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  • Head in the Sand on Dams and Hydropower

    Posted by Carl from Chicago on August 24th, 2014 (All posts by )

    The popular (untrue) image of the ostrich as a bird that puts its head in the sand came to mind as a I read a recent NY Times article titled “Large Dams Just Aren’t Worth the Cost“. This article describes the usual culprits that plague dam construction:

    1. Cost overruns
    2. Dams take much longer to construct than originally planned
    3. Dams displace local residents (many in impoverished third world countries) who rarely thrive in their new locations
    4. Dams that are paid for with foreign loans (for many years the World Bank provided funding) often do poorly because the dam revenues come back in local currency and the loans are denominated in dollars; thus even if they hit their “nominal” returns, they don’t reach their “planned” returns when adjusted for currency depreciation

    These are all true objections to dam construction. However, these same criteria can be applied to virtually any energy construction project, from coal plants to nuclear plants to major LNG efforts.

    One key point that the article completely misses is that dams don’t require spending for “fuel” once they are up and running, and often it is fuel and distribution of fuel that bankrupt energy companies in the third world. The dam requires rain / water to generate power, and if this changes significantly, it can change the amount of power provided, but this is still generally better than “nothing”.

    There simply would not be electricity in many areas of the third world without hydropower, and the choice really isn’t between other alternatives and dams, it is a choice between power and no power. Once a dam is built they often can be run with a few individuals and if there are major problems you can bring someone in to fix them. You don’t need to find coal or fuel oil (which moves in price and is denominated in dollars that the country often doesn’t have). On the other hand, complex machinery and distribution systems can’t be left in the hands of areas with revolutionary governments and broken economies because in short order they are often taken apart and destroyed.

    Many of the problems with dams being unprofitable are actually the fault of the local un-functioning and corrupt economy. In third world countries ill-enforced laws encourage people to “steal” electricity and prices are often kept low to avoid unrest (who really cares if that loan to rich countries is repaid, anyways?). These problems are endemic to all of the alternatives and are “a feature, not a bug” of any of these local projects.

    As far as the damage to locals and their livelihoods, this is true and absolutely sad. However, since Western companies have largely gotten out of the dam building business (due to environmentalist pressure), the actors that have come into this space have zero compunction about locals as long as they don’t actively destroy the site with military tactics. From the article.

    All this runs directly counter to the current international dam-building boom. Chinese, Brazilian and Indian construction companies are building hundreds of dams around the world, and the World Bank announced a year ago that it was reviving a moribund strategy to fund mega-dams.

    Thus by forcing Western companies out of the act of building dams, all of this business just migrated to comparatively ruthless firms from China, Brazil and India. While these countries are nominally “non-aligned” and the left loves them for tweaking America, in practical terms they just partner with dictators, have little compunction about offenses that get Western firms in hot water (like bribery or displacing local tribes), and build the same exact dam, anyways. This compounds the economic model where Western firms can’t compete in the third world because of our restrictive laws, and then the Chinese and other unchecked state sponsored or ruthless firms just fill the vacuum. As a result, the West goes from having SOME influence to having NO influence, and the same exact dam is built anyways.

    The article should have focused on the advantages of dams which are:

    1. They require little local skills once completed, which is often a big benefit in countries where experts leave or are replaced by political appointees
    2. They require nothing for fuel to keep running, meaning that it will keep running even when the country runs out of dollars to purchase and transport fuel
    3. They leverage local assets, which are the river, and turn them into something useful for the country, power, which is absolutely needed for everything from cell phones to modern medicine to the basics of a functioning economy

    And finally, they should have noted that the “West” does not have a monopoly on construction skills or funding and as soon as we abdicate the field, any ability to impact the morality or processes involved with dam building exits and we hand it over to ruthless state sponsored and funded enterprises who will build that same dam.

    The final impact of all this is that these third world economies are all enmeshed in the orbit of state actors from other countries that pay lip service to human rights in public (at the UN) but pay little respect to them in actual practice.

    Cross posted at LITGM

     

    23 Responses to “Head in the Sand on Dams and Hydropower”

    1. Mike K Says:

      As long as the dam is built competently, I don’t much care who builds it. The West has been hobbled by leftist politics so long that it is just another fact of life, like the weather. Fortunately, the weather is a fact and global warming isn’t. For example, the Pacific islands that are always being described as at risk of drowning due to ocean level rising, are in fact at risk because environmentalists seem to have lost interest in the coral reefs that actually protect islands.

      Here is an example of a Gresham’s Law of environmentalism. Global Warming takes all the money and attention and real issues, like coral reefs that used to be a major concern, are now neglected.

    2. David Foster Says:

      Frankly, my dear, I do need a dam

    3. David Foster Says:

      Also: Dancing on the Ruins

    4. dearieme Says:

      Water power bad, wind power good.

    5. vxxc2014 Says:

      Americans getting the contracts BAD.
      Everyone else [except Israel] GOOD.

      Oh and Putin BAD.

    6. Michael Hiteshew Says:

      >>Thus by forcing Western companies out of the act of building dams, all of this business just migrated to comparatively ruthless firms from China, Brazil and India.

      I’m shocked. Who could possibly have foreseen that?

      I wonder how the folks at the NYT feel about that massive tunnel project to bring fresh water from upstate down to the metro area? Or is fresh water and electricity good and necessary for them; others, not so much?

      The NYT has become a parody of what it thinks it is.

    7. Michael Hiteshew Says:

      1. Cost overruns
      2. Dams take much longer to construct than originally planned

      There are ways to avoid those things. Are lawsuits slowing things down? Many groups have a lawfare agenda to do just that to infrastructure projects they oppose. File a continuous stream of harassment suits, or get allies in regulatory agencies to slow-walk permits and require more reviews and studies. It seems to me that legislation could be written to streamline these project schedules and forbid harassment suits.

      Cost overruns are related to:
      1. The above.
      2. Low bidder awards.
      3. Union work actions.
      4. Graft and corruption.
      5. Unforeseen problems.

      Solutions:
      1. Looking at actual cost to finish on similar projects can give a realistic estimate on cost to build the current project.
      2. Contracts can be written with incentives for finishing milestones. That is a tried and true method.
      3. Involve unions in the schedule incentives.
      4. Make contract and subcontract awards public. That will reduce the graft/corruption.
      5. Thorough exploratory work on dam sites can reduce but never eliminate the unforeseen. Getting highly experienced consultants involved can reduce problems because they’ve seen many problems over the years, know what to look for, and know how to deal with it when it’s found.

      We used to know how to do this stuff. See Hoover or Glen Canyon dams for examples.

    8. Mike K Says:

      “We used to know how to do this stuff. See Hoover or Glen Canyon dams for examples.”

      It wash;’t that long ago. Pete Wilson was California governor when there was an earthquake that damaged freeway. It was in 1994 and the contracts for repairs went to bid. They were finished ahead of schedule due to incentives. That has not happened in California since.

      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.

      Democrats have never heard of this.

    9. Jim Miller Says:

      Here in Washington state, we have a lot of hydro power — but it isn’t officially counted as “renewable”.

      And we sometimes are forced to throw away cheap hydro, in order to use expensive wind power.

      As far as I can tell, most here are not annoyed by these absurdities.

    10. Mr Black Says:

      The vast majority of people have no idea what government regulations are doing to their wallet. I could guarantee you that if the taxes required for “renewables” had to be paid in cash each month at city hall, the alarming cost would generate a groundswell of opposition almost overnight. General revenue hides all kinds of corruption.

    11. Bill Brandt Says:

      I grew up in a California that had a Can Do spirit and was the envy of the world.

      Now I hear radio ads about when to run your washing machine so as to not put demands on the grid.

    12. Jonathan Says:

      Now I hear radio ads about when to run your washing machine so as to not put demands on the grid.

      That is what annoys me, on an emotional level, about many self-described green ways of doing things. It is the pinched outlook that willfully avoids the big picture or mature consideration of the possibilities in things, in favor of ritualistic obsessions about minutiae: unplug your phone charger, don’t spill a few drops of used solvent, etc. At first this looks like neuroticism, but it’s really a religion built on appeals to some of the more counterproductive tendencies in human nature.

    13. Whitehall Says:

      Being in the power business, I have to second the article and all the above comments.

      Electric utilities used to be all about serving the customers with electricity when and where they wanted it. That business plan was replaced by government action with customers serving the government and its cronies. Your electric bill is now a tool of economic redistribution. Politicians buy votes with your money, penny by penny, and its largely hidden from public view.

      As to Mr. Miller’s point about dams in Washington having to spill water because of too many windmills, here’s a detail assessment in Forbes:

      http://www.forbes.com/sites/jamesconca/2014/01/18/wind-energy-of-no-use-in-the-pacific-northwest/

    14. Will Says:

      “A religion built on appeals to some of the more counterproductive tendencies in human nature”

      Gawd, if that ain’t the truth. Once a week I visit a facility in a blue town in an otherwise red state. It’s as though they overcompensate for the fact that they aren’t Amherst or Berkeley. I dread using the toilet. It’s a showpiece of dysfunction. The light is poor, one of those energy efficient bulbs, the no-flush toilet occasionally removes what’s put in it, and the hand dryer well, it’s so weak it doesn’t dry your hands. NO paper towels. I asked. A staff member shot a stat about how many trees are destroyed annually without blinking an eye. I laughed as I shook my hands dry and got a cold stare.

    15. Michael Hiteshew Says:

      >> A staff member shot a stat about how many trees are destroyed annually without blinking an eye.

      Trees for paper are grown as a crop by companies like Weyerhaeuser. Just like corn or wheat or carrots. I sometimes think Leftists have no clue about how the world functions or how things are produced.

    16. Whitehall Says:

      Some of the most successful dams in the Third World are those coupled with a large energy-intensive plant that exports to the First World.

      I’m thinking aluminum reduction plants in particular in countries with hydro sites AND bauxite ore bodies. The mills get first priority and their export product, aluminum ingots, pay off the loans.

      That’s one factor that closed down the US aluminum industry around the Columbia River Valley in the Pacific Northwest, along with users who could afford a higher price for the electricity.

    17. Carl from Chicago Says:

      Thanks for all the great comments per usual.

      I didn’t realize that they were forcing the dams to spill in order to use wind power, that is just crazy.

      One funny thing about California is that in San Francisco, the old hotbed of hippies, lie some of the most ruthless capitalists in the world. They are now an extension of Silicon Valley and have terraformed that city. Capitalism WORKS in San Francisco as far as companies, venture capital, and some of the most intelligent and hardest working folks in the world.

      I can’t speak for the rest of the state nor the government.

      But I will absolutely say that the can-do spark is alive in Silicon Valley and San Francisco.

    18. veryretired Says:

      As a culture, we have become detached from the daily grind of actually producing anything basic to our lives.

      The average person, regardless of economic status, is so used to the presence of fresh water, electricity, gas for the stove, food supplies in a bewildering variety and quantity, and so many other aspects of our everyday lives, that they can’t imagine the needed product or service simply not being there.

      We live in an age of magical thinking as delusional as any demon infested time in our past, in which people routinely believed in witches, curses, and ghosts and goblins of all sorts, and, conversely, that there were good fairies floating about in the ether who could protect them, and solve all their problems.

      The same people who are forever lamenting that we have lost contact with nature, and are too beholden to an artificial, technological society, are the very ones who have forgotten the first lesson nature teaches, and has taught us innumerable times in our history—it is utterly indifferent to our living or dying.

      The vulnerabilities of modern culture are so many they cannot be listed, and the cold, and the dark, are only a moment away.

    19. Whitehall Says:

      Civilization is but 7 meals from anarchy.

    20. Michael Hiteshew Says:

      I had an online discussion a year or so ago with a California Leftist who was bemoaning the existence of a hydroelectric dam somewhere in the mountains. If that dam ever breaks, he argued, thousands of people would die in the resulting flood as it washed down to the Pacific.

      I asked him how he intended to replace all the fresh drinking water that reservoir impounds. I also asked how he intended to replace the clean hydroelectric power it produced, possibly providing the electricity he was using at the very moment.

      Would he and his family go without clean water? Would he go without electricity? Would he support a new power plant on the coast for a new desalinization plant? I could never get a straight answer. I eventually gave up, but I hope I at least got him thinking about the questions.

    21. Whitehall Says:

      Mr. Hiteshew,

      Based on my long experience with California Leftist, your correspondent was no doubt really thinking to himself on how to get you to STFU.

    22. RonaldF Says:

      Can people who are willing to live near nuclear power plants receive free electricity? I can’t believe the hysteria around these things and now I’m told that our electric rates will go up because we switched from evil nuclear in the 70’s to Earth friendly coal in the 80’s. That is it. I want free electricity. Sure, we will live daily with the terrible fear of a jane fonda meltdown, but somehow we will get through it.

    23. Joe Wooten Says:

      Michael Hiteshew Says:
      I had an online discussion a year or so ago with a California Leftist who was bemoaning the existence of a hydroelectric dam somewhere in the mountains. If that dam ever breaks, he argued, thousands of people would die in the resulting flood as it washed down to the Pacific.
      I asked him how he intended to replace all the fresh drinking water that reservoir impounds. I also asked how he intended to replace the clean hydroelectric power it produced, possibly providing the electricity he was using at the very moment.
      Would he and his family go without clean water? Would he go without electricity? Would he support a new power plant on the coast for a new desalinization plant? I could never get a straight answer. I eventually gave up, but I hope I at least got him thinking about the questions.

      Most folks do not have a clue on how much infrastructure goes into making our modern civilization. Leftist envirowhackos are even more ignorant. Flip the switch and the lights magically come on. Open the faucet and clean water comes out. More magic.

      Magical thinking infests our nation’s “intellectuals”.