Assorted Thoughts For the Holday Season

Posted: December 20, 2011 in Economy, Energy, Jobs, Military, Politics

Holiday greetings from Afghanistan! I apologize for the lack of posts, but I was enjoying a much-deserved vacation back in the States with the fiancee and our dogs. But that was then and I am now back in the ‘Stan, awaiting my second Christmas away from the family. At least I have a job…for the time-being.

Nothing is Recession Proof…Not Even War

For whatever talk there has been of a recovery, things are still contracting. An interesting progression has been the impact to the Department of Defense, the military, and the contractors (of which I am one) that support their efforts. In the Air Force Squadron and Group I am embedded with, there have been troop reductions, both in lower numbers of replacement troops coming into the theater and some currently deployed troops having their rotation cut short. Deployment cycles are also being shortened…Air Force units typically work on 6 month rotations, but the Army units we support have conducted 12 month deployments. Those are being shortened to 9 month deployments. On the contracting side, the overseas war efforts have been the life preserver buffering against a distinct lack of jobs in the States. Now that Iraq has wound down to its current levels of activity, competition for contractor jobs (particularly in the construction, engineering, and planning fields) has gotten much more intense. The contract I am currently on recently went out for bid and a joint-venture underbid my current employer. Talking with my co-workers, compensation packages are ranging from 35% to 50% cuts compared to the current contract. Because of my current financial obligations, that brings me dangerously closely to not being able to cover my expenses. Many of my co-workers (who aren’t necessarily in the same straits that I am) have decided that putting up with the conditions, the danger, and the dysfunction simply isn’t worth the offered compensation. The hiring manager for the joint-venture has told people that it doesn’t matter if they leave, because he has a bunch of resumes waiting. As you might suspect, I am aggressively pursuing my options…globally. I’m already overseas…I’m not likely to find much worse than Afghanistan.

The Progression of Clean Technology

I have argued in several forums that (using the example of solar, and the failure of Solyndra and others), that government can serve a vital role in the development and adoption of new technologies, in this case clean-tech and alt-energy. The problem (well, one of them) that hit Solyndra was that the government provided funding for an actual development venture, before ensuring that the technology was fully deployable and that there was a market for the ensuing products. That’s the problem with funding the production side of things…you actually do have to make a profit or the venture will fail. Look at all of the technology that arose from the 60s, 70s and 80s via Cold War defense research. Internet. Cellular communications. Aeronautics. Lightweight materials. The Federal Government put out a request for these types of innovations, and provided the R&D funding to make it happen. Being that these requests were borne out of what was effectively a war-time need, there was a ready-made market and the manufacturing side of the businesses tended to be handled without direct Federal funding (beyond purchase orders). And once again, the Department of Defense is taking the lead on this, only this time it is not just war-time technology but the kind of clean technology that has potential applicability far outside of the battlefield. In an article in The New Republic, the authors make the exact same point.

(T)he U.S. Department of Defense (DoD)–one of the largest institutional technology and energy users in the country…is using its power of procurement to at once create markets and drive the deployment of both existing and new technologies.

This is exactly how the Federal Government is supposed to work. A need or goal is identified, R&D funding is provided, and the private sector can innovate as it sees fit. Then, the initial market is supported by the Federal Government, thus providing both stability for the firms manufacturing and providing the technology, it allows for proper field-testing and refinement of the technology, and demonstrates the technology’s potential applicability for other uses. I know that I am oversimplifying, but that’s the whole point. Don’t bog it down by over-thinking things. Set up an environment that fosters creativity, ensure that adequate resources are available to support the creative efforts, and let the magic happen. Battery technology is a huge potential target for this type of effort. Electric vehicles, hybrids, and the like are rapidly arriving in the market, but the one thing keeping pure EVs (as opposed to hybrids or “range-extended” EVs) from truly taking over the marketplace is that current battery technology doesn’t support the type of range that most people would expect from their vehicle. Likewise, part of the premise behind solar farms, wind farms and smart grids is the ability to generate clean power, store it, and then utilize it when the demand is there. A possible concept would be for the Federal Government to fund battery research, with the goal of deploying energy storage “facilities” in support of a nation-wide network of regional smart grids that generate power from solar, wind, whatever, and can then store it until it’s needed. Having the planned roll-out of a new energy infrastructure in this country would both create the market and drive the deployment of the technology. Plus, the added engineering and construction jobs that would support such an effort couldn’t hurt.

Strange Bedfellows

A recent article in Governing serves to highlight the evolution of clean-tech industries, and the unique circumstances they find themselves in. Much of the clean-technology that is being developed requires some sort of manufacturing element, and (as with rust-belt industries such as automotive), Southern states like Tennessee, Mississippi and Georgia are courting these industries with tax incentives, regulatory relief, and low costs of living. It is a strange confluence of a (generally) left-leaning desire for clean-technology and a (generally) right-leaning ability to offer lower taxes and a less-burdensome regulatory environment, combined with available land and facilities and a workforce able to provide manufacturing services. Some examples of this include: Nissan built a plant to build its all-electric Pure EV car, the Leaf; Sharp has a solar panel manufacturing plant that employs 400 people; Volkswagen constructed a new auto plant that employs a number of green-technologies (green roof, reclaimed water, solar power, etc.) and one of the deciding factors was hearing of the nearby Oak Ridge National Laboratory working on a biofuel public/private venture; finally, Tennessee is installing a major solar farm east of Memphis. The concern noted in the article (and it is a very valid concern) centers on continued funding for the region. Given that the populace of the region tends to vote right-leaning, the concern is that continued public funding support of these and other similar efforts could be in jeopardy. The hope is that the population would, if nothing else, see the effective job creation arising out of these efforts…again, efforts focused on R&D or on a supportable market…and not risk kicking out the golden goose. Besides, if we can clean up the air, lessen our dependence on foreign oil, and save money on our electric and gas bills, it seems like a reasonable trade-off to me.


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