Bipartisanship! On Food Safety!

The Senate just passed a sweeping Food Safety Bill that would grant the FDA new power to recall tainted foods, increase inspections, and demand accountability from food companies.  The Senate and the House now need to agree on a consolidated Bill.  In the Senate, the bill passed 73-25.  Apparently, a rare phenomenon has occurred, whereby lawmakers of different parties work together to pass legislation.  Historians note that this used to be called bipartisanship.  Hopefully the House and the Senate will continue the good work and get a law signed before the end of the session.


If you’re going to have renewables, you’d better love transmission

The controversy surrounding a proposed high voltage transmission line in El Centro, CA, which would potentially deliver wind, solar, and geothermal energy to San Diego, is instructive on the difficulties that will surround future renewable energy development.

El Centro has 110 degrees plus temperature, high wind, and readily available geothermal resources neat the San Andreas Fault.  All told, there ate 16,000 MW of potential renewable energy in the area. However, some environmentalists want the utility to forego the project and simply develop rooftop solar in San Diego.  Other critics worry about the fact that existing natural gas energy will be transmitted over the same line, and that the renewable energy claims are merely a smokescreen for a government-subsidized investment that will have a large ROI.

Michael W. Howard, president and chief executive of the Electric Power Research Institute, a nonprofit utility consortium based in Palo Alto, Calif., said that while the potential for exploiting renewable energy remains huge nationally, “you’ve got to get it from somewhere,” he said. “If you’re going to have renewables, you’d better love transmission.”

In the end, rooftop solar deserves development, but so does an area as resource rich as El Centro, especially with its low population.  If we can’t build a transmission line in El Centro, we will certainly be unable to do it in more populated areas.


Black Friday, a window into America’s soul

Yesterday was Black Friday, the now traditional day after Thanksgiving, when stores discount their wares, shoppers line up before dawn, and every few years, one of those shoppers is stampeded into the hospital.  Apparently the deals were so good at Best Buy in Oakland that college student Jan Paulo Patena lined up Thanksgiving eve, with a chair, blanket, and Thanksgiving dinner leftovers.  Of course, 200 fellow travellers joined him in spending the night in the Best Buy parking lot.  Was Patena buying a gift?  Nah… he was buying an external harddrive.  Analysts quoted by the times noted that the parking lots were full, people felt like spending money again, and many, like Patena, were buying goods for themselves.  Black Friday shows just how much the consumer we have all become.  Give us a Holiday weekend, and we find an excuse to go to the store and buy stuff.  I considered paying heed to the Buy Nothing Campaign, but I decided to head to Whole Foods and pick up supplies for dinner.  Now, one could make the argument that I am just the same as Patena, and any other person who braved the busy roads on Black Friday.  Consumption is not an evil in itself.  However, consumption in America jumped the shark long ago.  Landfills are full of the fruits of our shopping soul.  The stuff we buy is designed to be replaced, designed to be thrown out.  The problem is that the stuff we buy uses too many resources.  The act of firing up the Chevy Suburban, heading 15 miles to the mall, buying the stuff, eating the hamburger, it is all an investment of resources that are being consumed in an unsustainable manner. By and large, people don’t realize it.  Instead, we celebrate a successful Black Friday, as if this can go on forever.  What about spending the rare Holiday with family and friends, instead of strangers in the parking lot of Best Buy?  I guess the family and friends just don’t offer the right Sale Extravaganza.  This Friday, spend the afternoon throwing a football around with your son, for 35% off!  Buy one family game of Scrabble, get one free! It just doesn’t have the same ring.


Giving Thanks

USS George Washington with escorts

Today, the Sailors of the George Washington Battlegroup are steaming towards the Yellow Sea, to participate in Naval Exercises with South Korea, in response to North Korea’s shelling of Yeonpyeong Island this week.  Of course, tomorrow is Thanksgiving, and the Sailors will be absent from their families once again. For Sailors in the Forward Deployed Naval Forces, this is routine.  I have had my share of Thanksgiving meals served shipboard, and I don’t miss them.  In fact, I missed plenty of Christmases, Birthdays, and Weddings as well.  Today, I give thanks that I am home with my family, and that these Sailors and their families are making a sacrifice for all of us.  It is certainly not easy, as my wife will attest.


Coal, climate change, and our energy future

This Monday morning, I have one thing on my mind: coal.  Tennessee Ernie Ford’s Sixteen Tons is ringing through the air:

“I was born one mornin’ when the sun didn’t shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said “Well, a-bless my soul”

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store”

Why am I thinking about coal, you might ask?  It is not just Ford’s sweet voice.  In the December issue of The Atlantic, James Fallows examines efforts in China and the United States to create “clean coal.” To many environmentalists, that is a dangerous oxymoron.  You probably saw this ad, filmed by the Coen Brothers:

That ad was in response to ads like this, from General Electric:

Well, on one hand you have folks that say clean coal is impossible.  On the other hand you have General Electric saying that “coal is looking more beautiful every day.”  Who is right?  Well Fallows’ article gets to the heart of that question.  He identifies some of the basic math that makes coal inescapably part of our immediate energy future:

“Precisely because coal already plays such a major role in world power supplies, basic math means that it will inescapably do so for a very long time. For instance: through the past decade, the United States has talked about, passed regulations in favor of, and made technological breakthroughs in all fields of renewable energy. Between 1995 and 2008, the amount of electricity coming from solar power rose by two-thirds in the United States, and wind-generated electricity went up more than 15-fold. Yet over those same years, the amount of electricity generated by coal went up much faster, in absolute terms, than electricity generated from any other source. The journalist Robert Bryce has drawn on U.S. government figures to show that between 1995 and 2008, “the absolute increase in total electricity produced by coal was about 5.8 times as great as the increase from wind and 823 times as great as the increase from solar”—and this during the dawn of the green-energy era in America. Power generated by the wind and sun increased significantly in America last year; but power generated by coal increased more than seven times as much.”

An article today in the New York Times shows that China’s hunger for coal has now resulted in coal imports from Australia, the United States, Indonesia, Canada, Columbia, and South Africa; new mines are even being planned in Washington State.  Fallows interviewed Ming Sung, a geologist who worked in the United States for many years for the Department of Energy and Shell Oil, and now works in China for the Boston-based Clean Air Task Force:

“People without a technical background think, ‘Coal is dirty! It’s bad, but will you turn off your refrigerator for 30 years while we work on renewables? Turn off the computer? Or ask people in China to do that? Unless you will, you can’t get rid of coal for decades. As [U.S. Energy Secretary] Steven Chu has said, we have to face the nightmare of coal for a while.”

Sung’s Clean Air Task Force is working to create partnerships between American and Chinese businesses to develop new technologies like underground coal gasification (UCG).  Here is a description of  UCG from the CATF:

“UCG processes coal where it lies, eliminating the environmental hazards of mining. In the process, coal is converted into a syngas through partial oxidation, creating the same reactions as surface gasifiers. The syngas generates “feedstocks” for several products, including electric power, chemicals, liquid fuels, hydrogen, and synthetic natural gas.  UCG allows for extensive pollution control and costs less to construct and operate than equivalent plants using surface gasifiers. The process has the potential to greatly enhance energy security, environmental sustainability, and economic competitiveness.”

In the United States, only one UCG plant is being constructed, the Texas Clean Energy Project, in Odessa, Texas.  However, in China, the development is occurring much faster.  In fact, development in all areas of energy research is occurring much faster:

‘In the search for “progress on coal,” like other forms of energy research and development, China is now the Google, the Intel, the General Motors and Ford of their heyday—the place where the doing occurs, and thus the learning by doing as well. “They are doing so much so fast that their learning curve is at an inflection that simply could not be matched in the United States,” David Mohler of Duke Energy told me. “In America, it takes a decade to get a permit for a plant,” a U.S. government official who works in China said. “Here, they build the whole thing in 21 months. To me, it’s all about accelerating our way to the right technologies, which will be much slower without the Chinese. “You can think of China as a huge laboratory for deploying technology,” the official added. “The energy demand is going like this”—his hand mimicked an airplane taking off—“and they need to build new capacity all the time. They can go from concept to deployment in half the time we can, sometimes a third. We have some advanced ideas. They have the capability to deploy it very quickly. That is where the partnership works.”’

So lets go back to the beginning.  How do we create a sustainable future, with sustainable energy consumption?  There are a lot of perspectives out there; I see them every day.  I happen have faith in the potential of nuclear power, whereas some of my colleagues would sooner eradicate nuclear power and rely on solar and wind.  The geologists and businessmen in Fallows’ article believe that coal is inescapably part of our future.  Who is right?

In part, I suppose, it depends on how you envision energy consumption developing, globally.  Coal, natural gas, nuclear power, and oil provide the majority of our energy today.  To stop using them, and rely exclusively on wind, solar, geothermal, and other developing clean energy possibilities, will require us to consume energy locally instead of systemically, and it will require us to reduce the scale of our consumption significantly.  More importantly, to get there, it will require time, energy, and financial investments on a significant scale.  Additionally, it will require a sea change in the way we live.  Alternatively, the people in Fallows’ article look for a game changing technology that will create a ‘clean coal.’  Similar to those efforts, Bill Gates and others are looking to the  next generation technology of Travelling Wave Reactors (TWR), which promise to produce almost zero waste with lower costs, a significant progression from 1960s nuclear energy technology.  The big problem in following either path seriously is that like our political gridlocks, we face ideological inflexibility in developing climate solutions.  Fallows identifies the problem we face in America:

“But China’s very effectiveness and dynamism, beneficial as they may be in this case, highlight an American failure—a failure that seems not transient or incidental but deep and hard to correct. The manifestation of the failure is that China is where the world’s “doing” now goes on, in this industry and many others. If you want to learn how the power plants of the future will work, you must go to Tianjin—or Shanghai, or Chengdu—to find out. Power companies from America, Europe, and Japan are fortunate to have a place to learn. Young engineers and managers and entrepreneurs in China are fortunate that the companies teaching the rest of the world will be Chinese.  The deeper problem is the revealed difference in national capacity, in seriousness and ability to deliver. The Chinese government can decide to transform the country’s energy system in 10 years, and no one doubts that it will. An incoming U.S. administration can promise to create a clean-energy revolution, but only naïfs believe that it will. “The most impressive aspect of the Chinese performance is their determination to do what is needed,” Julio Friedmann told me. “To be the first, to be the biggest, to have the best export technology for cleaning up coal.” America obviously is not displaying comparable determination—and the saddest aspect of the U.S. performance, he said, is that it seems not deliberate but passive and accidental, the product of modern America’s inability to focus public effort on public problems. “No one in the U.S. government could ever imagine a 10-year plan to ensure U.S. leadership in solar power or batteries or anything else,” Joseph Romm, a former Department of Energy official who now writes the blog Climate Progress, told me. “It’s just not possible, so nobody even bothers to propose it.” The Chinese system as a whole has great weaknesses as well as great strengths. Its challenges, as I have reported so often in these pages, make the threats facing America look trivial by comparison. But its response to the energy challenge—including its commitment to dealing with the dirty, unavoidable reality of coal—reveals a seriousness about facing big problems that America now appears to lack.”

The reality is that we need to look to everything: we need to reduce our energy consumption, become more efficient, increase the development of wind and solar, and pursue new technologies like UCG and TWR.  With growing energy consumption globally, with the coming age of electric vehicles, we will need to have all of the solutions we can get our hands on.  There is no one Holy Grail here.  We need strict environmentalists to work with climate change denialists, and everyone in between, to increase investment in new technology, to increase efficiencies, to guard precious resources like rare earth metals, and to reduce the throughput of energy and resources in our economy.  We need to get over our disagreements and find common ground, pronto.  Clean coal?  I am willing to embrace the possibility.


All Hands on Deck

This is a nice illustration of progress as we know it, and the choices we have going forward.


A visual illustration of why the housing market is broken

This is a diagram, put together by an expert on securitization, showing what has happened to his mortgage since he closed.  (Click image for a larger version).  This is insane!  If you missed out on the This American Life chronicling Toxie, a toxic mortgage bond the economic team at Planet Money dissected, it is worth checking out.  Does this make any sense?  Why do America’s best and brightest work on Wall Street, so they can engineer transactions like this one?