(Image via PoweringANation.org.)
A UNC student-run organization called “Powering A Nation” has unveiled its newest documentary project: “Whole Hog,” an online multimedia exploration of North Carolina’s complex hog industry.
The hog industry is central to the state’s economy, particularly in eastern North Carolina where the tobacco industry is in decline. But it also comes with pitfalls, ranging from the environmental (health issues raised by the spraying of hog waste onto farms as fertilizer) to the economic (the decreasing power of individual small farmers as the industry grows more and more consolidated into fewer and fewer hands).
Available online at WholeHogNC.org, the “Whole Hog” project consists of “written pieces, video stories and graphic design elements” created by six UNC fellows. “Powering A Nation” has been active for six years, creating projects like this that examine various aspects of the energy issue in America – but editor-in-chief Kelly Creedon says this is the first of their projects with a North Carolina-specific focus.
Kelly Creedon, design editor Grayson Mendenhall, managing editor Jess Clark, and graphics editor Bailey Seitter joined Aaron Keck in WCHL studios to discuss the project, a day after its online launch.
CHAPEL HILL – Last year, the General Assembly voted to cut off unemployment benefits for thousands of North Carolinians—and the unemployment rate went down, faster in this state than anywhere else in the country.
But were those two connected—and if so, how?
Republicans say cutting off benefits motivated people to get back on the job market; Democrats say the move actually discouraged people, to the point where they dropped out of the job market altogether.
But Mark Vitner—managing director and senior economist at Wells Fargo—says he’s skeptical all around.
“As with many things in economics,” he says, “if you take the data and twist them the way you want, you can say just about anything.”
Vitner says he doesn’t believe the unemployment rate fell solely because people dropped out of the job market: North Carolina’s labor force did decline in 2013, but the decline was actually faster in the first half of the year, before the state cut off benefits.
Furthermore, Vitner says, “(while) we had the biggest drop in the unemployment rate in the country, we didn’t have the biggest drop in the labor force in the country – not even close to it.”
That suggests North Carolina was, in fact, getting people back to work in 2013, at a faster rate than most other states.
Governor Pat McCrory and other Republicans have touted this as a “Carolina miracle.” But Vitner says not so fast.
“If you’ve been unemployed for long periods of time and you’ve received emergency benefits, odds are you’ve exhausted your savings,” he says. “I think many people, many of those folks, took jobs that they wouldn’t have taken in the past – because they were looking for something to replace the job that they had lost – but now they’ve got a different concern, which is ‘I’ve got to get money in the door’…
“And so part of that increase in leisure and hospitality employment and retail trade that picked up in the second half of the year may have been people saying, ‘well, I’ve got to take something because I’ve got to get money coming in.’ And that’s not a success story.”
Vitner made those comments at the Chapel Hill-Carrboro Chamber of Commerce’s annual economic outlook briefing, last week Thursday at the Sheraton Chapel Hill.http://chapelboro.com/news/business/nc-cutting-benefits-really-cut-unemployment/
How is the Affordable Care Act affecting small business owners in the Chapel Hill-Carrboro area?
The answer may depend on the gender of the workers they employ.
That, at least, is the tentative finding of a survey of local business owners conducted by the Chapel Hill-Carrboro Chamber of Commerce.
When asked how the Affordable Care Act was impacting them, 30.5 percent responded “negatively” or “very negatively,” while 23.9 percent responded “positively” or “very positively.” (The rest—not quite half—were either unaffected or unsure.)
But Chamber president Aaron Nelson says a closer look at the responses reveals something interesting.
“Some of that is about the neutralizing of men and women, (who) cost differently in the old world and cost the same now,” he says. “So if you had a predominantly younger female staff, your rates likely go down – (but) with a predominantly male staff…your rates could go up. So gender has had a real impact on cost.”
Nelson says auto body shops, in particular, have reported their health care costs going up—while the Chamber itself, with a mostly-female staff, has seen its costs decline.
Additional results from the survey are available at www.slideshare.net/carolinachamber/2014-economic-outlook-briefing (also the source of this image). As seen here, there’s only a slight lean towards the ACA having a “negative” effect if severity is not taken into account, but that changes if severity is considered: a far greater percentage of respondents reported a “very negative” effect than a “very positive” effect.
Nelson presented the results of the survey at last week’s annual Economic Outlook Briefing at the Sheraton Chapel Hill.http://chapelboro.com/news/business/gender-may-key-aca-impact-small-biz/
CHAPEL HILL – The national and local economy got off to a slow start this year, but economist Mark Vitner of Wells Fargo says he still expects 2014 to be a strong year overall.
“Most of the numbers that we’re going to see (from February) are likely to be disappointing because the time that those reports are put together, the time period that they reference, is right about the time that we had the big snowstorm,” he said Thursday. “But I think that’s all pretty much a temporary disruption.”
Vitner delivered the keynote address at the Chapel Hill-Carrboro Chamber of Commerce’s 2014 Economic Outlook Briefing, Thursday morning at the Sheraton Chapel Hill.
Vitner based his optimism on a number of positive developments—including reduced uncertainty following the federal budget deal; rapid growth in the nation’s energy and tech sectors; and an expected drop in the unemployment rate, down below six percent by the end of the year. He said he expects the improved economy will spur the Fed to raise interest rates sometime in 2015 (though not before).
Even so, Vitner says economic growth will be slower in the future than it has been in the past. Prior to the recession, he says, the U.S. economy grew at an average rate of 3.3 percent per year—but that was sustained in part by heavy debt. Now that credit’s harder to come by, Vitner says growth won’t be quite that fast: he predicts the economy will grow by 2.4 percent in 2014, up about half a point from last year, and by about 3.1 percent in 2015 and 2016.
If that prediction holds, Vitner says we’ll be doing pretty well.
“We think that 2014, 2015 and 2016 will be the three best years of this decade,” he said Thursday.
And with the economy returning to normal, consumer confidence too is up from previous years. But Vitner says people aren’t necessarily feeling more optimistic, just less pessimistic: fewer people say the economy is “bad,” but there’s been no change in the number of people who are ready to say the economy is “good.”
“I kind of sum that out as ‘less bad is good – but more good would be better,’” he quipped. “That’s kind of where the economy is right now.”
Vitner is a Charlotte-based managing director and senior economist for Wells Fargo. More than 100 people were in attendance for his speech on Thursday.http://chapelboro.com/news/business/economist-next-three-years-will-strong/
Across the nation and here in North Carolina, the unemployment rate has been in decline, a fact that has many cautiously optimistic about the economy.
But U.S. Congressman David Price (D) of Chapel Hill says not so fast.
“Has the number of jobs, and people filling jobs, actually increased?” he says. “The answer is no.”
And he says that means federal and state government still has to be active in aiding both the economy and those individuals struggling to find a job.
“We’re still stalled here in this economy – you still have three people seeking (work) for every job that’s available – and so people still need this support system to go after these jobs,” he told WCHL last week, shortly after attending a pair of roundtables on unemployment at Wake Technical Community College in Raleigh.
“These folks are really, really wanting to work…(and) I’m hopeful that eventually they’ll succeed, but the notion that you help them by pulling the safety net out from under them is just preposterous.”
At those roundtables, Price met with instructors and students in the school’s Human Resources Development program, which provides career advice and job skills training for students who need it.
“This is a group of people who have good training (and) good job backgrounds,” he says. “The group that I talked to was remarkable in that respect – but yet also remarkable in just not being able to penetrate this job market.”
Price says that’s why he’s currently urging both the federal government and the state government to extend unemployment benefits for those out of work. North Carolina legislators cut unemployment benefits last year, a move that also disqualified the state from receiving federal Emergency Unemployment Compensation as well. And at the federal level, Congress too is currently debating whether to extend unemployment benefits.
Price, along with a majority of Democrats, says it should be done.
“I don’t think there’s any question (about that),” he says. “Never – never – in a period of unemployment this severe have benefits been yanked at this point.”
Republicans in North Carolina point to the state’s declining unemployment rate as evidence that cutting benefits has motivated people to get back to work. But Price says the attendees at last week’s forum said otherwise—and he says the numbers seem to indicate that if anything, cutting benefits has actually motivated people to drop out of the job market altogether.
“The unemployment program requires you to seek work and keeps you plugged in to the employment security system,” he says. “One economist (at the roundtable) who has studied the trends said that the number of people seeking work actually went down when the unemployment benefits were discontinued…
“In other words, far from making people go out and look for a job more diligently, it seemed to have the opposite effect: it just discouraged people and caused them to drop out.”
North Carolina’s labor force shrank in 2013 by about 111,000 workers; about half of that came after the benefit cuts took effect in June. The state only added about 13,000 new jobs in 2013, but it did add more than 41,000 in the second half of the year after a drop from January to June.http://chapelboro.com/news/state-news/rep-price-cutting-benefits-doesnt-cut-unemployment/
ORANGE COUNTY – Chapel Hill is adding a new parking lot downtown: on Monday, February 3, the town is opening the Courtyard parking lot, located at 115 South Roberson Street near the west end of Franklin. Town staff say there will be 53 spaces available at the new lot. (There are about 1200 available parking spaces in all in downtown Chapel Hill.)
Earth Policy Institute founder and president Lester Brown will be on campus Tuesday, February 4, lecturing on the future of agriculture in a world of dwindling water.
The lecture is entitled “Peak Water: What Happens to Our Food Supply When the Wells Go Dry?” It begins at 5:30 p.m. in the Nelson Mandela Auditorium at the FedEx Global Education Center. It’s free and open to the public.
Starting in April, ARCA will begin assembling CM18 cash recyclers at its manufacturing facility in Mebane, transfering operations from Italy. The move will make the Mebane facility the only one in the U.S. to produce cash recyclers, used by banks and credit unions to speed its balancing and inventory functions.
Twelve Chapel Hill-Carrboro City School teachers have recently earned National Board Certification: Melissa Nicholson-Clark and Samantha Howard of Morris Grove Elementary; Susan Azzu, Agnes Bernasconi, and Ashley Laver of Rashkis Elementary; Christine Cohn of Estes Hills Elementary; Jennifer Pedersen of Northside Elementary; Lisa Myles of McDougle Elementary; Miles Chappell of Phillips Middle; Beth Kinney of McDougle Middle; Holly Loranger of Chapel Hill High; and Jenny Marie Smith of East Chapel Hill High. Congratulations to all twelve!
North Carolina leads the nation in the number of teachers certified by the National Board.
Another recognition for UNC: the Princeton Review has ranked UNC-Chapel Hill as the number-one public university in the nation on its 2014 list of America’s “Best Value Colleges.”
UNC has long been recognized as a national leader in preserving affordability and accessibility while simultaneously providing a high-quality education and maintaining high graduation rates.
NC State also made the Princeton Review’s list, as the number-four public university in the nation. Williams College in Massachusetts ranked first among private universities.
Chapel Hill-Carrboro City Schools are participating in North Carolina’s first official pilot test with school buses filled with propane autogas, an alternative fuel designed to lower gas costs while also reducing toxic emissions.
The North Carolina Propane Gas Association is promoting the new technology in conjunction with Triangle Clean Cities Coalition and Triangle Air Awareness. They say propane autogas can reduce emissions by 80 percent compared to diesel fuel.
Other districts participating in the pilot program include Union, Brunswick, and Nash-Rocky Mount.
Carolina Brewery is celebrating its 19th birthday with events beginning on Wednesday, February 5 and running through Saturday the 8th–including the debut of a new “Anniversary Ale” and a pint glass giveaway on Friday the 7th.
Visit CarolinaBrewery.com for a full schedule of events.http://chapelboro.com/news/news-around-time/parking-water-beer-business-education/
CHAPEL HILL – About 400 political and business leaders gathered at the Friday Center on Thursday for the Chapel Hill-Carrboro Chamber of Commerce’s annual meeting, to honor outstanding local businesses, nonprofits, and individuals.
Meg McGurk of the Chapel Hill Downtown Partnership set the tone in her keynote address. “Downtown has reached a tipping point,” she told the attendees. “The private sector is investing in downtown on unprecedented levels, the public sector has taken a new pride in engaging in our downtown…(and) you are the ones that are making that change happen.”
The highlight of the annual meeting was the awarding of the Chamber’s annual Business of the Year honors:
• The Micro-Enterprise Business of the Year award went to Sweeps, a company that matches UNC students with locals in need of moving, cleaning, tutoring, and other odd jobs.
• The Large Business of the Year honor went to ARCA, an international manufacturer and distributer with global headquarters in Mebane.
• The Orange County Rape Crisis Center won the Chamber’s Nonprofit of the Year award.
And the Chamber also recognized three individuals as well. Longtime volunteer Irene Briggaman won the Ambassador of the Year award; UNC Executive Director of Real Estate Gordon Merklein won the Duke Energy Citizenship and Service award for his work not only with UNC, but also with various local service organizations. And outgoing Chamber board chair Paige Zinn recognized former Carrboro Mayor Mark Chilton with the Chamber’s award for Leadership in Public-Private Partnership.
“Mark has demonstrated that you can support economic and community development without forswearing your interest in the environment and social justice,” Zinn said of Chilton.
Attendees at the meeting included state government officials, the three mayors of Chapel Hill, Carrboro and Hillsborough, and all but one member of the Orange County Board of Commissioners.http://chapelboro.com/news/business/local-leaders-businesses-honor-local-leaders-businesses/
RALEIGH - Your local economy is already one of the best in the state, but President Barack Obama traveled to N.C. State University Wednesday afternoon to announce the future of American jobs.
“I’m pleased to announce America’s newest high-tech manufacturing hub, which is going to be focused on the next generation of power electronics, is going to be based right here in Raleigh, North Carolina,” President Obama said.
That announcement received a standing ovation in N.C. State’s J.W. Isenhour Tennis Center.
***Listen to President Obama’s Remarks at N.C. State***
The Next Generation Power Electronics Innovation Institute is the second of its kind. The first was started more than a year ago in Youngstown, Ohio and focuses on developing 3D printing technology.
President Obama said Raleigh-Durham’s innovation institute will focus on energy efficiency through this partnership of universities and businesses.
“Bringing together leading companies, universities, and federal research all together under one roof,” President Obama said. “Folks at this hub are going to develop what are called wide band gap semiconductors.”
The President likely addressed many engineers as he pointed out that he was on the campus of a university with one of the largest undergraduate engineering programs in the country.
He said the wide band gap semiconductors will revolutionize energy conservation.
“They’re special because they lose up to 90 percent less power,” President Obama said. “They can operate at higher temperatures than normal semiconductors. So that means they can make everything from cell phones to industrial motors to electric cars smaller, faster, and cheaper. There are going to (still be) applications for the traditional semiconductors, but these can be focused on certain areas that will vastly improve energy efficiency (and) vastly improve the quality of our lives.”
President Obama said this is just the start of where he wants to see the United States go with these partnerships. A year ago in his State of the Union address, he told congress he wanted to see bills passed to allow for 15 institutes in the U.S. Now he says he wants congress to approve the funding for 45.
“Republicans and Democrats in the House and the Senate introduced bills that would get this going,” President Obama said. “That’s good. But they haven’t passed the bills yet. So, I want to encourage them to continue to pass the bills that would create 45 of these manufacturing hubs. In the meantime, I’m directing my administration to move forward where we can on our own.”
While the Triangle has the best unemployment rate in North Carolina, the state itself if still struggling. It currently ranks 35th in the U.S. at 7.4 percent as of November.
However, President Obama says this will institute will create job opportunities and provide a major boost to the state’s economy, and he says he hopes that it will spread nationwide.
“This can be a breakthrough year for America,” President Obama said. “The pieces are all there to start bringing back more of the jobs that we’ve lost over the past decade.”
And he says he’s seeing signs of other countries sending jobs back to American and that he doesn’t want to miss the opportunity.
“A lot of companies around the world are starting to talk about bringing jobs back to the United States, brining jobs back to places like North Carolina—partly because we’ve got cheap energy costs; we’ve got the best workers in the world; we’ve got the best university systems in the world; and we’ve got the largest market in the world,” President Obama said. “So, the pieces are there to restore some of the ground that the middle class has lost in recent decades.”
President Obama kept his focus on the economy, job creation, and the new innovation institute. He did not mention Democratic Senator Kay Hagan during his time at N.C. State. She’s running for re-election this year and has distanced herself from the President in recent months.
***Correction: President Obama mentioned Senator Hagan at the beginning of his speech by thanking her for the hard work she’s doing in Washington and that he was sorry she couldn’t make the trip.
She told the media that she felt it was important to stay in Washington while the Senate was in session. However, the Replublican party has criticized her for her support of President Obama, especially during the struggling times of Obamacare and its website troubles.
However, Sen. Hagan has tried to show that she wants to keep the president honest when she asked the Obama Administration for a full investigation of HealthCare.gov. She also asked the administration to extend the filing period for Americans since there were many problems.http://chapelboro.com/news/business/president-obama-introduces-innovation-institute-n-c-state/
(Being Part 2 in a two-part series about University Mall.)
So it turned out to be a movie theater after all. Good.
In case you missed it: University Mall announced Tuesday that Dillard’s will be leaving—ooh, sorry, hope you were sitting down for that one—and they’ll be replacing it with Silverspot Cinemas, a 13-screen luxury multiplex that comes with leather seats, a well-stocked bar, a fine restaurant (here’s their menu), and selections ranging from “Bad Grandpa” to the Bolshoi Ballet. (Here’s hoping that selection also includes Rifftrax Live.)
Everybody’s excited about it—the mayor, the business community, U-Mall staff, Chapel Hillians in general. (Heck, they even brought Rameses and four UNC cheerleaders to the press conference, so you know this is something something.) Personally I try not to get too excited about anything in advance, before we know exactly what it’s going to entail. This will have consequences. The Chelsea Theater in Timberlyne might be in real trouble, for one thing. Less worry for Deep Dish, but that bears watching too. (Movie theaters and live theaters aren’t really competitors, even if they’re right next door, but that may change if said movie theater starts putting live performances up on screen.) And Silverspot’s ticket prices are higher—sixteen bucks each—so it remains to be seen whether Chapel Hillians will go for that anyway. (Though it apparently works in Naples, Florida.)
So let’s get all that on the table too. But even so, I still say this is a good move—for Chapel Hill, sure, but also for University Mall. Especially for University Mall.
This is where they ought to be heading. In many ways, this is what they already are.
I don’t know about you, but all my happy memories of University Mall seem to be arts-related. I remember the first time I walked in the place, how surprised I was at all the galleries. I remember walking through the mall during Scrapel Hill, admiring all those ingenious pieces. I remember the first time I saw “Baltimore Waltz” at Deep Dish last year—and the second, when I dragged my friend a week later. I remember stopping by U-Mall as a reporter to cover any one of the number of times they stepped in to provide space for some displaced business or agency—the library, Orange County Gymnastics, the Red Hen, the post-flood assistance center, now Kidzu. (Plus half of University Square.) I remember many a night on that center stage back in 2010-2011, playing moderator for WCHL’s Quiz Bowls. (Highlight: stumping eight Town employees in 2011 by asking them to name two of the three people running for mayor.)
What are they calling it? “Reimagine University Mall”?
There’s no “reimagine” about it. This is University Mall becoming what we were already imagining it to be.
One non-arts-related memory I can’t not mention: I also remember showing U-Mall off to my parents when they came down from Michigan to visit—and we couldn’t find parking downtown. (This was during 140 West construction, so yes, yes, the parking situation has gotten better since then.) It worked out okay—my parents loved Southern Season. And Spice Street, as it happened.
And a good thing too. The history of malls in America is pretty simple: the first wave of indoor malls opened in the 1950s, 60s, and early 70s; later came a second wave of larger, multi-floor, more upscale megamalls that ran the first wave largely out of business. (Nowadays even those second-wave malls are struggling; the really successful ones tend to be the most upscale. Score one for income disparity.) We’ve seen this play out in Durham/Chapel Hill: Northgate opened in 1960 and put up a roof in 1973, University Mall opened in 1973 and South Square opened in 1975—then along came Southpoint in 2002. Bye-bye South Square. Northgate hung on okay, but there’s not much vibrancy in it anymore. And University Mall’s in that same group. By all rights, according to all the trends, it really should be struggling too. (Heck, how many times have we heard the line about U-Mall, that it’s a nice place but nobody buys anything there?)
I walk into University Mall and I sense vibrancy. I sense a place that’s bucking the trend. What’s different about U-Mall? What does U-Mall have that South Square didn’t and Northgate doesn’t? It’s the arts. It’s culture. It’s that commitment to remaking itself as a cultural center rather than merely a shopping center. That line, “nobody buys anything there,” doesn’t refer to U-Mall, not really. It refers to Dillard’s. And Dillard’s—we love you, but you’re not the U-Mall. Scrapel Hill is the U-Mall. Deep Dish is the U-Mall. The Farmer’s Market is the U-Mall. Southern Season’s cooking school is the U-Mall. That’s where U-Mall gets its lifeblood. Even Try Sports, big and cool as it is, feels like the icing rather than the cake.
A cautionary tale. Earlier this summer, I was at a family reunion in Houghton, Michigan, way way up in the Upper Peninsula. In Houghton is the Copper Country Mall, opened 1981, about the size of U-Mall. It used to do great. It had two department stores, a K-Mart, a sporting goods store and a 5-screen movie theater all in one. Then Walmart opened just down the road, and that was that. I went in there this year—first time in a decade—to find JC Penney still hanging on and the movie theater and the sporting goods store still open, and that was literally about it. There were two craft shops, a consignment store, a GNC, and a recruitment center for the local community college. Everything else, everything else, was empty storefronts. (You can read all about it on a website called DeadMalls.com.)
I recognized it instantly.
“God,” I said to a friend afterwards. “This is what University Mall would be if you took all the arts and culture away.”
But—they’re not taking the arts and culture away.
Instead, with this latest move, they’re doubling down on it. Good. Yes.
Will Silverspot succeed? Will it thrive? Will it find a place in Chapel Hill’s entertainment community without threatening its potential competitors? The Chelsea? The Lumina?
I don’t know yet. We’ll find out in 2015 or so.
But it’s the right move, absolutely the right move, for University Mall—a destination for culture as well as commerce…a shopping center I remember not for what I buy there but for what I experience…a special and unique place that just got specialer and uniquer.
So bring it on, Silverspot. Let’s see those sixteen-dollar seats.http://chapelboro.com/columns/aaron-keck/becoming-university-mall/
In Part I of this series I reviewed the rise of infrastructure in the United States. This week we will explore the fall and how it came to be that the American Society of Civil Engineers (ASCE) has given the current condition of our infrastructure a D+ grade due to crumbling roads and bridges, leaking water mains, and many other deteriorating systems.
There is no particular mystery in determining why our critical infrastructure systems are falling into a state of decay. According to data from the Congressional Budget Office, the spending on transportation and water systems as a percentage of gross domestic product (GDP) has fallen from 5% in 1960 to less than 3% today. Given that current U.S. GDP is approximately 15 trillion dollars, this two percent reduction corresponds to a $300 billion “shortfall” in infrastructure investment.
If this was an ordinary news article on infrastructure spending, we would be finished now. But here in Common Science, we delve a bit further into matters and try to find the root causes. Below I propose three contributing factors to why I think we have stopped investing adequately in our infrastructure, one psychological, one political, and one thermodynamic.
Building new things is a lot more fun and interesting than maintaining old ones. Let’s consider some local examples. When we decided that we needed an upgraded library in town we passed bonds, held fund raisers, and poured champagne at the grand opening. (Please note, this is not a criticism of the new library which I think was a great investment.) In contrast, just up Estes Drive from our beautiful new library are two aging schools, Phillips Middle and Estes Hills Elementary, which struggle each year to scrape together sufficient funds to fix leaking roofs and repair broken sidewalks. At the church my family attends, the parish has raised and borrowed millions of dollars to build a brand new fellowship hall, yet the historic original chapel is in desperate need of a paint job. This same dynamic is operative at the national level, where our legislators are much more inclined to allocate funds to splashy new construction projects rather than spend money on mundane things like repairing storm water systems.
For the past five years President Obama has recommend a broad array of infrastructure investments to grow our economy and secure our economic future. During most of our history as a nation these would have been considered non-controversial suggestions and enjoyed broad partisan support. Consider that the three major pieces of national infrastructure legislation that I discussed in Part I were all signed into law by Republican presidents, the US Highway Act of 1924 by Coolidge, the Interstate Highway Act of 1956 by Eisenhower, and the Clean Water Act of 1972 by Nixon.
Unfortunately, the political climate in the U.S. has turned against infrastructure projects with Republicans decrying them as socialism and Democrats shying away from supporting them for fear of being labeled “tax and spend” liberals. As a result, President Obama’s recommendations for infrastructure investment have mostly foundered in Congress. If our current infrastructure is to be repaired and the infrastructure we need for the future is to be built, this political climate will need to change.
During most of the 20th century when the U.S. was pouring money into infrastructure systems, a substantial portion of the funding came from fees and taxes collected from the oil industry. The oil industry experienced tremendous growth from its infancy around the year 1900 until its peak year of production in 1972, with an output of 9.5 million barrels a day. Profits and taxes from the oil companies in the 1950s and 1960s helped to build our highways, fund the space program, finance the construction of suburbia and pay for the Vietnam War. It was easy money.
From 1972 to 2006, U.S. oil production fell steadily to only 5 million barrels a day, a 48% reduction from its peak. Around 2006, oil companies in the U.S. started to utilize horizontal drilling and hydraulic fracturing (“fracking”) to aggressively exploit low-purity oil deposits which are contained in shale rock formations. These operations have increased U.S. oil production to its current level of 6.2 million barrels a day, leading to splashy headlines stating that U.S. oil production is up by 20% over the last few years.
So if U.S. oil production is up by 20% since 2006 why aren’t we back to the days of easy money and fixing our roads and bridges? The answer is a thermodynamic one. Back in the 1960s when you could drill into easy-to-reach, easy-to-pump, high purity oil deposits, we could expect a thermodynamic return of twenty units of oil energy for every unit of energy expended during extraction. This ratio is called energy returned over energy invested, or EROEI. Due to the difficulties in extracting and processing it, shale oil production has an EROEI of only five making it a far less profitable enterprise than exploiting traditional oil deposits.
Whatever the psychological, political, and thermodynamic challenges may be, we will eventually need to address the issues arising from our crumbling infrastructure. However, there is an important question to ask first. Do we have the correct infrastructure for the 21st century? If so, then we should get busy repairing it. If not, we should consider making some changes going forward. I will address those issues next week in Part III, the conclusion of this series.http://chapelboro.com/columns/common-science/the-rise-and-fall-of-u-s-infrastructure-part-ii-the-fall/