By Chris Nelder
Posting in Cities
In his inaugural column, resident energy futurist Chris Nelder outlines why the United States' infrastructure spending plans are a rounding error to what's actually necessary.
America is broken.
Like our financial system, we have kicked the infrastructure can so far down the road that we are approaching a dead end. Our failure to modernize infrastructure that was built 50 years ago or more is finally catching up with us.
The San Francisco Bay Area where I live is, as ever, a leading indicator. Over the last seven years we’ve had fires, explosions, or other accidents in underground electrical vaults roughly every three months, which caused deaths, property damage, blackouts, and flying manhole covers. We’ve had an accelerating series of natural gas pipeline failures, including the one in Sept. 2010 that killed eight people and destroyed 38 homes in San Bruno. We’ve had significant accidental discharges of sewage into the Bay’s watershed every other rainy season or so. Invariably the fault is found to be with aging equipment, some dating back to the 1920s. Nearly all of the vulnerabilities have been known for decades.
Many roads are more patch than original pavement, and littered with potholes. Older bridges need replacement. Ports are struggling against the encroaching silt, spending $3 million a year on dredging just to maintain key shipping channels. Meanwhile, smaller marinas are slowly rendered unusable. The stalwart light rail system that connects the Bay’s communities, BART, dates back to the 1960s and is showing its age. The San Francisco intracity rail and bus system, MUNI, is ugly, decrepit, and so unreliable that it has become a standard butt for jokes. And aside from a few new wings, most of the area’s airports are battered dumps.
Nationally, we’re in similar shape. Most of nation’s systems are operating beyond their planned life cycles and suffer from deferred maintenance: power plants and grid works, roads, bridges, water lines, sewage treatment plants, dams, water ways and levees, rail systems, waste systems, schools and parks.
For the fourth time since 2001, the American Society of Civil Engineers gave America a grade of D in its 2009 Report Card for America’s Infrastructure. They estimated that the country needed to spent $2.2 trillion over five years -- $440 billion a year -- just to upgrade the nation’s infrastructure to a satisfactory level. Transportation alone would require $186 billion a year.
The price tag rises with every year of inaction, as problems worsen and commodity prices escalate. For example, in 2006 the U.S. needed an estimated $48 billion to repair all deficient bridges; that cost is now estimated at $70 billion.
Any international business traveler can tell you that the municipal transportation infrastructure of our major cities looks sad and shabby compared to that of their international peers.
Alex Herrgott, a staffer in the U.S. Senate Committee on Environment and Public Works, put his finger on the problem: "The reason maintenance budgets are where they are is that you can’t cut a ribbon on a maintenance project. […] we’re at a pivotal point where we have a legacy system that was built 50 years ago that’s crumbling under our feet -- not just the roads or the small drinking water systems. We have an entire crisis that no one has seen. It’s a silent crisis and engineers know about it."
The energy connection
Even if our infrastructure were restored to a satisfactory level -- a grade of C -- the 21st century will demand much more. Ever-increasing populations will require expanded infrastructure. Increasing demands for water will require ever-greater efficiency in how we use and recycle it. Our power grid must be massively upgraded and transitioned from its reliance on aged centralized coal and nuclear power plants to distributed power generation from renewables like solar, wind, and geothermal.
More urgent is the proximate peak and decline of fossil fuel production. The curve of conventional crude oil production hit its peak-plateau in 2004 and ushered in the era of permanently higher fuel prices. By 2015, the world will likely lose its race the against the five percent-per-year depletion of the world’s mature fields and start experiencing net annual declines in liquid fuel supply. By 2025 or 2030, natural gas and coal are likely to begin their respective descents.
These new demands will require additional investment. In 2008 the IEA estimated that the world would need to spend over $1 trillion per year until 2030 to meet the world’s projected energy demands. Half of that would be needed just to maintain oil production at current levels. A reasonable share for the U.S. would be in the neighborhood of $200 billion per year, either through direct supply investment or higher costs for imported fuel (on which we already spend about $500 billion per year).
As liquid fuel supply fails to keep up with demand, the U.S. will be gradually priced out of the market by the emerging economies. We will have to transition our transportation regime away from cars and semi-tractors and airplanes and back to rail. A key element in that transition will be the planned national high-speed rail network that would link America’s major cities by 2030. In 2010 the estimated cost of the network was $500 billion, but by the time it gets built that number will undoubtedly be higher, so let’s call it $35 billion per year.
The Electric Power Research Institute estimates that another desperately needed upgrade, fully modernizing the U.S. electricity system, would cost up to $476 billion by 2030, or about $25 billion per year.
America has no plan to transition to renewables, so no good cost estimates are available. But we might consider the vision offered by university researchers Mark Jacobsen and Mark Delucchi, who estimated that the world would need to spend around $100 trillion by 2030 to transition away from fossil fuels entirely. A reasonable 10 percent share of that cost for the U.S. would be $500 billion per year.
Therefore, the real infrastructure challenge for America -- repairing our existing crumbling infrastructure, transitioning to rail, transitioning to renewables, and upgrading the grid -- is on the order of $1.2 trillion per year, or about 8 percent of our $14.7 trillion GDP, give or take a few hundred billion. And that doesn’t even include some key steps in transition, like upgrading the thermal efficiency of the built environment, fundamental research to support an all-electric infrastructure, and natural gas conversions for transport trucks.
Strategic investments, not quick fixes
Before you call these numbers absurd, consider what other major economies are spending on infrastructure. According to the Urban Land Institute’s Infrastructure 2011 report, China is spending $1 trillion over five years; that’s 3.3 percent of its GDP. India is planning to spend $1 trillion over five years; about 9 percent of its GDP. The U.K. is spending $320 billion over five years; 2.9 percent of GDP. Brazil has allocated $900 billion over five years; 8.2 percent of GDP. All of the plans include significant investments in rail infrastructure.
America’s infrastructure spending pales in comparison. According to the Congressional Budget Office, public spending on transportation and water infrastructure has declined from 3.1 percent of GDP in the early 1960s to 2.4 percent of GDP in 2007.
The American Recovery and Reinvestment Act of 2009 (commonly known as the “stimulus” program) currently allocates only about $105 billion over 12 years for infrastructure projects. Most of that will be spent in the first five years; annualized, it’s about $18 billion per year, or 0.12 percent of our GDP. A mere $8 billion has been committed as “seed money” for high-speed rail, where cash-strapped state and local governments are expected to make up the difference. The most viable of the high-speed rail lines, connecting the major cities of the Northeast, is expected to cost over $120 billion alone.
Our current infrastructure spending plans are a rounding error on what we actually need to spend.
The difference, of course, is that the rest of the world has taken a hard look at the future of fossil fuels and come to the same conclusion I have: We have to leave fossil fuels before they leave us, and the world only has about 20 good years left before they start declining in earnest. And we have to invest heavily in efficiency upgrades in order to make the most of the remaining BTUs, while simultaneously building renewable capacity.
Other countries can’t indulge themselves in fantasies about following the U.S. transportation model and running hundreds of millions of cars on low-grade resources like oil shale and tar sands long into the future; they have to be realistic. So they have laid out long-range plans for energy transition and transportation according to a scientific, data-driven view of the world.
No such thought exists in America. We have no energy or transportation transition plans. We can’t even admit that the era of affordable and plentiful oil is already behind us. We form policy around ideological sloganeering, not data. We still believe prominent editorials in the Wall Street Journal that suggest that oil supply will continue growing for decades to come, even though it already maxed out seven years ago. We still entertain a presidential candidate who thinks she can bring back $2-a-gallon gasoline.
In America, we seem to think only about quick fixes. The Democrats’ stimpak wasn’t really a coordinated infrastructure plan; it was built around only “shovel ready” projects that might throw off some new jobs and generate some politically useful headlines. The GOP, for its part, is primarily focused on depriving president Barack Obama of any successes, and shows no real interest in infrastructure spending (unless, of course, it’s in their own districts). They are opposed to high-speed rail, opposed to incentives for more efficient and electric cars, and opposed to renewables and smart grid projects. They heavily favor the nuclear and fossil fuels industries, who have massive lobbies, and look askance on the renewable and efficiency industries, who have negligible lobbying juice.
Our only real motivation appears to be job creation. We just want to goose our stalled-out economy and relieve enough pain that the working class doesn’t get too restless and start occupying more than just Wall Street. Long-term investments to meet long-term challenges are the furthest thing from any politician’s mind.
But if we focus on building an appropriate infrastructure for this century, and start investing over $1 trillion a year in it, we’ll get all the jobs we need. Only they’ll be the right jobs. Jobs that won’t disappear the next time oil spikes. And the legacy will be a transportation infrastructure that can survive $150 oil and declining supply, instead of freshly-paved roads to dead suburbs. We’ll also make far better progress on reducing carbon emissions than the misbegotten focus on climate change produced.
We need to think bigger. Much bigger. Moon shot big. Interstate highway system big. World War II mobilization big. Big enough to remain competitive with China in manufacturing tangible, real-world assets.
Infrastructure investment isn’t cheap, but it isn’t getting any cheaper. It will benefit the whole country, and see us through some very rough water dead ahead. After a decade of studying the future of energy, I believe that transitioning from roads and airplanes to rail is a strategic, operational, and mission-critical imperative. If we fail to make it, our economy will be forced to contract as fuel simply becomes unaffordable and maintaining our existing transportation paradigm becomes impossible.
It’s long past time to act, America, and act boldly. Our future literally depends on it.
Photo: Damage from Hurricane Katrina in Biloxi, Miss. (Chris Metcalf/Flickr)
Oct 2, 2011
My system, the Tripe, or track-pipe system should be built. It's at www.environmentalfisherman.com Nice article.
As a former facility engineer for 35 years, facility maintenance (that is infrastructure maintenance) has always taken a back seat to management and those leaders solely looking to boost the budgets in their personal, short term directions. Budget money goes to where the greatest profit or publicity is, rarely to maintaining the status quo. The number one priority of this, and all other countries should be energy - now and more importantly as we envision the future. Cheap and abundant energy will promote business and industry, job creation, elimination of foreign energy imports, and subsequently a reverse in money hemorrhaging out of our economy to foreign sources. While nuclear power has its issues, many of which are caused by Uncle Sam, it is still the most inexpensive (and yes, green) option. In stead of negativism, the US should embrace a significant growth of nuclear power (perhaps the Thorium model) so that US business and industry will find electricity the least cost energy source available. Abundant and inexpensive energy has fueled past booms in our economy, as well as other countries, especially those in the 3rd. world position. I believe this is the most important factor to improving the US economy, and thus opening the door to improvements in maintaining the US infrastructures now and into the future.
Much is made of Nelder's "fact" driven approach, but it's just the same old hyperbole all over again. He talks about making investments in high speed rail, even as this year China's efforts in this area have been shown to be too expensive, corrupt, and using technology that's not nearly ready. People died in a July collision as a result. Trains have had to be slowed down because the tracks just couldn't take it, and the cost of a ticket is beyond what the average Chinese can pay. Neider praises other countrys' planning. China certainly has plans. It's now producing more cars than the US, and increasing production at a rapid rate (see http://www.wolframalpha.com/input/?i=china+vs.+US+car+production ). It's also dominating the world in coal consumption, with plans to rapidly increase it (see http://www.wolframalpha.com/input/?i=chinese+vs.+US+coal+consumption ) While the US still dominates in other areas of energy consumption such as gasoline, it's clear China wants to overtake us in these areas (see http://www.wolframalpha.com/input/?i=china+vs+us+oil+consumption ). In all of these graphs, it's important to compare the trend lines of both the US and China as well as the actual levels. Neider talks about "Other countries can???t indulge themselves in fantasies ... running hundreds of millions of cars on low-grade resources like oil shale and tar sands long into the future; they have to be realistic." And yet China is busy courting Canada to buy most of its tar sands oil production while the US dithers over building a pipeline to support its own deal with Canada. We worry about pipeline spills over land while China will be shipping Canada's oil via pipelines and tankers -- a much more riskier proposition. China obviously doesn't care where it gets its energy. It sees no need to curb its insatiable appetite for even greater consumption. This is a model for the US? Even if it's not, it's clear the US is not going to be the biggest problem in the future. Neider talks about "the curve of conventional crude oil production" hitting its peak in 2004, but fails to mention that the source of much of that "conventional" production, such as deep land drilling, horizontal drilling, steam injection, and the use of supercomputers to find oil, wasn't considered "conventional" a few decades ago. Everybody praises the marginal steps in solar and wind that still haven't made a dent in traditional energy sources after decades of development, and ignores major advances in oil and gas. The 1.5 million barrels per day currently from Canadian oil sands is real. The deep sea drilling wells in the Gulf are real. The huge new natural gas reserves as a result of fracking are real. Renewable resources still don't come close. The truth is we can't afford to make artificial distinctions between new and old technologies. One day fossil fuels will run out. The economies between different energy sources will continue to shift, and ultimately tilt in favor of non-fossil fuels. But fossil fuels will be important and the most economical for decades to come. We need it all. Trying to end our dependence on fossil fuel prematurely will only kill the engine that we need to make the transition. Neider talks about the trillions we need to upgrade our infrastructure, but he overlooks just how many of those trillions in revenue we need ultimately depend on fossil fuels.
Unfortunately I believe we are too late to address the issues facing our infrastructure problems. Entropy is at work and we will just watch our internal systems crumble over time. When I was younger, we built stuff to last. My 54 Ford was build like a tank and probably would still be running today if my brother hadn't wrecked it. My 05 Ford will get totaled if someone runs a shopping cart into the side at the supermarket. We don't build stuff to last for a long time anymore. The only standout example of something that outlasted its design life were the two Mars rovers recently, a tribute to NASA. The will to fix an infrastructure problem only improves when it fails, like the bridges that kill people. Its amazing how quickly those problems can be fixed. We just seem to have a short attention span for such things. I have been telling people for 30 years that our infrastructure needed to be addressed before it was too late. Well, the time has come, and I believe we are already too late to fix everything that needs to be fixed. Even if we throw trillions of dollars at our infrastructure tomorrow, it will not be enough to stem the tide.
The problem with private ownership is that it has the legitimate aim of milking its assets. Maintaining them is only relevant if there is no more advantageous use for the money it would cost. Whilst new projects pay better than maintaining the old, the old will languish, and there is no mechanism for sounding a warning bell that things are getting critical. So inevitably it becomes ever more uneconomic to maintain the infrastructure at the same time as it becomes ever more important to everything else that we do. There is a very strong argument for social ownership of infrastructure assets, and for maintenance to be funded by taxation. The longer we spend not liking that idea the worse the burden gets and the more we don't like it. So unless we have a dramatic change of thinking, and dig deep into our pockets to fund maintenance of our infrastructure through taxation, we had better get a plan B.
Most of the systems you discuss are highly interrelated. For example, improving roads and bridges gives more efficient travel that improves fuel consumption of vehicle miles traveled. Improving mass transit reduces use of personal vehicles. Stopping water leaks cuts costs at the water treatment plant and pumping stations. Etc. etc. But as noted these kinds of investments are not as politically palatable as big new construction, with ribbon cutting photo ops etc. For certain key decision makers it's better to build a new $20billion bridge than to spend $5billion to maintain what we've already got.
If you want to compare projects in other nations then you have to match the same PHYSICAL size with ours - and only a few countries in the world match our total land size. Building a high speed rail link across a nation like France 600 miles (Cherbourg to Strasbourg) does NOT compare to building one across the USA - 3000 miles (Boston to LA) and three mountain ranges! You are certainly right about one thing, you NEVER see a political person standing in front of a newly repaved street saying how great it was. We EXPECT that to be done. Now taking a 2 lane road and making it 8 then it warrants him being there - but that sort of work is now actively bypassed and dropped in favor or bikes and light rail.
The problem behind the decay of infrastructure is a lack of political will to take on these problems. We also are used to this infrastructure and as long as it still works as much as it can, we will treat it like the old car that is bad on efficiency but still runs enough to do what we need. This is the first time that I have read that peak oil has happened in 2004; most information I read does not say that peak oil has happened but is very close. A big problem with getting off of using oil is that it has many uses beyond fuel. Oil is used to make a lot of things, plastics is one but it is also used to make fertilizers and food additives. Oil was such a cheap way to solve some problems a generation or two ago, but it is not so cheap and easy to obtain anymore. I also live in the same area that the author lives in. The local mass transportation pales in comparison with European and other countries, but it is also better than some of neighboring cities in this area. The local mass transportation is crowded and often fails to follow a schedule to be reliable; but, it runs continuously 24/7 and does not shut down after the end of the commute. The local mass transportation is good to get to many places cheaper than driving and paying for parking. Rebuilding and maintaining our infrastructure would be costly, but it would create a lot of jobs. With new jobs comes other jobs needed to support those jobs and it would put more people to work. This should create enough jobs that anyone who wants a job can find one quickly. With more people working, then there will be more money in the economy to keep it healthy. The problem is there is no political will to make this happen.
The private sector is dominated by corporations that are focused on quarterly earnings reports 1st & annual ones 2nd. The political establishment is focused on the biennial election cycle 1st & the presidential 1 2nd. You can't think big if you can't think long. The Soviet & Chinese 5-year plans were once a joke here. Not so funny when you're lucky to get anyone to think beyond 2.
The State of South Carolina roads and other infrastructure began failing many years ago but I'll begin with roads and bridges. Our state Department of Transportation is managed, operated, and run by "good old boys" in our state lesgislative branch not one of which is an engineer or understands why and how roads and bridges need constant maintenance, repair and replacement. Even when a bridge is classified dangerous that matters not if one of the good old boys has a pet project that he wants done first in his city, district or county. It is 99.99% pure politics and nothing else. In order to get a bridge in danger of collapse "fixed" or replaced it has to really collapse. While the state has roads and bridges (thousands of bridges) that are dangerous to travel on the SCDOT recently set aside millions for an interchange for an Interstate that has not been approved and does not exist. In every state there are similiar problems with mangement and operations run by politicians while the engineers scratch their heads in wonder and the public take theirs lives in jeopardy when the drive. Don't get me started on the rail systems or water and sanitary sewer systems.
The problem with the way we to infrastructure is that few treat it as though they own it, or more precisely, have any personal ownership interest in it. Due to the nature of politics, we build things as cheaply as possible with little regard as to how it will be sustained or eventually replaced in the future. Instead of maintaining things as well as we would if we personally owned them, we let them degrade until it's a crisis situation. Only then do we act, begrudgingly. Add to this reality the fact that our government is little more than a spoils system that builds and maintains stuff mainly as a justification for its existence. For the trillions of dollars that we've spent in the name of "infrastructure" and "stimulus" over the last decade, there shouldn't be a pothole left in sight. So whenever another politician (or the same one) suggests another infrastructure program, is it any wonder the public is anywhere from ambivalent to outraged? Fool us once, shame on you. Fool us the next dozen times, shame on us! Perhaps more of our infrastructure should be private, like it is in Europe. As it is now, we're getting more like Europe economically anyway, with absolutely none of the benefits.
IF WE GLOBALLY TAKE ADVANTAGE OF ONGOING ADVANCES AND POTENTIAL OF INFORMATION COMMUNICATIONS TECHN OLOGY (ICT), it will help many Nations to Improved their Healthcare Services, as well as help Reduced their National Deficit. Gadem Korboi Quoquoi President & CEO COMPULINE INTERNATIONAL, INC.
"The American Recovery and Reinvestment Act of 2009 (commonly known as the ???stimulus??? program) currently allocates only about $105 billion over 12 years for infrastructure projects." Does that include the $3 billion given to GM to upgrade a plant in Brazil?
There's something to what you say about the size of a nation making a difference in rail transportation costs, but it's not the huge bugaboo you want to make of it. Here's an interesting little number game to conpare to your number game of 600 miles vs. 3000 miles. The population of France is 60m vs. US 300m, the exact same percentage difference. If you add to that the fact that, aging and decrepit as it is, the US rail system, particularly freight, is the most extensive in the world per the size and population of our country. We've got a great start. The mountain ranges have already been crossed and almost all of the rights of way are in place for what we need, thanks to our predecessors.
I've been reading Chris Nelder for 3 years now, elsewhere, and there is no one better at explaining energy issues. He is data driven and precise, i.e., he does his research and when he says something, be prepared to pay attention. You wrote, " This is the first time that I have read that peak oil has happened in 2004; most information I read does not say that peak oil has happened but is very close. " You mis-read. He did not say that peak oil arrived in 2004. He said CONVENTIONAL oil reached a peak PLATEAU in 2004. Conventional oil includes only the drill a hole on land or close by in the sea and pump the oil, not things like deep ocean drilling, tar sands and fracking shale oil. With relatively small variations we have been on a peak plateau of world wide conventional oil output since 2004 and a combination of recession and the unconventional sources have made up for any increase in demand--at a cost. Sometime, probably soon, this peak plateau in the output of conventional oil can't be maintained, and will start dropping at an estimated 2-5% per year and unconventional sources won't be able to make up the difference. That's what most of us imagine when we speak of Peak Oil. We can't know that it has actually happened until after the fact, but we will sure know the consequences. Stick with Chris and your energy literacy will grow. What you say about the job efficacy of infrastructure renewal and upgrade is certainly true and now thanks to this article we know what it will cost, not the 1-2% of GDP current, but around 8%. Perhaps when we get through with Occupy Wallstreet we'll locate the $$$. (grin)
Highways are national, railways and utilities were (and many still are) government-owned, and everything is heavily subsidized by the petrol tax that results in eight- or nine-dollar per gallon gasoline.
I know we must be at the beginning of peak oil production when in the face of an enormous enviromental disaster, such as the Macondo well accident, the response was not "Let's find out what happened and do it safer" but "We don't need a moratorium, keep drilling". I am seeing that the need to produce more oil is taking greater precedence over learning from mistakes and preventing other disasters.