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Political Class Isn’t Leveling With Us About the Hard Times Ahead

March 26, 2022 by Llewellyn King Leave a Comment

There is a rough road ahead for the world, and our political class isn’t leveling with us.

As Steve Odland, president and CEO of The Conference Board, one of the nation’s premier business research organizations, said in a television interview, inflation will continue at least until 2024, and longer if things continue to deteriorate with the supply chain and the war in Ukraine.

Particularly, Odland, who serves as a director of General Mills, fears a global food crisis with famine in Africa and many other vulnerable places if Ukrainian farmers don’t start seeding spring crops to start this year’s harvest. Already, Ukraine — known as the world’s breadbasket — has cut off exports to make sure there is enough food for their own people, as war rages.

Odland sees U.S. inflation continuing at 7 percent to 8 percent for several years at best. But his primary worry is global food supplies, as countries face a crisis of new and frightening proportions.

His second worry is stagflation. If the rate of productivity falls below 3 percent, “then we will have stagflation,” Odland told me during a recording of “White House Chronicle” on PBS, the weekly news and public affairs program I produce and host.

Odland faults the Federal Reserve for being timid in raising interest rates to counter inflation.

I fault the political class for not leveling with us — both parties. As we are in a state of perpetual election fervor, we are also in a state of perpetual happy talk. “Get the rascals out, and all will be well when my band of happy angels will fix things.” That is what the political class says, and it is a lie.

We are in for a long and difficult period, which began with the pandemic that disrupted supply chains and set off inflation, and now the war in Ukraine has compounded that. Supply chains won’t magically return to where they were before COVID-19 struck, and more likely they will have further constrictions because of the war. New supply chains need to be forged, and that will take time.

For example, nickel, which is used in the batteries that are reshaping the worlds of electricity and transportation and for stainless steel, will have to  come from places other than Russia. At present, Russia supplies 20 percent of the world’s voracious appetite for high-purity nickel. Opening new mines and expanding old ones will take time.

The world’s largest challenge is going to be food: starvation in many poor countries, and high prices at the supermarkets in the rich ones, including the United States. There are technological and alternative supply fixes for everything else, but they will take time. Food shortages will hit early and will continue while the world’s farms adjust. There will be suffering and death from famine.

The curtailing of Russian exports will affect the United States in multiple ways, some of which might eventually turn out to be beneficial as the creative muscle is flexed.

In the utility industry, someone who is thinking big and boldly is Duane Highley, president and CEO of Tri-State Generation and Transmission Association in Denver. Highley told Digital 360, the weekly webinar that emanates from Texas State University in San Marcos, the challenging problem of electricity storage could be solved not with lithium-ion batteries but with iron-air batteries.

In its simplest form, an iron-air battery harnesses the process of rusting to store electricity. The process of rusting is used to produce power when it is exposed to oxygen captured on site. To charge the battery, an electric current reverses the process and returns the rust to iron.

Clearly, as Highley said, this won’t work for electric vehicles because of the weight of iron. But in utility operations, these batteries could offer the possibility of very long drawdown times — not just four hours, as with current lithium-ion batteries. And there is plenty of iron stateside.

Another Highley concept is that instead of dealing with all the complexities of transporting hydrogen, it should be stored as ammonia, which is more easily handled.

This isn’t magical thinking, but the kind of thinking that will lead us back to normal — someday.

Politicians should stop the happy talk and tell us what we are facing.

Filed Under: King's Commentaries Tagged With: Duane Highley, food shortages, hydrogen, inflation, iron-air batteries, lithium-ion batteries, nickel, Russia, Steve Odland, supply chain, Texas State University, The Conference Board, Tri-State Generation and Transmission, Ukraine

Helping America by Helping Ukrainian Refugees — a Plan

March 18, 2022 by Llewellyn King Leave a Comment

The Ukrainian diaspora is upon the world. Of the millions who are dispossessed by Russia’s invasion of Ukraine, it is wishful thinking that on some glorious day they will all go home. In reality, the world will have to accommodate them. They can’t all stay in Poland and Romania.

One by one, the countries of Europe falteringly are stepping up to their moral and humanitarian duty. Most countries say they will take some Ukrainian refugees. The Biden administration, without clarity, has indicated that some refugees will be welcomed. What the administration is hoping is that these will be glommed onto existing Ukrainian communities in several cities.

This might be a mistake. The cities with large Ukrainian communities are New York, Chicago, Philadelphia, Los Angeles, Detroit, Cleveland and Indianapolis. In all these cities, housing is expensive and in very short supply; and there are many social problems for those at the bottom, where refugees traditionally find themselves.

Now comes an extraordinary proposal for refugee resettlement from an attorney, Christopher Smith, who practices in Macon, Georgia. He is also the honorary consul there for Denmark, but he tells me his proposal is in no way a reflection of that office and is entirely his own as a private citizen.

Smith’s sweeping and enticing proposal is that refugees from Ukraine should be settled, with federal and state assistance and with the participation of local government, not in crowded cities but in American counties that have been losing population for decades. “Those include counties here in south Georgia,” Smith told me by telephone.

You may think, from anecdotal reporting, that there is a major move from cities to the country, spurred by COVID. But Smith tells me that movement is small and doesn’t reverse the decades-long trend of county depopulation.

My own observation of this COVID-induced trend is that it applies to places like New York and Boston, where the outward movement has been to garden locales where virtual commuting can be accomplished. For example, people who have moved from Boston and New York to Rhode Island and Connecticut, and from Los Angeles to smaller outposts, or north to Washington and Oregon.

Smith said in a position paper: “There are 3,143 counties in the United States. From 2010 to 2020, approximately 1,660 (53 percent) of American counties lost population. Here in Georgia, 67 (42 percent) of 159 counties saw a reduction in population during that time span. Most but not all American counties that lost population during this 10-year period are located in rural areas.”

While counties tend to have a higher apartment and rental home vacancy rate and a lower cost of living than the national average, many of these communities have job shortages, Smith said.

“Logic would suggest that these communities would be an ideal location to host Ukrainian refugees,” he said.

The thing that struck me about Smith’s proposal is how thoroughly he has researched it. He hasn’t just sprouted an idea, he has worked out a plan and enshrined it in a draft act of Congress, which lays out the federal, state and county responsibilities and the issuance of work permits and residence certificates — and, of course, the all-important issue of funding. He has sent it to his congressman, Austin Scott, a Republican.

Smith told me that it is worth noting that Scandinavians were encouraged to populate the Midwest — as anyone who listened to “Prairie Home Companion” on NPR knows.

I don’t know whether America’s wheat farmers need help, but certainly there will be pressure to grow more wheat. The chances that wheat will be sown in the middle of Russia’s war on Ukraine are unlikely. Ukraine is a huge wheat producer. Canada brought in Ukrainian immigrants in the 1890s to help boost wheat production. It was a great success.

It seems to me that Smith’s well-conceived proposal has merit and deserves attention. It has the prima facie merit of helping a part of America that needs help, and giving succor to the most desperate of people, those uprooted by war.

Filed Under: King's Commentaries

Putin’s Diabolical Romanticism Is Sinking the Global Economy

March 12, 2022 by Llewellyn King 1 Comment

The barbarity of the Russian assault on Ukraine is neither mitigated by the ineptitude of the Russian army nor can hearts be uplifted by the bravery of the Ukrainians. Murder on a colossal scale is taking place in plain sight on television day after day.

At this writing, there are 3.5 million refugees and thousands of civilian casualties reported. This is killing, killing, killing without respite. The Russian economy is destroyed, and the consequence of this bloody slaughter is affecting the world economy.

Even pusillanimous nations like India and Brazil feel the hot breath of the crazed organ grinder Vladimir Putin and his Russian bear.

The invasion of Ukraine was folly and a criminal act, but its continuation has become pure and sustained evil.

Some in the U.S. commentariat have suggested with amazing thought gymnastics that all this is because of the expansion of NATO. But if NATO hadn’t expanded after the fall of the Berlin Wall, then Russia wouldn’t have felt threatened and wouldn’t have invaded Ukraine. Nonsense. 

Russia has felt threatened in Europe since the days of the tsar. If NATO hadn’t expanded to include the Baltic nations of Estonia, Lithuania and Latvia, Russian troops would be billeted there right now.

Had Ukraine joined NATO, the United States wouldn’t be paying the price at the pump and Europe wouldn’t be shivering out the last days of winter, wondering how it will get through the coming months without enough fuel to produce electricity.

Security is the abiding fault line in Russia’s thinking about the West. Sure, St. Petersburg is close to the rest of Europe and could be overrun. And Moscow isn’t so far from European neighbors that it couldn’t be reached easily by an invader: Napoleon got there, and Hitler could have if he had been a better strategist. But most of Russia with its 11 time zones is geographically out of reach. That makes it hard to swallow the security argument.

Putin wants to restore Imperial Russia and the empire that reached even farther under communism — which makes him a diabolical romanticist. He wants to restore Russian hegemony over its former states: Ukraine first.

Larry O’Donnell, the MSNBC host, correctly postulated that for NATO, or the United States alone, to intervene to help Ukraine, nuclear war could result; war not just in Europe but also between the United States and Russia — the very thing that dominated the world from 1945 to the fall of the Soviet Union.

O’Donnell’s argument reveals the impotence that comes with nuclear weapons and sets up this question: Can we never challenge Russia, China or any other country with a substantial nuclear arsenal and the ability to deliver its weapons into the United States and Europe?

If that is so, does it inoculate Russia from invading the Baltic states?

We know the reality that lurks behind China’s ambitions for Taiwan. Is that more inevitable than ever? President George W. Bush said we would do “whatever it takes to defend Taiwan.” That is very unlikely now, if it ever was.

It isn’t that the reality of the international scene has changed so much as it has come into a clear and harsh light. However, one thing has changed: The slaughter, the unspeakable suffering in Ukraine will change the attitude of a generation to Russia in Europe. Russia will be a pariah, not a partner.

The United States fears war with Russia, but Russia, much weaker in every way, must fear war with NATO and the United States.

On a visit to Moscow, toward the end of the Soviet occupation of Afghanistan, I heard a four-star Russian general say, “Never again.” But the Ukraine invasion is again. Will Russia and other aggressors be deterred long after the last of the dead are buried in Ukraine, and long after the last body bag has gone back to Russia? Maybe for a generation, which is about how long it will take to rebuild the global economy after the Russian invasion of Ukraine has run its ghastly course.

Filed Under: King's Commentaries

The Wildfire Next Time: Drought Increases the Risks in the West

March 5, 2022 by Llewellyn King Leave a Comment

Wildfires aren’t just for summer anymore. In the West and Southwest, the fire season will begin earlier this year and last longer.

If you live in a western state, take heed: That adorable cottage of yours in the woods may be consumed in flames. Small towns may feel the heat of nature’s wrath. The threat and consequences are real.

The drought that began two decades ago continues; it just gets a bit worse each year.

That is the collective view of a group of western utility executives and an eminent long-range weather forecaster who participated in a virtual press briefing which I organized and moderated for the United States Energy Association.

The prognosis of a long, hot fire season beginning in spring and extending into fall was delivered by Paul Pastelok who leads the team of long-range forecast scientists at AccuWeather.

He said, “We feel with confidence that the drought will cover a large section of the western U.S. and will extend out into the Plains, similar to the trend we saw in 2018. The Northern Plains, Four Corners region, are going to experience some pretty extreme drought but for a shorter period of time.”

The good news, if there is any, is that the authorities – yes, them — are working on mitigation in wide-ranging cooperation between the Electricity Subsection Coordinating Council (ESCC), the influential but little-known, CEO-led utility organization which liaises with government departments on cybersecurity and other issues.

In this instance, the cooperating departments include the Department of Energy and some of its national laboratories; the Agriculture Department’s Forest Service; the Department of Transportation; the Department of Homeland Security’s Federal Emergency Management Agency; and the Federal Aviation Administration.

Maria Pope, president and CEO of Portland General Electric, said she would like the FAA to expedite its regulations for drones, which are used to surveil utility lines and will be on the front lines.

But the brunt of the fire onslaught will be borne by communities and their fighters with help, where possible, from the states. Think the National Guard.

The ESCC has a wildfire working subcommittee which is headed by Pope, a star in business circles and a key figure in wildfire management. Not only does she head a utility that has been in the eye of the storm but earlier in her career, she was an executive in the forest products industry. She knows the forest as a benefactor and a malefactor.

For utilities, the issues are multiple. Many wildfires start with trees in high winds landing on power lines that arc and spark when they hit the ground.

If the forest floor is tinder dry, the result is known. Last year a late-season fire, on Dec. 30, started in the Boulder area and destroyed 1,000 homes. The cause of the fire hasn’t been identified positively.

After the threat to life and property has subsided, and the fires have either burned out or been extinguished, the painful inquests begin with accusations often directed against the power companies because they are large and visible and can be sued.

But fires start in many ways. There is, indeed, the issue of arcing and sparking from utility lines. But there is also, as Pastelok noted, lighting and hundreds of activities that can go wrong from burning refuse to picnic fires and, sadly, arson.

Technology is increasingly important in identifying the root cause and mitigation of fires. This includes data management coming from smart meters; better line surveillance with drones and sensors; and instant communications, so that if a line fails, it can be de-energized instantly, maybe in one second.

Ruth Marks, who manages distribution for the Denver-based Tri-State Generation and Transmission Association, said “problem trees” – dying or dead trees near a power line — need to be identified and harvested. She also said the fire season now lasts the whole year, from January to December. Sobering.

Filed Under: King's Commentaries

Gas Is Needed in Foreign Policy and To Stabilize the U.S. Grid

February 26, 2022 by Llewellyn King Leave a Comment

Natural gas has been getting short shrift in the U.S. energy debate. It deserves better. Much better.

It has been battered by environmentalists who oppose exploration and the pipelines to get it to market. They are attempting to evict natural gas and force utilities into reliance on intermittent renewables.

But events in Europe may cause a rethink about natural gas, both as a transition fuel in the United States and a foreign policy tool.

Even before Russia’s invasion of Ukraine, natural gas was in short supply in Europe after a summer of wind drought caused European utilities to scramble for natural gas – prices went up 400 percent. Russia added to the crisis by reducing volumes flowing through the Ukrainian system that serves much of Europe.

Fear of Russian weaponization of natural gas has been an ever-present reality. Now Europe trembles, especially Germany, which has just closed its last three nuclear plants and has relied on renewables and natural gas from Russia.

In the United States, the danger is that natural gas may be pushed aside prematurely in favor of renewables, leaving the electric grid destabilized and vulnerable to severe weather. The grid is less stable today than it was 20 years ago, according to experts I speak to regularly. Environmental mandates are taking a toll, and natural gas is being pushed out before there are stable renewables and utility-scale storage.

A new assessment of natural gas is needed. Its value to the United States to counter Russia now and in the future isn’t in doubt. The United States is the world’s largest natural gas producer, and liquefied natural gas is needed as a diplomatic tool.

Domestically, though, it needs a defined place in the electricity evolution. It is an option too valuable to be elbowed out by well-meaning but not well-informed arguments.

In electricity production, natural gas is the least polluting of the three fossil fuels. It emits half the carbon dioxide of coal and heavy oil used to make electricity. Also, it doesn’t have the other pollutants which make coal so devastating to the environment. Progress is being made countering methane leaks, a serious problem.

When burned in a combined-cycle plant, favored by utilities for more than just peaking, natural gas reaches an efficiency of around 64 percent. That is a remarkably high rate of fuel to electricity. Coal-fired plants have an efficiency of about 40 percent.

Back in the 1970s, a combination of price controls and regulation served to dry up the amount of natural gas coming to market. The newly formed Department of Energy added to the sense of an end by declaring that gas was “a depleted resource.” The conventional wisdom was that it was too precious for most uses and especially for making electricity.

In 1978, Congress passed the Power Plant and Industrial Fuel Use Act. It was a prohibiting measure and went after what Congress thought were wasteful uses of natural gas such as ornamental flames and pilot lights in gas stoves. And it prohibited the burning of natural gas to make electricity.

Known simply as the “Fuel Use Act,” it was draconian. There was even a debate about whether the Eternal Flame at Arlington National Cemetery would have to be extinguished.

In 1985, deregulation began to increase the natural gas supply and two years later, the Fuel Use Act was repealed.

But the big break, the great game-changer, was fracking — first used in the late 1980s. It was developed by George Mitchell and his Mitchell Energy company with help from the DOE. Together with horizontal drilling, it would change everything quickly.

Natural gas became cheap and plentiful and the utilities, using turbines developed from aircraft jet engines, began to switch off coal and to question the cost of building nuclear plants. A new dawn had broken.

Now that happy day is in the past and utilities must make the case for gas turbine capacity to back up their alternative energy operations and as an efficient form of energy storage. Also, if hydrogen is to be the fuel of the future, it will need to use the natural gas infrastructure.

Filed Under: King's Commentaries

Stone Carving to Dickens: The Delights of a Charleston College

February 19, 2022 by Llewellyn King Leave a Comment

It takes years to learn to fashion something out of a block of stone. You may think you have talent, but it isn’t intuitive. You have to study stone carving, take up the mallet and chisel, waste a lot of rock, and gradually turn from novice to craftsman.

Likewise, you won’t learn the delights of English literature in a week. It takes time.

All of this can be accomplished in one extraordinary place: the American College of the Building Arts in Charleston, S.C. — a jewel of the South with its many antebellum mansions and buildings, making it a place of living history.

The college offers a full liberal arts curriculum plus a specialization in one of six building arts: Classical architecture, blacksmithing, timber framing, carpentry, plaster, and stone cutting. It owes its existence to Hugo, the Category 4 hurricane which slammed into Charleston and much of the southeast coast in 1989. Many of Charleston’s treasured homes and buildings were damaged.

Then came the second heartbreak: There was a dearth of craft workers who could put Charleston, like Humpy Dumpty, back together again. The shortage was so acute that it took more than 10 years to restore the city to what it had been pre-Hugo.

The civic pride of the city asserted itself. A group of shocked citizens vowed they wouldn’t go through that again. They would train fine artisans right there in Charleston. But they didn’t want just a trade school; they wanted a seat of learning and restoration to be part of that learning.

They didn’t want to turn out graduates who felt that they had to go through life entering through the back door. No. These would be graduates with a robust degree in liberal arts, as comfortable reading Shakespeare as helping restore a European cathedral built in his day.

So, the American College of the Building Arts was born in 1999, and it is flourishing and growing. By college size standards, it is minuscule: 120 graduates this year. But in terms of educational creativity, it is huge. It shines a light that shows the way to a new concept of education: students learning a trade they enjoy, that is highly marketable, and also getting the benefits of four years of liberal arts education.

In April 2018, I visited the college to film an episode of “White House Chronicle” on PBS and was captivated. I had never seen anything like it. A slight, young woman working at a 2,000-degree forge, making a beautiful piece of decorative ironwork, inspired by one in a French cathedral;  a woman, who had a previous career in the Coast Guard, carving stone, with an ambition to work on the National Cathedral in Washington; and a gifted, African American man, a former Marine who had traveled the world, working with big timbers in the framing shop.

Because I have an interest in words, I sat in on a literature course wondering secretly whether it was, perhaps, a bit cursory. It wasn’t. The former Marine timber framing student said the literature course, taught by Wade Razzi, who has a doctorate degree from Oxford, was his favorite, and among the authors he loved was Charles Dickens.

A friend’s daughter was attracted to the college after learning about it from my television episode. He credits the college with having done wonders for her. She is a star stone carver there, likely headed to work on Liverpool Cathedral.

The college is a beacon for these reasons:

  • It gives its students a sense of purpose they might not have found otherwise: The reward of making something special and durable.
  • The college accepts men and women, although Razzi told me women were often the stars. Twenty-five percent of the students are women, and they lead in valedictorians. Five percent are veterans.
  • About one-third of the students, within five years of graduating, start their own contracting businesses. This is so prevalent that the college has added accounting courses so that the young entrepreneurs can keep books.
  • The college must teach one language, and that is Spanish. In a recent episode of “White House Chronicle” on the college, Razzi said Spanish is taught because it is essential in the building trades, where many workers are from Latin America.

One of the college’s biggest challenges is recruiting faculty Razzi, who also serves as chief academic officer, said in that TV episode. Many faculty members come from Europe to teach arcane-in-America trades such as decorative plaster, stone carving, and blacksmithing.

Arcane but in great demand from Newport, R.I.’s mansions – called cottages — to Washington’s National Cathedral and the Capitol, to memorial gardens. Artisans are in demand and artisans with liberal arts credentials are something special: Roundly skilled and roundly educated.

Filed Under: King's Commentaries

The Biden Blues: Difficulties at Home, Big Trouble Abroad

February 12, 2022 by Llewellyn King 2 Comments

The country has the Biden blues bad, and that ain’t good.

Joe Biden, 46th president of the United States, has pushed all the buttons that were supposed to be the right ones and they have produced no result or the wrong result.

Domestically, things have been bad enough. He hasn’t convinced anyone that he has a viable border policy and his point person on the issue, Vice President Kamala Harris, has no ideas and an aversion to being reminded that she is the policy chief of the border.

His stimulus package, so timely at the time, now appears to have overstimulated the economy, leading to the worst inflation since the 1970s.

Congress frustrates the president routinely. The man who spent 36 years in Congress is unable to find consensus. To the shame of the Democrats, the Guantanamo Bay prison remains open.

Crime is rampant, cities are again unsafe. The administration has been silent, pointing up a sustained ideas drought.

Abroad, things have been worse and more consequential. As vice president, Biden prided himself on his foreign policy nous. But as president, he seems to be a study in foreign policy infelicity. Doing the right thing at the wrong time is his special talent.

The speedy, ill-considered withdrawal from Afghanistan is emblematic of the Biden blunders. It led one to wonder what he is told in those daily briefings? What was he told that led him to believe that he should build on Donald Trump’s foolish negotiation with the Taliban? Biden seized that misbegotten idea and executed it.

Similarly, when a column of asylum seekers was making its way up South America from as far as Chile, didn’t the daily briefings mention this; explain that this appeared to be well-financed. If he weren’t told, what action did he take to make sure there wouldn’t be such failures going forward?

Biden persuaded Germany not to certify the Nord Stream 2 pipeline under the Baltic Sea, taking natural gas from Russia directly to Germany.

That Germany has willingly climbed between the sheets with the Russian Bear wasn’t Biden’s fault, but Nord Stream 2 was a long time in planning and construction. It all got going during the Obama years when Biden was being thought of as the vice president who understood foreign policy.

That was the time to dissuade Germany, not when it is complete and threatens to drive a wedge between Germany and NATO. Friends don’t let friends date the bear. They warn them off.

Now comes the Winter Olympics in China. Taking your marbles and going home isn’t a good strategy. The game goes on and you are out of it, as with Biden’s diplomatic boycott of the games.

That led not to a better deal for the Uighurs, but to the world being treated to innumerable images of Chinese President Xi Jinping and Russian President Vladimir Putin together — images that suggested they represent a new Axis that can dismember the world as they wish.

Those images are more damaging than any agreements the two caudillos concluded; they cement the sense that the West is defenseless against dictators.

In his administration, Biden’s propensity to do the right thing and get the wrong result is demonstrated in his relationship with Harris. He has worked hard to elevate her to a status she isn’t earning for herself. The administration now bills itself as the Biden-Harris administration. It was never the Obama-Biden administration.

Biden’s cabinet is filled with the right people for a charity event: good people who are likable and bland to a fault. The exceptions are Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo. Sadly, neither is in a position where they can redirect the ship of state or even nudge it back on course. If you don’t have the mettle yourself and lack the needed cunning, hire it.

Filed Under: King's Commentaries

New Transmission Vital in Stabilizing the Electric Grid

February 5, 2022 by Llewellyn King Leave a Comment

It has become second nature. You hear that bad weather is coming and rush to the store to stock up on bottled water, canned and other non-perishable foods. You check your flashlight batteries.

For a few days, we are all survivalists. Why? Because we are resigned to the idea that bad weather equates with a loss of electrical power.

What happens is the fortunate have emergency generators hooked up to their freestanding houses. The rest of us just hope for the best, but with real fear of days without heat.

It happened most severely in Texas in February 2021; during Winter Storm Uri, which lasted five days, 250 people died. Recently, during the Blizzard of 2022, 100,000 people in Massachusetts endured bitter cold nights when the electricity failed. There were more power failures in the most recent ice storm.

There are 3,000 electric utilities in the United States. Sixty large ones, like Consolidated Edison, NextEra Energy, Pacific Gas and Electric, and the Tennessee Valley Authority, supply 70 percent of the nation’s electricity. Nonetheless, the rest are critical in their communities.

All utilities, large and small, have much in common: They are all under pressure to replace coal and natural gas generation with renewables, which means solar and wind. No new, big hydro is planned, and nuclear is losing market share as plants go out of service because they are too expensive to operate.

The word the utilities like to use is resilience. It means they will do their best to keep the lights on and to restore power as fast as possible if they fail due to bad weather. When those events threaten, the utilities spring into action, dispatching crews to each other’s trouble spots as though they were ordering up the cavalry. The utilities have become very proactive, but if storms are severe, it often isn’t enough.

Now, besides more frequent severe weather events, utilities are facing the possibility of destabilization on another front, due to switching to renewables before new storage and battery technology is available or deployed.

The first step to avoid new instability — and it is a critical one — is to add transmission. This would move electricity from where it is generated in wind corridors and sun-drenched states to where the demand is, often in a different time zone.

Duane Highley, president and CEO of Tri-State Generation and Transmission Association, which serves four states in the West from its base in Westminster, Colorado, says new west-east and east-west transmission is critical to take the power from the resource-rich Intermountain states to the population centers in the East and to California.

“Most existing transmission lines run north to south. They aren’t getting the renewables to the load centers,” Highley says.

Echoing this theme, Alice Moy-Gonzalez, senior vice president of strategic development at Anterix, a communications company providing broadband private networks that make the grid more secure and efficient, sees pressure on the grid from renewables and from new customer demands (such as electrical vehicles) as electrification spreads throughout society.

“The use of advanced secure communications to monitor all of these resources and coordinate their operation will be key to maintaining reliability and optimization as we modernize the grid,” Moy-Gonzalez says.

Better communications are one step in the way forward, but new lines are at the heart of the solution.

The Biden administration, as part of its infrastructure plan, has singled out the grid for special attention under the rubric “Build a Better Grid.” It has also earmarked $20 billion of already appropriated funds to get the ball rolling.

Industry lobbyists in Washington say they have the outlines of the Department of Energy plan, but details are slow to emerge. Considered particularly critical is the administration’s commitment to ease and coordinate siting obstacles with the states and affected communities.

Utilities are challenged to increase the resilience of the grid they have and to expand it before it becomes more unstable.

Clint Vince, who heads the U.S. energy practice at Dentons, the world’s largest law firm, says, “We aren’t going to reach the growth in renewables needed to address climate without exponential growth in major interstate transmission. And sadly, we won’t succeed with that goal on our current trajectory. We will need significant federal intervention because collaboration among the states simply hasn’t been working within the timeframe needed.”

Better keep the flashlights handy.

Filed Under: King's Commentaries

How Can We Spread the Innovation Culture to Old Business?

January 28, 2022 by Llewellyn King Leave a Comment

Microsoft is buying, subject to regulatory approval, Activision Blizzard for $69 billion. The Internet of Things is white-hot and likely to remain so.

If you want to whistle at that humongous sum for a company that makes games, you may have to add many octaves to the known musical scale.

Yes, high-tech is chasing trivia. The imperative at work here is if you don’t get your latest game into the market, someone else will. The threshold of entry is low and the rewards are astronomical.

If you are talking innovation and creativity, you are talking the internet. That means whole areas of society aren’t progressing as fast as they might and should. There is asymmetry.

The internet firmament is driven not by market demand, but by a business dynamic that exists in the world of internet entrepreneurism: Innovate and create because the internet can create great wealth — and take it away, too.

Most non-internet companies — and I talk to a fair number of CEOs — say they are innovative and that they are innovation-driven but, in fact, they aren’t. Most companies don’t need to innovate the way the internet giants do. The metaverse is demonstrably an unstable place.

Most companies are looking for stability, for a plateau where they can manage what has been created while adding to it cautiously, often by acquisition. They confuse innovation with evolutionary improvement. The last thing they want is the kind of destructive innovation that characterizes Silicon Valley.

The febrile need to innovate in the internet world is unique to that world. This because internet companies are all on a treacherous slope; failure can come as fast as success. Remember MySpace, Nokia, Palm, and Wang?

The internet is global, and it is intrinsically favorable to monopoly. In the internet world, first past the post takes the prize money — all of it.

When you have market caps that value a company at $1 trillion, and all of that is dependent on the next innovation not overtaking you, you are going to throw money and talent at innovation because the alternative is known. Whenever possible, you are going to buy up your competition, hence the Microsoft purchase.

With all of the money, all of the glamor, all of the talent, there also is fear that some kid in a garage somewhere will invent the next big thing.

I submit that for the non-internet world the business dynamic is very different. Most CEOs of public companies, snug in their C-suites and buttressed by huge salaries, are seeking a quiet place; a plateau where profits grow but there is some business serenity. For example, Boeing doesn’t want new airframes, it wants upgraded models.

They won’t admit to it, but many businesses long to be rent takers (known collectively as rentiers). They want a steady income with small risk.

Unfortunately, the business culture, including that spawned in business schools, aims to channel ambition into the rent-taking model. We have a business culture where ambition is channeled toward climbing to the top of the established order, not creating a new order.

There are many excellent minds managing established companies, often established many decades earlier, but there are few who yearn to create something wholly new.

The great names of management are many, but the great names of true innovation are few. Almost always, they have to break away from the established to create the new, to alter the world.

My friend Morgan O’Brien, the cocreator of Nextel, and now the executive chairman of the pioneering wireless company Anterix is that kind of innovator who saw new horizons and went for them.

Today’s standout inventor is Elon Musk. He began as an internet whiz with PayPal and has blazed the innovation trail like none other since Thomas Edison, more than a century earlier. He has changed the world underground with new concepts of subways, changed surface transportation by going electric, and changed space with his rockets.

Thirty years ago, I wrote the weakness of U.S. companies is that they are happy to make silent movies when the talkies have been invented. Today, the established auto manufacturers are hell-bent to make electric pickup trucks now that new entrepreneurs are in the truck market with electric trucks. They never wanted to abandon the internal combustion engine, just improve it a little at a time.

If the dynamic of the internet and its constant innovation is missing in most American businesses, it needs to be grafted onto the business body politic. Must the internet be behind every innovation of consequence? Ride-sharing and additive manufacturing (3D printing) are all computer-driven — software at work.

The challenge for the business culture is to harness ambition – it is never in short supply — and point it not toward the greasy pole of promotion, but toward the firmament of innovation.

Filed Under: King's Commentaries

How I Came To Fall for Taylor Swift Big Time

January 22, 2022 by Llewellyn King 1 Comment

If Taylor Swift sat next to me on a bus – an unlikely confluence — I wouldn’t know that she was a famous singer, an idol to millions of young people (who call themselves Swifties), and especially to young women. But I have fallen for her big time.

Popular culture – with which I’ve never been very familiar, even when I wrote about movies and the theater — has given me a wider-and-wider berth as time has passed. Truth is that I am more familiar with the evolution of technology than I am with the history of pop music, more comfortable with Turner Classic Movies than I am with this year’s releases.

This from a man who was paid by the London Dispatch to follow Elizabeth Taylor and Richard Burton around London when they were making “Cleopatra” — and making whoopie — in 1962.

I might mention that when I did catch up with the most famous lovers of the day, they were lunching in a pub near where I lived in the leafy Dulwich area of South London. They were everything you would want of lovers: They glowed, held each other’s eyes, and were so clearly in the thralls of enchantment that I didn’t call for a photographer, or in any way fulfill my assignment for the newspaper. It was an active dereliction of duty, but they were so compelling.

The Romantic poet Lord Byron — who knew a thing or two about adulterous love — described an adulterous pair as “happy in the illicit indulgence of their innocent desires.” Taylor and Burton seemed to be lost in their affair, and then it was adultery — they were both married, although later they wed, twice.

So much as I have been aware of the couplings of the rich and famous since those days, I have thought of them as tawdry. If you had seen Taylor and Burton in love, you would have dined at the table of the gods: love, fame, wealth, and talent in one sublime package.

Enter Taylor Swift. I had gleaned indirectly — the way one picks up information about subjects that don’t really interest one — that she has had a string of lovers and almost ritually wrote songs about them. Self-indulgent, I thought. So many not very good modern singers seem to sing about themselves and their luckless love lives. Sing what you know, as it were.

So how come I’m head over heels for Swift? I have said I don’t know what she looks like, and I don’t believe I would recognize her music — that is until I listen to the lyrics.

I met Swift and fell for her on one of those websites that aggregate quotations. I tell you the woman is a poet, a remarkable poet of love and its turbulence.

Just take just these lines from four different songs:

“Who could ever leave me, darling/But who could stay?”

“You’re not my homeland anymore/So what am I defending now?”

“You kept me like a secret/But I kept you like an oath.”

“Cold was the steel of my axe to grind/For the boys who broke my heart/Now I send their babies presents.”

They are so elegant and so true that they belong up among the great lyrics of the great love songs of the musical theater, the world of Ira Gershwin, Cole Porter, Lorenz Hart, Oscar Hammerstein, and others from the golden age.

I don’t expect to meet her, nor do I have any special desire to. But if I did, I would say, “Keep writing, Taylor. You comfort young hearts and light up old ones.”

Filed Under: King's Commentaries

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