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Published: February 28, 2007

 
 

Lights! Water! Motion!

Where this kind of arrangement has worked, private contractors regularly provide comprehensive updates on the operations, detailing ongoing costs, maintenance needs, supply–demand balance, and the status of upcoming phases. The government, as well as nongovernmental organizations and local citizens, can easily and publicly respond to this information, pointing out the deficiencies in the company’s plans so they can be addressed before it is too late. The profession of asset-management specialists is emerging to help both public and private organizations navigate these new types of partnerships, bringing in awareness of best practices from around the world, and helping to define the incentives and procedures that will lead to better results.

One last change would also help: In conventional infrastructure initiatives, the same engineers who build the project often have a hand in approving it. That is a recipe for abuse, and it led, in the 1970s, to a backlash; one motto of the antidevelopment movement was “don’t trust the experts.” Both the abuse and the lingering backlash attitude from past abuses must be discarded. The relationship between the builder and the approver must be kept at arm’s length, but it need not be adversarial. There should be a thorough, up-front exercise in cost-benefit analysis, open to all onlookers, done in time to influence the decision. Incentives for meeting goals in quality, longevity, environmental impact, and employment should be clarified before companies bid for a project.

As people pour into cities, the abundance of power, water, and mobility will define their lives. Problems like this $40 trillion challenge are not solved overnight, and muddling through will probably work, as a substitute for strategy, for another five years. But the sooner we think about it comprehensively, the less expensive the solution will be.

In the end, some cities will organize their infrastructure more effectively than others. They will figure out how to balance public and private interests; how to put the right incentives in place for resilience and growth; and how to leverage the relationships between water, power, and transportation. They will become the cities of opportunity; they will be the cities, for example, where many readers of this magazine will choose to work and live. They will become centers of growth and innovation for the farsighted companies of the next 100 years. And they will become magnets for humanity, standing on the platform of quality infrastructure: a platform that goes generally unnoticed — except when it doesn’t work.

Beyond Vulnerability
by R. James Woolsey

In March 2004, United Kingdom police raided the home of Omar Khyam, the 24-year-old ringleader of the so-called Operation Crevice terrorist plot. They found CD-ROMs with detailed plans of Britain’s electricity and gas systems. According to a New York Times report in November 2006, Khyam was recorded talking about a planned simultaneous attack on Britain’s gas, electricity, and water systems: “The electrics go off so it’s a blackout, and then the gas lot move in and bang. Then something goes wrong with the water.”

Even in the absence of a planned attack, the world’s infrastructure for energy, water, and transportation is increasingly congested, fragile, and in need of costly modernization. Tens of millions of electricity consumers, for example, lost power for many hours in the eastern U.S. and Canada in August 2003 because a tree branch fell on power lines in Ohio. But terrorists are a great deal smarter than tree branches. Just as they figured out the vulnerabilities that could be exploited in our civil aviation infrastructure prior to September 11, 2001 (short knives permitted in hand luggage, flimsy cockpit doors), they can exploit the growing vulnerabilities of our energy infrastructure — as the defendants in the Operation Crevice case seemed to have intended for the U.K. That’s why it is so crucial to design and build the next wave of infrastructure with resilience in mind.

At least the systems providing electricity and water are under the control of the societies that need them. Not so the infrastructure for oil, much of which is in the increasingly volatile Persian Gulf. In February 2006, Saudi guards fought off an attempted al Qaeda attack on Abqaiq, an oil production facility in northeastern Saudi Arabia through which roughly two-thirds of Saudi crude must pass. Had the attackers destroyed the sulfur clearing towers there, they could have taken 7 million barrels a day offline for well over a year and sent oil prices above $100 a barrel. 

Fortunately, three sets of technological developments may increase resilience around the world by making it possible to design new types of far less vulnerable infrastructure.

First, genetically engineered enzymes and other biocatalysts, together with several new thermal and chemical processes, are now entering the market. They are making it possible to produce transportation fuels — ethanol, methanol, renewable diesel, biodiesel, and butanol — from inexpensive and widely available biomass feedstocks, including prairie grasses such as switchgrass, and even industrial, municipal, and animal wastes. As a result, transportation fuels will increasingly be produced in relatively small facilities, often located near farms, urban waste sites, or other sources of biomass. Such facilities may also function as small biorefineries, producing such compounds as polylactic acid (basic to many plastics) and propanediol (for textile fabric products). 

These developments have the potential to substantially reduce the world’s dependence on oil from the Middle East and other unstable regions. The economic implications of such a shift are profound. In 2007, the United States alone will borrow about $320 billion, nearly $1 billion a day, to import oil. Replacing only one-quarter of those imports with biorefinery feedstocks consisting of biomass and waste would transfer some $80 billion to the U.S. economy — an amount roughly equivalent to current total net farm income.

The second technological development with profound implications is the continued development and decentralization of the electricity grid itself. Forty of our 50 states have net metering laws that enable individual electricity consumers to sell electric power that they generate back to utilities. But until recently, the cost of photovoltaic solar collectors, the inadequacy of modern wind turbines, and the limited capability of batteries for electricity storage have substantially restricted the practicality of small-scale electricity generation. 

Now the promise of thin-film solar collectors is beginning to be realized, making rooftop electricity generation considerably more efficient and affordable. Wind turbines suitable for individual building use are also beginning to come onto the market. Wind and solar collectors have an inherent complementarity; solar is most effective in the middle of the day, whereas wind tends to blow strongest during the morning and evening hours. New and far more powerful batteries will augment their capability and make feasible a new form of plug-in hybrid gasoline–electric vehicles. Dozens of prototypes of these vehicles exist; they demonstrate the flexibility of a hybrid (storing gasoline for long trips), with double the mileage of ordinary hybrids. Energy efficiency has also sharply increased in the design of items as varied as lightbulbs, appliances, and buildings. Before long, consumers may generate much of the electricity they use, even supplying a portion of their plug-in vehicles’ power needs — with transmission lines no longer than the distance from a rooftop collector device to an electrical outlet in the house or garage.

The third factor is Moore’s Law: Computer chips’ power continues to grow even as their price continues to shrink. This longtime phenomenon is working its inexorable changes on today’s still-too-cumbersome communications infrastructure. New telecommunications systems such as wireless mesh, currently used mainly for emergency networks, are extremely resilient. They can permit voice over IP, videoconferencing, and other communication modes. Their use can greatly reduce business travel and commuting.

A society that can fuel its vehicles from locally available biomass and waste, generate its essential electricity (including a share of its vehicles’ power needs) from its rooftops, and handle essential communications without vulnerable infrastructure will be much better equipped to face the challenges of the 21st century.

R. James Woolsey (woolsey_jim@bah.com) is a vice president with Booz Allen Hamilton and former director of the United States Central Intelligence Agency. He has held U.S. presidential appointments in two Democratic and two Republican administrations.

 
 
 
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Resources

  1. Alan A. Altshuler and David E. Luberoff, Mega-Projects: The Changing Politics of Urban Public Investment (Brookings Institution, 2003): American political history from Robert Moses to Boston’s Big Dig, proposing new forms of multiple accountability.
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  3. Shaila Dewan, “Cities Compete in Hipness Battle to Attract Young,” New York Times, November 25, 2006: Atlanta and Portland, Ore., are magnets, whereas Philadelphia struggles.
  4. Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter, Megaprojects and Risk: An Anatomy of Ambition (Cambridge University Press, 2003): Skeptics document how enthusiasts negligently green-light bad projects and explain how to build in better accountability, particularly in Europe.
  5. Daniel Gabaldon, Tom Hansson, Eric Spiegel, and Joseph Van den Berg, “The Next Wave of Generation Investment,” Booz Allen Hamilton white paper, May 2006: Strategy for electric power companies to invest presciently amid the risk of gas prices, regulations, and new technologies. Adapted as “Baseload in the Balance,” Electric Perspectives, May–June 2006, and as “Betting Big on Baseload,” Electricity Journal, August 2006. PDF download.
  6. Mark Gerencser, Reggie Van Lee, and Fernando Napolitano, “The Megacommunity Manifesto,” s+b, Summer 2006: How to bring together multiple organizations to develop solutions to complex problems. Click here.
  7. Joseph Giglio, Mobility: America’s Transportation Mess and How to Fix It (Hudson Institute, 2005): Impassioned, well-reasoned plea from a financier–academic for transportation infrastructure investment.
  8. International Energy Agency, “World Energy Outlook 2004,” OECD/IEA 2004: Comprehensive forecasts of energy demand and supply. PDF download.
  9. Bill Jackson and Vikas Sehgal, “One Billion New Automobiles,” s+b, Winter 2006: One billion new cars will need at least 1,000 new roadways. Click here.
  10. Jeffrey Rothfeder, Every Drop for Sale: Our Desperate Battle over Water in a World about to Run Out (Tarcher/Putnam, 2001): Journalist’s view of the pending global crisis in water infrastructure.
  11. Lord Andrew Turnbull, “Toward a Flexible Energy Future,” s+b, Winter 2006: How governments can promote better capital investments despite imperfect information. Click here.
  12. Eric M. Weiss, “Beltway Toll Plan May Need Virginia Funds; Rising Costs Strain Private Partners,” Washington Post, October 23, 2006: Private ownership is not a panacea for infrastructure projects.
 
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