Filling the Gap

Congress passed a $127 billion highway funding bill on Friday.  The transportation legislation extends federal highway, rail and transit programs for 27 months, authorizing $120 billion in spending, financed by the existing 18.4 cents-gallon federal gasoline tax, as well as about $19 billion in transfers from the Treasury (in the case of both the highway fund and Social Security, it will be interesting to track how we move money around in the Era of Transfer Payments as the Treasury bails out funding shortfalls).

Want to read the details of the bill?  Try 596 pages.

The bill pays for 27 months of highway funding with 10 years of revenues and spending cuts - - the budgeting magic of a promise to pay for spending now with cuts in the future (what does this mean in two years at the next authorization fork in the road moment).  The bill also loops in $9 billion in "budget" offsets from allowing corporations to contribute less over the next several years to their defined-benefit pensions.  How and why this works should be a mystery to most (the 99%).

Read more at Taxpayers for Common Sense (which must think this bill was a gift from heaven).

http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=5328&action=Headlines

Quote of the Week

From David Zetland - - "Bad governance leads to bad outcomes (100% karma effect)."

The Texas Water Plan and Chicken Fried Steak

From Drawing Straws by Nate Blakeslee (July 2012 issue of Texas Monthly).  The key (and very good) question that Mr. Blakeslee raises - -

"For more than fifty years, Texas has issued version after version of a comprehensive water plan.  The newest edition includes $53 billion in projects, ranging from new reserviors to treatment plants.  So why is so much of the state always left high and dry?"

Blakeslee writes the following - -

"Rivers, of course, tend to flow through more than one planning region, and a number of major proposals to the plan call for pulling water out of one area for use in another.  The board {Texas Water Development Board} is supposed to resolve conflicts between regions before it finalizes the plan, but that doesn't always happen: on page 48, for example, planners from the Dallas-Fort Worth area recommend damming the Sulphur River in northeast Texas to create the long-proposed Marvin Nichols Reservior and pump the water to their constituents.  But that project is explicity rejected on page 50 by the people who actually live near the river.

If you catch the authors of the various regional plans in a frank mood, they will tell you that most of the projects in the plan will never be completed anyway.  The executive summary of the current plan reveals that only 65 of the roughly 500 initiatives listed in the previous version, compiled in 2007, have been implemented.  That happens to be a marked improvement over the 21 projects in the 2002 plan that were put into action by 2007.  The state water plan is to planning as chicken-fried steak is to steak." 

2012 Water Utility Report

Very good report from Black & Veatch on the strategic issues facing the U.S. water industry.  Great line regarding the strategic view and importance of "One Water" - - "The ongoing practice of classifying water into different categories creates divisions about water value and its potential uses."

http://bv.com/survey/2012-water-utility-report

Coalition for Responsible Regulation vs. E.P.A.

Link to the June 26, 2012 ruling from the federal appeals court upholding the E.P.A.'s central 2009 finding that greenhouse gases such as carbon dioxide endanger public health and likely have been responsible for global warming over the past half century.

http://www.cadc.uscourts.gov/internet/opinions.nsf/52AC9DC9471D374685257A290052ACF6/$file/09-1322-1380690.pdf

Feeling Like It's 1978

Change in wealth of top cities between 1978 and 2010.

 

Link to the report - -

http://www.theatlanticcities.com/jobs-and-economy/2012/06/americas-richest-cities-1978-and-now/2391/

The Arithmetic of Shale Gas

Very interesting paper on the costs-benefits of shale gas.

From the abstract - - and the link to the paper:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2085027&download=yes

Academic and professional assessments of shale gas (also known as frac gas) from vast shale formations in the US have focused on the social costs of shale gas development. Using the economic tools of traditional cost benefit analysis, we demonstrate that for one given year, 2010, the consumer surplus from shale gas is in excess of $100 billion to the US economy. The benefit to the US economy of replacing 1.0 million bbls per day of oil consumption with the BTU equivalent of natural gas is in excess of $25 billion.

Public Infrastructure Engineering Vulnerability Committee

A group established by the Canadian Council of Professional Engineers - - read their Adapting to Climate Change.

http://www.pievc.ca/e/Adapting_to_climate_Change_Report_Final.pdf

Potholes and Commen Sense

From an op-ed piece in the June 26, 2012 edition of The Wall Street Journal (Stimulus Isn't a Dirty Word) by Alan Blinder - -

"Unlike private investment, inadequate public investment is part of the problem.  America's infrastructure needs are so huge, and so painfully obvious, that it's mind-boggling we're not investing more.  The U.S. government can now borrow for five years at about 0.75% and for 10 years at 1.75%.  Both rates are far below expected inflation, making real interest rates sharply negative.  Yet legions of skilled construction workers remain unemployed while we drive our cars over pothole-laden roads and creaky bridges.  Does this make sense?"

Rethinking that summer internship at SeaWorld

If you got that summer job feeding the killer whales at SeaWorld, check out the video - - probably not part of your orientation package. 

The video is also a great example of the power of cooperation, coordination, and communication - - even at the lower rungs of the evolutionary ladder.

Outsourcing the whole thing

We have over 200 years of the "Big Government" or "Small Government" debate - - probably another 200 years is ahead of us.

A town in Georgia has added to the debate with what looks like a third alternative - - call it "No Government."

http://www.nytimes.com/2012/06/24/business/a-georgia-town-takes-the-peoples-business-private.html?src=me&ref=business

The Engineers not only created human life, they supervised our development

The true meaning of Prometheus - -

http://www.reddit.com/r/movies/comments/uswn1/prometheus_everything_explained_and_analysed/

An economist's review of the movie - - "One thumb down, but on the other thumb . . ."

Health Reform Bracketology

We can all play at - -

http://www.healthreformbracketology.com/

Between Hell and Texas

The July 2012 issue of Texas Monthly has a great series of articles on water issues in Texas - - the cover story for the special issue is entitled, The Last Drop. 

One of the more powerful visions of our recent drought is the commentary of ranchers.  Texans expect drought - - and we are a  tough state with even tougher people.

Ranchers were forced to feed their cattle with prickly pear cactus (after burning the pads to remove the spines).  This is how one rancher described the process in the article:

"Oh, man, the cattle get after it.  There's a problem after you burn pear for'em: they'll even it with the stickers on and that's not good.  It tears their mouth all to pieces, and it'll kill a sheep.  They get screwworms in their mouth, and then you'd better find'em and doctor'em in a day or two, or the worms'll eat their heads off."

This is a great paragraph from the article:

"Drought and dry weather are a part of our heritage as much as cowboy boots and Tex-Mex.  This was likely more evident to a greater number of Texans when the state was more rural, but, in part because of the severe impact of drought on rural areas, Texas has undergone a dramatic shift toward urbanization over the past sixty years.  In 1950 the population split between urban and rural areas in Texas was around sixty to forty; today it's almost ninety to ten.  And though the residents of our growing, thirsty cities may be more insulated from the effects of drought than their counterparts in the country, they are the very ones whose policies, routines, and expectations will determine whether our scant supply of water will be enough to go around."

Read the articles - - the entire series is very good.

Voting on your tax rate

The votes are in - - the results are provided at the link:

http://www.newsmax.com/US/Tax-rates-wealthy-corporations/2012/02/27/id/430704

It is somewhat amazing we can actually come up with the consensus to crown a Miss America - - if we are going to have a collective future, we had better get together collectively on the payment plan.

Tracking Heat Records

Great site to review the scale of the June temperature records.

The Next Generation and the OGRs

So you are in line at the Walmart and the old guy behind you with the "Old Guys Rule" (OGR) tank top three sizes too small is buying a 12-pack of Keystone Light.  Bored, you ask "Hey, did you happen to see the reprint of the Reith Lecture by Niall Ferguson entitled, We're mortgaging the future of the younger generation, that was recently in the June 23, 2013 edition of The Telegraph?" 

Hundred percent probability of a no answer (and a 75% chance of another word in front of the no).  If the OGR seems a bit interested, jump in with the elevator summary - - "Did your know that uncontrolled public debt threatens to rupture society as the older generation thrives at the expensive of the young?"

OGR points out (correctly) that Keystone Light is not exactly the picture of thriving.  But this gives you the opportunity to pull out the article (you happen to have The Telegraph in Walmart) and show OGR some of the key points, like:

"The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues is $200 trillion, nearly 13 times the debt as stated by the US Treasury. Notice that these figures, too, are incomplete, since they omit the unfunded liabilities of state and local governments, which are estimated to be around $38 trillion.

These mind-boggling numbers represent nothing less than a vast claim by the generation currently retired or about to retire on their children and grandchildren, who are obligated by current law to find the money in the future, by submitting either to substantial increases in taxation or to drastic cuts in other forms of public expenditure."

OGR starts to look like he wishes he had selected another tank top and a different check-out line.  But you continue:

"The present system is, to put it bluntly, fraudulent. There are no regularly published and accurate official balance sheets. Huge liabilities are simply hidden from view. Not even the current income and expenditure statements can be relied upon. No legitimate business could possible carry on in this fashion.

Public sector balance sheets can and should be drawn up so that the liabilities of governments can be compared with their assets. That would help clarify the difference between deficits to finance investment and deficits to finance current consumption.

Governments should also follow the lead of business and adopt the Generally Accepted Accounting Principles. And, above all, generational accounts should be prepared on a regular basis to make absolutely clear the intergenerational implications of current policy. "

As OGR reaches for a Keystone, the curtain falls with:

"As our economic difficulties have worsened, we voters have struggled to find the appropriate scapegoat. We blame the politicians whose hard lot it is to bring public finances under control. But we also like to blame bankers and financial markets, as if their reckless lending was to blame for our reckless borrowing. We bay for tougher regulation, though not of ourselves."

OGR wants the reference link (and asks about the word "bay" and you explain Ferguson is British and it is simply English cleverness), and then walks off and wishes he had gone to the Tom Thumb.

http://www.telegraph.co.uk/finance/financialcrisis/9338997/Reith-Lecture-Were-mortgaging-the-future-of-the-younger-generation.html

  

The State of the Nation's Housing 2012

This is a comprehensive assessment of U.S. housing prepared by Harvard University (The Joint Center for Housing Studies) - -

http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/son2012.pdf

Best Novel of the Year

Without question it is Don Winslow's Kings of Cool.  The book is the pre-quel to Savages, which is out in the theaters this summer.

One of the main characters is a Navy SEAL - - and this is how Winslow describes the War on Terror in 2005:

Put simply:
Find enemy leaders and kill them.
The theory being that dead people are probably degraded but definitely disrupted, death being more or less the maximum kink in someone's day.

The collateral theory being that if you kill enough leaders, it discourages the middle management from applying for the job vacancy.

Nobody wants that promotion.
(More money
More responsibility
Corner office
Laser dot.)

Most Salafist leaders want to do to Paradise eventually, not immediately, generously yielding that privilege to lesser beings.

And - - the difference between antiterrorism and counterinsurgency - -

Cheaper,
Faster,
And easier to tabulate.
Bodies (especially dead ones) being easier to count than hearts (fickle) and minds (transitory).

Water Services etc. (Scotland) Act of 2005

Link to the text of the legislation to allow competition in the Scottish water markets - -

http://www.legislation.gov.uk/asp/2005/3/contents

Switching Your Water and Sewerage Supplier

It seems the Scot's are the first to deregulate their water and wastewater industries - - giving customers the freedom to select who supplies their water and who treats their wastewater.  Similar to electrical deregulation in the United States - - maybe the start of a global movement to break the monopolistic practices of a very old vertically integrated industry.

Read more at - -

http://www.scotlandontap.gov.uk/view_how_does_it_affect_me.aspx

Drinking Bottled Wastewater

From Singapore - - NEWater in a bottle.  Toilet-to-bottle - - the success of high technology and advanced wastewater treatment (and marketing!).  Be thinking about acquiring the distribution rights for the U.S market.  One clip of George Clooney drinking NEWater at the Oscars next year and you will wish you would have been the first!!

http://en.wikipedia.org/wiki/NEWater

Drilling and Drought

Great article in the Austin-Statesman - - the road from drought to decentralizing water resources.

http://www.statesman.com/news/local/more-austinites-drilling-private-wells-to-water-lawns-2388246.html

Climate Adaptation

This is an excellent example of the type of document and plan that engineers will be tasked to participate in the development of in the coming years.  Climate adaptation plans and preparedness - - this particular document, Boulder County Climate Change Preparedness Plan (Draft), is for Boulder County, Colorado and was prepared by Stratus Consulting.  I would highly recommend a review of this very important document. 

The goal of the document as stated in the plan:

"The objective of this plan is to assist county and city departments that manage climate-sensitive resources and assets to achieve their departmental objectives in the face of challenges posed by anticipated future changes in the climate of Boulder County."

Several key words in the objectives - - climate-sensitive, challenges, anticipated, and changes - - a lot will be riding on the engineering community as it deals with these types of issues.  There are several key questions that face engineers - - the most important is what are we doing in the face of significant and anticipated threats to climate-sensitive infrastructure assets and natural resources?

Chapter 3 - Water Supply provides an excellent overview of the threats and challenges that Boulder County faces in the context of critical water resources.  Per the plan:

". . . water supply entities throughout the county are still vulnerable to major shifts in climate trends that can affect planning especially due to the long time frames used by municipal water utilities." 

Graph of the week

From the June 20, 2012 The New York Times - - Public Workers Face New Rash of Layoff, Hurting Recovery:

"So while the federal government has grown a little since the recession, and many states have recently begun to add a few jobs, local governments are making new cuts that outweigh those gains. More than a quarter of municipal governments are planning layoffs this year, according to a survey by the Center for State and Local Government Excellence. They are being squeezed not only by declining federal and state support, but by their devastated property tax base."

Modern economics trumps modern engineering

Patrick Radden Keefe has a fascinating article in last week's The New York Times Magazine on the business of drug trafficking - - Cocaine: How the world's most powerful drug traffickers run their business.  The article provides a unique view inside the billion-dollar business of the Sinaloa cartel.  The equation is rather simple - - economics on one side, and engineering on the other.

The economics of cocaine and other drugs drive the entire business model.  Keefe explains this in a single paragraph:

"The Sinaloa cartel can buy a kilo of cocaine in the highlands of Columbia or Peru for around $2,000, then watch it accrue value as it makes its way to market.  In Mexico, that kilo fetches more than $10,000.  Jump the border to the United States, and it could sell wholesale for $30,000,  Break it down in to grams to distribute retail, and the same kilo sells for upward of $100,000 - more than its weight in gold.  And that's just cocaine.  Alone among the Mexican cartels, Sinaloa is both diversified and vertically integrated, producing and exporting marijuana, heroin and methamphetamine as well."

The somewhat geographically linear price increases probably have some relationship to true logistical costs - - gas for the trucks and bribes for the border guards.  But most is associated with risk - - the risk of capture or competition.  The article also points out the gross revenue (does Sinaloa honestly worry about the accounting specifics of net revenue?) amounts to $6.6 billion per year.  By most estimates, Sinaloa has achieved a market share (I can see this being an important metric) of at least 40%.  Roughly the earnings of Netflix or Facebook. 

Engineering got involved in this global market as part of the Secure Fence Act of 2006.  The act authorized a fence (numerous fences is probably more accurate) for roughly 600 miles at the cost of approximately $2.8 million per mile ($530 per foot of fence - - while the cocaine increases in value at the average rate of $330 per foot going going from Lima to Chicago - - for a "fence to coke ratio" of 1.61).  The attached video said $4 million per mile - - the sad fact is we actually might not know how much El fence cost.

This is one way the cartel responded to the fence according to the article - -

"Michael Braun, the former chief of operations for the D.E.A., told me a story about the construction of a high-tech fence along a stretch of border in Arizona.  "They erect this fence," he said, "only to go out there a few days later and discover that these guys have a catapult, and they're flinging hundred-pound bales of marijuana over to the other side."  He paused and looked at me for a second.  "A catapult," he repeated.  "We're got the best fence money can buy, and they counter us with a 2,500-year-old-technology."

The catapult was first seen by the Greeks in around 399 BC.  As Keefe points out - - improvisation is a trafficker's greatest asset (it is also the greatest organizational asset in the era of global uncertainty and complexity).  Nothing says improvisation like a catapult.  It is probably a security engineer's biggest nightmare - - the drug dealer that watches Myth Busters. 

Check out what $530 per foot buys you on the border - - this is how two Anglo-suburban-looking girls responded to the fence:

One universal truth of engineering - - problems generate solutions, which generate more problems, which generate more solutions, which generate . . . till you run out of other people's money (we like to summarize the truth with the word "progress").  Border fences are a great example of this universal truth.

Capturing Rainwater

Good report from the Natural Resources Defense Council - - Capturing Rainwater From Rooftops.

It will be interesting if this holds up - - "If all rooftops in these cities {the report looked at eight cities} captured rainwater, it would meet the water supply needs of 21% to 75% of each city's population."

The era of rain barrels and cisterns to ease water shortages and prevent pollution.  The era of decentralization - - my water is not your water.

Microsoft Surface

Microsoft announced the Surface yesterday - - their entry into the tablet market.

http://www.informationweek.com/news/hardware/handheld/240002115

TacoCopter

Innovation - - as only we can do it in the United States.  When TacoCopter flies into the McDCopter - - we will also show the world how to regulate new technology and innovation.

http://tacocopter.com/

Smart Construction

From Cambridge University and the Innovation Knowledge Centre - - a program that aims to bring cutting edge sensor technology to the construction industry.

http://www-smartinfrastructure.eng.cam.ac.uk/IIC-20120111/Mair.pdf

Every business that exists now is a data business

The world of information, data management, and sensors is increasingly becoming a part of modern agriculture.  As we march toward a global population of 10 billion - - the "data harvest" will become an important part of the actual harvest.  From an iPad that shows a map of the crop field overlaid with data such as soil type to "smart" planters that automatically adjust seed depth - - this will produce greater efficiency and increased yields (at current prices of $6 per bushel of corn, every 10-bushel-per-acre-increase in the yield on a farm of 2,000 acres would translate to $120,000 in additional revenue - - so droping $5,000 on better data management has a very nice ROI).

Gadgets are not new to farmers - - what is new is the volume and quality of data available to farmers.  The era of "big data" has come to the farm - - farmers currently have the ability to easily utilize information to and from computers in the tractor cabs.  Modern computing, with tools like the iPad and senors, have allowed farmers to make the leap from data to information to knowledge.  The leap allows farmers to make better decisions - - from greater knowledge should come better decision making.  Every business that exists now is a data business - - where the goal is better decision making in an uncertain and complex world.  It will be interesting to see if real-time tractor cab generated information and knowledge makes it to the world of crop insurance and the commodity traders at Goldman Sachs - - real time crop data interfacing with real time global markets.

Keep an eye on Precision Planting and MachineryLink, Inc. for the latest on innovation and advancement in the Era of Big Data Farming.

A Racing Hybrid

The world of hybrid cars has come to racing.  In this case - - the 24 hours of Le Mans.  Audi and Toyota have entered hybrid cars.  For the first time, hybrid racers have a serious shot at winning.  Both team cars will capture energy during braking - - Audi using a flywheel and Toyota using supercapacitors to transfer energy to an electric motor that powers the front wheels.

Toyota will field two hybrids, Audi has entered two turbo-diesels, plus two hybrids. 

The video is a cash of one of the Toyota hybrids.

A link to an interview with Dr. Wolfgang Ullrich, head of Audi racing, regarding the hybrid technology - -

http://auto-racing.speedtv.com/article/le-mans-qa-with-audis-dr-wolfgang-ullrich/

Update - - the Audi hybrid (#1) won the race!!!

Induced Seismicity Potential in Energy Technologies

Link to the latest report by the National Academy of Sciences on the research associated with the linkage between earthquakes and fracking.  The report said the increased earthquake risk probably comes from a related activity - - injecting large amounts of drilling waste underground for disposal. 

The Barnett Shale, which stretches from Dallas County to the west past Fort Worth, has nearly 20,000 natural gas production wells.  Almost all were drilled in the past five years .  But the region has only 100 waste injection wells .  Scientists have tied the timing and locations of earthquakes to the injection wells.

http://www.nap.edu/catalog.php?record_id=13355

When 11% is a big problem

From the McKinsey Global Institute - - The World at Work: Jobs, Pay, and Skills for 3.5 Billion People.  This will be very interesting to watch - -

"90 million to 95 million more low-skill workers (those without college training in advanced economies or without even secondary education in developing economies) than employers will need, or 11 percent oversupply of such workers"

When employers have no need for "such" workers - - who does?

http://www.mckinsey.com/insights/mgi/research/labor_markets/the_world_at_work

Pension Tension

The era of declining public infrastructure is starting to collide with the era of pension tension.  A collision of the desire to build the new bridge or upgrade the municipal water treatment plant with the obligation to pay for public retirement benefits.  The issue is fundamentally very simple - - our collective desire to invest in the future and a legal (maybe moral) obligation to pay for the past.  It is simple with the word "and" - - not so simple when one has to deal with the word "or". 

This is a huge and important issue for engineers - - those that see the need for infrastructure renewal and investment and those that have worked for the benefits.  Do you build the new fire station and pay retirement benefits that a fireman has historically received?  The word "and" appears to be a distant memory.

The debate has just started - - read more at:

  http://www.bloomberg.com/news/2012-06-11/why-the-public-sector-isn-t-doing-fine-.html

Eno Center for Transportation

Interesting think-tank that focuses on transportation issues - -

http://www.enotrans.org/

The Best Book on Water Economics

I just read this - - without question the most insightful and interesting book I have read on water economics.  The book is The End of Abundance: Economic Solutions to Water Scarcity by David Zetland.  Zetland also writes the blog Aquanomics.

Zetland writes the following - -

"What forces a water manager to change the way his organization manages its water?  Not much.  In most parts of the world, water service is provided by a monopoly, which means each organization chooses how to serve its local customers without fear of competition.  While some managers may pursue novelty and change because they have the internal drive to search for the best ideas, others wait until they are pushed.  Politicians may push them if they are not too busy.  Sometimes customers push, but customers lack bargaining power.  Sometimes drought pushes, but a drought may end before hard choices must be faced.  The same can be said for the irrigation districts that serve farmers, the engineers who run dams, and so on.  All of these water organizations exist in a world where competition is weak, oversight is intermittent, customers have few alternatives to taking the service they are given.  Although managers may earn gold stars for operating by the book, they may not be doing the best job at managing their customers' resources.

The end of abundance means water managers have more to worry about than recovering costs on the way to delivering water to anyone who demands it.  Managers need to either increase supply or reduce demand.  Although additional supply can be expensive, the biggest headache comes from allocating the cost of new supply among customers who claim others should pay more.  Reducing demand is even harder, since it requires rationing.  In a market, rationing occurs through higher prices, but water agencies often ration through bureaucratic rules.  These rules may be designed with good intentions, but they can be manipulated, unfair and inefficient.  In many cases, they add significant valve to the rights that were distributed long before scarcity became a concern."

Also - -

"Markets move water from those who have to those who want, using prices to balance supply and demand.  Markets may not be fair in outcomes (rich people can still buy more more than poor people), but they provide equal access.  Market prices accurately reflect value and scarcity, but they can be high.  Can we allocate water with markets and prices - without producing civil war, dry taps, dead ecosystems or thirsty people?  Can we do so in the presence of monopoly property rights and other institutions?  Yes and yes."

Trash as the trash can

Innovation in the developing world - - Haiti.

The Water Design-Build Council

 The Water Design-Build Council seeks to advance the development and rehabilitation of municipal water and wastewater systems through the sound use of design-build and construction management at-risk methods of project delivery.

The link to their site - -

http://www.waterdesignbuild.com/

I would also recommend the AWWA publication, Design-Build for Water and Wastewater Projects by Holly L. Shorney-Darby, PhD, P.E., Editor.

Buried No Longer

I picked this up at the American Water Works Association annual conference and exposition (ACE 12) in Dallas yesterday - -

Buried No Longer: Confronting America's Water Infrastructure Challenge

Making The Future

Call it a "manufacturing renaissance" or "re-industrialization" on a global scale.  Whatever it is, manufacturing and the jobs potential and strong economics associated with it are hot.  High-cost nations (such as the U.S) are considering a return of manufacturing.  This is partly driven by innovation that makes manufacturing cleaner and more competitive.  Brainpower reserves and technology are the keys to this renaissance (where places like Portugal, with only 30% of the population graduating from high school, will be hard pressed in this new manufactured world).  We in the U.S. might even start to think about developing a collective "Industrial Policy" - - with the goal of pursuing higher value and a more sustainable middle class.

In The New Industrial Revolution: Consumers, Globalization and the End of Mass Production, author Peter Marsh lays out the seven secrets of success in the new (and better) era of global manufacturing:

1. Environmental Imperative - Companies use "green" thinking to sell more products and invent new ones.
2. Networked Manufacturing - Companies are making more effective use of global supply chains and talent, using people where they are most cost-effective geographically.  This makes them more nimble at spotting trends.
3. Technological Acceleration - Companies are becoming more adept both at improving individual technologies and using them in combination with others.
4. Cluster Dynamics - Even as supply chains become more geographically diverse, manufacturers are becoming more reliant on certain "clusters" of local suppliers and "technology partners", many of them located in high-cost countries.
5. Niche Thinking - Changes in technology mean more business for boutique, specialist businesses with emphasis on design and top-flight manufacturing.
6. Personalized Production - Making things in small batches tailored to a customer, perhaps even one at a time, is starting to become routine.
7. Industrial Democracy - More countries have become capable of top-class manufacturing and product development, giving manufacturers greater choice over where to produce.  China, now the world's biggest manufacturing country, has made the greatest strides.

Congestion and Parking Relief Incentives (CAPRI)

Stanford University is working on a incentive based program for drivers who avoid traffic jams.  The world of carrots comes to a part of the public infrastructure matrix known for its sticks.  This is a good example of what is ultimately needed in the context of sustainability - - throw a little computer science, technology, engineering, behavior research, and economics into the pot - - and out comes behavior change that benefits all of society. 

The Visual Arts

A great example of the information that can be embedded in one graphic - - relating to a very complex issue.

Public and private money to build Texas reservoirs?

From the June 10, 2012 issue of the Dallas Morning News ( Water sources, funding needed) - - a summary of the meeting Lewis H. McHahan, a member of the Texas Water Development Board for Dallas, had with civic and community last week.  Funding constraints and alternatives are starting to go down the path of public-private partnerships - - similar to the toll roads being build in North Texas.

From the article - -

"Elections this year mean new legislators in the 2013 session, many of them winning their seats on pledges of "no new taxes" at a time when ensuring the water supply requires billions of dollars in new construction.  The projected capital costs for the state's "recommended water management strategy" total more than $53 billion through 2060, with more than $21 billion of that needed in Region C, the Dallas-Fort Worth region.  The local portion of those costs could be around $11 billion, McMahan said, money that could be very hard to find.

Higher utility rates could fund part of the costs.  So could "tap fees" - modest charges for every water tap in your home, McMahan said.

"Other sources of money have been talked about - fees and taxes, local funding, even private funds like we've used to build toll roads - public and private money to build reservoirs," he said.  "These are foreign to what we've done in the past, but they're things we need to talk about if we're going to stay in front of our water needs."

The immediate need is focusing on two or three funding ideas that could be presented to the Legislature in its 2013 session, he said.  And failing to find ways to provide more water will come with a stiff cost as well - a potential $50 billion loss in regional income by 2060, and the loss of more than half-million jobs, according to Texas Water Development Board data."

Distributing Water's Bounty

Excellent paper from Ronald Griffin and James Mjelde of Texas A&M University (look for their forthcoming Ecological Economics).  The paper looks at the fairness and effectiveness of increasing block rate and uniform rate water pricing structures.

http://ron-griffin.tamu.edu/reprints/GriffinMjelde2011a.pdf

An Engineer Reviews Prometheus

I have three comments regarding the movie.  I enjoyed the movie more than some of the critics and I will admit that it is not the 1979 Alien.  For these types of science fiction movies, the engineer needs to view the movie in the context of hardware, software, and plot.  Both plot and character development are rather weak in Prometheus - - especially compared to Alien.

My three comments - -

1.  I am not the first to point this out - - but you can see the Windows 7 toolbar on a quick shot of one of the  ship's computer screens.  Not sure which is the more troublesome - - aliens from an unknown world or having to deal with Microsoft and Windows 7 in 2092.  We need a transformative revolution in software this century before we can start visiting distance planets.  I am not yet ready to go to LV-223 with Windows 7.
2. Two pieces of hardware were fascinating and have huge potential.  The first is the capsule-like robotic surgical unit (and I will not spoil this part of the movie).  This could revolutionize the cost and convenience of surgery.  I can see Walmart surgery "stations" in their stores by 2090.  Gall bladder removal for $299 with a coupon.  The other piece of hardware that has potential is the remote autonomous robotic mapping spheres (RARMS - - remember that I named it first!).  I can see 3-D mapping like in the movie as being the norm in 2090.
3. My last comment is the statement in the film that the Prometheus voyage cost one trillion dollars in 2092.  Assuming a 6% discount rate and 80-years, the present value of one trillion dollars is "only" $9.5 billion.  So what is the big deal?  Big money at the end of the century will be in quadrillions - - 15 zeros.    

A Tale of Two Tribes

Two different Indian tribes appear to be moving in opposite directions.  The first are the Cleveland Indians - - who are in second place in their division with a record of 31 and 27.  They lead all of baseball in terms of poor home attendance - - their home games average 17,159 fans.  This is last in the major leagues (the Texas Rangers average 43,000 fans per home game at 34 and 26).  Forbes recently ranked Cleveland as the 12th most miserable city in the United States.

The other Indian tribe is the Navajo Nation and the Jicarilla Apache Nation.  They are getting a billion dollar water project in New Mexico.  Known as the Navajo-Gallup Water Supply Project.  The project will provide the tribes with surface water from the basin of the San Juan River.  Mandated by federal law to be completed before 2025, the estimated $995-million project will entail the design and construction of about 280 miles of pipelines, multiple pumping plants, and two water treatment plants.  The project is being carried out in order to provide more sustainable supplies of surface water to arid communities that currently have no water service, rely on groundwater of poor quality, or are using groundwater sources at a rate much faster than the sources can be recharged.  At present, more than 40% of households with the Navajo Nation rely on hauled water.

Speaking of water . . .

We seem to have engineered a world where it is easier to talk about water rather than actually drink it.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2015338

Sustainism

The Financial Times had an interesting book review yesterday by Edwin Heathcote (the architecture critic for FT) - - the book is Vitamin Green and the title of the review tells us a lot - - Enough Already.  Heathcote raises the central question for engineering in the age of sustainability - - Can we submit our urge to build and still make claims of sustainability?  I am not sure engineering yet understands the importance of addressing this question.

Heathcote writes the following:

"Part of the problem lies in the fuzziness of the future.  The introduction suggests that 40 percent of carbon emissions are caused by buildings - ergo architecture is responsible for 40 percent of global warming.  But what does this mean?  If I boil a kettle in a house, is that me, is it the kettle or is it the house?  Is it a moral problem or one of design?

If we don't live in houses and work in offices, presumably their carbon emissions would be lower.  It is not the buildings, it is us and all the stuff that is the problem.  And design is, by and large, about stuff.  New stuff, better stuff, worthier stuff, greener stuff, more exclusive stuff.  The greenest chair is a second-hand chair: no design involved."

Engineering is fundamentally about the stuff.  But we should also guard against the idea that the greenest engineer is the one not working.  Sustainability must be viewed positively - - design can and must become a way in which young people can participate in changing today.  The thinking engineer of this century should be taking into account the effects of production, the social/economic impact and the recyclability of a new product, not as an add-on or a marketing trick.  Sustainability must be viewed as a matter of course.

15 Opportunities to Improve Resource Productivity

Management consulting firm McKinsey has a report that can be viewed as a career guide for engineers.  The report, Resource Revolution: Meeting the World's Energy, Materials, Food, and Water Needs, outlines a path for coping with a resource crunch on a crowded planet.  All fifteen recommendations listed below intersect with engineering.

McKinsey places the greatest hope on what it calls the "productivity response" - - improvements in resource productivity.

1. Energy efficiency in buildings - - Making buildings more energy efficient could contribute about 19% to the total benefits McKinsey projects for the resource-productivity path.
2. Improving yields on large farms - - Boosting crop yields could deliver 7% of the total resource-productivity benefits.
3. Reducing food waste - - About 20 to 30% of food is wasted even before it reaches the consumer's plate.
4. Reducing municipal water leakage - - Reducing leaky pipes in bulk water supply at commercial, residential, and public locations could be saving 100 to 120 billion cubic meters of municipal water a year by 2030.
5. Increasing the density of urban areas - - This measure would result in greater efficiency in transportation by supporting a movement away from automobile to public transport.
6. Improving energy efficiency in the iron and steel industry - - One important measure in this sector will be recapturing waste heat through cogeneration.
7. Improving yields on smaller farms - - Smallholder farms account for 30% of land under cultivation while yields are 50% of those on large farms.
8. Improving transport fuel efficiency - - Electric and hybrid are the future, but the internal combustion engine has much room for improvement.
9. Increasing market penetration of electric and hybrid vehicles - - Assuming an average lifetime of 15 years for a vehicle, this means a complete turnover of vehicles by 2030.
10. Reducing land degradation - - This measure will involve restoring degraded farmland and improving agricultural practices to prevent further degradation.
11. Improving end-use steel efficiency - - The construction, machinery, and automotive industries account for 80% of global steel demand.  Better design, materials optimization, and use of higher-strength in this sectors can improve performance of the material and mitigate demand.
12. Increasing oil and coal recovery - - Better technologies and improved recovery practices can help operations recover more of what's there and increase the productive lifetimes of coal mines and oil wells.
13. Improving irrigation methods - - Moving farmers from flood irrigation to sprinklers and drip irrigation can improve yields and save water.
14. Shifting road freight to rail and barge transport - - Ship and rail transport are much more efficient than road transport.
15. Improving efficiency of power plants - - Even though coal and natural gas will continue to be the primary energy sources for electrical generation, upgrading to more efficient technologies can offer significant benefits.

One way to reduce traffic congestion

One way would be to set the value of a "permit" to purchase a car equal to the value of your house - - welcome to Singapore.

http://www.bloomberg.com/news/2012-06-04/singapore-family-sedan-matches-cost-of-a-u-s-home.html

Contradictons, Inversions, Oddities, and Coincidences

I love this from the May 2012 issue of Wired (How To Spot The Future) on looking into the future and spotting the next big thing.  This is from Paul Saffo, managing director at the Silicon Valley investment research firm Discern - -

"There are four indicators I look for: contradictions, inversions, oddities, and coincidences.  In 2007 stock prices and gold prices were both soaring.  Usually you don't see those prices high at the same time.  When you see a contradiction like that, it means more fundamental change is ahead.

The second indicator is an inversion, where you see something that's out of place.  When the Mexican police captured the head of the drug cartel, in the photos the perpetrators were looking proudly at the camera while the cops were wearing ski masks.  Usually it's the reverse.  To me that was an indicator that Mexico was very far from winning its war against the cartels.

Then there are the oddities.  When the Roomba robot vacuum was introduced in 2002, all the engineers I know were very excited, and I don't recall them owning vacuums.  I said, this is damn strange.  This is not about cleaning floors, this is about scratching some kind of itch.  It's about something happening with robots.

Finally, there are coincidences.  At the fourth Darpa Grand Challenge in 2007, a bunch of robots successfully drove in a simulated suburb.  The same day, there was a 118-car pileup on a California highway.  We had robots that understand the California vehicle code better than humans, a bunch of humans crashing into each other.  That said to me, really, people shouldn't drive."

For Whom the Bell Tolls

Very good article in the June 1, 2012 issue of the Financial Times - - Crisis in eurozone hits toll road.

http://www.ft.com/intl/cms/s/0/0b1c09f2-ad74-11e1-bb8e-00144feabdc0.html#axzz1wqaU27Pr

The Beveridge Curve

Named after an influential British economist of the 1930s and 40s.  The graph compares unemployment and vacancies.  As the economy contracts, joblessness rises and vacancies shrink.  During the recovery, the process reverses.  In the current upturn, the curve isn't retracing its steps.  Unemployment is falling more slowly than you'd expect, given the rise in vacancies.

The Integrated Production Visibility (IPV) Software

Boeing is utilizing software on the 787 termed the "Integrated Production Visibility (IPV)" referenced in Air & Space (July 2012) - - Inside Boeing's 787 Factory.

If you have an information link on the software, please contact me.

Exxon 2012 Outlook for Energy

Exxon's 2012 energy view to 2040.  Exxon projects global demand for natural gas will rise about 60% from 2010 to 2040.  During this time period, natural gas will overtake coal as the second-most widely used energy source by 2025.

http://www.exxonmobil.com/Corporate/files/news_pub_eo.pdf

The Globalization of Infrastructure

In January of this year, the China Investment Corp. bought an 8.68% share of British utility Thames Water.  As the euro-zone crisis deepens - - what will the Chinese (and others) buy; infrastructure or government bonds?

Potholes and pension funds

As reported in the Financial Times (June 4, 2012) by Daniel Schafer - - Pension funds back away from infrastructure investment.  This is not a good sign - - highlights from the article:

• Pension funds globally are pulling back from infrastructure investments is a worrying trend for cash-strapped western governments.
• In the past five years until the end of April 2012, pension funds around the world have reduced their allocation to infrastructure projects by 8% or roughly $49.46 billion.
• This has hit the UK particularly hard - - pension funds were seen as a source of funds for road and rail improvements.
• Investment banks, which dominated the sector in the past decade, have been overtaken by independent fund managers for the first time.
• The research shows the emergence of a new breed of independent infrastructure investor, such as Arcus and SteelRiver.
• A couple of exceptions - - the Ontario Teachers' Pension Plan and the China Investment Corporation are pushing into the infrastructure sector.

A good source of information is the Infrastructure Investor - -

http://www.infrastructureinvestor.com/

Bluefin Robotics

The Navy is building drones to fight underwater enemies.  A future of patrolling the seas with deepwater robots.  The Navy is spending $170 million over the next five years to design and buy eight of the robots from General Dynamics and Bluefin Robotics.

Investing in Guar Seeds

Investment tip - - but watch for botany bubbles.  From the Dutch tulip bubble of 1637 to the Indian guar seed bubble of 2037?

http://gulzar05.blogspot.com/

The Water Risk Atlas

A new mapping tool from the World Resources Institute - -

http://insights.wri.org/aqueduct/atlas

KPMG Global Manufacturing Outlook: Fostering Growth through Innovation

This is a good report from KPMG.  The next wave of transformational innovation is either already here or will begin in the next two years. 

http://www.kpmg.com/global/en/issuesandinsights/articlespublications/global-manufacturing-outlook/pages/fostering-growth-through-innovation.aspx

The Top 100 < 50-Years Old

The link to the top 100 world universities that are less than 50-years old - -

http://www.timeshighereducation.co.uk/Journals/THE/THE/31_May_2012/attachments/THE_100_Under_50_.pdf

Graphic of the Week

A 50-to-1 Advantage

From Natural Gas Signals a "Manufacturing Renaissance" by Jim Motavalli in the April 11, 2012 New York Times - -

According the Kevin Swift, chief economist at the American Chemistry Council, European producers mostly use oil-derived raw materials for making these same products.  "The U.S. has a competitive advantage when oil is seven times as expensive as natural gas, but now we have more like a 50-to-1 advantage," he said.  "The shale gas is really driving this.  A million B.T.U. 's of natural gas that might cost $11 in Europe and $14 in South Korea is $2.25 in the U.S.  Partly because of that, chemical producers have plans to expand ethylene capacity in the U.S. by more than 25 percent between now and 2017.

SteelRiver Infrastructure Partners

In some form or fashion, the U.S. infrastructure woes are going to have a path that leads to independent infrastructure investment firms like SteelRiver Infrastructure Partners.

I would keep an eye on this trend and market segment.

Accelerating Infrastructure Repairs

A couple of excellent paragraphs from Robert Frank (who is an economics professor at the Johnson Graduate School of Management at Cornell University) in his June 3, 2012 article in the New York Times - - Repairing Roads Can End All Kinds Of Gridlock:

"The same logic applies to overdue infrastructure investments,  Yes, paying for them requires more government debt.  And while austerity advocates fret that such projects will impoverish our grandchildren, they concede that the investments can't be postponed indefinitely, and that they'll become much more expensive the longer we wait.

Our lingering economic doldrums reinforce the case.  Many skilled people who can do these jobs are unemployed today.  If we wait, we'll have to bid them away from other useful work.  And with much of the world still in a downturn, the required materials are cheap.  If we wait, they'll become more costly.  Annual interest rates on 10-year Treasury notes have fallen below 1.5 percent.  Those rates will also be higher if we wait.  So it's actually our failure to undertake these projects that's saddling our grandchildren with gratuitously larger debt.

By itself, the savings from accelerating infrastructure repairs won't be enough to balance government budgets.  But debt is a long-run problem, and as the budget surpluses of the later 1990s remind us, the American economy at full employment can generate more than enough revenue to pay the government's bills."

Link to the Frank academic website - -

http://www.johnson.cornell.edu/Faculty-And-Research/Profile.aspx?id=rhf3

We are all living downstream

A good video presentation from the WateReuse Association.

The Gold Medal for Engineering and Construction

The Games this summer will cost the British taxpayers an estimated $13.2 billion.  Here's the breakdown:

• $3.1 billion - - site preparation and infrastructure
• $1.9 billion - - vehicles construction
• $1.4 billion - - transport infrastructure
• $1.4 billion - - other Olympic park projects
• $1.4 billion - - security
• $4.0 billion - - other (including news media support)

Global Internet Geography

You can get a view of the Internet's backbone illustrating the key links between cites in the Global Internet Geography (GIG) produced by Telegraphy.  The report is sold to the telecommunications industry for $5,495 a pop.  Other graphics illustrate the quantities of network traffic and the world's undersea communications cables.