I got to bed early tonight only to be woken up by my crying 7 month old daughter. Advance Indiana and Taking Down Words are reporting that the House has passed HB 1008, privatizing the Toll Road and authorizing the Governor, without further approval from the legislature, to create I-69 as a privately operated toll road from Evansville to Martinsville but not from Martinsville to Indianapolis. Perhaps my daughter was crying for the road that won’t belong to Indiana again until she is 75. Probably it was just gas.
I don’t believe in an advantage that the Democrats can’t fritter away somehow, but this was something of a Ben Kenobi/Darth Vader moment for the Democrats, particularly in northern Indiana. You might recall the famous Star Wars scene where Ben and Darth are fighting and Ben says, “You can’t win Darth. If you strike me down, I will become more powerful than you can possibly imagine.” With this vote of 51 to 48, I believe the Republicans have created a solid blue strip across the north on the electoral map from Illinois to Ohio.
Governor Daniels has 3 years to rehabilitate himself in the minds of citizens. Representatives that have hitched their wagons to the Governor and his unpopular agenda items have only 8 months and two time changes to get the job done. And they might be able to do it if the Dems are as politically tone deaf as Advance Indiana reports Craig Fry (D-Mishawaka) as being.
Fry urged opposition to the toll road privatization on the grounds that nuclear waste could now be transported across Indiana on a highway controlled by foreigners. That’s just a little stupid. The foreignness of the toll road purchaser has never been the problem, it’s the privateness. And, even more, it’s the fact that the motorists of Northern Indiana will be paying for road construction in other parts of the state, and it’s the fact that future motorists will be paying for road construction in the present.
Another objectionable trait I notice in those who have backed two of Governor Daniels most controversial initiatives, Toll Road privatization and Daylight Saving Time, is a sort of inferiority complex they have on behalf of Indiana. With DST, the question was almost never whether the change would be best for Hoosiers in their every day lives, it was almost always a question of what those in other states think of us. “They’re laughing at us,” you could almost hear the proponents whine. And we have echoes of this once again in the reporting of Advance Indiana on Rep. Randy Borror’s (R-Ft. Wayne) sentiments, a sentiment I’ve heard before from the Governor:
Rep. Randy Borror (R-Ft. Wayne), the bill’s chief sponsor, got it right. We need to let the folks in California and New York know that there is something in between, and that something is Indiana.
I believe Indiana is already a great state, and I’m not particularly concerned what people in California or New York think of us. If we have problems we need addressed, we need to fix them ourselves.
Well, my daughter has stopped crying (and bless my wife, by the way, for taking care of her). I guess it was just gas.
Update
Democrats focused on the loud popular opposition to leasing the Toll Road for the next 75 years in exchange for money to bridge the state’s highway transportation gap.
“We are gobbling up everything … and we’re going to grab it right now. We’re not going to leave it for our kids,†Moses said. “Then we’re going to turn around and we’re going to spend it, and we’re going to spend it right away.â€
Ms. Kelly does a good job of explaining the general provisions of both the privatization contract and HB 1008.
it’s the privateness. And, even more, it’s the fact that the motorists of Northern Indiana will be paying for road construction in other parts of the state, and it’s the fact that future motorists will be paying for road construction in the present.
Great Point!!! Once again the Republicans have sold Privatization as a Tax Cut instead of a Tax Shift on future and most likely poorer generations.
However, my main concern is the wisdom of promoting additional interstate construction as a longterm economic growth proposal while the United State’s is facing Peak Oil just around the corner. Personally I believe in Peak Oil and that we will be seeing 5-6 dollar gas within the next couple of years. Now with >$5 dollar gas does building I-69 make a bit of sense???
What happens if $5 gallon gas results in a major decline in interstate driving and a return to railroads for hauling freight? What are the provisions in Toll Road Lease under a scenario where there is a massive 25% or more decline in truck traffic?
I can not imagine that in such a situation where the foreign firm would not attempt to back out of the agreed to financial commitments, resulting in massive lawsuits and years of legal deadlock.
I predict that gas prices will hit $3 a gallon for much of this summer, $3.50 in 2007 and $4.00 by 2008. I bet the enter idea of even building I-69 by 2008 will look as insanity.
Unless Indiana is able to actually collect the $3.85 billion for a soon to be useless Indiana Toll Road and then has the wisdom to put that money to some other purpose than building soon to be obselete interstate and other road expasions I think this deal is a turkey.
Read more on Peak Oil Here:
Daily Kos is just one of dozens of great places to learn about Peak Oil
http://www.dailykos.com/tag/peak%20oil
Just Google Peak Oil
If traffic on the Toll Road takes a major hit because of oil prices or other developments in the future, I actually agree with the Governor’s assertion that the private company is assuming most of the risk. Obviously, there are endless ways in which lawyers can fight over a billion dollars, but I don’t recall any recourse for the consortium if traffic doesn’t materialize as predicted. Furthermore, I believe Indiana is supposed to receive the $3.85 billion in July.
So, in that sense, the deal isn’t bad for Indiana. But, on the other hand, if highways become less useful because of oil prices or alternate methods of transportation, we’ll be in a bit of a fix because we will have locked ourselves into highways through immediate road construction. The money will basically be spent and we won’t have as much flexibility to adapt. Furthermore, the Toll Road won’t be ours to use as a tool to help us adapt. The toll revenues won’t be ours, and I don’t believe we can screw with the right of way too much. I’d have to look at the language again, but we might also limited in our options throughout the corridor near the Toll Road. Certainly we can’t improve US 20 into a competitive highway. But I’m not sure whether we can or can’t adapt US 20 or nearby corridor into some theoretical future mode of transportation that competes with the consortium’s Toll Road.
PARIS, France (UPI) — France is preparing to sell its stake in the nation`s three biggest highway operators to cut its budget deficit.
Paris needs the money to help get France`s public deficit below the eurozone target of 3 percent of gross domestic product, the BBC said Friday. The government hopes to get about $13.4 billion for its share in the companies.
The three motorway operators are Autoroutes du Sud de la France, Societe des Autoroutes du Nord et de l`Est de la France and Autoroutes Paris-Rhin-Rhone.
The sale, which could happen in the next few days, may spark takeover bids for the companies.
http://news.monstersandcritics.com/business/article_1034445.php
Doug,
This is what I find very interesting.
France is selling off its interstates while continuing to invest heavily in Nuclear Power construction and expansion of its TGV high speed passenger and freight train network.
Even the new Millua bridge was a private venture
http://news.bbc.co.uk/1/hi/world/europe/4091813.stm
French entrepreneurs are even working on practical short range cars that run on compressed air generated by electric compressors and small amounts of ethanol for additional power. http://www.theaircar.com/ So obviously the French government wants out of the Highway business. France is also probably one of the most prepared nations for the onset of Peak Oil.
So I am not necessary against highway privatization if the idea is to find the proverbial “greater fool” who is willing to pay for a soon to be obselete public asset. Hell that is what capitalism is all about. But, like I said, there could be huge legal, right of way and ownership issues if the tollway is no longer economically viable in a Peak Oil scenario.
However using the sell of the Tollway inorder to finance additional interstate construction is to me certain stupidity.
This is probably a small point,but it takes years usually to establish a right of way for an expressway. Will this mean that there will be an I-69 Tollroad from Evansville to Martinsville,where it will empty out onto existing highways for the next many years,maybe 75? That’s a high growth area and by 75 more years it will be solid. The only logical right of way would come off I-70 somewhere north of Martinsville, also a relatively high growth area. I know that area fairly well and it aint gonna be easy.
Doug, because you don’t permit trackbacks, I’m writing to let you know that I referred to this post in an analysis of Major Moves from a public relations perspective. I hope you’ll read the post.
What about the terrific inferiority complex of the city of Indianapolis? We’ve been told for twenty years that the city is nothing but a hole in the ground if we don’t have a professional football franchise. At one point a few years ago, some idiots downtown even hired a “consultant” to look around the city and tell us what we should be proud of! If they would get the blue and white paint out of their eyes, they might recognize that museums, art galleries, a world class symphony, ultra-modern hospital facilities, good institutions of higher education, a fine public park system – to mention just a few – are all things of which we can be proud. Does it really matter what some semi-literate sports writer from New York or San Francisco thinks?
I’ll be interested to see if the Democrats can win enough elections based on the Republicans “changing too much too fast” to win back the House. The Democrats don’t seem to have a whole lot to offer in the way of original ideas, but they might not need to.
I think llamajockey makes a good point about the wisdom (or lack thereof) in spending the lease payment for the toll road on more highways, especially if highways are soon to be economically obsolete. There are so many other ways that the money could have been spent that would have benefited the state more uniformly than what is being done.
In order to compete in a “global economy” you need an educated populace, attractive (in the broad sense) communities and reliable telecommunications and energy. Segments of India’s economy are booming on a foundation of just an educated workforce, notwithstanding one of the world’s worst highway systems.
Daniels’ obsession with roads isn’t imaginative. If it a blueprint for our children’s future it rather smacks of 1950’s thinking. Of course, if it intended just as a short term fillup for the greater Indianapolis area and pork for engineering contractors it makes all the sense in the world.
India is like one big city with so many people no one has to travel far to go to work.USA is very fluid and people normally travel quite a few miles to work,because they want to live in ‘just the right place’
But the newer trends of housing give choice, like downtown Indianapolis rehab of old buildings into great places to live and if this trend continues,roads and commuting may be less necessary.
Leasing the toll road just sold out our children. Pensions cannot use cash flow accounting, but must use accrual accounting. Accrual accounting means to spread out the cost or revenue over the span of time in the agreement. Will this happen?
We began down this slippery slope of thinking we can borrow our way out of a problem in 1935. Altmeyer summed it up: http://www.ssa.gov/history/aja1144a.html
“If we should let a situation develop whereby it eventually becomes necessary to charge future beneficiaries rates in excess of the actuarial cost of the protection afforded them, we would be guilty of gross inequity and gross financial mismanagement, bound to imperil our social insurance system.”
62 years later the state of Indiana has voted to accept $3.85 billion for a 75 lease. Will they use accrual accounting or cash flow and spend it in a few years leaving future Hoosiers in debt?
Assuming Indiana is paid $4 billion tomorrow, $104,201,747 is the amount that can be realistically spent in the first year and increased yearly by 4% if invested at 6%. At the end of 75 years, the balance is zero. If the state spends more than this amount in any given year, then some time within 75 years, there will be zero to spend thereafter. In simple terms we took future dollars and spent them now. This is theft.
$104,201,747 paying $50,000 to a worker would produce 2,084 jobs for 75 years. If you wanted to create 130,000 new jobs and keep them every year for 75 years, then the most they could be paid is $801.55 per year.
One of the largest mistakes school districts make in budgeting is they fail to match a bond term for new construction with the life span of this construction with no upgrades or maintenance. By setting the term greater than the life span with no upgrades or maintenance, you end up with the condition of having multiple bonds being used to pay for something that no longer exists plus a new bond to cover the new project.
It would be like buying a car and paying for it over 25 years. You replace the car in year ten with a new car and a new note. You now have fifteen years to pay yet on the first car and a new loan for the second car. After another ten years the second car is shot and you buy a third car. You have five years left on the first car, fifteen years left on the second car and twenty-five years left on the third car.
75 years is too long. The life span of a road without renovation is less than ten years easily. Therefore, the term should be no more than ten years and most likely closer to six years.
Those who voted for this major moves bill were fiscally irresponsible.
William Larsen,
Clearly the leasing of the Tollroad is a “Tax Shift” onto future generations of Hoosiers and from Northern Indiana to the benefit of Central and SouthWestern Indiana. Obviously the new operators of the Indiana Tollroad are going to have to charge(tax) its customers substantially larger tolls to cover the lease AND continually rebuild the tollway.
Again I can only agree with the leasing of the Toll Road if the idea to somehow use the revenue as a hedge against the risk of a drop in economic value of Indiana’s current road and highway infastructure as Indiana enters the age of Peak Oil in the next 5-10 years. Not to mention the potientially huge liablity of having to maintain if not abandon much of the state’s road infastruction in the wake of declining automobile and gas tax and toll revenue as fuel prices skyrocket and automobile purchases and miles driven decline. Instead, it seems Gov. Daniels wants to go on a road and interstate construction binge in the next 5-10 years as oil prices are expected to soar. Gov. Daniels mind seems to be stuck in the mid-1950’s.
Gov. Daniels wants to believe that NAFTA, suburban sprawl, and real estate speculation are the means for future Indiana economic growth. Building I-69 as the NAFTA highway will only assist the disapearance of what remains of Indiana’s manufacturing base to Mexico and then China. I-69 will also mean more Indiana farmland all the way to Martinville will become just another bedroom suburb of Indianapoilis. Sure there is some economic growth potential mixed in all this along with the destruction . But only if Peak Oil does not first spell the collapse of Gobalism and Suburbia.
Imagine istead what could be done with 4 billion dollars.
Imagine a Government and Private industry partnership where Indiana and Illinois leverage their huge coal reserves to massively upgrade and rebuild their coal power plant infastructure with the 21st century efficient “Clean Coal” technology. The waste CO2 emission could be stored underground in long abandoned midwestern Natural Gas and Oil fields inorder to drain the last drop energy from them. The sequestered CO2 could under the Kyoto be sold as emission credits other poluters still using older technology. Private Industry could be attracted to the Midwest to provide jobs and international trade for Clean Coal technology.
Indiana and Illinois could enter into a longterm electricity swap/backup agreement with Wisconsin, Minnesota and Michigan to trade Coal generated electricity for Renewable Wind Energy that is potentially plentiful in the Upper Midwest, strengthening the entire Midwest power grid.
Instead of seeing billions of dollars each year leave the state as Hoosier battle with rapiding escalating natural gas heating bills, millions of Hoosiers could be encourged to switch to electricity using state of the art geothermal heat pumps to warm their homes. This could be done as a longer term better alternative to property tax relief for Hoosiers. Again promoting energy conservation could be seen as a way of promoting local job growth.
The political battle over Major Moves is not over if fact it has just begun. If this summer again brings ever higher gas prices if not a panic with the return of hurricane season, the idea of blowing 4 billion on future road construction will be a huge issue.
Hopefully, by then you will well prepared to address this issues in your campaign.
llamajockey,
I am very familiar with the clean coal burning plants. I worked for B&W a leader in fluidize bed boilers. It was a very neat idea where just about every bit of energy was extracted.
However, even with these efficient coal burning power plants, I think there is an even better method of producing Electricity. In Denmark they produce 80% of their electricity this way. It is clean and renewable. I am talking about wind power.
Three miles off the coast of Massachusetts are I believe they are installing 150 windmills. They produce 5 megawatts, turn at 5 to 6 rpm. Farm price supports cost us billions. Why not utilize the 1 to 5% of farm land that is not feasible to farm and install a windmill? It could provide a royalty income to the farmer eliminating the need for price supports or other aid and is economically viable now.
I believe we need to get out of using the 18th century process of burning something to transform it into another form of energy. It would also make power plants less of a target.
William,
I’m all for windmills, and I was very upset how much opposition was raised over the ones in Massachusetts.
However, in Indiana, I can think of two issues.
1. Bird Migration. The windmills in Southern CA are being looked at for killing a great deal of birds; we don’t know if it is an accecptable number yet. However, Indiana is in the path of many migrating foul that could be harmed by this.
2. What wind? Wind power needs consistancy. I love flying kites, but I can remember being disappointed more times than not as a child when I would go to fly them. We have days, if not weeks where there is barely any wind at all.
Again, I love the idea, but I just don’t think it works here. We should line the coasts with them, though, since there is usually a constant breeze.
Plus, with all the hurricane activity, we would have surplus power in August-December!
Just since you guys brought it up, I might as well mention a neat looking concept I saw on television once. I have no idea how effective it might be.
Highway medians were lined with windmills to catch the wind of the cars running by. So, you’re not really cutting down on automobile energy use, but at least you’re recapturing a bit of it. Like I say, I have no idea how effective that was, but it seems pretty clever. Perhaps we should have put that into our deal with the private contractors.
William Larsen,
Every article I have read on Peak Oil stresses that their is no single magic bullet solution.
Next Generation Nuclear Powerplants capable of burning our nations vast quanties of existing nuclear waste instead of hauling to Yucca Mountain.
New Clean Coal Technology powerplants that meet the demand of the Kyoto treaty.
Wind Energy combined with storage of wind energy in the form of compressed air in abandoned mine shafts. Later the compressed air can be combined with gasified coal, natural gas or biofuels to power turbines.
Bio-Desiel and cellulose derived Ethanol.
Passive and active Solar technology for home heating combined with geo-thermal electric heat pumps to replace natural gas.
Pluggin hybrid electric cars and trucks for longer distances,hilly regions and heavy loads. Low cost compressed Air vehicles for urban and suburban driving. High speed electric rail to replace longer distance region travel that will no longer be possible for the masses by air. Light rail and street cars to replace buses and cars in urban areas and long comerical strips.
Truth is we will need all these technologies inorder to meet the challanges of peak oil. And while I too prefer Wind energy most of all, I believe that the massive electical power grids of the future that will power industry and increasingly provide transportions can not be provided by wind energy alone. We will always need nuclear, coal and solar energy for when the wind does not blow.
We will need it all!!!
Jason
Again, I love the idea, but I just don’t think it works here. We should line the coasts with them, though, since there is usually a constant breeze.
That is why the Indiana with its limited shoreline should look towards working with Minnesota, Wisconsin and Michigan to trade/swap Clean Coal energy with Wind Power. That way you have a power grid that is protected from calm spells.
I’d rather see them leave room in the median of the road for mass transit options, either trains or express bus lanes. That would be forward-thinking enough for me.
llamajockey,
It just so happens I worked on figuring out how to store nuclear waste for five years. We built a big shear to operate under water in a radioactive environment. We tested it at Millstone in CT in 1993. The concept was to extract each fuel rod, read the ID, retain where it was placed in a canister, shear the non-fuel bearing material and collect them in a container. Consolidate ten fuel assemblies and put them in the space of six. This opens up four storage cells in the spent fuel pool.
Another way is to re-rack. This is where you put new storage racks with poison pins to asborb nuetrons in the spent fuel pool used to hold the fuel assemblies.
Every nuclear power plant in this country is about to shut down due to reaching full core reserve. A portion of the spent fuel pool must be left in reserve to unload the full core in the event of an emergency. When this reserve is reached, the reactor must be shut down. Every fuel assembly ever “burned” in a reactor is sitting on that reactor’s site.
Most reactors were built with spent fuel pools to hold only 20 years worth of fuel. Carter signed an executive order not to reprocess spent fuel. Utilities have paid a fee yearly to DOE to take this fuel starting in 1998. They did not take it because YUCCA Mountain is not ready.
I also worked in dry storage casts using heat pipes to cool spent fuel that was ten years or older. This is costly and requires land. I was aksed to work on a team to design a storage cast for YUCCA Mountain that would not leak for 10,000 years.
The DOE is being sued for breach of contract for having to shut down plants.
I built reactors for the Navy and have a patent from working on space power. At this point, I would not support nuclear power until the waste problem is resolved.
In any event, if you are going to produce electricity, then a windmill is far easier, more environmentally friendly and takes less lead-time. The new windmills today turn at 5 rpm, slow enough for birds to get out of the way. The ones built in the 60’s in the Taluga pass in CA I believe turn faster.
The ideal location in the US for a windmill farm is in the Dakotas and Nabraska. In reality it does not takes much land to replace all electrical generating capacity in the US.
William Larsen,
I have read that the Dakotas are really Americas best location for wind energy. However would it still not make lots of sense to have Wind generation capacity spread across the places like the Upper Midwest/Great Lakes, the Rocky Mountains, New Hamsphire/Maine, Appalachian Mountain Tops and the Texas Panhandle etc… Also areas that already have thousands of miles of abandon mile shafts could be used to store wind energy as compressed air making wind a more pratical energy source. That is why to me the Upper Midwest, the Dakotas and the Rockies could be ideal wind energy locations.
Also with Oil and Natural Gas both peaking wouldn’t North America need an Electrical grid far larger and more robust than what we have today. Think about all the electricity we would need if it becomes the country’s primary transportation resource and for replacing natural gas to make Ammonium fertilizer by extracting Nitrogen from fresh water.
Is it possible that we might actually need an electrical grid at least triple of what we have today??
llamajockey,
Yes, it makes sense to spread out our electrical capacity not only in terms of generating, but in distribution as well. I was only pointing out that the coastlines are not the only place where windmills are best suited.
Several years ago, well I guess now, a long time ago, I studied how to store energy generated during the evening hours so that it could be used during the day. There was a concept where by compressed air was stored during the night to be used to help “lift” water back up behind a dam so that it could flow through it again. It would sound a lot like what you describe as mine shafts.
We need to move away from oil, natural gas, and coal. These pollute, create holes in the ground, are not renewable and will only get more expensive.
I would expect for windmills to be a the prime producer of electricity, that capacity would have to be 25 to 35% larger than demand in order to ensure meeting peak demand. This excess capacity would have to be factored into cost. I am sure that a well-diversified and distributed grid could be created that would minimize this.
You are definitely one of the more knowledgeable individuals I have communicated with concerning energy. It is a pleasure. Thanks. Are you in an energy related field?
William Larsen,
I got interested in energy related issues in part because my last corporate job was working on Meta-Database for all the ten of thousands of energy related data items available to a trading desk at a major US bank. Everything from energy futures prices, refinery and tanker capacity, refinery costs, drilling equipment costs and purchase, water pumps sold, number of wells drilled, estimated reserves……. I am not a engineer, merely a underemployed computer programer. I found it interesting to over hear the Energy Traders argue that there was no downside to going long in the Oil and gas markets because all the trends pointed to majore shortages of supply and growing demand for the rest of the decade and as far as one could see.
So with this background I got particularly interested in following the Peak Oil debate that has been a major staple of the blogosphere since the Traditional Media is loath to discuss it with any depth of knowledge or sense of reality.
Wow! Since there are two experts monitoring this thread, I have a question.
I have heard proposals of connecting nations grids to each other, making a global grid. The idea is that power plants are operating under cap during the night, but we could get extra power from India during the day, and selling our extra power to England at night.
Using wind power, this seems even more important. One part of the county, or the world, might not have great wind at one time or another, but the wind is somewhere!
However, the great blackout we saw in the Northeast not long ago puts some fear in that idea. Could we have a global blackout if we did that?
Good or bad idea?
A “global” grid in the literal sense does not strike me as practical if for no other reason than Europe uses 50 cycle AC while North America and Japan use 60 cycle. The power system stability issues would be immense even if there were agreement on either us, or the much of the rest of the world, changing the frequency of their exisiting system. Even with agreement on one frequency we do not even have a common grid for the contiguous United States but three (Eastern, West Coast and Texas). There are interconnect points between the grids, which is done by converting AC to DC and than reconverting the power to AC. Such steps solve the phase and frequency issues, which would make international power sharing possible, but political and economic control (and the centralization implied by the system) over such interconnect points would be an issue. On the technical side I would suppose that, given the problems with transmission losses, a world wide power sharing system would require long distance, high current density DC superconductor transmission) before people would consider taking on the other issues. I would put more hope in using surplus electrial power to break down water into hydrogen and oxygen and then shipping the hydrogen to local, stationary fuel cells to regenerate electricity. Even that though is not very efficient.
A world wide energy grid would be a daunting challenge. The longer the cable from source to point of use, transmission loss you have. Just looking at the distances from here to Europe is huge. I do not see it as feasible any time soon nor would I see it as practical. I do not know, but I would imagine that the wind has not been calm across any large expanse ever. The wind is always blowing some where. The new windmills are designed to work in low wind as well; you just do not get as much energy.
In any event I would rather spend $5 billion in building windmills a year than giving tax credits to Ethanol. The $5 billion is gone in one year, where as you have a windmill churning out electricity maintenance free for ten years or more. Maybe I should calculate the energy payback of wind versus ethanol?
On another note: How many would like to hear/see a debate between Mark Souder and William Larsen? If so, contact the media, blogs, etc. Thanks