Ports, trade and jobs

In Steven Solomon’s book “Water: the Epic Struggle for Power, Wealth and Civilization” he notes two of the greatest water decisions that helped make America a global power are the building of the Erie Canal and Panama Canal. Both gave the US the ability to conduct trade more easily. I mention these decisions as many east coast US ports have dug deeper channels to permit larger ships to enter their harbors. And, non-port cities have developed trans-modal distribution facilities to get goods on and off planes, trains and trucks often going to or from ports.

The leaders of ports and these trans-modal facilities have concerns over the tariff wars that are beginning because of the short-sighted decision of the US President. While some industries will see job increases, peripheral and other industries will see job losses. But, the ones who see red flags are those who handle the distribution of goods.

The port leaders are concerned the return on the investment to dig deeper ports may be watered down. But, less trade also means fewer truck drivers, rail workers, dock workers and distribution handlers. This is on top of industries specifically hit by tariffs.

Nick Hanauer, a venture capitalist spoke on a Ted Talk about his frustration that business leaders called themselves job creators. He asked “Do you know who creates jobs? Customers.” It should be noted the first and third Presidents who witnessed the most jobs were Bill Clinton (22.9 million) and Ronald Reagan (16.1 million). Per David Smick, an economist who worked for both, this was in large part due to their emphasis on free trade.

Tariffs hurt the wrong people. They may help some targeted industries, but they end up hurting far more employees than they help.They do hurt business owners, but in the end, they reduce the number of customers. And, fewer customers cause fewer jobs. The math is that simple. Any decision that adds to customers is job accretive, while the converse is also true. And, one thing is certain – we cannot shrink our customer base to greatness.

Water – the real crisis facing us

While Americans are distracted and consumed by the routine chaos out of the White House, we are letting huge problems go unaddressed. One of the major problems is the current and growing global water crisis. For several years, the World Economic Forum has voted the global water crisis as the greatest risk facing our planet over the longer term, defined as ten years. But, this is not just a future problem, the city of Cape Town in South Africa is in severe water crisis and continues to ration pushing forward their Day Zero as long as they can

Per The Guardian in an article this week, the United Nations warns that water shortages “could affect 5 billion people by 2050 due to climate change, increased demand and polluted supplies, according to a UN report on the state of the world’s water. The comprehensive annual study warns of conflict and civilisational threats unless actions are taken to reduce the stress on rivers, lakes, aquifers, wetlands and reservoirs.

The World Water Development Report – released in drought-hit Brasília – says positive change is possible, particularly in the key agricultural sector, but only if there is a move towards nature-based solutions that rely more on soil and trees than steel and concrete.

‘For too long, the world has turned first to human-built, or ‘grey’, infrastructure to improve water management. In doing so, it has often brushed aside traditional and indigenous knowledge that embraces greener approaches,’ says Gilbert Houngbo, the chair of UN Water, in the preface of the 100-page assessment. ‘In the face of accelerated consumption, increasing environmental degradation and the multi-faceted impacts of climate change, we clearly need new ways of manage competing demands on our freshwater resources.’

Humans use about 4,600 cubic km of water every year, of which 70% goes to agriculture, 20% to industry and 10% to households, says the report, which was launched at the start of the triennial World Water Forum. Global demand has increased sixfold over the past 100 years and continues to grow at the rate of 1% each year.

This is already creating strains that will grow by 2050, when the world population is forecast to reach between 9.4 billion and 10.2 billion (up from 7.7 billion today), with two in every three people living in cities.

Demand for water is projected to rise fastest in developing countries. Meanwhile, climate change will put an added stress on supplies because it will make wet regions wetter and dry regions drier.

Drought and soil degradation are already the biggest risk of natural disaster, say the authors, and this trend is likely to worsen. ‘Droughts are arguably the greatest single threat from climate change,’ it notes. The challenge has been most apparent this year in Cape Town, where residents face severe restrictions as the result of a once-in-384-year drought. In Brasília, the host of the forum, close to 2m people have their taps turned off once in every five days due to a unusually protracted dry period.”

Here in the states, we exacerbate our drought and other water problems with bad piping and fracking, which waste or use huge amounts of water. But, with our vast agriculture, we need water to produce our and much of the world’s crops. We must manage it better. Two books are very illuminating. “Water: The Epic Struggle for Wealth, Power, and Civilization” by Steven Solomon is a terrific look back and ahead. He is the coiner of the phrase “water is the new oil.” The other book is called “Rancher, Farmer, Fisherman” by Miriam Horn that details the struggles of these professions and two others with climate change and its impact on water and other things they do.

Folks, this is a major problem. We must address it now before we all have our own Day Zeroes. If this is not enough to raise concern, one of the financial experts who forewarned us of the pending financial crisis, has a new concern – water.

 

Water problems have been around for ages

The water issues that have been plaguing Flint, Michigan residents are not new. Our planet has had water (and sewage) issues dating back to when people gathered together in villages. In Steven Solomon’s book calledWater: The Epic Struggle for Wealth, Power, and Civilization” he describes how the mastery over water resources kept leaders of civilizations in power. The needed mastery revolved around water to drink and bathe in, water to carry sewage away, water for transportation and trade and water for naval control.

Here are a few examples to illustrate this point.

  • Every major city has had water/ sewage issues. In London in the 1850s, a  major problem came to a head which was called the Big Stink. The planners had sewage lines dropping waste into the Thames. When cholera and dysentery epidemics broke out, initially, the planners thought these were air borne diseases. But, when they realized a brewery, where employees drank free beer, had only minimal breakout, they realized the diseases were water borne. It turned out the sewage line was perilously close to the line that pulled water from the Thames to drink. Once that was remedied, the breakouts subsided.
  • In Edinburgh, the Scots had an unusual way have handling sewage. It turns out, the city dwellers would throw sewage out of their homes around 10 pm, which is the reason people smoked after meals to mitigate the smell. This made foot traffic very perilous and less than sanitary.
  • In Chicago, when the city got so crowded and filthy, city leaders realized they needed to carry sewage away, but they could not figure out how to do it. An engineer had an idea that they should lift the buildings using railroad car heavy duty jacks and build the sewage and water lines beneath the buildings.This actually worked too well, as Lake Michigan began to get filthy and fish would be coming up through the water lines into bath tubs. So, they had to remedy where the sewage was dumped.
  • It is thought that the greatest Chinese achievement is the Great Wall. Yet, a more monumental achievement per Solomon was to build a canal between the two major rivers in the country – the Yangtze and Yellow Rivers. This was a massive undertaking, but led to transportation and trade across the country.
  • Solomon also advocates the two greatest achievements in US History that made us a world power is the building of the Erie and Panama Canals. The former linked the east coast with trade of goods with the Midwest, making Chicago a very important port. The latter gave us access to two oceans and helped with global trade and naval might. He also credits the two Roosevelts as our greatest water presidents, with Teddy building the Panama Canal and buying watershed rights in the west. FDR built many dams to create hydro-power.

I mention this now, as Solomon has been a staunch advocate for addressing our water problems before it is too late. Flint-like problems exist in several cities right now. Yet, this goes beyond Flint, as our planet is drying up our water resources and it is noticeable by satellite pictures. It is also being made worse by climate change, which the Department of Defense says is one of the greatest threats to our planet. And, The World Economic Forum echoes these concerns with the global water crisis being the number one risk in their 2015 Global Risks report followed by climate change inaction. Solomon is adamantly against fracking as the amount of water wasted is huge per frack. He also notes that not only climate change will make the water crisis worse, but so will over-population.

Finally, the man who predicted the housing crisis two years before it happened, who is featured in the movie “The Big Short,” has only one investment right now. He is buying up water rights. Yet, outside of the Flint issue which is being spoken to by Clinton and Sanders, no candidate is addressing our water concerns and only one Republican candidate admits that climate change is a problem, John Kasich, with both Democrats being vocal about it. These might be questions we want to ask our candidates about, especially with Department of Defense and World Economic Forum noting their concerns.

Ten Greatest Global Risks over Next 10 Years per World Economic Forum

Let’s face it, long term thinking is hard for most leaders and society in general. It is too far off, but we still cannot wait to plan as the cost and problems can get too large. The World Economic Forum recently produced a Global Risks Report – 2015, which highlights the greatest risks over the next eighteen months and over the next ten years.

Rather than focus on the next eighteen months, let me focus on the longer term, ten-year horizon, as the risks are far more dramatic in impact as many are planetary in scope.

  1. Water crisis
  2. Failure of climate change adaption
  3. Profound social instability
  4. Food crisis
  5. Extreme weather events
  6. High structural un- or under-employment
  7. Large-scale cyber attacks
  8. State collapse or crisis
  9. Major biodiversity and ecosystem collapse
  10. Failure of national governance

Water tops the list as it is becomingly an increasingly dear commodity worldwide. I have noted before our energy production must bring into the equation more the impact on water sources. Moving to renewable energy sources which are not water intensive is as important as their positive impact on climate change. And, climate change will only make water and other problems like the food crisis, extreme weather events, and ecosystem collapses even more problematic with increased droughts, forest fires and floods with stalled weather systems.

The profound social instability and high structural un- and under-employment are contributors to our global poverty problem. Other top ten risks are also contributors such as state or national governance failures or the climate impacted natural crises. Those in poverty tend to more impacted by these issues as they have so few choices. Plus, I would season the ability to address these issues with overall corruption, where monies, services and goods intended to help are steered to the pockets of leaders and oligarchies of influential people.

These are the questions we need to be asking politicians and candidates about. If they are unprepared to address these issues or deny their existence or importance, then we need to vote for other folks who are prepared. These problems are already rearing their ugly heads, so the time is fleeting on our ability to do things to address these problems.

A link to the 2015 Global Risks Report follows:

http://www.weforum.org/reports/global-risks-report-2015

Water – the best reason for renewable energy

At a recent Sierra Club meeting, I heard an environmental science professor speak about the river system that provides water for millions of Carolinians called the Catawba/ Wateree River Basin. This system has been on the watch list due to poor planning for several years. About half of the use of the river also goes to generate electricity for these same citizens through Duke Energy, so it is a multi-purpose river system. While this river basin is endemic to the Carolinas, the issue is more universal with water concern areas like California, Oklahoma, Texas, etc.

In previous posts, I have noted major concerns over our fresh water supply, noting it as one of our two dearest resources on the planet, with air being the other. Often citing Steven Solomon from his book “Water: The Epic Struggle for Wealth, Power and Civilization,” I noted a concern over our need to manage this resource, especially in light of the vast amounts of water that do not feed us, quench our thirst or help us stay  clean, but go instead into non-crop irrigation, fracking and other fossil fuel and nuclear power production.

Further, one of the key impacts climate change  has and will continue to have is on drought areas, making them worse. In fact, water provided cooling for power  generation (while water is replenished, there still is a net loss of water) is so significant, that when we have a drought, we should not only conserve water, we should raise the thermostat and turn off the lights. The reduction in electricity use will save water as well.

Yet, until I heard this presentation which included excerpts from Duke Energy’s internal presentations, it did not hit me that we run a reasonable risk of running out of  our capacity to support additional people in the Catawba/ Wateree River Basin. With our growth expectations for the area, even with modest growth, we will need to alter our mix of energy production in a dramatic way or we may very well run out of water. At a minimum, we will need to spend several hundreds of millions of dollars to add more water processing and waste management processing plants, as the ones we have will max out. Saying this last statement a different way, as we grow, we will grow beyond the capacity of existing plants to provide fresh water and treat sewage regardless of what the river might provide.

Even though the time period for concern is beyond the tenure of current politicians, we need to plan accordingly with a long term strategy. We cannot wait to act, as if we do, it will be too late to intervene. We need to have more active conservationist strategies per the counsel of previous Duke CEO Jim Rogers who liked to quote from Solomon’s book that “water is the new oil.” We need to be more concerted and aggressive in our move to renewable energy which need not require water usage. We must diminish fossil fuels not only for climate change reasons, but to afford us water to drink and cook with. And, we need to be prepared to build water and waste management processing plants before they max out.

Please note, I am not trying to be an alarmist, but more of a pragmatist. We must begin our planning and accelerate our actions. Not planning ahead is a key reason our Catawba/ Wateree River Basin has been included on the list of most threatened rivers.  A final comment is Denmark which sits at sea level, developed a long term plan to deal with the encroaching seas due to climate change. The plan had to have consensus from multiple parties as it had to survive the terms of the political officials. That is what is needed here.

A Cautionary Tale of Too Little and Too Much Water

We have two major environmental concerns that are impacting us now and will continue to do so, unless we plan and execute a more dramatic strategy. One gets too little air time, while the other gets talked about, but is under constant attack by hired public relations people who are highlighted in the documentary ‘Merchants of Doubt” and the most recent airing of “Vice” on HBO. First, we have a growing fresh water shortage problem that is predicted to get worse in drought stricken and other areas. Second, we have an increasing intrusion of salt water in low-lying coastal areas that will also get far worse than predicted, likely displacing 300 million people by century’s end.

Fresh water is one of our two most dear resources on the planet, with the other being the air we breathe. Managing a predicted water shortage may be one of the most crucial tasks in front of us, yet we do not give sufficient news coverage to this looming problem. I would encourage you to read one of the best history books I have ever read by Steven Solomon called “Water: The Epic Struggle for Wealth, Power and Civilization.”  The book does more than look backwards as it highlights a major concern going forward and uses the term “water is the new oil.” A link is provided below to an article on the book.

Any investment that requires the substantial use of water needs to factor that use in its Return on Investment calculations. I am against fracking for several reasons, but my greatest fear is the significant use of water that we cannot let trickle back into our water supply. When this issue is scoffed at by industry people, it should be noted that in the past couple of years frackers and farmers have been fighting over water in California, Kansas and Oklahoma. It should be noted in some areas of Texas, which is heavily drought prone, about 20% of an area’s water supply goes to fracking.

I use the fracking case as an example. We must be mindful of coal ash supplies near water sources, which is where they almost always are placed. We must be mindful of developers and how run off can occur from houses built on various lakes. We must be mindful of where we have placed dams and where we may have straightened out rivers, which can be harmful. And, we must re-emphasize conservation of water through the use of waterless water heaters, planting more endemic plants to an area, less water sprinkling, gray water plumbing for toilets, and what Orange County has done with sewage water which is treated and filtered many times over and reused as drinking water (yes, it is drinkable).

The other major concern relates to the impact of climate change on coastal locations, especially those below or at sea level. Climate change has many impacts, one of which is to make drought prone areas worse, but the rising sea levels is getting more attention. And, after watching what is happening in Antarctica and Greenland on the documentary “Vice,” the scientists who measure the impact on melting ice masses say it is too late to save Antarctica from severely melting with what we have done thus far.

The “Merchants of Doubt” who are the hired guns of the fossil fuel industry note that Antarctica is growing in ice mass. Yet, this is clearly refuted by the scientists doing the annual measuring noting the PR folks are purposefully confusing sea ice with land ice. The “sea ice” is thawing and refreezing to the tune of a meter thick, while the “land ice” which is kilometers thick is melting away and that is the major problem. The scientists equate it to ice thawing in a glass and refreezing (sea ice) versus adding more melted ice to the glass (land ice) which is causing the glass to run over. I make this distinction as the “Merchants of Doubt” are very good at what they do and are well paid by the industry to cause this doubt. Just remember the overflowing glass as a metaphor for what is actually happening versus the false message put forth by deniers.

The sad truth is people and some leaders believe this messaging and it is actually harming our planet and its inhabitants by delaying what needs to be done. The country of Bangladesh is being consumed by the encroaching waters in a very noticeable way. Impoverished people who farm and fish are required to move to overcrowded cities. The country of Denmark developed a long-range plan that had to survive different parties in power, so it had the buy-in of everyone. Ecuador is fighting a never-ending battle against the relentless sea. The City of Miami’s county (Dade County) has joined with three adjacent counties to invest $200 million into plans to stave off the encroaching sea water which is coming up through the storm drains in the streets more frequently. Below is a link to an article on the renewed efforts.

The rising sea levels will impact every low-lying area on the planet and is already consuming islands like the Cartaret Islands, whose ambassadors had to go to larger islands to ask if they could move there. It is also making the impact of hurricanes worse and will continue to do so. Climate scientists note hurricanes hitting shore with higher sea levels is like dunking a basketball off a raised court. The damage is more severe. Hurricane Sandy is a precursor to what will happen more often. This is where the cost of repair comes into play which totaled in the hundreds of billions, just with Sandy.

But, don’t take my word for it, read for yourself. I am not a scientist, but I can read. 97% of scientists note that man-influenced climate change is a happening and is a major concern. Out of 14,000 peer-reviewed scientific papers on climate change, only three were contrarian. Mercer Investment Consulting surveyed the largest pension scheme sponsors on the planet and these sponsors estimate the cost of climate change impact will be in the tens of trillions of dollars. Marsh, the largest risk management firm in the world, is speaking routinely with clients about managing risk of coastal assets. Georgia State University, one of the most well known risk management and actuarial schools in the US, has a curriculum around planning for climate change. Wall Street is factoring in the cost of climate change risk in their pricing. You also have the conclusions of the National Oceanic and Atmospheric Administration, NASA, the UN International Panel of Climate Change, and the American Association for the Advancement of Science on man-influenced climate change. And, it goes on.

These two water issues are critical to our future. We are past time on acting and we need to plan and execute accordingly. We do not need well paid BS artists using science out of context to further prevent action from happening. We are at a point where we must question politicians on what we should do about these issues. And, if they say climate change or global warming is hoax, do us all a favor and do not vote for them. If they do not recognize water shortage as the major problem it is has become, do not vote for them. If they say it is a jobs issue more so than an environmental issue, note that the one of the fastest growing industries for jobs is the solar energy industry, which is averaging annual double-digit growth with 174,000 US jobs at year-end. The wind energy industry is growing as well and could also grow at the same clip with even more investment. And, the sun shines and wind blows in every state, some more so than others, so the energy impact and job creation can be spread around.

If anything, please understand the importance of these two issues. Question everything, especially politicians, leaders and so-called news sources. We do not have time to wait on leaders to catch-up. We need to make them catch-up. If they don’t or are not willing, get leaders who will look at real data and listen to unbiased science and help us do something about our problems. Our failure to act has made this even more crucial.

http://www.huffingtonpost.com/steven-solomon/water-is-the-new-oil_b_380803.html

http://www.law360.com/articles/613588/miami-dade-officials-accelerate-response-to-sea-level-rise

A New Childish Tactic to Combat Global Warming Preventive Actions

I commend President Obama for addressing the issue of global warming and the need to act. He has helped already with the higher miles per gallon standards on cars and perpetuating tax credits to invest in alternative energy which have been paying dividends. However, we do not have an orchestrated eco-energy plan to do what is needed to more aggressively combat this problem. We are already at least ten years behind on this and our failure to do more would be viewed as one of greatest tragedies by our children and grandchildren. Yet, two articles that appeared in the Wall Street Journal last weekend and one editorial by a national columnist in my paper today have interested me for both their begrudging acknowledgement of the climate change problem as well as a very childish theme in response.

This morning Charles Krauthammer, a conservative national columnist, wrote an editorial called “President Obama’s Global Warming Folly” which picks up on themes of the two articles in last weekend’s WSJ. The first was by Rusty Todd on “Why the Grass Should Not Always Be Greener” and the second by Holman Jenkins, Jr. “The Climate Change Speech Obama Didn’t Give.”  In Todd’s article, it was noted we should be less concerned by the significant use of water to frack with as we waste more water in the US watering our lawns. In Krauthammer and Jenkins’ articles, it was noted that we should be less worried about addressing climate change as the Chinese will be using far greater coal and it won’t do any good. To me, that is like a child asking why should I behave because Johnny and Susie are doing worse things than me?

Two comments. First, water is a dear resource and we should be concerned about the use of water in many more calculations of Return on Investment, including its use in lawn irrigation and fracking. To this latter point, frackers and farmers are fighting over water in places like Kansas and California. This is before we get to the other environmental concerns of the toxic air and water pollution which are occurring. I would encourage people to read Steven Solomon’s excellent book “Water: The Epic Struggle for Wealth, Power and Civilization” whose historical context lends credence to his concerns over our use of such a dear resource.

You may ask what does this have to do with global warming? Water is becoming a dear resource with or without global warming. The scientific models say global warming will make the drought areas worse and more prone to forest fires, while dumping excessive amounts of water in other areas through stalled weather systems causing flooding. This is already happening. Yet, as we look at ways to countervent this problem, we must factor in the use of water in our equations. Burning natural gas is cleaner than burning coal, but it is not perfect. Yet, if we must drain our water supply to get natural gas, not to mention all the other toxic chemicals that find their way into the air and water, then we are creating other major problems that global warming will exacerbate.

Second, the climate change comments are equally irksome, as we are beyond the tipping point on doing something about this obvious problem. Not that it matters, but I left the GOP in 2006 because of its stance on global warming. It was very apparent then, that the fossil fuel industry’s unhealthy influence over the GOP is causing smart people to ignore what NOAA (the National Oceanic and Atmospheric Administration)  and 97% of scientists are saying. Please check out the “The Global Warming Reader” complied by Bill McKibben, a world-renowned climate scientist. He notes the significance of Congress failing to approve an acknowledgement of climate change along party lines in April, 2011. He said that date may go down in history as a point when we could have acted, but did not. Due to their failure, the President is now picking up the reins and driving ahead.

If we are going to get others to act more responsibly on climate change, we need to do better ourselves. We need to more aggressively move toward alternative energy sources and build on what is already happening in our country on a confederated basis with solar, wind and biomass energy. By itself, California is the producer of the 7th most solar energy in the world (if measured as a country) and wind energy is in 39 states. My own state of North Carolina is the 5th most prolific solar energy producing state in the US and is home to Semprius, a company that produces the most efficient solar photovoltaic panel in the world, improving by 40% the effectiveness over the previous best model. And, these industries are producing local jobs, so it truly is not an either/ or proposition. I have learned recently that Strata Solar, a North Carolina based company that installs solar systems for businesses and individuals, has more orders than they can handle.

Let me close with a survey that USA Today did after the President’s speech. It noted that 65% of Americans are concerned or greatly concerned with climate change as problem, with 33% being unconcerned. The lowness of the 65% disturbs me as it shows how effective the fossil fuel industry efforts to create doubt have been. According to McKibben’s book, this effort to confuse the issue dates back to 1992. His book actually takes the time to show dissenting views, which I found very generous and even-handed.  Yet, when you read the three articles and editorials above, you do see a begrudging acknowledgement of the problem after previous naysaying by the authors. At least that should be viewed as a success. Now, let’s go do something more about it and stop throwing childish tantrums.