America is one big pothole – how to fix them and create jobs

Part of the above headline is a quote from former Secretary of Transportation and Republican lawmaker, Ray LaHood. When he and former Democrat Governor of Pennsylvania, Ed Rendell appeared on PBS Newshour the other night regarding America’s need to improve our infrastructure, LaHood responded to Judy Woodruff’s question about its importance with “America is one big pothole.”

Rendell and LaHood are co-chairs of a bipartisan group called “Building America’s Future,” which is pushing for the overdue needs to rebuild and improve America’s roads, bridges, ports and electrical grids. Both speak from experience in what improving infrastructure can mean for the assets in question, but the jobs they create both directly and indirectly. And, we need not have to wait for another bridge to collapse to prove the need. Attached is a link to their interview with Woodruff on PBS Newshour. http://www.pbs.org/newshour/bb/nation/jan-june14/infrastructure_01-08.html

They cite numerous examples of how the American Recovery and Reinvestment Act (ARRA) has aided in improving infrastructure and getting people back to work. With the echo effect of the projects at hand, these capital investments are some of the best job programs around, as people are needed to build, repair and renovate, not to mention the peripheral support, supply chain and maintenance jobs. And, the needs exist whether we address them or not. Rendell cited the number of bridges identified just in Pennsylvania that were deemed in need of significant repair. On his watch, they were able to rebuild and repair about 20% of them, but there is much work left to be done.

To show an echo effect, one of the reasons cited as to why the City of Chicago did not get the 2016 summer Olympics it was vying for is our aging infrastructure. Further, one of the challenges facing our even larger move into solar and wind energy is our infrastructure is insufficiently supportive to where the new sources of power exist. In other words, we need more grids to garner and distribute electricity in places more conducive to alternative energy to make it even more effective and widespread.

Yet, in my last post, I mentioned an even more concrete example. With the widening and deepening of the Panama Canal slated for completion next year, almost all of our eastern harbors are not deep enough to support larger transport ships. We have plans that need to be expedited to dredge these harbors. As LaHood points out, if we do not do this, the larger ships will sail past these harbors to larger Canadian ports. That means more distribution jobs will be needed in Canada and fewer in Jacksonville, Savannah, Charleston, Baltimore, New York and Boston. That also means fewer taxes collected from wages and fewer goods bought here causing a very unwelcome echo effect. People will migrate where the jobs are.

There are numerous examples of win-win partnerships that are occurring. In fact, per “That Used to be Us: How America Fell Behind in the World it Invented and How it can come back” by Thomas Friedman and Michael Mandelbaum, this co-investment in our future between federal, state, local governments and private business is how we have become so successful over time. I have written about one example before where Clemson University, the City of Charleston, the wind turbine makers (GE, Siemens, etc.) and Department of Energy and South Carolina Energy Department have invested in a wind turbine testing facility in Charleston. The idea is to help the onshore and offshore wind turbines be more functional and efficacious.

When some leaders question paying for these investments, here is where we need to distinguish between capital investments and operational funding. I have heard several economists state that borrowing money to pay for an asset is different from borrowing money to pay for operations. With the low-cost of borrowing as of this writing, the time to borrow money to do this is now. With that said, we do need sustainable funding to pay the cost of borrowing and both cite an increased gas tax, as an example. There are other avenues to do this, but we need to explore the entire cost/ benefit equation with the bipartisan lens they are offering. This issue is too important to leave it to the special interest groups who lobby and tell our congressional leaders what they need to do.

I have written several posts about our infrastructure needs. Rendell and LaHood are breath of needed fresh air into addressing these needs. They have real ideas and experience to help us address real problems. Let’s get behind their efforts and challenge our leaders to do the same.

Clemson/ City of Charleston Focus on Wind Energy – Very Impressive

Last night, I was channel surfing and happened upon a weekly show called “Carolina Business Review” on PBS, which I watch from time to time. Last night, one of the three guests was the retiring President of Clemson University, James Barker who is an architect and professor of architecture by profession. During the discussion which included Ivan Urlaub, the Executive Director of the North Carolina Sustainable Energy Association, Clemson’s efforts toward sustainable energy initiatives were highlighted as great examples for others to follow.

The Clemson Restoration institute, among other initiatives, has partnered with the City of Charleston, Santee Cooper, SC Department of Energy, Coastal Carolina University and US Department of Energy, to establish a Wind Turbine Testing Facility along the coast of South Carolina. This effort is backed by numerous wind energy companies who build turbines, such as General Electric, to test and improve upon the veracity of their turbines.

The goals of the Wind Turbine Testing Facility are to:

– improve the reliability and efficiency of the wind turbines;

– reduce capital cost and operating and maintenance costs;

– improve electric grid compatibility (this is key to success); and

– match generation with demand.

More on the mission and goals of the project can be found with the following link:

http://www.clemson.edu/facilities/energy-awareness/projects/windturbine.html

This effort was funded through a $98 million investment, which included a $45 million grant from the US Department of Energy. It is an ideal example of the historical public/ private partnership to fund major initiatives that will move us forward and has been a vital reason for our success as a country over time. And, this kind of investment creates jobs – 20,000 are predicted in the area. The Wind Energy industry already had 75,000 jobs in the US as of last fall, but that number is expected to grow to 500,000 if we take advantage of our wind power by 2030. Also, the industry anticipates 20% growth, which is definitely nothing to sneeze at.

For example, one of the statistics cited showed that 78% of the electricity used in the United States is within 28 coastal states. Our wind is in our plains and mountains, but there is an abundance of wind in our coastal regions, especially just offshore. This is where matching use with need comes to bear. And, unlike nuclear energy, oil derricks, and natural gas fracking sites, the worse thing that happens if a windmill crashes in the water is a splash. Please remember this, as any technology is only good as its worst operator.

Before closing, I also wanted to highlight a few other things that Clemson is doing within the Clemson Restoration Institute. They are focusing on energy initiatives such as: biodiesel, composting, electric vehicle charging, solar energy and sustainable building. President Barker is an impressive person. He has led Clemson to do some impressive things, especially around understanding the needs of businesses in the area and training his students to fulfill roles therein. I hope others are replicating his vision.