still favors incumbents, so we need smart market development and regulation to make sure that we can transition to smarter uses of energy and not just ones that provide economic benefit to existing companies. Utilities need to be a part of the solution, and need to adopt a more flexible business model: one that allows them to maintain and transition their distribution infrastructure, but also allows them to participate in the renewable energy and community energy arenas.
Why US power companies don't want you putting solar panels on your roof
"The solar companies, however, fear this will make solar more expensive, hurting both their business and the spread of green energy as direct subsidies fade away. They argue that the utilities are overplaying their hand. A study they commissioned argues that the utilities actually benefit from distributed solar’s ability to help the grid meet local demand. This is especially true, it says, when utilities are required to use a certain share of renewables, and when customers are paying 'smart rates' that vary depending on when they purchase their power."
Happy Friday!
Plastic to oil fantastic
"'If we burn the plastic, we generate toxins and a large amount of CO2. If we convert it into oil, we save CO2 and at the same time increase people’s awareness about the value of plastic garbage.'"
The fact that three of the top twenty sit near or on the largest freshwater reserve in the world should raise eyebrows. The number of cities in California and Florida on this list should raise alarm bells. The fact that it's a list of cities should not have prevented the authors of the study from listing the State of New Mexico in its entirety. We have more than enough water on the planet to support the projected population, but people do not always live where the water is, and localized issues are going to present major problems going forward...especially as sea levels rise and pollute freshwater aquifers with salinated water.
Could these 20 cities run out of water
"Unlike many other analysis, this study incorporated both local rainfall and the availability of stored and imported water – what the authors called 'hydraulic' sources. These sources include man-made reservoirs and aqueducts that can transport water from one drainage basin to another. The study also accounted for natural variability in rainfall and water availability to classify each urban area as low, medium, or high in vulnerability."
I am one of the first to confess my enjoyment of smartphones and small-computer technology, and my corresponding ambivalence to the energy use that supports it. My house is hyper-efficient relative to electricity use, so I do not notice - or pay for - much of the electricity that makes my devices possible. (Including the electricity that makes my blog available for viewing or updating 24/7/365.) As the efficiency of our heating, cooling, and refrigeration equipment has dropped significantly over the past two decades, we retain high rates of electricity use because of this device proliferation, and the energy needed to support cloud data centers. With development of infrastructure in an era of cheap electricity, there is no incentive to make things cheaper.
Your iPhone uses more electricity than your fridge
"The global digital economy, also known as the ICT system (information-communications-technologies), sucks up as much electricity today as it took to illuminate the entire planet in 1985. The average iPhone requires more power per year than the average refrigerator. It’s like you’re walking around all day with a fridge’s worth of electricity in your pocket (but no hummus!)."
Even with this growing energy consumption by our personal devices, we still need to prioritize improving our homes. Thankfully, the market rewards transparency, efficiency, and renewable energy. Especially for those that have the ability to take advantage of historically low costs of capital, the investments in energy technology and efficiency will pay huge dividends in reclaimed value.
Study finds solar panels increase home values
Unlocking the value of an energy efficient home
"The premium ranged from $3.90 to $6.40 per watt of capacity, but tended most often to be about $5.50 per watt. This, the study said, 'corresponds to a home sales price premium of approximately $17,000 for a relatively new 3,100-watt PV system (the average size of PV systems in the study).'"
Unfortunately, the market still favors incumbents, so we need smart market development and regulation to make sure that we can transition to smarter uses of energy and not just ones that provide economic benefit to existing companies. Utilities need to be a part of the solution, and need to adopt a more flexible business model: one that allows them to maintain and transition their distribution infrastructure, but also allows them to participate in the renewable energy and community energy arenas.
Why US power companies don't want you putting solar panels on your roof
"The solar companies, however, fear this will make solar more expensive, hurting both their business and the spread of green energy as direct subsidies fade away. They argue that the utilities are overplaying their hand. A study they commissioned argues that the utilities actually benefit from distributed solar’s ability to help the grid meet local demand. This is especially true, it says, when utilities are required to use a certain share of renewables, and when customers are paying 'smart rates' that vary depending on when they purchase their power."
Happy Friday!
Thursday, August 15, 2013
Hyperloop is not alchemy or mysticism, but Musk just might be another Newton
Elon Musk, the entrepreneur behind PayPal, SpaceX, Tesla Motors and SolarCity, has responded to California's plan to create a nearly $100 billion high-speed rail corridor between San Francisco and Los Angeles by publishing a plan to create high-speed transportation between the cities for one-tenth the cost and besting the time by hours. In an open-source posting on the SpaceX website, Musk encourages anyone to use his idea and build the Hyperloop, or to offer suggestions for improvement, adjustment or refinement. The Hyperloop works using a low-pressure air tunnel installed above ground (picture the love child of the Monorail at Disney and the pneumatic tube communication system used at your local bank drive-up window) through which capsules carrying passengers - and potentially cargo - travel at speeds up to 700 miles per hour. This would limit the trip from San Fran to LA to about 30 minutes plus a couple of station stops along the way. This beats plane travel by an hour (not including the saved time going through security and waiting to board), and Musk predicts the ticket price could come in at around $20 each way, about twenty percent of even the best fare one could get.
Musk has already begun to hear from skeptics about the plan, which for the guy who founded one of the most disruptive car companies in the last fifty years probably means very little. Having read a few, I have to note that there appears to be more than a bit of knocking the king off his pedestal going on. Musk admits that the plan could likely be tweaked, and offered it up open-source for precisely that reason...well that and running or co-running four entrepreneurial ventures already takes up just a bit of his time. Also, reading the plan, I was struck by his plain-spoken language available to almost anyone to read and understand at least the concept. In addition, he acknowledges the limitations of the concept for trips over the distance between SF and LA, that it would likely not best supersonic air travel in any of the relevant metrics. It appears to me that Musk has given more than a cursory effort into the concept, and has hit upon if not a perfect idea, at least one that merits some consideration. What I do not get is the immediate dismissal of the concept as underwhelming or quixotic. Nor do I think Musk's reputation will get damaged in any way because of it. Newton spent many hours trying to turn lead into gold (which no one would want these days as it would further devalue gold), and Bohr spent years trying to refute or defend (depending on your point of view) the concept of mind controlling matter as part of quantum physics. Comparatively, postulating that travel across states can happen more cost effectively in a low-resistance tunnel powered by solar radiation seems positively sane.
As intriguing as attacking or defending Musk might be, I want to focus on the potential his idea has for changing the way we perceive location, and for changing the conversation about energy and transportation. If we look at the miles per energy input of various forms of transportation, we see:
Walking - 336 Btu/mile
Bicycling - 168 Btu/mile
Electric car - 1,237 Btu/mile
High mpg diesel car - 2,200 Btu/mile (55 mpg)
Passenger plane - 2,000-3,000 Btu/mile
Passenger train - 2,400 Btu/mile
Ship - 8,500-9,000 Btu/mile
Low mpg gasoline truck - 9,000 Btu/mile (13 mpg)
At about 7.4 million passengers each way for 350 miles each way, the total passenger miles equals about 5.18 billion per year. At an average power draw of 21 MW over the course of a year, that gives us a total energy draw of around 630 billion Btu per year, resulting in a net of about 120 Btu/mile...besting bicycle travel! Even with the overall production efficiency of the system running under 25%, the efficiency of the travel is impossible to beat. Add to this, a solar panel system that generates twice as much energy as the system need, and you have a combination fuel-free travel system and local energy generator for transit-oriented development around the stations.
I talk frequently about a low-entropy economy: one where we focus less on the inherent efficiency of the system as a means to lowering fuel consumption, and more on meeting the service need that energy delivers within the framework of the naturally available energy to the system. Even if Musk is off by a factor of two (and right now that looks unlikely), the system would still work within the available natural energy...making Hyperloop the only net-zero form of transportation (even for walking we need food transported to us).
It is okay to challenge creative thinkers...they usually welcome it as a way to make their ideas better. But we need to focus more on ways to implement the idea or best it. We need a major sea change in our approach to transportation, and the cascading effects on our way of life. Elon Musk might have hit on a concept that will revolutionize our approach to urban development and the way in which we connect with people...and like he says in his design description, until someone invents the transporter, we need a better way.
Musk has already begun to hear from skeptics about the plan, which for the guy who founded one of the most disruptive car companies in the last fifty years probably means very little. Having read a few, I have to note that there appears to be more than a bit of knocking the king off his pedestal going on. Musk admits that the plan could likely be tweaked, and offered it up open-source for precisely that reason...well that and running or co-running four entrepreneurial ventures already takes up just a bit of his time. Also, reading the plan, I was struck by his plain-spoken language available to almost anyone to read and understand at least the concept. In addition, he acknowledges the limitations of the concept for trips over the distance between SF and LA, that it would likely not best supersonic air travel in any of the relevant metrics. It appears to me that Musk has given more than a cursory effort into the concept, and has hit upon if not a perfect idea, at least one that merits some consideration. What I do not get is the immediate dismissal of the concept as underwhelming or quixotic. Nor do I think Musk's reputation will get damaged in any way because of it. Newton spent many hours trying to turn lead into gold (which no one would want these days as it would further devalue gold), and Bohr spent years trying to refute or defend (depending on your point of view) the concept of mind controlling matter as part of quantum physics. Comparatively, postulating that travel across states can happen more cost effectively in a low-resistance tunnel powered by solar radiation seems positively sane.
As intriguing as attacking or defending Musk might be, I want to focus on the potential his idea has for changing the way we perceive location, and for changing the conversation about energy and transportation. If we look at the miles per energy input of various forms of transportation, we see:
Walking - 336 Btu/mile
Bicycling - 168 Btu/mile
Electric car - 1,237 Btu/mile
High mpg diesel car - 2,200 Btu/mile (55 mpg)
Passenger plane - 2,000-3,000 Btu/mile
Passenger train - 2,400 Btu/mile
Ship - 8,500-9,000 Btu/mile
Low mpg gasoline truck - 9,000 Btu/mile (13 mpg)
At about 7.4 million passengers each way for 350 miles each way, the total passenger miles equals about 5.18 billion per year. At an average power draw of 21 MW over the course of a year, that gives us a total energy draw of around 630 billion Btu per year, resulting in a net of about 120 Btu/mile...besting bicycle travel! Even with the overall production efficiency of the system running under 25%, the efficiency of the travel is impossible to beat. Add to this, a solar panel system that generates twice as much energy as the system need, and you have a combination fuel-free travel system and local energy generator for transit-oriented development around the stations.
I talk frequently about a low-entropy economy: one where we focus less on the inherent efficiency of the system as a means to lowering fuel consumption, and more on meeting the service need that energy delivers within the framework of the naturally available energy to the system. Even if Musk is off by a factor of two (and right now that looks unlikely), the system would still work within the available natural energy...making Hyperloop the only net-zero form of transportation (even for walking we need food transported to us).
It is okay to challenge creative thinkers...they usually welcome it as a way to make their ideas better. But we need to focus more on ways to implement the idea or best it. We need a major sea change in our approach to transportation, and the cascading effects on our way of life. Elon Musk might have hit on a concept that will revolutionize our approach to urban development and the way in which we connect with people...and like he says in his design description, until someone invents the transporter, we need a better way.
Wednesday, August 14, 2013
Tuesday, August 13, 2013
Engineers do smart things that get us into trouble
Reports surfacing that ExxonMobil may have known about the risks associated with moving diluted bitumen through the Pegasus pipeline in Arkansas brings about the following response from me:
Yep.
I say this not in a "of-course-the-evil-corporate-behemoth-knows-that-its-likely-to-kill-nature-and-babies-and-doesn't-care" sort of way, but rather because EM employs thousands of engineers and as a rule - especially for the engineers oil companies can afford to hire - they inherently understand the imperfection in systems like pipelines. Engineers design, maintain, and reconfigure systems based upon the best information available at the time, the best practices at the time, and the acceptable level of risk given by ownership at the time.
And therein lies the point: the acceptable level of risk to an executive looking to tap into new markets varies greatly from the acceptable level of risk to a parent raising a child within a mile of a pipeline being reconfigured for use beyond its intended design.
The engineers who oversaw the reconfiguration of the pipeline used information from "the 2006 hydrotest [ExxonMobil] performed on that stretch of pipe ... conducted at stress pressures appropriate for calibrating maximum operating pressures, but not at levels experts believe is necessary to rid a pipeline of seam crack threats. The stress pressure Exxon used in 2006 also was lower than the stress pressure it used in 1991 to test a newer segment of the Pegasus." Engineers have an ethical requirement to protect the health, safety and welfare of people when they sign off on design work, and that would have applied to this effort as well. But they also have to be faithful trustees to their employer, and as long as their employer asks of them something legal and not in conflict with protecting health, safety and welfare, they are obligated to do it.
And therein lies the second point: by allowing the pipeline to run near a residential area, the people of Arkansas told ExxonMobil - and therefore its engineers - that having a pipeline with "acceptable level of risk" running near people was ok. No one associated with the approval process considered the pipeline accident-proof, and as long as the engineers relied upon practices consistent with the standard of care in the industry, they did everything they were supposed to do. (As did engineers designing Fukushima, and Three Mile Island)
Which leads us to the last point: that makes no sense.
Elizabeth Douglas at Inside Climate News suggests that "Exxon took calculated risks given the known condition of the 20-inch pipeline and either used a flawed integrity management plan, or had a good plan and didn’t adhere to it." But that tries to assign blame to the company when the blame lies with us. It is just as likely that the engineers at ExxonMobil did everything they were supposed to do within the ethics of their practice, standards in the industry, and legal requirement to protect the people near the rupture site. Pointing blame at ExxonMobil minimizes the true issue:
We have to allow our engineers to hold themselves to a higher ethical standard.
As long as balance sheets and insurance rates tell engineers how much they can threaten the health, safety, and welfare of people, they will be bound to provide their clients with solutions such as what happened at Pegasus. If we stiffen regulation on professionals and require them to calculate the likely risk scenarios, and prove that more people would be harmed by inaction than by action, then corporate decisions such as the one that lead to the reconfiguration of Pegasus will not happen in the future.
But be prepared, neither will new coal plant construction, new car manufacturing, or bridge opening (to name a few). We have told our engineers - our stewards of applied science and gatekeepers of our quality of life - that risking the lives of some to maintain quality of life for many is ok.
If you do not think it is, then you need to do something about it.
Yep.
I say this not in a "of-course-the-evil-corporate-behemoth-knows-that-its-likely-to-kill-nature-and-babies-and-doesn't-care" sort of way, but rather because EM employs thousands of engineers and as a rule - especially for the engineers oil companies can afford to hire - they inherently understand the imperfection in systems like pipelines. Engineers design, maintain, and reconfigure systems based upon the best information available at the time, the best practices at the time, and the acceptable level of risk given by ownership at the time.
And therein lies the point: the acceptable level of risk to an executive looking to tap into new markets varies greatly from the acceptable level of risk to a parent raising a child within a mile of a pipeline being reconfigured for use beyond its intended design.
The engineers who oversaw the reconfiguration of the pipeline used information from "the 2006 hydrotest [ExxonMobil] performed on that stretch of pipe ... conducted at stress pressures appropriate for calibrating maximum operating pressures, but not at levels experts believe is necessary to rid a pipeline of seam crack threats. The stress pressure Exxon used in 2006 also was lower than the stress pressure it used in 1991 to test a newer segment of the Pegasus." Engineers have an ethical requirement to protect the health, safety and welfare of people when they sign off on design work, and that would have applied to this effort as well. But they also have to be faithful trustees to their employer, and as long as their employer asks of them something legal and not in conflict with protecting health, safety and welfare, they are obligated to do it.
And therein lies the second point: by allowing the pipeline to run near a residential area, the people of Arkansas told ExxonMobil - and therefore its engineers - that having a pipeline with "acceptable level of risk" running near people was ok. No one associated with the approval process considered the pipeline accident-proof, and as long as the engineers relied upon practices consistent with the standard of care in the industry, they did everything they were supposed to do. (As did engineers designing Fukushima, and Three Mile Island)
Which leads us to the last point: that makes no sense.
Elizabeth Douglas at Inside Climate News suggests that "Exxon took calculated risks given the known condition of the 20-inch pipeline and either used a flawed integrity management plan, or had a good plan and didn’t adhere to it." But that tries to assign blame to the company when the blame lies with us. It is just as likely that the engineers at ExxonMobil did everything they were supposed to do within the ethics of their practice, standards in the industry, and legal requirement to protect the people near the rupture site. Pointing blame at ExxonMobil minimizes the true issue:
We have to allow our engineers to hold themselves to a higher ethical standard.
As long as balance sheets and insurance rates tell engineers how much they can threaten the health, safety, and welfare of people, they will be bound to provide their clients with solutions such as what happened at Pegasus. If we stiffen regulation on professionals and require them to calculate the likely risk scenarios, and prove that more people would be harmed by inaction than by action, then corporate decisions such as the one that lead to the reconfiguration of Pegasus will not happen in the future.
But be prepared, neither will new coal plant construction, new car manufacturing, or bridge opening (to name a few). We have told our engineers - our stewards of applied science and gatekeepers of our quality of life - that risking the lives of some to maintain quality of life for many is ok.
If you do not think it is, then you need to do something about it.
Monday, August 12, 2013
Return of Request Monday: Car purchase under $12k
For a while, I stopped getting asked questions, so Request Monday went on hiatus. For those who miss it, you can either ask me a question (which is what normally prompts a RM post) or visit a couple of other interesting blogs of similar nature: Ask Umbra at Grist and Mr. Green.
Today's question came from some friends who did not give me permission to post their name, so they will remain the Tom and Trish Needacar from Chicago. Tom has a job that requires him to drive about 500 miles a week, so they are now in the market, but can only spend about $12,000 for a new car. They want to be as conscious of the environment as they can, so what do they do?
First, I need to make an assumption, which hopefully does not stretch too far. If I assume a maximum cost in the neighborhood of $12,000, to me that means I will assume a maximum monthly car payment of about $225.00. I used the rate from my credit union (3%) for a 60-month loan. The exact cost and outcome of the analysis will vary if the term and rate change, but the relative comparison will not since I assume all of the cars will have the same term and rate of loan.
With that out of the way, I did a little shopping at Carmax to find a couple of used car options and found the following:
2005 Honda Civic ($10,500)
2005 Toyota Corolla ($12,000)
2007 Hyundai Elantra ($9,000)
All of these still get good gas mileage (around 30-35 combined city/highway), and have decent maintenance backgrounds. Note that for this analysis, I will only consider the cost of purchase and the cost of gasoline as part of the financial analysis. Because maintenance record varies by the manufacturer and dealer, the Needacars will have to determine their tolerance for used car maintenance versus new car maintenance.
For new cars, the only ones that fit into the budget of the Needacars are:
2013 Nissan Versa ($11,990)
2013 Chevy Spark ($12,170)
2013 Mazda 3 Sedan ($16,945)
I included the Mazda because it has the next step up in fuel efficiency (about 10% more efficient than either the Spark or Versa) and I wanted to see if that increase had any real impact on the value. To consider hybrid and electric options, I added:
2014 Chevy Spark ($27,500)
2013 Prius c Hatchback ($19,080)
With this list of eight as the basis for the analysis, I used FuelEconomy.gov for the official combined miles per gallon, emissions and list MSRP (manufacturer's suggested retail price). Then using a price of gasoline at $3.75 per gallon, I came up with a first year cost of ownership for driving about 25,000 miles per year. The results are as follows:
First Place: 2007 Hyundai Elantra
It is hard to beat the lowest first cost. At the current price of gas, the used option has the greatest value (again, ignoring maintenance costs) with better than average fuel efficiency. Total annual cost: $4,910.64.
Second Place: 2005 Honda Civic
The low sticker price again provides value, and although the fuel efficiency - on average - beats the Elantra, the difference does not make up for the over 10% better sticker price. Total annual cost: $5,064.33.
Third Place: 2014 Chevy Spark EV*
The surprise entry in the top three comes from the US-made electric Spark. We should note that part of the reason for this is a generous tax credit of $7,500 that the owners must take to lower the overall purchase price (something that would take a bit of wrangling since they will need to find a way to monetize that, but it is possible). The other piece that cannot be precisely determined is how much of the charging will be done where. If all of the charging is done at home, then the Spark drops out of first, but if Tom's place of work will provide access to a vehicle charger, then the net cost is $5,136.05.
The rest all fall between $5,300 and $6,300 per year, with the Prius and Mazda coming in near the top and the new Versa and Spark (non electric) coming in at $5,400 and $5,500 respectively. That puts the annual cost difference for used versus new at about $500. Pending the warranty and maintenance deals that the Needacars can get, that gives them a starting point for comparison.
I should note that looking at the sensitivity of the analysis to the price of gas, if the price of gas climbs to $4.25 a gallon, then the Spark EV (with employer charging) holds onto its value and becomes less expensive annually than any other option. The relative position of all other cars stays the same. At $5.00 a gallon, the Spark EV betters the used cars by at least $500 making it cost competitive, even if Tom and Trish had to charge it at home. Surprisingly, even a 25% increase in gas prices does not change the position of the Prius Hybrid. It remains a better value than the cars in its class, but it cannot compete with the lower-priced options.
I will not provide a recommendation, because there are so many other factors that must go into a car purchase: comfort, size (for parking), reliability, and resale value. Also, on the environmental side, the embodied energy of a used car getting used to its maximum has value over producing a new car from raw materials, and although this gets a little fuzzy (since its debatable that one car purchase actually prevents a new car from being made), it still is a consideration. That said, if someone is looking to be cost and emissions conscious, the Chevy Spark EV provides a hedge against rising gas prices while still being within the total price range for a middle-class family.
* I should note that emissions-wise, the Spark EV - like all electric vehicles in the Chicago area - carries an emissions profile similar to that ove the Prius at about 50 mpg. This is because a significant portion of Illinois electricity comes from coal. As that changes (or if an owner charges from electricity generated only from renewables), then the emissions profile improves.
Today's question came from some friends who did not give me permission to post their name, so they will remain the Tom and Trish Needacar from Chicago. Tom has a job that requires him to drive about 500 miles a week, so they are now in the market, but can only spend about $12,000 for a new car. They want to be as conscious of the environment as they can, so what do they do?
First, I need to make an assumption, which hopefully does not stretch too far. If I assume a maximum cost in the neighborhood of $12,000, to me that means I will assume a maximum monthly car payment of about $225.00. I used the rate from my credit union (3%) for a 60-month loan. The exact cost and outcome of the analysis will vary if the term and rate change, but the relative comparison will not since I assume all of the cars will have the same term and rate of loan.
With that out of the way, I did a little shopping at Carmax to find a couple of used car options and found the following:
2005 Honda Civic ($10,500)
2005 Toyota Corolla ($12,000)
2007 Hyundai Elantra ($9,000)
All of these still get good gas mileage (around 30-35 combined city/highway), and have decent maintenance backgrounds. Note that for this analysis, I will only consider the cost of purchase and the cost of gasoline as part of the financial analysis. Because maintenance record varies by the manufacturer and dealer, the Needacars will have to determine their tolerance for used car maintenance versus new car maintenance.
For new cars, the only ones that fit into the budget of the Needacars are:
2013 Nissan Versa ($11,990)
2013 Chevy Spark ($12,170)
2013 Mazda 3 Sedan ($16,945)
I included the Mazda because it has the next step up in fuel efficiency (about 10% more efficient than either the Spark or Versa) and I wanted to see if that increase had any real impact on the value. To consider hybrid and electric options, I added:
2014 Chevy Spark ($27,500)
2013 Prius c Hatchback ($19,080)
With this list of eight as the basis for the analysis, I used FuelEconomy.gov for the official combined miles per gallon, emissions and list MSRP (manufacturer's suggested retail price). Then using a price of gasoline at $3.75 per gallon, I came up with a first year cost of ownership for driving about 25,000 miles per year. The results are as follows:
First Place: 2007 Hyundai Elantra
It is hard to beat the lowest first cost. At the current price of gas, the used option has the greatest value (again, ignoring maintenance costs) with better than average fuel efficiency. Total annual cost: $4,910.64.
Second Place: 2005 Honda Civic
The low sticker price again provides value, and although the fuel efficiency - on average - beats the Elantra, the difference does not make up for the over 10% better sticker price. Total annual cost: $5,064.33.
Third Place: 2014 Chevy Spark EV*
The surprise entry in the top three comes from the US-made electric Spark. We should note that part of the reason for this is a generous tax credit of $7,500 that the owners must take to lower the overall purchase price (something that would take a bit of wrangling since they will need to find a way to monetize that, but it is possible). The other piece that cannot be precisely determined is how much of the charging will be done where. If all of the charging is done at home, then the Spark drops out of first, but if Tom's place of work will provide access to a vehicle charger, then the net cost is $5,136.05.
The rest all fall between $5,300 and $6,300 per year, with the Prius and Mazda coming in near the top and the new Versa and Spark (non electric) coming in at $5,400 and $5,500 respectively. That puts the annual cost difference for used versus new at about $500. Pending the warranty and maintenance deals that the Needacars can get, that gives them a starting point for comparison.
I should note that looking at the sensitivity of the analysis to the price of gas, if the price of gas climbs to $4.25 a gallon, then the Spark EV (with employer charging) holds onto its value and becomes less expensive annually than any other option. The relative position of all other cars stays the same. At $5.00 a gallon, the Spark EV betters the used cars by at least $500 making it cost competitive, even if Tom and Trish had to charge it at home. Surprisingly, even a 25% increase in gas prices does not change the position of the Prius Hybrid. It remains a better value than the cars in its class, but it cannot compete with the lower-priced options.
I will not provide a recommendation, because there are so many other factors that must go into a car purchase: comfort, size (for parking), reliability, and resale value. Also, on the environmental side, the embodied energy of a used car getting used to its maximum has value over producing a new car from raw materials, and although this gets a little fuzzy (since its debatable that one car purchase actually prevents a new car from being made), it still is a consideration. That said, if someone is looking to be cost and emissions conscious, the Chevy Spark EV provides a hedge against rising gas prices while still being within the total price range for a middle-class family.
* I should note that emissions-wise, the Spark EV - like all electric vehicles in the Chicago area - carries an emissions profile similar to that ove the Prius at about 50 mpg. This is because a significant portion of Illinois electricity comes from coal. As that changes (or if an owner charges from electricity generated only from renewables), then the emissions profile improves.
Friday, August 9, 2013
Friday Five: August 9, 2013
America established most of its infrastructure and set most of its lifestyle (not necessarily equal to quality of life) expectations in an era of limitless energy. Now that we realize not only will our current forms of energy be exhausted in most of our's lifetimes, but that even consuming a portion of it will irrevocably change our planet, it no longer seems as exciting, safe, or cool to do what we once did.
Have the suburbs hit a dead end?
"The suburbs were a great idea that worked really well for a long time, but they overshot their mandate. We supersized everything in a way that led many people to live far away from where they needed to be and far away from their neighbors, and that has far-reaching implications, no pun intended. People have turned away from that kind of living. Add in the demographic forces that are reshaping our whole population, and the result is a significant shift. Census data shows that outward growth is slowing and inward growth is speeding up."
For something to have "scientific proof", we must first identify correlation, establish the science of causation, then repeatedly replicate the causation under the assumed scenario. Using this as a guide, we are well along the path to proving that processed foods - as currently engineered - do more harm than good.
Scientists officially link processed foods to autoimmune disease
"The team from Yale University studied the role of T helper cells in the body. These activate and ‘help’ other cells to fight dangerous pathogens such as bacteria or viruses and battle infections.
Previous research suggests that a subset of these cells – known as Th17 cells – also play an important role in the development of autoimmune diseases.
In the latest study, scientists discovered that exposing these cells in a lab to a table salt solution made them act more ‘aggressively.’
They found that mice fed a diet high in refined salts saw a dramatic increase in the number of Th17 cells in their nervous systems that promoted inflammation.
They were also more likely to develop a severe form of a disease associated with multiple sclerosis in humans."
Although we do not yet know that the levels of radiation released into the ocean will cause issues - for we should remember that we have some level of radiation naturally occurring all the time - the larger concern comes from the continued inability to contain. The safety of nuclear-fuel generated energy comes from the assumption of perfection in operations. Without perfection, the risks escalate to an unacceptable point. Especially when we know now that other forms of energy generation that cause less harm also cost less.
New leaks into Pacific at Japan nuclear plant
"The water contains strontium and cesium, as well as tritium, which is considered less dangerous when released into the ocean. Despite increasing alarm among regulators in recent weeks, the plant’s operator says it does not yet pose a health threat because levels of the contaminants are still very low in the open ocean, beyond the plant’s man-made harbor — a contention even critics support."
I will continue to point stories like this out until the point comes across: our economy is man-made, and whatever we deem important will be cost effective. Incumbents in the marketplace can always rig the system in their own favor, unless we step in and stop it. It has nothing to do with theoretical economics or "free markets", its just greed and self-preservation and our system encourages it. It also has no connection to natural law, which should frighten all of us.
FirstEnergy paid $100 million too much for renewable power
"The Public Utilities Commission of Ohio has ruled FirstEnergy overcharged its Ohio customers by $43.3 million for electricity generated by wind and solar. A consultant to the commission found overcharges of more than $100 million. "
For those in the Midwest who see this as just another story of how "the coasts" are doing, the Great Lakes present a huge opportunity for offshore wind. If these developments move forward, we could see offshore wind on the great lakes by 2020 to 2025. If done right, that would mean greater opportunity to rid our local grid of harmful forms of electricity generation.
Deepwater wins first auction for US offshore wind lease
"The project may cost as much as $5 billion, including about $1 billion for transmission systems to deliver power to shore, Deepwater Chief Executive Officer Jeff Grybowski said yesterday by phone. He plans to market the project’s electricity to potential buyers in Long Island, Rhode Island, Massachusetts and Connecticut.
'We’re hoping that this year and next year we can start putting the power purchase agreements together,' Grybowski said. The project will likely be built in phases with 200 megawatts to 400 megawatts of generating capacity, he said. 'It’s unlikely we would try to sell the power all at once.'"
Happy Friday!
Have the suburbs hit a dead end?
"The suburbs were a great idea that worked really well for a long time, but they overshot their mandate. We supersized everything in a way that led many people to live far away from where they needed to be and far away from their neighbors, and that has far-reaching implications, no pun intended. People have turned away from that kind of living. Add in the demographic forces that are reshaping our whole population, and the result is a significant shift. Census data shows that outward growth is slowing and inward growth is speeding up."
For something to have "scientific proof", we must first identify correlation, establish the science of causation, then repeatedly replicate the causation under the assumed scenario. Using this as a guide, we are well along the path to proving that processed foods - as currently engineered - do more harm than good.
Scientists officially link processed foods to autoimmune disease
"The team from Yale University studied the role of T helper cells in the body. These activate and ‘help’ other cells to fight dangerous pathogens such as bacteria or viruses and battle infections.
Previous research suggests that a subset of these cells – known as Th17 cells – also play an important role in the development of autoimmune diseases.
In the latest study, scientists discovered that exposing these cells in a lab to a table salt solution made them act more ‘aggressively.’
They found that mice fed a diet high in refined salts saw a dramatic increase in the number of Th17 cells in their nervous systems that promoted inflammation.
They were also more likely to develop a severe form of a disease associated with multiple sclerosis in humans."
Although we do not yet know that the levels of radiation released into the ocean will cause issues - for we should remember that we have some level of radiation naturally occurring all the time - the larger concern comes from the continued inability to contain. The safety of nuclear-fuel generated energy comes from the assumption of perfection in operations. Without perfection, the risks escalate to an unacceptable point. Especially when we know now that other forms of energy generation that cause less harm also cost less.
New leaks into Pacific at Japan nuclear plant
"The water contains strontium and cesium, as well as tritium, which is considered less dangerous when released into the ocean. Despite increasing alarm among regulators in recent weeks, the plant’s operator says it does not yet pose a health threat because levels of the contaminants are still very low in the open ocean, beyond the plant’s man-made harbor — a contention even critics support."
I will continue to point stories like this out until the point comes across: our economy is man-made, and whatever we deem important will be cost effective. Incumbents in the marketplace can always rig the system in their own favor, unless we step in and stop it. It has nothing to do with theoretical economics or "free markets", its just greed and self-preservation and our system encourages it. It also has no connection to natural law, which should frighten all of us.
FirstEnergy paid $100 million too much for renewable power
"The Public Utilities Commission of Ohio has ruled FirstEnergy overcharged its Ohio customers by $43.3 million for electricity generated by wind and solar. A consultant to the commission found overcharges of more than $100 million. "
For those in the Midwest who see this as just another story of how "the coasts" are doing, the Great Lakes present a huge opportunity for offshore wind. If these developments move forward, we could see offshore wind on the great lakes by 2020 to 2025. If done right, that would mean greater opportunity to rid our local grid of harmful forms of electricity generation.
Deepwater wins first auction for US offshore wind lease
"The project may cost as much as $5 billion, including about $1 billion for transmission systems to deliver power to shore, Deepwater Chief Executive Officer Jeff Grybowski said yesterday by phone. He plans to market the project’s electricity to potential buyers in Long Island, Rhode Island, Massachusetts and Connecticut.
'We’re hoping that this year and next year we can start putting the power purchase agreements together,' Grybowski said. The project will likely be built in phases with 200 megawatts to 400 megawatts of generating capacity, he said. 'It’s unlikely we would try to sell the power all at once.'"
Happy Friday!
Thursday, August 8, 2013
When you rob Peter to pay Paul, what happens when Peter is REALLY angry and powerful?
We all love low prices. If we can get something for nothing, all the better. If something does not keep dropping in price, it becomes fodder for politicians to rail against the party in power as not doing enough to keep prices down.
We often - if not always - miss the point.
Prices are a relative indicator of priorities. When we get caught up so much in the "something for nothing" game, we forget that what we pay for something determines the value and incentive someone else has to produce that good or service. (Just try to find a high-quality, full-feature VCR these days.) Typically, in theoretical economics, the price of a good or service depends only on the availability of the item (supply) and the desire of the public for it (demand). When supply is high and demand low, prices drop, and vice versa when demand is high and supply low. On paper, this works well at allocating consumable or finite resources (like food and time respectively), but in the real world, we manipulate prices in so many ways that disrupt the ideal marketplace, often with disastrous results.
One need look no further for an example of this than US food and agriculture policy for the last seventy years. After the Depression, and the devastation of rural America during the Dust Bowl of the first half of last century, we made a social compact to support farming with crop insurance, infrastructure support, and - unfortunately - subsidies. Let me quickly state that reducing the risk associated with farming, especially for independent and small farmers who should make up the entirety if not the majority of farming in this country, is a good thing. However, the way we have subsidized it has had disastrous results for our health and our way of life.
The Union of Concerned Scientists just released a report (with a catchy video) detailing the cost to Americans in lives lost and medical cost escalation due to the skewed policies of farm subsidies and crop insurance in the US, and the behaviors that we have adopted readily because of the distortions in the market. Because of the cost and availability of fruits and vegetables relative to subsidized crops such as corn and soybeans (and their byproducts), Americans eat less than half of the fruits and vegetables necessary to maintain health. Meanwhile, overproduction of these "staple crops" results in the desire to find as many ways as possible to get the product into the marketplace. Anytime a cheap, subsidized product can replace a more expensive, unsubsidized one, the market will make sure it happens. Thus we have high-fructose corn syrup, soy lecithin, and cheap junk food from various forms of processed soy and corn finding their way into our food system. (The fact that 90% of this soy and corn comes from genetically modified sources is a topic for another day.) From the report:
In addition, policy makers should remedy flaws in current
farm policy that restrict the supply of domestically
grown fruits and vegetables in more overt ways.
Currently, farmers who receive subsidies to grow commodity
crops such as corn are prohibited under those
subsidy programs from planting any acreage with
fruits and vegetables, except under certain conditions.
The removal of such planting restrictions would be
an important step toward facilitating more competitive
market conditions for healthful foods.
The federal crop insurance program is yet another exampleFederal farm policy is not the only change needed, we must all make smarter choices as well.
of where farm policy reform is urgently needed.
The USDA-administered and -subsidized insurance
program is oriented toward farmers who grow a handful
of subsidized commodity crops, including corn,
soybeans, and cotton. Many fruit and vegetable farmers,
particularly those growing a variety of crops, do
not have access to adequate insurance. This omission
places these farmers at a disadvantage, as the
lack of crop insurance, particularly for those on smaller
farms, often translates into difficulty in obtaining
needed credit (O’Hara, 2012). Instead, a USDA-backed
insurance policy covering all the crop and livestock
revenue that a farm generates in a year (in contrast
to crop-specific insurance policies) should apply. The
new policy could provide risk management to diversified
fruit and vegetable farmers, thereby helping
them supply more local markets and consumers with fresh
and affordable produce.
The savings associated with major shifts in policy and behavior combined is huge. The authors of the report calculate that the savings in medical care and treatment resulting from increasing fruit and vegetable intake by one more serving a day would be $5 billion a year today and $13 billion a year in 2030. Increasing just to the recommended level of daily fruit and vegetable intake would mean a savings of $17 billion a year today and $54 billion a year in 2030. That just represents the cost savings from increased cardiovascular disease relative to a baseline of healthy eaters. The greater cost to society comes from the early deaths associated with this subsidized lifestyle of unhealthy eating. Again, the report:
While these medical cost savings are significant,The report acknowledges that setting a value for human life in an economy has its pitfalls. We do not think of people's lives in terms of the value someone else would pay for them, but the report does look at the costs people will pay to reduce their risk of death. Given that valuation, the report estimates the value of the saved lives from improved diet come in at around $11.4 trillion.
they are dwarfed when compared with the value of
increased longevity that would result from a population-
wide dietary shift. Assuming, as above, that
premature deaths from heart disease and stroke are
proportional to the incidence rates of these diseases,
we estimate that a sustained daily per capita oneserving
increase in fruit and vegetable consumption
would prevent 30,301 premature deaths annually.
And if Americans ate fruits and vegetables at the
Guidelines’ recommended levels, we could save
127,261 lives each year.
Yes. With a "t". Trillion.
This does not account for the value each person adds to the economy, nor the improved quality of life of both the saved lives and the rest of the Americans who eat a healthier diet. This just values the cost savings from treating one range of diseases associated with unhealthy eating and the reduced risk of death for the lives saved. With $11.4 trillion as a starting point, think of the impact if we made even some of the simple changes outlined in the report.
We can go on believing that a working economy will reflect our priorities and give us the right things at the lowest price, but the opposite is true. We must strive to make sure our purchases in the economy reflect our values. We must also make sure that our lawmakers reflect these values in the policy decisions they make, and that those decisions contribute to our quality of life - not damage it. We can celebrate low prices for basic needs, and ignore the fact that the proliferation of low cost "staples" means higher costs and shorter lifespans in the future.
But nature has a way of ignoring our man-made economy and our political rhetoric. If something is unhealthy, no amount of political speechmaking or low prices will make it not so. It is up to each of us to make our economy reflect our values...and to make our economy save life instead of wasting it.
Wednesday, August 7, 2013
Flashes: August 7, 2013
There ought to be a law:
- That closes down any energy company that pursues a gag order against anyone (especially a minor) to keep them from talking about the harm done them by the operations of the company - if that company causes harm to any other person.
- Against ag gag laws.
- Against smoking on public sidewalks. I genuinely have no issue with another persons choice to smoke. I just do not want to have to smoke someone else's cigarette.
- That makes sure every decision by a government, bank, business, or homeowner stops each of these from continuing on their present course:
Enjoy the journey!
Tuesday, August 6, 2013
The early returns are in....Chicago's aggregation is (barely) better than utility, but still more than hourly
A little late to the game, the City of Chicago made the leap to municipal aggregation this winter/spring, and gained a short-term benefit for residents of the city through the months of March, April and May. The City negotiated a price of $0.05589 per unit of electricity (in Illinois, our meters measure and report kilowatt-hours or kWh), compared with the $0.0799 per unit from the utilities - thanks to outdated, reliability-focused contracts. For three months, residents of the city enjoyed an approximately 15% reduction on their bill (totaling around $45 for the three months).
Although any reduction of cost to the consumer by a city has merit, that savings evaporated this summer when the outdated contracts ended, and the utility rate for supply (not for distribution, which the city did not, and cannot affect) dropped to more in line with the marketplace. Specifically, it fell to around $0.0569 per unit, meaning the City contract saves less than 1% over the entire bill.* On the plus side, this means that Chicagoans will not be harmed financially over the next year as a result of the aggregation. Also, if this September, when a new round of reductions may occur in the utility rate, the cost of ComEd drops below the aggregated rate, the consumers will switch back or the City rate will drop automatically.
There are two ways that Illinois, and specifically Chicago, loses in this. First, customers on the real-time pricing plan have enjoyed a savings of an additional 3-5% more than the city negotiated. This means had Chicago done nothing but move all its customers within the utility contract to real-time, there would be even greater savings without the involvement of a corporation that does not have to retain all its profits and expenses within the state or city. Second, the short-term nature of these supply contracts provides little incentive for the company to make any long-term investments in community energy or energy efficiency on a large scale. Chicago did its best in the negotiations to include some of those elements, but the marketplace significantly restricts what a short-term supplier can do.
At this point, it looks as if the main consequence of going through aggregation was to drive a wedge between the residents of the city and the electric utility. If a future step involves the city attempting to buy-back the electrical infrastructure and operate independently from ComEd, it will be easier if consumers are already used to the concept of an "electric company" that is not ComEd. (The City of Chicago already owns and maintains all of the water pipe and support infrastructure.) If this is not the City's goal, then we will see if decreasing the incentive for the utility to invest in community energy and storage technologies makes any sense.
So far, it is a short-term savings with long-term consequences that may be penny wise, but pound foolish.
*Note that the savings is on the energy supply portion of the bill, which makes up only about half of the total bill for the homeowner. Municipal aggregation does not change the utility distribution portion of the bill, which will continue to increase, now more steadily thanks to changes approved by the Illinois General Assembly this year that allows ComEd and Ameren to increase distribution charges automatically by formula, and give the Illinois Commerce Commission only the ability to go back after reductions if the formula generated a larger increase than warranted.
Monday, August 5, 2013
The Illinois RPS is broke...and needs a better fix than currently proposed
We have become dependent on relatively cheap, but environmentally damaging, energy resources to build the quality of life that we have in this country. That comes at a price, for now we use energy at nearly twice the rate of other developed countries, and pollute our air and water at rates that we cannot sustain. We have working technologies that produce the energy we need at costs equal to, or even less than, these "established" sources of energy. However, these established industries have sunk capital in them, and have leveraged incumbency to set high hurdles to entry: they do not pay for the impact of their industry on the quality of life of the citizenry, and the financial markets do not readily provide investment capital to new energy technologies without long-term agreements between generator and consumer.
Meet chicken and egg.
Renewable energy technology developers cannot get access to capital without guarantees that they will have customers. Customers cannot buy energy from a generating/supply facility that does not exist. Since the technology developers do not have a pile of cash from a century of previous development sitting around to fund their own development, we end up at a stalemate whereby people who know how badly we impact our environment through our current use of energy cannot make the choice to move to more renewable means because the marketplace does not have supply able to meet their demand.
Enter the renewable portfolio standard (RPS).
A unit of government (in the US this mostly happens on the state level) sets a minimum percentage of the energy supply that suppliers must meet through one of several means that the unit determines meets the definition of "renewable". This varies by state, however the top contenders usually include wind, solar, hydro, biomass, and geothermal. States that still have utilities as the only means of supplying energy monitor the utility purchases and make sure each complies. In state, like Illinois, that had both utility purchasing of energy and deregulated, private corporations supplying energy to customers that no longer wanted to purchase from the utility, this requires a more complicated - but manageable - regulatory effort. In either case, the market then has a "carve-out" of annual revenue that will go to the renewable energy industry, and developers with the best technology can (or should) use that leverage to obtain financing to develop. How this regulation happens, and how these financial mechanisms spur development, and where the energy comes from all determine the relative strength or weakness of a state RPS, and provide the framework for why the Illinois RPS is so out of whack and needs adjusting...and not just a simple revision to address a slight issue, but a major revamping to accomplish what the RPS in Illinois set out to do: "ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time".
The need for a standard
In the last years of last century, and the first few years of this century, the technology for wind-generated electricity improved to the point where analysts predicted that the price for wind-generated electricity would compete favorably with coal and nuclear-generated electricity. (This has proven to be the case.) As one would expect, states looking to get early entry into the market for supplying products and labor to build and install wind energy systems jumped at the opportunity. As early as 1990, Iowa had incentive programs in place to develop wind energy projects, which resulted in Iowa remaining mostly in the top three nationally in terms of installed wind capacity for the past decade (behind Texas and California). Through 2002, Illinois had almost no installed wind generation capacity (despite Iowa, Wisconsin and Minnesota developing measurable capacity), and through 2006, had only about 100 MW installed (about 0.2% of total capacity compared with Iowa and Minnesota's over 6% each). Illinois was losing out on expertise, manufacturing, and jobs.
In 2007, the Illinois General Assembly passed the
Illinois Power Agency Act (IPAA) which established in law two main goals:
1. Established a state agency to oversee
procurement of electricity for residential and small
retail customers of the state's two utilities (ComEd
for the northern half of the state and Ameren for
the southern). This agency - in theory - would then be able to procure electricity at better rates than the utilities, and lower prices for retail electricity.
2. It called for a RPS to require 25% of all electricity sold in the state to come from renewable sources by 2025. The agency would manage this process by entering into direct contracts with generators and wholesale suppliers, with priority given to Illinois generation, then adjoining states, then other states. The agency had the ability to tap into Illinois Finance Authority bonds, and back the payment up with renewable energy certificate purchases over up to twenty years.
Illinois finally had some clarity to the marketplace, utilities had some cover now that they would no longer have direct control over prices, and the development of wind energy in Illinois soared. (Truthfully, many projects had already been in development both for economic and political reasons as many expected movement on the RPS leading up to 2007.) The RPS focused on wind, with a requirement for 75% of all purchases to come from that source. Not surprisingly, over the next two years, total installed wind capacity in Illinois increased 1000%, and Illinois moved from 16th to 7th in the country in total installed capacity.
By 2012, Illinois had moved up to 4th in the country in installed capacity, with just over 3.5 GW (1,000,000,000 watts) of wind capacity in the state. Illinois still lags Iowa, but has surpassed Minnesota, and relatively quickly has become a leader nationally on wind energy development. Growth rates have slowed - due to the recession of 2008/9 and particularly after questions about the production tax credit renewal in 2013 lessened expectations in 2012 - as have most of the US, but the RPS appears to have done what it said it would do. So why fix it?
The challenge: municipal aggregation
Unbeknownst to the legislators at the time, establishing the Illinois Power Agency would prove a good long-term solution to renewable energy purchase, but a bad short-term solution to purchasing electricity. The charge to deliver "adequate, reliable" electric service served as the primary goal of the agency, much as it had the utilities previously. The agency took over the existing utility contracts, some extending out five years, then entered into some of its own long-term arrangements to "layer" supply contracts. (Layering is a term of art in the energy procurement business to describe a purchasing plan that takes the whole projected usage and purchases chunks of that future usage at regular intervals at the best price possible at that time. It minimizes risk that a future spike in prices will cause a major disruption, but it also means that consumers do not get the full benefit of future declines.) As we all know, in 2008-2009 we experienced a "Great Recession" that stagnated the economy. This stagnation reflected in significantly decreased energy use from which we have started to rebound, but that drop in demand caused an immediate drop in prices. This left the previous utility contracts and the new IPA contracts at well above market price, leaving an opportunity for those who had the information about those contracts.
Energy consultants and municipalities lead a charge to allow residents within smaller government entities - on their own and in combination - to do what industrial, institutional, and large commercial customers had done many years before: separate themselves from the utilities completely and negotiate directly with suppliers. In 2009, the Illinois General Assembly granted their wish and amended the IPAA to allow for community aggregation. The municipal entity (or entities in combination) could immediately establish a contract with a supplier to which their residents and small businesses could choose to join (or "opt-in"), or these governments could hold a referendum, and if it passed, they could move almost all customers over to a supplier. In this case, any resident who did not want to leave the utility could "opt-out" in writing. (The aggregation did not apply to any customer who had already chosen a retail supplier, or who participated in a utility real-time program where they pay the hourly price for electricity.) These supplier contracts were guaranteed to be cheaper than the IPA, and thus legislators took the easy victory and delivered cheaper electricity to their constituents in the short-term.
Lawmakers had the foresight to make sure that the renewable energy purchase requirements in the IPAA applied to any retail supplier chosen by a municipality. However, the compliance path for the suppliers who aggregated customers took an odd form. Instead of requiring that the ARES (or alternative retail electricity suppliers, as they are known in the law) follow the same procedure as the IPA and establish long-term deals, something they could not do because they had neither the state's bonding ability nor the assured customer base to use as leverage, they gave them the choice of purchasing through agreement or making a compliance payment.
The agreements could be power purchase agreements - as the IPAA envisioned with long-term purchases supporting development, or renewable energy certificates or credits (REC) in which a generator of renewable energy anywhere in the country can sell the "environmental attributes" of the generation (basically the cost above the local price for fossil-fuel/nuclear-generated electricity) to the highest bidder. The REC market in the US has declined in price to the point where existing REC do not cost enough to justify new development, and only provide additional revenue to existing generators.
The alternative compliance payment (ACP) provides another way for the ARES to meet its obligation to purchase renewable energy. In this case, that payment goes into a fund controlled by the IPA separate from the funds generated by contracts managed by the agency. In a quirk of lawmaking, the General Assembly gave the IPA the power to spend the money in funds obtained through direct contracts with the suppliers and utilities (covering about 10% of consumers across the state), but not funds coming from ACP (which covers the remaining 90% of consumers). Those sit, unspent, until the agency gets power, or the lawmakers move the funds to pay other bills as they did the first year it existed. So not only do we have less investment potential in new renewable sources, but those purchases that the ARES and the IPA make for REC go not only to local generation, but to any generator in the country.
The proposed solution (as found in Senate bill 103 from earlier this year) is to simplify. Advocated near and far recommend a simple change to the structure of the IPA and the ACP: instead of having ARES make payments into a fund, have the utilities collect the fees from consumers and place them into the fund that IPA can use for development. This restores the customer base to the IPA, as now it would be 100% of consumers in Illinois who would pay for the "additional cost" of renewable energy that would incentivize development. However, it does not change the ability of the IPA to use REC instead of purchasing agreements, and it does not change the balance of energy from mostly wind. Easy fix that should easily pass the General Assembly...except that it did not.
The counter-argument: everything's fine
Turns out that Exelon, the parent company of ComEd, does not want to change the way the law has been adjusted to work. Prices in Illinois have dropped over the last several years, and those declining revenues have created problems for the unregulated supply industry - especially those generators who use coal or nuclear as fuel, like Exelon. Anything that increases the growth of wind especially, which has shown promise against even natural gas as of late, jeopardizes the bottom line of these suppliers, and intentional or not, this adverse scenario at the very least slows the growth of wind. Those arguing against change have a point. Looking at wind development since 2006, the growth has remained steady and above the national average. The growth rate is comparable to Minnesota, and trails only Iowa, which one could argue we would no matter what. Until we see a drop, projected or real, in the growth of wind, why make any change?
Meet chicken and egg.
Renewable energy technology developers cannot get access to capital without guarantees that they will have customers. Customers cannot buy energy from a generating/supply facility that does not exist. Since the technology developers do not have a pile of cash from a century of previous development sitting around to fund their own development, we end up at a stalemate whereby people who know how badly we impact our environment through our current use of energy cannot make the choice to move to more renewable means because the marketplace does not have supply able to meet their demand.
Enter the renewable portfolio standard (RPS).
A unit of government (in the US this mostly happens on the state level) sets a minimum percentage of the energy supply that suppliers must meet through one of several means that the unit determines meets the definition of "renewable". This varies by state, however the top contenders usually include wind, solar, hydro, biomass, and geothermal. States that still have utilities as the only means of supplying energy monitor the utility purchases and make sure each complies. In state, like Illinois, that had both utility purchasing of energy and deregulated, private corporations supplying energy to customers that no longer wanted to purchase from the utility, this requires a more complicated - but manageable - regulatory effort. In either case, the market then has a "carve-out" of annual revenue that will go to the renewable energy industry, and developers with the best technology can (or should) use that leverage to obtain financing to develop. How this regulation happens, and how these financial mechanisms spur development, and where the energy comes from all determine the relative strength or weakness of a state RPS, and provide the framework for why the Illinois RPS is so out of whack and needs adjusting...and not just a simple revision to address a slight issue, but a major revamping to accomplish what the RPS in Illinois set out to do: "ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time".
The need for a standard
In the last years of last century, and the first few years of this century, the technology for wind-generated electricity improved to the point where analysts predicted that the price for wind-generated electricity would compete favorably with coal and nuclear-generated electricity. (This has proven to be the case.) As one would expect, states looking to get early entry into the market for supplying products and labor to build and install wind energy systems jumped at the opportunity. As early as 1990, Iowa had incentive programs in place to develop wind energy projects, which resulted in Iowa remaining mostly in the top three nationally in terms of installed wind capacity for the past decade (behind Texas and California). Through 2002, Illinois had almost no installed wind generation capacity (despite Iowa, Wisconsin and Minnesota developing measurable capacity), and through 2006, had only about 100 MW installed (about 0.2% of total capacity compared with Iowa and Minnesota's over 6% each). Illinois was losing out on expertise, manufacturing, and jobs.
In 2007, the Illinois General Assembly passed theIllinois Power Agency Act (IPAA) which established in law two main goals:
1. Established a state agency to oversee
procurement of electricity for residential and small
retail customers of the state's two utilities (ComEd
for the northern half of the state and Ameren for
the southern). This agency - in theory - would then be able to procure electricity at better rates than the utilities, and lower prices for retail electricity.
2. It called for a RPS to require 25% of all electricity sold in the state to come from renewable sources by 2025. The agency would manage this process by entering into direct contracts with generators and wholesale suppliers, with priority given to Illinois generation, then adjoining states, then other states. The agency had the ability to tap into Illinois Finance Authority bonds, and back the payment up with renewable energy certificate purchases over up to twenty years.
By 2012, Illinois had moved up to 4th in the country in installed capacity, with just over 3.5 GW (1,000,000,000 watts) of wind capacity in the state. Illinois still lags Iowa, but has surpassed Minnesota, and relatively quickly has become a leader nationally on wind energy development. Growth rates have slowed - due to the recession of 2008/9 and particularly after questions about the production tax credit renewal in 2013 lessened expectations in 2012 - as have most of the US, but the RPS appears to have done what it said it would do. So why fix it?The challenge: municipal aggregation
Unbeknownst to the legislators at the time, establishing the Illinois Power Agency would prove a good long-term solution to renewable energy purchase, but a bad short-term solution to purchasing electricity. The charge to deliver "adequate, reliable" electric service served as the primary goal of the agency, much as it had the utilities previously. The agency took over the existing utility contracts, some extending out five years, then entered into some of its own long-term arrangements to "layer" supply contracts. (Layering is a term of art in the energy procurement business to describe a purchasing plan that takes the whole projected usage and purchases chunks of that future usage at regular intervals at the best price possible at that time. It minimizes risk that a future spike in prices will cause a major disruption, but it also means that consumers do not get the full benefit of future declines.) As we all know, in 2008-2009 we experienced a "Great Recession" that stagnated the economy. This stagnation reflected in significantly decreased energy use from which we have started to rebound, but that drop in demand caused an immediate drop in prices. This left the previous utility contracts and the new IPA contracts at well above market price, leaving an opportunity for those who had the information about those contracts.
Energy consultants and municipalities lead a charge to allow residents within smaller government entities - on their own and in combination - to do what industrial, institutional, and large commercial customers had done many years before: separate themselves from the utilities completely and negotiate directly with suppliers. In 2009, the Illinois General Assembly granted their wish and amended the IPAA to allow for community aggregation. The municipal entity (or entities in combination) could immediately establish a contract with a supplier to which their residents and small businesses could choose to join (or "opt-in"), or these governments could hold a referendum, and if it passed, they could move almost all customers over to a supplier. In this case, any resident who did not want to leave the utility could "opt-out" in writing. (The aggregation did not apply to any customer who had already chosen a retail supplier, or who participated in a utility real-time program where they pay the hourly price for electricity.) These supplier contracts were guaranteed to be cheaper than the IPA, and thus legislators took the easy victory and delivered cheaper electricity to their constituents in the short-term.
Lawmakers had the foresight to make sure that the renewable energy purchase requirements in the IPAA applied to any retail supplier chosen by a municipality. However, the compliance path for the suppliers who aggregated customers took an odd form. Instead of requiring that the ARES (or alternative retail electricity suppliers, as they are known in the law) follow the same procedure as the IPA and establish long-term deals, something they could not do because they had neither the state's bonding ability nor the assured customer base to use as leverage, they gave them the choice of purchasing through agreement or making a compliance payment.
The agreements could be power purchase agreements - as the IPAA envisioned with long-term purchases supporting development, or renewable energy certificates or credits (REC) in which a generator of renewable energy anywhere in the country can sell the "environmental attributes" of the generation (basically the cost above the local price for fossil-fuel/nuclear-generated electricity) to the highest bidder. The REC market in the US has declined in price to the point where existing REC do not cost enough to justify new development, and only provide additional revenue to existing generators.
The alternative compliance payment (ACP) provides another way for the ARES to meet its obligation to purchase renewable energy. In this case, that payment goes into a fund controlled by the IPA separate from the funds generated by contracts managed by the agency. In a quirk of lawmaking, the General Assembly gave the IPA the power to spend the money in funds obtained through direct contracts with the suppliers and utilities (covering about 10% of consumers across the state), but not funds coming from ACP (which covers the remaining 90% of consumers). Those sit, unspent, until the agency gets power, or the lawmakers move the funds to pay other bills as they did the first year it existed. So not only do we have less investment potential in new renewable sources, but those purchases that the ARES and the IPA make for REC go not only to local generation, but to any generator in the country.
The proposed solution (as found in Senate bill 103 from earlier this year) is to simplify. Advocated near and far recommend a simple change to the structure of the IPA and the ACP: instead of having ARES make payments into a fund, have the utilities collect the fees from consumers and place them into the fund that IPA can use for development. This restores the customer base to the IPA, as now it would be 100% of consumers in Illinois who would pay for the "additional cost" of renewable energy that would incentivize development. However, it does not change the ability of the IPA to use REC instead of purchasing agreements, and it does not change the balance of energy from mostly wind. Easy fix that should easily pass the General Assembly...except that it did not.
The counter-argument: everything's fine
Turns out that Exelon, the parent company of ComEd, does not want to change the way the law has been adjusted to work. Prices in Illinois have dropped over the last several years, and those declining revenues have created problems for the unregulated supply industry - especially those generators who use coal or nuclear as fuel, like Exelon. Anything that increases the growth of wind especially, which has shown promise against even natural gas as of late, jeopardizes the bottom line of these suppliers, and intentional or not, this adverse scenario at the very least slows the growth of wind. Those arguing against change have a point. Looking at wind development since 2006, the growth has remained steady and above the national average. The growth rate is comparable to Minnesota, and trails only Iowa, which one could argue we would no matter what. Until we see a drop, projected or real, in the growth of wind, why make any change?
Time for a real solution: change the utilities and the RPS
Even though the growth of wind-generated electricity capacity has remained steady over the past five years, and does not show signs of significant slowdown, overall growth of renewable energy generation in Illinois lags the rest of the country. The original RPS looked for 5% of electricity generation from renewables in 2010, and per the Energy Information Administration, Illinois generated only 4%. Trends suggest that the growth needed to recover and meet future targets will not come with the market and policies as constructed.
Opponents of the RPS in Illinois, or at least those who oppose changing it, do have a point that the RPS does focus on wind, and even though a carve-out for solar was made in 2009, it is so small as to suggest that the current law picks favorites. Although challenges to RPS across the country have, to date, had little success, having the appearance of favoring one technology over another puts those advocates for real change in our energy economy at a disadvantage since they regularly rail against subsidies to fossil fuels that skew the marketplace. Providing the capability for long-term contracts has enough power in it to drive the marketplace, and carve-outs should remain only for technologies that have a proven track record of performance but need scale to drive investment...and wind no longer needs this.
In order to preserve the RPS, make it relevant again, and retain support from utilities, the legislature needs to consider a package of small changes to the law that will reinvigorate the renewable energy industry in Illinois, while providing incentive for utilities and consumers to get involved in the development process. Advocates for development will argue that we should make the easy fix now and pursue other alternatives later, but in politics, as in life, opportunity only comes along once in a while. Without the specter of the General Assembly "stealing" more of the taxpayer money allocated to renewable, and the urgency that creates, there may be no incentive down the road to make real fixes. Also, since the largest political donor in the whole arena, Exelon/ComEd, opposes the change and the House of Representatives does not appear in a hurry to touch the issue, we need a solution that brings all sides to the table.
1. Follow other states that have capped or given less credit for REC
The goal of an RPS is new renewable development to meet the growing need for energy. REC reward existing generation, but do not yet provide incentive for future development. By capping how much of the RPS an ARES or the IPA can accomplish through REC, the incentive for new development increases. As with most provisions of an RPS, this could slide in scale similar to California that caps at 25% but declines eventually to 10%. Alternatively, the state could recognize 100% of a REC today, but decline to recognizing only 75% of a REC as applicable to the requirement in a couple of years.
2. Provide more credit for community-level renewable generation (and include geo-exchange)
Communities in Illinois have ever-increasing possibilities to generate electricity through solar, and to store heat energy in the ground in summer to reclaim it in winter. This latter strategy (sometimes referred to as geothermal exchange, or geo-exchange so as to not confuse it with true geothermal energy from hot springs and geysers) significantly reduces the amount of electricity needed to provide the peak demand of the summer. Although similar to energy efficiency, in that it reduces load, it has infrastructure investments similar to energy generation, thus facing the same hurdles. These investments should receive 1.25-1.50 times the credit that a utility scale-development receives because they not only reduce the generation by polluting means, but they also reduce losses and preserve the grid infrastructure through reduced load. By recognizing these forms of community energy, it helps overcome the resistance to these technologies from homeowners who see themselves as "temporary" occupants that should not have to bear infrastructure investments. Which leads to...
3. Open up the utilities to get more credit for renewable energy and geo-exchange that they fund through on-bill financing
Utilities need to recognize that their model as single-point generator/supplier (which although dead in Illinois still exists across the country) or even as "manager of distribution infrastructure" will not survive in a world where we need to reduce the per-household consumption in order to survive. In order for municipal, and especially investor-owned, utilities to exist, they need a consistent revenue stream that coincides with the quality of life that energy provides each household. One way to transition to this eventual future where utilities bill you for the amount of light, heat, and preserved food in your house (and where they take ownership of the appropriate appliances and their maintenance) is to incentivize them to make investments outside of their normal transmission infrastructure and collect revenue through the shift in usage from off-site to on-site or near-site sources. Utilities will welcome interconnect if they have a financial stake in its success, and will drive for ever more efficient appliances and technologies if their bottom lines are not hurt by the reduced revenue from traditional per-unit-of-energy-consumed billing.
4. Restore the centralized purchasing power of the IPA relative to renewables
This should happen, but as a final piece of the solution, and not just the only piece.
With these common sense, and achievable, revisions to the RPS, Illinois can move from distant 4th in wind, and well below that in overall generation, to a leader in renewable energy generation and community energy development. For a state that has floundered in the last fifteen years to lead in anything but financial mismanagement and corruption, this would be a welcome - and potentially prosperous - change of pace.
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