[This follows up on the previous post, This is Not My Beautiful House. Taken from “The Globally Optimized House: AC,” written August 11, 2010.]
Most of my work (that paid) has been some form of global optimization, from optimizing parallel programs and schemes to automatically optimize parallel programs, to optimizing plan layouts in subdivision, to managing investments considering all tax and estate consequences and adverse events.
The new house in Palm Springs is no exception. Built in 2003, by the standards of the time it’s well-insulated and efficient. At that time, electricity cost about 12 cents per kWh; currently the highest tiered rate (which we will easily reach using AC) is above 30c/kWh. The pricing scheme is hugely complicated and unpredictably micromanaged by an incompetent state legislature and regulators, and discriminates against large families as well as wasteful users. It does, however, result in such high marginal costs for larger houses that solar power, as currently subsidized, is more than competitive for the highest-tier rates.
The former owners were doing what most people do, shutting off AC in most of the house and using it sparingly in the areas they actually live in; this kept their bills down to $400/month or so, averaged year-round. In our usage with less than half the house cooled to 79-84 F, the power bill for the month of July would have been about $600 if we had been there full-time.
Heating and cooling buildings is a complex global optimization problem. First note that what we want to optimize is not the temperature as shown by the thermostats (there are 6), but human comfort; if there is no one at home, there is no need to control anything (though furnishings can suffer from excess heat or extremely high or low humidity.) We want the house to know how many people are in what areas to determine how hard to work to condition the air. Also, comfort depends on many factors; temperature, humidity, moving air, radiation temperature (easily noticed in winter when it can feel cold at an apparently comfortable temperature because cold walls or windows soak up thermal radiation.) I am trying to give up hot coffee in the summer since a cup can make me uncomfortably warm for an hour when an iced coffee would not have.
The general problem of cooling can be approached using a variety of sources and sinks available in the environment. Groundwater, for example, is often at a reliable low temperature and can be used for cooling, either through a heat exchanger or indirectly by using it as a heat sink for a conventional AC compressor. In the desert, evaporating water is an energy-efficient cooling method. [BTW. don’t let anyone tell you that there’s a water shortage and that evaporative cooling will make it worse; fossil fuel power plants use more water to produce the additional power needed for conventional AC than evaporative cooling uses. One source comments that use of evaporative cooling for a typical house results in additional water usage of about a shower per day, implying it would strain water resources; but since Southwestern homes typically use many times that amount on landscaping irrigation, and generation of additional electricity for conventional AC would use as much, additional water use is not really an issue.]
In a climate with wide swings in outdoor temperatures, simple ventilation and storage can provide most of the heating and cooling in many seasons; a whole-house fan and the house’s heat storage capacity obviates the need for costly AC much of the time, but it requires constant monitoring of conditions and control of ventilation, and is most effective when outside conditions in the next 12-24 hours are known. A smart person can handle this, and until now, most whole-house fans have been controlled by a simple switch and the strategic opening and closing of windows.
There’s huge room for improvement in the technology of AC. Manufacturers have improved conventional compression-cycle refrigeration AC a great deal since energy prices started to climb; SEERs (Seasonal Energy Efficiency Ratios) have climbed from 10 to 14-16 in two decades, cutting power used by a third.
But the original form of cooling, used since ancient times in dry climates, passes hot, dry air over water to cool and humidify it; this is now called evaporative cooling. In its simplest form, a fan blows hot dry air over a medium soaked with water. Evaporating water cools the medium, which cools the air passing over it, which meanwhile picks up some moisture. In a desert climate, outside air at midday can be at 110 F and less than 10% humidity; the wet-bulb temperature (the temperature a thermometer registers when it is cooled by a soaked medium after air is blown over it) can be below 50 F. These simple evaporative coolers, known as “swamp coolers,” were widely used in the desert Southwest until cheap AC units and the bad reputation of swamp coolers for high maintenance and growth of microorganisms in the medium led to their replacement by conventional refrigerative AC. There are times of year, also, when the humidity levels rise enough to reduce a swamp cooler’s effectiveness, so that for some weeks of the year, the output air from a swamp cooler is uncomfortably warm and humid.
More recent development of two-stage evaporative coolers resolves most of those issues. By using outside air in a first stage to cool one side of the medium, but exhausting the now-moister air and then drawing in more outside air to pass over the already-cooled moist medium on the other side, the air can be cooled more with less addition of humidity. This is not as efficient as a one-stage swamp cooler under ideal conditions for their use (because it uses more fan power to move more air), but works in a much wider range of conditions, and can cool a space for about 1/3 the cost of conventional AC (SEERs of 40 vs AC’s 14). The fungus and microbial issues of old-style swamp coolers have been dealt with by a variety of automated purging and cleaning methods, though some disinfection and annual maintenance is still a good idea.
Many other factors influence comfort and can be tweaked to improve it; our house is not ideally oriented, with its long axis north-south and prime living areas facing west. The best designs for passive solar heating and cooling have the house laid out east-west, with a large southern overhang sized to allow in winter sun and keep out summer sun. We spend a lot of time opening and closing 15-20 shades on the east and west sides of the house as solar incidence changes. A set of automated shades with a smart controller which can respond to conditions would handle that for us…. [ultimately a window technology which can be controllably tuned to allow in or block light and heat will simplify this problem, but while this has been an area of research for some time, no cheap and practical windows of this type exist.]
Many articles on evaporative coolers mention the OASys, an energy-efficient appliance that was developed by engineers at the Davis Energy Group in Davis, California. Unfortunately, the OASys is no longer available.
For a while, the OASys was being manufactured by Speakman. After a while the production of the unit was moved to a factory in India. Because of poor sales, however, manufacturing was discontinued. The remaining units were shipped to a warehouse in Nevada, where a warehouse fire destroyed the entire inventory.
The end of a historical era
A few years ago I had a conversation about evaporative coolers with John Proctor, the president of Proctor Engineering Group in San Rafael, California. Proctor, a nationally known air conditioning expert, told me that evaporative coolers deserve wider use. “The problems with direct evaporative coolers are overblown,” notes Proctor. “I lived in an evaporatively cooled home in Colorado for many years and was extremely happy with it. It worked well. I’m befuddled by the fact that more people don’t use evaporative coolers.”
Like most GBA readers, Proctor is a strong advocate for the use of energy-efficient HVAC equipment, so his love of evaporative coolers isn’t too surprising. Although energy-efficiency advocates have been singing the praises of evaporative coolers for years, the tide seems to have turned away from these devices. Evaporative coolers are fading away.
A reporter for The Arizona Republic, Ryan Randazzo, described the trend in a 2010 article titled “Once-Common Evaporative Coolers Are Disappearing from Phoenix-Area Homes.” Randazzo wrote, “Now the metal boxes atop homes are rare, done in by a combination of cheap and increasingly energy-efficient air-conditioning and the time and expense of maintaining the coolers. Arizonans steadily have moved away from using the sometimes noisy, always drippy evaporative coolers, even though they may reduce energy bills.”
According to Randazzo, almost every Phoenix home had an evaporative cooler in 1940. In 1984, nearly half of all Phoenix residents still had one. By 2010, however, less than 10% of Phoenix homeowners had an evaporative cooler. “Most residents who still use them are either extremely cost-conscious, handy at fixing the units, or both,” Randazzo reported.
Randazzo continued, “New housing developments are limiting coolers’ use on roofs. And people are just happy to use an air-conditioner that rarely needs repairs vs. a cooler that needs rooftop service at least twice annually.”
Randazzo interviewed Mike Donley, president of Donley Service Center. Donley explained that “most people just tired of climbing on the roof in the spring to clean and activate their cooler, and getting up there again in the fall to clean it and seal it off. … ‘Coolers are a do-it-yourself project,’ Donley said. … ‘I hate to say this, but if you are going to [pay to] have us service it twice a year, you are better off buying a high-efficiency AC system,’ Donley said.”
So unless a manufacturer steps forward with a two-stage cooler that doesn’t require maintenance at all (which is possible; an automated device could clean itself, as ours did in part), people will think of it as too much trouble and move to use less efficient, overly drying AC.
When I went to work at BBN Labs (a DARPA research shop, like a B-grade Xerox PARC or Bell Labs) in 1984 as a freshly-minted MIT graduate, my office was small and barren, with a desk, a VT-100 terminal, and a classic Mac. But it was still the age of the private office, and I’m thankful I never had to deal with the cubicle, or worse, the bullpen of today — I would never have been able to program with the noise and distractions.
The engineer next door had a leather couch and an oriental rug, and art and geeky knick-knacks on shelves all around. Sometime during the first week, the headhunter / HR contractor who had recruited me stopped by. “Don’t get too comfortable. I mean, don’t spend a lot of time decorating.”
I didn’t know quite what he was getting at — interpreting it as philosophical advice, or perhaps practical because he had just seen the overdecorated office next door. Everything changes and ends, so best be prepared to move on as soon as you think you’ve arrived at your destination? Always have your bug-out bag packed and ready? But later I realized he meant he knew the Labs were splitting, with the part I was working for to be spun off to commercialize the BBN Butterfly multiprocessor. And in a few months we were in a new building next door, so decorating my office would have been a waste of time.
And so it is with houses. We find ourselves looking for a summer place to escape the heat of Palm Springs — it was 110 today, starting the season of excessive heat. My gym saves money by keeping the thermostats at 80, and I’m sick of fighting over fans and struggling to breathe. PS is great two thirds of the year, but that last third is deadly. We’ve been scanning the houses near the coast, from San Diego up to Irvine. But this has me thinking of what the headhunter told me — and why I’ve spent so much time moving and fixing up places, hoping this time it would be Just Right….
College Avenue House
By the time I started work at BBN I had been a landlord for five years, looking after a turn-of-the-century mansion that had been split up into four units during the Depression. It was my first venture into real estate investment — a grand three-story house on College Avenue between Tufts University and Davis Square, Somerville. I knew the Red Line subway extension would be coming to Davis Square, and at $70K the building was a good bet. I imagined doing all sorts of renovation, but while we lived in the ground floor apartment and I did do a lot of small upgrades for energy conservation and the like, I was too young and distracted to do anything major like finish the enormous attic into another glorious apartment as I had intended. And knowing what I know now, I realize I would have been stymied by the NIMBYs nearby anyway….
We had friends gutting and renovating houses in (crime-ridden, cheap) San Francisco (which is no longer cheap.) One time we were staying at their house while they had stripped their own bathroom down to the studs — which meant using a fully-exposed toilet. “Pretend there’s still a wall there.” The things we did when we were young and hungry…
I was getting into microcomputers and compilers and AI, which is how I ended up at BBN doing multiprocessor LISP for the SCI (Strategic Computing Initiative), which was supposed to be a government-funded response to the Japanese AI scare. Neither country cracked the problem, then both pulled the funding plug when no practical results happened — lots of money and effort went down the drain. This drying up of interest and collapse in AI research starting around 1986 is now called The AI Winter… which also crashed my next employer, Symbolics, when the beancounters decided to direct all researchers to buy Sun machines with Lisp compilers instead.
So because I had an absorbing job, I lost interest in the house projects, and it seemed like a good idea to free myself to move around by selling it. We got $350K for it; since we had borrowed all but $14K downpayment, that meant a profit of over $250K on a $15K investment, by the wonders of leverage and good luck. And the rents had largely paid for our own house expenses along the way, as rent controls ended, interest rates dropped, the subway opened, and investment started to flow back into the neighborhood, which today is highly desirable — Zillow thinks the building is worth $1.4 million now, 20x what we paid in 1978. Those conditions are unlikely to ever be repeated.
I entered a PhD program in computer science at Northeastern studying things like denotational semantics with Mitch Wand. A year of that was enough, and I moved to Vancouver to get away from the various unpleasantnesses of that era — escaping to a tiny apartment in a highrise tower in the West End.
First Bowen house framing stage – 1992
I bought a big piece of land on Bowen Island and spent the next five years subdividing it, attacked by the Islands Trust and the antidevelopment faction on the island — which as it turned out, is retirement home to many Canadian bureaucrats. You really haven’t lived until people at a public meeting gang up to attack you as “an American developer.” The photo is of the first house being built in my subdivision, not by me — I never built my own house there, since I realized I wasn’t wanted.
Sunnyvale Eichler – 2007
I fought them to a draw and got out alive, though just barely. I ended up in California, where I picked up a new partner and bought an Eichler in Sunnyvale (photo above). That was my first real success at renovation — we updated the kitchen and baths, much of it “just enough” updating — for example, the 1969 bathrooms just needed new drop-in sinks and faucets to seem fresh, so I could do a lot of the work myself. We paid the dangerously-high sum of $600K for the house in 2000 and sold it for $1.2 million in 2007. Now Zillow claims it’s worth $1.7, showing how inflated values are in Silicon Valley….
View from Upper Market SF House
We eventually ended up in the city of San Francisco itself, renting the top floor unit of a new building on upper Market Street. The developer built the largest building he could legally, and what he thought would sell — two condos in a five-story building, with the garage and entries in the middle floor.
The builder/developer made a few mistakes. First mistake: badly judging the market, which collapsed as he was finishing the project in 2008. Second mistake: the steel-framed center of the building didn’t settle, but the back end did, leaving our living room with an inch-high bulge running across the floor. Third mistake: the slate-tiled roof deck, planned hot tub and the garden box, which he never finished installing (but did fill with dirt.) The roof deck leaked. And leaked. And leaked — he rebuilt parts of it several times, while areas inside the house were soaked and had to be replaced. While it would be grand to sit in one’s rooftop hot tub watching the city lights and sipping Chardonnay, the reality never quite justified the trouble.
Market St Kitchen – Green Marble Counters!
Meanwhile, the green marble countertops in the kitchen were probably chosen as a selling point — luxury! Green! Marble! But were horrible, since the slightest hint of acid — a lime, champagne, anything — etched the marble in ugly gray spots and rings. Despite our precautions, parts of it looked terrible in less than a year, and the owner had to bring in a refinisher to redo it and seal it again.
Nighttime View from Market St House
One last view from the Market Street place. The effect of the views eventually wore off, and we were left with the high rent, the leaks, the cold wind and fog that made the roof deck less than pleasant most of the time, and the steep walk up and down the hill to the gym.
Sevilla Great Hall – 2010
Finally, we bought a big place in far south canyon Palm Springs. It came decorated in a sort of post-modern Beetlejuice style, not quite our taste but well-done. At over 6,000 sq. ft. it was a lot more house than we needed, but we were thinking one of our parents (or both?) might end up living with us, and of course we wanted room for guests. Neither of those really happened, so half the house was generally closed off.
The place had three dishwashers, three refrigerators, four water heaters, and six AC units. I replaced most of the ceiling lights with LED units, and since the AC bills were in the hundreds (and could easily have been in the thousands!), I looked into two-stage evaporative cooling.
Craning in Evaporative Coolers
Here you see one of the evaporative coolers being craned to the roof, where it was installed near the existing HVAC unit to share ducting. The concept of evaporative cooling takes advantage of the cooling effect of evaporation; the desert air is usually very dry, and under the right conditions evaporation can drive a surface down to near freezing temperature (the dew point is the theoretical limit, and that is often very cold — as I write it is 94 degrees outside, but the dew point is 37 degrees F.)
Normal evaporative coolers just run outside air over wet materials to cool and add moisture before sending it into the house. A two-stage cooler uses that effect to cool water, then expels the first stage air outside. The cold water is then sent to the next stage to chill outside air which is further cooled by running it over moist materials, but since the air is already cooled it gets a bit cooler and does not pick up so much moisture. The result is cool, clean, slightly moist air, perfect for a home in the desert. Running both units, we were able to cool the parts of the house we used most down to comfortable levels using less than 20% of the power used for AC, since all that was needed was a few showers a day worth of water and two big fans.
Control Board
Unfortunately this super-advanced cooler was made by a pioneering company, and I soon had arrows in my back. No one knew how to install it, so I had to design the ducts myself. The computer control program would occasionally glitch, requiring a system reboot — cut the power and restart. When it was running, the air was much nicer than what you get from AC, but you had to understand how to open doors and windows just so to balance the system — air was being blown in cool and had to escape, so choice of open windows to distribute the coolth was an art.
It was no great strain for me to run it, but when our plans changed again and I was left alone in the house, it made no sense to keep the house for several more years. We put it up for sale. No one understood the coolers, since unlike solar panels virtually no one has ever seen one — the cheaper one-stage coolers, known as “swamp coolers” locally, have a reputation for being high-maintenance and the choice of people too poor to afford real AC. So that was no help at all in marketing the house, and I doubt the new owner ever used the instructions I left for him.
The Morrison, Phase 2 Construction – 2012
While waiting for that to sell, I put a deposit down on a unit to be built at The Morrison, a trendy modern development of detached houses on tiny lots, each with a small pool. One of the few developments that kept selling through the recession, and now a model for many copycat developments in Palm Springs. Above is a view of the construction site from our partly-furnished new house.
Finished Pool – 2013
So again we had to move and set up a new place — change all the lighting to LED, buy new furniture, decorate. It always seems to be me that has the time and opportunity, so I do it. And years pass, and other things I could be focusing on don’t get done….
“Don’t get too comfortable. Don’t spend a lot of effort decorating,” as my HR guy told me long ago. Unless that’s what you want to do — specialization allows most of us to concentrate on what we’re best at, while farming out other tasks to people who specialize in those. When taxes are very high, there’s a big cost to hiring someone else to do something — you paid taxes on your income, and the people you hire pay taxes on what you pay them, and so on — which is why most of us try to do a lot of the work ourselves to save money. If I pay someone $1,000 to paint, I have to earn $1500-2000 more to make up for that expense. So I do the painting. And I get distracted, and do a worse job, and nothing gets written.
You can waste a lot of your life buying and selling houses, decorating and moving. I admire people who can stay in one spot for fifty years, happy with what they have — that’s not really me. But in my old age I now understand that a big house is a white elephant that owns you as much as you own it, that good enough is best, that getting your surroundings Just So is not worth the time and effort. Less stuff in less space means more money and free time.
New eastern span of the Bay Bridge – photo SF Chronicle
See the lovely bridge above? It cost about $13 billion dollars.
To update last week’s post about California’s disastrous high speed rail project, Regulation Strangling Innovation: Planes, Trains, and Hyperloop, the Obama administration has just given the already-failed project another four years to throw taxpayer money at connected consultants and contractors, delaying a halt to the boondoggle and recognition of its failure until long after Jerry Brown and Barack Obama are out of office (and then its waste of $billions will be blamed on “Republican intransigence”– which is rich in a one-party state.) The inept and corrupt process for building any large government project, especially in California, is more to blame.
First we’ll take a look at the mismanaged and endlessly-delayed project to replace the eastern half of the San Francisco-Oakland Bay Bridge, which had been damaged by the Loma Prieta quake of 1989. After the quake, temporary repairs reopened the old bridge to traffic but it was clear the span needed to be replaced as soon as possible.
The Atlantic’s Citylabsummarizes the disastrous Bay Bridge saga:
The first cost estimates, released in 1995, figured both east and west spans of the bridge could be upgraded for a cuddly $250 million. By the time the new east span opened in September 2013 the price tag for that span alone had reached a reported $6.5 billion, with a B. Just your run-of-the-mill rise of 2,500 percent.
Cover: Remaking the Bay Bridge – Amazon
UC Berkeley planning scholar Karen Trapenberg Frick meticulously chronicles the reconstructed bridge in a new book, Remaking the San Francisco-Oakland Bay Bridge. With Frick and her book as guide, CityLab tracked bridge expenses over time to get some sense of how the project that Herbert Hoover once called “the greatest bridge yet constructed in the world” became yet another example of a major public works project in which the cost ended outrageously higher than it began — and some ideas for what to do about it.
$250 million (1995)
Following the earthquake, the California Department of Transportation (which goes by Caltrans) assembled a board to advise on a seismic retrofit of the Bay Bridge. The agency’s initial estimate for fixing both east and west spans came to $250 million…
$1 billion (1996)
In the blink of an eye, the Bay Bridge cost quadrupled. “I remember one day I woke up and it was a $1 billion estimate,” says Frick, who was working at the Metropolitan Transportation Commission (MTC) at the time. “Here you tell the public in ’95: we can do the whole thing for $250 million. They vote on a bond measure that allows them to fund this plus other retrofits in the state. Then they come back and go, actually it’s $1 billion.”
The cost increase was the result of detailed engineering studies conducted during the year or so after the initial estimate was released. Among other things, soil testing in the Bay had revealed that bridge pilings would need to be anchored “deeper into bedrock than expected,” she writes. The public, of course, wasn’t pleased. In the book, one Caltrans manager recalled the immediate reaction:
“The numbers we put together (on the bridge costs) at lunchtime on Tuesday became the main front-page heading in both the San Francisco Chronicle and the Los Angeles Times on Wednesday morning.”
$1.3 billion (1997)
In 1997, Caltrans offered a range of cost estimates for various retrofit designs to the east span. Ultimately the state legislature agreed to fund the bridge to the tune of $1.285 billion.
There was still the big question of what the bridge would look like. Governor Pete Wilson expressed official preference for a basic “skyway” — a straightforward viaduct unadorned by a tower. He said if Bay Area residents wanted “an aesthetically enhanced bridge,” they should pay for it themselves.
That didn’t sit well. Pulitzer-winning architectural critic Allan Temko blasted the skyway option as “dull” and likened it to “an outsized freeway ramp.” MTC head Mary King said of the skyway: “While we appreciate the governor has offered vanilla ice cream, we want chocolate sauce on top.” One Oakland resident wrote that since the Bay Area was full of such creative types, “I think each of us should draw our own bridge” and send it to MTC for consideration….
$2.6 billion (2001)
When Caltrans released new estimates for the east span in April 2001, the cost had roughly doubled to $2.6 billion. The agency gave two main reasons for the rise. Construction costs were way up with a strong economy — steel and concrete prices, in particular, spiked 18 percent from 1999 to 2000. Caltrans also blamed the two years of delay associated with selecting the final single-tower design.
Despite a cost increase of a couple billion dollars in just six years, Caltrans was confident in its new figure. “We’re pretty comfortable with these numbers,” said its director in 2001. The legislature passed a new law to fund the bridge in October. It included a $448 million rainy day provision that one state senator said “insulates us from what we were worried about—open-ended cost overruns.”
$5.5 billion (2005)
Famous last words. In August 2004, a new cost of $5 billion was announced, with the tower alone expected to cost at least twice the estimated $750 million. Caltrans blamed the rise on three factors: elevated insurance rates in the wake of 9/11, a 50-percent rise in steel costs related to China’s boom, and greater staff needs owing to so many bridge projects going at once. A state auditor added one more to the list — poor cost management.
“People like to blame the tower,” says Frick. “Well, the whole span increased cost, and the other bridges increased cost, too. We really have a problem of cost-estimating in addition to a challenge of doing a design at this magnitude in earthquake country. That’s what gets lost in the story.”
In late 2004, Governor Arnold Schwarzenegger tried to terminate some of the costs by suggesting the bridge didn’t need the tower at all. (“Without thinking that there’s a ton of engineering and that this has actually been designed as a whole structure,” says Frick.) The following year he relented and signed a law to cover the new costs — with a provision that any further overruns be the region’s responsibility….
$6.5 billion (Current)
In April 2006, a consortium involving American Bridge and Fluor won the tower contract. It was built in China to save money — a decision that carried its own costs when inspectors later found poor welding and busted bolts at key points that required fixing. [Ed. note: there are still suspect welds and parts of the bridge understructure that may fail in a quake the bridge was designed to survive — investigations are ongoing.] Frick says the current $6.5 billion total is a rough estimate, and that it doesn’t include interest or financing costs.
With those costs included, some expect the total price to double yet again—to
$13 billion.
At least the state got a functioning half-bridge for its $13 billion, though hidden defects may end up causing it to fail or need more expensive repairs. But an entire cross-continent standard 4-lane Interstate highway could have been built for that — the usual figure cited for rural Interstate construction costs is $4 million per mile, so one could have built 3,000 miles of Interstate with enough left over to handle suburban bypasses. Did the state learn any lessons from the bridge fiasco?
Not really. Because of the long drawn-out nature of these boondoggles, voters can find no single politician or legislator to bring to task for failures. Meanwhile, politicians can promise new projects and collect campaign contributions from interested unions and contractors. Voters are inclined to turn down big bond issues for infrastructure as a result, rightly suspecting they are being sold a fantasy budget for projects which will end up costing more and doing less. But they weren’t cynical enough to dodge the bullet train… which voters authorized in 2008 with passage of Proposition 1A.
Eight years have passed, and the goals of the project have been downsized: from the original promise of routine and fast passenger service from downtown LA to downtown San Francisco, to maybe a line from San Jose ending in the Central Valley. Speeds are down, costs are up, and ridership estimates and operating costs are far from the goals promised. Yet California courts have refused to halt the project, and it lives on through a drip of federal funds and California carbon credit subsidies — another tax weighing down state industry. The most recent Republican candidate for governor got some traction by labelling the project the “Crazy Train,” but not enough to overcome California’s preference for Democrats:
An attempt to get enough signatures to put an initiative on the ballot to shift some of the bullet train money to water supply and storage projects has been postponed until 2018.
Now the struggling project has received an extraordinary lifeline from the Obama administration:
The Obama administration threw the California bullet train project another lifeline Wednesday, extending the schedule by four years for construction of 118 miles of rail through the Central Valley, according to congressional officials.
The extension came through modification of a $2.5-billion grant that originally required completion of a segment of rail structures from Madera to Shafter by 2017.
The changes also allow the Department of Transportation to extend a cash advance to the state, which potentially means the California High-Speed Rail Authority can continue spending long after the original deadline that was set in 2009 under the American Recovery and Reinvestment Act.
The change brought an immediate attack by Republican critics, who said the Transportation Department and its Federal Railroad Administration awarded the project an unprecedented concession. “This is the oversight agency that is supposed to monitor taxpayer money,” said Rep. Jeff Denham, (R-Turlock) chairman of the House rail subcommittee and a longstanding critic of the project. “For them to give a blank check and authorize a cash advance is a clear conflict of interest.”
…The Obama administration has made five previous modifications of the grant in recent years, including one that allowed the state to provide required matching funds after first using the federal money. Normally, grants require states to match federal funds on a dollar-for-dollar basis as they are spent….
A Federal Railroad Administration spokesman said the agreement will not amend the 2017 deadline for spending the grant, but acknowledged that it would allow the state to make its required match several years later. Denham believes the amendment may also attempt to allow spending the federal dollars after the deadline.
The project was supposed to be “shovel ready” when it received the grant in 2010, but has been hobbled by a series of political, legal, environmental and financial problems. One original purpose of the project was to help the nation recover from the Great Recession, which officially ended long ago.
In addition to the stimulus grant, the California project is receiving about $500 million a year from state greenhouse gas fees and an additional $1 billion federal grant approved in 2010. But it faces an estimated $43.5-billion shortfall to complete the San Francisco to Anaheim system by 2029.
The rail authority has had difficulty acquiring property since early 2013, when it claimed publicly that it was going to start construction by that summer even though it hadn’t bought a single piece of land. Even today, fewer than half of the parcels it needs for the 118 miles are in hand. The Central Valley was supposed to be the easiest section of the 500 miles system to build, but has proven to be a virtual minefield.
The delays have forced contractors leave to equipment idle, which is likely to result in multimillion-dollar claims of losses. Some outside construction experts are projecting the first 29 miles of construction alone could be as much as $400 million over budget.
The Central Valley segment had been running about two years behind schedule, based on the start of construction last summer. But this year, the rail authority said that under its new business plan, that segment would begin service from San Jose to Shafter in 2025, about three years past the previously scheduled start.
…Denham said he is alarmed by the potential for Transportation officials to advance far more than that just before the 2017 deadline, allowing the state to bypass the normal process under which grant recipients submit invoices after spending the money….
Without the cash advance and the grant modification, Denham asserted that the state rail authority would have been unable to spend all $2.5 billion by the 2017 deadline and would have forfeited it back to federal treasury.
The rail authority had spent only $1.1 billion of the $2.5-billion federal grant as of February. If it had not received the grant modification, it appears the rail authority would have had to spend nearly $3 million of the federal money and a similar amount of required state matching funds every calendar day through June 30, 2017. That $6 million per day burn rate would be far higher than any transportation project in U.S. history.
Bridge supports for high speed rail under construction in the Central Valley – LA Times photo
Starting in the 1970s, California gave veto and delaying power over all development projects to its politically-powerful attorneys and environmental groups, including local NIMBYs who delay or stifle most for-profit development. This litigious atmosphere now extends to all government projects as well, and it is nearly impossible to bring in a project on budget and on time. Rare exceptions to typical multiyear delays occur only when politicians cut the red tape of contracting and environmental assessments, as in the rebuilding of the Santa Monica Freeway in LA after the Northridge quake of 1994:
Less than three months after the Northridge earthquake knocked down two sections of the world’s busiest thoroughfare, Gov. Pete Wilson announced Tuesday that the Santa Monica Freeway will reopen next week, ending frustrating delays and bottlenecks for thousands of commuters.
State officials hope the final cleanup of construction work can be completed early April 12 in time to let rush-hour traffic inaugurate the two new freeway bridges at La Cienega and Washington boulevards.
Spurred by the promise of an extra $200,000 a day for every day work was completed ahead of schedule, the contractor, C. C. Myers Inc., will finish the project 74 days before a June 24 deadline and rack up a $14.5-million bonus for the company.
The high-speed construction was made possible by crews working around the clock, seven days a week, and by state officials cutting through red tape.
So it’s not that infrastructure is inherently complicated and slow to build; when voters demand action, they can get it. But such a quick project timetable doesn’t allow for all the padding and white-collar lawyering and consulting that returns a fraction of contract dollars as campaign contributions.
A high speed rail line through dense urban areas and mountains was always going to be a difficult project. But pie-in-the-sky projects pay off when you can direct money to your political supporters preparing for it, get back some of that as campaign contributions, and retire from public life before the public realizes they got nothing for their tax dollars. As in all these Bootleggers and Baptists stories, the “bootleggers” — politicians, unions, and contractors — pushed the project through fully aware the proposal was a fantasy and sold the dream to idealistic voters. Having foolishly voted for the bonds, the voters will never be allowed another vote to stop the project.

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Update: Funding through sale of carbon emission credits has evaporated, and one of the contractors pointed out the system would never be likely to be self-funding (since nowhere in the world is such high speed rail profitable) — Update: California High-Speed Rail Nearly Dead
Death by HR: How Affirmative Action Cripples Organizations
The first review is in: by Elmer T. Jones, author of The Employment Game.Here’s the condensed version; view the entire review here.
Corporate HR Scrambles to Halt Publication of “Death by HR”
Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.
Let’s start by looking at some examples of innovation delayed and strangled by overly-cautious regulation, a problem especially prevalent where agencies are charged with protecting lives. The outcome of a mistake in approving something which turns out to be deadly is an immediate and sharp punishment for the regulators, while delay, increasing costs, and overly cautious blocking of a valuable new product directly hurts only those promoting it — the people who might have benefitted from the innovation tend to be unaware of what they have lost when it’s turned down, an effect also seen with housing, where local residents veto new development but the people who might have wanted to live in the new development get little say.
I have two good examples: the delay of the Valkyrie Co50, a sexy and innovative airplane that has $50 million in advance orders but can’t get timely approval because it is too innovative; and Titan Pharmaceutical’s Probuphine, a lifesaving implantable form of the anti-opioid-addiction drug buprenorphine.
The Valkyrie Co50 can fly at up to 260 knots (roughly 299 MPH), significantly faster than other single-engine aircraft, which typically cruise at a max of roughly 242 knots. The plane stands at 30 feet long and 10 feet high, with a wingspan of 30 feet. Its unusual design, forward stabilizer and rear-positioned engine promised an usually smooth ride with, even in low altitudes, little-to-no-chance of a stall. According to Cobalt, 30% of fatal aircraft accidents are in low altitude stalls, a claim supported by the Air Safety Institute’s 2012 general aviation accidents study.
The company quickly racked up a reported $50 million in orders for a $749,000 aircraft that won’t arrive until 2017, if Cobalt and its customers are lucky. The hold-up? FAA Type Certificate process, which Cobalt describes as long, cumbersome and expensive…. The French entrepreneur and pilot understands the need for certification, “because it’s good for the safety of everyone,” but he contends that the process is needlessly slowing down the industry and increasing costs.
For example, when Loury was designing his planes, he found a $30 fuel valve — one that’s typically used in tractors — would work in the Valkyrie. However, according to Loury, when sold as a certified aviation part, the same valve costs $3,000.[1]
This is the same paperwork and certification problem that results in ballooning Defense Dept. costs, like $2,000 for an aluminum sleeve that would normally cost $10[2] and cost overruns for every major weapons system in the past few decades. The Israelis pioneered cheap, reliable drones for surveillance and warfare, but the US DoD versions cost orders of magnitude more because they have to be designed and built by defense contractors under bureaucratic bidding rules and without cheaper off-the-shelf parts.
The Valkyrie is beautiful:
Cobalt Valkyrie X – Photo: Cobalt
…But the new plane can’t be sold for commercial use without FAA approval, and the requirements are more time-consuming and costly because the plane is so innovative.
Regulators can’t keep up with what the aircraft designers are doing, said Loury, and, worse, the FAA continues to add new regulations — usually in response to air disasters.
Loury contends that, on Cobalt’s end, especially for things they cannot test in the air like a “ground vibration survey,” it takes “six months of work and thousands of dollars for one [certification] paragraph.”
The company is already selling an experimental version which is less regulated, but is barred from commercial use. Just getting its application ready requires years of expensive tests. The FAA notes that they cannot be faulted for delay because they have not received an application for the plane yet, but:
It’s true, Cobalt is still working its way through satisfying all the regulations before they submit their application to the FAA.
When Cobalt does finally submit the Valkyrie Co50 for certification, the FAA could grant it in three years, but it might also take four or more years. It’s a question everyone asks Loury. He really doesn’t have an answer. “I keep pushing because we have no reference…in how long it takes.”
And this is a well-capitalized company which can afford to wait out the lengthy approval process while being unable to sell their plane in the larger market. How many small companies might have accelerated development of new planes if they didn’t face a regulatory buzz saw and years of delay before being allowed to sell?
It’s often asked why we don’t have the flying cars and jetpacks envisioned in the 1960s of Tomorrowland:[3] the answer is that regulators and tort lawyers made it so slow and costly to innovate in the transportation sector that the rate of innovation has declined precipitously since 1970. As Glenn Reynolds writes:
1970 marks what scholars of administrative law (like me) call the “regulatory explosion.” Although government expanded a lot during the New Deal under FDR, it wasn’t until 1970, under Richard Nixon, that we saw an explosion of new-type regulations that directly burdened people and progress: The Clean Air Act, the Clean Water Act, National Environmental Policy Act, the founding of Occupation Safety and Health Administration, the creation of the Environmental Protection Agency, etc. — all things that would have made the most hard-boiled New Dealer blanch.
Within a decade or so, Washington was transformed from a sleepy backwater (mocked by John F. Kennedy for its “Southern efficiency and Northern charm”) to a city full of fancy restaurants and expensive houses, a trend that has only continued in the decades since. The explosion of regulations led to an explosion of people to lobby the regulators, and lobbyists need nice restaurants and fancy houses.
Maybe it’s just a coincidence that progress suddenly slowed down, but I don’t think so. Indeed, the Obama administration’s brilliantly successful policy for promoting private spaceflight ventures (basically one of benign neglect) can be seen as evidence that we can actually get the kind of progress we used to get, when we regulate lightly, like we used to. Who knows, if we regulated pharmaceuticals like we did in the early 1960s, perhaps we’d get as many major new drugs as we got in the 1960s. (“The time for a new drug candidate to gain approval in the United States rose from less than eight years in the 1960s to nearly 13 years by the 1990s,” notes Hanlon.)[4]
US-based light plane manufacturers boomed in the 1970s, but were nearly driven out of business by litigation and insurance costs between 1980 and 1993:
Following the recession in the early 1970s, production rates began to increase very rapidly, from 7,466 units in 1971 to 17,000 in 1977 – an increase of more than 125 percent in six years. Production in recent years is a trickle when compared to the heyday of general aviation. The numbers are compelling: Since reaching a peak of 17,811 shipments of light aircraft in 1979, U.S. production plummeted to 811 units in 1993, a decline of 95.5 percent. Other measures of general aviation activity in the United States are equally dismal. The number of private pilots fell 32.1 percent, from a high of 357,500 in 1980 to 288,078 in 1993. In 1980, there were twenty-nine U.S. manufacturers of piston aircraft and fifteen foreign producers. Today, there are sixteen U.S. and twenty-nine foreign manufacturers.
American manufacturers historically supplied most of the world’s general aviation aircraft and exported about 20 to 30 percent of the general aviation aircraft produced here. However, the nation lost this important contribution to its trade balance. Imports of general aviation aircraft, which include commuter airliners, exceeded the value of general aviation exports for the first time in 1981. By 1988, the trade deficit in general aviation aircraft soared to $700 million. The volume of exports plummeted from 3,395 units in 1979 to 440 in 1986. American aircraft accounted for a full 100 percent of the single engine piston aircraft sold in the U.S. in 1980. Today, American aircraft account for less than 70 percent. It is important to remember that this apparent surge in foreign competition is more an artifact of dramatically lower domestic production of single-engine aircraft, not a sign that the foreign firms were capturing sales that would otherwise go to American manufacturers hampered by product liability claims. [5]
To revive the industry in the US, laws were passed at both state and Federal levels[6] to limit airplane manufacturer liability. Light planes manufactured in other countries had taken most of the market, since they faced much lower regulatory and legal costs. North Dakota tried to bring the industry back to its state in 1995:
The North Dakotans propose something new: an agreement before the accident, rather than a fight after it. The root of the problem, they maintain, is the ascendancy of torts over contract law. In the small-airplane market, for example, the buyer and the seller rarely hammer out their financial risks in a contract. Instead, the manufacturer, fearing suits, buys enormous liability insurance, then charges the buyer for it indirectly by marking up the price of the plane, often doubling it. These high prices, manufacturers say, have driven 20 of 26 small-aircraft manufacturers from the business in the past 20 years.[7]
These liability-limiting laws did help bring some light plane makers back to the US, but much of the industry was permanently lost. The US had dominated small plane manufacturing until the cost crisis, but today is a small player, and has lost even mid-sized airplane manufacturing to Canada’s Bombardier and Brazil’s Embraer. Legal and regulatory overhead tore down the big advantage of US firms — and once lost, the network of expert workers and subcontractors cannot be rebuilt easily.
Credit: Wikimedia
Note the zooming cost of airplanes beginning in the late 1970s, and the weak recovery in numbers shipped after liability-limiting laws were passed in 1994. What had been a booming market was strangled by rising costs — anyone planning to build a flying car could read the tea leaves; they would never get a foothold as a mass-market product like ground cars given the multiplying costs.
Now central planners dream of a continent-spanning high speed rail network, and in California money is being spent at a rapid clip to build 1960s transport today, a multi-billion-dollar line from nowhere to nowhere that doesn’t in any way meet the goals of the project California voters approved and will cost hundreds of dollars per ticket sold in additional operating subsidies. The fantasies of Europhile statists who fail to understand how big the US is compared to Europe, where such lines can make financial sense, result in bizarre proposals like this one:
US High Speed Rail System – proposed by Alfred Twu
I created this US High Speed Rail Map as a composite of several proposed maps from 2009, when government agencies and advocacy groups were talking big about rebuilding America’s train system.
Having worked on getting California’s high speed rail approved in the 2008 elections, I’ve long sung the economic and environmental benefits of fast trains.
This latest map comes more from the heart. It speaks more to bridging regional and urban-rural divides than about reducing airport congestion or even creating jobs, although it would likely do that as well.
Instead of detailing construction phases and service speeds, I took a little artistic license and chose colors and linked lines to celebrate America’s many distinct but interwoven regional cultures.[8]
So festive! How about a line to Yellowstone, wouldn’t that be great?—This romantic Progressive choo-choo dream, free of any tedious thoughts of engineering and economics, would shackle the US to a costly, inconvenient, backward-looking rail system when an updated FAA, with better GPS and more sophisticated air traffic control systems, would allow air passenger service that is faster, cheaper, and serves all destinations. Because the FAA is a hidebound government agency, though, innovation has been slow and costly, and air traffic is held down by antiquated software, scheduling issues and TSA hassles.
This particular accounting-challenged dreamer bills the total cost of his entire system at $40 billion per year for 30 years — that’s $1.2 trillion. Meanwhile, the slightly-less-deluded dreamers of Jerry Brown’s California high speed rail project — which will never be built from LA to SF as originally proposed unless helicopter money starts raining down on Sacramento — have budgeted $64 billion. Soon we’ll be talking about spending real money….
The suit brought by Kings County Board of Supervisors and two Central Valley farmers accused the rail authority of violating restrictions imposed by a ballot held in November 2008 (Proposition 1A) that approved a $9.95 billion bond issue to help pay for the high-speed railway. Voters were told at the time that the project would cost no more than $33 billion, with the federal government stumping up $3.2 billion and private investors chipping in the balance. So far, such private investors have been conspicuous by their absence.
According to the Proposition 1A Bond Act, the high-speed rail project has to be financially viable; trains have to operate (without subsidy) every five minutes in either direction during the day; and funds for each segment of the route need to be identified before work on the leg in question can commence. Above all, trains have to make the 520-mile (840-km) journey between the Los Angeles basin and the San Francisco in two hours and 40 minutes, reaching speeds of 220 mph (350 kph). As for ridership, the rail authority reckoned some 65m to 96m passengers per year would be travelling the route by 2020. The basic fare was to be $55 one way.
That was all pie in the sky, a way of selling the deal to voters in 2008. A review in 2011 put ridership at a more realistic 30m passengers a year, with an end-to-end ticket price of $89. Meanwhile, the overall cost of the project had soared to $98 billion. And instead of going into service by the end of the decade, the high-speed railway would not be ready until 2033.
The uproar that ensued prompted a shakeup along with some hurried rethinking. The cost was subsequently pegged at around $68 billion for the first phase of the network, with an opening date in 2029 — almost a decade later than originally promised…. The draft 2016 business plan has now trimmed the cost of the first phase to $64 billion.
While private funds have shown little interest, at least the project’s finances are no longer quite as gloomy as they were a year or so ago. Jerry Brown, California’s govenor and a stalwart supporter of the high-speed train, strong-armed the legislature in Sacramento into allocating it 25% of the state’s annual “cap and trade” proceeds from auctioning off carbon credits to big polluters, which are currently worth around $1 billion a year. As a result, the rail authority has now identified the $21 billion required for building the project’s initial leg (San Jose to the Central Valley). It still needs a further $43 billion before it can start work on extending the line north to San Francisco and south towards Los Angeles.
With the rail authority’s finances resolved for the time being, opponents have focused instead on the project’s legal requirement to cover the distance between Los Angeles and San Francisco in two hours and 40 minutes. The rail authority claims (optimistically) that such a time remains doable, though cost-saving measures have forced the high-speed train to share tracks with slower-moving freight and commuter services in the Los Angeles basin and the Bay Area.
What also remains in doubt is just how many people will actually ride the high-speed network. In revising its revenue model, the rail authority has incorporated findings from surveys on rider preferences, along with forecasts of California’s likely population, housing and employment growth. The data were then crunched using Monte Carlo simulations to minimise the risks of being wrong. The analysis suggests that, based on a confidence level of 50%, the service will have some 28m passengers by 2029, generating $1.3 billion of revenue. However, as thorough as this analysis is, unanswered questions remain.
Above all, what is it that California’s railway planners know that their Japanese counterparts do not? The former state-owned Japanese National Railways and its partially privatised regional replacements have struggled for decades to make their high-speed Shinkansen (“bullet train”) routes profitable. Japan’s eight Shinkansen lines have little in the way of competition, thanks to over-crowded roads, expressways that charge exorbitant tolls and limited air services. Even so, only one Shinkansen service—JR Central’s 550-km line between Tokyo and Osaka—makes anything like a decent enough operating surplus to cover its costs, make necessary investments and pay a modest dividend.
It does so for one simple reason: the volume of traffic it carries—some 140m passengers a year. The Tokyo plain (Kanto) is home to 42m people, while greater Osaka (Kansai) has 23m. Between these two huge population centres reside a further 10m people in conurbations like Hamamatsu, Nagoya and Kyoto, all served by the Tokaido Shinkansen. At peak hours, trains leave Tokyo Station bound for Shin-Osaka and beyond on average every four to five minutes, and every seven to eight minutes for the rest of the day. The latest Nozomi (limited stop) service whisks passengers between Tokyo and Osaka in two hours and 22 minutes.
Compare that with California. As sprawling as it is, the Los Angeles basin has a population of just 18m. The nine counties surrounding the Bay Area have a little over 7m residents between them. The farming communities astride the proposed high-speed rail line through the Central Valley have a combined population of around 1m. In short, California’s high-speed railway is attempting to do what the Tokaido Shinkansen does, but with a third of the number of potential passengers, on a route that is half as long again. California’s taxpayers will pay dearly for Mr Brown’s high-speed legacy.[9]
Two notable new developments in transport, self-driving cars and the Hyperloop[10] (a passenger capsule propelled through a partly-evacuated tube by linear induction motors at up to 760 mph) have both managed to make progress by staying under the radar and working with the states before going to Federal regulators. One reason, of course, is that (especially in the case of Hyperloop) the risks of accidental death and destruction at high speeds are just as great, but the FAA is not involved because neither ever leaves the ground. And for self-driving cars, people are relatively used to carnage on the roads and it appears to most researchers that these cars will reduce accidents and deaths substantially.
The Hyperloop is especially glamorous (see the video of a test run here), and if the billions being spent on California’s high speed rail were instead spent on a Hyperloop line from LA to San Francisco, the result would be a technology-leading, tourism-generating marvel, not a has-been-technology, almost-as-good-as-French train. But the graft is already in politicians’ pockets, and it’s likely billions more will have been spent before the California high speed rail boondoggle quietly dies.
The Hyperloop technology has problems of its own, as the Economist article points out:
Everyone involved now accepts that Mr Musk seriously under-estimated the cost of building a Hyperloop between Los Angeles and San Francisco—probably by a factor of ten or more. There are few illusions, too, about the engineering difficulties involved. Fabricating an air-tight steel tube hundreds of miles long, with solar-powered linear motors providing propulsion while supporting passenger pods on air-bearings or by magnetic levitation is challenging enough. A bigger hurdle is overcoming the “pistoning” effect, caused by air in the tube (even though it would be at only a thousandth the pressure of that outside) piling up in front of the pod and slowing it down. Calculations done by NASA suggest the tube would have to be at least four times wider than the pod to prevent even the tiny amount of residual air within it blocking the pod’s passage. Mr Musk budgeted for tubes only twice as wide.[11]
In Bootleggers and Baptists terms, neither conventional high speed rail or Hyperloop are much of a threat to incumbent airline companies, and self-driving cars would be built by existing manufacturers, so they too are more likely to be allowed to prosper.
In an age of business meetings by Skype and telepresence, one would guess the market for costly long-distance passenger transportation would shrink, or at least not grow as quickly — flat demand is already observed in many business routes. More-efficient jets and updated air traffic control can limit emissions growth, while the pie-in-the-sky continental high speed rail and Hyperloop ideas would take a vast amount of capital, at least when built by government contracting rules where much of the money goes to law firms and environmental studies before anything is even built. But if California is to spend $billions on a boondoggle, let it be an interesting boondoggle which could probably attract passengers going from nowhere to nowhere.
The first review is in: by Elmer T. Jones, author of The Employment Game.Here’s the condensed version; view the entire review here.
Corporate HR Scrambles to Halt Publication of “Death by HR”
Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.
Death by HR: How Affirmative Action Cripples Organizations
