Category Archives: Economic development

The Lies in “Hillbilly Elegy”

By Peter Galuszka

A 2016 memoir by J.D. Vance, a former Ohio resident, drew praise from conservatives for its laud of self-reliance and disciple and criticism from others for its long string of debunked clichés about people from the Central Appalachians.

The book, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis,” was held up as being a great explainer as to why so many in the White lower classes voted for Trump.

Vance exalts the strength of self-discipline, family values and hard work. He complains that when he worked as a store clerk he resented it when people on welfare had cell phones but Vance couldn’t afford one. He ended up going to Yale Law School.

Vance also spends a lot of time complaining about his dysfunctional family including a nasty grandmother, a mother constantly stoned on alcohol and opioids and lots of divorce – in other words the “social rot” of the hillbilly lifestyle he so disdains.

His tie to Appalachia is a bit thin. He grew up in a suburb of Cincinnati but spent summers in Jackson in the mountains of East Kentucky.

Now director and child actor Ron Howard has made a feel-good movie from the book that stars Glenn Close and Amy Adams. It is getting lousy reviews. Continue reading

Behind Dominion’s Shift to Renewables

Image credit: Style Weekly

By Peter Galuszka

Ever wonder why Dominion Energy found religion and announced a major shift to renewable energy?

The answer is that modern, high technology businesses want it and the Richmond-based utility wants to respond to their desires.

This one of the themes in this recent cover story I did for Style Weekly that explores how Dominion’s major shift in direction is part of several dynamics that are pushing solar wind and other renewables instead of keeping on with fossil fuel.

Here’s the reporting in a nutshell:

  • Virginia’s economy is being driven more by data centers, giant box-like warehouses loaded with servers that can handle tremendous amounts of data. Northern Virginia, the incubator of the Internet, already handles about 70% to 80% of the global Net traffic and has a mature and still growing network of data centers.
  • The Northern Virginia experience is shifting downstate. Henrico County now has a partially construction data center run by social media giant Facebook. Centers have been announced or are being planned in Southside and Southwest Virginia.

Continue reading

Solar Mega-Project Proposed for Pulaski County

by James A. Bacon

Developers of solar energy projects in Virginia often encounter resistance from rural communities where residents worry about the impact of vast solar farms on viewsheds, the tax base and the rural way of life. In Pulaski County, Hecate Energy LLC is dangling a new incentive to make its project palatable — the chance to attract lucrative data centers.

Hecate has proposed investing $400 million in a 280-megawatt solar project in three phases on 2,700 acres of land near the Town of Dublin, reports the [Pulaski County] Patriot. Hecate would pay leases to landowners, who currently use the land for low-value pasture and hayfields. The project is anticipated to generate $392,000 annually in added county tax revenue for a total of $13.7 million over the 35-year life of the project. As a bonus, the project would create 130 jobs during the construction phase. The new sweetener, never mentioned in press accounts of other solar projects I’ve seen, is the chance to vie for data-center projects.

“Approval of this project instantly makes Pulaski a player in the high-stakes game of Data Center recruitment,” said Hecate spokesman Jay Poole. “Companies which build Data Centers and other high-tech companies which demand sufficient quantities of renewable energy, go to places which make renewable energy more available.” Continue reading

Stewart Gets Last-Minute Gift From Trump

Corey Stewart

Peter Galuszka

Corey A. Stewart, a conservative firebrand from Prince William County, is getting a last-minute going-away present from President Donald Trump.

As Trump’s administration comes to an end, Trump has created a position on trade at the U.S. Commerce Department that is just for him. In 2016, Stewart headed Trump’s Virginia election campaign before being fired. Stewart said that he was Trump before Trump was Trump.

Stewart is an international trade lawyer and is expected to strong arm Trump’s tough and confusing trade policies.

A special target is China, which Trump has castigated, with some justification, for cheating on business deals, fiddling with its currency exchange rates, growing its armed forces and trampling on human rights.

Stewart will toughen enforcement of Trump’s hostile trade relations, according to news reports.

Some trade experts wonder what the Stewart story is all about. According to Reuters, William Reinsch, a former Commerce undersecretary, said he viewed hiring as “peculiar” since he is filling a position that does not exist. Continue reading

The University of Virginia Eastern Virginia Medical School

by James C. Sherlock

With additional information and thoughts generated by responses to my original posts on this matter, I offer this post as a final proposal before the November 15 release of the Sentara-funded “study” of what I call the Sentara Plan for Eastern Virginia Medical school.

The nation is short of doctors and shorter yet of good doctors. The nation has to produce more of both or the situation projects to worsen.

There is an opportunity here in Virginia to deal with both objectives.

But the Sentara Plan is not it.

Continue reading

UVa Medical School Takeover EVMS – A Real Opportunity for A Lot of Good

by James C. Sherlock

Hampton Roads

I recommend the transformation of healthcare and physician training in the Hampton Roads.

I reject both the presumptions and the terms of the current study of a merger of ODU, EVMS, Norfolk State and Sentara to improve EVMS.

That study is funded by the organizations involved and the outcome is pre-ordained.

But it embarrassingly assesses a combination of some of the poorest performing institutions in Hampton Roads. From that baseline, it cannot possibly offer the best outcomes for the Commonwealth or the people of Hampton Roads. Continue reading

The New Secret Weapon in Economic Development: Mine Water

Map credit: InvestSWVA “Project Oasis” report

by James A. Bacon

I don’t know if the latest scheme cooked up by Southwest Virginia’s economic developers is crackpot or genius, but it certainly is intriguing. As the coal industry of the state’s coal counties continues to bleed out, regional leaders are looking for ways to diversify the economy. And they think they might have identified a unique resource in the region — geothermal cooling — that will make it attractive to data centers.

Data centers are energy hogs. Massive banks of servers generate a lot of heat, which takes a lot of energy to cool. As a consequence, electricity is one of the biggest cost components of every data center.

A data center in Pennsylvania uses an limestone cave, which has continually replenished supply of 52° water, to cool a data center. As it happens, Southwest Virginia has limestone caves. Moreover, the region is riddled with underground coal mines that have flooded with water. According to an InvestSWVA report, “Project Oasis: Market Analysis for Data Center Investment in Southwest Virginia,” using mine water for cooling could reduce the electricity required for cooling the data center by 90%. The annual savings would be more than $1 million annually. Continue reading

Northern Virginia Still Dominates Data Centers

Image credit: CBRE

by James A. Bacon

Northern Virginia accounted for 64% of wholesale data-center construction in the U.S. during the first half of 2020, as measured by megawatts of electric power consued, according to a CBRE report, “Data Centers Critical to Business Operations.” The construction trend reinforces the region’s role as the biggest, baddest center for data warehousing in the U.S. and the world.

Led by Loudoun County, the region touts 1,275 megawatts of “inventory,” about three-and-a-half times that of the No. 2 data-center cluster, Dallas/Fort Worth, and more than four times that of Silicon Valley.

The national outlook for the industry is favorable, says the report. “Companies are prioritizing IT spending as they restructure their overall budgets. While every dollar of investment is subject to scrutiny, a focus on mission-critical IT spending will be important to support remote working, transition to online platforms and serves, and to support online marketing and sales to consumers.” (Hat tip: Bill Tracy) Continue reading

Another Bust: $90 Million Spent on Industrial Megasites


by James A. Bacon

Virginia’s Tobacco Region Revitalization Commission has invested $90 million to develop seven industrial “mega-sites” in Southside and Southwest Virginia, but so far only two sites have attracted tenants, reports the Joint Legislative Audit and Review Commission (JLARC) in a review of state economic-development incentives, “Infrastructure and Regional Incentives.”

The two “successful” megasites are Commonwealth Crossing in Henry County and Oak Park in Washington County. Together, they accounted for two industrial investments totaling $48.4 million and creating 260 jobs. (A third tenant is a state job training program.) Press Glass, a European glass manufacturing company, is expected to open a 280,000-square-foot manufacturing facility this year. Blue Ridge Beverage, a wholesale beverage distribution company, started production in 2014.

The megasites could accommodate 4,400 workers after 10 years and 22,000 at full build-out. Two sites are not yet considered business ready. Continue reading

Coal Severance Tax Credits Obsolete, JLARC Says


by James A. Bacon

Virginia’s coal tax credits are obsolete, cannot forestall the decline of coal mining in the state, and should be eliminated, finds the Joint Legislative Audit and Review Commission in a new report, “Infrastructure and Regional Incentives.”

The state provides two tax credits to encourage coal production: The Coalfield Employment Enhancement Tax Credit and the Virginia Coal Employment and Production Incentive Tax Credit. The two programs have saved coal companies and electricity generators $291.5 million in income taxes between FY 2010 and FY 2018, according to the report on the cost-effectiveness of economic development incentives. But the credits ranked at the bottom of JLARC’s list of incentives based on economic benefits per $1 million in spending.

The  coalfield credit is not needed because Virginia’s remaining mines are competitive with mines in other states based on a labor productivity basis (tons per employee hour), JLARC contends. The credit targeting electricity generators is fast becoming irrelevant when the state is moving towards a 100% renewable electric grid and phasing out its remaining coal-fired power plants. Continue reading

End the Coalfield Boondoggle

Alpha Natural Resources mine facility

By Peter Galuszka

The General Assembly’s auditing watchdog has recommended the elimination of  two coal tax credits that have been a bonanza to Virginia coal companies worth $315 million from 2010 to 2018 but have created only 10 jobs.

The report by the Joint Legislative and Audit and Review Commission (JLARC) studied 16 different tax credits to boost the state’s economy but recommended  only eliminating the ones involving coal production.

Those credits involve the Coalfield Employment Enhancement Tax Credit, formed in 1995, and the Production Incentive Tax Credit, formed in 1986 to help with electricity generation.

Virginia’s coal production peaked in 1990 and has been declining since. In 2000, for instance, it had been 33 million short tons but in 2019, it had dropped to 12 million short tons.

Continue reading

A Sad Emblem of Our Times

By Dick Hall-Sizemore

A venerable Richmond-based printing company closed last May. Somehow, that really saddened me. Perhaps because it was located not far from where I live. Perhaps because it had been around for so long.  Perhaps because it had a niche business that seemed sort of neat to me. Perhaps because its closing seemed so emblematic of the times.

I meant to comment on it then, but other topics and activities kept bumping it down the list. Then, Jim’s post yesterday about the Virginia economy and some of the follow-up comments brought it back to my mind.

The William Byrd Press was founded in 1913. In 1984, it merged with a North Carolina company and was renamed Cadmus. By 2007, it had 500 employees and was the world’s largest printer for publishers of scientific, technical, and medical journals. It was the fifth largest printer of periodicals in North America. Continue reading

Is Green Hydrogen the Answer?

By Peter Galuszka

Utilities, including Dominion Energy, are increasingly exploring the use of now-costly hydrogen technology to produce electricity with little or no carbon.

One of the most promising uses involves using excess renewable electricity from solar farms or wind turbines to power electrolyzer devices that strip hydrogen away from oxygen in water. The hydrogen is then used to power special batteries.

The result? Carbon free power that is available at just about any time when winds are blowing or the sun isn’t shining.

According to the Wall Street Journal, Dominion plans on experimenting with hydrogen for another use. It will try to blend hydrogen into its natural gas distribution system to reduce carbon and methane emissions. It will be testing a 5% hydrogen blend in some natural gas shipments next year, the Journal reports.

Eventually, it may go the route of electrolyzers and use solar and wind power to produce hydrogen. It appears that Dominion’s experiments may take place in the Far West where it owns power generation and distribution systems in Utah.

Another firm that has plans for hydrogen is NextEra Energy Inc., based in Florida. It plans on using hydrogen and natural gas to run a power plant in California. “What makes us really excited about hydrogen is that it has the potential to supplement significant deployment of renewables,” the Journal quotes NextEra CFO Rebecca Kujawa as saying. Continue reading

COVID-19’s Long-Term Changes in Virginia

by DJ Rippert

In the long run…  Over the past eight months COVID-19 has dramatically impacted the world, the United States and Virginia.  One hundred and twenty thousand cases of COVID-19 have been reported in Virginia  Over 2,500 people have died from COVID-19 . The cases, hospitalizations and deaths continue to grow in the Old Dominion. One year ago unemployment in Virginia hovered at 3%. Today it is 8%. Protests and rioting, possibly catalyzed by the COVID-19 lockdowns, have occurred regularly in several Virginia cities as well as Washington, D.C. Schools in Virginia moved to virtual teaching last Spring and many schools will open this Fall with either fully or partially virtual teaching. Nobody doubts the short- and mid-term effects of COVID-19. But what of the long-term effects? What impacts of COVID-19 will be felt after this version of the Coronavirus is gone?

The Spanish Flu (1918), Polio (1916 – 1955), H2N2 (1957), HIV/AIDS (1980s -), Swine flu (2009), COVID-19 (2020 -). Epidemics have broken out in the United States since the colonial days. Smallpox, yellow fever and cholera outbreaks plagued the country for centuries. The Spanish Flu pandemic was far worse than COVID-19 (to date). That flu struck in four waves and is estimated to have killed up to 50 million people worldwide. However, most Americans today would say that the Spanish Flu didn’t create major long-term changes in the United States. Some would disagree. Academics like Andrew Price-Smith believe that flu tipped the balance toward the allies in World War I. The growth of predominantly female-led nursing in the US may have been a consequence. In utero exposure to the pandemic may have negatively affected the health and prosperity of those exposed. Some survivors of the Spanish Flu never fully recovered. Despite all that, the Spanish Flu was called “the forgotten pandemic” until COVID resurrected interest. Economically speaking, the end of the Spanish Flu coincided with the start of the Roaring Twenties, making it hard to find long -term negative economic impacts from that pandemic. Continue reading

Virginia’s Return on Investment in Corps of Engineers Civil Works Projects

by James C. Sherlock

In response to my suggestion to use the Corps of Engineers to assess Virginia’s needs for hurricane and flood control, libertarian commenters on this blog used the argument that only oceanfront landowners will benefit.

That shows a fundamental misunderstanding of how the process works.  I ran into that same level of ignorance in the General Assembly.

No plan can defend everything everywhere, but a proper plan will do a cost-benefit analysis, and the USACE by law does that in every plan. Corps plans will protect what that its cost-benefit analysis indicates can be protected with a significant return on investment.   The value of people, disadvantaged communities, historically minority communities and areas of historical and ecological significance are counted in that assessment, not just property.

The Corps is a designated federal enforcer of environmental laws with regards to water and water related projects. They first will do everything they can with natural solutions before shifting to such construction projects as levies, pumps, seawalls, flood gates and berms.

The Corps uses a Regional Economic System (RECONS) model, which is a program used to assess the regional, state, and national impacts of projects. It is constantly assessed and updated. Continue reading