January 16, 2018

The Wretched Refuse of Your Teeming Shore

There are two major reasons why we accept immigrants.

One is purely selfish: some immigrants have skills or money to bring which will make America better. These potential immigrants can presumably be identified. It shouldn’t matter where they’re from or what their race or religion is so long as they are bringing something of value. We have various programs like H1B for people with skills we need and EB-5 for people with money. They need examination and I think we should actively be recruiting those with skills; but there is no crisis here.

The second reason is much more important to America and the world. There are people who need refuge and we are able to grant it to some of them.

“Give me your tired, your poor,
Your huddled masses, yearning to breathe free,
The wretched refuse of your teeming shore,
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door.”

That’s what it says on the plaque on the Statue of Liberty. That describes most of my ancestors when they came two generations ago. Yes, the places they left were shitholes, at least for them. That doesn’t make them shit, just wretched refuse yearning to breathe free.

My grandparents were fleeing pogroms in Russia and the Ukraine. They contributed to their new country and I hope we who were lucky to be born here have contributed as well. But there was no way to know what they or their progeny would add when they came. They wouldn’t have qualified for H1B or been able to pay half a million dollars for an EB-5 visa.

At least partially because of prejudice, America refused most Jewish refugees from the Nazis even as it became apparent what would happen to them in Nazi-occupied Europe. As a Jew, I don’t want to see us turn back Moslems fleeing catastrophe.

There are so many refugees that the US can’t possibly take them all. Unfortunately, there are so many refugees from conflict that we must prioritize them over people who “just” want to be free or “just” what a chance to make a better living. In a world plagued by terror we have to vet refugees as best we can rather than let them teem into Ellis Island the way my ancestors did. We do have a right to insist that refugees adapt to our country and follow our laws. But we have a responsibility to provide refuge.

America is no longer great if we cannot lift our lamp beside the golden door.

January 11, 2018

Marijuana and the Constitution

It took the 19th amendment to the US Constitution to ban most manufacture, transport, and sale of alcoholic beverage in the United States. Why then was Congress able to ban marijuana and a host of other substances by simply passing a law? Good question and one worth addressing when this congressional prohibition is at odds with what most American apparently want and actions taken by the states. The question of congressional power is especially worth examining given a dysfunctional Congress which complains about enforcement of its own law but seems incapable of the simple act of amendment.

Section 8 of Article 1 of the US Constitution gives Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”. Clearly that gives Congress the power to regulate interstate sale of marijuana and its importation. Article X of the bill of rights says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” For most of American history, these two clauses were read together to reserve the power to regulate intrastate commerce to the states. That’s why it took a constitutional amendment to impose prohibition.

In 1942 a Supreme Court decision Wickard v Filburn essentially took the words “between the states” out of the commerce clause.  From Wikipedia:

“An Ohio farmer, Roscoe Filburn, was growing wheat to feed animals on his own farm. The U.S. government had established limits on wheat production based on acreage owned by a farmer, in order to stabilize wheat prices and supplies. Filburn grew more than the limits he was permitted and was ordered to pay a penalty. In response, he said that his wheat was not sold, so his activity could not be regulated as commerce, let alone "interstate" commerce…

“The Court decided that Filburn's wheat-growing activities reduced the amount of wheat he would buy for animal feed on the open market, which is traded nationally (interstate), and is therefore within the scope of the Commerce Clause. Although Filburn's relatively small amount of production of more wheat than he was allotted would not affect interstate commerce itself, the cumulative actions of thousands of other farmers just like Filburn would certainly become substantial. Therefore, according to the court, Filburn's production could be regulated by the federal government.”

The background of this ruling is that in 1942 eight of the nine justices had been appointed by President Roosevelt, the architect of the law being challenged – as good a reason as any for term limits. The US was also at war and draconian regulation of all kind was tolerated.

Fast forward to 2003 and Gonzales v Raich, a case challenging the federal government’s right to prosecute the instate use of medicinal marijuana in California where a referendum had legalized such use. Relying heavily on the Wickard v Filburn decision, the Supreme Court ruled 6-3 that the feds did have this right because the intrastate use of marijuana might interfere with interstate commerce in pot (even though such commerce was illegal).

Justice Thomas wrote in dissent:

“Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything—and the Federal Government is no longer one of limited and enumerated powers.”

It's not a good idea for the federal government to have unlimited powers even if it weren’t dysfunctional.

Justice O’Conner wrote in her dissent:

“Relying on Congress’ abstract assertions, the Court has endorsed making it a federal crime to grow small amounts of marijuana in one’s own home for one’s own medicinal use. This overreaching stifles an express choice by some States, concerned for the lives and liberties of their people, to regulate medical marijuana differently. If I were a California citizen, I would not have voted for the medical marijuana ballot initiative; if I were a California legislator I would not have supported the Compassionate Use Act. But whatever the wisdom of California’s experiment with medical marijuana, the federalism principles that have driven our Commerce Clause cases require that room for experiment be protected in this case.”

I think she is right. People the world over are resentful of over-reaching central authority (see Brexit, Catalonian separatists, Iranian demonstrators, and the election of Donald Trump for just a few examples). We in the United States are fortunate that the states and the US Constitution are a mechanism for resumed local control. We don’t need a revolution to ratchet back central power, just a return to federalism as it was practiced for most of our history. Invalidating federal control over instate drug use and sale will not make all drugs legal everywhere any more than the end of prohibition made alcohol legal everywhere. Control will just go back to the states and localities – and the feds will still be free to combat international smuggling or even interstate drug commerce.

 The Court is reluctant to reverse prior decisions but has done so. Brown v Topeka, which outlawed segregated public schools, expressly undid Plessy v. Ferguson, which held that separate but equal is good enough.  I hope the Court will give itself the opportunity to reverse the overreach of both Wickard v Filburn and Gonzales v Raich. 

Meanwhile, Congress should stop blowing smoke and promptly undo its own unwise listing of marijuana on the same schedule as heroin in the possibly unconstitutional Controlled Substances Act. See Marijuana and Congress for more on that.

January 08, 2018

Marijuana and Congress

The haze of bipartisan Congressional hypocrisy is thicker than the air in a marijuana bar. I’m for legalization; it’s time for Congress to stop blowing smoke and start legislating.

The Controlled Substances Act (CSA), which classifies marijuana as a Schedule I drug like heroin and proclaims it more dangerous than fentanyl and oxytocin (Schedule II), was passed by Congress in 1970. It has been amended many times since but congresspeople have not seen fit to remove marijuana from Schedule I.

If Congress did exempt marijuana from the CSA, which already exempts tobacco and alcohol, pot would not become legal everywhere. States would be free to ban or regulate it anyway they saw fit; exactly what outraged congresspeople say they want.

Under CSA the Drug Enforcement Administration has the authority to remove a substance from the various schedules. The DEA has rejected petitions to allow use of marijuana for medicinal purposes several times; the latest rejection was in 2011 and was upheld on appeal in 2013.

In 2013 President Obama’s Justice Department issued the Cole Memorandum essentially instructing federal prosecutors to lay off prosecuting marijuana offenses in most case. If Obama had just instructed the DEA to delist marijuana, we wouldn’t be having the debate we’re having today; but that’s history. Trump could give the same order; but we’ve seen that what one president can do by executive order, another can undo.

Last week Attorney General Jeff Sessions, a lifelong foe of marijuana use, rescinded the Cole Memorandum in what he calls a “return to the rule of law”. He didn’t mandate federal prosecution of cannabis cases but made non-prosecution less certain. His memo said:

“In deciding which marijuana activities to prosecute under these laws with the department's finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions. These principles require federal prosecutors deciding which cases to prosecute to weigh all relevant considerations of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.”

Senator Bernie Sanders lashed out:

“No, Attorney General Sessions. Marijuana is not the same as heroin. No one who has seriously studied the issue believes that marijuana should be classified as a Schedule 1 drug beside killer drugs like heroin. Quite the contrary.”

While I agree with Bernie about the pharmacology, he is deliberately overlooking the fact that it is Congress and not the Attorney General who put pot on Schedule I. Does he really want Trump’s AG to overrule Congress? Where is the Sander’s bill to declassify marijuana?

There seems to be Republican as well as Democratic support for legalization:

“I am obligated to the people of Colorado to take all steps necessary to protect the state of Colorado and their rights,” said Senator Cory Gardner of Colorado, a conservative member of the Republican leadership who has rarely broken with the Trump White House.

The senator seemed flabbergasted by what amounted to a federal assault on the expanding $1 billion legal pot business approved by voters in Colorado… (NYTimes)

Gardner apparently doesn’t think his obligation to the people of Colorado includes doing his job by pushing for amendment of the offending federal law. Presumably he’d support delisting.

Representative Matt Gaetz of Florida, a leading Trump ally in the House, said the decision would deny relief to suffering cancer patients, including children. He said the move by Mr. Sessions was “heartless and cold, and shows his desire to pursue an antiquated, disproven dogma instead of the will of the American people. He should focus his energies on prosecuting criminals, not patients.” (NYTimes)

Gaetz has a good point about the suffering caused by the prohibition of medicinal use of marijuana. An article in VTdigger details how assisted-living facilities, which receive federal funds, won’t allow the use of marijuana for pain-relief even though such use is legal under Vermont And New Hampshire law.  They are justifiably afraid of running afoul of the feds. It’s up to Congress to remove this threat. Gaetz should consider proposing legislation.

Nancy Pelosi: “Attorney General Jeff Sessions’s [sic] decision bulldozes over the will of the American people and insults the democratic process under which majorities of voters in California and in states across the nation supported decriminalization at the ballot box.” (NYTimes)

I don’t remember Ms. Pelosi pushing for federal deregulation when she was Majority Leader of the House. She apparently doesn’t remember that Congress, presumably following the will of the voters, made pot illegal. And I doubt if she really wants the AG to substitute his reading of the will of the people for Congressional mandates.

There is a good chance that there would be bipartisan support for the feds getting out of the marijuana regulation business. But would Sessions’ boss, President Trump veto such a bill if it passed Congress? Unlike Sessions, whom he certainly doesn’t feel a need to defer to, the President hasn’t said how he personally feels about pot use.

From the same NYTimes article: As for the president’s evolution on marijuana, Ms. Sanders [nb. his spokeperson] said Mr. Trump “believes in enforcing federal law. That would be his top priority, and that is regardless of what the topic is.”

If the federal law were changed, enforcement wouldn’t be an issue. Time for Congress to put their votes where their mouths are and “follow the will of the people.”

See also Marijuana and the Constitution for a discussion of whether Congress actually has the constitutional right to ban instate use of marijuana.

 

January 04, 2018

AT&T-Run Network Announces “Ruthless Preemption”

If you think this is some nightmare result of the Federal Communications Commission (FCC) voting to rescind the 2015 “Net Neutrality” regulations, think again. “Ruthless Preemption” is a feature of a so-far non-existent network called FirstNet for which the federal government has given AT&T a 25-year operating agreement, the exclusive right to sell FirstNet services to first responders, and lots of valuable radio spectrum.

While we technical types have been debating Net Neutrality regulation as a mechanism for curbing the last-mile oligarchy, AT&T has managed to walk away with another big gob of access spectrum in return for the slow deployment of an inferior service that addresses a need which no longer exists and leaves the real needs of first responders without a solution.

The genesis for FirstNet was an interoperability problem in the response to 9/11. Police and fire department radios were on different frequencies; they couldn’t talk to each other. The 9/11 commission recommended an interoperable network be built for first responders. Nothing happened until 2012 when Congress added FirstNet and a bureaucracy to run it to the Middle Class Tax Relief and Job Creation Act of that year. Still none of this network has been built; late last year AT&T was awarded the contract.

But a lot has changed sine 9/11/2001. First responders, like the rest of us, have smartphones; they can even use their smartphones as walkie talkies and can look at citizen-uploaded or drone-taken videos of whatever catastrophe they are responding to. Fire Department smartphones can talk to police smartphones can talk to ambulance smartphones. Computers in first responder vehicles stay online on the cellular network. FirstNet boasts that it is built on LTE, the technology now used for almost all cellular communication. So, with the interoperability problem gone, why do we need FirstNet?

There is the “Ruthless Preemption”, the cyber equivalent of a wailing siren and a flashing light which assures that that first responder communications won’t be caught in a digital traffic jam. But we don’t need a new network to implement preemption where it is justified. In fact, if the first responders are on the same network as everyone else, there will be much more bandwidth available for them to preempt if needed.

In rural areas of the US we are painfully aware that there is not universal cell coverage. FirstNet says it will build out to 95% coverage; but first responders go everywhere. One of the very real problems we all face in an emergency is that cell towers are destroyed or can’t operate for long without grid power (see Puerto Rico or Vermont after Irene). AT&T says they may have mobile towers to deploy but hasn’t committed to a response time. The solution is obvious, but it isn’t FirstNet. First responders should have satellite phones. Satellites are not affected by local catastrophes; they are solar powered; and satellite service is available everywhere except under a rock.

The next argument for FirstNet is that it will help increase broadband penetration in rural areas. Problem is that the FirstNet’s agreement with the US Department of Commerce only requires a download speed of 768kbs and upload of 256kbs. The FCC minimum definition of broadband is 32 times faster on download and 12 times faster for upload. This is fake “broadband”; it won’t solve the economic and social problems caused by lack of broadband in rural areas. At FirstNet minimum speeds no one is going to be uploading or downloading incident-scene videos. And only 95% coverage is promised. The rural problem is exactly that last 5%.

Terry LaValley, chairman of the Vermont Public Safety Broadband Commission, which recommended that Vermont join FirstNet, said “The speeds are a minimum which may or may not support a voice call.” He went on, according to VTDigger, to say  that these speeds allow sending and receiving texts. Text messaging in 95% of places some years in the future is hardly a breakthrough for first responders. I have a device from Garmin called an InReach. It costs $300 retail. For $50 dollars/month (also retail) I can use it to send and receive unlimited texts anywhere in the world where the sky can be seen. It uses satellite so no danger of local towers being invisible or out of service. It also sends a trail of bread crumbs so people can track me on Google maps. I’m not sure why a device like this isn’t built into every first responder vehicle. We could have that today.

Writing in The Atlantic, Steven Brill says “the prize for the most wasteful post-91/11 initiative arguably should go to FirstNet.“

TechCrunch says:

“For AT&T, the victory provides a new source of revenue from local police and fire departments, who will presumably come to rely on FirstNet for their emergency communications. It also gets a serious boost in its spectrum, along with free cash from taxpayers. But for all of us, it seems billions of dollars will be spent to create a specialist comm channel, when existing technologies are more than up to the task of providing these highly reliable services.”

Even though all 50 states have signed on to FirstNet (free money and draconian threats), I think the only visible results will be more spectrum for AT&T to sell in urban areas and no significant new buildout in rural areas. First responders will meet their real needs with devices which use the cell network when they can and satellites and perhaps mesh networks when they have to. Rescinding “Net Neutrality” means that prioritization and preemption if needed can be built into the broader Internet and cell networks to avoid digital gridlock in an emergency. Most first responders will never sign FirstNet contracts when their needs can be met more quickly and more effectively with non-AT&T solutions.

I hope the false promises of this boondoggle don’t lead anyone to say “mission accomplished” as far as first responder communication or rural broadband deployment.

January 02, 2018

The End of Net Neutrality Regulation COULD Mean the End of Last-Mile Oligopolies

Landline networks like the old phone system and the new(er) cable systems do lend themselves to monopoly or at least duopoly outcomes. Building these networks is both very expensive and requires myriad government approvals. Once a system is in place, it is hard for anyone to raise the capital to duplicate it. Even a network of wireless towers is hard to compete with. It’s hard enough to get a permit to build a tower to serve unserved areas (“it’ll ruin my view”; “it will stop the wildebeests from migrating”). It’s much harder to get permitted for a tower whose “only” purpose is to increase competition.

It is a fact that we have little competition for Internet access, especially in rural areas. This lack of competition and mediocre service from incumbents is why most of my friends in the tech world supported the “Net Neutrality” regulations promulgated in 2015, which allows the Federal Communications Commission (FCC) to regulate the Internet under the same terms as it regulated the phone network. The FCC did not regulate rates for Internet access, although it gave itself the authority to do so. They are furious that the FCC rescinded this regulation last month. They are right, in my opinion, that there is too little competition in access. They are wrong, also in my opinion, that regulation is the way to solve the local oligopoly problem.

Regulation acknowledges monopoly and protects it. Incumbents like utilities learn to live with regulation. They hire staffs of regulatory lawyers. They avoid innovation – it’s expensive and may raise regulatory issues. If innovations succeed, the incumbents argue, the regulators will make the utility give back the profits. If innovations fail, the utility’s shareholders will have to pay the cost. Most important, protected monopolies don’t have to worry about competition in the marketplace. They can count on the burden of regulatory compliance and the relatively low return of regulated businesses to make it impossible for a would-be challenger to raise capital. These are the reasons why the regulated phone network was almost an innovation-free zone for sixty years.

But now the net neutrality regulations have been repealed. Ironically, startups in the last mile access business are using that repeal as a fund-raising pitch. Daniela Perdomo is the cofounder and CEO of goTenna, a company which provides meshed connectivity for messaging and location sharing without using any connections to commercial networks. She says “Society requires connectivity to function and to advance but we are leaving telecommunications in the hands of a few large corporations. The lack of a choice is a problem.” To an innovator, every problem is an opportunity,

GoTenna is no threat to AT&T – yet. But, because goTenna doesn’t require any infrastructure, it was able to bring basic communication to parts of hurricane-damaged Puerto Rico immediately. Solar-charging is plenty of energy for goTenna to operate so they require neither an electrical grid nor generators. Mesh networks like goTenna gain capacity with each user they add so they can grow without enormous capital expense. Needless to say, no permitting required. So far goTenna users can only talk to other in their mesh. But if meshes connected by sat phone….

Veniam provides meshed networking between vehicles. This mesh does have access to the full Internet which it reaches through a combination of cellular connections and WiFi hotspots; among other uses are free WiFi for bus riders (and passenger information for the transit providers). At any moment a connection to the Internet may be directly to a hotspot or hopped through a mesh of vehicles. There are currently Veniam nets in Porto, Portugal, New York City, and Singapore. An obvious future use of Veniam is critical communication between autonomous vehicles.

I think that growth of companies like goTenna and Veniam will be super-charged by the end of Net Neutrality regulation. Lack of innovation and mediocre service from incumbents creates a need. Investors will like that there is no longer a threat, in the US at least, that regulators will decide that some service they are offering isn’t properly “neutral”. Even defending such a claim could stop a small company in its tracks. It’s possible that one of these companies or a company like them will want to offer a “fast lane” for emergency service or communication between autonomous vehicles. Under the “net neutrality” rules they wouldn’t have been allowed to. There is no longer a threat of “rate-of-return” utility price controls.  Regulation smothers innovation.

I may be an optimist to think that deregulation will topple the access network oligarchies. But I know that regulation would preserve the unsatisfactory status quo.

Full disclosure, I am indirectly a very small investor in both goTenna and Veniam.

December 27, 2017

America Not So Great

News about the new Lanzhou to Xian highspeed train in China made me sad. Service started this year with 35 roundtrips/day. Travel time is reduced from seven hours via the old train to 2.5 hours on the new train, which runs at 155 mph.

I’m happy for people who travel between Xian and Lanzhou or make connections on this route. I’m sad for my own country. When is the last time you remember us making a big improvement like this? We’re not even keeping up with the decay of our own existing infrastructure.

Contrast the new train with Amtrak’s flagship Acela service.  Acela has a top speed of 150 mph but can’t run that fast over most of its curvy and congested route. Its fastest scheduled time for the 226 mile trip from NYC to Washington, DC is two hours and forty five minutes, fifteen minutes more than the Lanzhou-Xian train takes to cover its whole 457 mile route. Pretty pitiful.

The reason for the difference is not the train technology but the track. Railroads in the US were laid out in the last century. Most routes haven’t changed since. That’s why there is a 30-mph curve in Olympia, WA on the new Portland-Seattle route. The curve was the scene of a fatal derailment of the train’s inaugural run.

The Portland to Seattle run helps point out our problem. Original plans for the route included straightening the curve according to a Wall Street Journal story based on planning documents. The plan was dropped because of cost, says the story, although as a former state stimulus czar, I suspect that the time required for permitting the straightening would have made the project ineligible for stimulus funding, which was only available for ostensibly “shovel-ready” projects. The article does talk about “fraught acquisition battles” and “reluctance to use eminent domain”. In other words we can’t get anything built because we allow opponents to drag out projects endlessly, and we don’t have the political will to pursue the greater good when there are local consequences.

At least as disgraceful is that a fairly simple technology called “positive train control” hadn’t yet been installed on the line; this technology would have prevented the train from entering the 30-mph hour curve at 80. Service is now not going to resume until positive train control is installed. Critics are asking why service was allowed to start without it; a better question is why positive train control isn’t everywhere in the US. It was mandated by Congress in 2008 with a 2015 deadline. Railroads lobbied successfully to have the deadline extended. It’s cheaper to lobby than actually do something, even something that safety requires.

It’s we who must choose to make America great again… or not.

See also Everything is Shovel-Ready in China.

December 19, 2017

Chinese View of US Tax Cut

Certainly the tax bill, which is now close to becoming law, is far from perfect. Just as certainly it has some things in it that needed to be done like lowering the industrialized world’s highest corporate tax rate, doubling the standard deduction for individuals, and wiping out many (but not enough) loopholes. It will increase the deficit if there is not enough growth stimulated to offset the lower rates.

So is the bill as whole a good thing for the US economy?

In China they are asking, of course, what is the effect on China. Here’s some answers from China’s Global Times.

“…some Chinese companies may consider moving to the US, where the corporate tax rate will be 20 percent [nb. Since raised to 21%]…while China may inhibit the momentum of capital and manufacturing outflow through policy adjustments, such changes could have an impact on the domestic economy and taxation system….

“Second, as a result of the US tax cuts and the anticipated interest rate hikes by the Federal Reserve, global capital will be attracted to the US, pushing up the value of the US dollar….

“Third, the US tax plan also involves individual income tax. When the tax cut is combined with US immigration reform, the country may be able to attract high-technology talent from other countries. China should guard against the possibility of a brain drain…. [nb. I’m not sure what they mean by immigration reform]

“Last but not least, tax cuts in the world's largest economy will have a global spillover effect. While stimulating the US' economic growth and attracting capital inflows, the tax reduction plan may set off a wave of similar cuts across the world, intensifying economic competition and prompting countries to move toward a taxation and legal environment that is favorable for the most dynamic companies.

“The UK, France and other European countries are reportedly working on tax-cut programs. If other developing countries also cut their corporate tax rates, China's manufacturing cost advantages will be eroded and the nation may experience outflows of high-technology talent and intellectual property. The Chinese government needs to be prepared and have comprehensive plans for all potential scenarios.”

Note that the tightly-controlled Chinese press are not fans of President Trump. Nevertheless he would probably be pleased to read Chinese fears that the tax changes will MAGA.

December 15, 2017

The Bicycles of Lanzhou

Lanzhou is a Chinese city , which you’ve probably never heard of , with a population of 3.6 million. It has a history: it’s here that the Silk Road crosses the Yellow River (on chained barges way back when). The Japanese never captured Lanzhou during WW2. It’s a major industrial city and a center of the Chinese nuclear industry as well as home to Institute of Modern Physics, Chinese Academy of Science. Lanzhou was once one of the most polluted cities in the world but in 2015 it won China’s climate progress title.

The climate progress wasn’t because of the bikes; they’ve only become significant again in the last year. At the end of the 20th century, traffic in Chinese cities was mostly bikes. Thy turned into scooters and motorcycle then into Audis and Mercedes as prosperity spread. At least twice a day the new cars froze into fuming gridlock.

Like many cities with a pollution and congestion problem, Lanzhou deployed municipal bike rental racks. They didn’t get much use, often looked like the picture below. IMG_20171208_214213766

People had the usual complaints. The racks weren’t conveniently located at either end of a trip. At your destination you might find a full rack and not be able to return the bike without going somewhere else. With so few bikes on the road, drivers didn’t expect them; and, even though some bicycle lanes had been designated, riding was extremely dangerous.

But private enterprises, which flourishes in the nominally communist country, had an answer. A new breed of rental bike quickly sprawled over the sidewalks. The innovation is that these are rackless bikes. There are no fixed bike racks. Each bike has a GPS, a cellular data connection of some kind (cell coverage is excellent in Lanzhou), and a locking clamp  on the rear wheel. IMG_20171208_213407611_LL

Since bikes are sprawled almost everywhere in the city, there is usually one very near the beginning of your trip. If you don’t immediately see one, the bike app on your phone will tell you where the nearest ones are. Remember, bikes transmit their location. You use the app to unlock the nearest bike and you’re off. When you finish a trip, you leave the bike outside the door of your destination and engage its rear wheel lock. Engaging the lock ends your rental.

Bikes are faster than cars during rush hours. Last year when I was in Lanzhou there were almost no bikes on the streets. This year there are so many bikes that they have become a new hazard to pedestrians but car traffic does seems to have thinned out. A bike is a normal way to get to a business appointment. People complain about the unsightly sprawl of bicycles everywhere; but the bikes are being used. American riders, however, would be shocked to see absolutely no bicycle helmets.

I understand that the same two companies whose bikes are now ubiquitous in Lanzhou are in other Chinese cities as well. My friend Fred Wilson, who is a Citibike fan in NYC, noticed that Shanghai has solved the rack problem which devils him at home. China has successfully gone back to the future and made progress against both congestion and pollution.

November 30, 2017

Vermont Shouldn't Let the Perfect be the Enemy of the Good

State of Vermont

In my last post I blogged that the world’s CO2 output is still rising despite various treaty commitments and huge expenditures on renewables. However, the US stands alone in having exceeded the emission reduction it would have been obligated to had we signed the Kyoto treaty. This accomplishment owes something to deployment of renewables but is largely the result of substituting natural gas for coal in our power plants.  Even though natural gas is also a fossil fuel, it emits less than half as much CO2 per Megawatt-hour of electricity generated than coal.

According to the Federal Energy Information Agency, in 2014 Vermont had the lowest output of CO2 in the country per electrical Megawatt hour (Mwh) generated: 19lbs/Mwh; the national average is 1123lbs/Mwh. However, at that time, 72 per cent of our electricity was generated at a nuclear power plant which has now shut down. 4.4% of our production was from wind and .2% from solar.

Now we generate less than 35% of the 5.5 million Megawatt-hours we use annually. The rest is carbon-free power from Hydro Quebec and “traditional” power from the New England Grid.  As a whole, New England in 2014 emitted 571lbs/Mwh of generation. Net net we are responsible for a lot more CO2 emissions than we were when Vermont Yankee was still producing.

Our wind generation rose rapidly a few years ago but has since plateaued. It was 293,000 Megawatt-hours in 2016.

As with the nation, natural gas is a bright spot in Vermont. The electricity we’re now importing from the rest of New England would be far more expensive if the price of the natural gas used to produce it weren’t historically low.

Very close to home Vermont Gas (VGS) and NG Advantage (NGA), a company I am chair of (please note I do have a pony in this race) deliver natural gas to significantly reduce CO2 emissions. Vermont Gas sells pipeline gas to residential, commercial, and industrial customers in Vermont. NG Advantage (NGA) trucks gas to large users including factories, asphalt plants, and hospitals located beyond the reach of pipelines; NGA buys the majority of its gas from VGS.

All NGA customers once used oil as a fuel. Because natural gas had become much cheaper than oil on a per BTU basis, they were at a disadvantage compared to competitors located on pipelines. They spent millions of their own dollars (no grants available) to upgrade their boilers to natural gas once they knew we could deliver it to them. Some might well have gone out of business without the savings we could help them achieve.

But they save more than dollars. The smoke that comes out of their stacks isn’t black anymore. They no longer emit SO2 and have virtually eliminated NOx.. Their neighbors like the change; first responders appreciate that natural gas is safer than oil or propane because it is lighter than air and can’t cause a sea of flame in an accident or pollute ground water. Replacing oil with natural gas reduces CO2 emissions by 26%, about 5 lbs. per gallon. Last year alone NGA customers reduced CO2 by at least 160,000,000 lbs.

What does that mean?

It’s the equivalent of taking 15,000 cars off the road.

It also stacks up favorably against CO2 savings from wind turbines. Let’s assume that the 293,000 of Megawatt-hours (Mwh) of electricity generated by wind in Vermont last year reduced CO2 by the full amount of the New England average, 571lbs/Mwh; that’s a total savings 168,768,000 lbs. In other words, NGA’s natural gas was responsible for about the same amount of CO2 reduction as all the wind turbines in Vermont. I’m proud of that. Next year NGA will do better.

Exclusive of sales to NGA, VGS sells almost twice as much gas as NGA. If they weren’t selling that gas, their customers would probably heat with oil or propane as most Vermonters do. If VGS weren’t selling that gas, there’d be another 300 million or so pounds of CO2 discharged annually in Vermont and their customers would be paying more for burning a dirtier fuel. Last year VGS completed an expansion to Middlebury and took over some service NGA used to provide. That’s a good thing; made gas even cheaper for those people and added residential customers whom our equipment isn’t suited to serve. I hope VGS will expand to Rutland where NGA also provides service. If that happy day comes, NGA will use its trucks to serve institutions somewhere else.

But What about the Negatives?

I wrote about fracking safety here and claims that “fugitive emissions” of natural gas outweigh the CO2 reductions in net greenhouse effect here. The facts are that drilling for natural gas is much safer than it’s ever been (but, of course, must be done right).  According to an extensive study by Argonne National Laboratory (done during the Obama administration), the environmental benefit of natural gas use far outweighs the environmental cost of leakage and leakage continues to be reduced while extraction increases rapidly. Moreover, according to the UN International Panel on Climate Change, the bible of climate change, atmospheric methane, the main ingredient of natural gas, is stable to declining despite more drilling than ever.

CO2 levels in the atmosphere, on the other hand, are increasing. That’s one problem natural gas can help with.

And in Conclusion

Renewables alone are not sufficient to reduce atmospheric CO2 as quickly as many people believe it must be reduced to avoid catastrophically rapid climate change. Nuclear power and natural gas both have an important role to play in that reduction. Unless there is massive permitting reform (or massive subsidies), nuclear is very expensive and very slow to deploy. Even where there are massive deployments of solar and wind, natural gas “peaker” plants are needed to fill in for the times when the sun isn’t shining and the wind isn’t blowing.

Thanks to new technology, America has huge new natural gas supplies economically accessible. We are buying American energy because we have product at the best price. We are becoming a supplier of natural gas to the world rather than a dependent on risky foreign oil.

Natural gas is a fossil fuel. Wherever it displaces coal or oil, there is an enormous environmental benefit. Those who oppose natural gas use, no matter how well-meaning, are delaying the day when we can burn less coal and oil. They are imposing the extra economic and environmental cost of dirtier, more expensive fuels on their neighbors, their communities, and the world. We don’t want to make some theoretical perfect fuel the enemy of all the good that increased natural gas substitution can do.

We want to drill (safely, of course), build pipelines where justified, and truck natural gas where pipelines don’t reach and aren’t economic. We don’t need incentives or mandates for this part of our environmental mission; we only need to make sure that our regulatory and permitting processes are reasonable. Natural gas adoption pays for itself. That’s sustainable!

November 28, 2017

Don’t let the Perfect be the Enemy of the Good

Increased use of natural gas has so far been the most effective way to reduce CO2 emissions. Natural gas is an excellent complement to renewables for electricity generation since it can be used effectively at almost any scale to fill in when the sun isn’t shining and the wind isn’t blowing.  Not surprisingly, those who sell competitive sources of energy like nuclear, oil, and coal are not fans of natural gas since it beats them on price, at least in North America. Many, but not all, marketers of renewables object to natural gas because it is a “fossil fuel” and because it is not carbon-free, despite the fact that natural gas is helping to reduce emissions and making renewables more practical.

I’m in the natural gas business so you should assume that I’m affected by self-interest like any businessperson. Nevertheless, this and my next couple of posts will be about why we should be using more natural gas to make the world a better place and why declining to do that means more carbon emissions and makes the perfect (carbon-free fuels) the enemy of the good (less emissions of CO2 and no emission of SO2 and other noxious gasses).

Let’s Start with the State of the World

Despite various climate accords, worldwide emissions of CO2 have continued to climb:

image from naturalgasnow.org

Germany, which has invested very heavily in renewables and has some of the highest electric rates in the developed world, has actually had a small increase in emissions for each of the last two years and has announced that it will miss the emission reduction goals it set for itself. Part of Germany’s problem is that it decided to shut down its nuclear plants after Fukushima. Germany also made a political decision against fracking so natural gas is expensive there (and comes in a dangerous degree from Russia). Renewable can’t replace the baseline power; Germany is burning more coal. The results are blowing in the wind.

And Now the State of the US

Our CO2 emissions continue to go down:

image from naturalgasnow.org

 

The United States is the only nation to meet the climate control goals set for it in the Kyoto Treaty – even though the US Senate never ratified it.   According to the EPA, almost all the US reduction in CO2 is result of a massive switch from coal to natural gas for electrical generation. This switch was driven by simple economics: the invention of horizontal drilling and the development of hydraulic fracturing made natural gas cheaper than coal. Fifty percent less greenhouse gasses are released per unit of energy when natural gas rather than coal is the source of that energy.

The US switched from coal to natural gas largely because natural gas is less expensive. Government didn’t drive this switch. Certainly, the Kyoto treaty had nothing to do with it.  Nevertheless, the switch and the consequent environmental benefits are “sustainable”. They are not dependent on either regulation or subsidy. The US leads the world in carbon reduction because we have allowed new technologies to reduce the cost of cleaner energy. We haven’t insisted on perfection; we have achieved good.

Next post, the state of the State of Vermont

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