Category Archives: Science & Technology

Speaking of Storing Electricity…

battery_storageIn the previous post, I quoted Dominion Resources CEO Thomas F. Farrell II as alluding to the impracticality of storing electricity on a large scale. He is indubitably right about the high cost of storage today, but scientists and entrepreneurs are looking for ways to drive the costs down.

Battery storage of electricity is no more than a niche business at present. In our part of the country, it is used mainly to help PJM Interconnection, which maintains wholesale electricity markets, make tiny, fine-tuned adjustments to equalize the supply and demand of electricity on the grid. But some say that advances in battery technology will make it economical one day to store large amounts of surplus electricity generated by wind and solar power during periods of peak production for use during other times of the day.

Given the strategic importance of power storage, it is interesting to note the submission of HB 452 by Del. Patrick Hope, D-Arlington, to create a Virginia Energy Storage Consortium. Here is a summary of the bill:

Establishes the Virginia Energy Storage Consortium as a political subdivision of the Commonwealth for the purpose of positioning the Commonwealth as a leader in research, development, commercialization, manufacturing, and deployment of energy storage technology. The powers of the Consortium include (i) promoting collaborative efforts among Virginia’s public and private institutions of higher education in research, development, and commercialization efforts related to energy storage; (ii) monitoring relevant developments nationally and globally; and (iii) identifying and working with the Commonwealth’s industries and nonprofit partners. Staff support shall be provided by the Department of Mines, Minerals and Energy. The measure expires on July 1, 2021.


Mobility-As-a-Service Is Coming Soon

Ford Motor Co. CEO Mark Fields -- now pushing mobility as a service.

Ford Motor Co. CEO Mark Fields — now pushing mobility as a service.

by James A. Bacon

In the world of surface transportation, self-driving cars are generating a tremendous amount of excitement. While such vehicles undoubtedly will transform the driving experience, I question whether they will alter the underlying economics of transportation. Yes, they will be safer, and they even may allow a passenger to stream Netflix or answer emails instead of keeping his eyes on the road. But there is little in the nature of autonomous cars that will alter an individual’s calculation whether to drive solo, carpool, walk, bike or take mass transit to work.

What could change the underlying calculus of transportation decisions is the concept of Mobility As a Service. I highlighted one of the world’s first experiments a year-and-a-half ago in “Car-Lite Burbs,” describing a project by Daimler AG (owner of Mercedes Benz) that bundled access to scooters, cars, circulator buses, destination shuttles and Car2Share carpooling in a monthly subscription service for residents of the Rancho Mission Viejo development in California.

Now comes news that Ford Motor Co. and General Motors Co. also are thinking beyond the sale of automobiles to individuals and in terms of providing mobility as a service. This trend, if it takes off, could result in people purchasing fewer cars and riding more vans and buses, thus cannibalizing automobile sales. But the big auto companies see growth opportunities in the transportation market outside cars.

At the Consumer Electronics Show Monday, Ford CEO Mark Fields said the company plans to diversity into “transportation services” beginning in 2016. The transportation services sector, which includes buses, cabs and passenger rail, is a $5.4 trillion market, reports the Wall Street Journal. (I presume that is the global market, not the U.S. market.) “Ford and all industry competitors receive virtually no revenue today” from that sector, he said.

Ford has experimented with mobility services, such as ride-sharing and pay-by-mile rental vehicles but has yet to launch a full-scale effort. Apparently, that will change in 2016. When asked if Ford might form a new subsidiary to make a strategic investment in ride-sharing, Fields said “We are open to all possibilities.”

The previous day, General Motors announced a $500 million investment in Lyft, Inc., the ride-sharing competitor to Uber Technologies. “We see the future of personal mobility as connected, seamless and autonomous,” said GM President Dan Ammann in a statement. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”

Much of the buzz focuses on the move of Ford and GM into driverless cars. Just imagine how much less it would cost to provide Uber- or Lyft-style service if there weren’t a driver to compensate. But the looming transportation revolution is much bigger. While the top 20% or 30% income earners might choose to stick with solo cars (whether self-driving or not), a far larger share of the market is looking for affordable transportation services, and that could include riding on vans, jitneys, buses or mass transit as well as access to a car as needed. The really big play is integrating these transportation modes and bundling them into a unified mobility service.

Bacon’s bottom line: Policy makers in Virginia need to understand that the future of transportation demand will not be a straight-line projection of past trends. The shape of the transportation future in 2035, twenty years from now, will look nothing like transportation today. Yes, driverless cars are likely to be part of the mix. But that’s only part of the equation. There is a good chance, in the major metros at least, that hundreds of thousands of Virginians will be subscribing to mobility-as-a-service packages.

How will that affect the demand for new roads and mass transit services? I have no earthly idea. But I think it would be prudent to begin thinking about these things before plowing billions of dollars more into transportation infrastructure that very well could become obsolete in a couple of decades.

And how will private-sector mobility-as-a-service competition affect entities like the Washington metro, plagued as it is by poor governance, poor finances, poor management, union featherbedding, huge maintenance backlogs, declining ridership and other ills too numerous to describe? Or smaller bus-and-rail services in smaller metros, for that matter? It could well put them out of their misery.

$1 Billion in Bonds for R&D Initiatives

Virginia Tech robotics competition team

Virginia Tech robotics competition team

by James A. Bacon

Governor Terry McAuliffe has unveiled a $2.43 billion bond package, about $1 billion of which will go to Virginia colleges and universities for technology initiatives.

“The bond package represents the largest research-oriented capital investment in the Commonwealth’s history as well as the largest state investment,” states the press release issued by the governor’s office. “The chief focus of this bond package will be strengthening research and workforce development in high-demand fields at Virginia’s four-year institutions of higher learning and community colleges.”

Stated McAuliffe in making the announcement at the Virginia Commonwealth University (VCU) Medical Center yesterday: “If we are going to build a new Virginia economy, we must make smart investments in research, higher education, veterans, public safety, tourism and environmental stewardship that will yield returns for decades to come.”

The proposed bond issue will allocate $100 million over two years in “competitive grants for research activities,” and $40 million over two years “in cash incentives for research and matching funds to secure federal grant funding.” Funds will be used to renovate research labs, purchase equipment and attract top talent to higher education institutions. The state will leverage the funds through public-private initiatives and by focusing on centers of excellence.

“The goal of the research component of this initiative is to put Virginia on the map as the best place in the nation for entrepreneurs to start their businesses and design the next generation of revolutionary products,” states the announcement.

Another $850 million will go to new buildings, labs, classroooms and renovations at VCU, VirginiaTech, Old Dominion University, the University of Virginia, Longwood University and several community colleges.

Bacon’s bottom line: The top priority of any bond package is to fit within the financial parameters — debt service accounting for no more than 5% of total revenue — required to maintain Virginia’s AAA credit rating. I presume that McAuliffe scaled the size of the $2.4 billion proposal to the bond-issuing capacity that will be freed up by retirement of old debt and the anticipated growth of state revenue projected over the next two years.

As for funding priorities, McAuliffe’s instincts are right — we need to invest in the industries of the future, not prop up the industries of the past. The assumption underlying his initiative is that pumping money into university buildings, labs and research programs will help build the industries of the future. Such a conclusion seems intuitively obvious but bears examination. As we move in for a closer look, questions arise:

(1) To what degree is R&D lab space and equipment a constraint on recruiting research scientists (and the grant money they bring with them) to Virginia universities? Is McAuliffe proposing the R&D equivalent of shell buildings used to entice manufacturers? Build it and they will come?

One could make the argument that the hard part in building an R&D program is recruiting star scientists, not building buildings and labs for them. Say Virginia Tech, UVa or VCU could land a research scientist who would bring $10 million in federal or industry research dollars with him. Surely it would be a relatively modest a challenge to find him (or her) lab space and equipment in short order. Might there be other ways to recruit star research scientists — to pay them more, for instance, as Texas has used a bond issue to do.

(2) To what extent will higher R&D spending at Virginia universities result in the local commercialization of technology, creation of opportunities for local entrepreneurs and local job creation? Tech, UVa and VCU all can point to anecdotal success stories, and each can point to research parks that have filled up with tenants. But add it all up, and what does it amount to? Do Blacksburg, Charlottesville and Richmond have the support resources — tech-savvy management, early-stage capital — required to leverage R&D into spin-off jobs in the local economy?

Northern Virginia has Virginia’s most advanced technology sector, the deepest technology management bench to recruit from, and the most advanced venture capital sector. If spinning off entrepreneurial opportunities is a key part of the mission, wouldn’t it make sense to build the R&D capacity of Northern Virginia’s largest institution of higher ed, George Mason University? GMU doesn’t even get broken out in the list of universities receiving funding support. What the heck is going on? Continue reading

How the Digital Trinity is Transforming Health Insurance

surdakby Christopher Surdak, JD

In his recent post, “The Politics of Big Data,” my friend and colleague Jim Bacon asked some pertinent questions regarding how our government, and our society at-large, can put data to use for the common good. In a fairly short discourse Jim hit on a range of explosive topics, from privacy, data sovereignty, property rights, Universal Service, government regulation and legislation, universal health care, Obamacare and Medicare/Medicaid, predictive analytics and preventative medicine, and more. Each of these could fill a book in their own right; I should know, as I’m working on those books right now!

Of all of the issues raised by this discussion, the one that immediately came to mind was that of the use of our individual data to support the effective delivery of healthcare. As I have written and spoken of extensively in the recent past, healthcare stands to be the industry most disrupted by the application of Big Data in the coming decade. (Indeed, I’m keynoting a discussion on exactly this disruption at the American Health Information Management Association information governance conference this week.) In no other industry is so much valuable information put to so little use, for so little gain, at so much cost, thereby leading to suffering, the waste of human life, and the ineffective expenditure of so much treasure.

Why is this so? Why is our health system so sickly when compared to that of other countries? Why does healthcare seem to extract so little value from information, when compared to other industries? Is it from too much government regulation, or too little? Is it from the influence of commercial special interests such as the payers, or the professional special interests of practitioners, such as the AMA? Is it because our technologies cannot meet our needs, or is it because we are not prepared to accept the implications of those technologies? I would argue that all of these factors are at play in this discussion; that all of the ranting that accompanied Jim’s post were all equally spot on, and all completely off the mark.

All of these positions are equally accurate, and equally pointless in the real world. Whether healthcare providers put patient data to work for the common good or their own good is irrelevant; it will be put to work in any event, with significant unintended and extremely disruptive consequences. Whether special interests or patients will benefit from the use of data is not open to question. The answer is: both will. Whether or not our privacy will be sacrificed or not is also a pointless question; of course it will. And finally, whether or not we will willingly give up our privacy in order to gain these benefits from our data is a further pointless question; we already have.

Disruption in Insurance: The Canary in the Coal Mine for Healthcare

The best example I can give of what WILL happen in healthcare over the next decade, equally in Virginia as with the other 49 states, can be seen in what is rapidly taking over the insurance industry across the country. Insurance is an old-school, highly-regulated, data- and money-intensive industry. Insurers have both access to massive amounts of very private information on all of us, and intense motivation for putting that data to use. The potential for profit, and hence abuse, is exceedingly large.

But, the motivation for using our data isn’t necessarily nefarious. Insurers look at each of us to determine our risk profiles so that they can both make money (that is, remain solvent so their checks to benefactors or debt holders don’t bounce) and provide coverage to all segments of the population at affordable prices (or at least the perception of affordability).

The regulatory framework that governs the insurance industry is well over a century old. It is state-based, state-enforced, and is designed to provide universal coverage to people from all walks of life. If you drive a twenty-year-old pickup truck, you probably pay proportionately less than someone who drives a new European sports sedan. If you’re a 60-year-old who smokes a pack a day and loves Miller Time, you’re likely to pay more for your life insurance than a 24-year-old jogger and yoga nut. Our regulatory framework has been designed to try to make insurance available and fair for all, and to ensure that insurers remain profitable, but not excessively-so.

Despite all of this, insurance is going through a fundamental, massively disruptive, and permanent transformation right before our eyes. This transformation is being driven by what I call the Digital Trinity of mobility, social media and advanced analytics. These three technologies trends are completely transforming how we live, work, play, and interact with our world, and they are causing enormous unintended consequences across our entire society. These changes are comprehensive, and old-school, hard-line, heavily regulated industries such as insurance are the MOST likely to be disrupted, rather than the least likely.

To see these disruptions consider this. Car insurers have deployed smartphone apps that allow them to track the driving behaviors of their customers in real-time, turn by turn. These apps keep track of how fast you accelerate, how hard you brake, how fast you drive down the residential streets of your neighborhood, and whether or not you text or talk while driving. These apps create huge amounts of extremely sensitive data, they are massively invasive of your privacy, they provide an enormous source of information for discriminating against you in setting your insurance rates; and they are massively popular.

If I told you three years ago that car insurance companies soon would be tracking all of this information on the drivers that they cover, you might think I was crazy. If I then told you that customers would sign up for such apps by the tens or hundreds of thousands, in order to gain a discount in their rates, you’d probably think I was certifiable. Americans are voluntarily giving up extremely intimate details on their behavior, surrendering their Constitutionally inalienable rights, and opening themselves up to all manner of government and commercial scrutiny in order to save 15% on their car insurance? Yes they are, in droves. You may think this sounds crazy, and you’d be right.

Yet, this is exactly what is going on right now. Innovators such as Progressive Insurance started these behavior-tracking apps, providing discounts to drivers who demonstrate good behaviors. These apps have been so successful, that now all insurers are scrambling to deploy similar apps with similar capabilities, while they still have time. Continue reading

Why Is GMU Stonewalling?

stone_wallby James A. Bacon

Two months ago, Jagadish Shukla, a George Mason University professor, was one of twenty climate scientists to affix their signatures to a letter calling for a federal investigation into “corporations and other organizations that have knowingly deceived the American people about the risks of climate change.” It was imperative, stated the letter, that “these misdeeds be stopped as soon as possible so that America and the world can get on with the critically important business of finding effective ways to restabilize the Earth’s climate.”

Outraged by the assault on free speech, climate skeptics brought to light some troubling facts about Shukla’s activities. Not only did Shukla take in $250,000 in salary and compensation from GMU, he paid himself $314,000 in 2014 as president of the Institute for Global Environment and Society (IGES), the recipient of generous federal grants, and that doesn’t include the $146,000 salary paid to his wife Anastasia Shukla.

A month ago, the controversy jumped from the Internet to the political realm when Congress got involved. Rep. Lamar Smith, R-Texas, sent a letter informing Shukla that it was “foreseeable” that the Committee on Science, Space, and Technology would investigate him, along with IGES, for using science-research monies provided by taxpayers while participating in partisan political activity. Although Shukla later stated that he signed the letter in a personal capacity, he did identify himself as a GMU professor, and he did post the letter on the IGES website.

The Smith letter asked Shukla/IGES to preserve a “full and complete record of relevant communications” should the Committee decide to request documents. The request encompassed all e-mail, electronic documents, and datacreated since January 1, 2009. The congressman also asked Shukla to exercise reasonable efforts to notify employees, former employees, contractors and third parties to do the same.

Shukla is a high-profile member of the GMU faculty, whose combined salary/compensation exceeds that of GMU’s president and makes him among the highest-paid professors at the university, if not the highest paid. If you’re looking for a local hook on this story, Shukla serves on Governor Terry McAuliffe’s Climate Change and Resiliency Update Commission, which is making recommendations to the governor regarding state climate change-related policy.

While the Congressional committee seems to be focused on Shukla, I would suggest that certain questions should be put to his employer, George Mason University.

  • What is GMU’s policy regarding faculty drawing salaries from outside organizations?
  • Did Shukla disclose to GMU that he and his wife were drawing salaries from IGES?
  • Did GMU review the arrangement to ensure that it complied with the university’s disclosure requirements, conflict-of-interest guidelines and other rules?
  • Has GMU been alerted to the congressional request for Shukla and IGES employees to preserve all electronic documents?
  • Do any such documents reside on GMU servers, and what measures, if any, has GMU put into place to ensure that the documents are preserved?
  • Has GMU “lawyered up”? Has Shukla “lawyered up?” If so, is GMU covering Shukla’s legal expenses?

Let’s crowd source this bad boy!

Contacting three separate people on the university’s communications team over the past three weeks, I have tried repeatedly to get answers from GMU. I received no answer from two spokepersons, and a non-responsive email response from a third. Clearly, GMU is stonewalling. To get answers of any kind, I apparently have no choice but to file FOIA requests. I expect that GMU will maintain that certain correspondence is privileged, either because it pertains to “employee” matters or “legal” matters. I get only one shot at this, and I want to make sure I craft the FOIA request correctly.

I would invite readers to crowd-source this story. If you dig up something worthwhile through Internet research, or if you have suggestions on how to word the FOIA request, let me know in the comments.

Virginia’s Commitment to Smart Cars and Smart Roads

Virginia Tech smart car

Virginia Tech smart car

by James A. Bacon

Tom Dingus has done as much as anyone to advance vehicle automation and the advent of self-driving cars. Many of the automated features found in automobiles today — automated braking, active cruise control, rear-view cameras — were tested at the Virginia Tech Transportation Institute, where he serves as director. But Dingus is cautious about predicting the imminent arrival of self-driving cars.

Estimates range from three years to thirty for how long it will take before self-driving cars dominate the road, he told the Governor’s Transportation Conference yesterday. He would lean toward the thirty-year estimate, he said.

Automated cars are excellent at dealing with routine situations. If the car ahead jams on its brakes, the automated car will respond more quickly than the typical human could. But most traffic fatalities don’t occur in routine situations, Dingus said. They occur in “anomalous,” or unusual, situations for which cars have not been programmed to respond. “You have to solve real-world problems.” And that takes time.

Despite the challenges, Dingus said, connected vehicles — vehicles that communicate data with each other and the road infrastructure — potentially could eliminate 70% of all crashes.

Virginia is in the vanguard of research on vehicle automation and connected vehicles. The Virginia Tech Transportation Institute is recognized as a national leader, having forged partnerships with leading technology and automotive companies, that generates millions of dollars in research contracts annually. The state’s Transportation Research Council, which does work on smart infrastructure, also is highly regarded nationally. Virginia Automated Corridors on Interstate 66 and Interstate 495 provide real-world “test beds” for both connected vehicles and smart infrastructure.

Meanwhile, Virginia Department of Transportation (VDOT) personnel are taking active part in an American Association of State Highway and Transportation Officials (AASHTO) coalition that is studying connected vehicles, and VDOT is the lead funder in a pool-funded research initiative geared to move connected-vehicles from research to pilot projects and testing.

The emphasis on smart technology, said Virginia Highway Commissioner Charlie Kilpatrick is part of a larger shift in thinking at VDOT. For decades the department had a civil engineering mindset that its  jobs was to build bridges and roads. “Our job is not about building bridges and roads,” he said. “It’s about moving people.”

VDOT sees the potential to use technology to improve system performance — reducing accidents, improving safety and increasing reliability, said Dean Gufstafson, state operations engineer. And the department is asking lots of new questions: What will the future of transportation look like? What investments does VDOT have to make? What is the role of government?

Catherine McGhee, VDOT’s safety chief, described how connected vehicles could work with connected infrastructure to make roads safer for public servants who work in and near the roads — construction workers, state police, emergency service personnel. A state trooper can carry a device that alerts cars when he’s on the side of the road so that cars will switch lanes. Similarly, a road worker can wear a vest that informs cars when he steps beyond the traffic cones.

Virginia had 700 traffic fatalities last year, said McGhee. That’s too many. And the new technologies can make a big difference.

Building an “Unmanned” Industry Cluster

Virginia Tech's smart road simulates a wide variety of driving conditions.

Virginia Tech’s smart road simulates a wide variety of driving conditions.

by James A. Bacon

Two decades ago the Virginia Tech Transportation Institute (VTTI) had two sponsors, fifteen employees and a dream of becoming a major player in testing new automotive technologies. Sixteen years ago, it opened a literal road to nowhere — a 2.2-mile “smart road” cutting through the hills of Montgomery County that ended in a dead-end loop.

Today, according to John Ramsey writing in Sunday’s Richmond Times-Dispatch, VTTI has 75 sponsors and 475 employees. The institute has helped attract $300 million in research funding to the state. VTTI is by most measures the largest transportation institute in the country.

The McAuliffe administration is hoping to turn that into a magnet for attracting autonomous-related corporate investment to Virginia. The autonomous vehicle initiative is one of the more sophisticated — and promising — economic-development efforts launched by Virginia in recent years. It encompasses more than smart cars. It includes drones, another up-and-coming industry — earlier this year, the first delivery of a humanitarian package by drone took place in Wise County — and autonomous boats.

“They seem like disparate industries, but when you start to think about sensor technologies, aerodynamics, there’s a lot of overlaps in capabilities that will support a land vehicle as well as an air vehicle or marine,” said Secretary of Technology Karen Jackson.  She says Virginia has the eighth largest concentration of autonomous-related companies in the country, including those that build sensors and analyze data.

Virginia formed an unmanned systems commission this summer with the following goals:

  • Identify the state of all unmanned systems industries in Virginia. This review should look comprehensively at the industry, including the supply chain from pre-competitive research and development through production and operation.
  • Identify challenges and needs of the unmanned system industry that may be met with Virginia assets for each domain of unmanned systems (aerial, land, maritime) including but not limited to workforce, research and engineering expertise, testing facilities, manufacturing facilities, and economic development opportunities within the Commonwealth.
  • Provide recommendations, develop a value proposition for economic-development marketing purposes, and submit periodic reports on its activities and findings.

Virginia can do much without showering subsidies and tax credits on the industry. For instance, the state has designated 70 miles of highways as “Virginia Automated Corridors” where fully automated cars can be tested on public roads. The state has implemented a simpler process for getting vehicles certified and on the road for testing. The Wallops Island spaceport is building a runway for drone testing, while an initiative is underway in Hampton Roads to develop autonomous boats.

Bacon’s bottom line: Google, Tesla and conventional automobile manufacturers are, and will continue to be, dominant players in developing and manufacturing autonomous cars, but there’s no reason that Virginia can’t get a share of the spoils from this emerging industry. The technology is new and in flux. The sector is big and sprawling, and hasn’t established a geographically centered clustered yet.

From a 10,000-foot perspective, Virginia seems to be going about this the right way, combining Virginia Tech’s R&D strengths with targeted economic-development marketing and the Virginia Department of Transportation’s (VDOT) opening up of state roads for real-world testing.

The only piece not mentioned in Ramsey’s story is evidence of any study of the state’s liability laws. If anything holds back the development of autonomous vehicles in Virginia, and other states, it will be a hostile tort climate. Given the fact that 90% of all traffic accidents occur as the result of human error, autonomous vehicles will likely make the roads far safer. But if accidents occur involving autonomous vehicles, as inevitably they will, it will be virtually impossible in some instances to disprove plaintiff claims that the fault resided somewhere in the millions of line of code. (See the “Demon in the Machine.”) Sorting out liability issues in a way that both promotes the public welfare and compensates accident victims from genuine wrongs would give Virginia a huge competitive advantage.

One thing Virginia is indisputably good at is producing lawyers. We ought to bring our best legal minds together — I nominate Chris Spencer, one of the top automobile liability attorneys in the country — to craft model tort legislation. If we can add that to our list of assets, we truly can make Virginia a national leader in unmanned vehicles.