Sustainable Government – Page 2

Congress Releases Report on Toxic Chemicals Used In Fracking

Posted on 17 April 2011 | by Jay Kimball | 74 Comments

$fracking water chemicals$ Democrats of the Congressional Committee on Energy and Commerce just released a new report detailing chemicals used in the toxic gas exploration process known as Hydraulic Fracturing (fracking or fracing). Fracking is a technique used to extract natural gas from oil shale beneath the earths surface. Communities are increasingly concerned about fracking polluting public water systems and the environment, when the chemicals leak into aquifers, rivers, streams and the atmosphere.

While the oil/gas industry has denied any problem, there is mounting evidence that public water systems and private wells are being polluted in areas around the drilling sites. In states such as Pennsylvania, politicians have welcomed Big Oil in with open arms, and thousands of gas extraction wells are expected to be drilled this year. Presently, the natural gas industry does not have to disclose the chemicals used, but scientists have identified known carcinogens and volatile organic compounds (VOCs) such as benzene, toluene, ethylbenzene and xylene. The chemicals can most often leak in to the water system in several ways:

Derrick – The natural gas process involves drilling 5,000 feet or more down and a comparable distance horizontally. The majority of the drilling liquid remains in the ground and is not biodegradable.

Well Casing – If the well casing that penetrates through the aquifer is not well sealed, chemicals can leak in to the aquifer.

Fractured Shale – To release the gas from underground, millions of gallons of water, sand and proprietary chemicals are injected, under high pressure, into the well. The pressure fractures the shale and props open fissures that enable natural gas to flow more freely out of the well. These fissures may allow the chemicals to enter the water system. In addition, recent reports suggest that radiation in the ground is contaminating the fracking fluid. This radiation has been showing up in drinking water. For more on that see the NY Times investigative article by Ian Urbina Regulation Lax as Gas Wells’ Tainted Water Hits Rivers.

Surface Contamination – The gas comes up wet in produced water and has to be separated from the wastewater on the surface. Only 30-50% of the water is typically recovered from a well. This wastewater can be highly toxic. Holding ponds, and handling mishaps can release this toxic brew into the environment. For some examples, see the video below about residents in Pennsylvania and the impact of fracking on their water systems. Surface evaporation of VOCs coming into contact with diesel exhaust from trucks and generators at the well site, can produce ground level ozone. Ozone plumes can travel up to 250 miles.

fracking process — For more detailed interactive image, see below.

Horizontal fracking uses up to 300 tons of a mixture of 750 chemicals, many of them proprietary, and millions of gallons of water per frack. This water then becomes contaminated and must be cleaned and disposed of. To date, the oil/gas industry has been secretive about what chemicals are used, and has lobbied Congress for a variety of protections. Much of the contaminated water is taken to water treatment plants that are not designed to process the chemicals and radiation found in fracking fluids.

In 2005, the Bush/ Cheney Energy Bill exempted natural gas drilling from the Safe Drinking Water Act. It exempts companies from disclosing the chemicals used during hydraulic fracturing. Essentially, the provision took the Environmental Protection Agency (EPA) off the job. It is now commonly referred to as the Halliburton Loophole.

The FRAC Act (Fracturing Responsibility and Awareness of Chemical Act) is a House bill intended to repeal the Halliburton Loophole and to require the natural gas industry to disclose the chemicals they use.

The Safe Drinking Water Act was passed by Congress, in 1974, to ensure clean drinking water free from both natural and man-made contaminates. Remember the days when rivers were so polluted with toxic industrial waste that they would ignite into flame?

Here’s the introduction from the Democrats report from the Energy and Commerce Committee – Chemicals Used In Hydraulic Fracturing (N.B. click on the link at left to see the actual report and list of chemicals):

Today Energy and Commerce Committee Ranking Member Henry A. Waxman, Natural Resources Committee Ranking Member Edward J. Markey, and Oversight and Investigations Subcommittee Ranking Member Diana DeGette released a new report that summarizes the types, volumes, and chemical contents of the hydraulic fracturing products used by the 14 leading oil and gas service companies. The report contains the first comprehensive national inventory of chemicals used by hydraulic fracturing companies during the drilling process.

“Hydraulic fracturing has helped to expand natural gas production in the United States, but we must ensure that these new resources don’t come at the expense of public health,” said Rep. Waxman. “This report shows that these companies are injecting millions of gallons of products that contain potentially hazardous chemicals, including known carcinogens. I urge EPA and DOE to make certain that we have strong protections in place to prevent these chemicals from entering drinking water supplies.”

“With our river ways and drinking water at stake, it’s an absolute necessity that the American public knows what is in these fracking chemicals,” said Rep. Markey. “This report is the most comprehensive look yet at the composition of the chemicals used in the fracking process, and should help the industry, the government, and the American public push for a safer way to extract natural gas.”

During the last Congress, the Committee launched an investigation into the practice of hydraulic fracturing in the United States, asking the leading oil and gas service companies to disclose information on the products used in this process between 2005 and 2009.

The Democratic Committee staff analyzed the data provided by the companies about their practices, finding that:

The 14 leading oil and gas service companies used more than 780 million gallons of hydraulic fracturing products, not including water added at the well site. Overall, the companies used more than 2,500 hydraulic fracturing products containing 750 different chemicals and other components.

The components used in the hydraulic fracturing products ranged from generally harmless and common substances, such as salt and citric acid, to extremely toxic substances, such as benzene and lead. Some companies even used instant coffee and walnut hulls in their fracturing fluids.

Between 2005 and 2009, the oil and gas service companies used hydraulic fracturing products containing 29 chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act (SDWA) for their risks to human health, or listed as hazardous air pollutants under the Clean Air Act.

The BTEX compounds – benzene, toluene, xylene, and ethylbenzene – are SDWA contaminants and hazardous air pollutants. Benzene also is a known human carcinogen. The hydraulic fracturing companies injected 11.4 million gallons of products containing at least one BTEX chemical over the five-year period.

Methanol, which was used in 342 hydraulic fracturing products, was the most widely used chemical between 2005 and 2009. The substance is a hazardous air pollutant and is on the candidate list for potential regulation under SDWA. Isopropyl alcohol, 2-butoxyethanol, and ethylene glycol were the other most widely used chemicals.

Many of the hydraulic fracturing fluids contain chemical components that are listed as “proprietary” or “trade secret.” The companies used 94 million gallons of 279 products that contained at least one chemical or component that the manufacturers deemed proprietary or a trade secret. In many instances, the oil and gas service companies were unable to identify these “proprietary” chemicals, suggesting that the companies are injecting fluids containing chemicals that they themselves cannot identify.

How Fracking Can Effect Your Community And What You Can Do About It

Once a communities water system is made toxic, property values plummet. Homeowners end up with homes that can’t be sold at anywhere near their original value. They are forced to live in their un-sellable homes and continue to be exposed to the toxic environment. Fracking can compromise public health and environmental quality. The map below from the Gasland project shows where oil shale gas drilling areas are most intensive, in red.

$fracking map$

Here’s a more detailed map from the Energy Information Administration showing “Shale Plays.”

The term “play” is used in the oil and gas industry to refer to a geographic area which has been targeted for exploration due to: favorable geoseismic survey results; well logs; or production results from a new or “wildcat well” in the area. An area comes into play when it is generally recognized that there is a valuable quantity of oil or gas to be found. Oil and gas companies will send out professional “land men” who research property records at the local courthouses and after having located landowners who own the mineral rights in the play area, will offer them an oil and gas lease deal. Competition for acreage usually increases based on how hot the play is in terms of production from discovery wells in the area. The more oil and gas there is to be had, the higher the lease payments per acre are.

And money talks. Homeowners and towns can be attracted to the offer of money for exploitation of the shale. The heavy costs paid are only realized after the deal is signed – costs to the environment, increased industrial traffic through the community, attraction of outsider oil/gas workforce that can stress local community wellbeing, and of course – environmental degradation, and risk to public water systems.

Bryan Walsh, one of my favorite environmental reporters, just published this evenhanded video that looks at some specific examples of toxic fracking related events in Pennsylvania, the heart of east coast gas extraction. While business leaders in the community enjoy the increased hotel and travel related economics, the devastating impact on homeowners and communities can be tragic.

As the video shows, there is a growing conflict between public health interests and business interests. Anytime oil/gas is involved, big money is at stake. Big Oil spends tens of millions of dollars lobbying politicians to favor their business, often at the expense of public health and the environment. Local businesses welcome all the truckers, traffic and drilling personnel because it means increased commerce. But at what cost?

Communities are fighting back. Do your homework and get to know about fracking. The articles below in Recommended Reading are a good start, and rent the HBO movie documentary Gasland. You will get a good background on how communities across the US are being effected. If you think your community is being impacted by fracking, the Gasland producers have setup a good website to learn more and with tips on how to Take Action, including links to elected officials, info on local organizations, and email action alerts. Remember – oil companies are funneling big money into politicians coffers to influence public policy. It will take your steady, informed, organized community voice to counter big oil special interests.

April 11 anti-fracking protest in Albany, NY, for safe drinking water

For ideas on how to hold your elected officials accountable, read Nicholas Kristof’s really fine article on The Power of Mockery. It highlights one of the most effective ways for grass-roots movements to speak truth to power. He also features Tina Rosenberg’s new book Join the Club: How Peer Pressure Can Transform the World. Kristoff offers examples of the techniques in action, including: how kids took on Big Tobacco and reduced teen smoking in Florida; the Egyptian revolution; Serbia, etc.

I just added this excellent video by Josh Fox, calling out NY Governor Cuomo on fracking. It is an excellent review of secret memos leaked from the gas industry, detailing how fracking system failures pollute our water resources. Rolling Stone Magazine online has a good article calling the Governor out on fracking.

And finally, support politicians that are committed to a strong Environmental Protection Agency (EPA).

The Trend Is Our Friend

Fossil fuels are becoming more expensive and extraction more toxic. The easy stuff has already been extracted over the decades. What remains poses greater and greater risk to public health and the environment. Fossil fuels are our past. Renewable energy is our future. Renewables are becoming cheaper and cheaper and are much cleaner to produce. Let’s not compromise our future trying to ring every last drop of oil and gas out of the ground. Support politicians that understand the pressing need to rapidly transition to renewable energy and invest in research and development, education, and regulation.

I’ll leave you with this interactive diagram from the Gasland website. Click on the small circles to learn more about fracking. Click on the “To The City” arrow to scroll the image to the left to see how fracking contaminated water effects community water systems.

[kml_flashembed publishmethod=”static” fversion=”8.0.0″ movie=”http://8020vision.com/wp-content/uploads/2011/04/fracking.swf” width=”590″ height=”286″ targetclass=”flashmovie”]

WikiLeaks on Peak Oil

Posted on 09 February 2011 | by Jay Kimball | 7 Comments

WikiLeaks has released US embassy cables revealing that Saudi Arabia’s oil reserves have been exaggerated by as much as 40%, or 300 billion barrels. Saudi Arabia is currently the world’s largest oil exporter.

Though this may not be news to those who understand Peak Oil theory, it helps give a rare view in to secretive government views on this critical subject.

For readers new to Peak Oil – it is the point when the maximum rate of global petroleum extraction has been reached and is about to enter terminal decline. As demand exceeds supply, prices rise very quickly, usually resulting in economic recession.

Over the past 10 years, estimates on when peak oil will occur have rapidly converged on “sooner rather than later”.

Peak Oil has enormous implications for the global economy, especially transportation and food production sectors. In the US, transportation consumes about 2/3 of the oil we use, with the food sector consuming about 16% of oil for fetilizer, pesticides, productions, etc. See recommended reading below for more information. A 10 percent increase in the price of oil that lasted one year could result in the loss of 270,000 American jobs, according to a simulation by IHS Insight.

Many economists observe that the likely trigger for the 2008 recession/depression was the cost oil hitting extreme highs of over $140 per barrel. As we can see in the charts at right, the economic effects were stunning. Commuters stopped buying gas guzzlers (yet again). Mass transport and commuter rail increased by over 35% in many metropolitan areas. The economy collapsed. Fear set in. Searches via Google on the word “recession” went from zip to off-the-charts in a matter of weeks. Personal savings rates that were trending down, turned on a dime.

When do you think global oil production will peak? Take the Poll at the bottom of this article.

The secret cable is printed below, verbatim. Though it is written in the dry dispassionate tone of a bureaucrat, it is compelling reading.

Cable dated:2008-05-07T17:53:00
C O N F I D E N T I A L SECTION 01 OF 02 RIYADH 000732
SENSITIVE SIPDIS
NEA FOR DAS GGRAY DEPT OF ENERGY PASS TO A/S KKOLEVAR, MWILLIAMSON, AND DASAHEGBURG TREASURY PASS TO A/S CLOWERY CIA PASS TO TCOYNE
E.O. 12958: DECL: 05/07/2018
TAGS: EPET, ENERG, ECON, NI, SA
SUBJECT: PRINCE ABDULAZIZ ON ENERGY MARKETS, OPEC LAWSUITS
Classified By: DCM Michael Gfoeller for reasons 1.4 (b) (c) and (d).

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Summary

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1. (C) In a May 6 meeting with Assistant Minister of Petroleum (MinPet) Prince Abdulaziz bin Salman bin Abdulaziz Al-Saud, he outlined the Ministry’s latest thinking on record-high crude prices, and OPEC’s general refusal to budge on possible production increases. Contrary a few months ago, Prince Abdulaziz promised no relief on production or pricing. He told the Energy Attache that the Ministry was “extremely worried about demand destruction” in the U.S. as a result of the latest financial crisis indicators. However, he also fretted about squeezed refining margins in the U.S. and globally, noting the grave impact on U.S. refining utilization, currently running a scant 84 percent. He asked if the USG could assist the current political situation in Nigeria, where the production has collapsed to about a million barrels per day (mbpd) during the last week as a result of militant attacks and strikes. On the anti-OPEC lawsuits, he explained Saudi Arabia continued to gather amicus briefs for the now-consolidated cases in Texas. He generally dismissed the further threat of NOPEC legislation, saying if Congress could have passed the legislation, they would have done so already.

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“Refining Margins Shocked,” Refining Utilization Falling

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2. (C) Queried about Monday’s record surge in crude prices to above $120/barrel, Prince Abdulaziz noted, “We are extremely worried about demand destruction, like in the early 1980s. Aramco is trying to sell more, but frankly there are no buyers. We are discounting crudes, now we’re at a $10 differential between West Texas Intermediate (WTI) and Dubai Light, sometimes as much as a $12-$13 differential. Our buyers still bought less in April than they did in March.” Prince Abdulaziz attributed the lack of willing buyers to the current low refining margins. He indicated that that current high crude prices were squeezing refining margins, as refiners were unable to pass on the full brunt of crude prices to the end consumer. “There are no refining margins, refining margins have been shocked. It’s purely technical, not policy-induced. There are commercial impediments.” The consequence of poor refining margins was a declining refining utilization rate. Prince Abdulaziz fretted, “the U.S. refining utilization is 84 percent now, it’s usually above 90 percent. The quickest relief would be if crude prices would come down from these highs, if some of these political crises would resolve.” He queried if the USG could do anything to assist current political situation in Nigeria.

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“Grey Area of Demand Destruction, We Must Hold Our Guard”

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3. (C) Prince Abdulaziz dismissed speculation that King Abdullah’s press statements last week on Saudi Arabia planning to cap production capacity at 12.5 million barrels per day and leave oil in the ground for future generations represented a new policy. He stated, “It’s a statement of fact, we need to be credible. We’re pumping more than 9 million bpd, and right now, there is a grey area of demand destruction. We must hold our guard, and wait and see what happens with potential demand. Vice President Cheney was very complimentary about our maintaining spare capacity. We are honest with our commitments, we’ve been credible with our program. The other producing countries should do it the way we do. If we announce new capacity, we budget for it, we allocate for it, we acquire rigs, we have timelines. We don’t have pipedreams, if we make an announcement, we are certain to supply it.

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Anti-OPEC Lawsuits and NOPEC Updates

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4. (C) On the issue of pending lawsuits against Saudi Aramco and the national oil companies of other OPEC member and oil producing nations, Prince Abdulaziz indicated:

–the lawsuits had been successfully consolidated into one court in Texas;

–Saudi Arabia had worked with most other OPEC nations to file amicus briefs with the court.

–To Iran’s offer to file an amicus brief, Saudi Arabia had said, “thanks, but no thanks,” recognizing it probably would not be helpful in a U.S. court;

–The Mexicans and Russians would also file amicus briefs.

–The Norwegians also now have a case filed against them in Florida, so are reluctant to file an amicus brief.

Prince Abdulaziz believes the Departments of State and Justice seem to be coming around to filing a Statement of Interest (SOI) on behalf of the Saudi government in the lawsuits, but noted the White House was still concerned about the political optics of such a move. He felt such concerns were mis-placed now, particularly with respect to possibly fueling NOPEC legislation.

5. (C) Prince Abdulaziz indicated that if NOPEC had the strength to pass it would have done so already, but it hasn’t, in large part he felt due to the Administration’s clear opposition. He argued the lawsuits and NOPEC had much in common: “The Adminstration needs to be consistent in its policy. The effects of the lawsuits are very similar to that of NOPEC, but the plaintiffs are individual companies, rather than the Attorney General.” Prince Abdulaziz added, “Frankly our Embassy feels that once people are aware of the ramifications of such legislation, they’ll be reluctant to abuse it. The Minister has been very candid to explain the ramifications, which would be far more serious for the U.S. economy and energy markets than the Saudi markets.”

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Comment

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6. (C) Prince Abdulaziz seemed more comfortable with the state of play in the anti-OPEC lawsuits, his considerable earlier anxiety much diminished. He appears to have largely dis-missed NOPEC legislation as a credible threat for now. We are concerned that the Saudi energy leadership does not seem sufficiently well-advised on how the current high oil price environment is fueling U.S. election year “resource nationalism,” and how this might impact our bilateral relationship in future years. In this vein, King Abdullah’s recent comments that Saudi Arabia would cap its production capacity at 12.5 million bpd and leave crude in the ground for its children — while representing no new initiative or substance — seemed ill-timed at a moment when the market is looking for calming words from the world’s energy market leader. GFOELLER

[polldaddy poll=”4582795″]

German Military Study Warns of Potential Energy Crisis

Sustainable Energy Security: Strategic Risks and Opportunities for Business

The Real Population Problem

What feeds a revolution?

Posted on 05 February 2011 | by Jay Kimball | 15 Comments

Charles M. Blow, one of my favorite “number crunchers”, and op-ed columnist at the NY Times, has a good article today on what causes a revolution. He turns the lens on Egypt and Tunisia, as well as other countries that might be poised for revolution, and looks at what factors can contribute to people rising up and overthrowing their government.

Though agitating factors like unemployment and age have featured in many articles on the situation in Egypt and Tunisia, Charles M. Blow digs deeper. He prepared the table below, which shows median age, unemployment rate, income inequality, food as a percentage household spending, level of democracy, regime type, and internet penetration.

Worth noting: The real US unemployment rate is about 16%, when considering the more comprehensive U6 Rate. The US has the highest income inequality of all the countries considered in the list above. The US ranks with Rwanda and Uganda. For more on that, see the recent 8020 Vision article When Does the Wealth of a Nation Hurt its Wellbeing?

I am glad Blow listed food as one of the metrics to consider. There is a proverb that governments ignore at their peril:

“Lo que separa la civilización de la anarquía son solo siete comidas.”
(Civilization and anarchy are only seven meals apart.)

—Spanish proverb

Though Egypt is not unique – corrupt repressive governance and cronyism can be found at the heart of many dysfunctional nations – once corruption interferes with meeting the basic needs of the populace, revolution is imminent.

food price correlation with food riots — Time dependence of FAO Food Price Index from January 2004 to May 2011. Red dashed vertical lines correspond to beginning dates of “food riots” and protests associated with the major recent unrest in North Africa and the Middle East. The overall death toll is reported in parentheses. Blue vertical line indicates the date, December 13, 2010, on which author submitted a report to the U.S. government, warning of the link between food prices, social unrest and political instability. Inset shows FAO Food Price Index from 1990 to 2011. (Source: The Food Crises and Political Instability in North Africa and the Middle East, New England Complex Systems Institute)

The Basics Of Revolution

When I work with clients and this subject comes up, I like to turn to Maslow’s hierarchy of needs to put this in perspective. As we can see, two of Charles Blow’s metrics – food and unemployment – are fundamental components of basic human needs.

The lower down on Maslow’s pyramid a dysfunctional regime effects the populace, the deeper the impact, and the more likely the effected people will rebel. In other words, when a government fails to meet the basic human needs of its people, the people rise up.

Looking back in history for examples of how food and government are connected at the hip, our eyes come to rest on the Roman empire. Though the causes of the fall of Rome are debated still, one thing is certain: As the Roman empire devolved into the late-stage “Bread and Circuses” phase, once the farm system failed and the bread ran out, the rulers quickly lost the support of the people. The party was over.

the fall of Rome by — The Fall of Rome by Thomas Cole

The party is over in Egypt. President Mubarak now requires plainclothes thugs with clubs to beat back the public, losing what little credibility and dignity he might have had. How will he sleep? I don’t think the prideful Mubarak’s $60 billion family bank account will numb the shame he must feel as he watches the Egyptian army protect the people from his secret police.

As Tunisia and Egypt fail, Charles M. Blow scans his table of cold hard data and asks “Who’s next?”

“Seen through that prism (of food, income inequality, and internet penetration), Tunisia and Egypt look a lot alike, and Algeria, Iran, Jordan, Morocco and Yemen look ominously similar.“

A Global Perspective on Food

Pulling the lens back for a more global view – as world population expands inexorably – we are approaching a tipping point with regard to food production.

This week, a report that gained little attention in the news, but has major ramifications for every nation – especially those where food is a larger percentage of household income – was published by the UN’s Food and Agriculture Organization (FAO).

The FAO report – The World Food Situation – reports that world food prices surged to a new historic peak in January, for the seventh consecutive month. The FAO Food Price Index (below) is a commodity basket that regularly tracks monthly changes in global food prices.

This is the highest level (both in real and nominal terms) since FAO started measuring food prices in 1990.

As we can see from the chart on the right, the price of individual commodities that comprise the index – meat, dairy, cereals, oil and fats, and sugar – are all on the rise.

Global food prices have exceeded their pre-recession price levels. Some of this is due to the price of petroleum returning to pre-recession levels. About 17% of all petroleum production is consumed for food production. Petroleum is a key ingredient in the manufacture of fertilizer and pesticides, and sources energy for irrigation, food transport, etc. Note how the Food Price Index closely parallels the price of oil.

In addition, climate change is driving an increase in extreme weather, including record heat during growing seasons, record flooding, and extreme rain.

And as nations move up the affluence curve, their consumption of food increases, creating rising demand from a limited supply. As Julian Cribb, author of The Coming Famine: The Global Food Crisis and What We Can Do to Avoid It, astutely points out – as developing nations become more affluent, they consume more protein, in the form of fish, meat, milk, eggs, etc. For an example from China, read the article that appeared in The Financial Times today: Chinese Corn Imports Forecast to Soar. Note the mention of corn for meat production.

Meat Protein Consumption in US and China — (source: US Department of Agriculture)

Protein is usually produced with grain, and it is an inefficient process:

It takes 1,ooo tons of water to produce a ton of grain
It takes about 15 pounds of grain to produce a pound of beef
So, it takes about 5,200 gallons of water to produce a pound of beef

As our population increases, and as each nation seeks affluence, food will become a major factor in the stability of all nations, not just the rotting authoritarian regimes of the world.

Why Farmers Need a Pay Rise…

Climate Change May Reduce Protein in Crops

Examining the Relationship Between Growth and Prosperity

Posted on 15 January 2011 | by Eben Fodor | 1 Comment

Most cities in the U.S. have operated on the assumption that growth is inherently beneficial and that more and faster growth will benefit local residents economically. Local growth is often cited as the cure for urban ailments, especially the need for local jobs. But does the empirical evidence show that growth is actually providing these benefits?

To test claims about the benefits of local growth, I examined the relationship between growth and prosperity in US metro areas. This study looked at the 100 largest US metro areas (representing 66% of the total US population) using the latest federal data for the 2000-09 period. The average annual population growth rate of each metro area was compared with unemployment rate, per capita income, and poverty rate using graphical and statistical analysis.

The “conventional wisdom” that growth generates economic and employment benefits was not supported by these data. The study found that those metro areas that have fared the best had the lowest growth rates. Even metro areas with stable or declining populations tended to fare better than fast-growing areas in terms of basic measures of economic well-being.

Some of the remarkable findings:

Faster-growing areas did not have lower unemployment rates.
Faster-growing areas tended to have lower per capita income than slower-growing areas. Per capita income in 2009 tended to decline almost $2,500 for each 1% increase in growth rate.
Residents of faster-growing areas had greater income declines during the recession.
Faster-growing areas tended to have higher poverty rates.

The 25 slowest-growing and 25 fastest-growing areas were compared. The 25 slowest-growing metro areas outperformed the 25 fastest-growing in every category and averaged $8,455 more in per capita personal income in 2009. They also had lower unemployment and poverty rates.

Another remarkable finding is that stable metro areas (those with little or no growth) did relatively well. Statistically-speaking, residents of an area with no growth over the 9-year period tended to have 43% more income gain than an area growing at 3%/year. Undoubtedly this offers a ray of hope that stable, sustainable communities may be perfectly viable — even prosperous — within our current economic system.

Eben_Fodor_growth_prosperity_3 — Per Capita Income versus Growth Rate Chart top 100 MSAs

While certain businesses prosper from growth, apparently the balance of the community does not. The statistics showing that fast-growing areas tend to have lower and declining incomes, indicate that any gains by the businesses that directly benefit from growth are more than offset by losses to the rest of the local population. In other words, a small segment of the local population may benefit from faster growth, but the larger population tends to see their prosperity decline.

This study was not an attempt to explain all the complex relationships that exist, but merely to test whether there is a correlation between growth and some of the benefits that are so often attributed to it. More research is clearly needed on this important topic.

Population growth tends to be directly linked to urban growth. There is a close, linear relationship between the two, as more people require more housing units and more commercial buildings for employment and shopping.

Public policies and plans regarding urban growth typically involve tradeoffs between economic, environmental, and social impacts. Local residents may view a policy to encourage land development or growth as negatively impacting their quality of life through increased traffic congestion, environmental quality impacts, loss of farm and forest lands, and loss of amenity values (such as tranquility, sense of community, and open space). They may also be concerned about higher taxes to fund the cost of the new public infrastructure (roads, schools, sewer and water systems, etc.) required to serve growth. However, the prospect that new growth will bring jobs and economic prosperity that may benefit local residents is often viewed as compelling enough to outweigh these costs.

So if growth is actually not providing these benefits, then the decision-making balance shifts towards the fiscal, environmental, and quality-of-life impacts. With greater awareness of the relationship between growth and prosperity, perhaps we will see a shift in our focus toward making our cities better places, not just bigger places.

Most US cities have been actively pursuing growth with all the policy and financial tools at their disposal under the presumption that they are fostering local prosperity. As US cities seek a path out of the recession, this study suggests that new economic development strategies will be needed that do not rely so heavily on growth. ###

To read the full study, see: Relationship between Growth and Prosperity in 100 Largest U.S. Metropolitan Areas by Eben Fodor

Eben Fodor is the Principal of Fodor & Associates, a consulting firm based in Eugene, Oregon specializing in studying the fiscal, economic, and environmental impacts of urban growth and land development. This independent research was funded by Fodor & Associates as a public service.

What’s Causing the Long Lines at Gas Stations in China?

Posted on 24 December 2010 | by Jay Kimball | 1 Comment

Long lines are forming at gas stations in China. Truck drivers now wait in line for hours to fill up on diesel fuel. What’s going on? The answer is not what you might think.

No, it’s not peak oil (at least not yet). And unlike the oil embargo of the seventies, where the middle east slowed down the flow of oil to industrial nations, China is able to purchase most the oil it needs (for now). No, in this case, the fuel shortages are self-inflicted.

China is, by some measures, the largest consumer of energy in the world and they are trying to reduce their consumption.

It takes a lot of energy to grow a modernizing society. To meet energy demand, China has been building power plants every week or two, many of them greenhouse gas emitting coal-fired plants. The damage to their environment, public health, and contribution to global pollution, CO2 emissions, and climate change are enormous. Reducing energy consumption will help slow and eventually lessen toxic impact.

Chinese leaders want to reduce their energy intensity, or the energy use per unit of GDP. Their goal is to reduce energy intensity by 20 percent from where it was five years ago.

To achieve this goal, China has implemented Draconian measures, including:

planned power outages
shutting down more than 2,000 outdated factories in heavy industry
turning off traffic lights in some areas

China save energy cartoon — A black-sleeved arm marked "Energy Target" presses down on little official yelling "I have to apply the brakes and save energy!" (source: Xinhua News Agency)

Small and medium business, unable to get special exceptions from party officials, are hardest hit by the power cutbacks. In frustrated response, entrepreneurial business owners are adapting by buying generators to make their own power. An unintended consequence: Generator prices are soaring, and factory owners have been stocking up on diesel fuel to power the generators, increasing demand for diesel fuel.

To make matters worse, according to the Financial Time

Wholesalers, betting on future price hikes, started storing diesel instead of selling it. Meanwhile diesel’s wholesale price, which is less tightly controlled by the state, started to soar and soon exceeded the retail price—so many gas stations could only sell diesel at a loss. There is also a basic shortage of supply: China’s diesel imports have soared and the country has announced a ban on diesel exports next year, according to reports.

China is walking a fine line between trying to restrain growth, and giving freedom the their citizens, who long for western super-consumer lifestyles. As China per capita income has soared, so has per capita energy consumption. The chart below shows income and energy use from 1968 through 2008, for the US, China, and India.

Energy Consumption and Income for US, China, and India — Per Capita Income and Energy Consumption in China, India and the US (source: BP’s Statistical Review of World Energy 2010, IMF)

While the gas lines are largely due to China’s brute force energy policy aimed at efficiency, as the world recovers from the global recession, heavy energy users like the US, China and India will likely return to their pre-recession energy consumption levels, and we should expect to see higher fuel prices.

And as we enter firmly into the peak oil phase of oil production, shifting to renewable forms of energy will be more important than ever.

How Charles David Keeling Woke the World up to Climate Change

Posted on 21 December 2010 | by Jay Kimball | 1 Comment

My wife just emailed me this great story. A compelling retrospective of Charles David Keeling, the scientist who measured the steadily increasing level of carbon dioxide (CO2) in the atmosphere, transforming the scientific understanding of humanity’s relationship with the earth.

The article, A Scientist, His Work and a Climate Reckoning, written by Justin Gillis, appeared in The NY Times today. It is an excellent even-handed overview and backstory of climate change.

As Congress dithers with political inaction on climate change and investment in renewable energy, this article provides a window into the quiet work of scientists around the world who say something extraordinary is going on.

I hope you will take 5 minutes and read every word. This is our history and our future.

Keeling died in 2005, but his son Ralph continues in his footsteps. Here’s a picture of the Keeling Curve – the history of atmospheric CO2 – measured by Keeling, starting back in 1958.

As atmospheric CO2 has increased, so has global temperature.

And with rising temperatures, we are seeing increases in extreme weather events.

For more on Climate Change, click on the Climate Change topic in the sidebar to the right.

For more on Charles David Keeling, see his biography at Scripps Institution of Oceanography.

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