Hurricane Sandy Generates Economic Activity at the Expense of those who Lost Their Homes

Posted by PITHOCRATES - November 25th, 2012

Week in Review

Hurricane Sandy left a swathe of destruction in its path.  But it turns out there is a silver lining to this death and destruction.  It’s providing an economic stimulus.  A regular Keynesian stimulus bill.  Only without the messiness of having to get a majority vote in Congress.  Something the politicians can really get behind.  If only they could get a hurricane generating machine (see Sandy Seen Boosting U.S. With as Much as $240 Billion Rebuilding by Jeff Kearns, Susanna Pak and Noah Buhayar posted 11/23/2012 on Bloomberg).

John Cataneo is working his 20 employees overtime and still can’t keep up with demand from customers who need plumbing repaired after superstorm Sandy. He says he’s hired two new workers and may need more…

Cataneo’s experience shows how the storm is giving the U.S. Northeast — and the rest of the country — an economic boost that may eventually surpass the loss of business it caused. Reconstruction and related purchases and hiring may range from $140 billion to $240 billion and increase U.S. economic growth by 0.5 percentage point next year, assuming $50 billion in losses, according to Economic Outlook Group LLC, a Princeton, New Jersey-based forecasting firm.

Well, that’s good news, isn’t it?  Up to $240 billion in new economic activity.  Wow.  Guess hurricanes are good things.  A blessing.  Providing new jobs.  Injecting new money into the local economy.  Why, there hardly is a downside.  Except for this (see After Sandy damage, insurance adjusters may bring more bad news by Ben Berkowitz, Michelle Conlin and Jonathan Allen posted 11/23/2012 on Reuters).

After another day of pumping out their swampy, moldy houses, neighbors in Breezy Point in New York City huddled at the quaint generator-powered firehouse Wednesday night, stamping their feet to stay warm. Neighbors picked at food from tin cans and sipped soups from Styrofoam cups as they lamented the growing holes in a safety net they thought they had: homeowner’s insurance.

“They’re covering five shingles and a piece of gutter, and that’s it,” says Kathleen Valentine, a fire alarm dispatcher who spent the night of Superstorm Sandy working while her house filled with water and dead fish. Her insurance agent from Narragansett Bay Insurance Company said her policy would pay only for wind damage. She is still waiting for someone from the federal flood insurance program to show up…

The trouble is, many homeowners don’t read those policies closely enough to realize that most don’t cover flooding. They don’t always get both homeowner’s insurance, usually provided by a private company, and flood insurance provided through the U.S. government’s National Flood Insurance Program.

Only 14 percent of homeowners in the Northeast hold flood insurance policies, according to the Insurance Information Institute.

Federal law requires flood insurance to mortgage any home in a designated high-risk floodplain. But once the initial policy, usually for a year term, expires, no law says you have to renew it, and many people don’t because banks don’t make them.

In New Jersey, only 231,000 of the homes in the 20 coastal counties had flood insurance, according to FEMA.

There’s a reason why private insurance companies don’t sell flood insurance to people living in high-risk floodplains.  The cost of the policies would be so high to cover the losses in the event of a flood (pretty much rebuilding all houses in the area) that no one would buy the insurance.  So why bother?  Which is why the federal government provides flood insurance.  So they can spread the cost of flood claims to people who don’t live in high-risk floodplains.  Something insurance companies can’t do.  Because they don’t have the power to tax or print money.  But even the policies the government sells are too expensive for 86% of the people living in high-risk floodplains.  So they don’t buy them.  And suffer the consequences when the flood comes.

So that blessing of Keynesian-like economic stimulus?  The money to pay for it comes from in part insurance companies who can’t invest that money elsewhere.  In part from the federal government, further increasing the federal deficit which is ultimately paid by the taxpayers.  But mostly from the people who lost everything and have to pay out of pocket to rebuild their lives.  This is the blessing of that economic activity.  The destruction of lives so other people can prosper.

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Superstorm Sandy Recovery Slower in Less Affluent Areas where People Feel Abandoned

Posted by PITHOCRATES - November 4th, 2012

Week in Review

After George W. Bush used his special secret powers to steer Hurricane Katrina into New Orleans and then blew up the levees protecting the city because he hated poor minorities (that’s what some on the Left believe), the media attacked him for the federal response.  Nothing was done fast enough.  Or good enough.  And the reason was because George W. Bush hasted poor minorities.  But many have placed a lot of blame on the mayor and governor.  For not following New Orleans’ evacuation plan.  Especially the mayor for waiting so long to give the evacuation order.  Probably few will ever be satisfied with placing the blame for the aftermath of Katrina.  For they could have done a lot of things better.

Katrina is past history.  A tragedy.  But a learning opportunity.  After that experience all levels of government should be able to operate as a finely oiled machine to bring quick relief to anyone suffering a Katrina-like event.  And now we’ve had one.  Hurricane Sandy (or Superstorm Sandy).  So how is the Sandy aftermath going?  Well, if you read some reports, you’d think you were reading about Katrina again (see ‘This is our Katrina’: Misery for 2.5 million STILL without power after six days as lawlessness and fear take over New York’s outer boroughs by Rachel Rickard Straus and Snejana Farberov posted 11/3/2012 on the Daily Mail).

Almost one week after superstorm Sandy struck the East Coast with its ferocious force, power was still out to some 2.5 million customers due to damages, down from 3.5 million on Friday, the U.S. Department of Energy’s Office of Electricity Delivery & Energy Reliability claimed.

The state with the largest number of outages by far is still New Jersey with 32 percent of customers without power, it said it a report.

And as the lights begin to flicker on in Lower Manhattan, nine percent of customers across the state of New York still do not have power, followed by seven percent in Connecticut.

This comes as residents of the Rockaways in Queens continued to struggle without power, heat or food for a sixth day as their neighborhood slowly descended into chaos.

‘It’s chaos; it’s pandemonium out here,’ said Chris Damon, who had been waiting for 3.5 hours at the site and had circled the block five times. “It seems like nobody has any answers.”

Added Damon: ‘I feel like a victim of Hurricane Katrina. I never thought it could happen here in New York, but it’s happened.’

With little police presence on the storm-ravaged streets, many residents of the peninsula have been forced to take their protection into their own hands, arming themselves with guns, baseball bats and even bows and arrows to ward off thugs seeking to loot their homes…

City Councilman James Sanders said he fears that things are going to get even worse.

‘We have an explosive mix here,’ he said. ‘People will take matters into their own hands.’

Sanders has directed much of his anger and frustration at LIPA, calling on the City Council to investigate the utility for ignoring the Rockaways for so long.

‘LIPA has failed the people of the Rockaways,’ he said. ‘It’s a question of class… serving the richer areas of Long Island and ignoring the Rockaways…’

Stranded neighbors largely have been relying on volunteers delivering food, water and other basic necessities while the Red Cross and FEMA were still nowhere in sight…

In a Coney Island apartment block, where tenants huddle together in one room and human waste spills out of the toilet, tenant Jeffery Francis despairs that help is not getting to Brooklyn faster.

We are scavenging for food like animals,’ he told the New York Daily News. ‘We are in a crisis and no one will help us. Look at us. We are misery. Everyone cares about Manhattan. No one is looking out for us. Nothing…’

While power is likely to be returned to Manhattan’s East and West Villages, Financial District, Chelsea, Chinatown and the Lower East Side by the weekend, according to the power company Con Edison outages in Brooklyn, Queens and Staten Island are not expected to be repaired for another week.

Across Staten Island residents are also increasingly frustrated they are being passed over while other parts of New York and New Jersey receive aid and attention…

For power companies, the scale of the destruction was unmatched – more widespread than any blizzard or ice storm and worse than the aftermath of Hurricane Katrina.

‘It’s unprecedented: fallen trees, debris, the roads, water, snow. It’s a little bit of everything,’ said Brian Wolff, senior vice president of the Edison Electric Institute, a group that lobbies for utilities.

Initially, about 60 million people were without power in 8.2 million homes and businesses.

By Wednesday night, that number had fallen to roughly 44 million people in 6 million households and businesses and today around 3.6 million are without power.

Manhattan and Long Island getting power before the less affluent areas hit by the storm?  That sounds like what the Left claimed the Bush administration was doing in New Orleans.  Now either President Obama hates poor minorities, too.  Or neither he nor George W. Bush hate poor minorities.  More likely the Democrat-friendly media reported every New Orleans failing because they hated George W. Bush.  While they will make no such claims in the Sandy aftermath because they love President Obama.

It would probably be better to have a Republican in the White House during the Sandy recovery.  Because the media would be relentless attacking the administration for every misstep.  While a lesser federal effort under a Democrat administration will get a more positive treatment in the media.  So there would be more urgency under a Republican administration to help people than there would be under a Democrat administration.  Especially poor people and minorities.  Who the Left says Republicans hate.  Especially when this is happening a week before an election.

Had Sandy happened with George W. Bush in office running for reelection they would have excoriated him for hitting the campaign trail.  For not expending every last effort in the recovery process.  It would have been just like Katrina.  But President Obama can hit the campaign trail.  For he walked New Jersey with Governor Christie.  And that was enough.  Of course the people in Brooklyn, Queens, Staten Island, New Jersey and in the other areas struggling to recover from Sandy probably want more.  Especially when they see the lights coming on in Manhattan when they have no power, food or heat.  And have to defend themselves from roving mobs of looters.

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FT142: “Solar and wind power would take the longest to restore after a devastating weather event.” —Old Pithy

Posted by PITHOCRATES - November 2nd, 2012

Fundamental Truth

Neither Snow nor Rain nor Heat nor Gloom of Night Stays the Production of Electric Power from Coal

What’s the best way to generate electric power?  This is not a trick question.  There is an answer.  And there is only one correct answer.  Coal.  A coal-fired power plant is the best way to generate electric power.  Coal-fired power plants can run 24 hours a day, 7 days a week, 365 days a year.  You never have to turn them off.  They can produce an enormous amount of power for the given infrastructure.  You can put these power plants anywhere.  Where it’s snowy and cold.  Where it’s bright and sunny.  Where it’s cloudy and rainy.  It doesn’t matter.  Coal-fired power plants are like the US Postal Service.  Neither snow nor rain nor heat nor gloom of night stays the production of electric power from coal.

Coal is a highly concentrated form of energy.  Burning a little of it goes a long way.  This is why one coal-fired power plant can add over 2,000 megawatts to the electric grid.  And why about 600 coal-fired power plants can provide over half of our electric power needs.  Coal is one of the most abundant fuel sources in the world, too.  In fact, America has more coal than we can use.  This high domestic supply makes coal cheap.  Which is why coal-produced electric power is some of the cheapest electricity we have.

The only thing that will shut down a coal-fired power plant is running out of coal.  Which doesn’t happen easily.  Look around a power plant and you will see mountains of coal.  And conveyor systems that move that coal to the firebox that burns it.  You’ll probably see more coal arriving.  By unit train.  Trains with nothing but coal cars stretching a mile long.  By river barge.  Or Great Lakes freighter.  Making round-trip after round-trip from the coal mines to the power plants.  We’ve even built power plants near coal mines.  And fed those plants with coal on conveyor systems from the mines to the power plants.  Trains, barges and freighters use self-contained fuel to transport that coal.  And electric power energizes those conveyor systems.  Electric power that comes from the power plant.  Making it difficult to interrupt that flow of coal to our power plants.  Onsite stockpiles of coal can power the plant during brief interruptions in this coal flow.  When the lakes freeze they can get their coal via train.  And if there is a train wreck or a track washout they can reroute trains onto other tracks.  Finally, coal-fired power plants are least dependent on other systems.  Whereas a natural gas-fired power plant is dependent on the natural gas infrastructure (pipelines, pumps, valves, pressure regulators, etc.).  If that system fails so do the natural gas-fired power plants.

Solar Panels produce low DC Currents and Voltages that we have to Convert to AC to Connect them to the Electric Grid

Neither snow nor rain nor heat nor gloom of night stays the production of electric power from coal.  But they sure can interrupt solar power.  Which won’t produce much power if there is snow or rain or night.  Giving it one of the lowest capacity factors.  Meaning that you get a small fraction of useful power from the installed capacity.  Wind power is a little better.  But sometimes the wind doesn’t blow.  And sometimes it blows too strong.  So wind power is not all that reliable either.  Hydroelectric power is more reliable.  But sometimes the rains don’t come.  And if there isn’t enough water behind a hydroelectric dam they have to take some generators offline.  For if they draw down the water level too much the water level behind the dam will be below the inlet to the turbines.  Which would shut off all the generators.

Of course, hydroelectric dams often have reservoirs.  These fill with water when the rains come.  So they can release their water to raise the water level behind a dam when the rains don’t come.  These reservoirs are, then, stored electric power.  For a minimal cost these can store a lot of electric power.  But it’s not an endless supply.  If there is a prolonged draught (or less snow in the mountains to melt and run off) even the water level in the reservoirs can fall too low to raise the water level behind the dam high enough to reach the water inlets to the turbines.

Storing electric power is something they can do with solar power, too.  Only it’s a lot more complex.  And a lot more costly.  Solar panels produce low DC currents and voltages.  Like small batteries in our flashlights.  So they have to have massive arrays of these solar panels connected together.  Like multiple batteries in a large flashlight.  They have to convert the DC power to AC power to connect it to the grid.  With some complicated and costly electronics.  And any excess power these solar arrays produce that they don’t feed into the grid they can store in a battery of batteries.  And as we know from the news on our electric cars, current battery technology does not hold a lot of charge.  Barely enough to drive a 75 mile round-trip.  So you’d need a lot of batteries to hold enough useful power to release into the grid after the sun goes down.

Storms like Sandy would wipe out Solar Arrays and Wind Farms with their High Winds and Storm Surges

When a 9.0 magnitude earthquake hit Japan in 2011 the Fukushima Daiichi Nuclear Power Plant suffered no damage.  Then the storm surge came.  Flooding the electrical equipment with highly conductive and highly corrosive seawater.  Shorting out and destroying that electrical equipment.  Shutting down the reactor cooling pumps.  Leading to a partial reactor core meltdown.  Proving what great damage can result when you mix water and electric equipment.  Especially when that water is seawater.

Hurricane Sandy hammered the Northeastern seaboard.  High winds and a storm surge destroyed cities and neighborhoods, flooded subway tunnels and left tens of millions of people without power.  And they may be without power for a week or more.  Restoring that power will consist primarily of fixing the electric grid.  To reconnect these homes and businesses to the power plants serving the electric grid.  They don’t have to build new power plants.  Now if these areas were powered by solar and wind power it would be a different story.  First of all, they would have lost power a lot earlier as the driving rains and cloud cover would have blocked out most of the sun.  The high winds would have taken the windmills offline.  For they shut down automatically when the winds blow too hard to prevent any damage.  Of course, the high winds and the storm surge would probably have damaged these as well as the power lines.  While shorting out and destroying all of that electronic equipment (to convert the DC power to AC power) and the battery storage system

So instead of just installing new power lines they would have to install new windmills, solar arrays, electronic equipment and storage batteries.  Requiring long manufacturing times.  Then time to transport.  And then time to install.  At a far greater cost than just replacing downed wires.  Leaving people without electric power for weeks.  Perhaps months.  Or longer.  This is why using coal-fired power plants is the best way to generate electric power.  They’re less costly.  Less fragile.  And less complicated.  You just don’t need such a large generating infrastructure.  Whereas solar arrays and wind farms would cover acres of land.  And water (for the wind farms).  And storms like Sandy could wipe these out with their high winds and storm surges.

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