Category Archives: Water-waste water

Interview: McAuliffe’s Economic Goals

 maurice jonesBy Peter Galuszka

For a glimpse of where the administration of Gov. Terry McAuliffe is heading, here’s an interview I did with Maurice Jones, the secretary of commerce and trade that was published in Richmond’s Style Weekly.

Jones, a graduate of Hampden-Sydney College and University of Virginia law, is a former Rhodes Scholar who had been a deputy secretary of the U.S. Department of Housing and Urban Development under President Barack Obama. Before that, he was publisher of The Virginian-Pilot, which owns Style.

According to Jones, McAuliffe is big on jobs creation, corporate recruitment and upgrading education, especially at the community college and jobs-training levels. Virginia is doing poorly in economic growth, coming in recently at No. 48, ahead of only Maryland and the District of Columbia which, like Virginia have been hit hard by federal spending cuts.

Jones says he’s been traveling overseas a lot in his first year in office. Doing so helped land the $2 billion paper with Shandong Tranlin in Chesterfield County. The project, which will create 2,000 jobs, is the largest single investment by the Chinese in the U.S. McAuliffe also backs the highly controversial $5 billion Atlantic Coast Pipeline planned by Dominion because its natural gas should spawn badly-needed industrial growth in poor counties near the North Carolina border.

Read more, read here.

(Note: I have a new business blog going at Style Weekly called “The Deal.” Find it on Style’s webpage —   www.styleweekly.com)

A Free-Market Approach to Protecting Our Water Supplies

Lynchburg train derailment. Image credit: CNN.

Lynchburg train derailment. Image credit: CNN.

by James A. Bacon

Writing in the Times-Dispatch today, my friend Noah Sachs highlights a systemic risk in our society: the threat of chemical leaks and spills to our water supply. Last year the release of toxic chemicals into the Elk River disrupted the drinking supply of 300,000 inhabitants of Charleston, W.Va. Closer to home, a Duke Power plant in North Carolina dumped coal ash into the Dan River. And a train derailment in Lynchburg sent three railroad cars into the James River.

“The accidents in 2014 are a stark reminder of the vulnerability of our drinking water, and we can’t fix the problem by imposing new requirements on water systems alone,” writes Sachs, a professor of environmental law at the University of Richmond. “We have to look upstream to the real source of the problem. Industries that store toxic chemicals near our waterways are putting Virginians at risk.”

The threat is real, and I credit Sachs for bringing attention to it. The question is how best to address the risk. Do we, as he suggests, need to impose a new set of regulations? Or are there potential private-sector remedies that could ameliorate the risk at less cost?

Sachs proposes three guiding principles for Virginia regulation:

  • Businesses that store large volumes of toxic chemicals “should be subject to some public oversight.”
  • There should be “minimum standards” for construction, inspection and maintenance of chemical storage tanks. Setbacks and secondary containment of requirements should be imposed for tanks near water sources.
  • Tank owners should prepare public communications and response plans in the event of an incident.

In this day and time, when the Environmental Protection Agency has taken upon itself to rewrite the Clean Air Act in order to regulate carbon dioxide emissions and shut down much of the coal industry, these standards do not sound especially unreasonable or onerous. But that’s hardly the criteria we should use when enacting new regulations. We should also seek to minimize the impact on industry consistent with our obligation to protect the public.

The red flag is Sachs’ suggestion that “minimum standards” should apply to everyone. Invariably, there will be instances in which the minimum standards are irrelevant, inappropriate or represent regulatory overkill. The problem is inherent with one-size-fits-all government regulations — they cannot take all unique circumstances into account.

What alternative is there to regulation? The tort system. Corporations should be held accountable for the harm they cause others. If a company spills chemicals into the water, it should be liable for the cost of the clean-up and compensation to those who suffer harm. Government should impose one rule only: As a condition of storing and transporting toxic chemicals, companies should be required to buy insurance. Insurance companies then would serve the risk-mitigation role. The insurers’ own inspectors would assess the level of risk and premiums would be adjusted accordingly. Companies could buy down those premiums by implementing measures such as those Sachs describes or perhaps by devising other solutions unique to their operations.

Regulators apply standard remedies and discourage innovative approaches, especially in situations when there may be idiosyncratic, site-specific solutions. Instead of telling industry how to do its job, perhaps Virginia should simply tell industry that the commonwealth will hold polluters liable for clean-up and damages — and let industry figure out how best to tackle the challenge.

Virginia’s Top Stories in 2014

mcd convictedBy Peter Galuszka

The Year 2014 was quite eventful if unsettling. It represented some major turning points for the Old Dominion.

Here are my picks for the top stories:

  • Robert F. McDonnell becomes the highest-ranking former or serving state official to be convicted of corruption. The six-week-long trial from July to September of the Republican former governor and his wife, Maureen, was international news. In terms of trash, it offered everything – greed, tackiness, a dysfunctional marriage, a relationship “triangle,” and an inner glimpse of how things work at the state capital.  More importantly, it ends forever the conceit that there is a “Virginia Way” in which politicians are gentlemen above reproach, the status quo prevails and ordinary voters should be kept as far away from the political process as possible. It also shows the unfinished job of reforming ethics. The hidden heroes are honest state bureaucrats who resisted top-down pushes to vet dubious vitamin pills plus the State Police who did their investigative duty.
  • Eric Cantor loses. Cantor, another Republican, had been riding high as the 7th District Congressman and House Majority Leader. A wunderkind of the Richmond business elite, Cantor was positioned to be House Speaker and was considered invulnerable, at least until David Brat, an unknown college economics professor and populist libertarian, exploited fractures in the state GOP to win a stunning primary upset. Cantor immediately landed in a high-paying lobbying job for a financial house.
  • Terry McAuliffe takes over. The Democrat Washington insider and Clinton crony beat hard-right fanatic Kenneth Cuccinelli in a tight 2013 race. He bet almost everything on getting the GOP-run General Assembly to expand Medicaid benefits to 400,000 low income Virginians. He lost and will try again. He’s done a pretty good job at snaring new business, notably the $2 billion Shandong-Tralin paper mill from China for Chesterfield County. It will employ 2,000.
  • Roads projects blow up. Leftover highway messes such as the bypass of U.S. 29 in Charlottesville finally got spiked for now. Big questions remain about what happened to the $400 million or so that the McDonnell Administration spent on the unwanted U.S. 460 road to nowhere in southeastern Virginia.
  • Gay marriage becomes legal. A U.S. District Judge in Norfolk found Virginia’s ban on gay marriage unconstitutional and the U.S. Supreme Court pushed opening gay marriage farther. The rulings helped turn the page on the state’s prejudicial past, such as the ban on interracial marriage that lasted until the late 1960s.
  • Fracking changes state energy picture. A flood of natural gas from West Virginia and Pennsylvania has utilities like Dominion Resources pushing gas projects. It’s been nixing coal plants and delaying new nukes and renewables. Dominion is also shaking things up by pitching a $5 billion, 550-mile-long pipeline through some of the state’s most picturesque areas – just one of several pipelines being pitched. The EPA has stirred things up with complex new rules in cutting carbon emissions and the state’s business community and their buddies at the State Corporation Commission have organized a massive opposition campaign. McAuliffe, meanwhile, has issued his “everything” energy plan that looks remarkably like former governor McDonnell’s.
  • State struggles with budget gaps. Sequestration of federal spending and defense cuts have sent officials scrambling to plug a $2.4 billion gap in the biennial budget. It is back to the same old smoke and mirrors to raise taxes while not seeming to. Obvious solutions – such as raising taxes on gasoline and tobacco – remain off limits.
  • College rape became a hot issue after Rolling Stone printed a flawed story about an alleged gang rape of a female student at the prestigious University of Virginia in 2012. Progressives pushed for raising awareness while conservatives took full advantage of the reporter’s reporting gaps to pretend that sex abuse is not really an issue.
  • Poverty is on the radar screen, especially in Richmond which has poverty rate of 27 percent (70 percent in some neighborhoods) and other spots such as Newport News. Richmond Mayor Dwight Jones got a lot of national press attention for his campaign to eradicate poverty but it is really hard to understand what he’s actually doing or whether it is successful. The real attention in Richmond is on such essentials as replacing the Diamond baseball stadium, justifying a training camp for the Washington Redskins and giving big subsidies for a rich San Diego brewer of craft beer.
  • Day care regulation. Virginia has a horrible reputation for allowing small, home day care centers to operate without regulation. Dozens have children have died over the past few years at them. This year there were deaths at centers in Midlothian and Lynchburg.
  • The continued madness of the Virginia Tobacco Indemnification and Community Revitalization Commission. This out-of-control slush fund in the tobacco belt continued its waywardness by talking with Democratic State Sen. Phil Pucket about a six-figure job just as Puckett was to resign and deny a swing vote in the senate in favor of expanding Medicaid. The commission also drew attention for inside plays by the politically powerful Kilgore family and giving $30 million in an unsolicited grant to utility Dominion.

Big Energy’s Conspiracy with Attorneys General

Former Va. Atty. Gen. Miller --toady for Big Energy

Former Va. Atty. Gen. Miller –toady for Big Energy

By Peter Galuszka

What seems to be strong opposition to a host of initiatives by President Barack Obama and the U.S. Environmental Protection Agency to curtail carbon and other forms of pollution is no mere coincidence.

According to a deeply reported story in Sunday’s New York Times, some state attorneys general, most of them Republicans, are part of what seems to be a covert conspiracy to oppose carbon containment rules in letters ghost-written by energy firms.

And, there’s a big Virginia connection in former Democratic Atty. Gen. Andrew P. Miller and George Mason University which have been bankrolled by conservative and Big Energy money for years.

The cabal has drawn its modus operandi from the American Legislative Exchange Council, funded by the ultra-right, oil-rich Koch Brothers of Kansas. In that case, ALEC prepares “templates” of nearly identical legislation that fits the laissez-faire market and anti-government and regulation principles held dear by the energy and other big industries. Many marquee-name corporations such as Pepsi, McDonald’s and Procter & Gamble have dropped their ALEC membership  after public outcries.

In the case of the attorneys general, big petroleum firms like Devon Energy Corporation of Oklahoma draft letters opposing proposals that might hurt their profits such as ones to regulate methane, which can be a dangerous and polluting result of hydraulic fracking for natural gas. The Times notes that Oklahoma Atty. Gen. E. Scott Pruitt then took Devon’s letter and, almost-word-for-word, submitted it in his “comments” opposing EPA’s proposed rules on regulating fracking and methane.

The secretive group involves a great deal of interplay involving the Republican Governor’s Association which, of course, helps channel big bucks campaign contribution to acceptable, pro-business attorneys general. In 2006 and 2010, Greg Abbott of Texas got more than $2.4 million from the group. Former Virginia Atty. Gen. Kenneth Cuccinelli got $174,5638 during his 2009 campaign.

One not-so-strange bedfellow is former Virginia Atty. Gen. Andrew P. Miller who was in office from 1970 to 1977 and is now 82 years-old. He’s been very business promoting energy firms. As the Times writes:

Andrew P. Miller, a former attorney general of Virginia, has in the years since he left office built a practice representing major energy companies before state attorneys general, including Southern Company and TransCanada, the entity behind the proposed Keystone XL pipeline. The New York Times collected emails Mr. Miller sent to attorneys general in several states.

“Mr. Miller approached Attorney General Scott Pruitt of Oklahoma in April 2012, with the goal of helping to encourage Mr. Pruitt, who then had been in office about 18 months, to take an even greater role in serving as a national leader of the effort to block Obama administration environmental regulations.

“Mr. Miller worked closely with Mr. Pruitt, and representatives from an industry-funded program at George Mason, to organize a summit meeting in Oklahoma City that would assemble energy industry lobbyists, lawyers and executives to have closed-door discussions with attorneys general. The companies that were invited, such as Devon Energy, were in most cases also major campaign donors to the Republican Attorneys General Association.

“Mr. Miller asked [West Virginia Attorney General Patrick Morrisey] to help push legislation opposing an Obama administration plan to regulate carbon emissions from existing coal-burning power plants. Legislation nearly identical to what Mr. Miller proposed was introduced in the West Virginia Legislature and then passed. Mr. Morrisey disputed any suggestion that he played a role.”

Not only that, but George Mason has an energy study center that is bankrolled by Big Energy and tends to produce policy studies of what the energy firms want. It also has the Mercatus Center, a right-wing think tank bankrolled by the Koch Brothers.

So, when you see what seems to be a tremendous outcry against badly needed regulations to curb carbon emissions and make sure that fracking is safe, it may not be an accident. And, it comes from attorneys general who should be protecting the interests of average residents in their states instead of being toadies for Big Energy.

Suddenly, It’s Raining Gas Projects and Tax Breaks

Anti-Pipeline By Peter Galuszka

Suddenly it seems to be raining natural gas pipelines and snowing millions of dollars in tax breaks and incentives for rich electric utilities.

Dominion Resources, the powerful and politically well-connected Richmond-based utility, apparently is getting $30 million in public money from the Virginia Tobacco Indemnification and Revitalization Commission without apparently asking for it to help build a new natural gas-fired generating plant in Brunswick County. The information was broken by the Associated Press.

Largesse for Dominion stretches to the other side of the Potomac River as well. The Washington Post reported Sunday that Calvert County Md., where Dominion has approval to convert a liquefied natural gas facility to handle natural gas exports, is going to give the utility about $560 million in tax credits.

And, back in Virginia, controversial is growing over the $5 billion natural pipeline that Virginia and three other southern utilities are planning to take natural gas drilled by hydraulic fracking methods from West Virginia to Virginia and North Carolina.

The Atlantic Coast Pipeline has drawn criticism from environmentalists who fear that gas is not the cleaner panacea to coal that many think. Landowners complain that Dominion and its powerful Richmond law firm, McGuireWoods, are using strong arm methods to force their way on their land to survey possible routes.

mountain valley pipelineYet another pipeline – this one doesn’t involve Dominion – is drawing concern in southwestern Virginia. The $3.5 billion Mountain Valley Pipeline that would likewise begin in the fracked gaslands of northern West Virginia and head south west of Roanoke and then cut to the small town of Chatham.

The complaints are the same as the Atlantic Coast Pipeline – green concerns about leaking methane and the threat of bulldozing bucolic private land by companies using eminent domain.

The Mountain Valley project is being spearheaded by EQT Corp. of Pittsburgh and NextEra Energy of Florida.

So what gives? Utilities like Dominion are using more gas, namely at its new Brunswick County natural gas plant and at an older coal-fired station that’s been converted at Bremo Bluffs on the James River. But how much gas does it actually need?

In the case of Cove Point, Dominion notes that the plant has been importing LNG from places like Northern Africa and Scandinavia for decades although imports have come to a spot given the glut of cheap, domestic gas.

Dominion, which bought the facility about a decade ago, can get gas from an older pipeline that for years has linked the Chesapeake Bay area with gasfields in Pennsylvania where some of the fracking for new product is occurring. Dominion can also tap gas from the venerable Transco Pipeline that for decades has transported gas the traditional way – from the Gulf State processing stations to the northeast.

Dominion says it already has contracts to export gas – from where it comes domestically – to utilities in Japan and India. But when one looks at the spaghetti-like twirl of all of the proposed new pipelines, one wonders what the game really is.

The Atlantic Coast Pipeline has a leg that bounds over to Hampton Roads from near the North Carolina border. Dominion says that this one will help supply one of its pipeline partners with gas because it serves South Hampton Roads. Ok, fine, but it might also serve another new LNG export facility in that area that has perfect deep water conditions for such a facility.

And, as some environmentalists and property owners wonder, why couldn’t the energy companies tap rights of way near existing pipelines? Why can’t existing pipelines be expanded? Go back to the utilities and they say they don’t know exactly where the pipelines will go.

That is very curious. While they don’t know where mega-billion project projects are going to go, they seem to be getting tens, if not hundreds, of billions of dollars in public funds and tax breaks to help them proceed with the Brave New World of natural gas.

 

Virginia’s Very Own Keystone XL

acl pipeline map By Peter Galuszka

The rise of natural gas keeps raising more questions about the proper future of Virginia’s and the nation’s energy policies. What just a little while ago seemed a benign source of energy has gushed into a mass of controversy and advantage.

One focus of the conflict – good and bad – is the $5 billion Atlantic Coast Pipeline that Dominion Transmission and three other southern utilities want to build from the booming natural gas fracklands of northern West Virginia, across sensitive Appalachian terrain and on through Virginia and North Carolina.

The pipeline is unusual since it doesn’t follow the usual post World War II path – Gulf States to the industrial northeast — but it shows just how the U.S. energy picture is being turned on its head.

People in West Virginia have faced the raw end of energy issues for a century and a half, but it is a new matter for the bucolic areas of Nelson County and some of Virginia’s most pristine and appealing mountain country.

Here is a story I wrote for Style Weekly on the promises and problems of Virginia’s very own Keystone XL.

Fracking Our Pristine Mountain Forests

GW forestBy Peter Galuszka

Is nothing sacred? Of all groups, the U.S. Forest Service should protect the lands it controls, but today it introduced a plan that would allow limited hydraulic fracturing for natural gas in the 1.1 million-acre George Washington National Forest which straddles Virginia and West Virginia.

Virginia Gov. Terry McAuliffe had opposed lifting the ban, although he supports other proposed gas projects in the state, such as the 550-mile Atlantic Coast Pipeline that would stretch from the fracked gaslands of Northern West Virginia over the mountains and southeastward to Southside and Hampton Roads and North Carolina.

Forest lands help supply drinking water to 4 million people including those in Richmond and Washington. Some of the forest land has so-called “Karst” topography made up of rock formation that can be dissolved. In those conditions, any leakage of methane, or the toxic, powerful chemicals used in fracking would be more, rather than less, likely to poison drinking water.

The only good news out of the new USFS plan is that before some 995,000 acres could be available for drilling and that amount will now be limited to 177,000 acres.

But what can’t they let it all be? If you head west where the heart of the Marcellus Shale formation has become one of the mega-meccas of fracked gas, you hear of impacts of all types from drilling. These have included fire, explosions, diesel generators roaring 24/7, drinking water effects, bright floodlights and so on. In fact, I am embarking on a drip in about an hour that will end up in frack-land and will report when I get back.

To be sure, natural gas drilling has been going on for decades in the Appalachian Plateau of the western slopes of the Appalachians. Few pipelines crossed eastward over mountains and it was rare to find many drilling rigs in those areas.

But the fracking craze continues unabated and is now a $10 billion industry in the Marcellus Shale formation. One potential new target could be a different formation that starts from Fredericksburg and slips under the Potomac northeast into Maryland. A Texas firm with a letter drop address has been talking about leasing rights for fracking. One assumes that if the leases are in place, they’ll be quickly flipped to an actual drilling company, but you won’t know who. Virginia is only in the very early stages of setting up state rules for fracking.

Environmentalists say natural gas can be an even worse carbon polluter than coal should methane be released. Some others believe that the biggest damage comes not from the actual fracking process with millions of gallons of water and chemicals but from faulty wells.

One can make an argument that gas is good because it has completely reorganized the global pecking order in terms of energy. It means the U.S. need not be beholden to machinations of the Middle East, Central Asia and the likes of Vladimir Putin.

What bothers me is the rush to frack. I remember back in the 1960s in West Virginia when mile after mile of mountain side had been ripped apart by surface miners. It was a cheap way to get at coal. Mystery companies were supposed to reclaim the mine site but rarely did because they’d bankrupt one alphabet soup firm merely to create a new one.

The fracking craze, if not properly regulated, could yield even worse environmental disasters.

Suburbia’s Silent Storm Water Crisis

What happens when your storm water system fails. Photo credit: Associated Press.

What happens when your storm water system fails. Photo credit: Associated Press.

America’s older suburbs may face an infrastructure crisis from the last place they expect — aging storm water management systems.

In a presentation at the annual LOCUS conference in Washington, D.C., this morning, Ellen Dunham-Jones, author of “Retrofitting Suburbia,” listed a number of factors driving the re-development of America’s suburbs. They include the usual suspects such as energy-efficiency, emancipation from auto dependency and housing affordability as well as some less commonly recognized trends such as the aging of the population and public health. But the one that took me by surprise was water.

“Water is the next oil,” said Dunham-Jones, a Georgia Institute of Technology professor. By that, I understood her to mean that clean water is the next object of resource scarcity, especially in western communities where much of the waste water is, well… wasted.

Water issues also have dogged America’s older cities where waste-water and storm-water infrastructure built a century ago first began to decay. But the problems are spreading to suburban jurisdictions developed since World War II, Dunham-Jones said. The early suburbs were built with little thought to water issues. Many developments were built in flood plains or wetlands. Streams were funneled through storm culverts. Engineered, hard-infrastructure solutions that may have been adequate back then have proven less so as development spread and watersheds were paved over with impermeable surfaces, she explained.

Add to that the fact that some older pipes and culverts are crumbling and that warmer climate is associated with more extreme weather events, and the suburbs could have a time bomb on their hands — one they don’t even hear ticking.

– JAB

Putting the “Garden” in Rain Garden

Photo credit: Lewis Ginter Botanical Garden

Fall view of West Island MP. Photo credit: Lewis Ginter Botanical Garden

This July Virginians will start spending billions to meet tough new storm-water regulations. Lewis Ginter Botanical Garden wants to demonstrate best practices that save the bay – and look really good doing it.

by James A. Bacon

About a decade ago the leadership of the Lewis Ginter Botanical Garden, an institution known mainly for its formal gardens and conservatory of exotic tropical plants, began re-defining its mission. The new vision called for showcasing how Richmonders and Virginians might address endemic environmental problems such as invasive species and pollution caused by storm water run-off. It was a hard sell at the time, and the 2007-2008 recession dried up traditional sources of philanthropic funding. For years the $9 million project stalled.

But the economy has improved, donations have picked up and the “Streams of Stewardship” vision couldn’t be more timely. The plan calls for reclaiming a stream running through the garden’s 80-acre property, replacing turf lawns with native meadow grasses and using rain gardens to reduce parking-lot run-off – exactly the kinds of things that Virginians will have to do to meet strict new water standards designed to clean up streams, rivers and the Chesapeake Bay.

wetlands

View of West Island Garden. Photo credit: Lewis Ginter Botanical Garden

Come July Virginia localities will have to get serious about reducing nitrogen, phosphorous and sediment borne by storm water run-off.  Localities will have 15 years to meet tough state-federal goals for the Total Maximum Daily Load (TMDL) of those pollutants detected in their waterways – achieve 5% reduction in the first five years, another 35% reduction in the second five years, and the final 60% reduction in the third five years. Nobody knows for sure how much it will cost or where the money will come from.

The relatively easy part will be implementing tighter regulations for new development. “The new standards are very stringent but well vetted, accepted by the developer community,” says Chris Pomeroy, chief counsel for the Virginia Association of Storm Water Agencies. As long as developers know the costs of new Best Management Practices up-front they can incorporate them into their business plans. “There’s peace in the valley on that subject now.”

The hard part, says Pomeroy, will be fixing old development. “It’s cheaper to build it right in the first place. It’ll cost something to do new development but the corrective action will cost far more.” The state Senate Finance Committee estimated that retrofitting the state could cost $15 billion. But even that is little more than a wild guess.

If Virginians are going to spend billions of dollars on retrofits, they might as well make sure the end result looks good. Lewis Ginter President Frank Robinson wants the botanical garden to be a living demonstration of the positive possibilities. With a little extra attention to detail, he says, storm-water remediation projects can become beautiful community assets.

In the 1990s and 2000s Lewis Ginter completed a series of improvements – two man-made ponds, a 1.5-acre man-made wetland and retrofitting building roofs to harvest and recycle two million gallons of rainwater annually. Not only did these investments help control water run-off, they made the facility water-independent by using rainwater to irrigate the grounds rather than expensive treated municipal water. By saving the need to purchase 500,000 gallons of  year from Henrico County, those investments offered an attractive Return on Investment.

The next step is to re-work the formal lawn near the entrance and west of the conservatory. Ornamental lawns always will have a place in Lewis Ginter’s formal gardens, explains Robinson, but maintaining vast swaths of turf is an outmoded idea inspired by 18th-century European landscaping models no longer appropriate for Virginia. Lawns of close-cropped green grass are unknown in the natural world and they can be maintained only through the expensive application of fertilizers. Grass lawns absorb little rainwater. The soil is typically compacted and the grass itself has little vegetative mass to hold the water. Rain just runs off horizontally, carrying the chemicals into the watershed where they feed the algae blooms that rob the water of life-giving oxygen.

Industrial discharges are tightly regulated and farmers are getting savvy about managing their fields, says Robinson. Lawns are the last great frontier of cleaning the Chesapeake Bay. The lawn of any individual homeowner seems small but multiply that size by a million suburban houses and the numbers get big. “There is more acreage in lawn in this state than any crop. … If it were a corporation flushing chemicals through their manufacturing plant, we’d be up in arms.” Continue reading

The Internet-of-Things Steamroller and the Economic Competitiveness of Cities

by James A. Bacon

Well, I’m a steamroller, baby, I’m bound to roll all over you.
Yes, I’m a steamroller now, baby, I’m bound to roll all over you. …
– James Taylor “Steamroller

The words to James Taylor’s blues classic “Steamroller” have been churning through my mind during the 2014 Niagara Summit hosted by Richmond-based Tridium as I learn more about the constellation of technologies known as the Internet of Things — the ubiquity of sensors, the falling cost of wireless and data-storage technologies, the rise of “big data” and the emergence of incredibly sophisticated algorithms — and the impact they will have on the business landscape and society at large.

The Internet of Things (IoT), to borrow Taylor’s imagery, is a steamroller, a demolition derby, a napalm bomb. It will flatten — or, to borrow the tech buzz word du jour, totally “disrupt” — the business landscape. Most Americans have yet to hear of the Internet of Things. But as the next wave of the ongoing IT revolution that has transformed the world since the 1980s, it is as momentous as the rise of the PC, the Internet and mobile computing. Admittedly, the IT industry thrives on hype and the search for the Next Big Thing. But there is absolutely no doubt in anyone’s mind at Tridium or among the industry illuminati speaking here that the IoT is for real. IBM, Cisco, Google, Microsoft, Samsung, Intel and other industry giants are all piling into the IoT. Google recently paid $3.2 billion dollars for Nest Labs, a company founded in 2010, that manufactures smart home thermostats!

Tridium, whose Niagara Framework software provides the IT foundation for the building automation industry, announced yesterday its intention to expand into adjacent sectors involving large, complex facilities, including data centers, industrial plants and smart cities. Tridium, the most successful IT company ever to emerge from Richmond, is bidding to carve out a big chunk of the IoT. And, as fluid and unpredictable as the IT industry is, it has as good a shot as anyone at this point of being successful.

I have been blogging the event for Tridium’s blog Datamorphosis from an industry perspective but it is impossible not to think about the public policy implications of the IoT and, in particular, the smart cities movement. Asia and Europe are applying IoT technologies far more aggressively than most American cities. As Carrie MacGillivray, an analyst with research firm IDC, noted yesterday, the city of Barcelona, located in debt- and deficit-ridden Spain, is running a budget surplus. Its IoT initiatives have generated roughly $10 billion in savings. Admittedly, smart city initiatives, many of which focus on energy conservation, deliver bigger savings in countries where the average price of a kilowatt hour of electricity is two to four times that of the United States. But European cities are forging ahead in areas such as water and sewer, garbage and recycling pick-up, and parking and traffic management. 

Whether you call it smart cities (evocative of IBM’s “smarter cities” advertising campaign) or the Municipal Internet (a term I just coined), the Internet of Things is sweeping through local government. There will be a lot of experimentation, a lot of false starts and a lot of bad investment that will prompt a lot of political hoo-ha and blowback. But cities and municipalities will learn a lot along the way and, like Barcelona, the intelligent ones also will make a lot of sound investments that (a) drive down the cost of providing basic services, (b) address chronic problems like parking and traffic congestion and (c) promote citizen engagement.

Anthony Townsend, the author of “Smart Cities” whom I recently profiled (“Tech Insurrection“) spoke yesterday at the Niagara Summit. He made the point that citizens and entrepreneurs operating outside the framework of government-funded infrastructure initiatives also have a lot to contribute. Tapping IoT technologies and accessing government databases that have long languished unused, grassroots movements can make cities more environmentally friendly, more responsive to citizens and just plain more fun to live in.

He gave the example of the Trees Near You app that draws from New York City’s tree census data to provide information about some 500,000 trees that live on city sidewalks. “No one at Cisco is ever going to think this app up,” he said, and if someone did, it would never win corporate approval.

oktoberfest_of_thingsThe “Democratization of technology” made possible by the IoT can become a force for social change as well. Citizens have established networks of sensors that measure ozone concentrations with much greater granularity than is possible in large cities monitoring only four or five sites. Another example of bottom-up innovation is Four Square, a social networking app that provides recommendations from friends and associates on the best restaurants and eateries in town, informs you when friends are nearby and extends deals from retailers near you. Some applications are frivolous or amusing, such as the Oktoberfest of Things, which uses sensors to measure how much drink is left in large beer steins. But there is something to be said for making a city a fun place to live.

Some of these innovations may be taking place in Virginia under the media radar but there is not much sign of them. The Virginia Department of Transportation is investing in IoT technology to upgrade the capabilities of some of its highways, mainly in Northern Virginia. But some of that investment has been squandered. (Maybe I’ll be able to talk about Virginia’s rest stops one day.) The City of Richmond is doing some interesting things with Big Data but it is too early to know if anything useful will come of it. Otherwise, I have heard of very little. If anything is happening, it is due to the initiative of exceptional government officials acting on their own — for there certainly is no groundswell of public opinion, or even of public discourse, here in Virginia.

Cities that adapt the most quickly and intelligently to the IoT revolution will gain an immense competitive advantage in the years ahead — they will be able to provide a superior level of public services at less cost to taxpayers. This is the new frontier of economic development. Virginians need to embrace the IoT or miss an historic opportunity to win the race for livability and the competition for human capital.