Flood Insurance Premiums rise following Katrina and Sandy beyond what Some can Afford

Posted by PITHOCRATES - June 9th, 2013

Week in Review

Few things are as enjoyable as a beachfront view.  What a way to live.  Seeing the sunrise over the ocean.  Breathing that sea air.  Walking out your door to the water’s edge.  How lucky those lucky few are who live on the ocean’s edge.  Of course, there are some drawbacks to living on the ocean’s edge (see After Sandy, a new threat: Soaring flood insurance by Katie Zezima and Meghan Barr, Associated Press, posted 6/10/2013 on Yahoo! News).

George Kasimos has almost finished repairing flood damage to his waterfront home, but his Superstorm Sandy nightmare is far from over.

Like thousands of others in the hardest-hit coastal stretches of New Jersey and New York, his life is in limbo as he waits to see if tough new coastal rebuilding rules make it just too expensive for him to stay.

That’s because the federal government’s newly released advisory flood maps have put his Toms River home in the most vulnerable area — the “velocity zone.” If that sticks, he’d have to jack his house up 14 feet on stilts at a cost of $150,000 or face up to $30,000 a year in flood insurance premiums…

Officials are urging people to elevate their houses now because they are eligible for federal financial aid. About $350 million of New York City’s and $600 million of New Jersey’s Sandy relief funding has been allocated for the repair of single- and two-family homes, which could help defray the cost…

Several months before Sandy hit, Congress quietly passed the Biggert-Waters Flood Insurance Reform Act, a bill that authorized skyrocketing premium increases for people in flood-prone communities.

It was a desperate attempt to keep the program financially solvent after it was nearly bankrupted by an onslaught of claims from Hurricane Katrina, which forced the federal government to borrow about $17 billion from the Treasury.

Borrowing $17 billion from the Treasury?  That means borrowing $17 billion from the taxpayers.  And that’s the sad truth.  The people who don’t enjoy living on the ocean’s edge are the ones who end up paying for storm damage suffered by those living on the ocean’s edge.  People who shouldn’t be subsidizing someone’s dangerous home location.  Unless these people throw open their doors for all of us to come over and spend a few weeks on the beach with them.

Living on the ocean’s edge is both beautiful and dangerous.  Those who enjoy the beauty should pay for the privilege of enjoying that beauty.  Yes, it’s sad these people lost so much from Sandy.  But it was their choice to live there.  And they should pay all the costs required to live there.  Including all their insurance costs.  Like every other home owner must do that doesn’t have that gorgeous ocean view.

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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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Global Warming Fears wane as People buy Cars with Powerful Internal Combustion Engines

Posted by PITHOCRATES - November 25th, 2012

Week in Review

After the devastation of Hurricane/Super Storm Sandy those on the Left are asking with smug arrogance if we’re ready to address the issue of global warming seriously now.  Just as they did after Hurricane Katrina.  About 7 years earlier.  With relatively calm hurricane seasons between Katrina and Sandy.  Which wasn’t supposed to happen according to those on the left.  For they said there would be an increase in the number of Katrina-like events happening each hurricane season following the year of Hurricane Katrina.  Because of man-made global warming.  What they call a scientific fact.  Even though the facts appear to say otherwise.

So the majority of people ignore their warnings.  As they tired of these people crying wolf.  Proven by the type of cars we’re buying.  And the type of cars we want to buy (see 12 More New Cars Worth Waiting For by Michael Frank posted 11/25/2012 on Popular Mechanics).

Go back a few years and every new car shouted about mpg and economizing. This year, fuel efficiency is still important, but style is back for the new cars sporting 2013 and 2014 model years.

What do these new cars have in common?  An internal combustion engine.  That’s right, not a one of them is a hybrid or an electric car.

When the government bailed out General Motors and took an ownership position they pushed the Chevy Volt.  A hybrid that was going to help save the world from global warming.  There was only one problem.  Few people wanted to buy a Chevy Volt.  As people don’t want to pay more and get less in a car.

Based on the type of cars we’re buying it’s fair to say the masses aren’t wringing their hands over the warming they’re causing.  Because they don’t believe they are causing it.  For after being told that if we don’t do something right now it will be too late prevent the destructive damage of global warming for the last 20 years people start doubting them.  Besides, glaciers once covered the world.  They don’t now.  And it sure wasn’t man-made global warming that melted them away.

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Governor Cuomo cuts Government Regulations to Speed Fuel Deliveries into New York Harbor

Posted by PITHOCRATES - November 4th, 2012

Week in Review

The crisis in the northeast following super storm Sandy has shown why we are ‘addicted’ to oil.  For when everything else fails us it’s what we turn to most (see New York Harbor Reopens, Bringing Hope to the Fuel-Hungry by Martha C. White posted 11/2/2012 on CNBC).

On Friday, Cuomo signed an executive order allowing distributors and transporters to bring gasoline, diesel and kerosene into New York State without being required to meet typical registration requirements.

How do you make things work faster and more efficiently?  Get rid of governmental regulations.  That’s right, when you need things to operate at their best you remove government.  You don’t add more government.  Just think how much better the economy would be if it was this way all of the time.  If it was we probably wouldn’t have a U-6 unemployment rate of 14.6%.

But other means of getting fuel into the area were still limited. And that’s not such good news for drivers who have spent hours lined up for gas or for thousands of homeowners who have been forced to use gas-powered generators to light homes darkened by Sandy.

Attack oil all you want but there is a reason why we’re addicted to it.  It’s the fuel that brings food to our grocery stores.  It’s the fuel that lets us drive to someplace that didn’t lose their electric power so we can find food and shelter.  And it’s the fuel that lets us heat our homes and refrigerate our food when we lose our electric power.  Oil is the go-to fuel when everything else fails us.  It’s Old Reliable.  And at times the difference between life and death.

The Oil Price Information Service reported that two big pipelines were scheduled to resume partial operations Thursday and Friday, although the oil they carry only moves at a rate of three to five miles an hour.

Even if the ports and pipelines were running at full capacity, though, getting that fuel into people’s cars presents other challenges.

One is the ongoing power outages. “We are all dependent on utilities for electricity and that includes service stations and bulk terminals,” Tom Kloza, chief oil analyst at OPIS, said via email…

At the retail level, tankers won’t deliver fuel to a gas station that doesn’t have electricity to power its pumps. As of Thursday, the American Automobile Association estimated that only 35 to 40 percent of gas stations in New York City and New Jersey were operating. On Long Island, the estimate was 30 to 35 percent.

The winds and tidal surge were devastating.  Downing power lines like falling dominoes.  But once the power lines are back up electric power will flow again.  Imagine if they had to rebuild the power generating infrastructure, too.  If the areas affected by super storm Sandy were powered by clean energy of the future.  Wind power and solar power.  If these were swept away like falling dominoes, too, it would take months to install new solar arrays and windmills.  In fact, it would take so long that they would probably attach the grid in those areas to a coal-fired power plant.  Until they could rebuild the clean power of the future.  While the detested coal-fired power plant (detested by the Left) shoulders the load comfortably.  Allowing those ravaged by super storm Sandy to return to normalcy quicker.  In fact, it would be far less costly just to leave these areas connected to a coal-fired power plant.  And smarter.  Because there will be other super storms coming that will just sweep the new solar arrays and windmills away like the previous ones.

If you’re interested in protecting human life during trying times you should embrace oil and coal.  As one will allow people to live when everything else is failing them.  And the other will allow the restoration of power as soon as the power lines are restored.  Something that solar and wind won’t do.

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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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