Robert Paterson's Weblog

Resilient PEI - When is an office not an office and when is a school not a school?

Making PEI more independent and more resilient does not demand in every case a major investment in money.

Some of the best things to do only demand that we open our eyes and see what is in front of us in a different way.

Let's say we do design and operate a public transportation system. Let's say we insulate our public buildings. These will lead to savings. But what if most government employees did not have to leave their communities to go to work every day? That would lead to immense savings. Not just in money. Such a project could lead to a revitalization of communities all over PEI.

But how could we do this? How do we get around the the cultural barriers for not all want to work at home.

For many, working at home is a nightmare. Kids, spouses, space - all work against being productive. Most of all, many would miss the social aspect of work.

But what if the local school became the workplace too. And/or the local community centre? What if they were set up like a Commons?

What if instead of driving from Kinkora to Charlottetown, you took the bus with your kids to the school? A school that does not have enough kids now but room for offices? What would it be like to be in one end of the building in your office with your kid at the other end in daycare or Kindergarten? Close but separate.

What would it be like working with people in other departments of both the Province and the Feds? Would soom of the silos fall away?

What about your boss? Well it's time to get with the program. Millions work remotely. Modern technology makes staying in touch very easy. You can still go to town once a week for a meeting.

The savings for all are huge. Not just in money but in energy and in quality of life. Better still,life comes back to the small towns that had become mere dormitories.

With hundreds working at the school, would not coffee shops and restaurants re-open? The school would become the magnet that attracted life and commerce back to the community?

Resilient PEI - Public Transport System - We have one right now - we just can't see it

Owning and running a vehicle is one of the most expensive aspects of living on PEI - we all need a vehicle. Rural families need more than one. Next time you try and find a parking spot at UPEI, think about what running a vehicle must cost a 19 year old male!

A new car costs about $9,000 a year when you factor in all the costs including depreciation. Average salaries on PEI are less than $25,000.

Next to heating, running a vehicle is the biggest "tax" on every Islander. This "tax" is of course very regressive and hits the less well off the most.

We all know that having a very good public transport system would help most Islanders. But the cost of having a very good one - convenient, reliable, inexpensive, that covers all the Island "Like the Dew" seems prohibitive.

That is until you look at what we have with new eyes.

In Toronto, most school kids and university students do not take a school bus - they take public transport.

In Charlottetown we have a very sub optimal public system - not convenient, not reliable, expensive and limited. On the other hand, our children all use a huge school bus system that lies unused for most of the 24 hours of the day and for 1/3 of the year. See where I am going? We have in effect two competing systems.

Let's push this.

PEI has a large and now up to date bus system that serves every house on the Island. Yes it's the school bus system.

What is we took a bigger view of this resource?

Let's set up a project to see how we can best use the fleet and the system that we have to offer all Islanders a bus system that can take any Islander anywhere at any time - as the Train used to.

In summary, if we give the job of taking our kids to school and back to the Bus system in Charlottetown - we get a very good system very quickly that serves all in the capital city. If we reorganize the school bus system outside of Charlottetown, we get a provincial system. It would still cost money but not the same as starting from scratch.

The bottom line - is that most Islanders are freed from having to own a car. The bottom line - we are ready for Peak Oil before it hits.

Resilient PEI - Heating - Wood Heat & Conservation

PEI spends about $200 million a year on oil to heat our homes and public buildings. Our total spend on energy is about $600 million.

We have enough wood in Atlantic Canada to heat the region sustainably. Here is the full argument by Roy MacMullin.

80% of homes in PEI, 25% in New Brunswick and roughly 65% of Nova Scotia use oil as the heat source. Approximately 1.3 billion liters of fuel oil are burned each year in Atlantic Canada. At last years price of 91 cents, that was $1.2 billion. At present day prices of $1.43 / liter, the new bill is $1.86 billion, a difference of $660 million. Next year, who knows? If families locked in a good price last fall, the sticker shock will only hit them later this year

To put our oil refugee’s plight into perspective, 1.3 billion liters of fuel oil is equivalent to 11.5 billion kWh’s or 11 times the annual usage of Saint John Energy. It is 61% of the output of NB Power’s system. The peak that it would create on the Atlantic grid would be 2500 MW or more, which is equivalent to four new Lepreau 1 units or 2.5 units of the new AECL 1000.

Looking at a wood alternative, we would have to cut 2.8 million cords of wood to replace this volume of oil. To compare, the existing residential usage of hardwood in New Brunswick is roughly 500,000 cords each year.

Using wood as a solution requires an additional 332 thousand cords to be harvested annually to displace the New Brunswick fuel oil requirement. This shouldn’t be a problem with mills shutting down. Pellets and briquettes can use softwood that is compressed to provide the same heat density of hardwood, with less moisture content.

Wood heat could very quickly meet the requirements of a conversion program. The reduction of oil purchases of 943,000 barrels would retain $137 million a year in the New Brunswick economy as opposed to sending it offshore. Over the years, this would be the equivalent of investing over a billion dollars in the local economy. If Efficiency NB extended their offer of $2,250 to oil heat customers converting to wood, it would go a long way toward alleviating the problems of oil prices. The cost of the providing stoves would be $135 million (60,000 x $2,250), probably spent over a number of years.

The use of EPA rated stoves ensures an efficiency of 70% and emissions that are less than 10% of previous generation stoves. In urban areas, the use of pellet or briquettes may have to be mandatory with round wood as a rural option.

Most of the money we spend on oil for heating leaves the province never to return. It is worse than a tax - we get health care etc for our taxes. Our heating oil bill is merely a drain on our economy. With wood, the money stays in the region.

A wood based heating strategy is a big employment strategy as there is not way to do this work in too mechanized a manner.

But is there enough wood? Newspapers are dying. In 10 years, there will be only a handful left. House building will not recover for decades.

There is also a wonderful opportunity for new technology. We are only scratching the surface on how efficient stoves and furnaces could be. Let's fund this work - The Best in Class - The Jetstream was made on PEI - we could be the leader again if we wanted to go for it. Here is the modern equivalent the Greenwood

But who wants to stack and lug tons of wood? Over time we will get better at this as well. Pellets, Briquettes, better delivery systems would all evolve - again here is an opportunity to invest in R and D that makes a difference

But what about the environment? Wood is in the current account of the cycle and is a renewable resource.

My pals at the Office of Energy remind me that it is possible also to save up to 40% if a building is properly insulated

What if we had a program to insulate all buildings public and private on PEI? Let's assume that we saved only 20%. That is $40 million a year. If we were to convert the bulk of our heating to oil then we might be able to get $200 back a year into the local economy. That is a billion dollars in 5 years.

More important we would have protected ourselves from the risk of being cut off or ripped off.

Resilient PEI - Hydro Electric Power

This week - a series on what we could do with Infrastructure Funding that would employ a lot of people AND provide a better future for all Islanders.

This is Scales Pond, near Kinkora. Today many see it as merely a nice place but it is not a natural feature. It was the largest of many diverse local Hydro Electric sites on PEI.

Here is the dam today.

My friend, Carl Brothers, PEI's leader in wind power thought, told me that he felt that Scales could be brought back into production at about 8 cents per kilowatt hour - competitive with wind.

There are smaller sites all over PEI that would be worth looking into as well.

There are many reasons why this would be a valuable project.

• Much of the hard work has been done
• Hydro is an ideal partner for wind. It can act like a battery - surplus wind power can pump water back up behind the dam
• It is very stable - once the sites have been brought back up - they can offer us power at a fixed cost for a very long time
• A project that would bring this back would drive us to invest in a hyper local and very flexible grid - thus opening up the ability to draw on other local sources of power and have a hyper local two way grid - it opens up more opportunity

Budget week - Packing Jobs Racetracks and Lobster - Throwing Good Money After Bad

My son phoned me the other day - he has a Art show coming up in New York - he is also the typical starving artist. Should he buy a special projector that has such control that he can use a pixel by pixel adjustment? It cost over $3,500. I asked him  if this would enable him to sell anything? Would he use it a lot in other situations? He said that it wouldn't. I reminded him that this would be 7 months of rent or 7 months of food. He didn't buy it.

My point? When times are tough, we have to be very careful in our choices.

My point? I am seeing a lot of what seem to be choices by governments that look like my son's recent dilemma.

Recent spending suggests that government will over-invest in the old that in the world and will not get behind what is really needed. They will buy the projector!

• $14.5 million to Master Packaging for 25 jobs in a business that depends entirely on a business model based on long distance shipping. This is not a business of the future. This is not an investment that will do anything for us when we need to build a local economy in the next few years. There are also some ethical issues that are not related to the future and they are these: if this is such a good business why can't the Irvings go to the bank. The total investment is about $20 million and PEI is giving $14.5? By the way PEI loaned Master Packaging $10 million in 2005 as well. What kind of return is this as well? $600,000 per job? Surely there are better choices? Surely we can find a way of spending less to get jobs that can last and that can grow?

• The Summerside Raceway will get $1.5 million and a Racino. The Racino in Charlottetown has been an abject failure and boosting more gambling is a tax on those that can least afford it. How does this help PEI? It is exactly James's Projector - looks great, is flashy, shows off well - but it does not get you anywhere and the money could be invested in things that can but now can't be. To wrap this in the label "The money will come from the Atlantic Canada Opportunities Agency's Innovative Communities Fund and Service Canada" is surely a stretch? I can understand Minister Shea's desire to help her people. I commend it. Many of the other investments she has been party too are right on the money. I only ask that in future we really do think about innovation and the path that will help Islanders in the times to come.

• The Lobster Processors - Finally I come to what got me going today. There is $25 million of unsold frozen lobster inventory at the PEI Processors. There will be huge calls to take this off the hands of the processors so that they can buy and process more frozen lobster that no one will buy to keep the lobster fishers still fishing and able to pay off their $100,000 loans on their boats. Buy more lobster so that we can import Russians and Newfies to do the processing because Islanders will not do this work anymore. I remind everyone that at the core of the Polar Foods collapse was more than $50 million of unsaleable frozen lobster inventory. The frozen lobster product is a fake product. It is designed to give low pay processing jobs. Jobs that no one wants any more. It devalues lobster and makes it into a commodity used only in soups and in catering. It encouraged fishers to over capitalize their boats. With the economy where it is, people will not even be eating fresh lobster as a luxury. Soon there will no longer be a viable long distance export model for any food. Enough already! PEI has already blown more than $30 million on this and learned nothing. The lobster industry as we know it is dead. We need to find a low capital local fishing alternative. If we rescue the fleet and the processors again, all that money will not be available for things that we are going to really need.

We are about to experience an orgy of government spending to get us out of the economic mess that we are in. $1.0 Billion for "Training" - we all know that this is a failed idea. 40 year old Coal miners or cod fishers cannot be trained to be competitive software developers. The real issue is to find real work for them where they live. The real help they need is to become less dependent. But off we go into a Billion $'s worth.

Other measures to help specific industries

$500 million to modernize farms - Farms don't need modernization - they need to be very different. The farm of the future is likely less than 30 acres, is high intensity and mixed and within 10 km of a town. It sells locally

$50 million to expand slaughterhouses. We don't need more giant slaughterhouses, we need more small local ones. This demands a huge overhaul of the Fed Health regulations that are designed to support the very large plants

$50 million to promote Canada's forestry sector abroad. There is no export model - There is no house building for years, newspapers are dying. What we need is a local model - pellets, wood for heat etc - Huge potential here but not in how this will be done

$100 million for better forestry technology. My bet it will all be about big forest. What is needed is tech that will enable small amounts to be removed selectively

Two new economic development agencies, one for southern Ontario and another for Northern Canada. All of course focused on supporting existing dying processes.

I am worried sick that most of this will be spent like this and that as a consequence - when the shit really hits the fan we will have not only missed the chance to help but prevented ourselves from being able to help. We will have shot our bolt.

We need to have a focus for our infrastructure spending. We need to have a context.

The context is this. That we have to buffer PEI from the breakdown that will happen to the system

• We have to be able to heat our homes and have at least 50% of our electrical power from local sources. We are the last market that will get any energy when the central system cracks. This implies refitting hundreds of public buildings and thousands of homes. It involves investing in a myriad of energy projects - pellets, hydro (reopen Scales Pond), oils, wind etc. It means reusing local schools as the centres of local economies.

• We have to be able to feed our entire population in the event of the Just In Time food distribution system failing as it will. This implies not only a viable local distribution system - but also a system that does not depend on imported oil and inputs. Again all the work here employs people and brings back life to the local community.

 

This is the situation in Mendacino County in California - you can see that nearly all the food that is eaten in this agricultural place comes from away. You can also see that the longest period of local storage is 7 days. Most food is on a 2-3 day cycle. They and we are a month away from starvation if the Just in Time Delivery System should fail.

Building these systems will employ thousands of Islanders not just for the transition but for all time.

I sympathize with our politicians - I know that they want to help. I know that they are pulled all over the place. But if we can see that THE revolution of our time is to need to bring back power home, then they can do the right thing and help more than ever before.

This is our chance. Our chance to have THE PLAN Mark II.

In the 1970's we set out deliberately to join the industrial world and THE PLAN - worked at the pivots of the Island to get us there. The big ideas were: scale, centralization, machine process and export.

Now the big ideas are: small, decentralization, networks and local.

Let's have a PLAN 2009 and use this direction to prepare us for what is to come - the breakdown of the scale, central, machine, export model. If you step back you can see that it is already failing - that is what is going on now.

It never fitted PEI anyway. If we do this right, we would be "Going Home" in a way.

Gloom versus hope and action

I regret that I must be very annoying to many of you as I post so often about why I think we are in worse trouble than the pundits suggest. I do that because, they were wrong in the lead up to the crash in September but I see that most people still take their word as gospel. 

LAURA TYSON, University of California, Berkeley: A central lesson is that this is a kind of Greek tragedy, where the explanation of the tragedy is human failings deep within what it means to be human.

And what it means to be human is sometimes to go to excess, to basically not pay enough attention to risk. Humans make those kinds of mistakes consistently, and it's led to some of the great crises in history. It's also, frankly, led to some of the great accomplishments in history, but it's all about us as people.

PAUL SOLMAN: The tragedy of underestimating risk takes us to the last stop on the cable car line and for this piece, Market Street, scene of another panic a century ago.

ROBERT SHILLER: The earthquake of 1906 was preceded by many California earthquakes. And there were architects and urban designers who were saying you needed to prepare better for the next one.

The reason it was so bad was because they didn't prepare.

The price of not seeing what was coming in September has been very high for many people. If I am right, and the financial crisis will lead to an energy and a food crisis - then the price of not being ready will be so much worse. Here is a brilliant case study of what could happen. (The Oil Drum - Jason Bradford) It opens like this:

It was common knowledge at the time that crude oil was the lifeblood of our economy, but little had yet been done to reduce our dependency on oil. The modern world was suddenly without sufficient transportation fuels and totally unprepared.

The specific numbers are staggering. Only a quarter of U.S. crude oil consumption was domestically produced in 2009. The trucking system was the key part of what was called the Just in Time delivery system. Warehousing and stockpiling were no longer practiced significantly and so no buffer existed when the trucks stopped. Our Just in Time system unraveled over a period of several weeks.

J-I-T now stood for "Just Isn't There."

As the flow of goods and services slowed dramatically and then in some cases stopped moving altogether, we were subject to cascading, compounding failures in key sectors of the economy. Just a couple of examples…Without constant truck movement, spare parts and basic supplies ran short. Electricity production relied on coal, which relied on diesel.

Most dire of all was that within three days of the halt to trucking, the grocery stores were out of food.

Looking back at historical records it is clear that, while shocking, this was no surprise. Community-based organizations had been warning of this exact possibility for years.

It is my curse to "see" this strong probability.I had been prepared  and some of my friends too for the financial crash of 2008. But the possible systemic failure in energy and food cannot be prepared for by one person at a time. The larger community has to work together.

"But what can we do?" is what many ask. Feeling helpless is perhaps the worst part of all of this.

I do have a course of action that I espouse - and that is Local Resiliency - taking back our control over energy, food and credit. In essence it means ensuring that your place has enough energy to cover the basics and enough food being grown and sold locally to keep you going if the Just in Time system breaks.

This is hard to get going. How do you start? On PEI it is very hard - just a few of us talk to the issue. What we don't have here is a more powerful catalyst.

In St Louis we do.

In St Louis, the local public TV station is a great catalyst. Last summer we began the work to pull together more than 20 local agencies to help people who were at risk of losing their homes. This was the first step in a new role for a TV station - that of being a social convener.

On Jan 27, we start the next phase and as the layoffs and the financial stresses build we will begin to widen and deepen the work to help St Louisans take back their power to help each other. Here is our opening shot:

I promise to talk more about what we can do to help each other and to find ways of reducing the fear and pain. I will do my best to show you what people are doing to take their power back.

Iceland - A warning to politicians

45% of Icelanders are bankrupt. 60% of Icelandic business is bankrupt.

The people have to blame someone - here is the scene outside the parliament. On the nut - the government.

It is becoming clear to many that governments in the west have been controlled by the interests that have brought us to this point. As the full extent of the crisis unfolds for the rest of us - might we not respond as Icelanders are?

The last para I find very evocative -

The Icelandic public fear that their country has virtually been stolen by the globetrotting business elite that spent more time rubbing shoulders with international high society than giving back to the society that enabled them to enjoy this privileged lifestyle. Now ordinary Icelanders are determined to take their country back.

I think that our response will be the same - the people will work to get their power back. The central institutions, including government - will be neutered.

Here is how the story is being reported in Iceland: (thanks Jevon)

Four months after the collapse of Iceland's entire financial system, no one has accepted any responsibility. Our currency has lost more than half its value, rampant inflation has already eaten up most people's savings, property values have dropped by more than a third and unemployment is reaching levels never seen before in the life of our young republic. The fault is clearly shared between the business elite and the government, which failed to regulate the newly privatised financial sector, allowing a few incompetent and egotistical business tycoons to gamble with the nation's fortune. And yet neither the government nor the bankers – who, by the way, seem to have disappeared into the cold thin air – see anything wrong with their own behaviour.

The governor of the central bank blames the risk-seeking bankers, the bankers blame the government and the prime minister attributes the whole crisis to the international credit crunch. This lack of any sense of responsibility has angered the Icelandic public to the extent that they have turned to the streets in greater numbers than ever before.

It started in October with peaceful demonstrations. Then the frustration grew, first with the lack of any sense of responsibility, then with the lack of any effective action to ease the economic pain most people feel – and finally with the sense that all the political elite were incompetent.

Initially the government tried to dismiss the protesters as frustrated wannabe politicians and disillusioned youngsters who did not understand the complexity of the situation. But when our grandmothers put down their knitting gear, strapped their boots on and took to the streets shouting for new elections we all saw that the disgust was almost universal.

Yesterday parliament resumed for the first time after Christmas. Without much organisation or central planning the public surrounded the parliament building and put forward a clear demand for early election. Ignoring them, the ministers and parliamentarians tried to sit out the protest, hiding inside the old building in downtown Reykjavik. This time it didn't work. The protests grew and ordinary people kept warm by burning torches in front of the building. They were going nowhere. Well into this dark night in Iceland's history, parliament remained under siege, and the vigil resumed this morning.

It is the first time in Icelandic history that a young anarchist can well expect to meet his grandmother in the crowd demonstrating against the government and drumming with her kitchen knife on pots and pans. The government is surely hanging by a thin thread and might fall at any moment.

The Icelandic public fear that their country has virtually been stolen by the globetrotting business elite that spent more time rubbing shoulders with international high society than giving back to the society that enabled them to enjoy this privileged lifestyle. Now ordinary Icelanders are determined to take their country back.

John Robb on how much trouble the banks are really in

It is clear now that Bailout 1 - has not fixed the banks. I asked John to help me find a graphic for why this is so hard. Here it is in full:

BIGGER THAN A PRESIDENT

I'm not sure most people grasp the sheer scale of the current crisis.  This may help.

First, there is the shadow banking system (see the estimate of its size below relative to other big things...).  

In short, it's the massive pile of derivatives accumulated over the past decades.  It's also tightly coupled and extremely complex (worse, not understood).  It isn't regulated, nor is it liquid enough to price (which is why global banks are still able to "act" like they are solvent).  

This shadow banking system is in the process of melting down/popping/exploding.

Next, there is the global economy.

Finally, there is the US economy.

You can see why global banks are now trading at prices that anticipate insolvency and government bailout ( See this chart from JP Morgan for more).  And why the UK looks like Iceland more each day.

They are dead. And in a way - so are we - it will just take a bit more time. We are like Wile Coyote just after he has stepped off the cliff - it's a long way down but when we get there it is going to be painful and there is no safety net nor can there be a God to catch us.

We have to start thinking of a new type of "Plan B". How can we mitigate the effects of the work's banks being frozen?

• What can be done at the customer end?
• What can be done to salvage the wreck?

When is a school not a school? When it is in Holland

My friend Ton emailed me this last night in response to my post suggesting that we on PEI should think more deeply about what is a school before we simply close some.

Your posting on the PEI Schools http://smartpei.typepad.com/robert_patersons_weblog/2009/01/school-closures-on-pei-going-from-lose-lose-to-win-win.html reminds me of what is called a 'broad school' (Dutch: brede school, http://www.bredeschool.nl/) here in the Netherlands.

These are almost always primay schools. I think in the US they call it community school, which comes in numerous variations.

Often in the Netherlands it combines social work, pre-school, library, Dutch as a second language teaching, the friendly neighbourhood policeman, healthcare, sportsclubs, other social clubs etc.
In other words the schools are usually build to be a community center where the building can be used for class room teaching as well. :)

A Dutch peculiarity that neighbourhoods often have a catholic, protestant and public/non-denominational primary school means that in a 'brede school' these are housed in seperate parts of the building as well, sharing infrastructure and computers etc.

There's a lot of experience with this kind of thing. In Scandinavia and the US since the early 80's I think, in the Netherlands since about 1990. In Sweden all schools are 'broad' by law. Which means they have full day programmes, as well as year round.

Can the Banks be saved? If not.......

I asked John Robb- the best source I know of information about how the foundations of our society are crumbling if he had a useful graphic that showed the position of the banks right now.

I wish I hadn't now.......

So for you guys who think that this is just a correction - we are going into uncharted territory folks