Leadership – Thoughts of a Lapsed Physicist

A Call to Arms Re Investing In Our Energy Future

The attached article by Steven Ratner appeared in the March 27, 2018 issue of the New York Times. It raises important questions about how the U.S.is preparing for future economic competition with other countries, particularly China. The questions are not new, but Ratner’s article is a timely reminder that our national leaders need to look forward and make and faciilitate investments now that will benefit us in the future. A dysfunctional and short-sighted Congress in recent years, and now a dysfunctional and short-sighted presidential Administration, are putting the nation’s long-term economic position and leadership role in jeopardy.

I say this for the following reasons: the world is in the early stages of an inevitable transition from dependence on fossil fuels (80% dependence today) to steadily increasing reliance on renewable energy in its various forms. After several decades of development triggered by the OPEC-imposed Oil Embargo of 1973-74, solar and wind energy are now rapidly joining hydropower as significant contributors to global electricity supply. Other forms of renewable energy – geothermal, biomass, ocean – are also experiencing active development. As global populations and water and energy demands increase as we move further into the 21st century, and there is greater attention to reducing the threat of global warming, the markets for renewable technologies will grow significantly. In the past the U.S. has led the movement toward greater use of renewable energy, and had expectations that it would lead the resulting market opportunities. This is no longer true: the U.K. and other European countries lead the world in the development and deployment of offshore wind, and China leads the world in production of solar PV panels and wind turbines. China has clear ambitions to take full advantage of rapidly emerging renewable energy markets, and is now well positioned to soon take the lead in offshore wind deployment. Less impressively, the U.S. only recently placed its first offshore wind turbines in Rhode Island.

The long-term economic consequences are clear: unless the U.S. takes a more aggressive stance toward achieving a major share of these emerging markets, there will be reduced U.S. economic growth and loss of jobs that will go overseas. What is lacking is a clear national commitment to facilitating and expediting a transition to a renewable energy future. This requires action by the U.S. COngress and leadership from the Executive Branch, both of which are now lacking. The GOP-controlled Congress and the U.S. President are still in the thrall of the fossil fuel industry and renewable energy in the U.S. Is not getting the support it deserves. Chinese and European governments are taking a long-term, economically sensible view. Ratner’s article points out that, at this point, the U.S. is not.

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Is China’s Version of Capitalism Winning?
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Steven Rattner MARCH 27, 2018

President Trump’s attacks on Chinese trade practices may be garnering the headlines, but underpinning that dispute lies a more consequential struggle, between liberal democracy and state-directed capitalism.

Of late, it’s a competition in which the Chinese approach has been delivering the more robust economic result. Indeed, implicit in the ferocity of the Trump administration’s attacks on China’s protectionism is the success of that nation’s economy.

Skeptics notwithstanding, China’s model, which has brought more people out of poverty faster than any other system in history, continues to flourish, as I’ve seen firsthand in a decade of regular visits. Meanwhile, liberal democracy — the foundation of the post-World War II order — is under pressure, most significantly for having failed in recent years to deliver broadly higher standards of living.

Here’s one stark example: Last week, Congress finally managed to pass appropriations legislation for the current fiscal year — six months after the budget year began. The 2,232-page bill was cobbled together in a frenzy, without any discussion of national priorities or careful examination of the expenditures.

In contrast, China is driving hard toward its “Made in China 2025” plan, an ambitious set of objectives to upgrade Chinese industry so that, among other things, it can manufacture its own high-value components, like semiconductors. And while we retreat internationally, China’s One Belt One Road Initiative will physically connect China to more than 65 percent of the world’s population.

If you think we have trade problems with China now, just wait.

To be sure, China is a long way from overtaking the United States. Its gross domestic product per person is just $9,380, compared with $61,690 in the United States. Less visible than the sleek modern skyscrapers that now dominate China’s cityscapes are the 700 million people — about half of China’s population — who still live on $5.50 per day or less.

And China’s mercantilist trade practices are indefensible, particularly its use of non-tariff barriers to discourage foreign companies from coming to China, its insistence that non-Chinese companies share their technology, its outright theft of intellectual property and on and on.

That said, I’m confident that China’s mixed system would have produced formidable growth even without these predatory practices. As China marches forward, Washington feels like it’s standing still.

Perhaps the only policy area on which President Trump and the Democrats agree is the need to fix the nation’s crumbling infrastructure. And yet, 14 months after the president was inaugurated, nothing has happened (except for the release of a plan that was quickly derided).

For its part, China continues to build airports, subway systems, renewable-energy facilities and the like at a torrid pace. Even its longstanding pollution problem is being addressed. In the past four years, China has succeeded in cutting concentrations of one pollutant — fine particulates — by 32 percent, roughly what it took the United States 12 years to achieve after passage of the Clean Air Act in 1970.

Next up, artificial intelligence. In mid-2017, China announced a plan to become a global leader in artificial intelligence by 2030, sending shudders through American policy circles. One research report estimated that A.I. could add 1.6 percentage points to China’s growth by 2035.

At the moment, the United States remains the world leader in A.I., and our scientists are working hard to achieve further advances. But from the Trump administration: silence, notwithstanding a parting warning and a call to arms from President Barack Obama’s team.

As a capitalist, I’ve never believed in excessive government intervention in the economy. One of America’s greatest strengths has always been its flourishing private sector. But in a complex, global economy, the public sector should play an important role, and ours just isn’t.

China, despite its Communist heritage, understands the benefits of incorporating a robust free-enterprise element. Beijing bustles with internet entrepreneurs. Venture capitalists are pouring vast sums into a dizzying array of start-ups, including in prosaic industries like retailing. And an increasing number of “national champions” are expanding beyond China’s borders.

Don’t get me wrong. I’m not suggesting that we rewrite our Constitution to emulate China. And I certainly understand the loss of freedom and civil liberties under the Chinese system. But that doesn’t mitigate the need for us to get our government to perform the way it did in passing the New Deal and Lyndon Johnson’s Great Society.

When Russia launched its first Sputnik satellite in 1957, our response was to redouble our efforts and win the race to the moon. While the merits of punishing China for its unfair trade practices are strong, that’s hardly the most important reaction to its extraordinary economic success.

Steven Rattner, a counselor in the Treasury Department under President Barack Obama, is a Wall Street executive and a contributing opinion writer.

The Coal Conundrum

A long article in the October 16th Washington Post, ‘U.S. exports emissions – as coal’ by Joby Warrick, points out the conundrum posed by the U.S.’s abundant coal resources. These coal reserves provide a relatively low cost energy resource that can be burned to produce steam and electricity and improve human welfare in both the U.S. and other countries. However, its combustion produces large amounts of carbon dioxide that when added to the atmosphere causes global warming and associated global climate change. The conundrum arises from a clear conflict of values – the need to provide energy services to people around the world, in particular people in developing countries whose per capita consumption of electricity is well below that of developed countries, and the need to address climate change with its many adverse consequences, identified by many as the most serious problem facing the globe. No easy answer exists to satisfy those on both sides of this conundrum.

Several statements in Warrick’s well-researched article captured my attention, including: “Just a dozen nearby mines, scattered across a valley known as the Powder River Basin (Wyoming), contain enough coal to meet the country’s electricity needs for decades. But burning all of it would release more than 450 billion tons of carbon dioxide into the atmosphere – more than all greenhouse-gas emissions from all sources since 2000.” and “The Obama Administration is seeking to curb the United States’ appetite for the basin’s coal, which scientists say must remain mostly in the ground to prevent a disastrous warming of the planet. Yet each year, nearly half a billion tons of this U.S.-owned fuel are hauled from the region’s vast strip mines and millions of tons are shipped overseas for other countries to burn.”

Given the legitimate needs on both sides of this conundrum I can see only one path to follow to bring the benefits of electricity to as many people as possible while minimizing the risks associated with burning coal. This is to promote the use of energy efficiency technologies wherever feasible, to reduce the demand for coal-based electricity, and expedite the development and deployment of renewable electric technologies such as solar and wind as substitutes for coal. This is already happening to some extent as the world slowly begins to come to grips with the climate change problem, but the pace needs to and can be accelerated. The ability of renewables to meet most of the world’s electricity needs has been documented in several recent studies, e.g., the June 2012 NREL report entitled ‘Renewable Electricity Futures Study’, and what is now needed is a commitment on the part of national governments and international institutions to make it happen as quickly as possible. It is a matter not of technology but of political will and financial resources. Admittedly, such a switch from coal and other fossil fuels (natural gas, oil) that also produce carbon dioxide when combusted, to a renewables-based energy economy, will take time, lots af planning, and lots of money. However, when the full costs of using fossil fuels are taken into consideration, including not just market costs but also health and climate change-related costs (such as coastline flooding due to rising seas, changed precipition patterns that adversely impact water availability and agricultural production), and international tensions due to competition for fossil fuel resources, renewables become a much more attractive and even less expensive long-term option. Renewable resources are also insensitive to cost increases once initial capital investments are made, unlike fossil fuels that rely on a depletable resource that produces uncertain and often volatile costs.

Nuclear power advocates will make some of the same arguments since the process of releasing energy via nuclear fission does not produce greenhouse gases, but nuclear technology faces four serious problems: high cost, safety, the need for long-term radioactive waste storage, and proliferation of weapons capability. If these problems can be successfully addressed, then nuclear-powered electricity can be a viable option for the future. Nuclear power also offers the tantalizing option of nuclear fusion, a relatively safer and cleaner nuclear technology with enormous resource potential, but the problem of achieving controlled nuclear fusion on earth (it is the process that powers our sun) is proving to be the most difficult technological challenge the world has faced to date. It can legitimately be labeled ‘the technology that is always a few years away.’

In sum, the choice is ours – we can continue to use our coal resources without limit or we can move more quickly to a clean energy society that provides needed energy services and minimizes global warming and climate change effects. I vote for the latter.

What Will Historians Say About Recent U.S. Congresses?

American history is filled with ugly periods of political confrontation and no-nothingness and recent years are no exception.

Political dialogue between two of our founders, Jefferson and Adams, was vindictive and nasty. It was only as both approached their final years that comity began to appear in their relationship and they died as reconciled friends on the same day, July 4, 1826.

Andrew Jackson, seventh President of the United States, disregarded an order from the Supreme Court and forced thousands of Native Americans to move from Georgia to the Oklahoma territory, a lasting stain on U.S. history. The Native American Party, renamed in 1855 as American Party and commonly called the Know Nothing movement, was an American political party that operated on a national basis during the mid-1850s. It promised to purify American politics by limiting or ending the influence of Irish Catholics and other immigrants. Mainly active from 1854 to 1856, it met with little success. There have been several other periods of anti-immigrant fervor in American history, dating to the early days of the Republic, and even continuing today.

A number of politicians of both major political parties in the U.S. in the middle of the 19th century continued to support slavery, leading to the formation of the Republican Party in 1854 and the election of Abraham Lincoln as President in 1860. The post-WWII period saw the rise of McCarthyism in the U.S. and it took years for the public and policians to address the damage this ‘ism’ was doing to America. And today we have loud voices taking issue with some of the fundamental tenets of American democracy.

I state all this as my way of getting to what triggered this piece, my concern about the know-nothingness exhibited by people who deny the obvious, that the earth is warming, the oceans are gathering more heat, glaciers are melting, sea levels are rising, and weather patterns are changing as a result of the several greenhouse gases we are adding to the atmosphere, mainly carbon dioxide and methane. The following cartoon by Toles in the Washington Post of 27 September 2015 was the immediate trigger:

It is my firm belief that when historians look back on this period in American history they will be unkind to those politicians and other leaders who disparaged or minimized the reality of global warming and subsequent climate change for their ignorance, short-sightedness, and failure to prepare for the future. My cynical self also believes that many of these ‘leaders’ do understand what science is so clearly saying – it is basic physics after all – but adopt their public positions for political or other self-serving reasons. Even the Pope has enriched this discussion by stating in his recent encyclical: “The warming caused by huge consumption on the part of some rich countries has repercussions on the poorest areas of the world, especially Africa, where a rise in temperature, together with drought, has proved devastating for farming.”

Whatever their reasons they are failing the American public and future generations by failing to act now in prudent ways to forestall greater difficulties and more expensive solutions in the future. A theme I always espouse is that a major responsibility of public officials is to look down the road, anticipate problems, and take steps to prevent problems from developing into crises. In my opinion the U.S. has failed to do this in recent years due to unusual (but not unique) polarization in the U.S. Congress and between the Congress and the President, with a high price attached. Not only is climate change a real, measurable phenomenon that we are still struggling to fully understand with all its consequences, but by failing to take the necessary steps now to move the U.S. more quickly to a clean energy society we are limiting the U.S.’s ability to compete as effectively as it could in future global energy markets. This future is coming, as more and more people around the world are recognizing and incorporating into their plans. Nevertheless, elements of the U.S. Congress still resist change, protect vested interests, and protect their political selves by attacking and denying well documented science. They should be held responsible for limiting the U.S. response to climate change and a changing energy world, and history will surely do so. Unfortunately, they will no longer be in office or responsible for corporate decisions and have to face up to their failure of vision and shortcomings.

The solutions are public education and the ballot box, which in democratic societies can be a slow process. But the understanding of climate change and its impacts on precipitation patterns, animal and plant diversity, storm intensity, public health, and coastline flooding is coming, as is the transition from a fossil-field based global economy to one increasingly dependent on renewable energy. It is Congress’ responsibility to set policies that advance this understanding and movement forward.

The Climate Change Thing – Revisited

I return to this topic because it is a growing global problem that must be addressed, and because I am disturbed by the continuing resistance by some members of the U.S. Congress to acknowledging the reality of global warming and resultant climate change. I am also scared because some of those members are in leadership positions in the 115th Congress that is just getting underway.

What I consider to be uninformed and unscientific global warming denial or minimalization reminds me of several incidents in my own lifetime – the reluctance of some national leaders in the UK and the U.S. in the 1930s to realize the full implications of Hitler’s aggressive and inhumane practices; suppression of public discussion of the dangers of civilian use of nuclear power in the name of developing nuclear weapons to oppose Soviet aggression in Europe; failure in the 1960s to understand the nationalistic focus of Vietnam’s struggle for independence from France in the name of resisting Communist advances in Asia; resistance to environmental protection in the name of economic development; and more recently our invasion of Iraq in the name of disabling non-existent weapons of mass destruction. I know that some, perhaps many, people will disagree with some or all of these characterizations, but the lesson for me is that leadership that is not open to a range of views can lead us into quagmires of human suffering.

Global warming and climate change is one of those issues. James Inhofe, the new Chairman of the Senate Environment and Public Works Committee, is a human-induced global warming denier, apparently based on his religious beliefs. He may be sincere in these beliefs – how could global warming be occurring if G_d didn’t want it to happen – but just as sincerely I believe him to be wrong. I am a trained scientist who believes that science is an avenue to understanding and truth as best we can know it, and the science increasingly says that carbon emissions are increasing the greenhouse effect in the earth’s atmosphere. This changes the energy balance between the earth and the sun, resulting in slowly but steadily increasing temperatures on earth. What is especially scary is the heating of the oceans, both surface and at depth, which provide the energy for hurricanes, typhoons, and other weather events. By changing the climate this warming also changes precipitation patterns that are our major sources of water, and produces adverse effects on environment and public health. By not addressing these issues now our leaders are committing future generations to having to deal with these issues, and at much greater cost. It has also always bothered me that those most vulnerable to the adverse impacts of global warming are those least responsible for and least able to deal with it – poor people in many countries and on island nations.

So what difference does it make if Sen. Inhofe, and others like him, are climate change deniers? Unfortunately, he and others (here I bring to mind House Speaker Boehner and Senate Majority Leader McConnell) are in a position to stop or at least slow down federal action to control greenhouse gas emissions, delaying for at least two years U.S. action, in concert with others, to counteract climate change. His and their behavior also sends a signal to young people to discount science and overwhelming scientific consensus, on an issue that will undoubtedly impact their lives. It is also a negative reflection on the quality of U.S. governance.

I would also note that these leaders will not be around to reap the whirlwind of their decisions. Climate change is a long-term issue, although some impacts are already becoming visible, and those making decisions for short-term politichal gain will not be around to face the voters when the bill comes due. Pressure from an educated public is the best avenue I see to changing this situation and putting us on a more responsible public policy path. Here’s hoping that not too much damage is done in the 115th Congress, and that climate change issues will be an important topic of discussion in the 2016 elections.

Looking Back at Energy Policy in the 1970’s

Recently I have spent some time cleaning up some boxes in my basement, as ‘requested’ by my wife. Three of the boxes contained personal files from my several years as Staff Scientist with the U.S. Senate Commerce Committee in the mid 1970’s. This was the period following the Arab Oil Embargo of 1973-4 when the U.S. first began to think seriously about energy policy. The history of this period is still largely to be written, and it promises to be a rich history. It also represents a unique period in recent American political history in that Democrats and Republicans occasionally cooperated to pass legislation that was deemed to be in the national interest.

Reviewing the files in the boxes took me several days because I.found the contents much more interesting than anticipated after 35 years of non-attention. I also will donate the files to the Senate Archives after I have absorbed more of and thought more about the contents.

The Oil Embargo focused U.S. attention on the country’s significant and increasing dependence on imported oil from unstable and often unfriendly parts of the globe. While only about a quarter of total oil consumption was affected at the time, the Embargo was a rude shock to Americans when they had to endure higher prices and long lines at gas stations and even alternate day access to the pumps based on their license plate numbers.

Suddenly, energy became a dominating issue and the Ford Administration and the Congress were struggling to reassure the American public and devise policies that addressed this increasing import dependence. Lots of disagreements ensued, particularly on oil pricing, but attention also began to be focused on limiting energy demand and indigenous energy resources. Thus was born a large push for greater use of America’s large resources of coal and for increased use of nuclear power. Most economists talked of the one-to-one relationship between gross national product and energy consumption (not true, as has subsequently been demonstrated) and a favorite theme of nuclear supporters at the time was to call for a “doubling every decade”, meaning that we should double the number of nuclear power plants every ten years until the turn of the century. It was also a time when domestic oil production had just peaked and natural gas supplies were thought to be in limited supply. This led to restrictions on the use of natural gas, reduced use of oil for power generation, announcements of many new nuclear power plant construction projects, increased attention to reducing energy demand in buildings, industry, and transportation, attention to non-fossil fuel energy resources (read ‘renewables’), and calls for a national energy strategy. In the intervening years we’ve made progress on a number of these issues, some more than others, but we still lack a national energy strategy, a critical missing piece as we penetrate further into the 21st century.

A major step forward was the passage in 1975 of the Energy Policy and Conservation Act (EPCA – Public Law 94-163), the country’s first comprehensive energy legislation. It passed that summer in the House by more than a 3:1 margin and by 3:1 in the Senate, triggering a 3-month House-Senate Conference to iron out differences. The bill, as finally negotiated, was signed by President Ford just before Christmas that year despite Republican threats of a Presidential veto. It created many features of our current energy scene, which are discussed below. I also want to recognize those I consider the major legislative leaders, both Republican and Democrat, who fought for this legislation across party lines and brought it to the President’s desk. I do not believe that they have yet received the full recognition that they richly deserve.

EPCA’s primary goals were to increase energy supply, reduce demand, put a focus on energy efficiency, and give the President more tools with which to respond to energy supply disruptions. It’s primary actions were to:
– establish the Strategic Petroleum Reserve. The need for such a reserve had been recognized for decades, since the 1940’s, but the Oil Embargo underscored the critical need for such a reserve.
– Part B/Title III established the Energy Conservation Program which gave “authority to develop, revise, and implement minimum energy conservation standards for appliances and equipment.” It also authorized an appliance labeling program, to assist consumers in making energy- and cost-wise purchasing decisions.
– Part A/Title III established the Corporate Average Fuel Economy (CAFE) standards for new automobile fleets. This legislation, which remained unamended for 32 years, is still the nation’s most impactful energy conservation measure.
– other provisions included loan guarantees to encourage domestic coal and oil production by smaller firms, and additional presidential authority to act in times of emergencies.

The principal legislative leaders behind EPCA (see photos below) included Fritz Hollings (D-SC) who was the prime mover in the Senate of the CAFE legislation, Warren Magnuson (D-WA) who chaired the Senate Committee On Commerce, Henry ‘Scoop’ Jackson (D-WA) who chaired the Senate Committee on Interior and Insular Affairs, Ed Muskie (D-ME) who chaired the Senate Committee on Environment and Public Works, Chuck Percy (R-IL), Ted Kennedy (D-MA), and John Tunney (D-CA), all strong Senate supporters of energy conservation, John Dingell (D-MI) who chaired the House Energy and Commerce Committee, Harley Staggers (D-WV) who chaired the House Science and Technology Committee, and Phil Sharp (D-IN) who shepherded the CAFE legislation through the House. One must also give credit to President Gerald ‘Gerry’ Ford of Michigan who signed the bill into law despite severe pressure not to from many of his constituents and advisors. All deserve the thanks of a grateful nation for putting national interest ahead of party politics as we don’t do too often today.

My final thought is the recognition that critical energy issues were clearly identified in the 1970’s, 40 years ago, but that progress since then has been slower than then hoped for. This has hurt the country in terms of preparing for the future (wje still lack a national energy policy codified by the Congress), less job creation and economic growth in clean energy industries, and unnecessary environmental degradation. We have made progress in the years following the scary wake-up call to the nation following the Oil Embargo and the Iran-Iraq War of the late 1970’s when global oil production was curtailed. Nevertheless, we can and must do better in the future if we are to successfully combat global warming and climate change (this became a public issue only after Jim Hansen at NASA began to talk about the issue in 1979) and ensure America’s place in the emerging and inevitable renewable energy society.

In order, left-to-right: Sen. Ernest ‘Fritz’ Hollings, Sen. Warren Magnuson, Sen. Henry ‘Scoop’ Jackson, Sen. Ed Muskie Sen. Ted Kennedy, Sen. John Tunney, Sen. Charles ‘Chuck’ Percy, Rep. John Dingell, Rep. Harley Staggers, Rep. Plil Sharp.