New Geography

Tag: Energy

  • Gas boom ripples through Pennsylvania economy

    Almost 150 years after Colonel Edwin Drake drilled the country’s first commercial oil well in Western Pennsylvania and transformed Pittsburgh into a manufacturing powerhouse, a huge natural gas field could be about to rescue this region’s sluggish economy from its post-industrial death spiral.

    The future energy boom will come from tapping an estimated 50 trillion cubic feet of recoverable natural gas that is locked into the Marcellus Shale, a huge, 400-million-year-old layer of sedimentary rock that lies about 8,000 feet beneath all of Western Pennsylvania and most of West Virginia, eastern Ohio and western New York. Worth an estimated $1 trillion, the gas from the Marcellus Shale could do for the Pittsburgh area what the smaller but similar Barnett Shale did for the Dallas-Fort Worth area in Texas – pump billions of dollars into local economies for two decades.

    Rodney Waller, a vice president at the Fort Worth-based Range Resources Corp. oil and gas company, said the exact size and scale of the Marcellus play is not yet known. But he says his company – the leading gas driller in Pennsylvania with 5,400 shallow producing wells – already has invested $500 million in the project. Marcellus’s gas is costly and technologically tricky to reach.

    Wells must be drilled to 7,000 or 8,000 feet, then a high-pressure mix of water, sand and chemicals is used to fracture the shale and liberate the gas molecules locked in it. Horizontal drilling allows each well to capture the gas within a 3,000- or 4,000-foot radius.

    Western Pennsylvania’s “Gas Rush” has already started slowly and quietly in the rural counties surrounding Pittsburgh and Allegheny County, where, since 1950, the economy has shed hundreds of thousands of manufacturing jobs and the metro population has been stuck at about 2.3 million. Thousands of landowners have leased their mineral rights to energy outfits like Range Resources. Waller said the coming gas boom could last 15 years or more, as the Barnett Shale field has in Texas. And the drilling pattern in Pennsylvania will follow the same rural-to-urban scenario it did in Texas, with the richest and most easily accessible deposits taken first and densely populated areas near Pittsburgh last. Waller says that in Dallas-Fort Worth, where gas production has escalated in the last five years, it seems everyone has been getting a cut of the Barnett Shale’s riches.

    For example, the homeowners’ association that runs Waller’s 38-acre gated community received a $25,000-per-acre signing deal. That $950,000, plus royalties, will be shared proportionally by the association and residents. Thanks to the techno-miracle of horizontal drilling, the well will be three blocks away.

    A million dollars is chicken feed compared to what the city of Fort Worth expects to get from gas leases and royalties over the next 20 years – nearly $1 billion. For the right to drill for gas under its 18,460 acres, the Dallas-Fort Worth International Airport alone received a check in 2006 from Chesapeake Energy for $185 million – not to mention the additional 25 percent of all royalties.

    Meanwhile, Arlington, the growing community of 367,000 between Fort Worth and Dallas, has already banked $50 million in signing bonuses for leasing 4,300 of its acres, according to city real estate manager Roger Venables. Signing bonuses in Arlington – $75 per acre in 2005 – were $30,000 in July, said Venables, who estimates that the city’s nearly 7,000 acres will ultimately generate about $850 million. He said most of that gas revenue will go into an endowment and be distributed through community grants to improve the quality of life in Arlington.

    In Washington County south of Pittsburgh, where Range Resources drilled a test well in 2002 that proved the Marcellus Shale contained enough gas to be profitable, the early returns are more modest. Hundreds of landowners who own the mineral rights beneath their property have penned “signing bonuses” that have now risen to $4,000 per acre. They also will get at least 12.5 percent of production royalties.

    Washington County’s government has already scored a small benefit: Planning Department Director Lisa Cessna says the county was paid an upfront bonus of $17,000 from Range Resources in 2002 to explore for gas in 2,700-acre Cross Creek Park. Plus, it gets a now laughably low price of $10 per acre per year. So far, the county has realized about $60,000 in gas-related revenue, but royalty checks will soon sweeten that figure, as will a deal the county is seeking for its other major land holding, 2,289-acre Mingo Park.

    Whoever wins the right to drill at Mingo must pay Washington County at least $4,000 an acre, fork over at least 15 percent in royalties and abide by strict environmental regulations, Cessna said. Bids will be opened Nov. 4.

    By the end of the year, Range Resources will finally see its first commercial flow of gas from the Marcellus from three wells operating in Cross Creek Park, Waller said last week. As for the cash-starved governments of the City of Pittsburgh and Allegheny County, which controls 9,300 acres of land at Pittsburgh’s two airports, they too will most likely benefit handsomely from the Marcellus gas play.

    But they’ll have to be patient. In Texas, the development of the Barnett Shale took 15 years to spread from the hinterland to downtown Fort Worth, where drilling is occurring now.

  • Resources and Resourcefulness – Welcome to The Real Economy

    By Delore Zimmerman

    The orchard-laden foothills of North Central Washington’s Wenatchee Valley are resplendent at this time of year. The apple and pear harvest is in full swing. The warm golden hues, the crisp mountain air and the bustle of trucks carrying produce to markets near and far provide a stark and welcome contrast to the daily barrage of bad news about the downward spiral of the nation’s financial markets.

    In places like New York, Chicago and San Francisco we can see the result of the demise of once-vaunted vapor traders. They created nothing but debts and are leaving whole economies in shambles.

    But in the Wenatchee Valley one can clearly see the fruits – both tangible and figurative – of the real economy. Over the course of almost ten years a determined coalition of community and business leaders has been working hard and working together to build an economy of substance and promise. The results of their efforts include a picturesque and vital downtown, a thriving and growing fruit and wine industry, a riverfront soon to be animated with housing and community recreation facilities, and a Yahoo data service center.

    These diverse elements make for an economy whose benefits are substantial and meaningful for the people of that region. The City of Wenatchee and the Port of Chelan County are the driving forces behind these initiatives. But the Wenatchee Valley’s success also can be traced directly to the investments and commitment of numerous private and government partners from within the region and from the outside. The Chelan County Public Utility District, for example, operates three hydro projects that deliver clean, renewable, low-cost energy to local residents and to other utilities that serve 7 million residents of the Pacific Northwest. The PUD operates a utility system that now includes local water, wastewater and wholesale fiber-optic services in addition to electricity.

    To capitalize further on its hydro power resources leaders in the Valley are aggressively pursuing an Advanced Vehicle Innovations (AVI) initiative. The AVI Consortium was conceived by the Port of Chelan County in 2005 to establish North Central Washington as a catalyst and center for development, demonstration, and deployment of flex-fuel plug-in hybrid electric vehicles. These are vehicles propelled by a combination of electricity-from-the-grid and bio-fuels (i.e., bio-diesel, ethanol). Both of these energy resources are in plentiful supply in the region.

    So here’s a lesson for our nation’s next stab at building a prosperous national economy. Put the money in the hands of those who can harness local and regional resources and make something useful out of them. It can be fruit, a manufactured product, or a service like data processing. The result is a community that, although not immune to the Wall Street tsunami, retains tangible assets that will survive the current storm.

    This real economy is working right now in the Wenatchee Valley. It also exists in many other communities and regions throughout the nation, from the Dakota plains to the energy corridor around Houston, and the growing industrial districts of the Southeast. These places represent the bright face of America’s future economy. If only they were taken more seriously by those – our nation’s leaders and so-called financial wizards – who are now driving us towards an era of darker expectations.

    Delore Zimmerman is President of Praxis Strategy Group and Publisher of NewGeography.com

  • Post-Imperial Foreign Policy: Our best allies are countries most like US

    When the Presidential and vice-Presidential hopefuls talk foreign policy, they look every which way — towards the Middle East, Russia, Europe, Asia or Africa, but they largely ignore our own backyard.

    In the next decades of the 21st Century, our policymakers will need different priorities. When looking for our closest allies, we may well need to look away from current entanglements in unfortunate, far away places and towards a stronger relationship with countries — notably Canada — with whom we share so much.

    This requires some understanding of where we are today. The breathless talk of an “end of history” and inevitable democratization that accompanied the fall of the Soviet Union should be swept aside by now. Instead we need to understand both a greater diversity in national systems and, increasingly, a trend towards ever more authoritarian regimes.

    Anyone who has studied history should understand this. Authoritarianism has been the default mode for millennia and seems likely to remain so in the foreseeable future.

    Twenty years ago it was possible to see in Russia and even in China, signs of a transformation towards democracy and a civil society. But clearly Putinism has produced something of a legal dictatorship in Russia, a downsized Soviet Union dressed in democratic garb. China seemed headed towards a more civil, less dictatorial state — before Tiananmen ended that dream. The recent Olympics seemed to highlight an authoritarian success story in a way that the designers of the 1936 Berlin Olympics would have appreciated.

    The influence of these countries, particularly China, in the developing world is also growing. Many see the so-called “Beijing Consensus” — placing economic development ahead of even modest democratization — as more appealing than the inherent inefficiencies of popular control, not to mention American hectoring and self-righteousness.

    Even our closest historic allies in Europe are increasingly asserting their own notions of what is best for them. With a rapidly aging, even declining population, these countries do not share the basic American need for sustained, vibrant economic growth over the next few decades. Instead they likely will continue to embrace a conscious policy of slow growth and stability. This will not change even when the hated George Bush is gone — despite a possible flurry of post-election Obamamania.

    How to respond to these trends? Flex our muscles? Been there, done that and what has it gotten us? In the end, we will have fewer opportunities to apply either military or economic power. The latter is now too well dispersed in the world and likely to become more decentralized in the coming decades. Even military power has its limits as can be seen by the rise of asymmetrical warfare. At the same time rising economies like China are rapidly increasing their military might as well.

    None of this means that we should accept the fashionable notion of American decline. Although obscured by the current financial crisis, our unique strengths — demographic, economic, and even political — remain very much intact. An aging Europe, the favored candidate for preeminence among many east coast policy wonks — does not share these assets. They have their own ethnic problems, a weak military, a shrinking supply of skilled workers and a continuing dearth of babies. Their economic system may not have our unfortunate penchant for excess, but built on security, it appears to restrain innovation and risk-taking.

    China, India and Russia and other rising powers of today also face enormous demographic and economic challenges. All have large populations of poor people once you leave the westernized cores. Russia’s economy is overly dependent on commodities; China and Russia face demographic declines equal or even worse than the EU.

    So where can we find our best allies? We look to those countries who share our demographic vitality, our fecundity and common values — Canada, Australia and New Zealand.

    Like the United States these countries are also “countries of aspiration.” They remain enormously attractive to both skilled and unskilled immigrants, including those from Europe and Asia. If there’s a brain drain in the world, it’s mostly to the US, Canada and Australia.

    Although born to British colonialism, these countries have over time, notes historian David Cannadine, “increasingly come to resemble the United States”. This is not a matter of liking George Bush, eating McDonald’s or even getting fat. It’s about young countries that are, in their own fashion, knitting together diverse legacies, including those of indigenous people. Strong pockets of anti-Americanism exist in certain circles in all of these countries, but on the grassroots level the similarities are likely to become more striking over time.

    Bolstering ties with Canada represents by far the greatest opportunity. High energy costs mean proximity matters more than ever. Canadian and American firms need to share adjacent markets. This will strengthen even more the strongest bilateral trade relationship on the planet.

    Perhaps even more important are family ties. Canada remains the largest source of visitors to the United States and vice-versa. Some 800,000 Canadians have settled permanently in the United States; 200,000 Americans have moved north to Canada. Many have dual citizenship. (A quick disclaimer: my wife is a native of Quebec and a dual citizen).

    Building on these natural ties will take some psychological changes in both countries. A strong alliance requires both a confident Canada and a respectful America. Americans need to stop thinking of Canada as a kind of northern icebox that we raid for resources when hungry. Canadians, for their part, should no longer regard themselves as America’s poor cousins but as equal partners with enormous resources, both human and material.

    With Canada, this relationship can be immediately strengthened at both the national and regional level. One step would be to embark on a program of cross-border infrastructure that would expand trade corridors from the Arctic down to Mexico, from Cascadia to the north Atlantic. Such steps would increase markets and productive capacity across our common continent.

    Another potential opportunity lies in building an alliance around environmental and energy issues. A strongly integrated North American Energy Community, including Mexico, could insulate Americans from unreliable suppliers in the Middle East, Russia and South America. For Canadians, it would cement a stable, long-term relationship with a steady customer and perhaps guarantee a floor on prices.

    Finally, NAEC would work on environmental concerns related to energy. We all share a common space here in North America; mountain ranges, rivers, lakes and topographical zones do not recognize borders. As we work to secure our common energy future, we should then create a sustainable future for all the residents of the great continent.

    Of course, none of this likely will excite the policy elites in Washington. They are already atwitter with ideas for how the President should address our relations with Pakistan, Russia, China or other troublesome distant place. It would be refreshing instead if perhaps Mr. Obama or Mr. McCain, on taking office, might first consider to build stronger relations with a neighbor who shares not only values and family ties but also this vast, rich and blessed continent.

    Joel Kotkin is Executive Editor of NewGeography.com.

  • Skipping the Drive: Fueling the Telecommuting Trend

    The rapid spike in energy prices has led politicians, urban theorists and pundits to pontificate about how Americans will be living and working in new ways. A favorite story line is that Americans will start trading in their suburban homes, move back to the city centers and opt to change everything they have wanted for a half-century — from big backyards to quiet streets to privacy — to live a more carbon-lite urban lifestyle.

    Yet, there has been little talk about what could be the best way for families and individuals to cut energy use: telecommuting. For more than a decade, the number of telecommuters, both full-time and part-time, has been growing rapidly, gaining more market share than any other form of transportation.

    This seems certain to continue with the proliferation of broad-band technology — as well as the effect of high gas prices. By 2006, the expansion of home-based work doubled twice as quickly as in the previous decade, and now is close to nine million, according to the National Highway Travel Survey of the Federal Highway Assn.

    Nationwide, according to the Gartner Group, in 2007 13 million workers telecommuted at least one day a week, a 16 percent leap from 2004. That number was expected to reach 14 million this year. In addition, more than 22 million individuals, according to Forrester Research, now run businesses from home.

    Last year’s skyrocketing energy prices appears to have pushed employers in this direction. A CDW survey of private sector employers this year found that 76 percent now provide technical support for remote workers, up 27 percent from a year earlier. Federal IT support, however, has lagged at roughly 58 percent.

    In some regions, like the San Francisco Bay Area and Los Angeles, as many as one in 10 workers are part-time telecommuters. In the Greater Washington Area, more than 450,000 employees telecommuted at least one day a week in 2007, 42.5 percent more than in 2004, according to a survey by Commuter Connections, a regional network of transportation organizations coordinated by the Metropolitan Washington Council of Governments. The percentage of employees who telework surged to 19 percent from 13 percent during that time period.

    Not surprisingly, home offices, particularly in upscale homes, have become a necessity for many buyers — demanded ahead of security systems. A recent study by Rockbridge Associates suggests that more than one-quarter of the U.S. workforce could eventually participate full- or part-time in this new work pattern.

    The potential energy savings — particularly in terms of vehicle miles traveled — could be enormous. Telecommuters naturally drive less, not only to work but for the numerous stops to and from work. According to the 2005/2006 National Technology Readiness Survey (NTRS), the United States could save about 1.35 billion gallons of fuel if everyone who was able to telecommute did so just 1.6 days per week. That calculation is based on a driving average of 20 miles per day, getting 21 miles per gallon.

    A more recent study by Sun Microsytems, which uses telecommuting extensively, found that, by eliminating commuting half the week, an employee saves 5,400 kilowatt hours — even accounting for home office use. They also can save some $1,700 a year in gasoline and wear and tear.

    Related technologies, like teleconferencing, according to another survey, could save another 200 million tons of jet fuel, if 10 percent of air travel were reduced over the next 10 years. There are other signs of a shift to substitute the web for the road — some college on-line classes report a 50 percent to 100 percent boost in enrollment over last year.

    In comparison, the talk of a huge “surge” in transit riders as a result of rising gas prices, represents a welcome, but relatively minor, trend, since transit still accounts for under 1.5 percent of all travel. The vast majority — perhaps as much as 98 percent —- of the recent reduction in gas consumption came as a result of people simply reducing their driving, not switching to the rails.

    Some of this is structural. Most metropolitan regions are simply not set up for efficient public transit; work patterns are increasingly dispersed as opposed to centralized. As a result, the ranks of telecommuters are greater in every metropolitan area in the country outside of the New York, Chicago, Philadelphia and Boston areas.

    This trend is particularly marked in growing regions in the South and West. In Portland, the mecca for light rail, there are nine telecommuters for every rail commuter. In 2008 Nustats survey, covering Austin, Dallas-Ft. Worth and El Paso telecommuting (at 12 percent) was cited four times as much as using public transit to reduce gas consumption.

    Perhaps even more important, telecommuting and related technologies represent a potential sea change for the future shape of families and communities. Already women are well-represented among telecommuters, in part so they can stay home with their children. In a world with fewer permanent employees and longer hours, telecommuting could help mothers stay in the workplace even while rearing children. A growing number of fathers are also looking to work at home to participate in child-rearing.

    In many ways, this represents a return to patterns that existed before the Industrial Revolution. In pre-industrial societies, members frequently worked at home or walked to work. The Industrial Revolution changed all that, with its need for mass standardization — demanding the efficacy of office and factory. Marx, the ultimate chronicler and prophet of the Industrial age, saw how “agglomeration in one shop” was “necessary” for human progress.

    Writing a century later, Alvin Toffler foresaw how the rise of the “electronic cottage” would return work to the home — where it had been before. As he put it, “social and technological forces are converging to change the locus of work” — back to the home, neighborhood and village. This is part of what Toffler envisioned in his “Third Wave” society, a breaking away from the “behavioral code” of “second wave” industrialism, where work and family were segregated

    These trends will continue as economic relations between business firms become less constrained by proximity. Information inputs can come from any source, and increasingly, any place. Of course, there will be serious constraints to this development. Perhaps, most important, will be the reluctance of managers —both private and public — to allow this dispersed work

    There are also interests, like urban office developers and real estate developers, who might find these trends troubling. Many new urbanists and environmentalists, who one would think would favor this energy-saving trend, tend to ignore or downplay the digital frontier — preferring a return to the dense, transit-dependent patterns common a century ago.

    Even telecommunications firms, which logically should be pushing this shift, seem unable to tailor their products for home-based work, according to a recent Forrester Research study. Morley Winograd, a former AT&T executive, says these companies have persisted in separating their “consumer and business customers.” As a result, they have been slow to abandon what he calls “the obsolete gene” in their corporate DNA, and target the home-based business

    Yet in the future, Winograd, now executive director of the Institute for Communication Technology Management at USC’s Marshall School of Business, says that developers, corporate executives and, presumably, telecommunications companies will be forced to focus more on this growing segment.

    Indeed, new suburban developments, like Ladera Ranch in Orange County, have incorporated such mixed usage into their floor plans — with separate entrances for business clients. Suburban historian Tom Martinson, believes that the Ladera plan will “be in the history books in 20 years” because it anticipates “an incredible change in the way we live and work.

    Many leading companies also see the potential of full-time and part-time telecommuting. Particularly amenable to this trend are leading technology and business-service firms. At IBM, for example, as much as 40 percent of its workforce operates full-time at home. Other companies, including Siemens, Compaq, Cisco, Merrill Lynch and American Express, have expanded their use of telecommuting, with increased productivity

    As more companies let go of their “command and control” approach to management, this practice seems likely to increase. Certainly the employee demand is there; one-third, according to one survey, would choose this option, even if it meant somewhat less pay. Teleworkers also generally show a higher job satisfaction

    This is also being adopted in some states and cities. Georgia, for example, approved tax credits this year for creating and expanding telework.

    But perhaps the biggest impetus, suggests Winograd, the former telecom executive, is the gradual ascendancy of younger workers. The millennial generation — the subject of his recent book, “Millennial Makeover,” co-written with Mike Hais — “have grown up up with the Internet and stay connected to the world on their laptops or cellphones 24/7” and sees “distinctions between work and life as arbitrary and unnecessary.”

    These younger Americans will likely see no reason to spend an hour in a car, bus or train to get from one computer screen to another. Once adopted by employers, this shift may do more to reduce the carbon imprint than all the current calls for largely unwelcome shifts in the daily lifestyles of many American

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of www.newgeography.com. This article also appears at The Washington Independent.

  • New Deal Investments Created Enduring, Livable Communities

    Growing appeals for more public infrastructure investment make two critical claims: that this would help stimulate the economy in the short run while making our country more productive over the long run. Unlike tax rebates and other short-term stimulus, a major infrastructure investment program can have powerful effects on community life beyond boosting spending at the local Wal-Mart.

    I thought about this recently when I visited my boyhood hometown of Wishek, North Dakota. Wishek is a small, farming town of 1,200 people nestled in the gently rolling hills of the central Dakotas, about 17 miles from the South Dakota border. Its population is made up largely of people who trace their origins to German immigrants from Russia. These people previously were recruited by Catherine the Great to farm the steppes near the Black Sea.

    Seeing a greater opportunity in North America, these Germans started to arrive in 1885 to homestead the Dakotas’ deep sod prairie – a glacial moraine of earth and rock. They were lured by the romantic thrill of developing a “Territorial Empire” that later became the states of North and South Dakota.

    This dream was widely realized by the 1920s but all but dried up and almost blew away during the drought-ridden thirties. That dream would have extinguished if not for the enlightened programs of the New Deal — from soil conservation to loans for farmers to the Works Progress Administration (WPA).

    Growing up in Wishek during the 50s and 60s, you rarely heard about the New Deal. Life was good, pretty much everything you might imagine small town childhood to be in Middle America. The pace of life was easy; everyone knew everyone and almost everything about anyone. The fortunes of the community rose and fell with farm prices, sometimes fluctuating wildly from year to year. Kids roamed freely on foot and in cheaply fueled cars and there were ample opportunities to participate in almost every facet of community life. With a k-12 school population of about 500 to 600, any child or young person who wanted to could play some kind of role in sports, arts and music, or church related activities.

    Unknown to me — and not widely discussed by the 1960s — was how many of the community’s best and most used facilities were constructed by the WPA. During the drought years of the mid-‘30s, the city park was enlarged and developed with a children’s playground, clay-surfaced tennis courts and a light skating rink paid for by WPA. Later a $6,000 bond issue was floated to build a pool that was designed by WPA engineers and is still in use today. Then in 1942 a new auditorium — a truly landmark building for the community — was completed for use by the school district. The auditorium continues to be used today as a civic center for community and family events including Wishek’s premier regional event the annual Sauerkraut Days.

    This investment strategy in community infrastructure was played out across North Dakota. Elwyn B. Robinson, in his classic “History of North Dakota,” recounts the massive investment in North Dakota:

    “In North Dakota the W.P.A. alone, between July 1, 1935 and June 30, 1942, built 20,373 miles of highways and streets, 721 new bridges and railroads, 166 miles of sidewalks, 15,012 culverts, 503 new public buildings, 61 additions to public buildings, 680 outdoor recreation facilities, 809 water wells, 2 irrigation projects, 39 sewage treatment plants and 9 water treatment plants. It reconstructed 1,002 bridges and viaducts, 2,180 public buildings and 1,721 culverts.”

    To be sure, today is not the “dirty” thirties of the Dust Bowl. It is also far different from the serene place of my boyhood in the 50s and 60s. Some of the old infrastructure needs maintenance while other infrastructure needs have changed significantly. A proposed wind farm just south of town, for example, has been delayed because of the lack of electric transmission capacity throughout the region. In addition, like many rural communities the major employment base is now in manufacturing and health services, pointing to the increasing and essential importance of broadband telecommunications, roads and air service that permit link places like Wishek with the national and international economy.

    Yet if we look about us, the legacy of New Deal endures to this day. It provides clear evidence of the impact that infrastructure investment can make on even the smallest of communities. Much of the current discussions about infrastructure investment too often focus on the giant projects and national implications. However, the case for a renewed investment agenda can be made most persuasively by pointing out what such investments have done for local communities — city or small town — in the past. And what they might have failed to become if there had never been a New Deal.

    Delore Zimmerman is CEO of Praxis Strategy Group and Publisher of www.newgeography.com.

  • Geography of Wind

    The American Wind Energy Association just announced that the US has overtaken Germany as the worlds top wind power generator, you’re certainly familiar with T. Boone Pickens’s wind obsession, and DOE is claiming we could be generating 20% of our power with wind by 2030.

    Check out DOE’s wind energy potential maps and AWEA’s run down of installed and pending wind power projects in the U.S.

    The question is can the country’s transmission infrastructure withstand a redistribution of power generation? Who will build the needed infrastructure? In my home state of North Dakota, often called the “Saudi Arabia of Wind,” the transmission capacity problem was cited so frequently for slow wind build out that the state government has gotten involved.

  • Wind Power: A Composite View

    It is believed that Canada has wind potential enough to produce at least 20 percent of the country’s current power needs. According to Toronto Hydro Energy Services and the Independent Power Producers Society of Ontario, the province could develop its potential and generate between 3,000 and 7,000 megawatts of wind energy in wind farms. Although useful and scientific, the Canadian wind energy atlas is nevertheless a mathematical simulation and requires further investigation, and the data available does not amount to a national wind atlas (figure 2).


    Europe and a number of other countries have developed tools and instruments to assess their wind potential, which happens to serve meteorological purposes as well. Although wind regimes are known for most of the geographic regions of the world, finer and more reliable data is essential for wind resource assessment and sound investment.

    In Canada, there are three sources of information on wind resources: Environment Canada’s Meteorological Service of Canada (2004), Ontario Ministry of Natural Resources (2005), and PEI Energy Corporation, Government of Prince Edward Island (2006). In Ontario, two alignments benefit from quality wind resources, Thunder Bay – Sudbury, and Windsor – Toronto. And in Prince-Edward Island, it is the Summerside – Charlottetown stretch.


    A survey of wind capacity in Canada has landed inspiring figures which translate to encouraging development perspectives for the global wind power industry. For example, Alberta has the largest installed wind capacity of any province although no data is available on the costs of these facilities. The figures collected by the Conference Board of Canada (Howatson & Churchill 2006) provide reliable data in measuring the starting point of future construction projets in view of attaining the goal: 20 percent of Canada’s needs or current demand in electrical power, if industry succeeds in securing the following pre-requisites: (i) public policies, (ii) public subsidies, (iii) environmental authorizations, and (iv) community approval of the projects.

    According to the Conference Board of Canada, adequate wind resources must be a definite characteristic of a site to enable ‘wind turbines to consistently produce a high output of power’ (Howatson & Churchill 2006, p.i). Of course, this underlines the fact that the issue adressed here is the massive production of power, the kind of output that would add to the overall regional generation and not MWs that are intended to supply local needs. This will become important when safety and reliability are factored in. A site must also be at short range of transmission lines.

    The combined experience of both Denmark and Germany has indicated “that as the share of power generation from wind approaches 20 percent in a region, both transmission and backup requirements become more costly” (Howatson & Churchill, p.i). Indeed, such a substantial setup of backup capacity is an inefficient use of scarce resources unless export is considered or, as is the case for Prince-Edward Island (PEI), unless the objective is to drop combustive generation entirely (attempted horizon 2015). The latest figures compiled from CANWEA (Canadian Wind Energy Association, a non-profit trade association), indicate that in coming years (to 2012) Canada’s wind power generation will have more than doubled, from 1450, 26 MW (installed) in 2006 to 2636,40 MW (figure 7). The generation of wind generated electricity is expected to double (or almost) in five Canadian provinces: Nova Scotia, Ontario, Prince-Edward Island, Québec, New Brunswick (starting from nil).

    In the process of establishing adequate wind maps in the Canadian Maritimes, provincial governments and researchers at Université de Moncton – and the PEI population in general, have agreed to “a long term goal to supply 100 percent of its electrical capacity through renewable energy sources by 2015” (MacDonald 2005). In PEI, the energy to supply the needs of the 138,000 population (56 percent in rural settings) is as follows: 80 percent fossil fuels, 13 percent imported from New Brunswick via underwater cable, 6.5 percent other combustive sources (biomass, including wood, solid waste, and sawmill residue), and 0.5 percent locally generated wind power. That is 87 percent from combustion processes. The overall demand in PEI is approximately 130 MW and therefore the 30 MW East Point Wind Plant would supply almost 25 percent of present needs. Ironically, a brand new 50 MW diesel combustion turbine generator was commissionned early in 2006 at the Maritime Electric Charlottetown plant in PEI, Canada.



    Wind maps are hardly new and the recent interest in them has taken stock of the develoment in computer programs and methods. The 50-year data and analysis below (figure 6) indicates the general direction of winds in the Canadian Maritimes and therefore the dispersion of atmospheric pollutants generated in combustive production plants (figures 8 and 9).

    CONCLUSION
    It would seem that taxpayers, voters and consumers would be pressing governments to subsidize industry toward the development of clean energy sources and technologies, yet this remains to be seen because new, more complex energy sources cannot forseeably replace oil or combustion energy in transportation and industry (67.1 percent of all energy consumed in Canada by the transportation and industrial sectors – and residential, commercial/institutional and agriculture buy the rest).

    Although the discussion concerns electric power, the ambient discussions remain focused on oil and combustion processes including nuclear (which exploits the classic force of steam). We have included rather unpalatable technotes at the outset of this paper because energy is first and foremost a scientific concept – not a commodity, and certainly not the locus of miracles that it has been in prescientific ages, and much may be hidden or concealed in measurement units and conversion factors, including the conversion of energy forms.

    Wind power and the technologies that support this approach are rather primitive, yet they offer sound opportunities for the continued development of life on earth unlike oil and its supporting attribute, internal combustion (including nuclear) with their foul emissions and deadly waste. Geographically, however, the exploitation of wind power on a global scale would bring about a redeployment of human establishments apparently detrimental to developing countries only because most countries, including the affluent, are growth-driven. Indeed, populations and cultural features are displaced when huge hydroelectric projects are implemented, but wind farms may require that people live under spinning and humming skies.

    In this paper, we have identified the trend-setting Canadian province of Prince-Edward Island (PEI) as an example. PEI intends to satisfy most of its run of the mill local power needs using wind and thus curb both energy imports and GHG emissions. Nevertheless on the island, transportation, waste management (biomass as it is called now and/or cogeneration) and energy backup will continue to burn diesel and depend on combustion processes generally. The PEI experiment or project is being established under the supervision of Canadian R&D experts at the Université de Moncton (K.C. Irving Chair in Sustainable Development). In the latter case, the base-load power production is reversed.

    Canada will continue, it seems, to afford itself with the best available local sources of energy and will export some surpluses to its neighbor, but clearly in our view the current demand for energy does not apply its pressure on residential, commercial and agricultural or institutional markets: the pressure is clearly on transportation and industry, and electric power is not a solution to those problems.

    References
    Bregha, F. (2006) Energy Policy, in The Canadian Encyclopedia © 2006 Historica Foundation of Canada. Online: http://www.thecanadianencyclopedia.com/PrinterFriendly.cfm?Params=A1ARTA0002613
    Gasset, N. (2005) Atlas éolien du Nouveau-Brunswick. Thèse de maîtrise en études de l’environnement : conférence publique. Faculté des études supérieures et de la recherche, Centre de génie éolien, Université de Moncton. Online : http://www.umoncton.ca/cge/atlas_eolien/pdf/Presentation_annonce.pdf
    Hepperle, M. (2005) Timetable: Development of the Propeller. Online : http://www.mh-aerotools.de/airfoils/prophist.htm
    Hoogwijk, M.M. (2004) On the global and regional potential of renewable energy sources. Universiteit Utrecht. Online : http://igitur-archive.library.uu.nl/dissertations/2004-0309-123617/full.pdf (2.28 MB)
    Howatson, A., and Churchill, J.L. (2006) International Experience With Implementing Wind Energy. Ottawa : Conference Board of Canada. Online : http://www.conferenceboard.ca/documents.asp?rnext=1537
    MacDonald, K. (2005) East Point Wind Plant (30MW) Project Description. King’s County, Prince Edward Island. WPPI Registration #: 5902-P7-1.
    Mota, W.S. and Alvarado, F.L. (2001) Dynamic coupling between power markets and power systems. Revista Controle & Automaçao, Vol.12 no.1, p.36-41. Online: http://www.fee.unicamp.br/revista_sba/vol12/v12a277.pdf
    Mudge, T. (2000) Power: A First Class Design Constraint for Future Architectures. High Performance Computer Conference, Bangalore, India, Dec. 00. Online : http://www.eecs.umich.edu/~panalyzer/pdfs/Power__A_First_Class_Design_Constraint_for_Future_Architectures.pdf
    NEB (National Energy Board of Canada) (2006) Emerging Technologies in Electricity Generation. An Energy Market Assessment. Ottawa : Her Majesty the Queen in Right of Canada as represented by the National Energy Board. Online : http://www.neb.gc.ca/energy/EnergyReports/EMAEmergingTechnologiesElectricity2006_e.pdf
    NEB (National Energy Board of Canada) (2004) A Compendium of Electric Reliability Frameworks Across Canada. Online : http://www.neb.gc.ca/energy/EnergyReports/CompendiumElectricReliabilityCanada2004_e.pdf
    NEB (National Energy Board of Canada) (2003) Canadian Electricity Exports and Imports. Online : http://www.neb.gc.ca/energy/EnergyReports/EMAElectricityExportsImportsCanada2003_e.pdf
    Price, M. and Bennett, J. (2002) America’s Gas Tank. The High Cost of Canada’s Oil and Gas Export Strategy. Ottawa: Natural Resources Defense Council and Sierra Club of Canada. Online: http://www.nrdc.org/land/use/gastank/gastank.pdf
    Wildi, T. (2002) Electrical machines, Drives, and Power Systems. 5th Ed. Upper saddle River : Prentice Hall.
    Wilson, K.G. (1999) Du monopole à la compétition : la dérèglementation des télécommunications au Canada et aux Etats-Unis. Québec : Télé-université.

  • The South Rises Again! (In Automobile Manufacturing, that is)

    Volkswagen’s announcement last week that it will build a new assembly plant in Chattanooga, TN is the latest sign of triumph for the South’s growing auto industry. The new plant will sit within close proximity to one Toyota is building north of Tupelo, MS (where the popular Prius will be manufactured), and another that Kia broke ground for last year in West Point, GA on the Alabama border. This joins existing plants such as those operated by Nissan in Nashville and Smyrna, GA, BMW’s plant in Spartanburg, SC and three assembly plants in Alabama.
    With the average cost of building these facilities at over $1 billion, and the high-paying manufacturing jobs they represent, these plants promise to give the area a substantial industrial base for years to come. On top of all this, BMW even announced a $750 million expansion of its Spartanburg plant in March.

    What’s interesting about these decisions is how foreign auto manufacturers are all choosing to forego building new facilities in the Upper Midwest where the labor market has many idle, qualified workers. Instead they are heading to locales south of the Mason-Dixon line, where such skilled employees in the past have been comparatively scarce.

    The impact has been devastating for the upper Midwest. Michigan, for example, has lost an astounding 34 percent of its auto jobs in the last five years leading to a glut of available and experienced workers. According to the U.S. Dept. of Labor, Michigan still leads the country in auto employment with 181,000 jobs followed by Indiana. But the next three states are something of a surprise: Kentucky, Tennessee, and Alabama.

    Why is this happening? Some it may have to do with the fact that recently laid-off workers in Michigan bring habits developed working in unionized environments – something which foreign automakers do not want, even though unions are very powerful in Germany, for example. The United Auto Workers (UAW) has found it hard to organize foreign automakers in general.

    In contrast, unions are comparatively weak in the South. Though Alabama has seen a huge jump in the number of its auto workers in recent years, according to its state department of labor, only 7,100 are unionized.Nationwide, according to the Bureau of Labor Statistics, around 12 percent of workers belong to unions compared to just over 10 percent in Alabama. However, the “Yellowhammer State” looks positively union-saturated compared to its neighbors: less than 5 percent of workers in Georgia, Texas, South Carolina, Virginia and North Carolina belong to them.

    But it’s not only a question of unions. The South is attractive to auto makers due to its network of rail and highway lines that make transport to key markets easy and affordable. Furthermore, many southern cities — notably Houston, Charleston and Charlotte — have made big infrastructure investments in recent years.

    Another plus for the South has been the growing role of universities in creating a research hub for the auto industry. The Clemson University International Automotive Research Center is the nation’s only school to offer a Ph.D. in automotive engineering and has secured $200 million in commitments. Additionally, the South Carolina center has created partnerships beyond auto manufacturers with other universities in the area: Auburn, Mississippi State, Alabama, Alabama-Birmingham, Kentucky and Tennessee.

    Alabama has seen the biggest net gain in auto-related jobs, having added more than 30,000 in the last ten years. The state has three plants: a Mercedes-Benz U.S. International in Tuscaloosa, a Honda plant in Lincoln and one for Hyundai-Kia in Montgomery. Additionally, many suppliers have set up shop to service the new Kia plant under construction just over the border in Georgia. A survey by the Alabama Automotive Manufacturer Association found that there are nearly 49,000 auto jobs in the state with another 86,000 jobs that depend on the purchases of these employees resulting in a combined payroll in 2007 of $5.2 billion.

    The overall impact of some of these plants may not be felt for a few years since three of them are just in the process of being constructed. But, with new behemoth facilities manufacturing some of the most fuel-efficient vehicles on the road, it appears that an industrial anchor for the region’s future has been secured. It also confirms a growing shift in the industrial geography of heavy industry in this country from the traditional Midwestern heartland to regions south of the Mason-Dixon line.

    Over time these changes will provide tests for regions both North and South. In the North, regions will have to learn how to compete in higher value-added, specialized industries, as we can see in places like Wisconsin. For the southern areas, the need to maintain and develop sophisticated industrial infrastructure — particularly in term of skills — will remain a major challenge in the years ahead.

    Andy Sywak is the articles editor for newgeography.com.

  • Guzzling BTUs: Problems with Public Transit in an Age of Expensive Gas

    As gas prices inch up toward $5 per gallon, many environmentalists and elected officials are looking to public transit as a solution to higher transportation costs and rising fuel consumption. A closer look at the numbers, however, warrants more than a little skepticism that public transit can fulfill the nation’s energy conservation goals.

    The US transportation sector is a voracious consumer of fuel, accounting for 28 percent of all energy use in 2006 according to the US Department of Transportation. Petroleum products account for 95 percent of this consumption. Naturally, those interested in conserving natural resources, fossil fuels in particular, would want to focus on reducing oil use. Moving people out of cars and onto public transit seems to make intuitive sense.

    It turns out, however, moving people to transit may not be the best strategy after all. According to the US Bureau of Transportation Statistics, a typical transit bus uses 4,235 btu per passenger mile, 20 percent more energy per passenger mile than a passenger car. More interestingly, the amount of energy used by cars has fallen to 3,512 per passenger mile in 2006, an 18 percent drop since 1980. In contrast, the amount of energy used by transit buses increased by 50 percent over the same period, rising to 4,235 btus per passenger mile. Light trucks were not quite so energy friendly as energy use fell by nearly one third to 6,904 btus per passenger mile (although their energy efficiency has remained stable since the mid-1990s).

    The long term trend toward more fuel efficient private vehicles is likely to continue as more and more energy-frugal cars such as gasoline-electric hybrids and electric plug-in vehicles become more popular. The Toyota Prius sold its one millionth vehicle in 2008 as it achieved mass production status. Sixty-five hybrid models are expected to be on the US market by the 2010 model year, nearly tripling the current number available. Moreover, all-electric vehicles such as the Tesla sports car are expected to become more popular as consumers become more accepting of personal vehicles fueled by non-traditional technologies. (Notably, Toyota is experimenting with solar panels on new generations of the Prius.)

    These trends, of course, don’t imply that fuel consumption has declined overall. On the contrary, US motorists are consuming 75.4 million gallons of fuel each year, up 7.8 percent from 1980. Yet, this is remarkably stable trend given the fact vehicle mile traveled have increased by 49 percent since then. Travel demand has more than doubled for light trucks and similar vehicles while fuel consumption by these vehicles increased by just 59 percent. Efficiency gains, then, have effectively compensated for large shares of the increase in travel demand, dramatically reducing the amount of energy used for each mile driven.

    Unfortunately, the same can’t be said for public transit. While transit ridership has increased significantly over the past year, climbing to 10.3 billion trips during the first quarter of 2008 according to the American Public Transit Association, the overall effect on the travel market has been modest. Long-term, transit’s market share for all travel fell from 1.5 percent in 1980 to 1 percent in 2005. Transit’s market share for work trips has fallen to 5 percent overall. Meanwhile, the public transit infrastructure – buses, route miles, etc. – has remained largely intact. That means more buses are transporting fewer people, significantly curtailing public transit’s energy efficiency. Not surprisingly, the energy intensity for public transit increased on average by 1.5 percent per year from 1970 to 2006.

    The story is a little different for passenger rail, which carries about half of the nation’s public transit riders (although national data are dominated by ridership in New York City). Transportation consultant Wendell Cox has calculated the energy intensity for other modes of transit in 2005 and found that commuter, heavy, and light rail transit used significantly less energy per passenger mile (about 40%) than public bus or passenger cars.

    Yet, the prospect for reducing energy use significantly by improving rail transit’s market share of overall travel is slim. Despite double-digit increases, light rail ridership accounts for just 3.4 percent of transit passenger miles nationally . In contrast, commuter and heavy rail ridership growth was just 5.7 percent and 4.4 percent respectfully. Moreover, increased ridership for rail services depend on the availability of other transit services, most notably feeder bus routes as well as urban densities that are difficult to sustain outside a few major cities such as New York, Chicago, or Boston.

    Thus, as a practical matter, public transit is unlikely to provide a meaningful solution to reduced energy use in transportation. This becomes clear after looking at travel behavior in the wake of the increase in gas prices over the past year. Overall, public transit ridership increased just 3.3 percent. If we convert ridership into passenger miles traveled – a distance-based rather than trip-based measure – a 3.3 percent increase translates into 1.6 billion passenger miles over the course of a year. That may seem like a big number, until it’s compared to overall US travel.

    As gas prices went up, US automobile travelers eliminated 112 billion passenger miles from our roadways as vehicle miles traveled fell by 2.3 percent. Even if we assume all the increased transit ridership was accounted for by the migration of automobile travelers to public transit, buses and trains captured fewer than 2 percent of the reduction in automobile-based travel demand.

    Thus, in the end, those seeking ways to promote energy conservation are still relying on market forces to affect behavior and resource use. Higher-income consumers value mobility, and automobiles provide the flexibility and adaptability they demand. As energy prices rise, incentives to provide resource stingy alternatives such as hybrid and electric only vehicles increases, stimulating even further innovation that bring down costs over the long run. Meanwhile, contrary to public perception, as fewer segments of the population rely on fixed route transit systems, the relative energy efficiency of public transit declines.

    Samuel R. Staley, Ph.D., is director of urban and land use policy at Reason Foundation and co-author of “The Road More Traveled: Why the Congestion Crisis Matters More Than You Think and What We Can Do About It” (Rowman & Littlefield, 2006). He can be contacted at sam.staley@reason.org.

  • Sprinting Blindfolded to a New Equilibrium

    Everyone except the fabulously wealthy and the truly disconnected knows energy has become much more expensive in recent years, but it’s worth taking a step back and examining just how much it has jumped and what we should (and should not) conclude about the impact on nearly all aspects of modern life.

    The raw data provides a startling enough starting place. Since 2004, the U.S. retail price for gasoline has leaped from $1.53 per gallon to $4.10, and oil has skyrocketed from $28 per barrel to over $140. The retail price of natural gas, largely ignored by U.S. consumers during the summer, has increased from $9.71 per thousand cubic feet to $14.30 (its highest price ever for the month of April), and even coal has risen from $19.93 per short ton to $25.40. Electricity, closely tied to the price of natural gas and coal, has increased from 7.61 cents per kilowatt hour to 9.14.

    Whether this rise in oil prices was triggered by the fundamentals of supply and demand, politics, collusion among oil producers or a lack of investment in developing oil fields around the world (I strongly favor fundamentals), or you think we’re headed toward a peak in world oil production very soon or decades from now (I’m firmly in the “very soon” camp), the bottom line is that the economy doesn’t care about causes or rationalizations, just prices.

    Economics, the study of the allocation of scarce resources, tells us that economies constantly adjust themselves in response to price changes. One company raises the price of the tennis rackets they manufacture, so some customers will buy a competitor’s product or forego buying a new racket this year or take up another sport. Many such events constantly send overlapping ripples throughout an economy, causing the quantities demanded and supplied of many goods and services to rise and fall slightly. In econo-speak, the entire system seeks a new equilibrium in response to a change in the price of one good or service relative to substitutes. Talking about minor price changes for non-critical items is the normal background noise of a healthy economy. But energy, especially oil, presents an entirely different scenario.

    Virtually everything we buy depends on the price of oil to some degree. Raw materials, finished goods, customers, and the people who perform services all need to be transported. Oil and natural gas are also critical components in making plastics and many chemicals and fertilizers, and fossil fuels provide 70 percent of the energy consumed to generate electricity in the U.S. In most applications, trying to find a substitute for fossil fuels on the scale and immediacy we’d prefer is impossible without paying a very high price. (As the old line goes, I can do a job for you quickly, cheaply, or well — pick any two.)

    When the price of such a significant and unique resource rises so much and so quickly we’ve pole vaulted over a mild jostle to the system and gone straight to a deep, pervasive, game-changing shock.

    The sheer magnitude of this shock explains why there is so much talk in the financial press lately about which of the Big Three car companies could file for bankruptcy within a year. Ford, GM, and Chrysler are in a desperate race against time. Can they radically overhaul their product lines to meet the rapidly shifting demands of their customers before they run out of cash?

    Given the high cost and long development time to create a new car model, this is a daunting task, to say the least. By comparison, the commercial airline industry is in far worse shape, as they don’t have the potential to save themselves via converting to electric vehicles or plug-in hybrids. Even using biofuels to run their jets is more wishful thinking than a real-world solution, and is at least a decade away from widespread application. Unless the price of jet fuel drops dramatically and fairly soon, the downsizing and bankruptcies we’ve already seen among airlines will be only the beginning of their “adjustment.”

    So, all is gloom and doom, right? Well, no, and this is the point that’s so easy to overlook. Even though energy prices have been rising for years, we’re still in the very early stages of the U.S. economy’s reaction; what we’ve seen to date is much more the initial impact than our individual and collective response.

    Still, it’s not hard to find media stories about the increased use of public transportation, people driving less overall, and more workers telecommuting or converting to a four-day workweek. Plus, we’re awash in reports of how 2010 will be a sea change in the car business, with several companies offering plug-in hybrid and full electric vehicles in the U.S. A further complication is the virtual certainty that soon the U.S. will overtly begin to rein in CO2 emissions, whether via a carbon tax or a cap-and-trade system.

    Beyond that we have the growing challenge of generating enough electricity to meet traditional demands plus the additional burden of recharging electric vehicles, all the while reducing CO2 emissions and finding enough water to cool thermoelectric plants (nuclear, coal, oil, and natural gas) in a world where climate change is creating drought in inconvenient places. With so many large and powerful forces suddenly in motion at once, trying to make firm predictions about the quantity demanded or the price of any fossil fuel is a revelation of one’s hubris or insanity.

    The last thing we should do is fall into the trap of making simplistic, linear extrapolations. You can barely Google any energy related topic without finding references to the impending “death of the suburbs,” a topic Joel Kotkin addressed recently and I commented on both here and on my own site. Similarly, you can find numerous other opinions that grossly underestimate the inherent flexibility (and therefore unpredictability) of entire economies. Many of them are based on a fallacy that roughly says: “We use a lot of oil to do X. Oil will get more expensive, so therefore we won’t be able to do X.” These comments almost never mention the possibility that we’ll find ways to do X with far less oil, or that we’ll fill the same need by doing Y, or that savings in oil consumption in other, less critical, parts of the economy will buy us time to change how we do X.

    In more concrete terms, how many people really think that more expensive oil will stop us from making medical supplies or fueling trucks that deliver food? Isn’t it more sensible to assume that we’ll cut back on far less critical uses, like pleasure boating or flying for vacations, and keep the increasingly scarce oil flowing to life-and-death applications?

    Humanity has just begun an unprecedented, expensive, painful, and, above all else, unpredictable journey. The end of the age of cheap energy will no doubt reshape almost everything we do, from decisions about personal consumption to our governments and public policies, to our institutions and businesses, to our cities. Our collective future will be a lot of things, but “dull” isn’t on the list.

    Lou Grinzo runs the web site The Cost of Energy , and is an economist by training, a programmer, technical editor, and writer by profession, and an energy geek by genetic predisposition.