RealCurrents

I’ve noted a number of observations about Hurricane Rita and the problems with the evacuations, particularly with the difficulty much of the public has in assessing risk and responding appropriately, and how public officials need to consider that in issuing warnings.

An additional problem is the lack of reserves near the end user, brought about by our just-in-time economy. If we want to leverage the just-in-time technique, then we need to compensate for it by having a more effective emergency delivery system.

I’ve written some of my initial thoughts on NASA’s just-announced Moon-to-Mars plan involving a larger capsule and a shuttle-derived heavy booster on my site AeroGo.

Capitalism works great until it doesn’t, and I’m wondering if in the energy sector we’re somehow reaching one of those economic eddies where things don’t just work themselves out. I’m not convinced yet that this is the case, but I’m really beginning to wonder how high oil has to go before we see some serious investment by the energy industry.

Okay, the term “serious investment” really isn’t fair, because that’s something they do as a matter of course. But here in Houston, Texas, the energy capital of the world, you’d think companies would be hiring like crazy. Oil is up about seven times (unadjusted for inflation) since the lows of the late 1980s.

Apparently I’m not the only one wondering about that. Reuters is reporting that European Union finance ministers meeting in England “issued a statement saying they … wanted oil companies to increase investment in oil exploration, production and refining capacity as well as alternative energy services.”

Back in the late 80s, when oil was really down, there was a bumper sticker in Houston that went “Dear God, Please give us $28/barrel oil again. We promise not to waste it this time.” For a long time, I assumed this more prudent mindset explained the oil industry’s rather non-aggressive stance (the economic devastation in the oil business was a lot worse than most people realize). Now I suspect oil exploration may well be restrained by the realities (?) of the global Hubbert curve, if indeed worldwide production is presently peaking.

In any event, it seems clear that worldwide energy demand is by no means peaking, mainly because of China and India, so oil companies may have to once again get aggressive about alternative energy sources (maybe it’s a good time to buy real estate in Parachute, Colorado - I wonder what happened to all those empty houses).

It may not be wise to press the oil companies too much to increase oil production through conventional drilling, but in a capitalist economy, when the price goes up steadily, consumers are sending a clear signal to producers to increase supply, and increased investment by producers is part of what justifies the premium profits they get in such situations.

I really don’t see how the energy companies can seriously be thinking we are presently in danger of seeing excessive investment in their sector. Oil would have to drop by nearly two-thirds just to get down to $28. I hope the oil companies will re-invent themselves as diversified energy companies or at least pay out the profits in dividends quickly so someone else can invest them in our energy future.

Although Houston is very different from New Orleans culturally, we share an understanding of the problem of subsidence and flooding.

Perhaps unlike New Orleans, however (I guess we will learn much more about their system soon), as Houston grew so rapidly in the 1970s and 80s, it quickly was realized that flooding was worsening, and a lot of money was spent in the past 25 years to improve drainage. Those taxes were ones I was always happy to pay! The combination of paving the ground and subsidence (the gradual lowering of the groud level) meant that drainage was steadily worsening, unless something was constantly being done to counter that.

New Orleans is different because it is at or below sea level, and I guess they are going to have to get a lot more aggressive about their drainage problems, which obviously are far worse. Unfortunately, they haven’t had the kind of economic growth that helps to fund big infrastructure work like Houston did.

Here we are in the process of moving water supplies from ground (wells) to surface (lakes) in order to stop subsidence. I don’t see how New Orleans could really do much to raise its elevation, or do what Galveston did, a century ago, raising the entire city by 10-15 feet (houses weren’t built on slabs back then, as they are here now). Maybe what they need is a redundant levee system, with a second berm (wall of dirt) in critical areas to act as a backup.

Though we have spent so much money on drainage improvements here, flooding is still a regular occurence, but usually just in a localized area. Even in some of the nicer parts of town, such as west of the Galleria, street flooding during major downpours is a common occurrence.

I’m not sure if there’s any way to really keep an area from flooding when it’s as flat as Houston or New Orleans, and gets as much rain as we do along the Gulf Coast. Nevertheless, in this part of the country, drainage is something that must be taken very seriously, and I hope that’s one lesson learned from this tragedy.