Blockchain, Data Analytics, and the Future of Energy and Transportation

Blockchain, a digital ledger in which transactions made in cryptocurrencies are recorded chronologically and publicly, is most closely associated in the public mind with BitCoin, a crytocurrency that is undergoing a mania like the 17th-century Dutch tulip crisis. I venture no predictions about the future of BitCoin, but I’m increasingly reading that blockchain has the potential to disrupt all kinds of industries.

One of those, according to this article in Oilprice.com, is the energy sector. By enabling peer-to-peer trading, blockchain is disrupting traditional markets and enabling decentralized networks. That’s particularly promising for renewable energy and distributed energy grids. Writes the author:

Blockchain has the potential to shake up the energy industry in countless ways, but perhaps the most disruptive would be a new, radical level of transparency. A wide-scale adoption of blockchain would create significantly more transparency at all levels. On a grand scale, every time a barrel of oil is bought or sold, it would be documented on a digital ledger, leaving an unprecedented “paper” trail. While the buyers and sellers themselves will remain anonymous, these transactions will be publicly visible like never before.

But before you break out the bubbly and toast the end to fossil fuels, consider this: The same article discusses how oil & gas companies are using data analytics to help drillers move faster, make better decisions, and recover more oil and gas at a fraction of the price.

(Hat tip: Rick Gechter)

Perhaps the bottom line is this: Blockchain, data analytics, the Internet of Things, and other technologies are enabling a new wave of innovation that will make energy — fossil fuels and renewables alike — cheaper. Does anyone remember the goal of achieving energy independence? Well, we’re almost there. The Persian Gulf can kiss my grits!

Some say the U.S. economy has entered a slow-growth era in which there are no transformative technologies to drive invention and productivity to new heights. Building another social media app won’t make a material improvement to our lives. The pessimists might be right about social media apps, but I suspect that’re missing a lot of action in the real world.

What does this mean for public policy in Virginia? When technology is scrambling the economics of the energy industry, we should be careful about making large, long-term investments that run the risk of becoming obsolete. Absent some technology breakthrough, nuclear is not looking like a good way to go. Speaking in broad generalities, the electricity future looks like renewables and natural gas.

I’d issue the same warning for investment in transportation infrastructure. The Uber revolution, driverless cars, and electric vehicles will upend the personal-mobility industry. There is no way to predict with any confidence how it will shake out. All I can say is that we should scrutinize any large public investment in highways and mass transit predicated on the assumption that the driving and commuting patterns of the next 50 years will look like the driving and commuting patterns of the past 50 years.

Virginia Wallowing in Ignorance about Coal Ash

Coal ash at the Chesterfield Power Station. Photo credit: Richmond Times-Dispatch

Sen. Amanda Chase, R-Chesterfield, has co-sponsored legislation that would require Dominion Energy to remove more than 25 million tons of coal ash from its Chesterfield, Bremo, Possum Point and Chesapeake power stations, reports the Chesterfield Observer.

Senate Bill 1398introduced by Sen. Scott Surovell, D-Fairfax, applies to any owner or operator of a “coal combustion residuals unit.” The bill specifies that any coal ash stored in an unlined pond that is located within a half-mile of a floodplain or river must be excavated and disposed of either by recycling into cement or removal to a landfill.

The concern of environmentalists, residents living near the power plants, and many elected officials is that Dominion’s proposed solution — burying the coal ash on-site and capping it with an impermeable liner — will not prevent groundwater from seeping through the pits, picking up contaminants, and migrating into rivers and streams. Reinforcing their fears are the findings of riverkeeper groups of elevated levels in nearby groundwater and surface waters of potentially toxic heavy metals found in coal ash.

A Dominion-commissioned study by AECOM, an international engineering firm, found that Dominion’s proposed bury-in-place solution would cost between $480 million to $1.7 billion (not including judicial remedies ordered for the disposal of ash at the Chesapeake plant). By contrast, the most economic solution for removing and landfilling the coal ash would run about $4.15 billion. Critics say that AECOM overstated the cost of recycling and removal.

For all that has been written about coal ash disposal, there is much that we don’t know. Given the current state of knowledge (at least the knowledge that has seeped into the public policy debate), it’s hard to see how a rational, well-informed decision can be made.

There is one thing we can say for certain: contaminants from coal ash do leak in minute quantities into the groundwater, and groundwater does make its way into rivers and streams. Beyond that, there is very little certainty. Two questions arise: Does the contamination reach levels that are hazardous to human health (generally measured in a few parts per million)? Will Dominion’s proposed remedy of capping the coal ash piles reduce the level of contamination to safer levels?

Adjudicating a lawsuit filed by the Virginia Chapter of the Sierra Club against Dominion Energy Virginia for coal-ash pollution at Dominion’s Chesapeake plant, U.S. District Court Judge John Gibney found that (a) the coal ash ponds at Chesapeake did contaminate groundwater and the nearby Elizabeth River, but (b) the concentration of potentially toxic compounds was so low that it did not pose a threat to human health.

Heavy metals and other pollutants are often found naturally in groundwater, rivers and streams. Zero contaminants — the equivalent of distilled water — is neither necessary nor desirable. Some elements, such as zinc, are toxic at elevated levels but are necessary to sustain human and animal life in minute traces. The purpose of public policy should be to keep the concentration of these chemicals below the threshold at which they pose a threat to human and aquatic health — not to achieve zero contaminants.

Environmentalists have conducted tests in public waters near Dominion’s coal ash pits and have found non-safe levels of chemicals on numerous occasions. However, those tests reflect the condition of Dominion’s coal ash impoundments in their current form. Following standard industry practice, the utility buried the coal ash in multiple pits at each location and covered them with water to keep them from drying out and creating a dust problem. Rainwater falling on the water-laden pits created hydrostatic pressure that elevated the movement of water through the coal ash and increased the rate of contamination.

At each location, Dominion proposes to drain the water from the ponds, consolidate the near-dry coal ash into a single pit at each location, and cap the pit with a synthetic barrier. That barrier will prevent rainwater from reaching the coal ash and eliminate the main source of hydrostatic pressure. Also, in theory, the coal ash also will be buried above the water table, thus foreclosing the potential for groundwater to migrate through. In practice, however, as the Southern Environmental Law Center has shown from documents filed by Dominion, low-elevation portions of the Chesterfield impoundment will intersect with the water table. In other words, while most coal ash will be inert, a small portion will be exposed to the groundwater.

It should be within someone’s power to compute (a) the rate of flow of the groundwater, (b) the volume of water that will be exposed to coal ash, (c) the extent to which groundwater will pick up contaminants, (d) the volume and toxicity of groundwater that will reach rivers and streams, and (e) the resulting increase of potentially toxic chemicals in public waters. If the level of contamination in the River remains below Environmental Protection Agency thresholds, it makes little sense to spend billions of dollars to remove the material to a landfill. If the level of contamination exceeds safe levels, then action is justified.

The problem is that we don’t know the answer to the question. The Surovell-Chase bill presupposes that Dominion’s preferred, cheaper remedy would be inadequate. But we don’t know, and we can’t reach a judgment based on tests conducted during the old regulatory regime.

Environmental groups are arguing that utilities in North Carolina and South Carolina are pursuing the recycling and landfilling approach called for in the Surovell-Chase bill. If recycling/landfilling makes economic sense for them, they say, it should make sense for Virginia. That argument is buttressed by the testimony of companies offering to recycle as much as half of Dominion’s coal ash, some of it potentially at a profit to the utility.

AECOM examined four potential recycling technologies and concluded that Dominion couldn’t come close to recycling its coal ash at a profit. What the study did not do, as best I can tell, is determine whether it would be cheaper to recycle or load into a landfill. In other words, even if Dominion lost, say, $30 to $100 per ton through recycling, would that still be cheaper than trucking the coal ash to a landfill? The report did not make that calculation. Moreover, the report allows for a wide variation in costs. It makes a big difference if the cost of beneficiation (as the recycling process is called) at the Bremo station is $96 per ton or $217 per ton. Likewise, it makes a big difference if the coal ash sells for $30 a ton or $60 per ton. The AECOM discussion of recycling economics makes only the roughest of rough cuts. It does not provide enough data to make an informed decision.

The same can be said of the environmentalists who are critical of the AECOM report. We are told that Carolina utilities are recycling and landfilling their coal ash. But an obvious question arises: at what cost? The coal ash issue is even more emotional in North Carolina than in Virginia because North Carolina is where one of the nation’s worst coal ash spills occurred. Is Duke Energy under more intense judicial and political pressure to pursue the recycling/landfilling strategy to remedy its coal ash problem regardless of cost? The cost per ton of recycling/landfilling in North Carolina may be public information, but it hasn’t entered into the public discourse in Virginia.

The problem with the Surovell-Chase bill isn’t that it’s a bad bill. It’s that the public has no way of knowing whether it is a good bill or bad bill. We don’t have the data to make an informed decision. Perhaps the General Assembly should make it a priority to get that information before voting the bill up or down.

Update: Haha! Looks who’s wallowing in ignorance! Juliana Condrey informs me that SB 1398 was from the 2017 session.

Virginia Falling Behind in R&D

Declining research funding in Virginia, 2010 to 2015. Blue bars=Virginia, gray=national. Source: TECconomy Partners LLC

Virginia universities are slowly gaining ground compared to their peers in R&D, but Virginia businesses are falling behind. Academia and industry need to cultivate closer ties, says strategic consultant Mitch Horowitz.

As a principal of TEConomy Partners LLC, a Bethesda, Md.-based research firm specializing in technology-driven economy development, Mitch Horowitz has had the opportunity to view a lot of technology-leading metropolitan regions close up. And Northern Virginia stands out… but not in a good way.

“I cannot recall a state that has a great technology hub like Northern Virginia that doesn’t have many great research institutes growing up around them,” said Horowitz while briefing the State Council of Higher Education for Virginia yesterday on the challenges in Virginia of linking university and industry R&D to stimulate new business formation and create jobs.

Despite strengths such as a highly educated workforce and access to venture capital, Virginia universities and companies have done a poor job of translating R&D into new business and jobs, said Horowitz.

All told universities, corporations and federal labs in Virginia conducted $10.5 billion in research funding in 2015, ranking it 13th highest in the country. But Virginia’s economy is larger than that of most states, so research as a percentage of GDP ranks the state only 21st nationally in R&D intensity. Even more worrisome, Virginia is losing ground. While research funding grew nationally between 2010 and 2015, it shrank in Virginia. Worst hit was “federal intramural” funding (federal labs). University R&D actually grew faster than the national average, but industry R&D declined 3.6% in Virginia while it surged 21% nationally.

“Decline in industry research and development in Virginia [is] not simply a reflection of strong dependency on federal R&D contracts, but weakness in company funding of R&D leading to the commercialization of new products and process,” stated Horowitz’s PowerPoint presentation.

A root problem is the lack of alignment between university strengths and industry strengths, which reflects the comparatively weak ties between Virginia universities and corporations, Horowitz explained. When Virginia universities do invent something that can be commercialized, Virginia companies typically are not the ones to benefit. Of 137 technology licenses issued by Virginia universities in Fiscal 2017, said Horowitz, 108 went to out-of-state companies.

While Horowitz did not specifically address the geographic imbalance between the location of Virginia’s leading research universities and its technology companies, his observations were entirely consistent with the observation on this blog that Virginia’s leading tech clusters are located in Northern Virginia while its leading research universities are located downstate. George Mason University, the sole public research university based in Northern Virginia, only recently passed the $100 million mark in R&D. The state’s R&D powerhouses, Virginia Tech ($504 million in 2015), the University of Virginia ($373 million), and Virginia Commonwealth University ($219 million) are located in Blacksburg/Roanoke, Charlottesville and Richmond respectively. However, it is worth noting that the rise of the promising Center for Personalized Medicine in Fairfax County under the aegis of the Inova health care system is developing institutional ties with the University of Virginia as well as with GMU and other institutions.

The good news from an economic development perspective, said Horowitz is that Virginia’s research universities have narrowed the gap with their national peers in recent years. The bad news is that all that effort is not translating into much economic activity beyond the research itself.

To stimulate local economic growth, says Horowitz, there needs to be a “line of sight,” or alignment between university research strengths and industry expertise. His analysis shows four broad areas where this alignment exists: life sciences; networking, communications, and data analysis; cyber and cyber-physical security; and system of systems engineering solutions.

“You can’t be a winner in every technology area,” says Horowitz. Virginia needs to build on fields in which it enjoys a competitive advantage.

To exploit these advantages, universities and corporations need to bridge the disconnect. Faculty researchers are scientists. While they are expert in the science, they cannot be expected to be experts in potential commercial applications. They need to partner with business. “We need our universities to build relationships with industry,” Horowitz says.

One small step lawmakers have made to bridge the gap is to create the Virginia Research Investment Fund, which dispenses $8 million a year to leverage other research dollars for projects showing a strong potential to create new enterprises and jobs. But the funding is small potatoes compared to the R&D commitment made by leading technology states. Massachusetts is investing $1 billion of public dollars to build its life-sciences sector. Texas has invested multimillions in its innovation ecosystems.

SCHEV board member Tom Slater called Horowitz’s report a “wake up call that’s desperately needed.”

“It’s a call to action,” said Gene Lockhart, another SCHEV board member. “I think there’s a lot of kidding ourselves, a lot of complacency.”

“This kind of effort lifts all boats,” said SCHEV Chair Heywood Fralin. But, he opined, “none of this is free.”

Polar Vortex II Brings Gas Curtailments, Price Spikes

Virginia’s climate has been setting record low temperatures in the past few days, and state newspapers have been full of stories about poor people shivering in the cold, traffic accidents caused by black ice, and the defects of Virginia Department of Transportation snow removal. But I have seen nothing about the impact of the deep freeze on business and industry. That’s not to say that no one has written about it, rather to say that the topic hasn’t surfaced in any of the newspapers and Internet news feeds that I peruse every day.

Here follows the untold story. Or at least part of the untold story. I publish here a communication from Aaron Ruby, spokesman for Dominion Energy and the Atlantic Coast Pipeline, who notes that the bitter cold caused a spike in natural gas prices and curtailment of service to major industrial customers. Bottom line: The disruptive Polar Vortex of 2014 was not a fluke. As the economy grows and natural gas supplies become even more constrained, we can expect more of the same in the future.

I fully acknowledge that Ruby’s remarks represent a corporate point of view and that there may be other ways to spin the economic repercussions of the recent cold wave. But, to be perfectly frank, given my other commitments, I don’t have time to flesh out a fully reported article. Instead, I post Ruby’s remarks with the idea of letting readers respond in the comments.

As our region recovers from the recent cold spell, I wanted to draw your attention to the significant challenges it posed for consumers who depend on natural gas for electricity, home heating and power for their businesses. The extreme cold and spikes in natural gas usage across the Mid-Atlantic over the last two weeks demonstrated in dramatic fashion the real and urgent need for the Atlantic Coast Pipeline.

Severely limited capacity on the pipelines serving Virginia and North Carolina forced some utilities to curtail service to major industrial customers and raised consumer prices to historic highs. The reason is simple: our region’s pipelines are too constrained, and we don’t have enough access to lower-cost supplies from the Appalachian region. In response to urgent requests from utilities, we proposed the Atlantic Coast Pipeline more than three years ago to relieve those constraints and bring these lower-cost supplies to consumers in Virginia and North Carolina. The Atlantic Coast Pipeline would significantly lower the risk of this kind of volatility in the future.

Virginia Natural Gas, which serves homes and businesses in the Hampton Roads region of Virginia, reported service interruptions to 11 major industrial customers over the last two weeks, some lasting for as long as 4 days. Piedmont Natural Gas, which serves homes and businesses in North Carolina, reported that it too interrupted service to several industrial customers. In fact, Piedmont alerted federal regulators this week that it urgently needs new infrastructure by the end of 2019 to serve customers’ growing needs.

Constraints on the Transco pipeline in Virginia and North Carolina also sent natural gas prices soaring from $3 per dekatherm in late December to an all-time record high of $175 at the end of last week. Those higher costs will ultimately be reflected in higher electric and natural gas bills for consumers. Dominion Energy Virginia relied on the Transco pipeline for about 75 percent of its natural gas supply during the cold spell, while public utilities in North Carolina depended on this single pipeline for 100 percent of the state’s supply. Transco is currently the only natural gas transmission pipeline serving all of North Carolina, leaving the state particularly vulnerable to shortages and price volatility.

In contrast, prices in the Appalachian region where the Atlantic Coast Pipeline would originate remained low, trading between $4 and $6 per dekatherm during the cold spell. The problem is we don’t have the pipeline infrastructure to deliver these lower-cost supplies to consumers in Virginia and North Carolina. While we’re still calculating the impact, having access to a lower-cost source would have saved consumers in our region hundreds of millions of dollars in fuel costs over just the last couple weeks.

We’ve said for a long time that the pipelines serving our region are stretched too thin and cannot handle the coldest winter days. Our economy isn’t going to grow if we have to curtail our industries whenever it gets cold, or if consumer prices skyrocket when our pipelines are overstrained.

New infrastructure is the only way to solve these challenges. The Atlantic Coast Pipeline will open up access to lower-cost supplies in Virginia and North Carolina – access we currently do not have – and it will make service more reliable for consumers, especially when they need it the most on the coldest winter days.

A Fresh Take on Workforce Development

Source: “Positioning the Commonwealth for Healthy Economic Growth”

Once a national leader in economic growth and surveys of best states to do business, Virginia has lagged most other states in economic performance in recent years, Stephen Moret, president of the Virginia Department of Economic Development Partnership (VEDP) told the State Council of Higher Education for Virginia (SCHEV) at its monthly board meeting today. Last year Virginia ranked 36th in five-year job growth, 42nd in Gross Domestic Product five-year growth, and 46th in median-income five-year growth. Moreover, the state continued to lose population through out-migration for the fifth consecutive year.

Moret would like to restore the state to the ranks of the five to ten fastest-growing states in the country — and tweaking workforce development is a centerpiece of his strategy.

While Virginia has many economic-development assets, Moret said, the state and its many regions have considerable work to do. His proposals cover a broad spectrum — developing more project-ready industrial sites, deploying more broadband in rural areas, restarting the state’s marketing program to build brand awareness among business executives and site-selection consultants. but the No. 1 priority in restoring Virginia’s economic competitiveness is strengthening the state’s human-capital development engine.

“The biggest driver of growth is human capital development,” Moret said. 

While the VEDP president has addressed workforce development issues at SCHEV before, after a year on the job he has visited every corner of the state and he is far advanced in developing a strategic plan for Virginia’s economic development. His report to the Council detailed numerous numerous recommendations for fine-tuning the human-capital growth engine.

The most concrete proposal is to create a turnkey workforce program aimed at giving employers get a fast start in finding, recruiting, screening, hiring and training workers for new projects. Moret had developed a highly regarded turnkey program for the state of Louisiana, and he was hired for the VEDP job partly on the strength of that accomplishment.

But Moret, who also serves on the SCHEV board, proffered several suggestions how colleges and universities can improve employment outcomes and drive economic growth:

  • Ensure that college graduates consistently attain college-level skills — critical thinking, writing — during their undergraduate studies.
  • Invest in career services to help undergraduates secure professional work experiences such as internships prior to graduation.
  • Continue to support the University-Based Economic Development (UBED) group, which provides businesses a point of contact to access public college/university resources.
  • Survey alumni to better understand what is driving out-migration of Virginia’s college graduates.
  • Build a stronger a stronger understanding of the underemployment problem among Virginia’s college graduates.
  • Integrate computer and data sciences across the undergraduate curriculum.

Moret highlighted a seeming paradox in Virginia’s workforce: There is a crushing shortage of certain categories of technology workers, yet thousands of Virginia college graduates are mal-employed, that is, working at jobs that don’t require college degrees.

While Virginia has one of the best educated workforces in the country, it can always improve. “We envision a Virginia that’s not just one of the premier states [for economic development,” he said, “but one that’s number one.”

Governor Recommends Modest Spending Hikes for Higher Ed

SCHEV Director Peter Blake (left) and DPT associate director Michael Maul discuss the governor’s budget proposals for higher ed.

Virginia’s colleges and universities aren’t getting all that SCHEV asked for in the FY 2019-20 budget, but the outgoing McAuliffe administration proposes giving higher-ed much of what it wants.

If’ you’d asked Michael Maul last October what was in store for Virginia’s higher-ed budget in the upcoming biennium, he would have said the question was how big the cuts would be. The state would have to make up $300 million in one-time funding from the last biennial budget achieved by tapping the Rainy Day fund. The state also was scheduled to update its Standards of Quality (SOQs), minimum inputs into the state’s public K-12 schools, which he expected to require significantly more state spending. As always, Medicaid costs were crowding out spending for everything else in the General Fund — and that wasn’t including an expansion of the program backed by the new governor.

As a percentage of its budget, Virginia has one of the smallest fund reserves in the country, said Maul, associate director of the Virginia Department of Planning and Budget in a report to the State Council of Higher Education for Virginia today. After the bond-rating agency S&P rapped Virginia’s knuckles by giving a “negative” outlook on the Commonwealth’s AAA bond rating, budget planners were under pressure  to start rebuilding the rainy-day fund instead of drawing it down — a swing of hundreds of millions of dollars. The prognosis for higher-ed funding look grim.

But by mid-November the picture had changed, Maul told the Council. When the SOQ data came in, the state’s obligation for extra K-12 funding wasn’t as large as expected. Medicaid spending increases were more subdued than anticipated. And a faster growing economy expanded revenue projections for the next two-year budget. Now, said Maul, it looks like the proposed budget for FY 2019-2020 will provide Virginia’s colleges and universities much of what SCHEV had recommended — not everything it asked for, but a lot.

Among the highlights of the proposed two-year budget from the governor’s office, which is subject to General Assembly approval:

  • $45.5 million in additional financial aid to in-state undergraduate students over the next two years.
  • $21.6 million in “base adequacy funding,” the higher-ed equivalent to K-12 standards of quality, to be distributed between Old Dominion University, Eastern Virginia Medical School, Virginia Military Institute, and Richard Bland College.
  • $17 million for a 2% salary increase in FY 2020 for state employees and faculty.
  • $14 million to George Mason University to help cover enrollment growth.
  • Restoration of $6.7 million in interest earnings and $6.3 million in credit-card rebates.
  • $4 million extra for the Virginia Research Investment Fund .
  • $3.8 million for the University of Virginia’s College at Wise.
  • $1.3 million for Norfolk State University cyber-security/cyber-psychology and eco-friendly bio-fuels programs.
  • Numerous miscellaneous adjustments less than $1 million.

The outgoing McAuliffe administration also is recommending that Virginia colleges and universities be allowed to set up institutional reserves funded by unspent balances from the previous year. Educational institutions have the theoretical ability to do so already, but legislation will provide assurances that accumulated reserves will not be snatched away by a penny-pinching General Assembly. However, said Maul, the reserves would be capped at 3% to discourage institutions from raising tuition for the purpose of building up the reserves.

The budget includes less-than-normal sums for capital spending projects — $50 million for equipment and $282 million for renovations, expansions and new buildings. The state is bumping up against the limits of how much bond debt it can support without jeopardizing its AAA bond rating, Maul explained.

In response to a question why the state can’t guarantee more stable funding for higher education, Maul made some observations not normally heard at a SCHEV meeting.

“There’s nothing in the world that’s guaranteed,” he said. He deemed it “odd” that people would think that higher-ed was uniquely worthy of protection from Virginia’s budgetary vicissitudes. Other agencies have seen their budgets slashed, and they have refocused and redefined their missions. Higher-ed has not had to make the same kind of hard choices, he said, adding that increases in higher-ed costs have consistently outpaced the rate of inflation.

Maul cited the innovative Math Emporium, a program of computer-assisted math instruction at Virginia Tech, that is widely (but not universally) considered to be successful at reducing costs without hurting performance. “Why don’t other math departments try it?” he asked. The higher-ed sector could adopt this and many innovations to cut costs but have not done so.

The proposed 3% reserve will give institutions a significant tool to offset future budget cuts. Such reserves, said Maul, would not have compensated for all the budget cuts imposed by the state, but they would have softened them by more than half.

Your Tax Dollars at Work: VDOT Snow Removal Edition

VDOT snow removal. Photo credit: Reston Now.

The Virginia Department of Transportation (VDOT) has largely cleaned up its act from the early 2000s when construction projects routinely ran behind schedule and over budget. But this story from Inside NoVA makes one wonder if its internal controls are still up to snuff.

Five people, including two state transportation officials, pleaded guilty this week to a bribery scheme involving more than $10.3 million in snow removal contracts, according to the U.S. Attorney’s Office for the Eastern District of Virginia. …

Over five years, Kenneth Duane Adams, 42, of Fairfax, and Anthony Willie, 55, of Culpeper, made agreements with several owners and operators of trucking and snow removal companies seeking work during snow storms, [U.S. Attorney’s Office Joshua] Stueve said, including Rolando Pineda Moran, 46, of Alexandria, and John Williamson, 51, of Springfield.

Beginning in the late 2012 and continuing through the 2016‑2017 snow season, Willie and Adams would often meet the snow removal contractors at local restaurants, grocery stores and parking lots in Burke and Fairfax, collecting approximately $440,000 in cash bribes, Stueve said.

Adams also pleaded guilty to possession with intent to distribute cocaine after law enforcement recovered approximately 129 grams of cocaine and related drug paraphernalia at Adams’ residence during the execution of a search warrant. Stueve said Adams also admitted to previously distributing cocaine to others, including several of his colleagues at VDOT, and to obtaining cocaine from a relative of one of his VDOT co-workers.

It’s not clear from the story how the authorities were tipped off to the bribes and drug distribution. If VDOT’s internal auditors discovered it, well, we can infer that its internal controls are working, even if a bit belatedly. If local cops or state police uncovered the wrongdoing, then VDOT needs to take a closer look at its controls. Time for random drug tests, perhaps?

(Hat tip: Larry Gross)

The Political Economy of the Metro Bailout

Funding for Washington’s Metro commuter rail system is shaping up as a bruiser of a fight in the 2018 General Assembly session.

Metro’s management says it needs at least $500 million yearly in government support — $150 million from Virginia — to meet pressing maintenance needs. Without the money, Metro will continue its slow-motion death spiral of cycle of deteriorating safety, schedule delays, eroding ridership, and declining fare revenue. Without the money, Metro’s General Manager has said he will need to cut service in July 1 this year.

While Northern Virginia legislators are eager to patch up the ailing transit provider, which moves hundreds of thousands of commuters, downstate lawmakers won’t be happy about any solution that reduces funding for downstate projects. And Republicans won’t like any remedy that perpetuates the status quo of a broken, dysfunctional rail system hampered by a featherbedding union contract.

In his proposed biennial budget for FY 2019-2020, Governor Terry McAuliffe asked for $150 million in dedicated funding for Metro; $84 million would come from Northern Virginia regional transportation funds, while $65 million would come from new taxes on real estate sales, hotel stays, and wholesale gasoline. Providing the money would be contingent upon Maryland and Washington, D.C., funding their share, and a streamlining of Metro’s governing board from 16 members to five.

“The Metro system is a lifeline for the Northern Virginia economy, and it remains critical to our economic competitiveness,” McAuliffe said. “But we all know that system is just plain broken. And it represents a significant threat to our economy if we don’t fix it, and quickly.”

Notably absent from McAuliffe’s list of requirements is any reform of the Metro’s labor contract. That shouldn’t come as a surprise given the Democratic Party’s pro-union orientation generally and its close ties to the Amalgamated Transit Union (ATU) in particular.

According to the Virginia Public Access Project, the Alexandria office of the ATU has donated $75,300 to Virginia political campaigns since 2007 — all but $2,000 to Democratic campaigns and funds. The Maryland office of the ATU has donated $44,000, all to Democrats. And Local 689 representing Metro transit workers, has donated $132,269 — all but $250 to Democrats. From all sources, the union contributed $30,000 to the Northam for Governor campaign.

Republicans won’t be happy about funneling $150 million a year more into an organization unwilling to extract concessions from a labor union that in turn funnels money into Democratic Party coffers. Crass political considerations aside, the GOP also has to be concerned that the alliance between Democrats and labor unions is the essence of the Blue State governance model that cements Democratic Party primacy in states like Illinois and New Jersey while pushing them to the brink of fiscal insolvency.

McAuliffe is shrewd enough not to ask downstate Virginians to share the hefty burden of supporting Metro. Virginia’s dispensation of mass transit funds already favors Northern Virginia by lopsided margins. If Metro has problems, that’s because short-term political considerations over the decades have driven Metro to its perilous predicament. Motivated by social justice concerns, the board has refused to raise fares sufficient to meet the organization’s needs. It has allowed the maintenance backlog to build to billions of dollars, and unfunded employee pension obligations to accumulate billions more. All the while, the board has assented to labor contracts that have crimped productivity and inflated costs. Downstate Virginians would be infuriated by any proposal requiring them to help pay the bill for such a dereliction of management.

The question is how Northern Virginia legislators will receive McAuliffe’s proposal. Only a fraction of Northern Virginia commuters ride Metro rail and buses — most commute by car. Tens of thousands of motorists who use the Dulles Toll Road pay additional tolls to help fund construction of the Silver Line to Washington Dulles International Airport — indeed, they pay more to subsidize the Silver Line than Silver Line passengers pay in fares.

McAuliffe shrewdly rejected the option of a new regional sales tax, a move that surely would have infuriated non-Metro-riding voters. His ploy is a classic one of imposing a series of opaque indirect taxes — levies on real estate transactions, hotel stays, and whole gasoline — that voters will not readily connect with the Metro. But dipping into Northern Virginia’s regional transportation fund will deny money for other projects. Metro could yet trigger an electoral revolt. But most of NoVa’s legislators are Democrats now, they are philosophically inclined to support mass transit, and they are likely to fall in line behind a Democratic governor.

About Time: the Assembly to Livestream Hearings

The Pocahontas Building, new housing in an old building for state legislators while the General Assembly Building undergoes renovations. Photo credit: Richmond Times-Dispatch

Long overdue but welcome nonetheless: The House of Delegates and the State Senate will livestream video of committee hearings in the 2018 session of the General Assembly. Reports the Richmond Times-Dispatch:

On the House side, staff operating cameras will work in two committee rooms and the speaker’s conference room in the Pocahontas Building and two committee rooms in the Capitol to record all full committee hearings. The cost for equipment and staff to start the program in the House was $511,000. …

For the Senate, committee hearings will be broadcast and archived from the three rooms where full committees will meet — two in the Pocahontas Building and one in the Capitol. The Senate is using automated video equipment and the cost to start the program in that chamber is about $225,000….

The General Assembly will not broadcast subcommittee hearings. However, ProgressVA, a liberal advocacy group that paid people to make video of committee hearings last year, has indicated that it will broadcast subcommittee hearings.

The long overdue measure, which lags that of many other states, came at the instigation of the bipartisan Transparency Caucus created in 2016 by Del. Mark H. Levine, D-Alexandria, and Sen. Amanda F. Chase, R-Chesterfield.

The Cost of Cold

Vermont on Friday. Photo credit: Washington Post

When climate gurus calculate the net cost of a warmer climate, do they assign any benefit to the reduction in extreme cold? From a Washington Post article about how Vermonters are dealing with temperatures 25 to 30 degrees below zero:

This stretch of extreme cold has taken a toll on much of the Eastern United States, bursting water mains, fracturing pipes, rendering car batteries useless. The frigid weather has turned tragic with news reports of weather-related deaths from South Carolina to North Dakota, in a storm that led to rare snow in Florida and record coastal flooding in New England. … The cold has been especially hard on people like [Todd] Alexander, who have fixed incomes or live paycheck to paycheck and cannot afford higher than normal utility bills. ..

Even with low-income heating assistance, weather like the stretch residents are enduring now has the capacity to throw the working poor over the financial edge. Heat must constantly be running to survive. Furnaces can break down. Fuel will run out more quickly than anticipated. The cold costs money.

Here in the Richmond area, I’ve heard the same quip a half-dozen times this week: Where is global warming when you really need it?

Update: Coal exports through Virginia’s ports are slowing because coal cars are freezing and need to be run through thaw sheds, reports the Virginian-Pilot.