Category Archives: The Economy

Fracking the Mother of Presidents

fracking rigBy Peter Galuszka

Controversial hydraulic fracking appears to becoming a distinct possibility in areas south and east of Fredericksburg on land that is famed for its bucolic and watery splendors along with being the birthplaces of such historical figures as George Washington, James Monroe and Robert E. Lee.

After several years of exploring and buying up 84,000 acres worth of leases from Carolina to Westmoreland Counties, a Dallas-based company that uses a post office box as its headquarters address participated in the first-ever public discussion of what its plans may be.

According to the Free-Lance Star, the meeting was put together by King George County Supervisor Rudy Brabo to air concerns and hear plans of Shore Exploration and Production Co., which is based in Dallas and has offices in Bowling Green. Its headquarters address is registered with the State Corporation Commission as P.O. Box 38101 in Dallas.

About 100 people attended the meeting April 14, but judging from the newspaper’s account, not many questions were answered. Participants repeatedly asked Shore CEO Ed DeJarnette what his plans were regarding fracking and who would be responsible for damages if something went wrong.

DeJarnette responded that his firm is merely buying up leases and is looking to sell them to other gas drillers and operators. The state’s Department of Mines, Minerals and Energy issues permits one at a time and is responsible for enforcing them, he said.

Hydraulic fracking and horizontal drilling have touched off a revolution in the American energy industry in recent years, particularly in the Marcellus Shale gas formations that stretch in the Appalachians from New York State to southwest Virginia. The methods have also been used to reach rich shale oil deposits in North Dakota and other western states.

Fracking has been used as a drilling process for years according to media accounts and authors such as Gregory Zuckerman whose recent book “The Frackers” covers the process’s increasingly widespread use in the past several years.

Among concerns are that the toxic chemicals mixed with water and then pumped hundreds of feet underground could eventually ruin groundwater serving streams and wells. Other concerns are that the inevitable “flowback” in drilling will require surface ponds to handle toxic waste. In places such as Pennsylvania and West Virginia where fracking is permitted, quiet country areas are badly disturbed by the roar of diesel generators at drilling sites and from trucks that are constantly delivering drilling supplies. Methane can leak from drilling rigs, further complicating global warming issues, and flash fires can be problems. Fracking can also consume great amounts of water which often has to be trucked in.

On the plus side, holders of mineral leases can receive great sums in royalties and various taxes and other payments can boost local tax coffers. Natural gas is cleaner and less deadly source of energy than coal, plays a big role in electricity power generation in the Mid-Atlantic.

At the King George meeting, DeJarnette told the audience that he preferred using nitrogen as an element in fracking rather than water, but there were few details in the newspaper story.

While providing scarce details on who would actually handle the drilling, how it would be done and who would be responsible for damages, DeJarnette repeatedly emphasized the monetary benefits and jobs fracking would bring.

If it proceeds, fracking in the Taylorsville Basin would likely be confined to Virginia, which is more business-friendly than Maryland where the basin also extends. The field stretches across the Potomac River into Charles, St. Mary’s, Calvert and Anne Arundel Counties but Maryland has a moratorium on fracking until it can be studied further.

DeJarnette says he wants drilling to start by late this year or in 2015. Major oil firms explored the Northern Neck area and found some evidence of oil and gas deposits there in the 1980s.

Protests Pick Up Against Bay LNG Exports

cove point By Peter Galuszka

Protests are picking up against plans to convert a liquefied natural gas shipping facility on Maryland’s western shore of the Chesapeake Bay at Cove Point so  it can both export as well as import the product. The proposed, $3.8 billion project is owned by Richmond-based Dominion Resources.

Four protestors were arrested today for blocking the entrance to the Allegany County Courthouse in Cumberland, Md.  according to the Chesapeake Climate Action Network which has officials in suburban Washington and Richmond.

They are trying to raise concerns that the Dominion project will increase the likelihood of using controversial hydraulic fracturing for gas exports at Cove Point and lead to more greenhouse gas emissions.

The Chesapeake network is just one of a number of activist groups that are drawing attention to fracking for natural gas. The method, which yields more product from hard-to-reach geological formations, involves the use of powerful chemicals. Other worries are that wells leak and are prone to fire. According to the network’s Kelly Trout, leakage throughout the LNG conversion cycles at Cove Point and at its shipping destinations could case as much or more greenhouse gas emissions as coal.

The Cove Point issue of interest to me because I have visited written about the facility and am familiar with coal mining and burning which fracked gas is displacing. Just a few years ago, green groups correctly protested what was going on in the Appalachian coalfields with highly destructive mountaintop removal and mine deaths. There is no question that coal is a major and negative factor for the lives of its workers and the environment in general. It is the single largest contributor to greenhouse gas emissions in this country.

Coal, however, is slipping in importance precisely because of the rise of fracked gas. Although gas prices have been rising recently partly because of harsh winter weather, the surprising crash in gas prices four years ago caught the energy industry off guard. A decade ago, coal had supplied half of the electricity generated in this country and that number has slipped to 35 percent.

Cheap gas has presented the U.S. with another unexpected benefit – rising energy independence. This is why Dominion is so eager to convert an aging LNG import facility in Maryland built in the mid-1970s into an export facility. It has long-term contracts already for exported LNG with Japanese and Indian utilities. Dominion bought the Cove Point facility about 12 years ago after a checkered history in which it  had been through several owners. Cove Point is one of about 20 facilities that are being proposed for LNG exports.

Cheap gas is likewise a curse and brings new uncertainty. Its economic benefits have meant that it is no longer worthwhile to invest billions in carbon capture technologies that might have allowed safer and less-polluting use of coal. Gas is also pushing back the urgency for expanding non-fossil and renewable energy sources such as wind and solar.

I’m of two minds on gas and LNG. On the one hand, gas beats coal hands down. It doesn’t kill as many workers, doesn’t destroy mountains and produces half of the carbon dioxide as coal.

Yet as time goes on, there’s more reason to be suspicious about fracking. There’s no certainty that the toxic chemicals used in the process will not hurt ground water. Natural gas wells do tend to leak and fires, fatalities are not uncommon. Pipelines blow up. Fracking has also been used with great success to tap previously inaccessible oil and shale oil in places like North Dakota. But that raises yet another problem: the use of unsuitable and unsafe railroad tanks cars to haul great quantities of it.

Ms. Trout provided me with material compiled by her group raising questions about leakage and Cove Point. Their research says that with a relatively low leakage point of 1.4 percent, taken over the entire LNG shipment cycle, enough methane would be released into the atmosphere that makes it about 80 percent as bad a carbon dioxide from other sources such as coal.

Cove Point would receive natural gas via pipeline from fracked gaslands in Pennsylvania and possibly Maryland or from pipelines running from Louisiana. At the Bay facility, it would be processed, cooled to minus 265 degrees Celsius, but in huge Thermos-style tanks aboard ship which would travel halfway around the world. In Asia, the LNG would be warmed back into gas, processed and used for fuel. This, she says, presents plenty of opportunities for leaking.

It very well could be. I have no data supporting or refuting the points. Meanwhile, the protests grow stronger and the arguments become more complicated.

Why Are Virginians Such Weather Whoosies?

norilskBy Peter Galuszka

The other day I tried to book a lunch date with the Blogger in Chief but was informed that inclement weather was looming on the Old Dominion and he might be hibernating for a few days.

Imagine my surprise this morning when I awoke to find a few inches of snow and some light sleet pelting around. Sure enough, the state seems to have shut down. This begs another question. Why are Virginians such weather whoosies?

Millions of people around the world live and work in much harsher conditions. I spent six years reporting from Moscow in the 1980s and 1990s and had plenty of bone-chilling experiences. There was that ultra-cold day in Novosibirsk just before Thanksgiving when the temperature was about minus 30. But if you want to consider the granddaddy of them all, go to Norilsk in Siberia, the northern-most city of more than 100,000 in the world.

khodorkovsyI went to Norilsk in January 1996 for a BusinessWeek cover story on the crop of rising oligarchs who were cashing in on post-Communist privatization. One was Mikhail Khodorkovsky, a geek-turned-billionaire who, ironically, was just recently released by President Vladimir Putin after spending a decade in prison. It was a pre-Sochi Olympics gesture to make nice. I had interviewed Khodorkovsky many times and found him a meek and thoughtful man.

Another oligarch was Vladimir Potanin who was cornering the market on Russia’s vast reserves of precious metals. It was thanks to Potanin that I got to go to Norilsk. He was involved in a rough proxy battle to take over Norilsk’s rich array of smelters insofar as Russia was capable of having real proxy fights back in the 1990s.

Vladimir-PotaninSo, with Potanin’s invitation, Alexei, a Russian photographer, and I jetted off to Norilsk, a horrible, treeless snow-swept waste. It has a particularly horrible history.

Founded at the end of the 1920s, Norilsk became a center of Stalin’s GULAG system which in this case exploited rich reserves of nickel, cobalt, copper, platinum, palladium and coal. The only way in or out if by air or by rail and road to a specially built port on a river that flows into the Arctic Ocean.

Norilsk is covered with snow for up to 270 days a year and has snow storms lasting a total of about 120 days. In January and February, the average lows are about minus 23. Record lows are about minus 63.

Political prisoners built up a huge metals mining and metallurgical apparatus from the 1930s until the 1950s. More than 16,000 died and many fatalities occurred during World War II when food was short.

When we arrived at the airport, we were met by one of Potanin’s black limousines that hustled us across a snowy tundra road whose outlines only the driver could see. Our hotel was a shamble of brickwork and amenities were similar to what many reporters are finding today in Sochi albeit no stray dogs. They’d be dead. Tracked bulldozers worked 24/7 keeping snow from piling up.

Rogov and I had trouble finding food. The hotel kitchen was closed and we slogged down the streets until we pounded on the door of a closed restaurant and convinced them to give us something to eat. Continue reading

West Virginia’s Lessons on Fracking

water in W.Va. By Peter Galuszka

Tap water is now drinkable for most of the 300,000 residents in the environs of  Charleston, the capital of Virginia’s sister state to the west, but the mess has ample warnings for future problems notably fracking for natural gas.

The national newspapers are filled with interesting pieces this morning about the problems of now-bankrupt Freedom Industries where 7,500 gallons of a chemical used to treat coal spilled 1.5 miles upstream from a municipal water system intake, making water unusable in Charleston and nine surrounding counties for about a week.

The affected area would be about the size of Chesterfield or Henrico counties individually or more than the entire city of Richmond. Imagine the business losses from the inability to wash dishes in restaurants, wash cars, or even make toilet trips in state office buildings. Think of the unknown health impacts.  Incredibly, that’s what happened in Charleston, the epicenter of the anti-regulation “War on Coal” propagandists.

The takeover warning for Virginia is that it could happen here and did back in the 1970s when Allied Chemical tried to sidestep pollution regulations by setting up a dummy company in a converted gas station in Hopewell to make the highly toxic pesticide chemical Kepone.

One cause for future concern here, as well as in West Virginia, is what happens when hydraulic fracturing for natural gas comes. Fracking, which involves using high pressure water with special chemicals to help break up before-unreachable pockets of natural gas has really taken off in recent years.

Combined with newer horizontal drilling methods, fracking has yielded a cornucopia of natural gas with a huge impact. It is utterly changing the dynamics of the U.S. energy picture and positioning the country to become an exporter of both gas and oil for the first time in decades.

Fracked gas has its pluses. It emits half the carbon dioxide of coal and has nowhere near the death toll for employees. It doesn’t destroy entire mountains. But it can increase the chances of fire, pipeline leaks, rail accidents and threaten water supplies depending on the types of chemicals used in the process.

The West Virginia case provides chilling inadequacies with regulation. The tanks at Freedom Industries were inspected for air emissions but not for leaks, even though they were built in the 1940s and 1950s. Ownership wound around a polyglot of corporations.

Within one week of the spill and facing hundreds of millions of dollars in lawsuits, Freedom promptly went bankrupt to protect itself against claims. That means that victims of the spill are doubly screwed. They have to eat the losses from the disaster and now they will find it much harder to get legal compensation.

More chilling is the fact that West Virginia’s legislative and regulatory climate will make it harder to know what’s in gas fracking chemicals when companies move south from Pennsylvania to exploit Marcellus Formation shale that covers most of the state.

The New York Times notes that in West Virginia, state regulators can issue regulations but they can’t be enforced until the lobbyist-heavy legislature approves. A law last year would have required that companies disclose the types of chemicals they use for fracking but under pressure from oil equipment giant Halliburton, lawmakers decided to make them confidential.

The same aura of confidentiality in favor of industry pervades Virginia which prides itself on being “business friendly. Much of what the State Corporation Commission does when it deals with firms or handles electricity rates is immune from the Freedom of Information Act. When former Gov. Robert F. McDonnell set up committees to study uranium mining and the nuclear industry in general, they were likewise immune from the FOIA. A lawyer working for former Attorney General Kenneth Cuccinelli was rebuked by a judge for advocating for energy companies in a lawsuit over natural gas rights.

Fracking could come to Virginia although it isn’t certain when or how much. The state already has more than 7,500 older gas wells near the Southwestern coal fields that do not use fracking.

A sliver of frackable Marcellus formation skirts the West Virginia border west of  Interstate 81 in mountainous regions unused to energy extraction. Rockingham County has already blocked a special land use permit sought by an energy firm. Washington area drinking water officials are seeking limits of fracking in the nearby George Washington National Forest at the headwaters of the Potomac River and other municipal water sources.

Another possibility is the so-called Taylorsville Basin which runs from west of Annapolis to east of Fredericksburg and Richmond and Petersburg in areas better known for crab pots and pine forests. It isn’t known how much gas is actually there, but a Dallas firm, Shore Exploration and Production Corp. is looking.

I don’t know offhand what rules Virginia actually has in place to reveal the chemicals companies use for fracking, but it is obviously something to watch. One example not to follow is that of the Mountain State.

Journalism’s Death Is Greatly Exaggerated

rachel_maddowBy Peter Galuszka

“Investigative reporting, R.I.P. In-depth reporting is dead. If not dead, it’s comatose. Reeling from declining revenue and eroding profit margins, print media enterprises continue to lay off staff and shrink column inches.”

Err, maybe not. James A. Bacon Jr., meet Rachel Maddow.

The quote comes from advertised “sponsorships” in which an outside entity can help fund reporting and writing on this blog. It’s a morphed form of traditional journalism and there’s nothing wrong with it, provided the funding source is made clear.

But what might be jumping the gun is the sweeping characterization that in-depth reporting is dead. That is precisely the point of Maddow’s monthly column in The Washington Post.

She notes that it was local traffic reporters and others who broke the story about Chris Christie’s finagling with toll booths to punish a political opponent. She shows evidence of other aggressive reporting in Connecticut and in South Carolina, where an intrepid reporter got up early one morning, drive 200 miles to the Atlanta airport and caught then disappeared Gov. Mark Sanford disembarking from an overseas flight to see his Latin American mistress when he had claimed he was hiking the Appalachian Trail.

Closer to home, it was the Post, which has seen more than 400 newsrooms layoffs over the past years, that broke GiftGate, the worst political scandal in Virginia in recent memory. The rest of the state press popped good stories, including the Richmond Times-Dispatch that has been somewhat reinvigorated despite nearly 10 years of corporate cheerleading and limp coverage under publisher Tom Silvestri. The departure of the disastrous former editor Glenn Proctor, Silvestri’s brainchild, helped a lot as did the sale of the paper by dysfunctional Media General to Warren Buffett.

To be sure, there are sad departures. The Hook, a Charlottesville alternative, did a great job reporting the forced and temporary ouster of University of Virginia President Teresa Sullivan, but it has folded.

Funding, indeed, remains a huge problem, even at Bacon’s Rebellion where we all write pretty much for free. One solution, Maddow notes, happened in a tiny Arkansas town that found it was located over a decaying ExxonMobil fuel pipeline. The community raised funds to help hire more reporters to break through the news.

She suggests: “Whatever your partisan affiliation, or lack thereof, subscribe to your local paper today. It’s an act of civic virtue.”

Hear! Hear!

Where the Poor Are

ram wise countyBy Peter Galuszka

With expanding Medicaid about to become a major issue with the incoming Terry McAuliffe administration, it is curious to see exactly where the poor people in Virginia live. An intriguing New York Times interactive graph provides clues and allows one to draw some rather disturbing conclusions.

The single worst pocket of poverty of 76.7% appears to be in an inner city part of Hampton. Trailing not far behind are inner city parts of Norfolk (67.8%) and Portsmouth (64.9%).

Much-touted RVA is a hotbed for low-income people as defined by individuals making less than $11,945 a year or a family of four making $23,283 a year. Despite all the hoopla you read about Richmond becoming an artsy draw for white, educated millennials, the capital, at least its downtown and east end, is as poor as church mice.

An east end section near Fairfield Avenue is 67.% poor. Manchester south of downtown has rates of 35% and farther south it is 50.7%.

Zip over the mostly white Short Pump area where the fancy stores are in Henrico and poverty is about 2 percent. I tried to look up where Jim Bacon lives but the chart said it was a “low population area” and rates weren’t available. My area in southwestern Chesterfield is about 3 percent.

A cursory scan around the state did not show any poverty rates anywhere close to those of the inner cities of Tidewater or Richmond –certainly not in Northern Virginia although Winchester seemed a little sketchy.

In more rural areas, Halifax County in the dying tobacco and textile belt was high but the surrounding area was low. An area near Lynchburg showed 50 percent levels.

Another curiosity was that once you get to the Southwest, you can see the black hand of coal. The Virginia coalfields are generally just west of U.S. 19. Giles County to the east of it has poverty rates of about 13 %. But cross to the western counties and watch it double (Buchanan 23%; Dickenson, 21.3% and Wise, 25.6%).

What do these counties have in common? A dying coal industry and even dying is a misnomer. One would think that these areas would be swimming in money thanks to black diamonds. Anything but. They’ve been stripped and raped with the wealth flowing elsewhere. This is something to keep in mind when you hear about “The War on Coal.” Turns out the “War on People Living Near Coal Mines” has been going on since the late 19th century.

The Times chart is a wonderful reality check. It should have huge applications as expanding Medicaid is considered. The lesson seems to be that extreme poverty is concentrated in neglected inner city neighborhoods and abused rural areas.

If (God forbid!) poor people start flocking to emergency rooms once they get Medicaid, those emergency rooms are likely to be in large, downtown teaching hospitals like the Virginia Commonwealth University Health Systems and Sentara Norfolk General Hospital. They won’t be in rich, white suburban areas for the simple reason that public transit is lacking. In rural areas, the poor may well have to find rides to take them dozens of miles to find care.

(Hat tip to Scott Elmquist) 

The Zany, Crazy Cold War Days Return

“Give me back the Berlin wall b52
give me Stalin and St Paul
I’ve seen the future, brother:
it is murder.Leonard Cohen

 By Peter Galuszka

The other night I watched Dr. Strangelove, one of my favorite movies. Then I read the headlines.

China is cracking down on U.S. journalists, especially those representing The New York Times and Bloomberg, by threatening their visa renewals if they keep reporting about the corrupt ties between Communist party officials and business.

President  Barack Obama orders two unarmed B-52s to fly smack down the middle of a “no fly” zone recently declared by China as a diplomatic move against Japan and Taiwan over some rocky islands.

Meanwhile, back in Russia, my old stomping grounds, President Vladimir Putin is celebrating Ukraine’s decision to stick with Mother Russia in an economic union that should help keep alive the memory of empire.

Gee, it sounds like old times.

As bad as it seems, I am more concerned about what’s going on with China and how it is being ignored by most Americans outside of big financial and media centers like New York. China is playing its economic hole card to force America to go along with its mossback ways involving freedom of speech and force projection.

On this score, we always give the Chinese a free pass because we like their cheap goods and also because they hold a lot of their debt. Back in the Cold War, threatening the visas of a couple of dozen U.S. journalists would have been headline news. Not anymore and that’s worrisome.

The Times won a Pulitzer last year for its coverage of the shady and endlessly complex relations between Party members, their wives and children, and various businesses. After the Party announced an internal crackdown on scams, the government last summer promptly started hassling foreign, including U.S., companies with SWAT teams of accountants and court orders for their books.

I’m not a China Hand but the tonality is very different now. It seems bitter. China’s old guard clings to control. Wealth has spawned expectations that seem to be met only with Web crackdowns and gobs of air pollution. Military threats are more common. A comeuppance seems inevitable.

What does it mean to Virginia? China is Virginia’s top importer, double the level of Brazil, the next highest. Top imports are machinery, furniture and salt. Virginia’s export – coals – far outdistances its Chinese imports in volume by many times. And China’s going to keep needing coal, especially the metallurgical type.

In terms of the defense industry, angrier showdowns with China will hurt the state, since the Navy will move assets to the Pacific from places like Hampton Roads which were major staging areas for the decades’ long wars in Iraq and Afghanistan. Obama is already putting a small contingent of Marines in Australia.

Concerns remain about China’s alleged cyberattacks on U.S. data centers and surveillance. It could be that the highly questionable scope of U.S. spying by the National Security Agency could be more directed at China than at Middle Eastern terrorists, but it’s all part of a troublesome mix.

Years  ago when I was Moscow bureau chief for a large business magazine, I was constantly annoyed when my New York editors always seemed to hold China in higher regard as a potential reformer than the Soviet Union. Money talks and I think they liked the advertising potential that never would be realized with the Russians.

History would prove them right on the money. But pre-Putin, Russians did enjoy a number of years of remarkable freedom of expression. Sadly, that’s over (as well as the lives of several of my Russian journalist friends who were either murdered or have died suspiciously).

Yet China never seems to have made all that much of a transition when it comes to freedoms. It has plenty of people in jail for saying what they think and they target websites, shutting many down.

On that score, my New York editors, it turns out, were wrong on both counts. At the moment, though, it’s back to the future.

More bad news for Virginia’s economy

uncle samThe Sage of Short Pump?  Jim Bacon (and others) have been questioning whether Virginia’s economy will continue to perform well for quite some time.  Beyond his epic tome Boomergeddon Bacon recently penned an article on this blog entitled “Sub Par Economic Growth for Virginia in 2012.”  Bacon’s missive came just over a month after my own foray into Virginia’s new economic reality – “Is Virginia’s Economy Tanking?”  These articles generated some lively discussion both here at Bacon’s Rebellion and over at The Tysons Corner with this well considered rebuttal from Frank Muraca.  Unfortunately, it now seems that Governor McDonnell and Governor-elect McAuliffe have checked in as pessimists on this debate.

Pre-budget prenuptials.  Gov. Bob McDonnell recently convened his annual meeting of the Virginia Governor’s Advisory Council on Revenue Estimates.  In the interests of bi-partisanship Governor McDonnell invited Governor-elect McAuliffe to this year’s meeting.  One suspects that neither man was very happy with what was said.  The Roanoke Times is reporting that McDonnell came out of the meeting saying that the Virginia forecast “reflects a slightly more pessimistic scenario” than for the rest of the country.  Uh oh. There are a number of articles in the mainstream media like this one questioning the strength of the national economy in 2014.  And Virginia will be worse? Governor-elect McAuliffe may want to see if his old job at GreenTech is still available, if that’s the case.

Sequestration aberration.  The Roanoke Times article places a lot of the blame for the predicted sub-par performance on Washington, D.C., saying:

“The deal requires $19 billion in defense cuts that are set to drop, meat-cleaver style, in mid-January. The Pentagon warns this will devastate important military functions. It surely will hurt Virginia’s defense-heavy economy.”

Live by the sword …  Personally, I am far less willing to simply blame the federal government for not spending enough money in Virginia. Not only has federal spending been increasing for decades, federal spending as a percentage of the GDP has been going up, up up.  Is it really fair to claim that Virginia’s economic growth concerns are due to a lack of sufficient federal largesse?  I think not.  The Imperial Clown Show in Richmond has made no effective progress in reducing Virginia’s addiction to the federal teat.  In fact, we are more addicted than ever.

Looking back.  A succession of Virginia governors and General Assemblies have tried one half-baked economic development idea after another.  From Mark Warner’s unrequited love affair with wireless carriers and dot com commandos to Tim Kaine’s dusting of tobacco money over the countryside like sprinkles on a summer cone, the Democrats have come up short.  McDonnell’s Energy Capital of the East Coast fared no better.  One can only hope that super-salesman Terry McAuliffe has the right stuff to start separating Virginia’s lips from Uncle Sam’s butt.

– D.J. Rippert

Pope Francis Slams “Trickle Down”

Pope Francis Holds His Weekly General AudienceBy Peter Galuszka

In a sharp rebuke to traditional conservative economic thought, the leader of the world’s Roman Catholics says he wants the church to rethink its strategies towards addressing income inequality and poverty and shun “the idolatry of money” and “trickle down” philosophies that give the rich far too much influence.

Pope Francis outlined his thinking in a 50,000 word treatise titled “Evangelii Gaudium” (“The Joy of the Gospel”). The new Pope appears to be a dramatic change in Vatican leadership which has been dominated by theological conservatives since the mid-1960s.

He wrote in his piece: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by the free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.

“This opinion, which has never been confirmed by facts, expresses a crude and naïve trust in the goodness of those wielding economic power and the sacralized workings of the prevailing economic system.”

There’s no question the view, written by a man who spend much of his life working with the urban poor of Brazil, is a slap in the face of such contemporary conservative influences, notably Ronald Reagan, who posited in the 1980s that if governments cut taxes and regulation and left  the rich alone, the benefits would trickle down to the middle and lower classes.

Since then, the idea has become a mantra for conservatives around the world from Margaret Thatcher to Paul Ryan. It was cited as being part of the “End of History” when the Soviet Union collapsed in 1991. It is also hummed like a Hindu chant on this blog.

In Virginia, the benefits of “trickle down” are assumed to be God’s word among Republicans and Democrats alike. The theory is that business can only flourish in a low tax, low regulation and anti-labor union state. Somehow everyone benefits although as Pope Francis points out these ideas “have never been confirmed by facts.”

Globally, the fast spread of current capitalist thinking by high-speed information technology has created ever wider disparities between rich and poor.

The United States is still struggling to recover from the worst recession since the Great Depression. According to the New York Times, one result of the so-called “recovery” has been similar to the trend in the rest of the world –a small slice of the richer get richer to the detriment of others. The Times writes:

“The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

“The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

“The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.”

It seems to be the case in Richmond, which is often painted on this blog as a wonderland of bike lanes, “New Urbanism styles,” “the creative class,” and lots of Millennials flocking in to enjoy its exquisite cultural amenities.

In truth, according to Style Weekly, about 50,000 of the city’s population of 208,000 live in poverty.  Although the minimum wage is $7.25, workers need to make $10.35 an hour to make ends meet, according to a Massachusetts Institute of Technology study. One pilot workforce training project that served 550 Richmonders over the last three years found that their wages averaged $8.50 an hour. Jamison Manion, who administrates the program, likened the situation to “nothing, absolutely nothing. It’s like draining the ocean through a straw — when it’s raining.”

Pope Francis appears to pose a big change in contemporary Catholic thinking after decades of the status quo. He’s likely to further shake things up by making the ossified Church’s bureaucracy more decentralized, de-emphasizing the overplay on abortion and gay issues and giving women a stronger voice.

A big question is whether the Church is finally ahead of the curve instead of being constantly behind it. In the process, he’s making “Trickle Down”  sound “oh-so-1980s.”

Why McAuliffe Is Saying No to Uranium Mining

mcauliffeBy Peter Galuszka

Governor-elect Terry McAuliffe has made one of his first pronouncements and it is an important one: he will veto any law the General Assembly passes to lift the decades-long ban on mining uranium in Virginia.

The bigger question is whether he was start disassembling the energy-industrial complex that outgoing Gov. Robert F. McDonnell had put together that tended to serve such large-scale energy firms and utilities beholden to fossil fuels and nuclear power.

One unsavory part of McDonnell’s plan to make Virginia “The Energy Capital of the East Coast” was that he packed his study commissions with lobbyists and Big Energy types (no environmentalists or independent citizens’ groups need apply) and then shielded them from the state Freedom of Information Act. When he held energy fairs, they typically were dominated by oil, natural gas, coal and nuclear power representatives with only a token showing from wind, solar or other renewables.

McAuliffe’s stance is not unexpected but he did seem to wobble a bit about nuclear power in the campaign. Curiously, when Republican Lt. Gov. Bill Bolling started his personal revolution about a year ago, knowing he was being shown the door by the tea party hardliners within the state GOP, he dramatically came out against ending the uranium moratorium.

About that time, a McDonnell study commission headed by Cathie J. France was finishing its work just before the moratorium issue was to come up before the General Assembly. Plans were afoot to develop state mining and milling regulations.

What then happened? When it looked like the moratorium bill was dead, it was quickly withdrawn. Now McAuliffe says there’s no need for state uranium regs because they won’t be needed if the moratorium stays.  As for Ms. France, she’s off at Williams Mullen, the lobbying firm, of course, but says she won’t handle uranium.

A few weeks ago, state environmentalists were afraid that Attorney General and failed gubernatorial candidate Kenneth Cuccinelli was setting things up for Big Nukes by expressing in an opinion requested by Del. Donald Merrick of Chatham that localities could not have the power to set up laws banning uranium mining if it came to that because the the Dillon rule that has it that localities have only the power that the General Assembly lets them have.

I’m not a lawyer, but I have to say that Cuccinelli’s giving the straight stuff on the Dillon Rule, which should be dumped because it has screwed up so many things in Virginia that localities can do better than the state.

Cuccinelli’s opinion seems moot anyway if the mining ban stays. But there’s a much bigger reason why the issue is going nowhere. Global uranium prices are trading at roughly $35 a pound. When the Coles Hill Farm project was proposed back in 2007 or so, prices were at least four times as high.

The spike collapsed thanks to the global recession and the Fukushima disaster in 2011. While nuclear stations are being planned in Asia, they are getting nowhere in this country because they would need huge federal loan supports from Congress. Utilities are less likely to push for them if they can use cheaper and plentiful natural gas which results in large part from fracking.

I realize that fracking has its own dangers but one can’t deny how the energy mix works. If one reads the typically clueless Richmond Times-Dispatch editorial page, they would assume that McAuliffe won’t give on uranium because of the oodles of campaign dough he got from the green movement and from people Tidewater cities fearful that mining uranium in Pittsylvania will contaminate their water supplies.

These are real concerns, but the kicker and killer is the global price of uranium ore.