Millions face homelessness. How will we respond?

The Covid-19 pandemic has uncovered multiple fault lines and fractures within American society: health care inadequacy and pay inequality two of the most glaring.

Concerns have been growing for month over the possibility that millions of Americans are in danger of becoming homeless, a result of long-term job loss, the expiration of unemployment benefits and the end of a nationwide moratorium on evictions.

Even as most of us look forward to the merciful end of 2020, millions of people are fretting about a new danger come January 1: homelessness.

The Washington Post newspaper reports that millions of Americans who lost their jobs during the pandemic are now thousands of dollars behind on rent and utility bills. Nearly 12 million renters will owe an average of $5,850 in back rent and utilities by January, the paper says. In November some 9 million renters said they were behind on rent, according to a Census Bureau survey.

The paper reports that numbers were especially high for families with children, with 21% falling behind on rent, and among families of color. About 29% of Black families and 17% of Hispanic renters were behind. The Federal Reserve Bank of Philadelphia found that 1.3 million such households are now an average of $5,400 in debt on rent and utilities after those people lost their jobs due to the pandemic.

In late March, Congress authorized more than $2 trillion in relief for U.S. households and others affected by the pandemic. Although the cash infusion helped millions, people with limited savings or wealth were more likely to suffer anyway, according to research from the St. Louis branch of the Federal Reserve.

Researchers found the most important predictor of serious delinquency is whether a family has at least two months’ worth of income in the form of liquid assets, such as cash and checking and savings accounts. If they don’t, they are about 300% more likely to become seriously delinquent than those who have at least that much. That’s right: 300%.

For those who are more likely to have a serious delinquency, the researchers also found:

These families have too much debt relative to income. Another important factor associated with serious delinquency is whether a family’s debts exceeded 40% of their income. If their debts were over that threshold, they were about 200% more likely than others to be seriously delinquent.

They aren’t healthy. Families reporting “fair” or “poor” health were nearly 60% more likely than those describing “good” or “excellent” health to report a serious delinquency, the authors found.

They’re supporting family or friends. Families providing financial support to relatives or friends were 41% more likely to fall at least two months behind on payments. In addition, each child in the family increased the likelihood of a serious delinquency by 17%.

They own vehicles. Those who own vehicles were 35% more likely to report serious delinquency, possibly because of the vehicle loans.

The precarious nature of living paycheck to paycheck has been a troubling aspect of American culture for decades. Back in the 1980s, in reporting I did on a housing assistance program in Columbus, Ohio, I learned that most people were only a paycheck away from having serious financial difficulties. The recent research done by the Philadelphia and St. Louis Fed branches, as well as reporting by the Washington Post, suggest that we haven’t moved very far since then.

The immediate need is for Congress to extend unemployment benefits and targeted stimulus relief. The task for the incoming Biden administration will be to address many of the weaknesses that have lurked for years beneath the veneer of American prosperity. It’s taken a pandemic to fully reveal the unsustainable flaws in health care and income inequality.

With millions of people on the brink of losing their homes, the need to act couldn’t be clearer. Will our leaders respond to this latest crisis that threatens still more long-term disruption to American lives?

Invigorating a region’s economy by thinking small

A team led by researchers from the University of Pittsburgh’s Center for Sustainable Business has published what they call a “Marshall Plan for Middle America Roadmap.” In it, they outline how a four-state chunk of the Ohio River Valley can pivot from an economy that still has strong ties to fossil fuels and extraction industries like coal mining toward one that uses more renewable energy and results in fewer carbon emissions.

The research team begins by assuming a path that will lead to a 50% contraction in the region’s fossil fuel-related economic activity between 2021 and 2030. That’s on top of the contraction that has been underway since the mid-1990s.

Appalachian coal production has declined in part because of the rise of low-sulfur coal from surface mines in the Powder River Basin of Wyoming. Environmental worries over acid rain led to regulations aimed at cutting emissions of sulfur dioxide from coal-fired power plants. Switching to coal from the Powder River Basin helped many power companies come into regulatory compliance. One sector that suffered as a result was Appalachian coal.

A storefront in Newcomerstown, Ohio. Summer 2018.

Some of the job losses have been mitigated in recent years by the oil and gas industry. The adoption of hydraulic fracturing techniques created boom times for oil and natural gas production in the Marcellus shale of Pennsylvania and the Utica formation of Ohio. It’s worth remembering that before Oklahoma, Texas and even Saudi Arabia, this part of the United States was the world’s oil capitol. John D. Rockefeller’s Standard Oil Company was founded in Cleveland, which for years was the dominant center for refining and oil transportation.

In their report, the University of Pittsburgh authors also point out that many communities across Appalachia and the Ohio River Valley suffer due to the effects of environmental degradation. Communities have higher than average poverty and unemployment rates, and lower rates of educational attainment. A host of socioeconomic ills coincide with what the report says are negative health outcomes in the region. These ills include higher rates of depression, suicide, diabetes, obesity, substance abuse, and premature deaths due to pollution exposure.

States within the study area–which includes parts of Kentucky, Ohio, Pennsylvania and West Virginia–already have shed thousands of jobs in related industries.

In 2018, West Virgina’s coal mining industry counted about 13,000 workers; the oil and gas industry about 11,000. Taken together, these two industries made up no more than 3.2% of the state’s overall employment. Comparable employment figures were 1% in Ohio, 0.9% in Pennsylvania and 0.7% in Kentucky.

Some of my ancestors farmed not far from this quiet spot in Holmes County, Ohio. I took this photo in late June 2018.

The authors suggest that these statewide employment shares are “relatively low,”especially in Pennsylvania and Ohio. But they also estimate that eight Ohio counties may experience private sector employment losses of 2% or more
between in the coming decade due to the state’s fossil fuel industry contraction. Monroe County, which borders the Ohio River in the southeastern part of the state, could suffer employment losses equal to about 14% of private
employment.

Economic issues in this part of the Ohio River Valley are not isolated to energy. Some of the most vulnerable communities have had their cores hollowed out as big-box stores and discount retailers wiped out local merchants. A job restocking shelves at the Wal-Mart out by the bypass isn’t the same as a job in the family’s clothing store.

For me, then, any “Marshall Plan” would need to be built on a foundation of respect for and support of local businesses. Simply stated, Wal-Mart killed Main Street retail in small towns all across the region. Renewal must have, as one of its foundational elements, a focus on rebuilding the honorable profession of small town merchant.

At the same time, decarbonized energy solutions should be local as well: rooftop solar and storage; run-of-stream hydro where available; and ridge-line wind turbines where feasible. Distributed energy resources increasingly are feasible alternatives that reduce carbon emissions and expand local control over energy production.

My ancestors’ reliance on community and local control can help inform today’s efforts to reimagine the Ohio River Valley’s economy. I took this photo near the aptly named Farmerstown, Ohio, in June 2018.

Make no mistake, much of the region lends itself to local empowerment and problem solving. The region’s terrain means that towns often are separated from one another by tall hills or deep valleys. Because of this, the region has a history of success with local control and solutions. Rural electric cooperatives and farm cooperatives have existed for years. Their model of local control and decision making offers a useful blueprint as Ohio River Valley communities reinvigorate their economies.

What would emerge, then, would be a myriad of self-sustaining communities all across the region. Micro electric power grids based in renewable energy resources and owned cooperatively would power the communities. Micro-finance concepts that have been used successfully around the world could be used to support local stores. Locally focused, locally owned farms and businesses would support the people who live there.

Most important, work would not be a commodity to support a distant owner’s stockholders, but a vocation capable of renewing the senses of dignity and purpose that we all crave.

My ancestors worked fields very close to this one–and in much the same way!–in rural Holmes County, Ohio. I took this photo in late June 2018.

Hydrogen may be gaining a foothold Up North

We are inching closer to an emission-free hydrogen-based future.

By the end of the year a 20 megawatt (MW) electrolyzer that runs on hydropower is expected to be up and running in Canada where it will produce on the order of 3,000 tons of hydrogen every year.

There’s a lot of unpack here, so let’s have a closer look.

Hydrogen is the most abundant element in the universe. That’s the good news. The bad news is that it almost always comes attached to something else. We know it most familiarly when two hydrogen atoms hook up with one atom of oxygen to form water (chemical formula H2O).

That “H” shows up in many other common forms such as methane (one carbon atom and four hydrogen atoms: CH4), bituminous coal (C137H97O9NS) and even table sugar (C12H22O11).

Hydrogen also has the highest energy content by weight of all known fuels—around three times higher than gasoline—and has long been used as a critical feedstock for the chemicals industry, including for liquid fuels.

The trouble is that it takes energy to separate hydrogen from whatever else it is attached to. (Read “Will hydrogen ever be more than the future’s greatest fuel?“.)

Hydrogen can be produced from diverse domestic resources, including fossil fuels, nuclear energy, and renewables (hydro, wind, solar, geothermal, biomass, and waste, including plastics).

The primary processes for producing hydrogen include thermochemical processes (such as reforming, gasification and pyrolysis) and through electrolysis via water splitting.

One big drawback with thermochemical methods is that carbon emissions result. By contrast, renewable energy resources such as wind, solar and hydro can power electrolysis and result in a virtually emission-free source of “green” hydro.

Colleagues who write the Electrifying blog identify three factors that they say are critical to contributing to hydrogen’s overall viability: (i) the initial capital expenditure for the electrolyzer, (ii) the cost of input electricity to be used for the process, and (iii) the base load (number of operating hours per year). They note that with the costs of wind energy and solar PV energy having fallen over the past decade or so, green hydrogen production is more economically feasible than ever, as input energy costs play a significant role in its production.

The U.S. Energy Department weighed in on hydrogen’s future in a report issued in mid-November. It said the primary demand for hydrogen today is as a chemical feedstock in petroleum refining and ammonia production. Around 10 million metric tons (MMT) of hydrogen are currently produced in the U.S. each year for these end uses. Most of the production comes from natural gas.

By the middle of the century, DOE estimates that production could rise to as much as 41 MMT with the largest share of that (on the order of 17 MMT) devoted to transportation uses. At present, hydrogen makes up a negligible amount of transportation fuel.

Given the focus that the outgoing administration has had on fossil fuels, it’s not surprising to see the DOE report tout both natural gas and coal as primary sources for hydrogen production. The report points out that natural gas and coal can be used with carbon capture to produce hydrogen “with no carbon dioxide emissions.”

To be sure, carbon capture and sequestration methods are available, but they are expensive and energy intensive in their own way. What’s more, coal mining and natural gas production present additional environmental costs that need to be accounted for.

With all that as background, let’s get back to the Air Liquide facility in Canada. Engine maker Cummins is supplying the electrolyzer, which will use surplus renewable hydroelectricity to generate green hydrogen. The electrolyzer technology is a relatively new addition for the engine maker, which a year ago bought a manufacturer called Hydrogenics.

Cummins estimates that the current cost of hydrogen produced from natural gas is somewhere between $1.50 to $2 per kilogram. It says that can power about 60 miles of travel for a hydrogen fuel cell passenger car. Green hydrogen, by contrast, costs around $5 to $6 per kilogram to send that same family the similar distance down the road.

The engine maker may be better known for the power trains it produces for big rigs. Last year, Cummins rolled out a demonstration Class 8 truck truck designed for 90 kW hydrogen-based fuel cells. The fuel cells are scalable in 30 kW or 45 kW increments up to 180 kW. The fuel cell truck also has a 100 kW lithium-ion battery capacity with a range of 150 – 250 miles between filling up.

The engine maker admits that without subsidies fuel cell vehicles are not cost competitive. That may well change in the next 10 years as technology advancements take place.

In yet another Canadian application, hydrogen produced during periods of excess renewable generation will be injected into an existing network of natural gas pipelines to boost the renewable energy content. People living the Toronto suburb of Markham will be the first to receive the blended natural gas.

“Small quantities of hydrogen can be manageable in existing natural gas pipeline networks,” according to a press release issued by energy company Enbridge and Hydrogenics. The venture also plans to deploy utility-scale facilities to produce green hydrogen, store it and then combust it at a later time for electric power generation.

The Canadian ventures are the latest steps in a widening effort to develop and deploy green hydrogen as a source of energy for industrial processes and large-scale electric power generation. For more on those topics, read this and this.

And let me know your thoughts! theinfrareport@gmail.com

The illustration is of an Air Liquide hydrogen facility in Denmark.

Building Texas coastal defenses could top $26 billion

Decades from now and at a cost of more than $26 billion, the Texas Gulf Coast from Beaumont to Brownsville could lie behind a protective chain of natural and man-made structures designed to reduce the impact of rising sea levels and potent tropical storms on one of the nation’s most important economic engines.

The region included in the study includes nearly one-quarter of the state’s population including metropolitan Houston and is home to nearly one-third of the country’s oil refining capacity. Texas gulf ports handle more than 15% of the nation’s cargo and the Houston Ship Channel is a vital link in the global movement of crude oil.

As a result of global warming, relative sea level change are increasing the vulnerability of existing coastal defense systems. Damage from hurricanes and tropical storms could become more severe as wind speed is projected to increase with higher sea levels and rising ocean temperatures.

(Read “What works: Marshland restoration.”)

The Coastal Texas Protection and Restoration Feasibility Study was launched by the U.S. Army Corps of Engineers in 2014 to evaluate large-scale coastal storm risk management and ecosystem restoration actions.

The storm surge structure at Galveston Bay would have an 800-foot opening for ship traffic that could be closed during a storm. Source: Texas A&M Foundation

If authorized and funded by Congress, later project phases would include pre-construction engineering and design, construction and operations and maintenance stretching to the middle of the century and beyond.

The report notes that the Texas coast is vulnerable to tropical storms and hurricanes whose impacts are devastating to coastal communities. Among a wide array of risks, the study identified three primary risks as drivers for investment in costal storm risk management and ecosystem restoration on the Texas coast: hurricane storm surge, coastal erosion and relative sea level change.

Those risks are not unique to Texas.

Nationwide, sea-level rise and flooding threaten around $1 trillion in national wealth held in coastal real estate. Florida could lose more than $300 billion in property value by 2100, according to a study by the state legislature that was released in July.

In April, researchers from the U.S. Geological Survey, the University of Illinois at Chicago and the University of Hawaii, wrote that sea-level rise will “radically redefine” coastlines through this century.

Sunny day flooding at high tide is becoming more common in Miami as sea levels rise. Starting next July, contractors building publicly financed projects within Florida’s coastal building zone must complete a sea level impact projection study.

They said that for many coastal regions, projections of global sea-level rise by the year 2100 (anywhere from 0.5–2 meters) are in line with what currently are considered to be extreme but short-lived water level rises due to storms. The researchers said that their findings “underscore the need for immediate planning and adaptation to mitigate the societal impacts of future flooding.”

Coastal regions are not the only areas where Americans may face a greater flood risk. Although the Federal Emergency Management Agency classifies 8.7 million properties as having a substantial risk of flooding, a new approach by a group called the First Street Foundation identifies nearly 14.6 million properties with the same level of flood risk. That means nearly 6 million households and property owners have previously underestimated or been unaware of their current risk. The Foundation’s model suggests the number of properties with substantial risk grows to 16.2 million by 2050.

Coastal damage near Galveston in the aftermath of Hurricane Ike. The proposed coastal defenses could reduce such losses by an estimated $2.8 billion a year.

The recommended Texas coastal plan includes a combination of ecosystem restoration and and coastal storm risk management features that are intended to work together to reduce the risk of coastal storm damages to natural and
man-made infrastructure and to restore degraded coastal ecosystems.

The plan is divided into three groupings:
• A Coastwide ecosystem restoration plan to restore degraded ecosystems that
buffer communities and industry on the Texas coast from erosion, subsidence
and storm losses. This includes a combination of projects at eight locations along the coast, and proposes 114 miles of breakwaters, 15 miles of bird rookery islands, 2,000 acres of marsh, 12 miles of oyster reef and almost 20 miles of beach and dune.
• On the lower Texas coast, a beach restoration measure on South Padre Island is proposed to include 2.9 miles of beach nourishment and sediment
management. The plan proposes beach nourishment on a 10-year cycle.
• On the upper Texas coast, the Galveston Bay Storm Surge Barrier System is
proposed as a system with multiple-lines-of-defense to reduce damage to
communities, critical petrochemical and refinery complexes, Federal navigation channels, and other existing infrastructure in and around Galveston Bay from storm surge.

The proposed upper Texas coast defenses separate Galveston Bay from the Gulf of Mexico to reduce storm surge volumes entering the Bay. Components include:
• The Bolivar Roads Gate System across the entrance to the Houston Ship
Channel between Bolivar Peninsula and Galveston Island ;
• More than 40 miles of beach and dune segments on Bolivar Peninsula and West Galveston Island that work with the Bolivar Roads Gate System to form a continuous line of defense against Gulf of Mexico surge; and
• Improvements to an existing 10-mile-long Seawall on Galveston Island.

Galveston Bay defenses are designed to enable the system to manage risks that are the result of any additional Gulf surge that overtops the Gulf line of defense. The Bay defenses also would provide resiliency against variations in storm track and intensity and relative sea level change. Bay defense components include:
• An 18-mile Galveston Ring Barrier System that would impede bay waters
from flooding neighborhoods, businesses and critical health facilities within
the City of Galveston;
• Two surge gates on the west perimeter of Galveston Bay to reduce surge volumes that push into neighborhoods around the critical industrial facilities that line Galveston Bay; and
• Home elevations or flood-proofing, to further reduce Bay-surge risks along the western edge of Galveston Bay.

The study has an estimated construction cost of $26.13 billion. It said that if damages from storms were distributed equally across the 50-year period of analysis, the planned measures could reduce average annual damages by $2.28 billion a year.

An artist’s concept of a flood barrier that could be closed to protect Galveston Bay and key energy infrastructure near Houston from floods and storm surge.

My love affair with voting

Over the last several days, I’ve served as a volunteer poll watcher at voting locations in Jefferson County, Colorado, which sits between Denver and the Rocky Mountains.

The county has a reputation for being decidedly purple. In the recent past it has been an indicator of how statewide races and ballot measures may fare.

Unlike other states, Colorado has a comparatively long history with early voting and voting by mail. I’m convinced that Colorado’s system is one of the best and that my county has some of the best-trained and impartial election workers anywhere.

I am angry that in 2020 some people have been working hard to suppress the vote, discount the integrity of our election processes and intimidate people who show up to take part in the act of voting–the very foundation of our democracy.

I’m a sucker for elections; I love them. My dad was a newspaperman, so I was always aware of news and current events. My mother was active in the League of Women Voters and served as president of a local chapter in Cleveland in the early 1970s. Voting rights and voter education were always important to her, and she helped train election officials. I was immersed in news and public affairs.

Legend has it that as a two-year-old in 1960, I paraded around the house chanting “Let’s back Jack, let’s back Jack.” An enthusiastic, if politically naive, supporter of JFK.

My parents as a matter of habit brought me into the voting booth as they flipped levers to cast their votes. They’d let me help pull the final lever, a big red-handled device that recorded their votes and simultaneously opened the voting booth curtains, signaling they were done voting.

When I was 10 years old in 1968 I loved Bobby Kennedy. I was heartbroken when he was killed; sadness over his death added to the sadness I already felt every November 22, the anniversary of President Kennedy’s assassination. I was 5 in 1963 when the Jack I had backed was killed. I vividly recall that weekend: My dad–ever the newspaperman–kept Walter Cronkite tuned in on our black-and-white TV set. I saw the widow and the casket and recall the incessant drum roll as the funeral procession slowly made its way along Pennsylvania Avenue. The 1960s were a lot for a kid to process.

My mother in the early 1970s at a downtown Cleveland demonstration.

In 1976, at the age of 18, I was the youngest voter in my precinct. I was something of a minor celebrity among the poll workers when I walked across the street to our local library to vote. I haven’t missed a primary or general election since; my celebrity status faded long ago but my love for elections continues to run deep.

But here, in celebration of our right to vote, are a few vignettes that I mentally recorded during my quiet hours as a volunteer poll watcher in recent days.

…The handicapped man who was helped to vote by his attendant and who proudly put the “I Voted” sticker on his shirt as his helper applauded his accomplishment.

…The woman who wore a stars-and-stripes jacket to drop off her ballot and then waited nearby while her son–a newly registered voter–spent 30 minutes marking his selections.

…The young father who had to vote in person after his daughter crayoned on his original ballot.

…The immigrant parents who arrived with their son, who patiently moved from mother to father to help them understand the ballot.

…The poll worker who stood by the ballot box and instructed the voter, “You put the ballot in yourself, I’m not allowed to touch it.” Such is the sacred nature of that piece of paper.

I’m sentimental and old-fashioned, but I find a quiet dignity as people like these go about the important work of exercising their right to vote; our democracy’s fundamental act.

I took the photograph of the American flag at Mystic Seaport in Connecticut in 2015.

Biden for President

I’m endorsing Joe Biden for President. Here are my reasons.

  1. He’s empathetic. One of the big jobs that will consume a lot of time for the next president will be rebuilding and restoring confidence in core American institutions. There are so many pieces of the American fabric that are frayed and torn, including confidence in our justice system and even more basic tools of our democracy such as the voting process. People are rightfully aggrieved–on both ends of the political spectrum–about injustices and inadequacies of many core institutions. A primary Biden strength is his ability to listen and work cooperatively to make substantive changes. I appreciate his willingness to admit mistakes and to continue to learn. Those traits will serve him well.
  2. He knows foreign leaders. A big job for a vice president is to represent the United States at funerals for foreign leaders. It offers a chance to network informally and forge and strengthen important alliances and coalitions. The European Union has its flaws and individual countries have their own odd agendas and personalities. Even so, Europe is our best ally (outside of Canada and–with a bit of work–Mexico), so repairing relations to address a range of threats from Russia, Iran, China and North Korea is a must. Japan and South Korea also are key strategic partners and a President Biden will do well to reassert a strategic approach to relations and not merely a policy of one-off transactions.
  3. He understands the existential threat of climate change. The causes and consequences of a changing climate are complex and are having immediate and tangible impacts across the U.S. Wildfires in the West are one thing. Coastal flooding as sea levels rise affect places like Miami and the important ring of energy infrastructure along the U.S. Gulf Coast. Greater amounts of rainfall in the Upper Midwest are affecting agricultural production. The climate change-driven derecho that devastated large parts of Iowa cropland earlier this year was ill-timed for its effect on that state’s farmers. A transition away from fossil fuels really is a priority, and is a goal that business and industry have been pursuing even without recent support from the White House or the Senate. Detroit automakers are embracing electric vehicle technology and the steady deployment of renewable energy resources like wind and solar make it possible to think about producing enough green hydrogen to achieve zero-emission electric power generation that can be called on as readily as a fossil-fueled plant. I’m not convinced that renewable energy generation will result in huge numbers of jobs. At best, solar and wind farms need only a handful of people to operate and maintain them. But opportunities exist for everything from R&D to manufacturing…if we can retain those jobs in the U.S.
  4. He understands how government works. This skill is particularly important in addressing the pandemic. I found it shameful that states found themselves competing with one another this past spring for critical medical supplies, even striking deals with international suppliers. Caring for any American in a health crisis as serious as Covid-19 should not have been allowed at the federal level to sink to the point of us vs. them. Our Covid-19 response was a lost opportunity to make beneficial use of our government institutions that were created to serve the American people. No doubt, tens of thousands of lives could have been saved with a more comprehensive, more compassionate, more coherent and coordinated response from the federal government.
  5. He has a vision for the next generation of leaders. Kamala Harris, Cory Booker, Michelle Lujan Grisham, Keisha Lance Bottoms represent an exciting and diverse group of leaders who admirably represent the sort of diverse and dynamic American future that Barack Obama made possible. As an aging white guy I readily acknowledge that we need to embrace the undeniable evolution of the American narrative.

So much good, hard work needs to be done; healing needs to occur; and the groundwork needs to be established for an economic transition that protects our planet for future generations. I hold no illusions that Joe Biden will somehow magically solve all of our problems. But his temperament, experience and vision all give me hope that we can effectively address the myriad challenges that face us. I hope you will join me in voting for Joe Biden.

I took this photo of Independence Day patriotic bunting in Ohio in 2018.

Forests are burning

One Saturday a few years ago, we packed the in-laws into the back seat, loaded up the dog and headed into the mountains west of Denver. We exited I-70 at the U.S. 40 cutoff for Berthoud Pass and drove past the Winter Park ski resort on the road toward Kremmling.

Before we reached that little mountain town, we took a right-hand turn onto a side road and started exploring. As we drove north we saw huge expanses of dead pine trees; the rugged landscape was covered with gray trees. I remember thinking at the time, “Man, if these forests ever catch fire…”

In the past couple of days those forests have caught fire. The East Troublesome fire, as it has come to be known, started October 14 and so far has burned around 125,000 acres. Last night it exploded and burned through forests at a rate of 6,000 acres an hour. The fire is being driven by high winds, unusually warm temperatures and massive amounts of fuel from dead trees.

This real-time disaster has been years in the making. It offers a clear example of how a changing climate has impacted forests and led to a disastrous wildfire year in the West in 2020.

Denver’s precipitation has been behind normal since May.

Nature provided an insect called the pine bark beetle. The beetle’s work focuses on chewing on stressed and diseased pine trees. In normal years, the beetle is active during the warm summer months, then dies off in the frigid winters that characterized the Colorado Rocky Mountains.

But winters in the High Country have been getting warmer. The deep freezes that controlled the pine bark beetle have grown less intense and less frequent. As a result, the beetle has been active more months out of the year and has killed vast swaths of Colorado forestland.

Once dead, the pine trees take on a gray-blue pallor. Some furniture makers like the color and make use of some of the dead trees in interesting ways. Mostly, however, the dead trees have stood on slopes and ridge lines, prime targets for a lightning strike or a careless hiker to set them ablaze.

Down here in Denver this year, we have received around half of our normal amount of precipitation. This part of Colorado is semi-arid, so a typical year sees around 14 inches of precipitation. Kansas City, a few hundred miles east of here, averages more than 40 inches each year. Atlanta averages around 52 inches a year.

A hot and dry year in Colorado and now forests — killed years ago by pine bark beetles that now thrive in a warmer climate — are burning.

Smoke from wildfires burning in the Colorado mountains was particularly bad in my part of town on the afternoon of October 16. This smoke plume, seen from near my house, is from a wildfire burning just north of Boulder.

Your tax dollars at work: An SMR gets a federal subsidy

You may as well know where some of your tax dollars are being spent.

A first-of-its-kind small modular nuclear reactor that a Utah electric power cooperative plans to build won a $1.355 billion subsidy from the Energy Department in an effort to make the plant’s cost of energy competitive with other power sources in the western U.S.

The subsidy would be paid out over 10 years and would need annual congressional appropriation. When applied, it would help the ensure that what is known as the “levelized cost of energy” target price of $55 per megawatthour can be achieved at a level of risk that the cooperative can handle. That price target is expected to make the nuclear reactor competitive with other nonintermittent and dispatchable energy sources like combined cycle natural gas plants.

A total of 12 small modular reactors, each with a generating capacity of 60 megawatts, would be built at the Idaho National Laboratory, near Idaho Falls, Idaho. The reactors would be able to ramp up and down as needed to follow load and support renewable energy sources like solar and wind that are intermittent. Energy from the project would replace electric generation from coal plants that are nearing the end of their life cycles. The plant would help many members of the Utah Association Municipal Power Systems (UAMPS)
completely decarbonize their energy portfolios.

UAMPS set up a special purpose entity known as Carbon Free Power Project (CFPP) to develop and build the 720 MW nuclear plant. The plant will include power modules provided by NuScale Power based in Portland, Oregon. Electricity from the plant will be distributed to customers of 33 UAMPS member utilities in five states. Other western utilities may join the project in the future.

The NuScale Power Module, comprised of an integrated reactor vessel, steam generator, and containment vessel in a single cylindrical module. Photo courtesy of NuScale

Douglas Hunter, UAMPS CEO and general manager praised the subsidy in a press release, saying “It is entirely appropriate for DOE to help de-risk this first-of-a-kind, next-generation nuclear project.” He said the project would be “much bigger than UAMPS itself” and that the subsidy would lower the cost to introduce “transformative advanced nuclear technology” not only in the U.S. but globally.

As with many new technologies, the first SMR is likely to be the most expensive. The subsidy in effect would close the gap between the cost of the first plant and the second. Costs are expected to be rigidly controlled through factory production-line techniques.

Taxpayers regularly subsidize other forms of energy production. Federal tax credits for years have helped the wind and solar industries grow. In some instances, the credits enabled wind farms to bid at zero and (on occasion) even negative prices in some markets. Without those subsidies over the past couple of decades, we may not be talking about a near-term future that includes green hydrogen production for electric power generation.

It’s also worth waving the flag a bit and noting that the NuScale technology was developed and would be built in the U.S. We long ago gave up our large-scale commercial nuclear technology know-how and now look to Japan, China and Russia for technology. For those who like to scoff, even Canada has its own commercial nuclear reactor design.

An SMR like NuScale could mean that the U.S. will once again export nuclear technology and not import it.

In late August, the U.S. Nuclear Regulatory Commission (NRC) completed Phase 6 review—the last and final phase—of the Design Certification Application for NuScale’s SMR and issued its Final Safety Evaluation Report. The report represents the end of the NRC’s technical review and approval of the NuScale SMR design. It essentially offers a green light for customers like UAMPS to move ahead with plans to develop NuScale power plants.

NuScale Power’s design includes a factory-built power module capable of generating 60 MW of electricity using a smaller, and scalable version of pressurized water reactor technology.

Factory built is key. Most nuclear power plants today are anything but standard. That can make them expensive to operate. If NuScale (among other competing SMR proponents) can get the production line nailed down, then economies of scale and scope can kick in and help keep construction costs down. The module nature means that a small city could scale up its carbon-free energy production over time in 12 MW increments.

As designed, a NuScale power plant can house up to 12 individual power modules, theoretically making the power plants more affordable for applications such as water desalination, process industries and other small electric power loads. NuScale’s majority investor is Fluor Corp., a global engineering, procurement and construction company with 60-years in commercial nuclear power.

Locating one of the first reactors at Idaho National Laboratory is a calculated move. The permitting and construction process should be streamlined with the plant sited on federal property.

In 2012, for example, NuScale signed a Memorandum of Agreement with the Savannah River Site and Savannah River National Laboratory to locate an SMR in South Carolina. Several locations on the 310-square-mile Savannah River site were said at the time to be suitable for project development.

All forms of nuclear power are simply another way to boil water. Heat from the nuclear reaction boils water to create steam which is then super-pressurized as it moves through a turbine, which is connected to a generator. Unlike coal or natural gas, nuclear power results in no air emissions and is carbon free.

Nuclear power is not waste free, however, as spent nuclear fuel has to be disposed of. The Energy Department backed out of its commitment to safely dispose of and store spent nuclear fuel. Nevada Senator Harry Reid all but ended plans to use Yucca Mountain as the nation’s nuclear waste depository. Work is under way in New Mexico on a separate private-sector plan to receive and store nuclear waste. For now, anyway, spent nuclear fuel is stored on-site at nuclear power plants all around the country.

The artist’s image of a NuScale power plant is courtesy of the company.

No energy sector recovery before 2022…or ’23?

“Without a doubt this is the most difficult cycle I’ve experienced in my 30-year career,” one survey respondent told KC Fed analysts.

The energy sector may not recover from pandemic-caused disruptions until 2022, according to new analysis from the Dallas branch of the Federal Reserve Bank. The bank said that an upswing in petroleum consumption may signal that the worst has passed.

At the same time, a quarterly survey by the Kansas City Fed branch found that a majority of respondents didn’t expect the sector to recover until 2022 or even 2023.

“Without a doubt this is the most difficult cycle I’ve experienced in my 30-year career,” one survey respondent told KC analysts.

Before the pandemic, the U.S. energy sector had been expected to produce more than 13 million barrels per day. It may not reach 11 million barrels per day by year-end 2021. However, the Dallas Fed said that with supply curtailed, a return to more normal demand levels could aid a price recovery in 2022.

In its report, the Dallas Fed said the price of benchmark West Texas Intermediate crude oil has stabilized at near $40 per barrel. It averaged $38 in June and $17 in April. At one point in April, producers found themselves forced to pay buyers $38 per barrel as near-term oil contract prices collapsed on fears that there was no place to store deliveries.

WTI prices are recovering, but remain lower than what operators need to be profitable. Full recovery may still be months away.

Even at current levels, prices barely cover operating expenses, the Dallas Fed said. And the price is also too low to support new drilling. The average price per barrel needed to cover operating costs is $23–$36. Meanwhile, profitably drilling a well requires prices of $46–$52.

The Kansas City survey pegged the average oil price needed for profitable operations at $49 a barrel, with a range of $35 to $65. That average price level isn’t expected to be reached for at least a couple of years.

Lest we forget, in a one-month period from mid-March to mid-April, diesel fuel consumption declined 37%, gasoline fell 48% and jet fuel was down 80%, all due to Covid-19-related economic shutdowns and stay-at-home orders.

In April, Americans used 14.7 million barrels of oil per day, 73% of what was forecasted. Consumption rebounded from that low, the Dallas Fed said, and reached 85% of forecasted levels in June.

The U.S. energy sector is still coping with market uncertainty, the Dallas Fed said. Sixty energy companies sought bankruptcy protection from January through June. Relief is difficult given the industry’s limited access to new capital.

“Bankrupt companies are just restructuring and there is very little new capital available,” the KC Fed quoted one respondent to its survey as saying.

Energy companies are cutting workers, even as some other sectors of the economy are showing signs of recovery. Texas oil and gas companies laid off 61,000 employees through June, roughly 26% of the workforce they employed before the pandemic. Further cuts are likely, the Dallas Fed said.

As one energy sector respondent to the KC Fed’s quarterly survey put it, “The longer it takes for economy to recover, people to get out and start spending, the more difficult it will be for companies to survive.”

I took this photo of a plane headed west out of Denver from my front porch a couple of years ago. Those are storm clouds, not smoke!

When Pressed, Ohio Regulators Do the Right Thing (mostly)

Two updates on recent blogs that were related to rather bizarre news out of my home state of Ohio.

In the first, the Ohio Siting Board voted unanimously to reverse an earlier decision that would have limited the hours of the day when a wind farm proposed to be built in Lake Erie could operate. The Board earlier this year said, sure, you can build the wind farm; you just can’t operate it at night between March and November.

In the second, the Ohio Public Utilities Commission will require utility FirstEnergy to show that its Ohio utility ratepayers didn’t pay, “directly or indirectly,” for political or charitable spending in support of the state’s $1.6 billion nuclear and coal bailout bill. The commission’s action is a good move, but more lenient than what the state’s consumer advocate had sought. And it’s tangled up in a federal indictment alleging bribery by a prominent Oho Republican who shepherded the bailout bill through the state legislature.

Here’s background on both.

In late May, the Ohio Power Siting Board offered up what amount to a poison pill when it approved the Icebreaker wind power project: The turbines must be completely stopped from dusk until dawn between March and November.

The board said that its requirement to “feather” the turbines was meant to protect birds and bats that might fly into the blades at night and be killed.

The developer, Icebreaker Windpower, said at the time it was “stunned” by the board’s decision. It said the feathering requirement reneged on an agreement reached a year ago between Icebreaker and the board’s staff.

Icebreaker would be eight to 10 miles off of Cleveland. It would consist of six wind turbine generators, along with submerged electric collection cables, a temporary staging area at the Port of Cleveland, an operations and maintenance center and a substation. It would use Vestas 3.45 megawatt offshore wind turbines with a total generating capacity of 20.7 MW.

In its statement, LEEDCo said it had invested “incredible amounts of time and money” into studying and assessing potential impact to birds and bats. It said the U.S. Department of Energy ruled after a two-year study that the project would have “no significant impact” on the environment.

Renewable energy advocates alleged that the poison pill could be traced to Sam Randazzo, a longtime representative of the “traditional energy industry” and “vocal critic” of renewables. He also happens to chair both the Public Utilities Commission and the power siting board.

One anti-fossil fuel group went a step further to suggest that attorneys working for coal company Murray Energy filed briefs on behalf of two residents of a Cleveland suburb who opposed the wind farm. Bob Murray is a staunch ally of President Trump. His company (Murray’s not Trump’s) filed for bankruptcy protection last October. The Wall Street Journal reported that the company had defaulted on its $440 million bankruptcy financing package.

Reports said that siting board members have been under pressure from state lawmakers to life the nighttime limits. Thirty-two lawmakers from both parties signed a letter urging the board to reconsider its earlier decision.

It’s not yet full steam ahead for the wind farm project, however. The board still needs to approve the developer’s plans to address a variety of topics, from mitigating harm to birds, bats and fish to how to eventually decommission the wind farm.

As for FirstEnergy, back in July the U.S. Attorney’s Office for the Southern District of Ohio charged the Speaker of the Ohio House of Representatives, the former chair of Ohio’s Republican Party, three other people and a “501(c)(4) entity” with a federal public corruption racketeering conspiracy involving $60 million.

The politician, Larry Householder, was arrested July 21 and charged in an alleged conspiracy to pass and then defend a billion-dollar nuclear plant bailout, known as Ohio House Bill 6. The feds alleged that Householder and the “entity” conspired to violate the federal racketeering statute through the use of wire fraud, receipt of millions of dollars in bribes and money laundering.

The federal complaint and indictment allege that the defendants received approximately $60 million from “Company A” — widely thought to be FirstEnergy — and its subsidiaries and affiliates.

Earlier in September, the Office of Ohio Consumers’ Counsel filed paperwork with the Public Utilities Commission (chaired, remember, by Sam Randazzo) in an effort to learn where FirstEnergy got the $60 million.

The Commission agreed to review the utility’s political and charitable spending and directed the company and its affiliates to file a response by the end of the month.

I took this photo of Cleveland’s skyline in June 2018.