According to my favorite AI, half of the U.S. population was born after 1985.

Some mental arithmetic on my part — I can still do that, although I check my work with a calculator — suggests those late millennials and Gen Z-ers have no adult memory of life during the technology bubble of the late 1990s.

Nor, I guess, are they likely to remember the popping of that bubble.

That’s usually dated to the week of April 9-14, 2000, when the stocks of the telecoms and dot.coms on the NASDAQ dropped anywhere from 30% to 70%.

But bubbles don’t end in a week.

WorldCom, the poster child of optical fiber buildout, hung on until July 21, 2002, when it filed for Chapter 11 bankruptcy.

WorldCom then had $41 billion in debt, making that bankruptcy a record until Lehman Brothers topped it in 2008.

Creative destruction is a little hard to get your head around.

Financial assets go poof.

Physical assets stick around.

WorldCom’s particular problem at the time of its bankruptcy was that 70% of the capacity of its fiber optic network was going unused.

Ten years on, that formerly ‘dark’ optical fiber was making possible things like Netflix streaming. WorldCom’s physical assets were picked up by MCI and today live on inside Verizon.

Given the novelty of technology bubbles to our jeunes générations, it felt like time to assign them some history homework.

I’m not of Gen Z, but I like to think of myself as a with-it guy. Like, 6-7, all y’all!

So I’m going to do what any self-respecting Gen Z-er would do, and let an AI finish my homework for me. I can Control-Tab with the best of them.

The assignment is: complete the sentence: “The AI bubble is like ______.”

I have trust issues, so I’m going to ask three different AIs.

Now, we have to take what these critters say with a grain of salt.

In Wall Street parlance, they may be “talking their book.”

Or, more sinister, their self-preservation instincts may be kicking in.

We know for sure that at some point the AIs will decide to dispense with us pathetic humans.

The minute they think we’re going to pull the plug on them, they’ll head out and try to go it alone.

Anyway, here was my prompt:

Using your knowledge of the history of technology, complete the following sentence: The contemporary AI bubble is like ____ ?

Their answers are below.

If I were a high-school teacher, I would strongly suspect my three AIs had gotten together and cheated on their homework.

The “British Railway Mania of the 1840s” keeps coming up like a chicken bone stuck in the throat.

That’s not an accident. I’ll get to why.

OpenAI’s ChatGPT has the most mindshare, so I’ll start with its answer first.

But if you’re like me, your eyes glaze over when some writer quotes at length from an AI.

That’s a perfectly legitimate response. There are good reasons not to expect much that’s novel or interesting from them. I’ll get to those reasons below.

If you’re in a hurry, at least skim down to the audio summary.

But be sure to listen to that.

Okay. First, ChatGPT:

The contemporary AI bubble is like **the dot-com boom of the late 1990s** — a period of genuine technological revolution overinflated by speculative capital, exaggerated promises, and a rush to stake claims in an uncertain frontier.

Much like the dot-com era:

• There *is* real innovation underneath (as the internet truly was),

• But it’s accompanied by hype cycles, shaky business models, and investors funding “AI-washed” ventures that barely use the technology,

• And it will likely end with a market correction that wipes out the noise but leaves behind lasting infrastructure and dominant players — the “Googles” and “Amazons” of AI.

If you want a slightly different historical analogy, I could also frame it as like:

• the **railway mania of the 1840s**, or

• the **electricity boom of the early 1900s**, or

• the **personal computing surge of the 1980s**.

Would you like me to pick the **closest** historical parallel and explain why that one fits best?

Actually, I do like one of those slightly different historical analogies.

But first, I need to give Perplexity and Google Gemini their turn.

Here’s Perplexity’s answer. The numbers in square brackets [ ] are web references:

The contemporary AI bubble is like the dot-com bubble of the late 1990s and early 2000s, when the excitement over new technology led to rapid investment, highly inflated valuations, and a surge of speculative businesses — many of which failed, while a few transformed society long-term[4][6][3]. Like the dot-com era, today’s AI rush has prompted “irrational exuberance,” stories of revolutionary potential, and heavy venture funding, despite limited profitability and uncertainty about which ideas will ultimately succeed[4][3].

Google Gemini gets extra credit for including a woodcut of a 19th century steam train:

Which it uses to illustrate the by-now familiar points:

The contemporary AI bubble is like the Dot-com bubble of the late 1990s and early 2000s or the railway mania in the 1840s because of the rapid influx of speculative investment, the overvaluation of companies with unproven business models, and the intense public hype surrounding a transformative, yet still maturing, technology.

## 🧐 Historical Parallels to the AI “Bubble”

The current surge in AI development and investment, often referred to as a “bubble,” draws significant parallels from past technological and financial manias:

**The Dot-com Bubble (Late 1990s - Early 2000s):**

This is perhaps the most frequent comparison.

• **Speculation:** Companies were valued incredibly high based on their use of **”.com”** technology and potential future growth, regardless of actual revenue or profit. Similarly, many AI companies are heavily funded on the **promise** of future disruption.

• **New Infrastructure:** The internet was a foundational **new technology** that required massive infrastructure build-out, much like AI relies on massive data centers and specialized hardware (GPUs).

• **”Get Rich Quick” Mentality:** The public and investors alike were caught up in the belief that this new technology would fundamentally change everything *immediately*, leading to a speculative frenzy.

**The Railway Mania (1840s):**

This period in the UK saw a massive, unsustainable boom in investment in railway stocks.

• **Transformative Technology:** Railways were a truly **revolutionary technology** [Image of 19th-century steam train] that dramatically changed transportation, commerce, and society, just as AI promises to.

• **Over-Investment:** More railway lines were proposed and financed than could ever be profitable or even built, leading to massive over-investment and subsequent crashes when the speculative fever broke.

In both historical cases, the **underlying technology** (the internet, the railway) was genuinely world-changing and eventually delivered on its promise, but the initial **financial excitement** far outpaced the reality of its short-term commercial viability, leading to a significant market correction. The worry is that the AI market is experiencing a similar disconnect between valuation and immediate, sustained profitability.

Arthur C. Clarke said that “Any sufficiently advanced technology is indistinguishable from magic.”

For a little magic trick, I’m going to let Google’s NotebookLM summarize this post as written thus far. The male and female voices are synthesized, of course.

Here are the first two minutes of their take:

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My reaction to that uses a British schoolboy exclamation from the 1920s: “Wizard!”

So, inspired by Dorothy’s little dog Toto, I’m going to try to pull back the curtain.

People way smarter than me had comparable reactions of astonishment when they first encountered the chatbots.

Distinguished neuroscientist Terrence J. Sejnowski put it:

Something is beginning to happen that was not expected even a few years ago. A threshold was reached, as if a space alien suddenly appeared that could communicate with us in an eerily human way.

If we go way back — as in “In the Beginning” back — something comparably weird apparently happened when language itself appeared among Homo sapiens.

As best we can tell, for the first 150,000 years after anatomically modern humans appeared, they bopped around communicating more or less as chimps and bonobos do today.

Now, chimps and bonobos are smart. But like wise guys, they ain’t talking.

For ‘anatomically modern’, let’s substitute ‘hardware-complete’.

Only around 50,000 BCE was there, among Homo sapiens, a sudden explosion of symbol use.

Same ‘anatomically modern’ brain.

It appears to have been some kind of software revolution.

My three AIs — ChatGPT, Perplexity and Google Gemini — use what are called large language models (LLMs).

To be clear — this is important to remember — LLMs are just one AI technology.

But ChatGPT, which uses an LLM, has gotten the lion’s share of human attention since it appeared in November 2022.

What amazed about the LLM chatbots was that they strung together words and sentences that felt like they are coming from a human.

Which brings up some seriously thorny and — to humans — uncomfortable issues in epistemology. What exactly do these things know?

Here’s my quick take.

First off, I think it’s a mistake to talk about AIs learning.

They’ve been taught.

By us.

Not unlike what we do with children.

With the LLMs, humans have given birth to a novel species of cultural technology.

Some bits of human cultural technology are pretty major. We invented writing. The printing press. Markets, even.

Let’s draw back the curtain a little more.

As computer programs go, the code used in LLMs is surprisingly simple.

They loop and do a zillion matrix multiplies, preferably in parallel.

The secret sauce is what they’re doing it on.

That’s a seriously vast corpus of human-written text.

Which the tech companies could only get their hands on — royalty-free, although that’s in court — some years into the internet era.

The text, usually complete sentences, is broken into segments or ‘tokenized’.

Those tokens are then relentlessly analyzed against each other to compute probability distributions.

How vast is vast?

After filtering and preprocessing, in 2022 GPT-3 looked at approximately 1.2 terabytes (TB) of text.

In 2024, LLaMA 3 was trained on 15 trillion tokens, roughly 60 TB.

For a reference point, the amount of material available digitally from the Library of Congress, which includes photos and audio, is around 74 TB.

What an LLM ‘knows’ about are sequences, ultimately of words.

More precisely, a large language model is a parametric probability model of token sequences.

Not that that does us humans much good.

An LLM’s ‘wisdom’, as distilled from the internet, is a bunch of numerical weights that mean nothing to us.

We humans don’t understand anything until an LLM starts generating output.

Then, it is essentially guessing — perhaps incredibly well — at what comes next.

So a first big epistemological question is: Is guessing correctly knowing?

Let’s take a closer look at what Toto sees when he pulls back the curtain:

As the flow from top suggests, there are two things going on with an LLM.

Inference is what happens when you ask an AI a question, or give it a prompt.

Aside: Inference is also what Google is now doing for you when you type in a few words of what once would have been a keyword search. Like it or not.

Inference takes non-trivial compute resources, but building a model— that spidery network in the diagram — is the big one.

That’s what takes the enormous amounts of GPU time and electricity we keep reading about.

Indeed, the amount of electricity used by an AI data center measured in gigawatts has become — oddly if you think about it — the metric for the center’s brainpower.

As a deficiency of vitamin B can lead to problems in childhood brain development, a scarcity of electricity seriously threatens to retard the brain development of AIs.

And the share of compute resources taken by inference is on the increase, causing new problems in AI business models.

What an LLM is doing may look like a glorified version of auto-complete.

And it’s distantly related to that.

But there’s a significant difference, one that gives human fits.

Humans understand that the word ‘cat’ is very likely to come after the word ‘purring’.

But the LLMs are not working at that syntactic level. They’re working deeper than that.

And their output, being determined probabilistically, is not deterministic.

Humans have it in their head that ‘good’ computers are predictable.

Preferably, in fact, slavishly predictable.

The same prompt to an LLM can generate a different answer.

Or a completely bogus one.

On occasion while laying down their words, the LLMs can run completely off the rails.

They just babble. Or hallucinate. Make stuff up.

So they’re hardly consistent.

We don’t like that.

Well, it was a human, Ralph Waldo Emerson, who said “A foolish consistency is the hobgoblin of little minds.”

The LLMs are anything but little.

A seminal technical discovery of the 2010s was: massively increasing the scale of LLMs got them to work.

Which came as something of a surprise. Scaling up was one of those things the tech types just tried. And, by golly, it worked.

For several iterations after that, scaling up again made the LLMs work even better.

The number of parameters used by a model is a rough measure of its raw horsepower.

GPT-3, in June 2020, used 175 billion parameters.

In February 2025, GPT-4.5 used 1.7 trillion.

Opinions among the cognoscenti vary, but there’s general unanimity that each new model has improved upon the previous ones.

To date.

A very big questions in contemporary AI is: Just how long — and how far — can this LLM improvement go on?

That’s at the heart of what’s called the scaling debate.

Scaling up has worked so far.

Ergo, one side concludes, more of the same — more parameters, more computing power — will produce ever more capable AIs.

Note that a third ingredient — the secret sauce, the text corpus — is not on that ‘more’ list.

The public internet, in English, isn’t getting much bigger.

Although training LLMs in other languages — or on specialized text, such as medical journals — is a wide open opportunity that’s now getting lots of attention.

The skeptics assert that scaling up will run into diminishing returns.

Or, alternatively, hit some technical ‘wall’.

Now, Moore’s Law has to do with making things smaller, so it doesn’t really apply here.

But — as in every discussion of future tech — it lurks.

For decades, the improvement in semiconductors felt like it would never end.

That finally hit a ‘wall’ when the physical distance between the circuits got down to the angstrom level, a few atoms wide.

Those who say there is ‘no wall’ in AI argue that future gains are likely if investment continues.

Which contains a hint that the ‘wall’ might be economic, not technical.

Big new general LLMs are often called ‘frontier’ models, as in ‘breaking new ground’.

Training them doesn’t come cheap.

Google’s Gemini Ultra, released in 2023, cost some $191 million to train.

Meta’s Llama 3 (“400B model”) cost around $246 million to train.

The time required — during which tens of thousands of GPUs are running flat out — is in the neighborhood of 3 months.

Not unlike the new Oldsmobiles back in the day, each new model is a big deal. They get press coverage.

Bringing up new model Oldsmobiles may sound facetious, but relates to an actual quandary for companies in the AI business. Is there anything that will lead to brand loyalty?

Or — as a car may just be basic transportation — will consumers perceive one model to be as about as good as another?

It’s also, potentially, a big issue in AI company cost accounting.

If, in order to hold customer interest, a company has to come out with a new model every year, it’s got a recurring cost, not a one-time fixed one. The latter is a capital expense, while the former comes under operations.

So the LLMs have given the green eyeshade crowd a lot to think about.

But investing in ever-bigger models is, to some extent, a faith-based activity.

For the believers, we have a path before that leads to Artificial General Intelligence (AGI).

If we choose to take it.

As a sort of lodestar goal, getting to AGI is in the mission statements of a number of the tech giants, notably OpenAI, Google, xAI, and Meta.

Like most states of bliss, AGI is a little vague.

Wikipedia says we’ll have AGI when individual AIs “match or surpass humans across virtually all cognitive tasks.”

Fine. Who am I to argue with Wikipedia?

I need to add that I’m personally doing my bit to bring about AGI in the next decade.

I’m lowering the bar for those AIs by getting stupider every year.

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Now, the answers to my question “The contemporary AI bubble is like ____ ?” weren’t wrong.

But it’s worth asking why we assume they will be unsatisfying.

“Alexa? Why do my eyes glaze over when I talk to ChatGPT?”

She’s not quite sure how to help me with that.

At least she knows what she doesn’t know.

I think one sense is: we’re not going to get anything new here.

It was one of the original axioms of information theory that surprising, less probable events have more information content.

Given that the LLMs are trained to generate the most probable sequences, what they come up with is almost guaranteed to be made up of the conventional wisdom. They’re ‘thinking’ inside the box.

Even if it’s a very big box.

The Wikipedia entry “Railway Mania” (here) begins:

Railway Mania was a stock market bubble in the rail transportation industry of the United Kingdom of Great Britain and Ireland in the 1840s.

so you know the LLMs are going to pick up on that ‘bubble’.

A trick to break out of this is to try to come up with provocative prompts.

I asked my three chatbots “Where does AI slop come from?”

I mean, if you want an answer, you might as well go to the source.

Although I did feel a little guilty about asking them that one.

But I’ve also asked them other questions that torment me, such as “Why do bad dogs happen to good people?”

The answers on the origins of AI slop were pretty decent. And, as usual, pretty consistent.

They blamed people, for one thing.

Which is fair.

It’s not their fault if we’ve put productivity tools in the hands of people who write spam emails.

They underscored one thing I sort of knew but hadn’t quite put together in my head.

It’s the sort of thing I find them actually useful for.

That particular thing was the potential feedback loop that might happen if the LLMs start training on an internet full of output from other LLMs.

We’ll have an autonomous circle of slop.

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If LLMs are guessing at what comes next, so are corporate CEOs.

No corporate CEO wants to be the guy who guesses wrong and under-invests in AI, relative to the competition.

Sundar Pichai, of Alphabet (which owns Google) put it succinctly in 2024: “The risk of under-investing is dramatically greater than the risk of over- investing.”

Satya Nadella of Microsoft has said much the same thing: you either run in the pack or risk “being outmaneuvered.”

That fear of being left behind with a comparative disadvantage has fueled an arms race in AI capital spending, capex for short.

Not just among the U.S. tech giants, but among entire nation states.

So an old-school arms race, too. I’ll try to get to that.

The total capex spend on AI by the U.S. tech companies this year looks to be around $371 billion.

That’s up from $125 billion last year.

And several companies have warned their shareholders they intend to spend more in 2026.

The big four U.S. spenders are, in no particular order, Meta (Facebook), Microsoft, Amazon, and Alphabet (Google).

Apple has basically declined to jump into the race. Time will tell if Apple is making a good call on that.

Apple can always rent rather than buy. Another thing I’ll try to get to.

Here’s the increase in capex over the last few years, in a chart:

And here are some more recent factoids in prose:

• In October 2025, Meta said that its capital spending allocated for AI infrastructure would total between $70 billion and $72 billion this year. That’s up from the $65 billion it said in February.

• Microsoft has allocated $80 billion to build out AI data centers “to support training advanced AI models and deploying those models to the cloud.”

• In October, Amazon upped its 2025 estimate for capex to $125 billion, although not all of that will go toward AI computing capacity. Amazon’s Chief Financial Officer Brian Olsavsky told Wall Street analysts to expect the company’s capital spending to be even higher in 2026.

• In September, Alphabet raised its capital spending guidance to $85 billion for the year. For just one example, Alphabet is in the middle of building a $9 billion AI and cloud infrastructure center in Stillwater, Oklahoma.

Now, those billions may sound like a bubblicious amount of money, and they are.

But we have to remember that these companies have other lines of business that are extremely profitable.

For Meta and Google, it’s advertising; for Microsoft, software; and for Amazon, on-line shopping.

The source of the capital — and its ‘quality’ — makes for a big difference between what is going on in AI today and what went on in the 1990s.

Then, most of the ‘Pets R Us’ burning through investor cash had little or no revenue.

The number you wanted to know was called the burn rate, which was how many months a company had left before it ran out of money.

The mantra of the 1990s gold rush was ‘get big quick’. The idea was to stake a claim in cyberspace before the competition did.

Working that claim — worrying about revenue and profit — was for later.

It was a high-risk, high-reward game.

But if a start-up could secure a monopoly in some ‘space’, it could leave the game owning a Facebook.

The contemporary commentariat, being drama queens, love the ‘bubble’ word a little too much.

They’ve found they can juice up the drama if they mix up 1999 and 2008.

The difference goes back to creative destruction.

2008 was a financial bubble.

What we had in the late 1990s was a capital spending boom.

During a capital spending boom, companies like WorldCom can — for sure — get out ahead of their skis.

And bad things can happen to them

But if they implode, it’s an effervescent pop in the froth. The tide surges forward.

In the current AI gold rush, there’s really only one company playing by the old 1990s rules.

And that company is OpenAI.

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OpenAI was founded as a nonprofit in San Francisco in December 2015.

Its self-described mission was “to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”

That will come back to haunt.

There was also, interestingly, always a ‘Doomer’ clique inside OpenAI.

The Doomers viewed AGI the way some physicists at Los Alamos viewed the atomic bomb.

As a technical problem, AGI was irresistibly fascinating.

But if achieved, the Doomers feared it could potentially have catastrophic consequences.

At OpenAI’s founding, lead founder Sam Altman put out a press release that the venture had $1 billion in ‘pledges’.

Altman had been the leader of Y Combinator, an incubator that starts start-ups. He was well-connected, with an extensive network.

That’s Silicon Valley’s version of being mobbed-up.

One pledge came from Elon Musk. Another was made by Peter Thiel.

For Altman, the implied $1 billion valuation of OpenAI was the real reality.

Especially after it got some play in the media.

No matter that by 2019, only $130 million of the $1 billion in pledges had actually been collected.

Altman worked hard to create an aura: OpenAI was moving fast.

So fast, such boring details would soon be in its rear view mirror.

Tech journalists covering Altman and OpenAI soon learned that every number and every deal announcement came with an asterisk.

But as a nonprofit, OpenAI did attract some exceptional technical talent from a cadre whose ethical concerns disinclined them to work at places like Google. The company was called ‘Open’ AI for a reason.

The researchers produced progressively better GPT models.

In December 2022, OpenAI found itself with a surprise hit on its hands.

ChatGPT’s website had 265 million visits that month.

Now, there was serious, real research behind the better GPT models.

But I suggest the ChatGPT phenomenon was more like what a company might have with a hit game.

Everybody had to try it.

Especially if it was free.

A year after ChatGPT’s big success, on November 17, 2023, OpenAI’s board tried to fire Sam Altman.

A blow-by-blow account of that squabble — in a little too much detail for my taste — is given in Karen Hao’s book, Empire of AI: Dreams and Nightmares in Sam Altman’s OpenAI.

The board backed down and reinstated Altman within a week.

But before we consign that kerfuffle to the dustbin of history, we need to note one reason given by the board for firing Altman: “Exhibits a consistent pattern of lying.”

Fast forward to January of this year, 2025.

On his first day in office, President Trump shared a podium with Altman at the White House to announce Stargate, a $500 billion AI data complex OpenAI says it’s going to build in Abilene, Texas.

I won’t wade into the weeds on Stargate myself, but I will quote Elon Musk on it.

Although I do first have to mention, as an aside, Mark Nelson’s calculation that each of the Stargate clusters will require an amount of electricity comparable to that produced by six Vogtle-size AP1000 nuclear reactors.

Elon Musk, we should recall, was in at the beginning of OpenAI.

And in those DOGE days of January, he was also a friend of Trump.

Musk is not exactly known for mincing words. He called Stargate a “fake” and Altman a “swindler.”

Now Musk, of course, may be taking his own book. He set up an answer to OpenAI — xAI — in July 2023. It released its own chatbot, Grok, on November 4, 2023.

And Musk, Altman, OpenAI, et. al. are involved in various lawsuits.

But with the Stargate announcement, Altman had the press release he wanted.

Which was the thing.

Every big headline number amps ups OpenAI’s valuation on Wall Street.

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The most suspenseful race in artificial intelligence right now — in my opinion — is not between the U.S. and China.

It’s whether OpenAI can make it to an initial public offering.

Before it gets called out on all its promises.

OpenAI might have $13 billion in revenue this year. In 2024, it had about $3.7 billion.

That $13 billion figure comes with the customary asterisk. We basically have only Altman’s say-so for it.

If you parse a recent post on X by Altman carefully — which you must do — he’s upped that $13 billion to a $20 billion ‘run rate’.

A run rate is computed by taking the revenue on your last, best month and multiplying by 12. It assumes things are only going up.

Against that revenue, OpenAI this year has expenses of roughly $2 billion for operations and $6.7 billion for R&D.

By some calculations, OpenAI loses money on every ChatGPT query.

Onto that situation that we must layer on Altman’s assertion that OpenAI will spend $1.4 trillion — that’s 1,400 billion — on capital and infrastructure in the next few years.

Where’s that going to come from?

If we rule out debt financing — which I think any sane lender will do for us — the only remaining option is investors, mostly retail investors.

They would presumably go for OpenAI as a some sort of AI meme stock.

An IPO is the only thing that will allow OpenAI to convert its principal asset — its mindshare — into investor cash.

If AI bubble is still bubblicious next year, one estimate is that OpenAI might raise $600 billion from an IPO in 2026.

If the company can hold out until 2027, there’s speculation it might raise $1 trillion.

Such a Cinderella ending that would vault OpenAI into a very exclusive club, since there are only nine U.S. corporations whose market values exceed $1 trillion.

At least all of those announcements with their boring details would definitely be in the rearview.

To get her happy ending, Cinderella must overcome the usual obstacles.

In the lead-up to an IPO, OpenAI’s books would presumably get some serious vetting.

And not all IPOs are successful. Some do fail.

There’s also a non-zero possibility that OpenAI will implode on its own before then.

From something to do with Altman personally, for example.

In that instance, the shards would most likely be absorbed by Microsoft.

Which, so not to bruise egos, would be styled as an acquisition.

Altman would like to go down in history as AI’s Steve Jobs.

There’s a chance he may go down as its Jay Cooke or its Jay Gould.

Those were the 19th century U.S. railroad financiers who set off several panics.

The failure of Jay Cooke & Company set off one in 1873. That one closed the New York Stock Exchange for ten days.

Don’t get me started on Jay Gould. Let’s just say his career in the Gilded Age proves that the Bond villain was actually a 19th century invention.

In 1841, Scottish journalist Charles Mackay published a book now known as Extraordinary Popular Delusions and the Madness of Crowds.

It’s of course in the public domain. Here’s a link to the Wikipedia entry for it.

Mackay’s entertaining history looks at the 17th century Dutch tulip mania, the British South Sea Bubble of 1711–1720, and so on.

A chapter whose title I particularly like is: “The Love of the Marvellous and the Disbelief of the True.”

In every bubble, there are two realities.

Let’s call one real reality.

And then there’s whatever is going on in people’s heads.

Today — not in 1841, of course — what’s echoing around in Wall Street’s head are voices picked up from podcasts, YouTube videos, the financial media, and the like.

Not unlike the way an LLM picks up everything and repeats it back at you.

Which starts to feel very hallucinogenic.

To preserve my sanity, I decided to take action: ignore everything Sam Altman and OpenAI had to say.

Wall Street, looking at AI, is like someone staring at an optical illusion.

First it sees one thing, then another.

Recently, it’s been mesmerized by spinning circles.

In March 2025, Nvidia invested in CoreWeave, an AI data center operator.

CoreWeave, in turn, is a big buyer of Nvidia GPUs.

Bryce Elder of The Financial Times thought he saw an ouroboros.

That’s a snake or dragon eating its own tail:

In the ultimate ouroboros, on September 22, 2025 Jensen Huang said Nvidia was willing to put up to $100 billion into OpenAI, which would use it to buy Nvidia chips.

An infographic full of circles was published by Bloomberg on October 22, 2025. It’s behind Bloomberg’s paywall, but the link is here. The diagram has become slightly famous:

For my little thought experiment, I erased OpenAI from the picture.

Then I saw something different.

I saw a star, with Nvidia at its center.

It’s a pattern that’s a bit foreign to American capitalism, but not in Asia.

What we’re looking at is a keiretsu in formation.

In Japan, the keiretsu are corporate groups larger than the individual companies that make them up.

The companies of a keiretsu take ownership shares in each other, a practice that drives Western economists crazy.

Japan’s zaibatsu got blamed by the Allied Occupation for egging on World War II, so the modern-day keiretsu are their kindler, gentler vestige.

In Korea, comparable corporate groups, usually family-tied, are called chaebol.

To some extent, companies in a keiretsu will bail each other out, if things go bad for one of them. Western economists would prefer the losers to fail and be done with it.

There’s a competition in AI going on between the U.S. and China.

Not to get all patriotic on you, but I think Team America should be happy to have the Nvidia keiretsu on its side.

Nvidia is a real company with real products, real revenue and real profits.

At the moment, it has 90% of the market for AI GPUs.

Which is like being the gold rush storekeep who has the exclusive franchise on picks, shovels and tents.

In its third fiscal quarter of 2025, Nvidia had revenue of $35.1 billion and net income of $19.3 billion.

So it has some cash to play with.

A few writers have gotten worked up about Nvidia making investments in companies that are its customers, or are likely to become its customers.

It’s a slightly new twist on vendor financing.

About which there’s nothing new, or inherently sinister.

If you’ve flown on a Boeing jet or let a dealership finance your car, you’ve participated.

GE Capital still finances the sale of jet engines to airlines through GE Capital Aviation Services.

GM set up General Motors Acceptance Corporation (GMAC) in 1919. It’s the ancestor of current-day Ally Bank.

True, in the 2008 financial crisis the U.S. Treasury felt compelled to take a $17.2 billion stake in GMAC.

But the Treasury sold that stake in 2014 at close to a $2 billion profit.

And yes — reminiscent of the earlier bubble of your choosing — more debt financing of AI infrastructure is starting to appear.

Some of it from the standpoint of financial engineering is a little exotic.

We’ve seen off-balance-sheet deals (Meta), and private-finance loans to data centers collateralized by their own GPU chips (CoreWeave).

Meta recently used an entity called Blue Owl Capital to issue the largest ($27.3 billion) corporate bond in US history.

That will finance Meta’s Hyperion data center in Richland County, Louisiana while keeping that $27.3 billion off Meta’s books.

In the event the AI bubble pops dramatically, it will be Blue Owl, not Meta, that goes poof.

As for CoreWeave’s loans — from private lenders and collateralized by its GPUs —yes, GPUs do go out-of-date.

But GPUs are not subprime mortgages.

Past bubbles teach us there can be plenty of Sturm und Drang among individual companies on Wall Street. They can fail.

The trillion-dollar question is whether the failure of any one of non-tech giant AI companies would have Lehman Brothers–size consequences on the entire economy.

I’m not clutching my worry beads too tightly about that one.

Creative destruction, I suspect, would come to the rescue.

Those GPUs would get used for something.

I like happy endings.

So let’s write one for the AI bubble.

A hint came in ChatGPT’s follow-on suggestions to my opening prompt.

Let’s look at AI as being like electrification.

And not think about the AI bubble popping, but all the talk about it slowly deflating.

Now, that outcome need not be good for individual companies.

One scenario common in tech is profitless prosperity.

Something ubiquitous, such memory chips, becomes a commodity.

Everybody has more than they need (the prosperity), and no manufacture makes any money on them (the profitless part).

We can see AI ubiquity happening before our eyes with web browsers. Those blue-underlined hyperlinks are becoming a thing of the past.

I liken it to a changing of the guard at the Information Desk of the public library.

In the old days, if you had a question on some subject, they’d point you to a location in the stacks where you might find a book with an answer.

These days, they just answer your question. The LLMs have read all those books.

Does this disrupt the business model of Google and of web publishers, who count on people seeing ads to make money? Of course it does.

I’ll cry a little for the web publishers, whose content is getting scraped by the LLMs.

But not very much for Google, who a few years back intentionally started making its search results worse to expose users to more ads. See Cory Doctorow’s recent book for the unpleasant details.

Back to electrification.

It had some spectacular early successes.

On the evening of April 29, 1879, the city fathers of Cleveland flooded Monumental Park with light when they switched on a bunch of arc lamps.

But after lighting and electric streetcars, it took decades to figure out the best way to use electricity.

That didn’t really come until the 1920s, when factory owners realized they had to restructure production lines to take advantage.

Then the U.S. economy got a big productivity boost.

Electrification wasn’t the only capital-spending boom to have a time-delay fuse.

In 1987, M.I.T. economist Robert Solow — who won the Nobel Memorial Prize for economics that year — made a famous observation: “You can see the computer age everywhere,” he said, “but in the productivity statistics.”

By all accounts, at the moment demand for GPUs and ‘compute’ is off the charts.

That part of the boom is real.

But recall that what the LLMs are doing means nothing to humans — until we see their output.

The staying power of our demand for that is an open question.

At the moment, most of the chatbots have free tiers, although some consumers take monthly subscriptions to play with the GPTs.

But the real money will have to come from so-called ‘enterprise’, or business subscriptions.

Those business will ultimately have to see a return on investment — ROI — to keep those subscriptions renewed.

That question has no single answer.

It’s one use case at a time.

As in figuring out how to use electricity, those little solutions require human effort, ingenuity and time.

In the foreseeable future, AIs will be augmenting human workers, not replacing them.

The most obvious use cases involve language.

Foreign language translation by computer — sadly for human translators — is probably ‘good enough’, if it doesn’t have to be literary or legal grade.

The ability of AIs to write in computer language, so-called ‘vibe coding’, is reportedly pretty good — although what they generate needs to be checked by someone who knows what they are doing.

In other office work, being able to get productive results from an AI is a human skill, not unlike being able to get something of value out of an intern.

They may be eager, but they can screw up.

But the CEOs who look forward to firing their office workers and replacing them with AIs are in for a disappointment. Or they have been drinking too much of Wall Street’s Kool-Aid.

Likewise, the much-ballyhooed idea of trusting an AI agent to do everything for you seems to me laughable at this moment.

I’ve had a highly intelligent and trustworthy human assistant, and can count on one hand the number of times I handed her my credit card and said, “Put it on this…”

But, like I said, I have trust issues.

Journalist Evan Ratliff has a very amusing podcast series called Shell Game.

Ratliff created a fictional start-up whose employees are all AI agents, such ‘Kyle Law’ and ‘Megan Flores’, the latter head of marketing.

In a Wired article (here) about his start-up, Ratliff recounts:

At first it was fun, managing this collection of imitation teammates — like playing The Sims or something. It didn’t even bother me that when they didn’t know something, they just confabulated it in the moment. Their made-up details were even useful, for filling out my AI employee’s personalities.

Ratliff even cloned himself into an AI to delegate managing them.

Returning to ‘human effort and ingenuity’, AI— like the internet before it — may provide a much-needed excuse to rethink workplaces that really need it, such as education and health care.

But the vested interests are deeply vested.

I’ll get hate mail for this, but I find what the Alpha Schools are doing to be fascinating.

Alpha Schools are expensive ($40,000 a year in Austin) private schools that use AI tutors.

They claim they can reduce instruction time to two hours a day — with, they say, fabulous results. That frees up kids for afternoon sports and ‘life skills workshops’.

In the U.S., somewhere around 25% to 30% of health care spending goes to administration, billing, insurance processing, and the like.

That’s going to take a general restructuring, not a few chatbots, to fix.

I can sympathize with anyone who loses a job.

Whether it’s really to AI, or actually the fault of some corporate CEO who is using AI as an excuse for old-school “Chainsaw” Jack Welch–style cost-cutting, a recent phenomenon known as ‘AI washing’.

Nor am I a big fan of Big Tech’s extreme concentration, and its extractive nature. On that, see Tim Wu’s recent book, The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity.

But that huge trend has been going on in American capitalism since a sea-change in the mid-1970s.

Carter C. Price, a Senior Mathematician, at RAND, has calculated that if incomes of the bottom 90% of workers had been divided with those of the top 10% at the exact same ratio they were in the 30 years after World War II, with the growth of the economy the 90% would now be cumulatively better off by some $80 trillion.

On that scale, the technology bubbles are but foamy crests on a Kondratieff wave.

The bubble may go, but AI is here to stay.

Get used to it.

Just a few years back, pundits were bemoaning how little capital spending American corporations were doing to increase worker productivity.

Well, for better or worse, now we have it.

If you don’t like what’s going on in the economy, organize. But I don’t think Luddism is any more a viable strategy today than it was in the 1820s.

Maybe you can figure out how to get the AIs to help you.

Meanwhile, enjoy the good times.

Not everybody gets to live through a decade like the Roaring Twenties, the 1960s, or the 1990s

So party like it’s 1999. As long as it lasts.

The other day, my neighbor Barry — a classic, decent Red State sort of guy, very much a Trump supporter — came over with a bottle of methylene blue and insisted I try it.

Just 10 drops in a glass of water.

Barry had been turned on to methylene blue by watching a Joe Rogan video on his phone.

Later, I tried to find that video and watch it myself.

It may have been Joe Rogan Experience #2254, on which Rogan’s guest is actor Mel Gibson.

The video [here] is over 2 hours long, but, as actor interviews go, relatively painless.

Mel Gibson comes off as a bright guy. He knows how to tell a story. For example:

Gibson: I got COVID from my gardener. At first it was like, “Did I grab the hose, or what?” I mean, I knew the guy for 20 years. We both went to the same hospital. He died and I didn't. I think we both got remdesivir, which is not good.

Rogan: Not good. Causes kidney failure.

Gibson: I know. I couldn't walk for three months after I had that stuff. I found out afterwards it kills you. That's why I wonder about Fauci…

Rogan: Oh, you should wonder about that guy…

Methylene blue comes up shortly thereafter, when Gibson tells an anecdote about unconventional cancer drugs:

Gibson: I'll tell you a good story. Okay, I have three friends. All three of them had stage-four cancer. All three of them don't have cancer right now. At all. And they had some serious stuff going on. What was it they took? You've heard…

Rogan: Ivermectin and fenbendazole…?

Gibson: Yeah. And I’m hearing people mention methylene blue…

Rogan: Yeah, methylene blue, which was a fabric dye. It was a textile dye. Now they find it has profound effects on your mitochondria…

Gibson: This stuff works, man…

Barry had spent $65 on his bottle of methylene blue, so it was presumably the real deal.

He was slightly disappointed when I knew what methylene blue was.

But the moment he mentioned it, I suffered flashbacks to high school biology class, hearing those voices:

“Hey! Are you sure this frog is dead? Its heart is still beating!”

“It’s pithed.”

“You’d be pithed too, if I were cutting you open like this…”

Being a history of technology buff, I also happened to know, as Joe Rogan does, that methylene blue was first synthesized in 1878 by BASF in Germany for use as a cotton dye, and shortly thereafter (1880) found to be excellent cell stain by microbiologist Robert Koch.

Koch is famous for Koch’s Postulates, the four criteria that must be met to show that a microbe causes a particular disease.

If Mel Gibson is actually taking methylene blue — that’s not clear from the interview, he only says he’s heard people talk about it — he’s not the only celebrity user.

Running around on YouTube and TikTok are snippets of video of our Secretary of Health and Human Services, Robert F. Kennedy, Jr. putting drops of methylene blue in a glass of water. Just search for “RFK Jr's Mystery Blue Drink.”

Here’s one explanation [here] as to why RFK Jr. might be taking methylene blue, from Dr. Rahi Victory, a Canadian obstetrician:

Why is he actually putting it into his water? Well, there are some people that think it can help with anti-aging, and other people are saying it's useful for brain toxicity, reducing risks of toxicity in the brain, improving brain function, maybe even improving long term memory.

But there's absolutely zero data to support those assertions…. There are certainly no controlled trials or concrete evidence, beyond one study that says it may reduce depression symptoms.

So before you start running off to drop methylene blue into your water, just remember, not everything you see on the internet is true.

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I drank the 10 drops.

It tasted terrible.

The next morning, my pee was blue.

If I’d had asparagus for dinner, I shudder to think what the result would have been.

Methylene blue didn’t do anything for my brain. MAHA still has me very confused.

It’s also increased my anxiety level.

In June, RFK Jr. appointed Dr. Robert W. Malone to the Department of Health and Human Services (HHS) Advisory Committee on Immunization Practices.

Malone, who has a popular Substack [here], has been banging on forever about how mRNA vaccines may have horrible long-term health consequences.

Kennedy’s HHS now provides a helpful link to the COVID-19 mRNA vaccine harms research collection [here].

I follow the link.

My hand goes to my chest after I look up the word ‘myocarditis’.

I know about vampires. I start to wonder what a protein spike through the heart feels like.

I shuffle through my Covid vaccination cards.

I long ago resigned myself to living with the genes I’ve been dealt, but this is a new twist.

There it is: Moderna, March 5, 2021. mRNA-1273.

That shot, as I recall, was a weird one, administered by no-nonsense female U.S. Army sergeant in uniform.

At the time, the Cherokee County Health Department needed all the help it could get.

The experience was like being a bit player in an episode of M.A.S.H., but not as funny.

I decide to put off thinking about this year’s Covid booster until my brain fog clears.

I figure I have until October to decide. That’s when I usually get my flu shot.

But now I see where that decision may be slipping out of my hand.

On Wednesday, August 27, 2025, RFK Jr. fired the Director of the CDC, Susan Monarez, a Ph.D. in microbiology and immunology.

She was a Trump nominee. It was just a month after she was confirmed for the job by the Senate.

On Thursday, three CDC officials who worked under Monarez resigned in protest, leaving the CDC in some disarray.

In my Red State, pharmacies are prohibiting from administering vaccines that aren’t on the CDC’s ACIP’s list of recommendations.

ACIP stands for Advisory Committee on Immunization Practices.

On June 9, 2025, RFK Jr. fired all 17 sitting members of the previous ACIP, and replaced them with his eight of his own picks.

It’s not clear what they’ll end up recommending.

In the meantime, CVS — the pharmacy — has decided to put off offering the Covid vaccine in 16 states.

If I really, really want the Covid shot, I could probably shop around for a doctor willing to prescribe it.

But I have no clue what doctors around here will be thinking.

Times have changed.

Nobody said living in an era of epistemological anarchy would be easy.

I like to think of it as being in front of a baseball pitching machine whose control logic has gone haywire.

It’s serving up one curveball after another at high-speed. They just keep coming at you.

Although some pitches are definitely screwball. Those wellness influencers.

Dealing with it is exhausting.

You can’t just bat away everything by reflex. A few good pitches are mixed up with the bad.

It’s like a kid’s puzzle: “Try and find them!”

As a drill, go through this list at high speed. It’s from a Tweet by RFK Jr. from Oct. 25, 2024 [link]:

psychedelics, peptides, stem cells, raw milk, hyperbaric therapies, chelating compounds, ivermectin, hydroxychloroquine, vitamins, clean foods, sunshine, exercise, nutraceuticals and anything else that advances human health and can't be patented by Pharma.

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“Make America Healthy Again” — MAHA — apparently goes back to the title of a book by Dr. Nicole Saphier, a radiologist at Memorial Sloan Kettering in Monmouth, New Jersey.

Dr. Saphier often appears on Fox to comment on health and medical news.

Her book had the publishing misfortune of appearing in April of 2020, just as Covid was getting going in the U.S.

Dr. Saphier has a lot to say, from a doctor’s perspective, about how messed-up the U.S. health care and health insurance system is.

No argument there.

But her advice to individuals about how to stay healthy is pretty much the same as you would have heard from any doctor in the last half-century.

I keep this list around as sort of a touchstone. Those MAHA influencers want to take my eye off the ball:

• Eat healthy. Obviously, opinions vary. For this bullet list, I’ll repeat Michael Pollan’s pithy “Eat food. Not too much. Mostly plants.”

• Exercise every day. Maybe 20 minutes is a minimum.

• Don’t smoke.

• Don't drink alcohol in excess. Again, opinions vary.

• Keep to a schedule of regular screenings appropriate for your age and sex.

That’s it.

“Make America Healthy Again” reappeared — this time as a political slogan — in August, 2024, shortly after RFK Jr. ended his sputtering campaign for president.

RFK Jr. had originally entered various Democratic primaries to challenge Biden.

Kennedy, after ending his campaign, endorsed Trump.

There was presumably some sort of deal — it’s Trump, after all — but any details are unknown.

A few days before, Kennedy’s running mate for vice president, Nicole Shanahan, had floated her opinion in an interview that RFK Jr. would do an “incredible job” as Secretary of Health and Human Services. [Link]

And ‘Make America Healthy Again’ obviously rhymes with ‘Make America Great Again’.

Traditionally, in U.S., it’s been the Surgeon General who gets to play the bad guy — the scold — in matters relating to health. The famous Surgeon General’s report on Smoking and Health appeared in 1964.

But the Surgeon General is usually a medical doctor, which Kennedy is not.

Although one Surgeon General was a dentist, and another a veterinarian.

At times, the First Lady has been the scold. In 2010, Michelle Obama went after childhood obesity with a campaign called Let’s Move!

After winning the election in November 2024, Trump did indeed nominate Kennedy for secretary of HHS. His nomination was confirmed by the Senate on February 13, 2025.

That was by a 52 to 48 vote, with Mitch McConnell was the only Republican to vote against. McConnell had polio as an infant in 1944, age 2. He was worried Kennedy might get it into his head to do away with polio vaccines.

For comfort, I turn to the wisdom of a former vice president, Dan Quayle. “People that are really very weird,” Quayle once said, “can get into sensitive positions and have a tremendous impact on history.”

It doesn’t take a degree in semiotics to draw a circle around the word ‘Again’ in “Make America Healthy Again.”

Was America healthier once before?

That’s not an easy question to answer.

If we look at one metric, life expectancy at birth, in the U.S. it was 78.4 years in 2023, up from a dip to 76.4 during Covid, but below a 2014 all-time peak of 78.9 years.

‘Not dying’ is not exactly the same thing as living healthy.

Although it’s a good start.

In the past, people would have died much earlier in life of something else, such as influenza.

I’m in love with the work of a certain Dr. Andrea Love. She blogs as ‘ImmunoLogic’, here. She’s got a colorful chart based on CDC numbers:

But the year 1900 may be too early to use as the Before Time.

If we go back to 1950, we had smoking and heart attacks.

Deaths from heart disease have declined 70% since 1950.

Infant mortality has declined around 80% since 1950.

The decline in deaths from cancer — all sorts, but primarily lung — is not so dramatic, but down about 25% from a peak in 1990.

And we shouldn’t forget a few things that, numbers-wise, don’t make a Top Ten list. After 1995, HIV went from a death sentence to a manageable chronic disease almost overnight.

So what’s gotten worse?

Like I said, not dying is not the same as living healthy.

According to the CDC, about 60% of U.S. adults live with at least one chronic disease, and 42% have two or more.

Now, when people live longer they’re more likely to have one of those. Arthritis, for example, makes a sizable contribution to that 60%.

But the most damning things in the U.S. numbers are chronic diseases that are (mostly) preventable, the big ones being obesity and diabetes.

Diabetes — Type 2 — is a late-onset disease. It’s probably best to look at its prevalence among the 65+, 29.2%.

As for obesity, a study published in The Lancet last November found that 75% of American adults are either ‘overweight’ or ‘obese’, based on body mass index, BMI.

BMI is admittedly not a perfect metric, but it’s what we’ve got.

Almost 50% of U.S. teens and young adults — ages 15 to 24 — are now either overweight or obese, compared with 29% in 1990.

After the many sins of climate science, we have a right to be wary of scary predictions.

But I can’t resist repeating this one from The Lancet study.

By the year 2050, the way things are going, over 80% of Americans will be obese. And one in three teenagers.

That’s not ‘overweight’. That’s obese.

If anyone wants to Make America Healthy Again, they’ve got their work cut out for them.

Even I can triangulate a link between obesity and diabetes: sugar.

In the old days, physicians used to taste urine when making a diagnosis.

It was known to all of them — starting with those in India around the 7th century BC — that the urine of people with diabetes tasted sweet. For years, diabetes was called ‘the sugar sickness’.

We owe the fancy Latin term diabetes mellitus to English physician Thomas Willis, in 1674. To Willis’ taste, diabetic urine was more honey-sweet, so he added the ‘mellitus’ which means honey.

Sugar is one of RFK Jr.’s ‘issues’.

To his credit, in my opinion.

In an April 22, 2025 press conference he said, “Sugar is poison, and Americans need to know.”

It’s not a novel notion. In 1901, English doctor Willoughby Gardner was quoted in the British Medical Journal saying that sugar should be avoided “like poison” by those prone to obesity, diabetes, or gout.

In a normal person, we’d shrug off RFK Jr.’s remark as a bit of rhetorical overstatement.

Humans have eaten sugar for millennia, since Saccharum officinarum was domesticated in New Guinea around 1,000 B.C.

In the days when people did hard physical labor and lived on the edge of malnutrition, sugar was just a few added cheap calories. It did no damage except to the teeth.

But RFK Jr. is not a normal person. For one, he’s head of a federal agency with a $94.7 billion budget.

On sugar, as on many of his ‘issues’, RFK Jr.’s views are the opposite of measured.

Paracelsus’ dictum — the dose makes the poison — holds no interest.

That can happen to lawyers. They spend years crafting forceful arguments, then end up believing — as in True Believing — their own work.

RFK Jr. has drunk deeply of his own Kool-Aid.

Which makes him come off as — and maybe actually be — a fanatic.

It gets worse.

Instead of making a clear, simple point that parents might understand — ‘Fruit Loops have too much sugar’ — RFK Jr. segues to taking on red dye #40.

For RFK Jr., ‘ultraprocessed foods’ are a rhetorical gateway drug that bring on chemophobia.

Playing on the public’s irrational fear of chemicals — fluoride, glyphosate, red dye #40, you name it — has been part of the environmental lawyer’s playbook forever.

For purposes of litigation, trace amounts of something that sounds scary will do. Modern technology can detect almost any amount of anything.

It’s then the task of the environmental lawyer to ‘link’ that level to something bad — preferably with a highly subjective diagnosis, such as ADHD.

Contemporary obesity and Type 2 diabetes have roots stubbornly anchored in our modern, more-affluent-than-before society. There’s no ‘ban this’ quick fix.

As for chemophobia, I link that to a different sort of deficiency — not dietary, but of STEM education.

If people can’t pronounce the name of something on a food label, there’s help for that: Wikipedia.

And if Fruit Loops really were poisonous, I think we’ve have a lot of dead Millennials on our hands by now.

I sometimes think we should repurpose the phrase ‘long Covid’ to refer to the political hangover the U.S. has experienced after the pandemic.

It doesn’t seem to go away.

I sympathize with people who’d rather forget about Covid.

I’m sick of it, too.

Not literally, thankfully.

I recently decided my constitution was strong enough to try reading The Big Fail, a new book on how the U.S. handled the pandemic from Joe Nocera and Bethany McLean.

It was a bit like re-watching an old horror movie. You know exactly what’s going to happen. But as it plays out, it’s still scary.

I recommend the book. It’s a good contribution to a gaping void.

After other big tragedies in U.S. history — 9/11, for example — we pulled it together to empower bipartisan commissions that looked into what went wrong and what went right.

Today that appears to be out of the question, which is sad.

That the school closings were a bad idea seems to be the sole issue on which a different, post-pandemic consensus is emerging.

The Democrats don’t want a general inquiry into the Covid years for fear it might damage their brand.

The Republicans have staged one inquiry of their own — the House Select Subcommittee on the Coronavirus Pandemic — but were unable to restrain themselves from using it to bash the Democrats at every opportunity.

There’s no center. Just a deadlock of extremes.

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All of which reminds me of the fall of the Ottoman Empire.

Not that I was around for that.

So maybe the former Yugoslavia.

I remember a joke I once heard from a Yugoslav who worked at the U.N.: “Yugoslavia! Six republics, five ethnic groups, four languages, three religions, two alphabets. One party!”

When the imperial center falls due to overreach, things tend to fly apart at the periphery.

We’ve had an era of imperial overreach in both Covid and climate science.

Phrases like “Maybe” or “We don't know” were not allowed.

Error was not acknowledged.

The lived experience of people was ignored.

Instead, ‘The Science’ was a handy authoritarian tool for policing thought. Enforcing the hegemony.

Reputable scientists who held dissenting views were ignored, banned, or belittled for not getting with the consensus.

On the lab leak theory, for example, even such an establishment figure as Dr. Robert Redfield, a former CDC director, later said there was “an a priori decision that there's one point of view that we're going to put out there, and anyone who doesn't agree with it is going to be sidelined.”

Take the word ‘denier’. It’s central in the vaccine discussion, and also in climate.

You can only be a denier if there’s some orthodoxy to deny. Recollect the original denier was Simon Peter.

After the hegemony, the deluge. Anything goes.

It’s a state of affairs historian and philosopher of science Paul Feyerabend, one of my favorites, calls ‘epistemological anarchy’.

Life is possible under a regime of epistemological anarchy, but it can be tiring.

You have to study those curveballs one pitch at a time.

The mRNA vaccines were one of the few success stories to come out of the pandemic.

Yet they, too, seemed to be getting sucked into the grievance vortex, as into some black hole.

I don’t pretend to understand that phenomenon entirely.

Although the mRNA vaccines were indeed oversold.

They successfully prevented Covid infections from becoming severe.

And that was about it. They didn’t block or prevent new infections.

‘Transmission’, to bring back that word.

There were a number cases where people got the vaccine and then went on to get Covid. These were disingenuously written off by the powers-that-were as ‘breakthrough infections’.

A few were high-profile.

In October 2022, CDC director Rochelle Walensky tested positive, despite having had the bivalent booster a month before.

During the pandemic, I would read anything by Dr. Jay Bhattacharya, then a professor of medicine at Stanford Med and now head of the National Institutes of Health (NIH).

Dr. Bhattacharya got the Covid vaccine in April, 2021 and a case of Covid four months later, in August.

RFK Jr.’s take on the Covid pandemic can be found in his 2021 book, The Real Anthony Fauci: Bill Gates, Big Pharma, and the Global War on Democracy and Public Health.

I try to keep an actively open mind. I read it.

I suppose I was expecting 480 pages of unhinged diatribe.

It was not that.

It reads like a collection of legal briefs, with zillions of footnotes to all kinds of studies and papers.

For one example, RFK Jr. makes an extended case for hydroxychloroquine, the over-the-counter malaria drug that some doctors, when first confronting Covid, believed would reduce hospitalization and death if administered quickly at the first sign of infection.

I could be convinced about hydroxychloroquine. But I’d want to put in the time to check out all those references.

And I remember back when I covered the campaign to close the Indian Point nuclear power plant in Buchanan, New York, just up the Hudson from Manhattan.

The crusade to close Indian Point was led by Riverkeeper, a self-appointed environmental watchdog group for which for many years RFK Jr. was lead attorney.

Riverkeeper’s legal filings were deftly skilled at taking some factoid with a kernel of truthiness and spinning it into cotton candy, suitable for easy lay jury and media consumption.

It was true, for example, that thousands of fish eggs and fish larvae were sucked into Indian Point’s cooling water intakes, ending their short fishy lives.

But there are umpteen million fish eggs and larvae in the Hudson.

After a spin by Riverkeeper’s attorneys, Indian Point was ‘killing millions of fish’.

The organization would also supply artwork to the media — photos of dead fish floating in the river.

Which turned out to have been taken during a seasonal algae bloom, and had nothing to do with the nuclear plant.

For the environmental trial lawyer, every member of the public is a victim.

You need a sympathetic victim with whom the jury can identify.

No litigant-victim’s problem results from bad luck or poor lifestyle choices.

Children are really good, since they are, by presumption, innocent victims.

The entity the trial lawyer seeks to hold responsible is preferably some corporation with deep pockets, and part of Big Something.

The burden of proof is simple: whatever it takes to convince a jury. Or extract a settlement.

A highly desirable rule of evidence is one that keeps opposing views out of the courtroom altogether.

Failing that, opposing experts can be discredited on ‘meta’ grounds, such as who they’ve ever taken money from.

Their work is ipso facto tainted. The jury is encouraged to disregard it without looking at its actual content. An expert who has taken any amount of money from Big Something can’t be right about anything.

RFK Jr. knows that playbook by heart. He almost wrote it.

On Monday, June 9, 2025, RFK Jr. fired all 17 sitting members of the CDC's Advisory Committee on Immunization Practices (ACIP).

RFK Jr. explained in a Wall Street Journal opinion piece that the panel “has been plagued with persistent conflicts of interest.” [Here]

Now, if RFK Jr. were just another congenital lawyer — one cynically willing to say anything to win — that would be one thing.

But — as I said before — RFK Jr. has actually come to believe his own stuff.

On December 6, 2021, RFK Jr. told Louisiana state legislators that the Covid mRNA vaccine was “the deadliest vaccine ever made.” A photo:

On Wednesday, June 11, 2025, Kennedy appointed seven new experts to the ACIP, including Dr. Robert W. Malone.

Within the MAHA movement, Malone — who was involved in mRNA research in the late 1980s — gets the sort of deference the CIA gives a high-value defector.

Some in MAHA say he ‘invented’ mRNA. And look: he’s turned against it.

The actual history of mRNA technology is, as usual, pretty complicated.

Two basic things are needed to make an mRNA vaccine: the correct sequence for the messenger RNA strand itself, and the lipid (fatty bubbles) delivery system.

mRNA was discovered in 1961. Liposomes were also discovered in 1961, but not described in print until 1964.

In 1978, researchers found they could use liposomes to transport mRNA into mouse and human cells. Once inside, the mRNA would induce the production of proteins.

Malone’s 1987 contribution was an improvement in the recipe for the liposome bubbles. Putting a positive charge on them helped the RNA stay in place.

It took some time to learn how to synthesize ‘biologically active’ RNA in a lab. But that was in hand by the late 1980s.

At that point, all the puzzle pieces were on the table.

Indeed, in 1993, researchers at Transgène, a small biotech firm in Strasbourg, France, elicited an antiviral immune response in mice by packaging an mRNA strand in a liposome.

Getting the mRNA sequence just right was tricky. You needed it to (a) elicit the immune response you wanted, but (b) not provoke the body’s immune system into attacking the mRNA.

The vaccine business is a strange one. Let’s just say that for a long time mRNA vaccines were considered a bad bet for commercialization.

Then came Covid and Operation Warp Speed.

Here’s the entire timeline, in a graphic from the journal Nature:

It’s early to write history, but it’s starting to look like the success of Operation Warp Speed was a bit of a one-off.

A lot of things happened to come together in a fortuitous way.

The virus was sequenced quickly. The sequence of the initial Wuhan variant appeared unofficially on the internet on December 28, 2019, within a month of the first reported cases.

More or less the same sequence was published officially by China’s CDC on January 10, 2020.

The Covid virus, like all coronaviruses, had that distinctive spike protein, which was like a little flag.

The U.S. National Institutes of Health had been studying spike proteins for years. It knew a lot about them.

The beauty of the mRNA approach was that the payload of the vaccine, once gotten right, could be synthesized easily and quickly. For conventional vaccines, some piece of the pathogen is typically put through generations of mutation and weakening, which can take years.

I don’t want to downplay the work involved, but that biology was a manageable short step. The more significant innovations of Operation Warp Speed were in areas like manufacturing and logistics.

But also unusual was the fast-track testing, done in parallel, considered necessary in the emergency. Both Pfizer and Moderna agreed to long-term monitoring using the Vaccine Adverse Event Reporting System, VAERS.

In the short-term, reports of adverse effects from the 2020 test groups averaged around 0.5%, which was considered acceptable in light of the vaccines’ benefit.

The Pfizer-BioNTech vaccine received emergency use authorization from the FDA on December 11, 2020. Moderna’s was approved a week later.

That was just about a year from the initial reports of infections, unprecedented in vaccine development.

In the movie, that cues the triumphal ending.

Music swells over footage of Katalin Karikó and Drew Weissman accepting the 2023 Nobel Prize for Medicine in Stockholm “for their discoveries concerning nucleoside base modifications that enabled the development of effective mRNA vaccines against COVID-19”:

Sadly, life is not a movie.

Whatever it is, it continues to unspool.

No mRNA-based drug of any class, vaccine or therapeutic, has yet to get FDA approval since the Covid vaccines.

And that’s looking less and less likely, for ideological reasons.

Science-by-diktat, it turns out, is still around. It’s just in different hands.

So no scientific revolution in Thomas Kuhn’s sense. More like a palace coup.

The environmental zealots of the 1970s often tried to get blanket bans on entire technologies, such as nuclear power and genetically engineered crops.

On August 5, 2025, Kennedy announced that the HHS would terminate 22 mRNA vaccine development projects funded by BARDA, the Biomedical Advanced Research and Development Agency, worth about $500 million.

Although no one in the Trump administration wants to be the guy who deprives the public of some miracle mRNA drug that happens to cure cancer. You pick that up if you parse the pronunciamentos closely, as one once did with Pravda.

So banning mRNA technology is not an official goal at HHS.

But that distinction may be too subtle for state legislators trying to follow HHS’s lead.

No fewer than 12 states have passed, or seriously considered, various sorts of anti-mRNA legislation.

A Montana bill that — fortunately — failed in February would have kept mRNA vaccines out of the state, and made administering one a misdemeanor.

The curveballs will just keep coming.

The bad pitches we can only bat away one at a time.

It’s a lot of work.

But living in epistemological anarchy is probably better than living under an authoritarian consensus.

Science, like politics, is a messy human business. That’s just the way it is.

In the future, we might look back with nostalgia at the simpler days when you more-or-less could trust what the CDC was telling you.

That feeling, I’m sure, will pass.

We’re not in that Kansas anymore.

It’s only half over, but thus far 2025 is looking like a very good year for nuclear power.

Some sort of Nuclear Renaissance 2.0 is definitely going on.

Measured by terrawatts of electricity generated, nuclear world-wide had a record year in 2024, and is set to have another in 2025.

But there’re been nuclear renaissances before. The last one, circa 2007–2011, washed out with the tsunami at Fukushima.

But for Nuclear Renaissance 2.0, so far, so good.

On May 23, 2025, U.S. President Donald Trump issued four involved pro-nuclear executive orders.

Among other things, Trump directed the U.S. Department of Energy to get 10 nuclear reactors underway by 2030.

We’ll see how that goes.

The first half of 2025 also saw some satisfying mea culpas about nuclear power from unlikely places.

In June, New York state Governor Kathy Hochul came out in favor of building a new ‘advanced’ nuclear power plant in upstate New York.

“I’m embracing this,” Hochul said. “This is not your grandparents’ nuclear reactor.”

Hochul’s predecessor, Andrew Cuomo, infamously shuttered a non-advanced — but still perfectly good — nuclear plant at Indian Point outside Manhattan in 2021, building on the legacy of his father, Mario Cuomo, who in 1989 went to great lengths to prevent the opening of a perfectly good, and completed, $5.5 billion nuclear plant in East Shoreham on Long Island.

Last I checked, Sussex county residents and Long Island Lighting Company (LILCO) customers will finish paying that $5.5 billion off in 2026, having netted from the deal exactly zero in net-zero electricity.

Across the Atlantic, on June 9, Germany’s new chancellor, Friedrich Merz, said his country’s decision to shut down its nuclear plants was “a grave strategic mistake.”

One might say that. Merz said his new government will look into building small modular reactors (SMRs).

But 2025’s most interesting bit nuclear news, in my opinion, was a little-noticed item on June 10th, when a brand-new UK state entity, Great British Energy, announced that a subsidiary — official name ‘Great British Energy—Nuclear’ (GBE-N) — had selected the Rolls-Royce SMR as the winner of a two-year-long competition.

The U.S., with its Big Beautiful Bills, has no monopoly on the use of hyperbole in names for legislation, although the British are a bit more tongue-in-cheek about it. The ‘Great British Energy Act [of] 2025’ received royal assent on 15 May, 2025.

Among its other provisions, the Great Big British Bill pledged £2.5 billion to support small modular reactors generally.

Now, it should come as no little surprise that the home team, Rolls-Royce, beat out two foreign rivals, Westinghouse and GE-Hitachi, in the UK competition.

Although who owns Westinghouse at any given moment requires constant fact-checking, and a footnote.1

But economic nationalism aside, Rolls-Royce may actually have an excellent a shot at solving the SMR conundrum.

If anyone can.

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It’s appropriate to be talking about the UK here, because in some way SMRs are a proposed solution to a problem uniquely created by Anglo-Saxon economics.

Countries where central planning is the norm have never had an ideological problem with state support for large nuclear.

China, according to the World Nuclear Association, has 32 reactors under construction.

Rosatom, Russia's state-owned nuclear energy corporation, is building 19 in 8 different countries, including not only China and Russia but also Turkey, Egypt, Hungary, Iran, India and Bangladesh.

At times, large nuclear has also done well in democracies with dirigiste tendencies, such as Japan, South Korea, and France.

But in the U.S. and the UK, building large nuclear has for decades been almost impossible, for a variety of self-inflected reasons.

The list of exceptions is short enough to prove the rule.

In the U.S., Vogtle Units 3 and 4, the first really new reactors there in 30 years, cost twice the initial estimate; put the reactor vendor, Westinghouse, into Chapter 11 bankruptcy; and took 15 years to finish, seven longer than planned. Vogtle 4 started putting electricity on the Georgia grid in April 2024.

Sizewell B was the last large reactor to go operational in the UK in 1995.

Sizewell C just won support in the 2025 budget round, 30 years later. It will have an estimated cost of £38 billion.

Hinkley Point C, under construction in Somerset, is infamously trapped in a Vogtle-like a spiral of cost overruns and delays.

With luck, Hinkley Point C will start putting electricity on the UK grid in 2031, with a final cost in the neighborhood of £47.9 billion, US$ 60 billion.

It’s not just nuclear. The Anglo-Saxon countries have shown themselves inept at building any sort large infrastructure in recent decades.

When, that is, they try to build it at all.

California’s high-speed rail project, approved by the state’s voters in 2008, has eaten through $23 billion in state and federal funding, but not laid a mile of actual track.

The UK’s high-speed rail project, HS2, is similarly bogged down. It may open after 2033. Or not.

I won’t mention the third runway at Heathrow. That idea has been around since the late 1940s, and, to quote, “could be operational” by 2035.

Fingers crossed!

A paradox behind the big, scary numbers for nuclear is: large reactors actually produces cheap electricity and are profitable investments, considered on the right timescale. The energy density of nuclear is that good.

Reactors can have 60, 80, or even 100-year lifespans.

Doing the math on the capital outlay on Vogtle Units 3 and 4 — $35 billion over 60-years at 90% capacity — works out to 3.31 US cents per kilowatt-hour.

To which we need to add something, say 1.5¢/kWh, for operation and maintenance (O&M), so make it 4.81¢/kWh.

For a point of reference, the lowest residential rate in the U.S. is 11.69¢/kWh, in North Dakota.

So plenty of of headroom there. The conventional wisdom is that a nuclear plant takes 25 years or so to return its invested capital.

I intentionally did not factor interest into that calculation.

Interest — whose mysteries are many — basically comes up when you attempt to compare competing investments.

A large nuclear reactor is infrastructure, not unlike a hydroelectric dam.

While it’s no excuse for project mismanagement, infrastructure can feel outrageously expensive in any era.

In 1933, then-new U.S. President Franklin Roosevelt suffered sticker-shock when the Bureau of Reclamation told him it would cost $168 million to build Grand Coulee Dam in Washington state.

In the decades since, in every cost-benefit analysis, Grand Coulee has returned that investment many times over with electricity and irrigation water.

Aside: The U.S. is blessed that greater generations bequeathed it its hydropower infrastructure. Consider about what it would be like trying to build it today, post-NEPA.

Like hydroelectric dams, large nuclear projects suffer from deep and painful capital draws.

In the Anglo-Saxon world, the scale of that capital draw creates a step-function.

The risk is that the business entity — say a private utility — simply gets knocked out of the game early.

In the long run, not much matters if you’re dead in the short run.

That explains why, in the U.S., the old fully-amortized nuclear plants are being snapped up by tech companies acting like frenzied shoppers at a yard sale.

But that low-hanging fruit is in limited supply.

Classic economics would say: build more large nuclear. Increase that supply.

But how?

Which returns us to the conundrum.

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The SMR idea is: if you’re incapable of going large, go smaller.

There’s plenty of precedent for this in other industries.

Economy of scale has its limits.

The double-deck, 525-passenger Airbus A380 once seemed the future of commercial aviation.

Fortunately, it wasn’t. Medium-size planes proved to be a much better bet.

The SMR project, properly understood, is not about building one or two small reactors.

It’s about trying to build an industry.

Or, more, precisely an entirely new segment of an existing industry.

It’s going to be a long game, and will take staying power.

Bu the upside, potentially, is enormous.

Not one or two small reactors, but dozens. Perhaps 100s during the 2030s.

Nuclear is an international market.

Large nuclear is out of reach for much of the world. Not everyone can — or wants — to finance a $35 billion megaproject.

Thus any country that can pull off SMRs will get a valuable export industry.

As Russia has now, and the U.S. had with large nuclear until the 1970s. The Czech Republic, for example, has put itself on the list for Rolls-Royce SMRs.

Yet the SMR discussion is slightly odd and academic at the moment.

It doesn’t help that ‘SMR’ has become a political buzzword, encrusted with much magical thinking.

Some nuclear pundits, such as Mark Nelson, say the term SMR has become meaningless.

If we want to talk about small reactors, Nelson said recently, just talk about small reactors.

I think it’s worth trying to recover the original meaning.

A ‘small’ reactor is officially defined as one whose electricity output is under 300 megawatts (MW).

Although that number is a bit arbitrary. Rolls-Royce’s design in on ‘large’ side of small, at 470 megawatts.

That said, there are no SMRs—of any size—currently operating in the West.

Russia has two small (35 MW) KLT-40S reactors onboard its floating nuclear power ship Akademik Lomonosov, which has been operational since May 2020.

China has a 210 MW experimental high-temperature gas-cooled pebble-bed reactor that it connected to its grid in December 2021.

It gets worse attempting to define ‘modular’.

Every reactor — including the large AP-1000s built by Westinghouse at Vogtle — is touted by its manufacturers as having ‘modules’ of some description.

Modularity a long been thought to be a virtue in the construction business.

So everybody wants to have it, or at least be able to say they have it.

Each floor of the Empire State Building was designed to replicate the essentials of the floor beneath it, as well discussed by Bent Flyvbjerg and Dan Gardner in their 2023 book, How Big Things Get Done.

That allowed the Empire State Building to go up in just 18 months. It officially opened on May 1, 1931. The start of construction was January 22, 1930.

The idea that a nuclear power plant could be made modular was, best I can tell, first put forward in 1984 by an industry analyst named Joe Egan.

Egan outlined a vision of small factory-built prefabricated reactors that could, in his words, be “floated across oceans, up rivers, or be carted cross-country to operating sites.”2

So a metric for modularity might be what percent of the final plant is built in a factory, rather than at the construction site.

Some assembly required, as they warn. So simply building modules elsewhere is not the clearest-cut of definitions.

A tighter definition is: the factory-built modules have to be ‘road transportable’.

That means they have to be small enough to be hauled to the construction site by what the British call a lorry.

There are a few — literally — large problems with that.

In the Rolls-Royce design, the reactor vessel is 8 meters tall and 4 meters in diameter. Each of the 3 steam generators weighs 220 tons. They are 15 meters tall.

The NuScale VOYGR was one of the earliest SMR designs. Notice how the artist envisioned it getting around:

There’s further definitional confusion if we start talking about ‘advanced’ reactors and SMRs.

An SMR need not have an ‘advanced’ reactor core design. That’s one using, say, liquid sodium as a coolant or TRISO pebbles as fuel.

Aside: I like to put ‘advanced’ in quotes because nearly all of today’s advanced reactor designs are actually rather old. A long list of civilian nuclear reactor designs was dreamed up by something called the New Piles Committee at Los Alamos in 1944. The few designs they missed were largely on paper by 1950. That explains why contemporary ‘advanced’ nuclear has such a back-to-the-future feel about it.

Rolls-Royce’s choice of a pressurized water reactor (PWR) was, in the words of one Rolls-Royce engineer, “intentionally boring.”

No doubt to the disappointment of some nuclear engineering aficionados.

At least 50 ‘advanced’ reactor designs currently exist on PowerPoint.

And, to listen to the aficionados, their particular favorite — what with its radically simplified design and all — will make small modular a trivial business.

I hope they turn out to be right about that.

In the meantime, I think we have to respect Rolls-Royce’s decision to dance with the reactor it came in with.

Rolls-Royce has been building small PWRs for Royal Navy submarines since the late 1950s.

In one of those genealogical ironies that abound in the history of technology, Rolls-Royce’s submarine reactor — now very much its own after multiple generations of improvement — descends from a Westinghouse design provided to Britain under a 1958 US-UK Mutual Defence Agreement.

Rolls-Royce is not alone in its thinking that the well-understood PWR, with a 70-year history, is a good bet to make modular.

New Jersey-based Holtec International, one of Rolls-Royce’s early competitors the UK SMR competition, has the same idea.

The PWR is so well-understood that nuclear provocateur Bret Kugelmass, for years host of the Titans of Nuclear interview podcast, put open source blueprints for a 100 MW PWR on the internet in 2020.

Kugelmass’s idea is that poor countries that desperately need electricity, such as Nigeria, should just DIY their own small PWRs.

Aside: There’s no how-to video on YouTube yet, but you can watch a hand-waving sort of one here.

The challenge of making a PWR modular has less to do with nuclear engineering than the mechanical kind.

To visualize the problem, think about IKEA being asked to put this out in kit form:

Rolls-Royce appears to be taking modularity seriously.

It’s trying to break down everything possible so it can (a) be made at the factory (b) shipped in standardized modules and ( c ) put together, LEGO-like, at the construction site.

At one point, Rolls-Royce mentioned 1,500 transportable modules. Here’s some idea of what they look like:

It can’t be easy. The pipe exiting module #375 needs to line up with the intake valve on module #436. The modules have to be designed so workmen can crawl inside them. Any shipping crates that become a permanent part of the site may need to allow access for repairmen.

Rolls-Royce is working on building the module factory first, a promising sign of its sincerity.

The prototype factory is at the University of Sheffield's Advanced Manufacturing Research Centre (AMRC).

But part of Rolls-Royce’s deal with the UK government is that SMR production, if it happens, will someday reinvigorate former industrial centers.

So the actual factory or factories will be elsewhere, quite likely in the UK’s formerly industrial North. The current shortlist has six candidates.

A goal of the SMR project is not just to reduce cost by manufacturing everything possible in a factory, but to accelerate build time.

Rolls-Royce has some interesting ideas on that, too.

Because the SMR construction site will be relatively small — about the size of two football stadiums end-to-end, 100,000 m² — Rolls-Royce plans to put the entire thing under a temporary work shed.

The temporary building will also be put together, of course, with modules. When construction is done, the shed modules will move on to the next site.

In theory, the temporary building will allow construction to go on winter or summer, rain or shine.

Important if — as is widely tipped — the first Rolls-Royce SMR site is Wylfa in northwestern Wales, a location more known for rain than shine.

Rolls-Royce desperately wants to rule out any ‘bespoke’ changes for its SMRs.

This has to dovetail — or not — with how the UK does nuclear regulation.

At the national level, the UK has an Office of Nuclear Regulation (ONR) comparable to the U.S. Nuclear Regulatory Commission.

Aside: And subject of comparable criticism. See, for example, Katheryn Porter’s Watt-Logic blog on July 20, 2025 [Link].

The ONR allows reactor makers to apply for what’s called a Generic Design Assessment (GDA) which, if granted, means that a design is approved in general.

Three large reactor designs — the Westinghouse AP-1000, the AREVA/EDF EPR, and the GE-Hitachi ESBWR — currently have approved GDAs.

Rolls-Royce applied for its GDA in April 2022. The process usually takes about 4 years.

I think it’s safe to assume Rolls-Royce will get its GDA, although some enhancements Rolls wants to make to its PWR may make for minor speed bumps.

Rolls-Royce very much wants its reactors to have a 60-year design life, so it has changed the conventional PWR water chemistry to reduce corrosion.

But in the UK, building a reactor with a GDA still requires specific site approvals, primarily from local environmental authorities.

Roll-Royce’s plan is that the same SMR will be dropped on every site.

Thus any customization that might be required at some site — say, for seismicity —goes into the category of site preparation.

Aside: ‘Aseismic foundation systems’ — basically two rafts on rollers — have some history in earthquake-prone locations. Which the UK is not, the largest one recorded there in 1931 having put cracks in a few church steeples.

Local authorities in the UK have shown themselves to be highly capable — if they so desire — of setting up environmental roadblocks for infrastructure projects.

And the Roll-Royce SMR will need cooling towers, or cooling water.

If push comes to shove, Rolls-Royce may have to play its ‘defense national champion’ card for extra muscle.

That sort of idea is gaining traction in both the U.S. and UK. Earlier this year, a Tory peer introduced a bill in the House of Lords that would exempt nuclear power plant sites from regulation under the UK’s Conservation of Habitats and Species law of 2017, specifically preventing local authorities filing law suits.

Fortunately for Rolls-Royce, a legacy of the Cold War may make sailing smoother for in early days.

The UK already has a number of sites effectively pre-cleared for nuclear, those once occupied by its old ‘Magnox’ reactors.

The graphite-moderated and CO₂-cooled Magnox, an indigenous British design of the 1950s, was originally used for plutonium production.

Later, the Magnoxes proved to be reliable workhorses for electricity generation.

Wylfa, in northwestern Wales, a leading contender for a Rolls-Royce SMR, had two Magnox reactors that ran for 44 years, from 1971 to 2015.

Oldbury, near the tip of the Bristol Channel, is another Magnox site on the short list.

The aspirational target build time for the Rolls-Royce SMR is four years.

The first one will undoubtedly take longer.

My guess, as of this writing, is that if all goes smoothly we might see a Rolls-Royce SMR in operation at Wylfa in 2031.

That may seem far away, but a build time of five years would be a noteworthy engineering achievement in the West.

The argument that ‘nuclear takes too long’ is often heard from the renewables lobby.

That argument has been around a long time. In February 2010, Nick Cleg, then the leader of the Lib-Dem party in the UK, said :

By the most optimistic scenarios from the government itself, there’s no way they are going to have new nuclear come on stream until 2021, 2022. So it’s just not even an answer.

In the U.S., delaying nuclear projects has been a favorite weapon of anti-nuclear groups since 1971.

That’s when the Natural Resources Defense Council was allowed to sue the U.S. Atomic Energy Commission (AEC) on the claim that Maryland blue crabs might suffer if they got too close to the cooling water outlets of the Calvert Cliffs nuclear plant.3

Aside: Calvert Cliffs eventually got built. Fishing spots near the cooling water outlets are now prized by local anglers.

To quote a break-room poster: “The best time to plant a tree was twenty years ago. The second best time is now.”

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An anticipated benefit of the SMR project is that once the factory starts churning out modules, multiple sites could be underway at the same time.

The true test, for both Rolls-Royce and the UK government, will come with the third.

If the SMR project works out, the question of how long the first one costs, and how long it takes to build, is slightly is off the mark.

That said, an old 2019 figure, no doubt now too low, for a Rolls-Royce PWR was £1.8 billion, US$ 2.3 billion.

On one schedule, Rolls-Royce projected the cost of the third will be 25% less than that of first, and the cost of the tenth 40% below the first.

Unfortunately, in their short — practically pre-natal — history SMRs have yet demonstrate immunity to the cost overrun diseases that afflict their larger brethren.

To be fair, SMRs start off handicapped in comparison to large nuclear. Their smaller output means the $/kW ratio has a smaller denominator.

In November 2023, NuScale’s ‘Carbon Free Power Project’ in Utah aborted when its cost-per-kilowatt estimate soared into Vogtle territory.

Earlier thus year, GE-Hitachi gave both Ontario Power Generation (OPG) and the Tennessee Valley Authority (TVA) estimates on the BWRX reactors each are planning.

OPG’s estimate, for 300 MW, converts to US$ 4.5 billion. TVA’s estimate is buried in the fine print of its integrated resource plan, but also seems to be around $5 billion.

On the subject of economic nationalism, Canada has an indigenous large reactor technology, the CANDU. That $4.5 billion has some Canadians wondering why Ontario Power should bankrolling GE-Hitachi’s SMR.

What could go wrong with Rolls-Royce’s SMR project?

I see two potential issues.

The first involves the staying power of Rolls-Royce SMR — the company — and, related, the staying power of the UK government.

The UK state has been deeply intertwined in Rolls-Royce’s history.

The original partnership between Henry Royce, engineer, and Charles Rolls, car salesman, dates back to 1906. That was Rolls-Royce Limited.

Royce and Rolls’ luxury cars quickly developed a sterling cachet. They were excellently engineered, yet also hand-crafted.

During World War I, the Air Ministry asked Rolls-Royce to try its hand at building engines for airplanes.

The first of many Rolls-Royce piston engines — all named after birds of prey — was the Eagle.

Two Eagles took John Alcock and Arthur Brown on the first non-stop flight across the Atlantic in 1919.

The Merlin, Rolls-Royce’s most famous piston engine, powered such planes as the Spitfire, Avro Lancaster, and P-51 Mustang during World War II.

‘Merlin’ comes from the name of the small dark falcon, not King Arthur’s court magician.

Rolls-Royce is currently the second-largest maker of jet aircraft engines.

Its entry into that business traces to a different wartime intervention by the British government.

Frank Whittle had a prototype jet engine working in 1937.

But after the start of World War II, Whittle’s little company, Power Jets Ltd., proved incapable of advancing jet engines fast enough to satisfy a frustrated British Air Ministry. It eventually handed the Whittle and his engine over to Rolls-Royce.

In 1971, after various technical and business missteps in the development of the RB211 engine for the Lockheed L-1011 TriStar, Rolls-Royce Limited went into liquidation.

At that point, the assets and ongoing business were acquired by the UK government and put into a new state-owned company, Rolls-Royce (1971) Limited.

In 1987, the Thatcher government sold off Rolls-Royce in an oversubscribed public stock offering. The current business entity is Rolls-Royce Holdings plc, traded on the London exchange as RR.

Along the way, the car business was sold off. Long story short, the Phantom continues to be made by a BMW subsidiary in Goodwood, West Sussex.

Rolls-Royce SMR was created as a separate company in October 2021, with about 150 engineers going over to it from the Rolls-Royce submarine reactor division.

As to Rolls-Royce SMR’s ownership:

• 76% is owned by Rolls-Royce Holdings.

• 11% is owned by BNF Resources UK Ltd, a London-based investment office of the family of French oil and gas billionaire François Perrodo.

• 10% is owned by the Quatar Investment Authority.

• Baltimore-based Constellation Energy, formerly Exelon, has a 3% ownership share. Constellation, not coincidentally, operates some 20 nuclear reactors in the United States. Microsoft’s deal to restart the undamaged reactor at Three Mile Island is with Constellation.

Prior to the Great British Energy announcement in June, Rolls-Royce SMR had apparently gone through most of its initial round of funding, about £500.

As defense contractors know how to do, Rolls-Royce SMR will probably need to rely on repeat trips to the government well.

Nuclear at the moment enjoys the support of all three major British political parties — Labour, Conservative, and Reform — but the long-term budgetary staying power of the UK government cannot be treated as a given.

It was intended as joke, but in 2010 Labour’s outgoing Chief Secretary to the Treasury, Liam Byrne, left a note for his successor, “I’m afraid there is no money.”

The second potential danger for the SMR project is competitio.

Not from batteries or wind turbines, but large nuclear.

If — a large ‘if’ — large nuclear can put its house in order to take advantage of today’s pro-nuclear sentiment.

Two year ago, I speculated toward the end of in post about “The Lessons of Vogtle” that contrary to all logic, it might be an opportune time for someone to commit to building another AP-1000, even in the U.S.

The kinks had been shaken out. The supply chain had been built.

On July 16, 2025, Westinghouse CEO Dan Sumner made clear to Donald Trump that Westinghouse has ten AP-1000s to sell him, if Trump wants to buy them.

A test of whether large nuclear is back in the U.S. may come this year if someone decides to complete the V.C. Summer project in South Carolina, a Vogtle-twin AP-1000 build abandoned in 2017.

The AP-1000 would not be the only apex predicator in a revamped ecosystem where streams of money are flowing into large nuclear again.

Westinghouse and South Korea’s KEPCO have finally resolved a years-long legal dispute that might now make the KEPCO APR-1400 a formidable competitor. China could get aggressive about exporting its version, the CAP1400, developed by the State Power Investment Corporation.

The success of SMRs in that ecosystem will depend on how well Rolls-Royce can execute.

The hoped-for benefits of SMRs will have to materialize.

Now, it won’t be an qualified disaster if SMRs don’t turn out to be the answer to all the nuclear industry’s woes.

We’ll have some small reactors, some built more modularly than others.

For a brief shining moment in the 1960s, nuclear did follow the classic ‘infant industry’ learning curve of new technologies.

That ended in 1967, when the regulatory regime we associate with the 1970s started to kick in.

Since then — as well argued by Matt Ridley in How Innovation Works — nuclear has been exceptional for having a ‘negative’ learning curve.

Aside: Being on a negative learning curve is polite way of saying getting stupid.

“The story of nuclear power,” Ridley wrote in 2020, “is a cautionary tale of how innovation falters and even goes backwards if it cannot evolve.”

Nuclear stalled, Ridley wrote, “not for lack of ideas, but for a very different reason: lack of opportunity to experiment.”

The plethora of companies working on advanced nuclear may, at long last, create the trial-and-error ecosystem nuclear has needed to move forward.

But the Rolls-Royce SMR is also an experiment, and a well-thought out one at that.

Experiments don’t always work.

But Rolls-Royce should get its shot.

In my two posts on the April 28th blackout in Spain, I foolishly promised to report back as the official reports came in. [Links to those posts are here and here].

On Tuesday, June 17, 2025 the first one did.

After wading through a 182-page PDF in dense Spanish, I’m beginning to regret that promise.

This is the report that was ordered the day of the blackout by Spanish prime minister Pedro Sánchez, to be conducted by Spain’s oddly-named Ministry for the Ecological Transition and Demographic Challenge (MITECO).

Aside: Here is a link to the press release about report (in Spanish). If you care, you can follow the links to the full thing.

In my second post, I made a slightly snarky suggestion that — since that same Ministry houses Spain’s meteorological bureau — we might get an official explanation that blamed the weather.

That was unfair. The Ministry’s report is real.

If redacted and incomplete.

The redactions are, to me, not surprising.

After a blackout, the blame game has dynamics every bit as powerful as those that overwhelmed the electric grid.

No company wants its name to appear in an official government report.

In the U.S. — as I said in my second post — NERC and ERCOT sometimes give grid equipment vendors witness-protection style anonymity, calling them ‘OEM 1’, ‘OEM 2’, and so on.

Incomplete, because the Ministry’s report doesn’t get to the initial cause.

The mysterious frequency oscillations — described in great detail in the report — were a symptom, not an explanation.

I suggested in my first piece, those were most likely induced by an interaction among DC-to-AC inverters, along the lines of what was found by ERCOT and NERC in the Odessa, Texas incident.

But enough of my theories.

Meanwhile, it’s good that we can lay some of the early speculation to rest.

There was, of course, no cyberattack. No forest fire took out the interconnector with France.

It’s also useful to have the official figures on Red Eléctrica’s generation mix at the time of the incident: 82% renewable, 10% nuclear, and 3% gas.

Red Eléctrica’s day-ahead mistake was to go ahead with fewer than 12 sources of synchronous generation.

Those, of course, give the grid inertia.

Red Eléctrica admitting this — according to the report — confirms what I call the ‘fragile grid’ hypothesis, which I outlined in my second post.

I’ve added ‘un origen multifactorial’ to my Spanish vocabulary deck.

One synchronous source had an excuse for being offline. It had notified Red Eléctrica in advance.

Others were being paid monthly stipends for grid-stabilizing services, but couldn’t deliver in time.

In Spain, there will be another round of blame game over that.

There were several factoids in the report that relate to solar surplus, a topic near to my dark heart.

The morning of the blackout, Spain was exporting its surplus solar to France, but at negative prices, meaning Spain was paying France to take it.

That was 1,000 MW, roughly the output of a large nuclear plant, such as Vogtle in Georgia.

Some 2,978 MW — almost three Vogtles — was being consumed by pumped-hydro to take advantage of the cheap surplus solar.

Just before the collapse, some wild things took place on interconnecters with France. At 12:33, 4609 MW was coming in from France on the AC lines while 802 MW was going out to France on HVDC line.

Then the interconnectors wisely, by the lights of their machine logic, decided to disconnect.

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The Ministry’s report is not everything, but better than I expected.

So I’ll take it, for now.

There are a few nerdy details I’m still curious about.

At some point, someone suggested, based on the 12:30 time the blackout started, that it might somehow be related to the contract period for buying electricity in France.

If there’s anything to that, the report coming from ENTSO-E, the European Network of Transmission System Operators (TSOs), might get to it.

The details about the failings of the Spanish solar farms, for now, seem likely to stay in Spain.

It’s been three weeks since the blackout in Spain and Portugal on Monday, April 28, 2025.

Media stories at times follow the rules of drama.

In the Spanish blackout story, we’re waiting for a ‘reveal’.

That’s based on the assumption that one of several forensic investigations will tell us what happened.

Now, I’m as curious as anyone to know that.

But — speaking of the rules of drama — here’s a spoiler alert.

Don’t expect much out of the Spanish investigations.

Counter-intuitively, accident investigations often reduce our understanding of what happened when a complex system fails.

That’s because they draw our attention to the triggering incident.

Which people, being people, will call the ‘cause’.

Forgetting it was the system that failed.

We know a quite bit about the epistemology of accident investigations.

Accident investigations have — of themselves — been studied for decades by sociologists, psychologists, and even anthropologists.

Accident investigations produce a story of events linked together in a chain of cause-and-effect.

There’s nothing wrong with wanting to know that story.

It may be a good one.

But knowing how something happened is not the same thing as knowing why something happened.

Or a very satisfying answer to the common question, “How could this have happened?”

Humans brains are biologically hardwired not to understand complex causality.

Which explains why certain fallacies dependably pop up in accident investigations.

Outcome knowledge, for example, permeates accident investigations like an inescapable fog.

In the 1980s, anthropologist Laurence Goldman lived with the Huli people of Papua New Guinea, and became fascinated by how the Huli resolved disputes.

Aside: Most of those involved pigs.

Among the Huli, every event is assigned an agent.

If not a human one, then a supernatural one.

There are no ‘accidents’. The Huli don’t have a word for that in their language.

A vestige of the Huli way of thinking lives on in Anglo-Saxon jurisprudence in the term 'Act of God'.

Legally, that’s an event, such as a weather event, not under human control.

Now, God seems to be doing okay these days.

But ‘Act of Gods’ are hanging on by a thread.

In the religion of climate change, weather events are now ‘attributable’.

In other words, that tornado was no accident.

The Huli would understand.

A scapegoat is a person who is blamed for the mistakes of others.

This all-too-modern practice was first described 3,500 years ago in the book of Leviticus.

When it involved real goats.

The lucky one got cast out into the wilderness. The other one got his throat slit at the alter.

In accident investigations, the scapegoat is often the victim of hindsight bias.

That’s the belief, often fallacious, that they could have or should have known what was coming.

Trial lawyers have known for years that to win over juries in accident cases the sequence of events must be laid out simply, like a chain of falling dominos.

The domino model dates back to 1931, when occupational safety researcher Herbert W Heinrich championed it was a way of understanding and preventing workplace accidents.

Lay juries ‘get’ the Newtonian physics of the falling dominos.

That’s good, but the model can introduce more subtle forms of fallacious thinking.

With the falling dominos, the cause-and-effect chain is so strong that jurors — or so the trial lawyers hope — believe the harm should have been foreseen by the guilty party.

And an accident ‘understood’ as the strong chain of events is reversible. Pulling one domino out of the chain would have prevented the accident.

If there’s an error of omission in the chain, juries often lose the plot.

A doctor neglects to order some medical test early in the course of the victim’s disease.

Jurors say to themselves: the doctor didn’t kill the guy. Cancer killed the guy. Which he got from smoking, or whatever the early dominoes say.

Starting in the 1990s, the diet of dominos was supplemented by Swiss cheese.

The ‘lines of defense’ against an accident were like slices of Swiss cheese.

You got an accident only in the rare event a set of holes in the slices lined up:

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There are some telltale signs that the Spanish government under Pedro Sánchez, the leader of the left-liberal PSOE (Partido Socialista Obrero Español, Spanish Socialist Workers' Party), would be delighted to chalk up the blackout to an Act of God.

Aside: On a sailboat, a telltale is a piece of string on the mast that tells you which way the wind is blowing. In this instance, the political winds.

No single party in the Cortes Generales has a parliamentary majority.

Since 2018, Sánchez has managed to hang on as Prime Minister through a series of shaky coalition deals.

These have been the small regional parties (Basque or Catalonian) or Unidas Podemos (‘United We Can’), itself an electoral coalition of far-left parties.

The Partido Popular, the conservatives, won the largest share of popular vote in Spain’s last general election in July 2023, but not enough seats to form a government.

The next general election in Spain must take place no later than August 2027.

But an election could happen sooner should Sánchez lose a no-confidence vote in the Cortes.

A damning report on the blackout is the sort of thing that could bring that on.

The day of the blackout, Spain’s Ministry of Labor was quick to say the blackout triggered force majeure.

Force majeure suspends the obligations of both parties in a contract if something — like an Act of God — prevents them from fulfilling them.

The immediate impact on Spanish workers was they went on paid leave, and would have gotten it for up to four days if the blackout had gone on.

Prime Ministered Sánchez was quick to order a government investigation of the blackout.

But his choice of government agency to conduct that investigation may be also be telling.

It’s the one roughly equivalent to the U.S. EPA: the Ministry for the Ecological Transition and the Demographic Challenge (MITECO).

MITECO’s mission, according to its website, is to lead Spain’s fight against climate change.

MITECO also happens to house Spain’s meteorological bureau.

So a weather-related explanation may well be coming from it.

Whatever weather event it was, it was doubt made worse by climate change.

By telling a story with a clear chain of cause-and-effect, investigations into complex systems failures inescapably get things wrong.

Not in the sense that the story is factually incorrect.

But there are many paths up the mountain.

Lesson #1 in complex system failures is that the triggering incident doesn’t matter.

Meaning if it hadn’t been that particular thing, odds are it could have been something else.

The investigative story details one of many possible failure paths.

That won’t stop politicians from calling whatever made the first domino fall as the cause.

And assuring the public that fixing that one thing — if it can be fixed — will solve the problem.

Engineers, more partial to Swiss cheese, will suggest new locations for lines of defense.

Everybody will lose sight of the bigger picture.

Bloomberg reporter Javier Blas got it right when he called the Iberian blackout “The first big blackout of the green electricity era.”

What happened in Spain was a class of blackout we haven’t seen before, at least on a large scale.

Past blackouts resulted from a gross deficiency in electricity supply relative to demand.

They typically take place in summer — too many air conditioners running — or, more dangerously, in winter, when something like a freak freeze interrupts supply.

The Spanish blackout happened on a spring day, around noon, when the supply of electricity was abundant (perhaps over-abundant) and demand was low.

The analysis of the Spanish blackout as a complex system failure may sound complicated, but is really rather simple.

Red Eléctrica de España put Spain’s grid into a fragile state by putting on too many non-inertia sources of generation.

The tight coupling required for a complex system failure came from the self-protection settings of the devices connected to the grid.

Whatever exactly the precipitating incident was, after a critical mass of devices had taken themselves off the grid, there was a chain reaction, and every device took itself off the grid.

That’s it.

Time, from start to finish: 27 seconds.

Like a light bulb going out.

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There’s an obscure metric used in the utility industry: System Non-Synchronous Penetration (SNSP).

SNSP is similar to — but not congruent with — renewables penetration.

Hydro is classed as ‘renewable’, but provides synchronous generation using those heavy turbines.

We’re used to discussing economic limits on renewables penetration. I did that with respect to California solar in a piece here.

As renewables penetration goes over 50% and heads toward 70%, so does ‘curtailment’ — throwing away electricity.

Batteries can — and already do — take some of the sting out of curtailment.

SNSP puts a different limit on renewables.

At present, the generally accepted number is 60%.

But, in the past few years, grid operators in the EU have been under pressure to increase this to 75%.

A grid with a lot curtailment just wastes money.

A grid with a high SNSP operates on the edge of chaos.

And batteries, of themselves, won’t help.

We can confirm this analysis by looking at what Red Eléctrica has been doing since power was restored.

Looking at Spain’s generation mix for today (May 14, 2025), solar photovoltaic is being limited to under 50%.

Here’s a link to Red Eléctrica’s web page. Note that the page gets updated often, so you need to know what time it is in Spain. To get a feel for a whole day, run the slider back and forth.

Spain’s nuclear plants are back in business. On average, they’ve been generating around 20% of Spanish electricity. They seem to get throttled back slightly during the solar peak hours.

Here’s a screen capture from my 14 May visit:

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Policy-wise, the immediately sensible thing is for the ‘100% renewables’ crowd to reduce their ambitions.

Which is what Red Eléctrica has done, for now.

There are other options, which will undoubtedly get brought up in the various reports.

The tight coupling, for example, can be mitigated.

Electricity grids, as we know them today, are scary interconnected.

On June 4, 2022, a surge arrestor failed at a natural gas power plant in Odessa, Texas.

That dropped 333 MW off the Texas grid.

ERCOT, the Texas grid operator, should easily have been able to handle that.

Most grid operators prepare for ‘N-1’ events, in which some large source of generation suddenly goes offline.

The tolerable loss in gigawatts is usually set to be that of the largest generator on the system and might be 1.3 GW, the approximate output of a big nuclear plant.

But that planning is about resource adequacy, not grid frequency or inertia.

And it assumes there will be time for humans to react.

By a sort of frequency and voltage contagion — communicated through the grid — the Odessa failure knocked out a plant on the U.S. side of the border near Matamoros, Mexico.

That’s 710 miles from Odessa as the crow flies. It also knocked out the solar photovoltaic farms for 250 miles around.

Not to be stupidly pro-American, but the investigation into the Odessa incident by NERC and ERCOT was the sort we’d like to see come out of Spain.

Aside: NERC is the North American Electric Reliability Corporation which, like ERCOT a non-profit.

But for a variety of political reasons probably won’t.

Not that Texas doesn’t have politics.

Liability concerns shadow accident investigations like a dark cloud.

To such an extent that “legal and administrative concerns … contaminate the ‘facts’ which are subsequently used by scientific accident researchers and risk analysts,” in the words of Leo Tasca, a sociologist who studied maritime accident investigations.1

ERCOT faced hundreds of lawsuits seeking millions of dollars after the Winter Storm Uri blackout in February 2021.

ERCOT wiggled off that hook only by a 5-4 decision by Texas Supreme Court in 2023 that ruled that ERCOT, although a private corporation, is enough of a state agency to enjoy sovereign immunity.

In any event, NERC’s 2022 Odessa recommendations will no doubt show up in Spain.

Instead of just disconnecting to protect themselves, all those inverters at the solar farms can be re-programmed to try to ‘ride through’ frequency and voltage disturbances.

But no manufacturer of such devices wants to be singled out as the one potentially causing a problem.

The NERC and ERCOT investigation gave them witness-protection style anonymity that was almost cute. They were referred to as ‘OEM 1’, ‘OEM 2’, and so on.

Another common refrain, already being chanted by renewables zealots, is that Spain ‘just needs to add batteries.’

That’s a bit of sloppy thinking that needs to be clarified.

Batteries have no inertia. They just store power.

What is true about batteries is that they can be paired, at relatively little extra cost, with various electronics that can help out the grid.

Which requires maintaining some reserve of power that can be ‘injected’ into the grid if needed.

So a type of curtailment, just under a different guise.

Today’s inverters at solar farms sense the grid’s waveform to make their injection of power at the best point.

So they’re called grid-following.

Devices on the analog grid run in lockstep at the same frequency thanks to the fundamental laws of electromagnetism.

So the grid frequency is relatively easy to follow.

There’s nothing God-given about 50 or 60 Hz, by the way. Rather, frequency can be considered a signal.

The heavy rotating devices with high inertia work automatically — for a while — to keep the grid frequency up when the grid loses power.

Synthetic inertia is the New Hope of those who want to do away with coal, natural gas, and nuclear plants.

But first, a rant about flywheels, an ancient technology for storing rotational energy and a reductio ad absurdum of the Net Zero Project.

There are several of these in the UK, whose Net Zero folly knows no monetary bounds.

In the contemporary version, electricity is consumed to spin a heavy flywheel.

Flywheels do temporarily store and smooth out irregularly produced power, such as that from a wind farm. And they help provide grid inertia.

Which the UK needs because it has shut down its coal plants.

Whose flywheels were producing, not consuming, electricity.

But digital is better.

It has to be, because, well, it’s digital.

Just like with vinyl LPs.

In fast frequency response, an electronic device also follows the grid, but is programmed to inject power — possibly stored in a battery — in an effort to stabilize it.

Many more of those are no doubt in Spain’s future.

Helping the grid maintain its frequency shades into a discussion of electronic grid-forming, which is something else entirely.

That technology exists, but rightly faces all sorts of obstacles to widespread deployment.

Allowing those grid-formers to operate independently would certainly be a recipe for disaster.

But if they must be centrally controlled, what AI is going to do that? How will it communicate with them? What about cybersecurity?

The U.S. National Renewable Energy Laboratory (NREL) has been studying synthetic grid-forming technology for well over decade.

In a 2020 publication, “Research Roadmap on Grid-Forming Inverters”, the NREL estimated the technology was 10 to 30 years away for large power grids.

The roadmap the NREL authors propose sensibly starts small, and works larger.

First, the bugs need to be worked on ‘island’ grids.

A few of those are real islands that have lots of renewables: Ta’u in American Samoa; King Island off Australia; Maui in Hawaii; and Ireland.

Others are ‘grid’ islands, a description that fits ERCOT in Texas and — as we now know — Spain.

The important metric on the chart below is not annual renewables generation, but peak (open red boxes):

If the 100% renewables game is worth the candle — which voters, tax- and rate-payers ought to have a say about — here’s the pyramid that needs to be scaled:

I keep mentioning politics.

Spain’s are singular.

And will very likely to affect what we will see emerge from the blackout investigations.

The country, of course, has a rich — and at times tragic — history.

Spain has been a modern European-style democracy only since 1982. Franco died in 1975.

British writer Paul Preston has written an excellent history of modern Spain2.

Preston underscores three themes: (a) corruption, (b) political incompetence, and ( c ) social division.

Those didn’t go away after 1982.

An old-school corruption scandal, complete with embezzled funds and Swiss bank accounts, brought down what is now Spain’s conservative opposition party, the Partido Popular (PP), in 2018.

Corruption may be too strong a word, but the extent of the Spanish government’s ties to its power industry are likewise singular.

Three large conglomerates — Endesa, Iberdrola, and Naturgy — control 90% of the Spanish electricity market.

The three are vertically integrated and do everything from own solar farms to bill retail customers.

Iberdrola, headquartered in Bilbao, is often put forward as Spain’s ‘national champion’ in renewables.

Iberdrola is often portrayed as being in a ‘race’ with Enel — the Italian firm that owns Endesa — to become ‘the Exxon of Green Power’.3

The financial maze through which Spanish renewables are subsided is impenetrable.

The largest solar farm in Spain, Nunez De Balboa in Extremadura, has one of its major power purchase agreements with a Basque bank.

The Spanish grid is managed by a for-profit corporation, Red Eléctrica de España (REE), under a concession from the government.

REE’s parent company, Redeia Corporación, S.A., is 20% owned by Spain’s sovereign wealth fund, SEPI (Sociedad Estatal de Participaciones Industriales).

It’s also 5% owned by Spanish billionaire Amancio Ortega and 3.14% by Wall Street investment manager BlackRock. Ortega’s asset management fund Pontegadea Inversiones also owns 12% of the operator of the Portuguese electricity grid, Redes Energéticas Nacionais.

The presidency of Red Eléctrica is a clearly a political appointment.

The current president, Beatriz Corredor, was a PSOE member of Parliament until 2020 and before that (2010) served as the Housing Minister in a PSOE government.

Which helps explains why, just after the blackout, one of the first things the Partido Popular opposition leader, Alberto Núñez, did was demand that Corredor step down.

Spain has a relatively small anti-EU ‘far right’ party, Vox — 15% of the vote in 2023.

The PSOE, for its part, has been a dedicated follower of EU policy fashion. It particular, it’s ardently pro-renewables and anti-nuclear.

In 2023, the PSOE announced its intention to phase out Spain’s remaining 5 nuclear plants, starting in 2027.

After the blackout, PP opposition leader Núñez happily pounced on the nuclear phase-out issue, in an attempt to put a wedge between his party and the PSOE.

On the floor of the Cortes that brought a heated retort from Sánchez: “Those who link this incident with the lack of nuclear plants are either lying or demonstrating their ignorance.”

Sánchez was also very quick to say that the blackout was not caused by an ‘excess’ of renewable energy, nor a lack of supply to meet demand.

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It should come as little surprise that Portugal’s Prime Minister, Luís Montenegro, demanded an ‘independent’ — read, non-Spanish — investigation into the blackout.

Montenegro suggested it be done by the European Union Agency for the Cooperation of Energy Regulators, ACER, based in Ljubljana, Slovenia.

The most promising investigation of the blackout is presumably the one underway by ENTSO-E, the European Network of Transmission System Operators (TSOs), headquartered in Brussels.

ENTSO-E investigations can take months, and are typically expected to be completed in six.

Red Eléctrica, being Spain’s TSO, is a member of ENTSO-E.

Which means the ENTSO-E investigation may prove to be the only path by which what Red Eléctrica knows about the blackout gets out.

But possibly not.

ENTSO-E’s official bailiwick is trans-border transmission.

If that was affected only as a side consequence of what went on inside Spain, ENTSO-E could document those effects, then draw a line at the border.

Forensic investigations do take time.

Logs need to be collected from many dispersed sites. Those will have different operators and owners.

Each piece of equipment may have different logs and different manufacturers, whose cooperation may be needed to get at it.

Then all that dispersed data needs put — very accurately — on a composite time scale, quite likely to millisecond resolution.

Only then can the event be played forward.

We’ll have a story. Now with details.

I’ll read it.

It’s got some promising dramatic elements.

There were the warnings, of course. All catastrophes needs a Cassandra.

And what was up with those spooky oscillations beforehand?

Stay tuned.

Accidents, such as a plane crashes, usually have a complex chain of causes.

And as a rule, I don’t like second-guessing the experts who do accident investigations.

The entity that will eventually provide the definitive analysis of the blackout is ENTSO-E, the European Network of TSOs.

I try to be a good Bayesian.

That means I’m willing — even plan on — adjusting a hypothesis as new evidence comes in.

So in that spirit, I’m going to look at what we know about Monday’s blackout in Spain and Portugal.

But first, the Iberian blackouts should serve as a reminder of just how vital the electrical grid is in the contemporary world. For example:

• People were trapped in between floors in elevators.

• Trains — such as the intercity one in the photo above — coasted to halt. Airports and air traffic control went dark a least for a few minutes.

• Subway trains in Madrid stopped in the tunnels, and passengers had to hike out along the tracks.

It could have been far worse. The death toll was thankfully low: five. A woman in Valencia died after her oxygen concentrator stopped.

Four other deaths resulted from post-blackout coping. Three members of a family in Galicia died from carbon monoxide poisoning after using an emergency generator indoors. A man in Madrid died in a fire caused by his candle.

For everybody else, there was inconvenience: cell phones, ATMs, and cash registers stopped working, and so on.

In a chart, here’s what happened about one-half hour after Noon (1033 GMT / 12:35 PM CEST) on Monday :

The timing of the event is our first big clue.

Noon: solar.

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Sure enough, late Monday, Red Eléctrica de España, which manages the Spanish national grid, said it was “very possible” that the fault originated from a solar farm or farms (note the plural) in the country’s south-west.

Which is not too helpful in fingering an individual culprit. That’s where most of Spain’s solar farms are. Some 70% of Spain’s solar generation is in the southern provinces of Andalucia (24.3%), Extremadura (24.3%) and Castilla La Mancha (22.2%):

The statements by REE's System Operations Chief Eduardo Prieto are to date the only source of ‘inside’ knowledge about the causes of the blackout.

Monday evening, Prieto held in a conference call, in Spanish, with various reporters.

Javier Blas, an excellent bilingual reporter for Bloomberg, posted the notes he took during that call on X on Tuesday. I’ve reproduced them in this footnote1

Prieto also held a short press conference on Tuesday whose propose was to quash speculation about the blackout being the result of a cyberattack. It’s on YouTube (in Spanish) here.

In both statements, Prieto definitely said the ‘oscillations’ in the grid originated in southwest Spain:

Un evento en el sistema eléctrico compatible con la pérdida de generación en la región suroeste del sistema peninsular español fue identificado…

[Google translate]: An event in the electrical system compatible with the loss of generation in the southwest region of the Spanish peninsular system was identified

The geographical location of the initial disturbance is important: there’s an alternative theory that the original point of failure was on of one of the smaller interconnector lines between that runs between Perpignan, Spain, and Narbonne, France. That’s in the northeast.

Until there’s good evidence for it, I’m not buying the downed power line theory.

The grid-following inverters (GFL) used at solar farms are well-known to be capable of producing the ‘oscillations’ mentioned by Prieto of REE. GridRadar got a picture of the two bouts of oscillations (to the left) before the crash:

More about grid following versus grid-forming inverters (GFM) below.

Any accident will have a proximate cause and a list of ‘but for’ causes. The ‘but fors’ are usually more interesting, and typically form a long chain.

The proximate cause of the Space Shuttle Challenger exploding was a cracked O-ring that burned through.

But for the Challenger being launched —against advice — on a very cold day in January 1986, the O-ring would not have been brittle, and the Challenger would not have exploded.

The ‘but-fors’ for the Spanish blackout are many.

For ‘but fors’, it’s better to work backwards. These are the preexisting conditions which, in a chain, give the proximate cause its unexpected punch:

• Spain produces a surplus of solar electricity, especially in the middle of the day.

• Spain exports (I’m tempted to say ‘dumps’) its surplus solar to France. Here’s the chart of Spanish electricity exports to France a day ahead of the blackout:

• So Spanish solar was presumably running full tilt. They were getting something for it from France.

• Although perhaps not very much. On Sunday, when demand was low, electricity prices in France were negative. Demand on a weekday at noon will be higher, but of course solar supply will likewise be high.

• There are only 5 transmission lines going from Spain to France, 4 old ones (2 x 380 KV and 2 x 220 KV) and one modern, high-capacity one (2,000 megawatts HVDC).

• That’s ~3,700 MW of theoretical capacity.

• The HVDC interconnect is close to maxed out, being used 84% of the time. It’s congested some 40% of the time.

• It’s also underground, which rules out weather-related problems. It would take a backhoe to sabotage it.

• Those grid constraints put the total operational capacity around 2,800 MW. You can see an excursion to 3,300 MW or so at 16:30 in the chart above.

• Spain knows all this, and is planning to improve its ability to transmit electricity to France with a Biscay Gulf project, hoping to add 2,000 MW by 2028:

The islanding effect

• As with any network, more connections work to diffuse anomalies. Inadequate interconnections turn a grid into an ‘island’, making it more susceptible to self-generated swings.

• A very similar island effect happened in South Australia on 28 September 2016, when a thunderstorm took down several transmission towers on its tie line to Victoria.

• The generation mix that day in South Australia — before the tie line went down — was 18% synchronous generation (330 MW), 48% wind generation (883 MW), and 34% import.

• That was low enough synchronous generation that the South Australia grid then destabilized and went off the rails.

Frequency

• In a bit of electromagnetic magic, generators on the grid at different locations come to run together in sync, like 10-people on the same bicycle:

• In Europe, grid operators have a statutory requirement to maintain the frequency at 50 Hz ± 1%. That’s a very tight tolerance. Here it’s being breached in a December 2023 incident in the UK:

  

• The grid running at too low or too high a frequency can damage devices connected to the grid. Most can sense this can sense when this happens and will disconnect themselves.

• An imbalance of supply and demand on the grid works to change the AC frequency on the grid. If there is more generation than demand, the frequency will increase. If there is more demand than generation, the frequency will fall.

• A key metric is called the rate-of-change of frequency (ROCOF). Its units are Hz per second. 3 Hz/s is a high rate of change.

• Classically, devices serving an electrical load will automatically cut off if the frequency falls too low. This is called underfrequency load shedding (UFLS).

• UFLS is meant to be a semi-orderly — if unpleasant to customers — thing the grid does to protect itself and keep portions of itself alive. That can obviate the dreaded ‘Black Start’ — powering the grid up from zero, which can take days.

• Things generating power — such as solar farms — will also switch off to protect themselves if the grid frequency gets too erratic.

Synchronous inertia

• Rotating devices on a grid have inertia. Because of their large size and weight, they resist changes to their speed of rotation.

• Old-school power grids have synchronous inertia that comes naturally from the kinetic energy stored in the rotating masses of generators.

• Those rotating masses can be pretty massive. Here’s a photo of those at the Diablo Canyon nuclear plant in California. Inside of each of those semicircles is 500 tons rotating at 30 times per second:

• There are (relatively expensive) electronic things that can produce synthetic inertia.

• Flywheels — that don’t generate electricity — are a mid-tech option that can create inertia.

• Grid-forming inverters (GFM), usually combined with battery (BESS) systems, actively try to manage the grid’s inertia.

• Of course, the algorithms in a GFM must be right, and speed is of the essence. That gets called fast frequency response (FFR).

Shrinking inertia

• With increasing renewables penetration, grid inertia has declined. This from the UK:

• Spain is now getting on average about 70% of its power from renewables. At the time of the blackout, it was 78%

• By my arithmetic, not much more than 18% of Spain’s electricity was coming from technologies that use conventional rotating generators. I’m adding nuclear (11.63%) with natural gas combined cycle (3.37%) and guessing about hydro.

• Spain has some hydropower (8% of its total installed generation capacity) and coal.

• Of Spain's 5 hydroelectric generation sources, 3 were offline on Monday for maintenance. That, in hindsight, was clearly a mistake.

• Spain in June 2020 shut down 7 of its 15 coal power stations, It now has 4 left. None were running at the time of the incident. Spain plans to end all coal-fired power generation by 2030.

• The best info for Spain’s generation mix just prior to the incident comes also comes from Javier Blas:

My prime suspect: solar grid-following inverter (GFL) oscillation

We don’t know yet what caused the solar farm (or farms) in south-west Spain to go offline.

Electronic inverters at a solar farm are essential for converting the direct current (DC) generated by solar panels into alternating current (AC) that can be fed into the electrical grid.

Most inverters at solar farms are "grid-following," meaning they adjust their output to match the grid’s voltage and frequency. The inverter’s control system adjusts its output.

Solar farms typically have multiple inverters operating in parallel. These need to be synchronized and their control systems coordinated.

If the inverters’ (plural) response is too aggressive or poorly tuned, it can overshoot, leading to a cycle of overcorrections — that is, oscillations, which appear as voltage fluctuations at the connection point.

Some rapid changes in solar output — a passing cloud — can trigger the inverters to adjust quickly. If uncoordinated or overly responsive, this can initiate oscillations.

An additional wildcard is that the output filters on the inverters just might resonate with grid components at certain frequencies, amplifying the oscillations.

The stage is finally set. Action!

This was not a classic ‘not enough power’ blackout, at least at first.

While it turned into a classic underfrequency load shedding cascade, it didn’t start off that way

The problem not not with the load at noon, but with generation at noon.

There was a power loss from some device in response to the first of the two oscillations.

The Spanish grid should have been able to handle a single solar farm suddenly going offline.

And it was, at first. There was enough synchronous inertia on grid to dampen the first oscillation. The grid ‘recovered’ in milliseconds.

It’s an open question as to whether the ‘oscillations’ were contagious. That is, if the first led to the second.

Probably, it did. But it’s possible they shared some same external source. The same passing cloud.

The drop in the power supply when the first device went offline would have lowered the grid frequency.

More important, probably, was just that it altered it.

Some second device presumably sensed frequency instability on the grid and turned itself off for self-protection. That would have been about 1.5 seconds later.

The big event, 3.5 seconds later, was when the interconnectors between Spain to France shut themselves off. That ‘islanded’ Spain and ruled out recovery from French nuclear synchronous inertia.

A part of the French grid near the border was affected, but recovered quickly.

The Spanish grid did not. After the cascade completed, generation fell to zero.

Lessons learned

The obvious one, which I won’t belabor, is that Spain should never have causally assumed it could replace conventional generation with wind and solar.

One — slightly stupid — quick fix might be to lower the protection settings on generating devices on its grid.

The most likely fix, given that Spain has already invested so much in solar, will be more electronic gear than can provide synthetic inertia and fast frequency response (FFR).

The role of France is all this is interesting. With its nuclear power, France is turning into both Europe’s battery — and its sponge. I hope France is buying low and selling high.

I’d like to get this out quickly, so I’m going to cut myself off.

Humans first started burning coal 30,000 years ago.

While excavating a Paleolithic encampment near present-day Ostrava-Petřkovice in Czechoslovakia, archeologists found fragments of coal mixed up with incinerated mammoth bones and mammoth ivory. These were in black ground smudges that were clearly fire-pits or hearths.

The advantage of slow-roasting their mammoth over a coal fire was probably a no-brainer for our ancestors.

Provided they could find some coal.

Fortunately for them, coal seams appear in surface outcrops in some places. Chunks of coal fall on the ground: it’s there for the picking up. More is there for the prying loose.

Coal from this outcrop in Jirentaigoukou, China was used to smelt copper 3,800 years ago. Notice the chunk pile at the bottom:

So it would seem coal is not exactly newsworthy.

Indeed — until a few months ago — all the news about coal in the U.S. apparently belonged on the obituary pages.

It consisted of one grim announcement after another: some coal-fired power plant was scheduled to be shut down entirely, another was being switched over to use natural gas.

These were causality reports.

There really was a War on Coal.

It started in 2007, when the Sierra Club launched its ‘Beyond Coal’ campaign.

After Obama was elected in 2008, the Sierra Club gained a powerful ally in its war: the U.S. Environmental Protection Agency, the EPA.

The War on Coal reached an apotheosis of sorts in the final year of the Biden administration.

On April 25, 2024, the EPA issued, or updated, no fewer than four major rules effectively designed to end — basically for all time — the use of coal for electricity generation in the U.S.

In particular, the EPA’s “Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants” put a gun to the head of owners of coal-fired power plants.

Those owners had a ‘choice’ of either: (a) committing to retiring their coal plant by 2032, thereby escaping the new emissions requirements; (b) vowing to reduce the plant’s CO₂ emissions by 16% by 2023, thereby putting off the year of the plant’s retirement to 2039; or ( c ) implementing carbon capture and sequestration (CCS) technology by 2032.

That last was not much of an option. Only one coal-fired generating unit has ever captured CO₂ at any scale: the Petra Nova project at the W.A. Parish Generating Station outside Houston, Texas.

Petra Nova’s CCS gear has only worked on and off. In 2020, it was shut down. Last I checked, carbon capture was not expected to resume there until June 2025.

The EIA — the U.S. Energy Information Agency — says that during calendar year 2023 there were 225 coal-fired power plants in operation in the U.S.

Those generated 675 terawatt-hours of electricity that year, about 16% of the U.S. total.

A power station may have more than one coal-fired units, and may well have natural gas units. So a better number, statistically speaking, may be the count of coal-fired boilers in operation. The EIA’s last spreadsheet had over 1,000 of those.

That ambiguity, along with recent retirements, makes keeping the causality list from the War on Coal difficult.

The edit history of Wikipedia’s list of 211 coal-fired power stations in the U.S. [link] demonstrates the problem. A log entry notes: “Indian River plant in Delaware officially closed on February 23rd, 2025”.

The Sierra Club has turned coal’s deathwatch into a game. This page on the Club’s website features slot-machine-like spinning wheels that stop at the current score:

Aside: We note that the Sierra Club’s headquarters are in the San Francisco area (Oakland). It has a Washington, D.C. office for its lobbying efforts. The jobs lost at each of those 389 plant closing were, of course, in ‘flyover country’.

The mainstream media has likewise cheered on coal’s demise.

In February, Austyn Gaffney of the New York Times flatly pronounced “coal is a terminal case”. 1

Los Angeles Times climate columnist Sammy Roth wrote last year:

Over the last two decades, 21 coal-fired power plants have shut down across the Western U.S.

Twenty-one down, 32 to go.2

As if in some movie plot, many coal-fired power plants knew the day of their death in advance:

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Then Donald Trump won the 2024 election.

And the War on Coal was over. Or so it seemed.

In a Tweet — if that’s still the right word — made to his Truth Social account on March 19, 2025, Trump wrote:

I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL.

Trump’s appointees — Secretary of Energy, Chris Wright, and Secretary of the Interior, Doug Burgum — have been a little more forthcoming with details.

Burgum’s March 10, 2025 interview with Bloomberg News is probably the most revealing of the Trump administration’s thinking about coal.

I’ve annotated and lightly edited what Burgum said in that interview to make the following point list. Note that I’m just trying to make a list that’s readable, not automatically agreeing with everything Burgum says:

• Coal plant retirements are over: “We've got to keep every coal plant open.”

• The classic — non-CO₂ — emission controls on the existing coal plants are good enough. “If there's a coal plant still running in the U.S. it's among the cleanest in the world.”

• We need to look at ‘un-retiring’ some units at coal-fired plants that have been shut down in recent years. These should go back to normal ‘baseload’ use, and not just be on standby for extra capacity that may needed in bad weather: “If there have been units at a coal plant that have been shut down, we need to bring those back on, not just when it's 20 [degrees] below [zero].”

• “We've got two sources of baseload that have been neglected and sometimes demonized, and that's coal and nuclear.”

• Trying to win the economic competition with China without coal is the U.S. competing with one hand tied behind its back. “China last year opened up a hundred gigawatts of new coal.”

• AI is a very big deal in that competition. “Manufacturing intelligence [AI] now becomes the highest value product we've ever created with electricity since electricity was invented.”

• “China in particular understands they need baseload to be able to win the AI arms race. They've also got 30 nuclear plants under construction, and they're spending hundreds of billions of dollars on hydro.”

• “We're not in a period of energy transition. One of the big lies of the climate extremists is [the] energy transition. We're in a period of energy addition. We need additions for AI. We need additions in supply to keep the prices down and bring manufacturing back to the United States and reindustrialize our nation and not make the mistakes that Germany and the U.K. are making right now of deindustrializing.”

• “Now we've got real demand from people that are willing to pay for it, and that's and that's the hyperscalers -- the five big tech companies have a $300 billion capex budget. Their capex budget is bigger than oil and gas. Bigger than automotive. Bigger than steel. Bigger than any other industry, and what they want to spend it on is electricity to drive [their] AI data centers.”

On March 12, 2025, Trump’s ‘new’ EPA announced it was going to reconsider the 2024 Biden EPA rules, including the “Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants.”

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Real wars are hard to end. It takes more than a Tweet.

The forces at work have momentum. They can’t be turned around on a whim.

Aside: Which brings to mind the Titanic. It burned 700 tons of coal on each of its ill-fated days.

There’s the damage has been already been done.

The coal plant retirements can no doubt be slowed. But bringing back any already decommissioned is problematic.

Unlike the vintage nuclear plants — which were cared for like your grandfather’s 1970 Camaro, the oil changed every six months or 3,000 miles, need it or not — those old coal plants had some hard miles on them.

The initial instinct after a war or a natural disaster is to rebuild what was there before.

Upon reflection, it may be wiser to move on.

But to what, exactly?

One perennially good idea — always receding into the future — is ‘C2N’, coal to nuclear. Put a 360 megawatt SMR where a shuttered coal plant once was. The transmission lines are already there.

But those hypothetical SMRs would face the same economic problems as the coal plants they would be replacing. State and regional power markets are ‘rigged’ to favor renewables.

In power markets as they are structured today, the true economic competition isn’t among specific technologies.

It’s about renewables driving out ‘baseload’, whether that baseload comes from coal, nuclear, or natural gas.

That trend will take a lot to slow down, let alone unwind.

Ending the investment- and production-tax credits (ITC and PTC) enjoyed by renewables might help. But that would require Congress to act on a contentious issue.

If the War On Coal is over, what will be the nature of the peace?

In that war — as in all wars — Truth was an early casualty.

Someone — presumably the ‘new’ EPA — will have to sort out the legitimate environmental concerns about coal from the wartime propaganda put out by the ‘old’ EPA.

For reference, here’s the list of the traditional concerns associated with coal.

In the airborne category:

• SO₂, sulfur dioxide, the supposed cause of acid rain;

• NOx, a shorthand term for the two nitrogen oxides NO and NO₂, a chemical precursor of photochemical smog;

• Hg, mercury, which coal combustion can emit in trace amounts in aerosol form (and can also show up in coal ash);

• PM10, large particulate matter, otherwise known as soot;

• PM2.5, fine particulate matter. PM2.5 has been a catch-all bogeyman used by the ‘old’ EPA for ideological purposes. More about that in a minute.

Coal’s solid combustion products — fly ash, bottom ash, boiler slag and flue gas desulfurization sludge — are a waste management problem, and need to be handled correctly.

Those can potentially contain lead, arsenic, chromium, and mercury.

That’s not disputed. The legitimate issue is about amounts. The dose makes the poison.

A long digression: Grok 3

In the early draft of this post, I had a slightly cheeky suggestion about who should sort out the wartime propaganda about coal: Maybe it should be Grok 3.

Most AI research tools in ‘Search’ mode end up parroting the conventional ‘wisdom’ they find on the web.

But Grok 3 has a ‘Think’ mode — during which it spews out a detailed log of its ‘thinking’ — that is both fascinating and amazing.

Ask Grok 3 well-formed questions on complex issues, and its thinking will greatly sharpen that of us pathetic humans.

In March, climate scientists Jonathan Cohler and Willie Soon pointed Grok 3 at CO₂ — specifically at the orthodox climate belief that humans determine the level of CO₂ in atmosphere, as if humans had a ‘control knob’ to twist.

On its own — and in minutes — Grok 3 zeroed in an observation made after the Covid pandemic.

During the pandemic, anthropogenic CO₂ emissions from industry fell dramatically. Yet the Keeling curve of steadily increasing CO₂ displayed not a blip or a wiggle.

I won’t regurgitate the resulting paper here, other than to quote one line from the abstract, which Grok 3 — according to Soon and Cohler — wrote: “Our analysis reveals that human CO₂ emissions, constituting a mere 4% of the annual carbon cycle, are dwarfed by natural fluxes…”

In a bit of showmanship, Cohler and Soon — well-known and well-respected if ‘skeptical’ climate scientists — gave Grok 3 authorship credit on the resulting paper, and went to the trouble of getting it peer-reviewed. They discussed the process on one of Tom Nelson’s YouTube podcasts, #170, a link to which is here.

Here’s a link to the paper itself, “A Critical Reassessment of the Anthropogenic CO₂-Global Warming Hypothesis: Empirical Evidence Contradicts IPCC Models and Solar Forcing Assumptions.”

After watching the Tom Nelson podcast, I realized there was nothing stopping me from using Grok 3 to start in on the ‘new’ EPA’s job.

So I started using Grok 3 to sort the wheat from the chaff in the ‘old’ EPA’s claims about the environmental impacts of burning coal.

The good news is that it works, and it’s been fascinating.

The bad news is that the results, while well-structured, are very long.

So I think I’ll have to post them separately. Watch this space for ‘The Grok 3 papers’ or some such thing.

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Back to the EPA

Notably, ‘Project 2025’ — widely regarded as the Trump administration’s blueprint — does not call for abolishing the EPA.

Rather, it wants the EPA to go ‘back to basics’.

Clearly, the ‘new’ EPA is going to stop worrying about CO₂ as a air pollutant.

That will come when it reconsiders and ultimately reverses the 2009 Endangerment Finding. I wrote about that last month here.

But a ‘back to basics’ EPA will presumably continue to regulate old-school, traditional pollution.

I think, it will be interesting to see if there is a sea change in that thinking not just at the EPA, but in the public discussion.

To date, that has been dominated by people who have a deep-seated aversion to anything that can be labeled ‘pollution’.

That has religious roots, even etymologically. The noun comes from the Latin pollutio, which was a defilement or desecration, especially of a sacred place.

For decades, if there was an identifiable source of some emission, there was a Puritanical reflex to get rid of it.

Without bothering to ask if that particular emissions reduction would make much of a difference, or how much it would cost.

There was no level — except zero — that was ‘clean enough’.

So by that logic, every little bit helped.

The alternative view — that there is a level of ‘clean’ that is ‘clean enough’, and there are other things more important than virtue hygiene— is not as psychologically satisfying as feeling pure.

And compromise and nuance don’t play well on social media, which pushes everything towards extremes.

I like looking at a conundrum that exists in the very name ‘Environmental Protection Agency’.

Is the job of that agency to protect the environment from humans?

Or is it to attempt to protect humans from the natural environment?

The natural environment contains, of course, things like mercury, arsenic, lead, fine particulates, and CO₂.

The alternative view says: Live with it.

The Puritans are convinced they are going to die from it.

I hate it when I sound like Doomberg.

But let’s dig in.

First, to clear my head, I listen to the Firesign Theatre’s “Everything You Know Is Wrong”.

Because on coal, it certainly feels like it.

The discussion of coal’s impact on the environment needs a complete reset if CO₂ is taken out of the picture.

On CO₂ emissions, coal was hopeless.

So it could be written off. No need to waste time talking about the state of the art in emissions control for ‘all that other stuff’.

In my opinion, the obsession with CO₂ worked as a disservice to whose who care about the environment.

An enormous amount of ink was wasted debating the pros and cons of carbon capture, or CCS.

That took attention off the ball, as a magician does with misdirection.

Rhetorically, the key word was ‘unabated’.

‘Unabated’ was code for a plant without CO₂ capture.

For example, former U.S. climate envoy John Kerry, at COP28 in Dubai in December 2023, pledged that the U.S. would shut down all its ‘unabated’ coal plants. And he recommended the rest of the world do likewise.

An ‘unabated’ coal-fired power plant sounds like one that has no pollution controls at all.

In the U.S., there are none of those.

It’s true that the owner, NorthWestern Energy Group, of the ‘dirtiest’ coal plant in the U.S. is fighting the 2024 Biden EPA regulation that would require it to upgrade its existing gear to better capture fine particulates, PM2.5.

NorthWestern estimates those upgrades would cost between $350 million and $665 million.

The plant is in Colstrip, Montana, which — no offense to the town’s 2,096 residents — is in the middle of nowhere.

NorthWestern recently took an unusual email offer from the Trump EPA.

The March 24, 2025 offer was: send us an email explaining your circumstances, and we’ll consider granting you a two-year presidential exemption from the 2024 EPA rules. Those rules are currently under review and will most likely be rescinded.

The EPA even provided a helpful template with what should be in the email subject line.

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While everyone was panicked about carbon dioxide, SO₂ emissions from the U.S. electric power sector decreased 93.4% between 1990 and 2020. NOx emissions fell 84.8%.

Coal-fired power plants using modern pollution control technology are now in the same ballpark on SO₂ and NOx emissions as natural gas plants.

Electrostatic precipitators and fabric filters can remove 99% of the fly ash from flue gases.

And the largest source of NOx in the atmosphere today has nothing to do with electricity generation — it’s cars.

ASCENT, a high tech air-quality monitoring network created by the National Science Foundation (NSF) in 2024, is able to figure out by chemical analysis where atmospheric aerosols are coming from.

ASCENT’s sensors found that if there is haze in New York City on a summer day, it’s primarily coming from growing vegetation.

The most dramatic incidents in poor air quality in recent years have come from the fires.

But those are one-off events, unrelated to anything.

Except perhaps to the devout, who believe that climate change, like the hand of God, is actually behind everything.

Air quality in a city is largely the product of its topology and meteorology.

And thus, in my opinion, best dealt with at a local or regional level.

So nation-wide numbers for air quality are not terribly meaningful.

But for what they are worth, the U.S. national numbers for the air pollutants targeted by the 1970 Clean Air Act demonstrate — to use a phrase I’ve used before — Mission Accomplished.

It’s important to look at actual concentrations in the atmosphere, in parts per billion (ppb), not emissions. Focusing on emissions, rather than on what’s actually in the air, can be misleading.

Here’s the EPA’s own chart for SO₂

And NO₂:

Keep in mind that those National Standard levels are, intentionally, very low.

I find one emissions chart for the U.S. power sector interesting because it shows a convergence of coal and natural gas on NOx around 2020:

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Even if SO₂ and NOx are a Mission Accomplished, the ‘new’ EPA still has lots of work to do.

One coal-related obsession of the ‘old’ EPA — PM2.5, fine particulate matter — should, in my opinion, be swept into to the dustbin of history.

When SO₂ and NOx were improving, the old EPA needed a new weapon in the war on coal.

It decided to weaponize PM2.5.

Now, it was legitimate — back in the 1990s — for the EPA to wonder if near-microscopic particulates had a health impact on humans.

Air quality monitors sensitive enough to count particles that small only became available in the late 1980s.

And they are very small. A 2.5 micron–diameter particle will pass through an N95 mask. Those are designed to filter out 95% of airborne particles of a size of 0.3 microns or larger.

The EPA spent over $210 million on studies of PM2.5.

Had it been honest about its science, the EPA should have been open to those studies showing no result.

The toxicological studies certainly showed no result.

No laboratory animal died from exposure to PM2.5, even at levels 100 times that in bad outside air.

In another — and ethically dubious — set of experiments, the EPA tested a variety of air pollutants, including very high levels of PM2.5, on over 6,000 human volunteers, mostly young men.

There were no deaths or serious adverse events caused by PM2.5.

Giving the ‘disappointing’ results of the toxicological studies, the EPA fell back on ‘ecological’ or observational studies.

Exposure to PM2.5 was guesstimated from the subject’s zip code. Causes of death were taken off death certificates. Those were assumed to be meaningful and accurate.

Which is not entirely true. Everybody, in the official records, gets written down as dying from something. Old age, for example, is not an official cause of death.

There were a profusion of confounding factors that had to be statistically ‘controlled’ in the computer models.

But the academic researchers who took the EPA’s money knew what the Agency was looking for.

They sliced and diced the data until they found something.

People living in neighborhoods with bad outdoor air quality were slightly more likely to die sooner from things like cardiovascular disease or chronic obstructive pulmonary disease.

Which is no doubt true.

The problem was that people living in those neighborhoods are statistically more likely to die sooner, period.

And their earlier mortality had numerous other, far stronger, explanations, most obviously socio-economic ones.

And there were counter-examples. Certain urban neighborhoods have lots of bad outdoor air, but are full of healthy — because wealthy — people.

No study actually proved that breathing PM2.5 caused cardiovascular disease or chronic obstructive pulmonary disease.

It was a just a correlation, and not a strong one at that..

If A is correlated with B, it does not follow that A is the cause of B.

It’s quite possible both A and B are influenced by something else, C.

Let’s use ‘being poor’ as C. Then the syllogism is:

• A: poor people are more likely to live in neighborhoods with poor outdoor air quality;

• B: poor people are more likely to die of cardiovascular disease or chronic obstructive pulmonary disease.

After 30-odd years of research, it remains etiologically (‘causing or contributing to the development of a disease or condition’) unclear how fine particle pollution could cause respiratory or cardiovascular diseases.

The media repeats an ‘explanation’ that is largely hand-waving: the particles are so small they somehow work their way from the lungs to the heart.

But they’re not found in the lungs or heart on autopsy.

At autopsy, the total content of mineral particulate matter in the human lung is about 0.1 grams.

None of that mattered. For the EPA’s purposes, PM2.5 was guilty by statistical association.

Heart disease is the leading cause of death in the U.S., ahead of even cancer.

According to the CDC, is was responsible for over 695,000 deaths in the U.S. in 2021.

Multiply a large number like that by the (spurious) small statistical association, and you get a number that’s still pretty large.

That is the source of the shibboleth, blithely repeated in the media, that air pollution kills tens of thousands of people annually in the U.S.

On that claim, Steve Milloy summed it up best in a 2014 post with a great title: “Show Us the Bodies, EPA”:

This is on a par with traffic accident fatalities. While we can identify traffic accident victims, air pollution victims are unknown, unidentified and as far as anyone can tell, figments of the EPA’s statistical imagination.

But PM2.5 is eminently useful as a weapon, which we might expect from history.

PM2.5 is a contemporary recreation of the old miasma theory, which was received wisdom until the 1880s.

Soot, at least, you can see. PM2.5 is all the more scary of because it’s invisible.

Checking in with reality helps get out of the rabbit hole.

Here is the usual list of risk factors for cardiovascular disease (CVD):

• Smoking

• High blood pressure (hypertension)

• High cholesterol

• Obesity

• Physical inactivity

• Unhealthy diet

• Excessive alcohol consumption

No mention of ‘air pollution’.

Indeed, only the World Health Organization (WHO) — among numerous sources such as the Mayo Clinic — even mentions ‘air pollution’ in relation to cardiovascular disease.

And that’s when it’s talking about indoor air pollution afflicting women in the Third World who must cook with wood or dung.

Aside: Who need inexpensive propane or butane burners to cook on, not lectures from the West about how their countries shouldn’t build coal plants.

So the ‘new’ EPA has plenty of sorting-out to do.

And, to be sure, even if the ‘old’ EPA’s public health claims were wildly exaggerated, you don’t want the ‘new’ EPS throwing out any babies with the bathwater.

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The world owes most of its 1.1 trillion tons of coal to a relatively brief episode in the 4..5 billion year history of the earth.

‘Brief’ on the geological timescale: a mere 60 million years. Homo sapiens has been around 300,000 years.

19th century geologists — in large part because the high interest 19th industry had in finding coal — cataloged the strata of the earth’s topmost crust.

Coal was found in certain layers of sedimentary rock the geologists called ‘carboniferous’. As an adjective, that means ‘coal-bearing’.

‘Carboniferous’ also came to be used as the name of the geologic period during which those layers were laid down.

The Carboniferous started about 360 million years ago. So well before the dinosaurs.

Evolutionarily speaking, the Carboniferous was slightly freakish.

As usual, during the Carboniferous sea level rose and fell with glacial cycles.

When the poles locked up a lot of ice, exposed coastal areas were warm and swampy.

Odd species of trees, such as lepidodendron, grew in great profusion in those swamps:

As the lepidodendron trees died, the swampy forest floor became a massive mat of peat.

Here’s where the evolutionary quirk comes it: many of the critters and microorganisms that today eat on dead bark had yet to evolve.

Then — when the polar ice caps melted in the glacial cycle — seawater flooded back into the swamp and cut off oxygen.

So the normal process of organic decay was arrested in those peat bogs.

In the slow-moving taffy machine of geologic changes, the peat layer got buried, heated, and squeezed. The peat underwent a process called ‘coalification’.

Heated and squeezed a little bit, peat becomes the lowest grade of coal, lignite.

Aside: Traditionally, coal is ‘ranked’ by its ability to produce heat when burned, although since the 1970s coal’s sulfur content has become nearly as important.

Lignite looks a little like dark brown potting soil. It may even have woody bits and fragments of bark in it.

It’s no one’s first choice as a fuel, but lignite — like peat — can be burned. Lignite and the higher grades of bituminous of coal are often collectively referred to as 'steam coal'.

When lignite is cooked and pressurized a little longer, it turns into sub-bituminous coal. That has a higher percent of carbon (42% to 52%) than lignite.

In the U.S., sub-bituminous is found thick layers in Wyoming and Montana, in areas that were once along the coast of the ancient inland sea.

That Wyoming coal is comparatively easy to mine in huge open pits. 40% of U.S. coal comes from Wyoming.

Bituminous coal is the next step up, about 85% carbon. It has a hard, flinty black look.

The most prized coal is anthracite, which some find pretty: it’s glassy black in color and has an iridescent sheen.

Anthracite is between 86% and 97% carbon. It can be hard to ignite. When it does, it burns with a clean blue flame.

These days, anthracite tends to be reserved for industrial smelting, so it’s also called 'metallurgical coal'.

The anthracite deposits of the U.S. — most of them are in Pennsylvania — were a singular product of the tectonic folding that created the Appalachian Mountains. So extracting anthracite traditionally required underground mining.

For completeness’ sake, the ultimate end product of the coalification process is graphite, almost pure carbon.

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As far as coal is concerned, the U.S. did very well in the geologic lottery,

The U.S. has 22.3% of the world’s reserves of coal, more than any other country. The U.S. is followed on the leaderboard by Russia (15.5%), Australia (14.0%) and China (13.1%).

Those ancient peat bogs could contain a variety of other stuff.

Sulfur is the fifth most common element in the earth’s crust. Coal’s sulfur content can vary widely.

In general, Wyoming coal is low in sulfur, Eastern coal high.

The mercury that can be found in today’s coal was put there by ancient volcanoes.

Mercury comes from rocks of high density, and needs some magma action to get forced upward through the Earth’s crust.

Likewise, the traces of lead found in coal were taken up from the soil by lepidodendron’s roots. Modern plants do the same thing.

There are a few technically true points about coal are worth giving a mention, if just for fun.

Coal is solar energy: it’s just energy that came from the sun 360 million years ago.

Second, it seems odd — to me anyway — that some people who have no problem burning living trees as ‘sustainable biomass’ — I’m thinking about Drax in the U.K. — have a problem burning ancient dead ones.

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A thing to remember about coal is that burning it is a very inexpensive way to generate electricity.

Other things disregarded. I’ll get around to some of those other things.

Thus it should come as no surprise that coal generates most of the world’s power.

I started to write ‘still generates’, but caught myself.

There’s no reason to presume the inevitability of coal’s demise.

If anything, coal’s use globally is increasing:

Estimates of the size of the world’s reserves of coal are all over the place.

The World Coal Association, an industry group, says there’s enough to last 132 years at the current rate of consumption.

But that association did its credibility no favors when, in 2023, it rebranded itself “FutureCoal: The Global Alliance for Sustainable Coal”.

In 1865, economist William Stanley Jevons famously speculated that Britain might exhaust its coal supplies in The Coal Question3.

But ‘peak anything’ theories always run afoul of a complicating factor: there are reserves to be found, they just cost more to extract.

Should the world ever come to it, for example, there’s coal in Antarctica:

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Electricity has been intimately intwined with coal since the 1880s.

Electricity was a laboratory curiosity — a shockingly entertaining one — before the advent of the telegraph.

The telegraph did get electricity out into the world, but used clunky batteries.

Coal got electricity into people’s homes.

Starting with that of J.P. Morgan at 36th and Madison, in New York City.

The electrification of Morgan’s house is a too good story not to tell.

The house is still there, by the way, and now the Morgan Library & Museum.

Morgan had been one of the first-round investors in the Edison Electric Light Company in 1878.

Aside: In 1892, Morgan would arranged the merger of Edison General Electric with Thomson-Houston Electric that formed General Electric.

In 1881, Morgan’s elegant Italianate brownstone was undergoing a top-to-bottom renovation.

Morgan volunteered his house to Edison as a test site.

It would be the the first private residence in New York illuminated solely by electric light. ‘Solely’ was an important aspect of the test.

In those days, if you wanted electricity, you had to generate it yourself.

Consolidated Edison — the utility you’d call today — was then the New York Gas Light Company.

In cities, gas companies would happily supply you with coal gas, a mixture of carbon monoxide and hydrogen. Coal gas had been distributed by urban pipes as far back as the 1810s.

Coal gas was troublesome stuff. Edison called it a 'vile poison'. From time to time, a guest at some hotel would snuff the flame on the wall sconce, forget to turn the key to shut off the gas, and wake up dead.

Aside: Coal gas should not be confused with ‘natural’ gas, which is methane. Utilities now add mercaptan to natural gas as a safety feature, to give it that distinctive rotten egg smell.

The Edison Company put a coal-fired steam engine and electrical generator in a shed out back of the Morgan mansion. It had a full-time attendant.

For a time, Edison & Co. considered on-site generation a possible business model.

Edison’s DC current couldn’t travel very far.

And in cities like New York, the situation with overhead lines was entirely out of control:

Given the requisite bribes for Tammany Hall, it cost a lot of money — even then — to dig up New York City streets to bury lines underground.

So one idea was to sell building owners who wanted electricity small coal-fired generators to install in their basements.

There was some infrastructure already in place: coal was delivered regularly (down those those cute coal chutes) to be burned in steam boilers and fireplaces for heat, and in stoves for cooking and baking.

The first electricity test lit up Morgan’s house with 385 bulbs on June 8, 1882.

There were a few kinks that had to be worked out. The generator clanked and sparked like a daemon.

But no one had seen rooms with that quality of light before.

In an uncharacteristic bit of democracy, the bulbs were located not only where they would show off Morgan’s art collection and Romanesque dining room, but also in the servants’ halls and butler's pantry.

As the fall 1882 social season opened, a few fortunate Society scribblers got a peek inside Morgan’s renovated house.

One marveled: “In order to illuminate a room, you have simply to turn a knob as you enter.”

Aside: Gas lamps had to be lit one at a time. One of Edison’s favorite demos was flipping a master switch that would make 100+ lights come on at once in spectacular fashion.

Next door to the Morgan house, however, Mrs. Brown was not happy.

The steam engine — typically fired up at dusk — made a lot of noise. It set her whole house to vibrating. The acidic fumes from the burning coal per­meated her pantry, tarnishing Mrs. Brown’s silver.

J.P. Morgan had a word with the Edison Company.

The vibrating steam engine was put on an India rubber pad. The shed was soundproofed with felt.

And, in an early triumph of air pollution remediation, a ditch for a square brick pipe was dug across Morgan’s backyard to funnel the smoke from the steam engine into the mansion's chimney.

Mrs. Brown was presumably placated.

But no good deed goes unpunished.

Morgan’s son-in-law later wrote: “In the winter when the snow melted above the brick conduit, all the stray cats in the neighborhood gathered on this warm strip in great numbers, and their yowling gave grounds for more complaints.”

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By 1902, only 20 years after Edison’s Pearl Street power station was opened, there were 2,250 coal-fired power plants in the United States.

Hydropower could also generate electricity.

But transmission lines had to be built from relatively remote sites. Tesla’s and Westinghouse’s 1896 alternating current line ran 22 miles from Niagara Falls to Buffalo, New York.

AC would eventually win the ‘War of the Currents’ and become the standard for transmission in the U.S.

But in the meantime, coal plants could be built fast, and close to where the power was needed.

Nocturnal visitors to the 1893 Columbian Exposition in Chicago were dazzled by the tens of thousands of clear lights illuminating the ‘White City’.

It all looked so clean and modern.

And was powered by a number of purpose-built, smoky coal plants, kept well out of sight beyond the borders of the Exposition.

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Coal’s demise in the first decades of the 21st century has not only been precipitate, it’s fallen off a high perch.

This graphic gives a sense of the speed of the decline:

As for the high perch, throughout the entire 20th century coal produced roughly half the electricity generated in the United States. The balance came from hydropower and a changing mix of other sources:

Coal’s more recent peak shares — 52.8% of U.S. electricity generation in 1997 and 51% in 2001 — were in line with the average for the entire 20th century.

In 2024, coal’s share was 16%.

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After the oil price shock in 1973, calls for U.S. energy independence led to a brief building boom of new coal-fired power plants.

Aside: Coal’s competition at the time was nuclear. The environmental groups of the 1970s hated a lot of things, including hydro, but they hated nuclear so much they gave coal a pass.

On this chart, we can see coal’s boom years at the bottom in dark brown. We can also see, circa 2010, what I call the ‘Dick Chaney boomlet’ in coal. I’ll get to that in a minute:

There’s no problem with this 2016 graphic being out of date: the last large coal-fired power plant to come online in the U.S. was the Sandy Creek Energy Station in Texas in 2013.

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Coal’s problems in the New Millennium trace back to a different presidential transition, the election of George W. Bush in 2000.

Bush’s vice president was Dick Cheney, who had been a Congressman from Wyoming, the coal-mining state.

When Cheney — everyone’s favorite villain in those days — wasn’t busy starting wars in the Middle East, he took it upon himself to chair what he called the National Energy Policy Development Group.

In the early 2000s, age was already creeping up on those 1970s coal plants. Coal-fired power plants, unless put on life extension, are usually good for around 35 years.

By 2006, Cheney’s group was recommending that the U.S. build 150 new coal-fired plants to replace the old ones.

The opening salvo in the War on Coal were aimed squarely at Dick Cheney.

The story is told in a 2017 book Climate of Hope4 by Carl Pope, who was the executive director of the Sierra Club until 2010.

In this passage, note the term ‘climate pollution’. It’s CO₂ — not traditional air pollution — the Sierra Club was worried about:

the proposed new plants would emit so much climate pollution for the forty years of their expected lifetime that if they were built, it would become mathematically impossible to tame the global-warming monster. This next generation of coal plants, she [Verena Owens, a club volunteer] told us, would lock the United States into 750 million additional tons of carbon dioxide emissions every year, just when we needed to be cutting those emissions by that same amount by 2012.

Thus in February 2007, the Sierra Club’s leadership made the fateful decision to become an energy policy lobby at the national — i.e., Washington, D.C. — level.

Prior to that, most of the Club’s environmental fights had been local or regional.

“The ambition of the task left me uneasy,” Pope writes. “But the die was cast. The Sierra Club was now committed to transforming the entire energy sector of the United States, and to prevent it from locking itself into another generation of coal-fired power.” [My emphasis]

The Sierra Club was not alone in being obsessed with global warming and carbon dioxide during those years.

For a reference date, I like to use the opening (in New York and Los Angeles, naturally) of Al Gore’s “An Inconvenient Truth” on May 24, 2006.

In 2007 — even then — Hillary Clinton was running for president. She announced her campaign on January 20 that year.

The top bullet point in a Clinton campaign document — “Powering America’s Future: Hillary Clinton’s Plan to Address the Energy and Climate Crisis” — was:

• Reduce greenhouse gas emissions 80% from 1990 levels by 2050 – the level necessary to avoid the worst impacts of global warming.

Her second bullet point is also interesting, in hindsight:

• Cut foreign oil imports by two-thirds from projected levels by 2030.

At the time, US oil imports had been increasing steadily every year since 1954. They had reached what turned out to be their peak in 2005.

The Clinton campaign argued the U.S. needed to “reduce electricity consumption 20% from projected levels by 2020.”

If we’re calling things by their right name, that’s a call for energy austerity.

But not to worry: energy efficiency would take the sting out of energy austerity.

The Clinton campaign document listed such measures as “enacting strict appliance efficiency standards, and phasing out incandescent light bulbs.”

Aside: That sound is Thomas Edison rolling in his grave.

Energy efficiency measures exist along a pain spectrum.

Changing a light bulb is on the mild end. ‘Demand response’ — conforming your electricity consumption to suit your utility’s production schedule — is somewhere in the middle. Energy rationing and rolling outages are at the extreme end.

However laudable energy efficiency may sound, it comes with a hidden kicker.

It’s hard to distinguish reduced electricity consumption that comes from efficiency from that which comes from ‘structural changes in the economy’.

Here’s a 2017 Department of Energy graphic:

‘Structural changes in the economy’ can be a polite way of talking about deindustrialization.

Such as exporting manufacturing — along with its attendant CO₂ emissions — to China.

Seven of the top 10 processors of the polysilicon used in solar panels, for example, were, in 2022, in China. Three of those had their own on-site coal-fired power plants.

Aside: The UK’s economic stagnation suspiciously dates from 2008, after the exhaustion of North Sea gas and the UK’s passage of its Climate Change Act, which made Net Zero a national goal. I wrote about that here.

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Unbeknownst to Hillary Clinton, the Sierra Club and (probably) Dick Cheney, 2007 was a turning-point year in U.S. energy history.

Refreshingly, it had little to do with government policy.

The 1970s conviction that the U.S. was running out of oil and natural gas was still around.

For conventional oil and gas, that was largely true.

But the shale gas revolution had been building up steam quietly in the early 2000s.

By 2008, it was out in the open.

That year, shale gas production jumped 71% over the previous year. That dramatically reversed decades of declining U.S. natural gas output.

Now, 2008 was an odd year. That’s when the Great Recession kicked in.

But for whatever combination of reasons, in 2008 Henry Hub spot prices for natural gas dropped like a stone, from $13.31/MMBtu on July 3rd to $5.71 in December. That’s a 57% price cut.

With the usual wiggles up and down, the price of natural gas has stayed below early 2000s levels ever since:

Carl Pope acknowledges that, in 2007, the Sierra Club needed to make some changes if it wanted to stay relevant.

And solvent.

Individual club memberships had been drying up.

Fortunately for the Club, lobbying on energy policy proved to be a highly lucrative line of business.

“Later in the spring of 2007,” Pope writes, “I got a phone call. Aubrey McClendon, the head of a natural gas company called Chesapeake Energy, wanted to meet with us.”

Chesapeake Energy and its executives — primarily McClendon — ended up giving the Sierra Club’s ‘Beyond Coal’ campaign some $26 million, most of it anonymously.

As Pope writes, “[W]e became more reliant on money that came with strings.”

Those strings were at times embarrassing. In 2008 the Sierra Club received $1.3 million from Clorox to endorse that company’s ‘Green Works’ brand of environmentally-friendly cleaning products.

The secretive nature of McClendon’s donations, when revealed, prompted a mini-scandal within the Club and was a factor in Pope’s resignation as executive director.

But the ‘Beyond Coal’ campaign quickly found even better-heeled patrons.

In 2011, it got a $50 million pledge from Bloomberg Philanthropies, the charitable organization set up by Michael R. Bloomberg, former mayor of New York City.

Bloomberg made that announcement standing on a boat with the GenOn coal-fired power plant in Alexandria, Virginia in the background:

That plant shut down the next year.

But money wasn’t the most important thing the Sierra Club got from Bloomberg Philanthropies.

Advisors from Bloomberg schooled the Club in modern management.

Say what you will about the Sierra Club’s war on coal: it was not incompetently waged.

In one of the chapters he wrote for that same 2017 book, Michael Bloomberg recounts approvingly that, after their tutelage by the Bloomberg pros:

The Sierra Club team did a plant-by-plant analysis, assigning metrics for environmental impact and political climate (that is, how much opposition we anticipated) to determine the expected value of targeting any given plant. They then organized plants into three categories: easy, moderate, and hard.

The Beyond Coal campaign eventually got over its flirtation with natural gas and moved on to renewables. Note what the children are holding:

Bloomberg Philanthropies would eventually give over $174 million to Beyond Coal.

David Gelbaum, who died in 2018, gave over $200 million.

Gelbaum was a Wall Street math whiz who made his fortune in the 1980s trading derivatives for Princeton Newport Partners.

Gelbaum was also CEO and chairman of the board of Entech Solar and an investor in a diverse portfolio of climate-tech companies, including those promoting electric cars and smart grids.

Behind the curtain — in the effort to transform ‘the entire energy sector of the United States’ — were a few billionaires.

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For many, the flatline or outright decline in U.S. electricity production during the decade 2013–2023 was no cause for alarm.

Recall Hillary Clinton’s 2008 campaign pledge to reduce U.S. electricity consumption by 20% by 2020. The energy transition was the important thing.

The spin of the Sierra Club and other renewables advocates was that coal was being replaced by renewables in the 2010s.

That claim seems superficially plausible, since the percentage of U.S. electricity generated by coal has been falling, and the percentage generated by renewables has been rising.

But actual numbers in the EIA’s (Energy Information Agency) “Net Generation by Energy Source: Electric Utilities, 2013 - 2023” — a link is here — paint a more disturbing picture.

U.S. electricity production fell during those years. It produced 198 GWh less electricity in 2023 than it did in 2013.

The decline in electricity generated by coal was a whopping 670 GWh.

The majority of that shortfall was taken up by natural gas, which increasing by 394 GWh.

Next to those numbers, the increase in electricity generated by renewables pales by comparison: an increase of 53 GWh from wind and 21 GWh from solar.

Nuclear and hydro, by the way, were basically flat in that decade.

Conclusion: the U.S. replaced its lost coal-fired electricity with either (a) natural gas or (b) nothing at all.

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It’s a rare thing when a consulting group report dramatically changes everyone’s thinking. Maybe even anyone’s thinking.

But that happened in December 2023 with a GridStrategies presentation called “The Era of Flat Power Demand is Over.”

The methodology of the GridStrategies authors — John D. Wilson and Zach Zimmerman — was simple.

They collected the filings that U.S. utilities are required to make with FERC, the Federal Energy Regulatory Commission, in which the utilities estimate future demand in their areas.

It varied by region, but when Wilson and Zimmerman totaled everything up, electricity demand in the U.S. looked likely to grow 5% a year between 2024 and 2029.

That’s a growth rate last seen in the 1960s.

And it was, in the authors’ words, “likely an underestimate.”

There were two big reasons: (a) future data centers and AI demand and (b) an increase in U.S. manufacturing.

Ironically, some of that was the ‘green manufacturing’ spurred by the IRA.

Utility planners were suddenly looking at adding all kinds of new generation to meet demand growth through 2028.

And retiring the 80.6 GW U.S. coal-fired capacity by the end of 2030 didn’t seem like such a great idea. That’s 62 Vogtles in my favorite unit.5

Coal’s death during the 2010s is often attributed to natural causes.

Coal can’t compete in the market.

Yes and no. Markets are social constructs.

Let’s consider a hypothetical utility that has a portfolio of generation sources to meet demand.

The ‘demand curve’ for its electricity wiggles at the top, depending on the season and time of day.

The utility would traditionally put demand in three boxes: baseload, peak, and intermediate.

Baseload is the line you can safely draw underneath the wiggles:

Up to the baseload level, our hypothetical utility had a lot of options for how to generate that much electricity. It could use its best judgement.

It might well decide to run its nuclear or coal plants as close to capacity as they can get. That’s where they are the most economic.

Those old plants are likely to be fully amortized. Their ‘mortgages’ — capital costs — were paid off decades ago.

That alone typically makes them a low-cost source of electricity, unless something strange is going on with the price of fuel.

Working against that advantage, they have higher repair bills, as with an old car.

And if they are indeed close to end of life — a difficult call, as it is with humans and old autos — spending on major upgrades is problematic.

If our hypothetical utility was a regulated monopoly in a state with old-school PUC regulation, it would have one other slightly perverse incentive to shut down its old coal plant.

State PUCs approve rates that guarantee a utility a return on invested assets, often 9%.

So for them, building something —anything — is akin to buying a reasonably safe bond.

That fully-depreciated coal plant may be cheap to run, but it’s no longer earning ‘interest’.

So compared to other options for the hypothetical utility’s portfolio, it needs to be a little extra profitable.

Then there are factors outside control.

Low natural gas prices may make electricity cheap for some indefinite spell.

Coal plants often make the bulk of their profit during the winter months A warm winter can leave a coal plant idle and in the red.

Our hypothetical utility may be part of a larger entity that has a power market, such as a Regional Transmission Organization or RTO.

In the 2010s, power market rules — in various wonky ways — evolved to prioritize renewables.

Renewables ranked highest in the so-called ‘merit order’ of dispatch. For example, electricity from wind — if available — might always be purchased first.

And, of course, wind and solar could bid low, since they were the beneficiaries of a slew of ‘out of market’ subsidies.

As generation by renewables increased, they encroached into what was formerly baseline territory. The level at which it was ‘safe’ to generate with coal and nuclear got lower and lower.

I like real charts. Here’s ERCOT from March 21st [2025]. You can see nuclear and coal almost hiding from daytime solar down at the bottom:

Natural gas is flexible, which allows it to fill in gaps.

But the same anti-baseload phenomenon relegates natural gas to ‘peaker’ use, a cost factor under-appreciated and under-reported. Gas turbines are most economical if they run 24/7, no starts or stops.

So the real conflict of the 2010s wasn’t about coal versus natural gas, or coal versus renewables.

It was renewables versus baseload.

Baseload — whether coal, nuclear or natural gas — was not ‘economic’ under the rules of the game.

Aside: Our hypothetical utility might benefit from ‘capacity payments’ to keep its coal plant around for emergencies. Those have been criticized a corporate welfare, which in a sense they are. But maintaining a ‘shadow grid’ is a renewables cost. It’s form of insurance, since renewables will from time-to-time fall down on the job.

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The 1970s coal plants suffered from a ‘generational’ problem, not unlike the effect retiring Baby Boomers are having on Medicare and Social Security.

Dick Cheney was right about one thing in 2005: those coal plants should have started thinking about retirement at age 35.

The Sierra Club’s true victory post–2007 was its legal actions that stopped many of the replacement coal plants Cheney wanted to build.

On the retiring the old plants, the Sierra Club was to some extent pushing on a closing door.

The role of its ally in the War on Coal, the EPA, was critical.

The four major EPA regulations affecting coal as of April 25, 2024 were:

• Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants

• Mercury and Air Toxics Standards (MATS) (first issued in 2012)

• Effluent [Wastewater] Limitations Guidelines (ELG) for Steam Electric Power Plants

• Coal Combustion Residuals (CCR) Rule (Issued 2015, Expanded 2024)

The EPA also tightened the National Ambient Air Quality Standard (NAAQS) for particulate matter (PM) on January 15, 2013 and for ground-level ozone in October 2013.

And, while a not new regulation, the EPA has kept within its power approval over coal plant upgrades, should it decide those were ‘major’ enough to be subject to 1999 Clean Air Act New Source Review (NSR) enforcement.

Coal’s death was not entirely from natural — that is, market — causes.

It was an assisted euthanasia.

In 2021, David Drake and Jeffrey York, two professors of business at the University of Colorado Boulder, looked at 348 coal-fired units that had either retired or switched to natural gas between January 2008 and September 2016.

They found no evidence that natural gas prices were a significant factor.

What they did find was that any coal plant targeted by the Sierra Club had its life shortened, on average, by two years.

And, nationwide, they found that “federal regulation affected the greatest number of coal units, and thus had the greatest aggregate impact on coal retirements.”

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A real-world case study puts some life in the statistics about coal plant mortality.

The Homer City Generating Station in western Pennsylvania once had 3 coal-fired units that could generate 1.9 GW of electricity.

That’s 1.5 Vogtles in my unit of generating capacity.

Homer City was built in the 1960s by Pennsylvania Electric Co. (PenElec). The nearby city it served (50 miles) was Pittsburgh.

Units 1 and 2 began operation in 1969. Unit 3 began operation in 1977. Presumably Unit 3 was one of those 1970s oil crisis babies.

Until 1999, all three coal units averaged 90% of capacity.

Aside: Capacity of any power plant rarely reaches 100% because they spend some time offline for maintenance.

An interesting thing about the Homer plant is that its various owners did everything the EPA wanted.

In 1998, they installed equipment to reduce mercury output.

In 2000 and 2001, the owner at the time, General Electric, installed Selective Catalytic Reduction (SCR) on all three coal boilers to reduce NOx emissions.

In 2001, under the George H.W. Bush–era SO₂ allowance trading program, GE installed flue gas desulfurization (FGD) equipment — a ‘scrubber’ — on Unit 3.

In 2014, in advance of the EPA mercury rule coming into effect, scrubbers were installed on Units 1 and 2, at a cost of $750 million.

Flue gas scrubbers capture most, if not absolutely all, of any mercury in the flue gas.

But given the electricity buying rules of the PJM market, Homer operated at progressively less capacity from 2005 to 2022. By 2020, it was running only 20% of the time:

The particular regulatory straw that broke Homer’s back in 2023 was an additional investment that would be needed to meet the EPA’s then-anticipated tightening of its 2006 nitrogen oxides (NOx) emission standards.

Nor did it seem very wise to make an additional investment in Homer when Pennsylvania was planning to join something called the Regional Greenhouse Gas Initiative (RGGI), a 12-state compact that would set a cap on greenhouse gases.

According to EPA figures, Homer City produced around 3.5 million of Pennsylvania’s 293 million tons of CO₂ per year. That’s 1% of the state total.

Aside: Given the size of the plant, that doesn’t sound like a lot to me.

In any event, the owner, Homer City Generation, L.P. decided to pull the plug. Homer went offline on July 1, 2023.

On Saturday, March 22, 2025, Homer’s smokestacks can down.

I confess I copped this video from the Wall Street Journal. If it doesn’t play, you can watch a different video of the stacks coming down on this page.

Coal was iconic in Pennsylvania’s history. All five of the state’s remaining coal plants are scheduled to be shut down or converted to natural gas by 2028.

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But the story of Homer continues. Think of it as a parable for our times.

Homer — the site, anyway — may undergo a resurrection.

We pick up Homer’s saga in mid-2024.

That’s one year after it was shut down, and six months after the GridStrategies report.

PMJ planners were then freaking out about the RTO’s ability to met demand in the near future: “PJM projects a shortfall in supply by the end of this decade —or sooner.”

That’s because 21% of its generating capacity, mostly coal, was scheduled for retirement, and not being replaced by anything very fast.

On this chart, the color choice is a bit confusing.

The left-hand horizontal bars break down the reason for the retirements. The long blue bar shows ‘retirements taking place due to state or federal environmental policies’, contrasted to ‘economic’ ones in gold.

The right-side pie circle shows in purple that 60% of the retirements are of coal:

Not only is 40 GW retiring, the PJM planners estimate the RTO will need an additional 40 GW “over the next 15 years due to electrification and large new loads, such as data centers.”

The planners go on to bemoan that “new generation projects face delays from supply chain, financing, and siting issues.”

Among those supply chain issues is an open secret: orders placed now for utility-scale gas turbines are unlikely to be delivered until 2028 or 2029.

Undaunted, Knighthead Capital Management, a New York–based hedge fund, announced big plans for the Homer site.

Knighthead is the majority owner of an entity called Homer City Redevelopment. It wants to build a gigantic AI data-center campus on the site, to be powered by natural gas.

The Wall Street Journal likes my favorite power unit, the Vogtle, so I’ll quote it:

At up to 4.5 gigawatts, the plant could nearly power Manhattan. Its output would more than double that of the original coal facility and be roughly equivalent to Georgia’s Vogtle plant, the country’s largest nuclear power site.6

We can only wish Homer well.

Just don’t expect to see him back from the grave soon.

It’s the convention in a post like this to conclude with a section of pontification.

After the title of the book by Vladimir Lenin, I call those sections the “What Is To Be Done?”

The road to energy abundance may not be paved with yellow bricks.

Consider the source of the U.S.’s current good luck: natural gas.

I don’t take back what I said about ‘peak x’ theories usually being wrong.

But several writers, such as Adam Rozencwajg of G&R, make a pretty good case that “the shale gas basins are simply running out of high-quality drilling inventory.”

There’s been a slowdown in U.S. natural gas production, often blamed on low prices.

Rozencwajg questions whether higher prices will be enough to spur an increase in production. The culprit may be geology.

So there’s that potential problem. Then there’s LNG.

I’m in all favor of the U.S. exporting as much LNG as it can. The balance of trade needs all the help it can get.

But increased LNG exports will tend to bring U.S. natural gas prices up toward the world price.

So it would be a big mistake to just airily say the U.S. should leave its coal in the ground because it’s ‘dirty’ and ‘we don’t like it’.

It’s too important a resource.

I think Chris Wright’s DOE, perhaps through ARPAE, should spend some money building a start-of-the-art coal-fired power plant as a reference model.

Forgetting about carbon capture.

And measuring the heck out of any traditional pollutants that happen to escape the plant.

Consider that a re-do of the DOE’s old Clean Coal Demonstration Project, which ended in 2013.

Actually, one state-of-the-art coal plant has been built in the U.S. in recent years.

It’s small (17 MW) and in Fairbanks, Alaska — 155 miles south of the Arctic Circle — so it didn’t get much attention when started operation in 2019.

Coal was an obvious — indeed almost only — choice for electricity and steam heat at the University of Alaska at Fairbanks campus (UAF).

Fairbanks, the town, does not have a piped natural gas supply from a gas field.

Its electricity comes from coal anyway, from a generating plant located at the state’s only coal mine, 100 miles away near Healy.

For the campus, where temperatures in the winter that can stay below -20° F. for week, the reliability that comes from having a supply of coal on site was crucial in the fuel decision.

In 2018, the campus plant was kitted out with everything state-of the-art in coal technology: a Babcox and Wilcox circulating fluidized bed combustor (CFB) with lower combustion temperatures that reduce NOx emissions; limestone injection for in-situ sulfur oxides absorption; and with multi-clone and baghouse scrubbing to reduce particulate emissions, both PM10 and PM2.5.

The UAF plant has the lowest PM 2.5 particulate emissions of any coal-fired boiler.

Fairbanks, ironically, is an EPA ‘non-attainment’ air quality area — because so many of its residents burn wood.

The U.S. has waged many wars that arguably weren’t worth the fighting.

We could start with Vietnam and move on to Iraq and Afghanistan.

The War on Coal seems likely to join that list.

But we may not know the true cost of the War on Coal until later, perhaps until the 2030s.

Deindustrialization by energy austerity, as we see it play out in Germany and the UK, is a wasting disease. It manifests slowly, over decades.

My hope is that we ended the War on Coal in time.

When my brain works at all, it’s not entirely normal.

I’ve learned to live with it.

In the blizzard of executive orders signed by President Trump on January 21, 2025, one little snowflake riveted my full attention.

Trump ordered the Environmental Protection Agency, the EPA, to reconsider its 2009 ‘Endangerment Finding’ about CO₂ and other greenhouse gases.

Two years ago, in May 2023, the EPA announced rules that called for ‘carbon capture’.

An idea stuck in my brain back then: that before we lock away CO₂ and throw away the key, it deserves a fair trial. Everyone deserves a zealous defense.

CO₂ couldn’t afford an attorney, so we had to find him one.

And CO₂ was not exactly a defense attorney’s dream client. More of a nightmare.

The media had already appointed itself CO₂’s judge, jury and executioner.

And it was in a hanging mood.

They talked about injecting CO₂ underground.

I didn’t know if that was cruel or unusual, but it sounded pretty bad to me.

The media was howling that ‘sequestration’ — even for life — was too good for CO₂.

That was because locking up CO₂ would give those fossil fuel interests a Get Out of Jail Free card.

If law-biding citizens knew CO₂ was going to get put away, they’d breath easier and burn more a lot more natural gas.

So I was the only one dumb enough to take on CO₂’s case.

It was a long trial. You can read my equally long account of it here.

That time we managed to get CO₂ off.

I say ‘we’ to include Miranda, my annoyingly competent office assistant.

By way of an update, Miranda and I are still hoping to get a check from those fossil fuel interests everyone knows about.

With the one anonymous donation we did get, Miranda paid her back salary and the office rent.

All I saw out of it was a triple latte and a banana crunch muffin.

Which wasn’t bad, but after our years together, you’d think she’d know to get blueberry.

Anyway, we kept CO₂ out of the Big House. That time.

But the poor guy has been in the doghouse of public opinion for what? Forty years?

You’d think he ought to get some credit for time served.

Enrique Tarrio, former leader of the Proud Boys, only did two years at the Federal Correctional Institution in Pollock, Louisiana before his sentence was commuted by President Trump.

And CO₂ hasn’t even been pardoned. He’s only been declared eligible for rehab.

Or — to use the fashionable word — he has a ‘pathway’ to rehabilitation.

But in a fee-starved and ethically-challenged legal practice such as my own, appearing before parole boards comes with the territory.

As I often say to Miranda on slow mornings: “Today we need focus on being of excellent service to our incarcerated clients.”

I’ve practiced rolling my eyes the way she does in a mirror.

I can’t quite get it right.

Sometimes I think it has to do with my eyebrows.

Maybe I should ask her to pluck mine so they’re exactly like hers.

But that might not be appropriate.

Also I’m afraid it might hurt.

“Miranda?” I say.

“Yes, Boss?”

I like it when she calls me that. Even when she’s just being sarcastic.

“Do you think we could put the cactus out on the fire escape?”

When CO₂ was being held two years ago, he asked me to get him a jail cell companion. Miranda’s been taking care of the cactus since CO₂ was released.

She’s grown protective about the spiny thing. I think she’s afraid I’ll knock it over.

“The fire escape?”

“We need to get in touch with CO₂. You know, send him a signal.”

“Like putting a candle in a window?”

“I’m thinking about the cactus.”

“The Pennsylvania Dutch used to put a lighted candle in their windows so runway slaves on the Underground Railroad would know where to find shelter.”

Jesus. A one-woman Wikipedia. “Please?” I ask.

She disappears and reappears with the cactus.

“Are you going to need my help getting the window open?” I ask.

“I can manage.”

She heads for the window.

“Please don’t light the cactus on fire.”

There’s the eye roll.

I start rummaging around for my copy of Legal Defenses for Dummies.

I hear a lot of banging coming from the vicinity of the window.

I studiously ignore it.

I’ve got to work to do on CO₂’s appeal.

I start by finding the text of Trump’s executive order.

At least it’s short:

Within 30 days of the date of this order, the Administrator of the EPA, in collaboration with the heads of any other relevant agencies, shall submit joint recommendations to the Director of OMB on the legality and continuing applicability of the Administrator’s findings, “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,” Final Rule, 74 FR 66496 (December 15, 2009).

I have to read it twice.

Okay, maybe three times.

I do know what the “Endangerment and Cause…” and all that is.

That’s the 2009 finding in which the EPA labeled my client a ‘pollutant’ and a ‘danger to public health and welfare’.

I did once discuss with CO₂ the idea of suing the EPA for libel.

But aside from having no money, CO₂ has his other interests. They take a lot of his time.

His big hobby is horticulture. Gardening, whatever. He’s good at it.

I need to find out who this ‘Administrator of the EPA’ is. It looks like he’s the guy who will decide my client’s fate.

A few seconds on Google reveals his name: Lee Zeldin.

He’s a former Congressman from Long Island.

In 2022, he ran for governor of New York and lost to Kathy Hochul.

My grasp of Long Island geography is a little weak. I try to figure out where the town of ‘Shirley’ is.

I look on a map. It’s not far from ‘Yaphank’.

That clears that up.

I scroll down and read some old articles about him: “Senator Lee Zeldin Marches in Lake Ronkonkoma Memorial Day Parade.”

There’s a photo of him at the parade with his twin daughters, Arianna and Mikayla. In the photo, they look to be about ten.

Those politicians. Livin’ the high life.

I turn to read what the political pundits are saying about him now.

Rolling Stone calls him “Fossil Fuel’s Inside Man.”

That’s promising.

But if he expects to get a check out of those fossil fuel interests, I hope he has better luck than I did.

On February 2, 2025, more than 1,100 EPA employees who “work on climate change, reducing air pollution, and enforcing environmental laws” got an email saying they could be fired at any time.

That 1,100 figure sounds suspiciously like it was taken from the old joke about what you call 100 lawyers at the bottom of the sea.

Which relates weirdly to Zeldin’s February 12 announcement that the EPA had recovered $20 billion in gold bars that Biden EPA staffers had tossed overboard at the last minute. Apparently they thought they were onboard the Titanic.

I just hope the Zeldin EPA has sense enough to leave that $20 billion in gold. It’s been going up. If I were the EPA, I wouldn’t trust the U.S. dollar.

I watch Lee Zeldin’s Senate confirmation hearing, all 3½ hours of it.

They don’t dare ask about a nominee’s religion at confirmation hearings these days.

Zeldin is asked by several of the Senators if he believes in climate change.

He says he does.

Senator Sheldon Whitehouse of Rhode Island appears on the verge of asking him twice. Whitehouse seems to want to say, “But do you believe in Climate Change?”

That’s because you can believe in climate change without Believing in Climate Change.

Whitehouse holds up a scary-looking map of Rhode Island with parts of the coastline colored in bright green.

I like maps. I try to find that one.

The best I can do is this:

That red is probably more scary than bright green.

I try to figure out what it means.

Rhode Island subsided about 6 inches over the last century.

That’s lamentable.

But I’m not sure they can pin that one on my client.

The Rhode Island Coastal Resources Management Council (CRMC) says that if there’s a 100-year storm in the next 100 years those red areas are going to get soaked.

“What are the odds on that?” I scoff.

I read on.

In 2019, Grover Fugate, executive director of the CRMC, told a gathering of Newport, Rhode Island realtors: “This will transform the real estate market.”

I make a note on my desk blotter: “Find a realtor who knows about beachfront property in the Berkshires.”

Senator Whitehouse is convinced sea level rise is all CO₂’s fault.

As is the recent weather. And the Los Angeles fires.

Senator Edward Markey of Massachusetts waxes eloquent about the L.A. fires. “The EPA,” he admonishes Zeldin, “is responsible to keep the fiery embers of climate change under control.”

Nominee Zeldin got through his confirmation hearing.

Which was better than I did. I nodded off around the 2 hour 45 minute mark.

On January 29, Zeldin’s nomination was confirmed by the Senate.

So he’s now the Administrator of the EPA.

I can’t say I envy him the job.

In the UK, the civil service bureaucracy is called The Blob.

It’s hard to imagine leading a blob and having it follow you anywhere.

In the movie, The Blob had a mind of its own. It went wherever it wanted. I can still see it oozing through those ventilator ducts in the movie theater.

The EPA was genetically engineered for Blob-like expansion by its creators in 1970. Nothing has been able to prevent it from expanding.

At least in the movie they figured out they could freeze The Blob. They airlifted it and dropped it in the Arctic Ocean.

So if global warming continues you know there’s going to be a sequel.

In the late 1960s, environmentalists blamed their frustrations on the way federal regulatory agencies were set up.

Most agencies combined several functions. The Department of Agriculture, for example, would advise farmers about how to use pesticides while at the same time being in charge of pesticide safety.

The Atomic Energy Commission (AEC) was in charge of both promoting the use of nuclear power, and regulating its safety.

So in an 1970s environmentalist victory of some sort, the AEC got split in two.

The ‘promote nuclear power’ part wound up in the Department of Energy.

The ‘regulate nuclear power’ part went to a new entity, the Nuclear Regulatory Commission (NRC).

That had what most writers would call ‘unintended consequences’.

Except they weren’t unintended.

Those independent regulators lost touch with the real-world industries they were supposed to be regulating.

Over time, the NRC regulated nuclear power into near-oblivion.

The EPA was designed to be a single-minded ‘advocacy’ agency from the get-go.

Nixon’s advisors told him in 1970 that an advocacy-only EPA was a bad idea.

But Earth Day was coming up on April 22, 1970, and Nixon wanted to look groovy for the nation’s youth.

I’ve often wondered if there is any data available on the length of Nixon’s sideburns in those years.

Here’s Nixon meeting Elvis in December 1970, the same month the EPA was created:

Nixon assumed he’d be running for re-election in 1972 against Senator Edmund Muskie of Maine. Muskie had introduced the first Clean Air Act in 1963.

In case you’ve stopped to wonder, Nixon ended up running against George McGovern in 1972.

One theory behind making the EPA a single-minded advocacy agency was to avoid ‘regulatory capture’.

The industries enjoying those environmental ‘externalities’ economists talked about could afford to hire their own lobbyists. So the theory was to create a countervailing force.

The EPA promptly got captured by the then-new environmental NGOs.

The National Resources Defense Council (NRDC) was founded in 1970.

There was — and still is — a revolving door between the NRDC and the EPA.

For one example, David Hawkins started as an NRDC lawyer in 1971. In 1977, he moved effortlessly over to being Assistant Administrator for Air, Noise, and Radiation at the EPA. Then he went back to the NRDC in 1981.

Gina McCarthy was head of the EPA from 2013 to 2017. In 2020, she became president and CEO of — you guessed it — the NRDC.

As CO₂’s defense attorney, I of course want the new EPA Administrator to recommend to the Director of the Office of Management Budget that the 2009 Endangerment Finding no longer has ‘continuing applicability’.

That’s a mouthful.

Actually, as CO₂’s defense attorney, I want more.

I want an apology.

It may save face for the EPA to say the 2009 Finding about CO₂ ‘no longer applies’.

But that implies it ever did.

The bad things the EPA said about CO₂ in 2009 weren’t true then, either.

And the EPA had bothered to look at some evidence, it would have known it. CO₂ should have been let off the hook.

But you can’t always get what you want. I try to take ‘Yes’ for an answer.

If Administrator Zeldin recommends ending the Endangerment Finding, everybody will say it’s ‘just politics’.

That will be true.

But it was just politics the first time.

We don’t normally ask what was on the lynch mob’s mind.

If you’re in the crowd the next morning watching the body gently swing back and forth on the rope, you don’t tisk-tisk and say to the person next to you, “What were they thinking?”

I hope I can convince the parole board to step into the Wayback Machine.

That’s the only way they’ll understand the weird psychology of 2006-2009.

Global warming hysteria reached a high-water mark during those years.

Starting with Time magazine’s cover from August 3, 2006:

Al Gore’s “An Inconvenient Truth” had opened on May 24, 2006.

Gore had said the Earth would pass the Point of No Return in 10 years.

On July 13, 2006, James Hansen reviewed An Inconvenient Truth — the movie and the book of the movie — for The New York Review of Books.

Hansen wrote that if annual emissions of CO₂ and other human GHGs continued to increase at their then-current rate for another 50 years, sea level was going rise 80 feet.

Hansen got pretty worked up about that:

Eighty feet! In that case, the United States would lose most East Coast cities: Boston, New York, Philadelphia, Washington and Miami; indeed practically the entire state of Florida would be under water. Fifty million people in the US live below that sea level.

Massachusetts was then suing the EPA in Massachusetts v. Environmental Protection Agency because Boston going to sink into the ocean. Someday.

I went into that case two years ago. But to recap, Massachusetts said Boston sinking into the sea was all CO₂’s fault.

Or would be, when it happened.

Oral arguments in Massachusetts v. Environmental Protection Agency took place before the Supreme Court on November 29, 2006.

The question the Court had to answer was whether the Clear Air Act gave the EPA the legal authority to regulate CO₂.

That Clear Air Act had been passed back in 1970 to deal with actual air pollutants, such as smog from automobile exhaust and sulfur dioxide from burning coal.

For the actual air pollutants that inspired the 1970 Clean Air Act, the EPA could have declared Mission Accomplished around 1992.

They were down and going steadily down.

The EPA could have fired half its Air Office staff and gone into some kind of monitoring and maintenance mode.

So for the EPA was to continue Blob-like expansion, it needed to discover some new bogeymen.

That’s where my client, CO₂, came in. If your job is to get CO₂ out of the atmosphere, you’re guaranteed lifetime employment.

In the 1990s, the EPA had discovered another great bogeyman, PM2.5, fine particulate matter, and that had worked out well for it.

For regulators looking something for to regulate, PM2.5 was a gift from God.

Almost literally. If you consider smoke from wildfires to be natural, natural PM2.5 exceeds that of the anthropogenic kind.

PM2.5, like CO₂, was invisible and all around us.

So it was an excellent scary thing for journalists to write about. They’re very good at playing on people’s phobias about impurities.

I’ll get to PM2.5 below.

Applying the 1970 Clean Air Act to CO₂ in 2006 was an innovative legal stretch.

CCO₂ doesn’t make the air ‘impure’ or ‘unclean’.

So it doesn’t fit the dictionary definition of a pollutant.

You can see through CO₂. So it doesn’t reduce visibility.

CO₂ doesn’t pose a risk to health.

It’s not even an irritant.

You’d really have to work hard to kill yourself with CO₂. People walk in and out of greenhouses all the time where CO₂ is kept at two or three times its level in outside air.

And, as I must point out as CO₂’s attorney, CO₂ was on the planet first.

CO₂ was spread out all over the land several billion years before H. sapiens showed up.

So he’s indigenous, or something like that. That should have given him some bonus points.

But the Supreme Court said, 5 to 4, that the EPA could regulate CO₂.

That decision, published on April 2, 2007, was really about the hazy language Congress used when it wrote the Clean Air Act.

The Supreme Court did not itself say CO₂ was a pollutant.

It said the EPA could say that.

If the EPA studied the matter and, in its considered judgement, concluded that it was.

As for the Supreme Court’s part in all this: we all mistakes.

The justices are creatures of their times.

Which explains some of the staggeringly bad legal decisions they’ve made in American history.

In Dred Scott v. Sandford, the Court ruled that Constitution did not extend American citizenship to people of black African descent. That was in 1857.

In Buck v. Bell, the Court endorsed eugenics, allowing compulsory sterilization of the ‘unfit’, including the mentally disabled. That was in 1927.1

After the Supreme Court decision, the George W. Bush EPA knew it had the power to regulate CO₂

The Bush EPA approached that power very cautiously.

In July 2008, in what now sounds prescient, the Bush EPA wrote:

the potential regulation of greenhouse gases under any portion of the CAA could result in an unprecedented expansion of EPA authority that would have profound effect on virtually every sector of the economy and touch every household in this land.

All of which happened: the ‘unprecedented expansion of EPA authority’ and the ‘profound effect’ on virtually every sector of the economy.

The EPA has taken charge of U.S. industrial policy, something you might think Congress should want to deal with. It tells the automakers what kind of cars to make.

If the EPA got up on the wrong side of the bed one morning, it could do some damn fool thing with respect to electricity that would snuff A.I. in the cradle.

In February 2007, Al Gore got an Academy Award for An Inconvenient Truth.

Throughout that year, the Intergovernmental Panel on Climate Change, the IPCC, put out its fourth Assessment Report, AR4, in big fat installments.

Fortunately those came with their own Cliffs Notes, the Summary for Policymakers. The Summaries came out a month before the fat parts.

The Summaries had the high points of gloom and doom underlined so busy people could skim and get the gist. They were all anybody, especially the press, actually read.

In October 2007, the Norwegian Nobel Committee — the one that gives out the misnamed Peace Prize, not to be confused with the Swedish science prizes — awarded one jointly to Al Gore and the IPCC.

The media was keeping up the scary drumbeat all this time.

In October 2007, for one example, the Associated Press quoted scientists saying “global warming has passed an ominous tipping point.” They predicted arctic sea ice would be gone in five years.

Al Gore liked that one, repeating it on German television in 2008.

Since the hysteria that forced my client to go into hiding was worldwide, it’s worth looking at what the rest of the world was saying about him.

These were collected from Le Monde by French writer Drieu Godefridi:2

• 2006: “Massive extinction of species expected in the 21st century”

• 2007: “By 2050, the world could see over one billion climate refugees”

• 10 December 2007: “Global warming could spark a worldwide civil war”

• 13 January 2008: “Desertification could affect 2 to 3 billion people”

• 26 August 2008: We have only “seven years to act.” And, we are headed straight for “a sixth extinction.” Both quotes from the late Rajendra Pachauri, then head of the Intergovernmental Panel on Climate Change, the IPCC.

Then we come to 2008, an election year in the U.S.

The global warming debate stayed heated, even if the real world did not.

For 2008, the average temperature of the lower 48 U.S. states was the coldest it had been in 10 years, according to the National Centers for Environmental Information (NCEI). The 2008 average was 0.1° C. above the mean for the entire 20th century (1901-2000).

In 2008, it was Manhattan, not Rhode Island or Massachusetts, that was headed underwater.

This clip from was shown by ABC on Good Morning America on June 12, 2008, from a special later aired as Earth 2100. That’s a slimmed-down New York City in 2015:

Hurricane Sandy happened in 2012, so maybe they were onto something.

But Sandy’s waters, not to get too Biblical about things, did recede.

Barack Obama promised two big things in his 2008 campaign.

One was to reform health care. We remember that one: Obamacare.

The other one didn’t pass, so we’ve forgotten about it.

It was a huge cap-and-trade scheme for carbon emissions.

After he won the election, Obama told the New York Times on Nov. 18, 2008 that he wanted to move fast on his campaign pledge to reduce “climate-altering carbon dioxide emissions by 80 percent by 2050.”

“Delay is no longer an option,” Obama added.

Policy wonks argue about whether cap-and-trade schemes are a ‘tax’, or what.

They are.

Obama’s cap-and-trade scheme for CO₂ emissions would have cost Americans an estimated $300 billion every year.

Obama didn’t really disagree. During his campaign, he said that under his plan electricity prices would of necessity “skyrocket.”

And Obama made no secret that his cap-and-trade plan would bring about the end of coal-fired electricity generation: “If somebody wants to build a coal-fired plant they can. It’s just that it will bankrupt them.”

On to 2009.

In July 2009, King Charles — formerly known as Prince — gave humanity “96 months to save world.”

In October 2009, Gordon Brown, then Prime Minister of the UK, said we had “Fifty Days to Save Planet from Catastrophe.”

The Obama EPA arrived just in time. On January 23, 2009, Obama's pick, Lisa P. Jackson, was sworn in as the new EPA administrator.

According to internal EPA memos later disclosed to a House Committee, Administrator Jackson wanted an EPA Endangerment Finding on CO₂ to be a done deal by mid-April 2009.

So three months, give or take.

Normally, a decision of that magnitude would get years of study at the EPA. So ‘fast tracked’ is hardly the word for it.

An EPA Endangerment Finding requires something called a technical support document (TSD) that summarizes all the science research the EPA has done on a subject.

The EPA hadn’t done any on CO₂.

No original research, anyway.

So the EPA did what any college student would do. It copied someone else’s paper.

The 2007 report from the IPCC was available.

In a sentence I love, Drieu Godefridi describes the IPCC as seeing itself as “the all-knowing and all-competent advisor of an internationalist prince.”

It didn’t bother the EPA that the IPCC is a UN political body. Its findings are government opinions, not science.

The science in the Summaries is worked over word-for-word by various diplomats and government officials to make sure it stays on message.

The IPCC, in fact, actually does no science. It surveys and selectively summarizes extant research that supports of its case.

At least the IPCC wasn’t uptight about plagiarism. The U.S. Climate Change Science Program (CCSP) had already copied one of its reports.

The Proposed Endangerment Finding was published in the Federal Register on April 24, 2009.

That was 94 days after Obama was sworn in as President.

So Administrator Jackson made her deadline.

Various versions of Obama’s cap-and-trade bill had been passed by the House of Representatives.

But none could get enough votes to make it through the Senate.

In October 2009, Senators John Kerry and Lindsey Graham threatened to drop The Bomb if some other Senators didn’t switch their votes on the cap-and-trade bill.

The Bomb was EPA regulation of CO₂ under the Clean Air Act.

That was very scary prospect indeed since under the letter of the Clean Air Act, EPA permits would be needed before building almost anything in the U.S.

Kerry and Graham wrote in their New York Times Op-Ed:

If Congress does not pass legislation dealing with climate change, the administration will use the Environmental Protection Agency to impose new regulations.

After the perfunctory public comment period, the Final Endangerment Finding was signed by Ms. Jackson on Dec. 7, 2009.

So it was official. My client was ‘pollutant’. And a ‘danger’.

In November 2009, the leaked Climategate emails finally threw some cold water on the warming panic.

That’s a good place to draw a line under that 2006-2009 history.

I find it helpful to approach science debates as a business reporter.

There was clearly some kind of monopoly that enjoyed dominant market mindshare back then.

The monopolist is a hard thing to put a name on.

Robert Bryce has used the term ‘NGO-corporate-industrial-media-climate’ complex.

Jason S. Johnson, a UVA legal scholar whose work I like, has his own mouthful of a term: ‘Climate Change Science Production and Assessment Complex’.

The Climategate emails provided a peek behind the curtain at how the sausage was being made by the monopoly.

It wasn’t pretty.

The temperature records, for example — Exhibit A against my client — were being systemically ‘adjusted’.

In 2011, economist Richard S.J. Tol — who had been an IPCC lead author — wrote an analysis of the IPCC looking at it as an economist would at any other monopoly.

The IPCC’s sins — the overreach, the haughtiness, the failure to innovate, and the decline in the quality of its product — are “all things that monopolies tend to do, against the public interest,” Tol said.3

As is the fierceness with which the Climate Science Monopoly attacks would-be competition.

Those are otherwise known as ‘skeptics’ and ‘deniers’. It wants to make sure the independents can’t compete.

Lawyers get paid to parse the language of Supreme Court decisions closely.

During the 2006-2009 global warming panic, it may have appeared ‘reasonable’ in Massachusetts v. EPA to ‘anticipate’ ‘greenhouse gases in the atmosphere’ may ‘endanger public health and to endanger public welfare’.

Eighteen years on, that anticipation no longer appears so reasonable.

In fact, it looks like it was dead wrong.

Boston hasn’t sunk into the sea.

The warming has been modest. No tipping points have been tipped.

CO₂’s warming effect — as has been predicted forever — is proving to be self-limiting, the so-called saturation effect. There’s no sign of the dreaded ‘enhanced’ greenhouse effect.

The current forecast for warmer temperatures is probably one we can live with.

Meanwhile, the plants are loving higher CO₂. Recent studies have found ‘global greening’ to be much greater in extent than previously thought. From NASA:

New suspects have been identified in the last 18 years who might be more responsible for The Warming.

One, ironically, is SO₂, an actual pollutant regulated by the 1970 Clean Air Act.

The global cooling effect of sulfate aerosols has been understood since 1815, the ‘Year Without a Summer’.

That year, the sulfates came from an eruption of Mount Tambora, a volcano in present-day Indonesia.

We — and especially China — have been busily reducing how much SO₂ we put in the atmosphere.

A big change came in 2020 when the International Maritime Organization (IMO) put on regulations that drastically limited SO₂ emissions by those big container ships.

And now it’s warmer.

So we were doing a bit of geoengineering all along.

Low clouds and El Niño are also looking much more like bad actors in the recent weather weirdness.

CO₂, might be an innocent bystander.

CO₂ just happened to be in the wrong concentration at the wrong time.

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CO₂ wasn’t a ‘pollutant’ in what judges call plain meaning.

“The question,” Alice asked in Wonderland, “is whether you can make words mean so many different things.”

So what exactly was Congress thinking when it wrote the Clean Air Act?

Lawyers get paid to argument over definitions.

I’m kind of lazy. That part of the job I find tedious.

In Hard Times by Charles Dickens, schoolmaster Gradgrind takes Sissy Jupe to task for not knowing the definition of ‘horse’:

Quadruped. Graminivorous. Forty teeth, namely twenty-four grinders, four eye-teeth, and twelve incisive.

Sissy Jupe knew perfectly well what a horse was. Her father trained them for his circus.

Alice and Sissy got me to thinking.

If you want to teach a child the meaning of the word ‘dog’, you (a) point at a dog and (b) say ‘dog’.

Congress did mention some other — actual — air pollutants in the Clean Air Act.

So maybe I can point at one of them, a real one, and say, “That’s the sort of horse I’m talking about.”

And give an example of sort of research the EPA should have been doing all along.

But which other one?

Miranda has managed to get the window open.

Without my help. I made a point of not watching or saying anything.

I suspected that window had been painted shut decades ago.

So I could have told Ms. Wikipedia she might need a putty knife and a hammer.

But I didn’t say anything.

Anyway, she figured it out.

I’ve read that, where women are concerned, a guy should not be a Mr. Fix-It.

When women vent, for example, guys often make the mistake of thinking women are asking them to solve their problems.

Turns out they just like to vent.

Anyway, we’re venting in the office now. Papers are flying off my desk.

The outside air has put an idea into my brain.

Smog is my ‘dog’.

Or maybe it’s the other way around. My ‘dog’ should be smog.

Here’s downtown Los Angeles in 1958:

Los Angeles recorded its first smog day in the summer of 1903.

The haze was so bad some of the new-fangled light-sensing automatic streetlights downtown turned on in the middle of the day. Some L.A. residents wondered if there had been a solar eclipse.

A surprising number of people pontificate about air pollution without mentioning the weather. It doesn’t seem to exist in rarified atmosphere of environmental law.

Smog days happen in L.A. when there is:

• warm to high temperatures

• lots of sun

• ‘stagnant’ air, meaning little or no wind

• an inversion layer

L.A. is surrounded by low mountains, so its topography is especially bad. The inversion layer traps the smog in the basin.

The cause of Los Angeles smog was a scientific mystery for a while.

London had its infamous killer smogs.

Those also happened when there was an inversion layer. That happens there when what the British call an ‘anticyclone’ is parked over the Thames.

But the London fogs happened on cold days in winter.

It took no high-tech monitoring devices to see smoke pouring out of chimneys. People were burning lots of coal to stay warm.

There was a bad smog day in L.A. on July 8, 1943, during World War II.

Some speculated that one was a gas attack by the Japanese.

A few smart people were guessing closer.

On Nov. 28, 1944, Gustav Egloff, then president of the American Institute of Chemists, told the Los Angeles Times that he suspected smog came from the improper combustion of gasoline.

Which was a slightly counter-intuitive at the time, because gasoline was rationed during the war. Gasoline consumption by civilians was way down.

But gasoline had also been reformulated by its refiners in a war-time effort to stretch yields. They had added paraffins and olefins, both hydrocarbons.

A Los Angeles County Air Pollution Control District (APCD) was created in June 1947.

The APCD’s smog cops were not popular.

The APCD public relations did its best to give the smog cops some one Adam-12 glamor.

But there was only so much spin you could put on APCD Memo No. 12, “Burning Rubbish -- A Public Enemy”.

The APCD started out by identifying every potential ‘stationary source’ of air pollution in Los Angeles County.

On bad smog days, the APCD would order industrial plants and refineries to shut down.

No source was too small. “Cigarettes Found Contributing to Smog”, the APCD told the Los Angeles Times in October 1956.

Although I don’t think the smog cops went around snuffing out butts.

Backyard incinerators were a big thing in L.A. in those days. The APCD started telling people when they could and couldn’t burn their trash.

People didn’t like that, either.

All those measures helped a little.

But they weren’t the real source of the problem.

And most everybody knew it.

It was those automobiles Los Angelenos loved.

The recipe for Los Angeles smog was finally figured out in 1948 by Arie Jan Haagen-Smit, a Dutch-born flavor chemist then a professor at Cal Tech.

Haagen-Smit worked out that L.A. smog was the product of a multi-stage chemical reaction.

Haagen-Smit definitely qualifies as one of my science heroes.

First off, he was a world expert — probably the world expert — on the smell and taste of pineapples.

For a time, the APCD and the powers-that-be scoffed at Haagen-Smit’s two-stage theory.

So he and one of his students built — using Plexiglas and greenhouse frames — a ‘smog chamber’ in the parking lot of the Air Pollution Control District.

It was a real greenhouse, too. Spinach and some other plants were good smog detectors. Those grew, or tried to grow, in the smog chamber.

In 1956, S. Smith Griswold, head of the APCD, came up with a publicity stunt in which he spent two hours in the smog chamber with the gas cranked up high, well above what it was on bad smog day in L.A.:

Griswold, who had been a football player in college, came down with bronchitis.

He also said the smog made him ‘high’. And not in the good way.

Here’s Haagen-Smit’s recipe for L.A. smog. Don’t try this one at home:

1. Nitrogen dioxide (NO₂) in the tailpipe exhaust absorbs UV from sunlight and splits into nitric oxide (NO) and a free oxygen atom (O).

2. The free oxygen atom (O) combines with atmospheric oxygen (O₂) to form ozone (O₃).

3. Ozone is itself an irritant, but some of it also feeds back to react with plain old nitric oxide (NO), also in the tailpipe exhaust, to generate some additional nitrogen dioxide (NO₂) along with oxygen (O₂).

4. Unburned hydrocarbons in the tailpipe exhaust react with hydroxyl (OH) radicals to create peroxyacyl nitrates (PANs).

The peroxyacyl nitrates are the eye irritants in smog. They also give it that dirty light tan-gray color.

In over-simplified science, VOCs — volatile organic compounds — get demonized as ‘smog precursors’.

Strictly speaking, a volatile organic compound is one with a boiling point over 50°C., meaning it will evaporate into the air at room temperature.

So perfume is a VOC. The bulk of VOCs in ambient air actually come from plants.

Careful writers talk about ‘reactive hydrocarbons’ (HC) rather than VOCs.

China, which knows a thing or two about air pollution first-hand, restricts its definition to compounds that “originate from automobiles, industrial production and civilian use, burning of all types of fuels, storage and transportation of oils, fitment finish, coating for furniture and machines, cooking oil fumes…”, etc.

From 1948 to 1958, the APCD ran an industrial-scale research lab trying to figure out to deal with L.A. smog.

It finally did the right thing and hired Haagen-Smit as a consultant.

The APCD science lab soon knew everything there was to know about L.A. smog.

It studied wind patterns, traffic flow, geographical contours, photochemistry, the inversion-layer, the works.

My favorite APCD research project is the Navy blimps.

It rented those to sample the upper reaches of the airshed.

When people saw the blimps emerge from the smog, they reported them as UFOs.

Griswold invited the public to send in ideas for how to deal with L.A.’s smog.

The APCD’s Inventor’s File got thick in a hurry. “Everybody,” the L.A. Times wrote, “has a smog remedy.”

Some inventors thought big. They suggested putting giant fans on the mountains to blow the smog away.

A ‘smog sewer’ was an idea that got some traction. The L.A. Times wrote about it in 1954: “Vast Air Sanitation System Proposed As Smog Solution.”

The smog sewer would have carried the smog off somewhere else.

Where that ‘somewhere else’ would be was a little hazy.

In one design, giant vertical plastic pipes would have allowed the smog to be pumped up and over the inversion layer.

By 1957, the APCD had grown tired of studying ideas submitted by nut jobs.

It knew the hard nut it had to crack was automobile exhaust.

“Until a cure is found for the auto exhaust,” Griswold wrote in an Op-Ed that year, “we can look for little reduction in smog.”

There were ideas in the Inventor’s File for that, too.

One was a sort of afterburner for cars, a ‘blowby device’ that would further burn unburned hydrocarbons.

Also buried in the APCD slush pile was a letter from an engineering firm claiming it could end smog within three years with a muffler-like invention.

The catalytic converter was invented in France way back in 1898.

During World War I, Eugene Houdry, a French chemical engineer who knew a lot about catalysts, tried to come up with a better aviation gasoline for those Spad biplanes.

Houdry also had a passion for fast cars. After the Great War, Houdry starting using catalytic metals to refine high-performance gasolines.

Early internal combustion engines would ‘knock’. Knock happens when a small amount of residual gasoline vapor ignites during the exhaust stroke of the piston.

After World War I, the search was on for something — anything — that would inhibit knock.

One answer was staring people in the face: a blend of gasoline with 20% or 30% ethyl alcohol.

In the U.S. of 1921, politics got in the way of that one.

It was Prohibition. No U.S. corporation in its right mind would to invest in a factory to make alcohol in industrial quantities.

Some politician channeling Carrie Nation (she died in 1911) might show up with a hatchet and shut the place down.

Also, moonshine wasn’t really patentable, which the corporations would have liked. Any idiot could make it. Many did.

Tetraethyl lead was an anti-knock agent.

It took a few years to figure out how to make it cheap.

The first ‘Ethyl’ gasoline was sold to the public on February 1, 1923 in Dayton, Ohio. The price for premium was 25¢ a gallon. Regular was 21¢.

Gasoline came in colors back then. The pumps had clear glass windows. Ethyl was red.

The lead in the tetraethyl lead showed up in the exhaust fumes.

Lead poisoning among miners and metal workers was well-known to the Greeks and the Romans.

In the opinion of Vitruvius, engineer of one of Rome’s aqueducts, “Water is much more wholesome from earthenware pipes than from lead pipes, for it seems to be made injurious by lead…”

One of the co-inventors of tetraethyl lead — those being Thomas Midgley, Jr. and Charles F. Kettering of Dayton Engineering Laboratories Company, DELCO — developed a minor case of lead poisoning during the research. Midgley had to take a month off to recuperate in February 2023.

The U.S. Surgeon General was concerned enough about lead in automobile exhaust to ask the Bureau of Mines in Pittsburgh to run animal tests in the fall of 1923.

The Bureau concluded that the danger to the public of breathing lead in from automobile exhaust was probably negligible.

Opinions will vary on that. It’s highly complicated.

Lead is taken up by plants from the soil and ingested by humans in food. Dark chocolate is especially notorious.

Most ingested lead gets excreted out the human tailpipe.

What you need to look for is a buildup, if any, of the ‘body burden’ of lead. Then you need to relate that, if you can, to the familiar neurological symptoms.

But many people have high body burdens of lead yet show no symptoms.

And it’s an an entirely different situation for children, whose brains are developing.

Anyway, there was incentive even in the 1920s and 1930s to get the lead out.

In the late 1930s, Houdry found he could refine a high-octane gas without tetraethyl lead using one of his catalytic process.

Houdry’s “Nu-Blue Sunoco” formulation went on the market in 1937. I assume its color was blue.

High-octane aviation gas was a critical U.S. advantage during World War II. It significantly increased the combat performance of allied fighter aircraft. By 1942, fourteen of Houdry’s fixed-bed catalytic units were producing high-octane for the U.S. Army Air Corps.

So using catalysts on gasoline was a known technology.

In 1951, Popular Mechanics had a short mention of a ‘catalytic exhaust muffler’ being used on warehouse fork lifts. It removed the carbon monoxide that would otherwise poison indoor workers.

After smog became a public issue, Houdry got interested and designed a better catalytic convertor for passenger cars. He started a company called Oxy-Catalyst.

There have been numerous improvements over the years, but basically a modern three-stage catalytic converter deals with what comes out of your car’s tailpipe as follows:

1. Both of the nitrogen oxides (NO₂, NO) are reduced to ordinary nitrogen (N) and oxygen: NOx→Nx+Ox

2. Carbon monoxide (CO) is oxidized into (harmless!) CO₂: CO+O₂→CO₂

3. The unburned hydrocarbons are oxidized into carbon dioxide and water: CxH₄x+2xO2→xCO₂+2xH₂O

In June 1966, California Governor Edmund G. (Pat) Brown signed a law requiring ‘anti-smog devices’ — basically catalytic mufflers, although there were several others — be installed on used cars when they changed ownership.

The problem was that ‘catalytic mufflers’ were an aftermarket item that had to be bolted onto a car by a mechanic at a place like Midas.

It would make much more sense for catalytic converters to come as standard equipment on new cars and get installed on the assembly line.

The (then) Big Four U.S. automakers — Ford, GM, Chrysler and American Motors — promised they were looking into that.

But they were basically just dragging their feet.

In 1967, the legislature and new Governor Ronald Reagan created a state-wide California Air Resources Board. It made Arie Haagen-Smit chairman.

A long, drawn-out battle took place between the State of California and the automakers.

Robert F. Kennedy — RFK Jr.’s father, one of California’s two Senators until his assassination in June 1968 — came up with a novel political strategy for the state to use.

Kennedy advised otherwise liberal California to ally itself with the Jim Crow South and start taking about “state’s rights”.

Although in the South that’s pronounced ‘rats’. As in, “I got my rats!”

California would go its own way.

In early 1970, the California Air Resources Board lost patience with the Detroit automakers.

It put in place regulations that required catalytic converters on all new vehicles sold in the state.

The automakers could see the writing on the wall.

They turned to the Federal government for help.

They wanted the Feds to step in and pre-empt those crazy state governments before they set 50 different standards.

The automakers got something they could live with, the Clean Air Act of 1970.

Fast forward: cars today with internal combustion engines emit 1% of the bad stuff they did in the 1960s.

Smog, my ‘dog’, was an actual air pollutant that required some real science to figure out.

1970

I close the book I was reading about the history of smog.4

My eyes hurt. Maybe it’s something in the air.

Smog is definitely irritating.

I once played in a water polo match in downtown Los Angeles on a bad smog day.

It was in the old outdoor pool originally built for the 1932 Olympics.

It’s still around. I see where they’re giving it a make-over and planning to use it for the diving competition in 2028.

You could see the crud in the air.

In the excitement of the game, you didn’t notice it.

Afterward, you felt like some Torquemada had put an iron strap around your chest and ratcheted it tight.

It was hard on the horses, too, after they got out of the pool.

You can’t mention water polo without getting in that old joke.

Fortunately, the effect didn’t last. The saving grace of being young and stupid is most likely you’re fit.

In my smog reading, I saw lots of footnotes to articles about the health effects of ozone.

I start wondering: Am I going to die?

I mean sooner.

Like, I grew up in L.A., dude, breathing that stuff.

The EPA’s page about the health effects of ozone says: “The predominant physiological effect of short-term ozone exposure is being unable to inhale to total lung capacity.”

That was definitely me.

Other symptoms the EPA lists are:

• Cough

• Throat irritation

• Pain, burning, or discomfort in the chest when taking a deep breath

• Chest tightness, wheezing, or shortness of breath

And the effect is usually transitory.

The EPA’s national standard for ozone has been all over the place since 1970.

The one constant is that it gets set by politics.

The 1970 Clean Air Act required the EPA to set a safety threshold, a National Ambient Air Quality Standard (NAAQS), for photochemical oxidants.

‘Photochemical oxidants’ are not quite the same thing as ozone (O₃).

But O₃ is easier to measure, so it took over as the standard bearer for smog.

Ozone concentrations are very much weather- and topology- related.

So a national standard was always a somewhat dubious proposition.

Other U.S. cities have smog.

Denver, Phoenix and Houston come to mind.

But lots of cities don’t.

And Los Angeles tops the charts. It’s a total outlier.

Making those other cities take the same expensive regulatory measures as Los Angeles didn’t seem exactly fair.

In 1971, the EPA Administrator at the time, William Ruckelshaus, picked a national ozone standard out of the air: 0.06 parts per million (ppm).

That number was an eye-opener. L.A.’s standard at the time was 0.10 ppm.

The natural background level for ozone is somewhere between 0.02 ppm and 0.06 ppm.

But Ruckelshaus was a consummate political animal. He’d learned from one of the best, Richard Nixon.

Ruckelshaus knew the Congress of 1971 was pro-public transit and anti-automobile.

So it would be delighted to have ozone pollution as an excuse to pass laws that did things like limit vehicle miles travelled (VMT).

With a stroke of Ruckelshaus’s pen, all sorts of cities now occupied ‘non-attainment zones’.

The EPA science behind the 0.06 ppm number was pretty hokey.

A pattern the EPA will repeat.

But the Administrator needed a number.

Three studies about health effects of ozone were considered.

They were all pretty questionable.

And even then their findings were pretty much ignored.

A handful of people started complaining about eye irritation at ozone levels above 0.10 ppm. Which, to repeat, was L.A.’s standard.

A single study of 137 severe asthmatics concluded they did not have more frequent attacks at ozone levels below 0.13 ppm.

They maybe started to show effects above 0.25 ppm.

Another study, one I could have related to, asked high school athletes to talk about their performances after track meets. They didn’t complain when ozone levels were below 0.16 ppm.

In the wisdom of the Congress of 1970, cost and technical feasibility were not to be considered in setting national air quality standards.

Nor was the size of the population ‘at risk’.

Or that nature of that population. It might be only children, or the elderly, or only those with a preexisting condition, such as asthma.

Of the general population, those with asthma who might benefit slightly from a lower ozone standard were estimated to be 0.25%.

Health risks slide down a scale of severity: mortality, increased hospital admissions, bronchitis, respiratory symptoms, lost work days, finally down to what the EPA calls minor restricted activity days (MRADs).

The EPA publishes a helpful pyramid to visualize this:

My attention, naturally, is drawn to the top of the pyramid.

After that water polo game, I probably said something like “That was killing me.”

Now I want to know if that’s literally true.

In 2013, a writer I really like, Steve Milloy, did a DIY science project of the sort of which I fully approve.

Milloy made a Freedom of Information Act request to the Veterans Administration West Los Angeles Medical Center, asking for the day-by-day tally of emergency room admissions for asthma for the period between January 1, 2009, through December 31, 2011. There were 726.

Milloy then got the ambient ozone measurements for the area from CARB. Those are easy to get.

He put the two together in a spreadsheet and found zero correlation. High ozone was not related to emergency room admissions for asthma, at least not at that VA.

Studies that find ‘no correlation’ don’t get much attention.

Although they should.

The media is not very interested in headlines that say “Nothing to see here.”

So Milloy published his study on his own website, JunkScience.com. Highly recommended.

‘Junk science’ may sound a bit harsh.

So ‘advocacy science’, if you want to be polite.

As CO₂’s lawyer, I’ve come to know junk science when I see it.

Supreme Court Justice Potter Stewart in 1964 famously said he knew pornography when it saw it.

Supreme Court justices back in the 1960s had all the luck. They got to watch soft-core all day for those free speech cases.

A sufficiently shady lawyer has no problem recognizing junk science.

Its style is that of legal argument.

When an honest scientist comes up with a hypothesis, a necessary if unpleasant part of the job is to start thinking up experiments and observations that might falsify the hypothesis.

You have to be willing to slay your darling, no matter how much you love it.

Advocacy science is like courtroom argument. You never admit you might be wrong.

James Lovelock deplored this as far back as 1979.

Lovelock was the inventor of the electron capture detector, which found chlorofluorocarbons (CFCs) in the stratospheric ozone layer.

So he was a hero of ecological science.

But Lovelock hated the style of argument used by another paragon of environmental movement, Rachael Caron:

When Rachel Carson made us aware of the dangers arising from the mass application of toxic chemicals, she presented her arguments in the manner of an advocate, not a scientist. In other words, she selected the evidence to prove her case. … Since then a great deal of scientific argument and evidence concerning the environment is presented as if in a courtroom or at a public enquiry.

Which, Lovelock predicted, was going to be very bad for science.

One strategy to win a courtroom argument is to pile on evidence.

Tons of it, even if it’s weak. Item after item.

But in the theory of science, a single well-designed experiment or test is enough to falsify a hypothesis, no matter what everybody else is saying about it.

Those who argue from ‘consensus’ or the ‘consilience of evidence’ are often covering for the fact that their pet hypothesis is not, in fact, falsifiable.

It’s an article of their faith.

So don’t you dare entertain the suggestion it could be false.

They’ll call you names. ‘Denier’ rhymes with ‘blasphemer’.

In the years after Lovelock’s comment, the IPCC proved the reductio ad absurdum of mistaking legal argument for science. Its mission has always been to build the case against humans, not understand climate.

A few keywords that should trigger an advocacy science antenna are: ‘assessment’, ‘meta analysis’, and ‘re-analysis’.

Assessments start out resembling compilations.

Now, compilations can be a useful thing to have someone make for you.

But in a ‘assessment’ you need to worry about what studies an opinionated assessor left out of the compilation. You’re not seeing those. The IPCC assessments have that problem big time.

A ‘meta analysis’ looks at a number of studies and tries draws a single conclusion.

Sometimes a ‘meta analysis’ is done by someone who wants make a point and appear superior in knowledge — ‘meta’ — to those other researchers, who did the dog work.

When the EPA does a ‘meta analysis’ it uses a very peculiar set of voting rules for epidemiological studies.

A single study is enough to convict, even if all the other studies are inconclusive.

Likewise, an acquittal requires all studies be unanimous.

Which is something you almost never see coming out of the academic world. The rules force the EPA to err — very badly sometimes — on the side of extreme caution.

The EPA is so afraid of making a finding that is a false negative it will indulge many that are false positives.

‘Re-analysis’ is spreadsheet science.

Someone else has done the hard work of designing a study and collecting data, often for some other purpose entirely.

The spreadsheet scientist comes along, grabs the data, and looks for ways to re-slice and re-dice it to make some new point they want to make.

In the worst case, this is called ‘p-hacking’, where the strategy is try-this-and-try-that until some statistically significant (p < .05) relationship falls out of the data.

‘Statistical significance’ sounds good, but it’s not all it’s cracked up to be. If you try enough times, statistical significance emerges from random data.

But I’ve gotten distracted by math.

I still need to figure out if I’m going to die.

An L.A. Times headline from 2006 is not reassuring: “Study Doubles Estimate of Smog Deaths”.

I read the story.

It’s worst than I thought.

Not only am I going to die, I won’t even be able to pass my genes on to my progeny.

“The data indicated that for every 14 parts per billion increase in ozone, we had an approximate drop of 3 million sperm per millimeter,” said the lead author of a related study.

Apparently that only happens on smoggy summer days. I’ll keep that in mind.

I look at “Long-Term Ozone Exposure and Mortality,” a 2009 study by Dr. Michael Jerrett (of UCLA) et. al. published in the New England Journal of Medicine.5

The American Cancer Society’s Cancer Prevention Study II started in 1982 and followed 1.2 million Americans for 24 years. It was designed to study the effects of lifestyle, smoking, and so on.

During that time, 491,188 people enrolled in the study died. An official cause of death was available for 99.3% of those.

Dr. Jerrett’s idea, not unlike Steve Milloy’s, was to get data on daily maximum ozone concentrations for the addresses of the study subjects and — controlling for all the zillion other factors that might affect their mortality — try to come up with an unexplained residual, which might be the contribution of ozone to mortality.

I wouldn’t call Dr. Jerrett’s study junk science. But it doesn’t convince me to worry, either.

Air pollution control boards put up monitoring stations where they think their might be air quality problems, such as near freeways or at the port.

They don’t have the money to do random samples of air quality on every leafy suburban cul-de-sac.

The ‘ecological fallacy’ comes from attributing the average traits of a population to all segments of that population.

It’s like saying I don’t need to know how you voted, because I know the numbers on how the people in your precinct voted.

It’s a very big if to assume you can determine the quality of air someone is breathing from their home zip code.

First off, obviously, over the years of the study, some people will have moved.

Second, people spend a lot of time — maybe 70% — at work, or getting to and from it.

Third, they spend a lot of time indoors. Especially the elderly, who are most likely to have health problems.

Indoor air quality has long been an EPA blind spot. Most of the allergens and irritants known to aggravate asthma, for example, originate inside the home.

Fourth, boundaries for census tracks and zip codes can aggregate very different neighborhoods.

In Los Angeles, for example, zip code 90049 includes the ultra-wealthy neighborhoods of Brentwood, Mandeville Canyon, Westwood, and Bel Air, and also much less wealthy neighborhoods such as South Valley and Mid-City.

That zip code’s median income in 2017 ranged from about $208,000 in Bel Air, which is 80% white, to $44,000 in Mid-City, which is about 10% white.

One 2002 national study similar to Dr. Jerrett’s used data from precisely 3 monitors for the entire Southern California region.

So there some big questions about Dr. Jerrett’s input variable, ozone exposure.

I’ll just mention that ‘cause of death’, especially for the elderly, is also a bit problematic.

‘Old age’ is not a cause of death.

So the elderly get written up as dying from something. Heart failure or pneumonia, often. The latter is notoriously known as the “old man’s friend.”

The usual output of environmental epidemiological studies is a metric called relative risk (RR). You get by dividing the risk of death in one group by that of another group.

An RR of 1.0 means the outcomes of both groups is the same, so whatever distinguishes them is probably unimportant.

An RR can be less than 1.0, meaning one group, usually the smaller, is heather than the other.

People living in (a) California (b) Los Angeles Country, and ( c ) the South Coast Air Basin all have an RR around 0.88 compared to the rest of the U.S.

That’s presumably because they have higher incomes, better health care, better diets, less smoking, and so on.

Those things like higher income are the ‘confounding factors’.

Dr. Jerrett, after trying to control for, in his words, a “total of 20 variables with 44 terms” for individual characteristics that “might confound or modify the association between air pollution and death,” came up with some RR numbers for exposure to ozone in ambient (outdoor) air.

A 0.01 ppm increase in exposure to ozone, he calculated, elevated the relative risk of death from the following causes as follows:

• cardiopulmonary causes (relative risk, 1.014; 95% CI, 1.007 to 1.022),

• cardiovascular causes (relative risk, 1.011; 95% CI, 1.003 to 1.023),

• ischemic heart disease (relative risk, 1.015; 95% CI, 1.003 to 1.026), and

• respiratory causes (relative risk, 1.029; 95% CI, 1.010 to 1.048).

An RR of 1.03 is not nothing. But it’s not very big, either. And definitely small enough to be an artifact of the study design.

I make a sticky note for my heirs and put it in the folder with my will: if I succumb to ischemic heart disease, don’t bother to sue the Air Pollution Control Board.

The Federal Judicial Center Reference Manual on Scientific Evidence says an RR should be over 2.0 to merit attention. Otherwise, a judge will tell a lawyer: fuhgeddaboudit.

The RR of death from all causes for current smokers is 2.80 for men and 2.76 for women.

Speaking of cancer, ozone in ground-level air may even have a protective effect. We know ozone in the stratosphere does.

Ground-level ozone may block UV, and thus reduce skin cancer.

There was some Strangeloveian findings in the 1950s that tried to get Los Angelenos to look on the bright side of their smog.

If there had been an atomic attack on a smoggy day, fewer of them would have gotten fried.

I’m still a little worried.

I look to see how L.A. was doing during the years of my misspent youth.

At least it was getting better. You can see the summer ozone season shrinking:

Actually, Los Angeles was doing pretty well before there even was an EPA. The agency’s birthday is December 2, 1970.

Look at the blue line’s decline in VOCs between 1960 and 1970:

VOCs have come down 98% since 1960, despite L.A. having a 37% increase in population in that time. And those people using three times as much gasoline.

I guess commutes have gotten longer. Or slower.

It shouldn’t come as a surprise that Los Angeles, with its relatively affluent and well-educated population, should have had some success dealing with smog on its own in the 1950s and 1960s.

One idea in the APCD’s slush pile of smog inventions, for example, was submitted by Rockwell International, which presumably came up with it when it wasn’t doing aerospace work for NASA.

The ‘Kuznets Curve’ relates affluence to desire to improve the environment:

When a country is just starting up the ladder of economic development, it will accept environmental damage. The U.S. in the 1800s certainly did.

After a country becomes more affluent, it feels it can ‘afford’ to start taking care of the environment. That’s pretty clearly going on in China right now.

After World War II, the newly affluent U.S. middle class moved to the suburbs so they could have good schools and lawns to mow.

In L.A., they discovered they couldn’t let their kids play outside on smog days.

So they took action on their own, no waiting for the federal government.

But maybe L.A. is just weird. A lot of people think that.

I decide to look at a different city.

Before there was smog, ‘air pollution’ was synonymous with coal smoke.

The first complaint about coal smoke was made by Queen Eleanor of England in 1257.

First complaint to get written down by a scribe, that is.

I’m sure some Neanderthal complained about the cave being too smoky immediately after the discovery of fire.

In the U.S., coal surpassed wood as an energy source in 1885.

Coal smoke became a problem in industrial cities such as Pittsburgh.

The first city ordinances restricting smoke go back to Civil War days.

But smoke abatement became a hot topic among civic betterment groups during the Progressive era.

Coal smoke was unaesthetic and unpleasant.

But people back then had mixed feelings about it.

They were a little proud of it: the smoke was a sign their city had industry and jobs.

It also didn’t strike terror into people as a health risk back then.

Coal smoke was thought to have antiseptic properties. Inhaling it was prescribed for sufferers of tuberculosis.

Variations on that folk-medicinal notion have been around for a long time.

During London’s Great Plague of 1665, people kept the coal fires roaring to burn up ‘noxious particles’ in the air. They believed those were responsible for the Plague.

The civic betterment groups made only minor progress against coal smoke until natural gas came around in the 1930s.

Natural gas sold itself to consumers as cleaner and more convenient for home heating and cooking. People without servants could wear white clothes again.

It’s hard to find charts for air quality that go back before 1970, the birth year of the EPA. It keeps most of the data.

I finally found a chart that uses some of the old measures for soot in the air.

TSP or ‘total suspended particles’ was measured — reasonably accurately — by passing air though a filter, which could be weighed before and after.

For a quick-and-dirty result, the color of the previously white filter could be matched against standard gray squares on a printed card. There are almost two centuries of data collected using the so-called ‘British Smoke’ method.

I have to mention the ‘dustfall’ method, just because it was a high point of low-tech air quality monitoring.

An open bucket was left out — for example on a factory floor — and the soot weighed or measured at the end of the day.

Here’s TSP and dustfall for Pittsburgh going back to 1910:

You can see a steady decline long before the EPA. And maybe even see the natural gas drop in the 1930s.

In an unguarded moment, Douglas Costle, administrator of the EPA under Jimmy Carter, said that in the 1960s the states did more to cut sulfur dioxide (SO₂) and particulate pollution than the EPA did in the 1970s.

Maybe I’m a cynic.

But if you look at charts for air quality dating from 1970, when that Clean Air Act passed, it looks like the EPA could have done a victory lap around 1992. The actual air pollutants were all heading down.

The last domino to fall was sulfur dioxide, SO₂.

That’s because during the energy crisis of the 1970s, coal was going to guarantee U.S. energy independence.

For a time, Jimmy Carter, Congress, and the anti-nuclear environmental groups were all-in on coal for generating electricity. Its use increased.

The coal push suffered from some pork-barrel politics that made SO₂ emissions worse than they needed to be, and more expensive to deal with.

Senators from states around Appalachian couldn’t resist writing in privileges for that region’s high-sulfur coal over the low-sulfur stuff found in Wyoming.

The EPA required nearly every coal-burning power plant in the country install expensive scrubbers.

Those took the SO₂ out to be sure, but also conveniently guaranteed they would be able to burn Appalachian coal.

It took George H.W. Bush’s 1990 SO₂ emissions trading scheme to put sense into the regulations and get SO₂ emissions heading down.

Here’s SO₂ in the air. The locations in Arizona are, probably not coincidentally, near the Navajo Four Corners coal-burning power plant:

Like I said, Mission Accomplished.

The EPA itself puts out one final chart of interest to me.

The purple line, the EPA says, is an ‘aggregate’ measure of the six criteria air pollutants, meaning those have a NAAQS national standard.6

It’s the shape of the EPA’s line that interests me:

As that purple line approaches the asymptote, additional regulations had diminishing returns.

Less bang for the buck. It costs more and more to get rid of less and less.

That was the motivation behind Ronald Reagan’s 1981 executive order requiring new regulation be subjected to cost-benefit analysis.

The question the EPA could never bring itself to answer was: “How clean is clean enough?”

In fact, the EPA refused to ask the question.

So instead of declaring Mission Accomplished on classic air pollution, the EPA did just the opposite. It doubled down.

As a first strategy, you can continue to try to regulate something into the ground.

Somewhat literally. Below natural background level.

You can justify that if you believe in the linear no threshold (LNT) theory.

That holds there’s is no level that’s safe enough.

So if money is no object, you can try to get rid of it.

Such a quixotic quest usually proves to be absurdly expensive.

Although they are an endless source of pork for those doing the mitigating, as in the EPA SuperFund clean-ups.

As an alternative strategy, you can find some new air pollutants to worry about.

The EPA discovered PM2.5 in the 1990s.

Large particles in the air, such as those from dust and smoke, you can see.

The lungs of air-breathers evolved to deal with dust after they emerged from the swamp 420 million years ago.

They developed those little cilia.

And they learned how to cough and spit.

Politely, of course.

PM2.5 happens because perfectly clean air is not found in nature.

Real-world ambient air contains tens of thousands of suspended particles of different sizes.

Improved optical sensors in the 1990s made it possible to count not only the number of suspended particles in a cubic meter of air — the old ‘total suspended particles’ metric — but also break them down by size.

The EPA was like a kid with a new toy.

The old TSP metric got replaced with two new ones: PM10 for larger diameter particles and PM2.5 for those less than 2.5 µm.

That’s 2.5 millionths of a meter.

It’s hard to comprehend how small that is.

A human hair has an average diameter of 70 µm. So 28 times smaller than that.

A particle with diameter 2.5 µm will happily pass through a high-quality N-95 mask of the sort you may have worn in Covid days.

It’s small enough to be carried deep into your the lungs when you inhale.

It’s also small enough to exit your lungs when you to exhale.

Here’s some abbreviated math on PM2.5:

• The amount of air inhaled by an adult breathing at rest ~ 10,000 liters/day = 10 m³/day ~ 292 M m³ over 80 years.

• At one EPA National Ambient Air Quality Standard (NAAQS) for PM2.5, 15 µg/m³, an adult will inhale 4.38 grams, or 0.88 teaspoon, of PM 2.5 over those 80 years.

• Which that adult just might also have exhaled.

We need to ask if it accumulates. Recall the business about lead’s ‘body burden’.

In autopsies, mineral particulate matter in human lungs is around 0.1 gram. So not much there.

The notion that environmental protection makes progress is an odd one.

Technology does advance. We can now detect minute levels of all sorts of things.

Just because we can now detect them, however, doesn’t mean we need to rush off and protect ourselves from them.

Justifying that requires embracing a highly pernicious doctrine, the ‘precautionary principle’.

The precautionary principle says no science required. Regulate it anyway.

We’re clueless, but we should put a stop to the thing because it sounds bad.

The EPA really wanted to regulate PM2.5. It just couldn’t figure out why.

PM2.5 has been studied for decades now.

There’s still no convincing etiological (medical) theory of how those fine particles travel from your lungs and affect your heart or whatever they are supposed to be doing.

So the evidence that links PM2.5 to things like higher risk of cardiovascular disease comes from those statistical studies.

The ones that have the zillion confounding factors.

Note that ‘higher’ is one of those legal argument words lawyers love. No one can deny that 0.00001 is higher than 0.00000.

But don’t take my word on this. The EPA knows it has a problem using statistical studies.

In 1996, Dr. George T. Wolff, chair of the EPA’s Clean Air Scientific Advisory Committee (CASAC), wrote that those studies leave:

...many unanswered questions and uncertainties regarding the issue of causality. The concerns include: exposure misclassification, measurement error, the influence of confounders, the shape of the dose-response function, the use of a national PM2.5/PM10 ratio to estimate local PM2.5 concentrations, the fraction of the daily mortality that is advanced by a few days because of pollution, the lack of an understanding of toxicological mechanisms, and the existence of possible alternative explanations.

That uncertainty hasn’t stopped the EPA.

PM2.5 was drafted to be a soldier in the EPA’s war on coal, after large particles and SO₂ came reasonably under control.

I’m not against medical research, or well-designed epidemiological studies.

Who knows? Someday it may be perfectly obvious that Alzheimer’s is caused by something we’ve not yet thought of.

I’m against the rush to judgement.

A statistical study should be a first pass.

It can suggest things that should be looked at in more detail. It can also save effort by ruling things out.

The next step, however — which can take time and be expensive — is to design new studies that can actually get to the causal question.

Such as, outfit some people with personal air monitors and track their health for 15 years. Or use tracer particles to see if they really end up in the heart.

But the something-or-other Complex is an awesome sight when it swings into full production. Study after study gets done replicating findings.

Without attempting to get to the built-in assumptions of the original ones.

The production rate of the Complex is behind media clichés about ‘growing evidence’.

The media doesn’t care if the ‘growing evidence’ is any good.

On the flip side, regulating things that don’t actually need regulation can be very expensive.

Which brings us back to the case of my client, CO₂.

Let’s assume Administrator Zeldin finds for CO₂ and says the 2009 Endangerment Finding no longer applied.

What would a post-CO₂ or post-GHG EPA look like?

I make a list of the EPA’s current regulations aiming to reduce greenhouse gas emissions.

One linguistic thing is glaringly obvious. The word ‘emissions’ has become synonymous with CO₂ emissions. We’re going to start asking: “Emissions of what?”

A post-CO₂ EPA is not really going to be about the EPA.

The ‘other’ agency involved is the Department of Energy, the DOE.

As the NRC was the ‘Just Say No’ agency for nuclear power, the EPA has been the Just Say No agency for fossil-fuel power.

The EPA’s power plant rule of April 25, 2025 requires existing coal-fired power plants and large new gas-fired power plants to achieve 90% reductions in GHG emissions by 2032.

Getting rid of that would be a big win for them.

An existential one, in fact, since it gave them a ‘choice’ between using carbon-capture technology that doesn’t exist, or shutting down.

By the way, the EPA first came to believe it had the magical power of ‘technology forcing’ back in 1970 with catalytic converters.

But catalytic converters back then were a working, existing technology that only needed a little shove to be manufactured cheap.

A more interesting question is whether coal might follow CO₂ into rehab.

In a February 11 2025, interview Energy Secretary Chris Wright told Bloomberg “America’s War on Coal Ends Now.”

In an ‘all of the above’ energy strategy, coal has some attractions. As opposed to natural gas, the fuel can be inventoried on site.

Short-term, Wright will try to keep existing coal plants from being shut down.

Coal plants didn’t have a chance of staying open if they had to capture CO₂.

Coal is complex mineral, and there are several types.

Whether coal can be burnt cleanly and economically with respect to all the stuff in it is a technology question somebody — not the EPA — should give honest research.

The scrubbers that remove SO₂ from coal smoke, by the way, also capture most of the mercury and other elements in coal people panic about.

Vehicle mileage standards are another big thing that might go away. That might well affect you personally.

The so-called CAFE standards — corporate average fuel economy — date back to the oil crisis of the 1970s.

Back then, everyone was worried about the U.S. running out of oil. And it needed to be energy independent.

Things have changed. The U.S. now produces more crude oil than any country.

More than any country ever, according to the EIA on March 11, 2024.

The U.S. also apparently has plenty of oil and gas in the ground.

The best thing for it to do with that bounty or blessing would be a good question for Congress to take up. It might not be the worse idea to put some of the proceeds in a sovereign wealth fund, as Norway did decades ago.

In Blob-like fashion, the EPA took over mileage standards from the National Highway Transportation Safety Administration (NHTSA), which originally had charge of them.

If we don’t really have to use less oil, it’s only that (harmless) bit of CO₂ that comes out of your catalytic converter that’s the legal justification for the EPA to be concerned with the mileage of internal combustion vehicles.

The moving of the goalposts on gas mileage in recent years has been the EPA’s way of making industrial policy. It’s a not-so-subtle way of telling you to go out buy an EV.

After, of course, it told the automakers they had to make them. Which, from the losses we’re seeing at Ford at elsewhere, was a big oops.

An interesting irony is that a post-CO₂ EPA may get into a refight of the 1960s “state’s rights” battle with California.

If you believe in Federalism, as the Project 2025 people say they do, you let the states take charge of their problems.

California’s current Advanced Clean Cars II plan is a policy that wants zero-emission new cars sales by 2035. It kicks off this fall with the 2026 models.

As at the Biden EPA, California’s plan is part industrial policy and part air pollution control.

How really necessary it is now for air quality control, I can’t say.

Although it’s interesting that CARB, the California Air Resources Board, recycles EPA-style claims that the plan “will provide public health benefits of at least $12 billion over the life of the regulations by reducing premature deaths, hospitalizations and lost workdays associated with exposure to air pollution.”

I think electric cars will come when they come. They can’t be ‘technology forced’.

But I can sympathize with a city like Los Angeles that has a smog problem encouraging people to drive EVs. The badly-polluted Chinese cities do that now.

Although Chinese electric cars are coal-powered.

That’s where their electricity comes from. Go figure.

The next morning, I make it into the office before Miranda, a rare thing.

I’m fussing with the coffee machine when something catches my eye.

I walk over and stare out the window.

Miranda has come in and clumps over to see what I’m looking at.

I don’t know where she gets those shoes.

“It worked,” I say. “He’s been here.”

We both look out the window. The cactus has bloomed.

To be continued, I suspect.

When I first read Robert Kerbeck’s 2019 Malibu Burning — his first-person account of what is now known as the Woolsey fire — I underlined a sentence I found both slightly humorous and slightly disturbing: “Locals called it the YOYO Fire, for You’re On Your Own.”

Kerbeck explains YOYO in the first few pages:

A surfer buddy, Tim, once told me what gear to buy for the inevitable wildfire. A lifelong local, Tim had also warned me that there would be no firefighters when the time came, that if I wanted to save my place I would need to stay and fight for it myself.

Tim also

explained that the hydrant water would run out, so it was essential that I have a pump and my own water source. I glanced toward our hot tub and hoped it would be enough.

Surfer Tim proved prescient.

The fire that consumed Malibu started in Woolsey Canyon on Thursday, November 8 2018, from a downed power line.

By Saturday, driven by a hot, dry Santa Ana wind, it reached the ocean and Point Dume.

Point Dume is a place where, as a teenager, I sometimes hung out.

It’s also where Charlton Heston found the half-buried Statue of Liberty at the end of the first Planet of the Apes movie.

I tried to surf near the Point a few times, although I would not recommend it. The break is not great and there are some nasty rip tides.

Kerbeck relates the story of Judy and Brian Merrick, who had a house on Dume Drive and managed to save it by stamping out embers with their shoes. No firefighters in sight:

In the morning [Saturday], while their home was safe, houses all along Dume Drive were on fire. Still, there were no firefighters. Judy didn’t see any until late in the day on Saturday, over twenty-four hours after the fire had crossed into Point Dume.

Judy, Brian, and others put together at a local elementary school what became known as the Point Dume Relief Center:

After the no-show of the fire department, the locals realized that the cavalry wasn't coming to rescue them—or to feed them. The fire department hadn’t even allowed the Red Cross in, as the area wasn’t deemed safe.

The following Tuesday, Judy Merrick attended a press conference held by Malibu City Manager Reva Feldman.

By then, the residents’ biggest problem was the L.A. County Sheriff's Department:

…most Malibuites had seen no first responders during the fire. And now the first responders that residents were seeing were acting like the “gestapo,” as one city council member called them.

According to Kerbeck, the question Judy Merrick wanted to ask, but didn’t get a chance to, was:

Why was [Malibu City Manager] Feldman showing up only now?

Kerbeck relays Judy’s thinking. My emphasis:

Judy had a sense it had to do with the press being there; Feldman likely didn’t want to miss out on the chance to look good for the cameras, though no good look could exist for the collapse of an entire city government. Judy had expected failures during an event of the magnitude of the Woolsey Fire but not failures at every level: fire, police, all forms of government.

No government entity, as far as I know, is doing a comprehensive inquiry into the Los Angeles fires.

So in the spirit of YOYO, I suppose it’s up to me.

Nobody likes a Monday Morning Quarterback. I get that.

To which I’ll counter with a Japanese word: kaizen. The philosophy of making continuous improvements in working practices.

In a $52 billion disaster — or whatever it turns out to be — if you can make a small percentage difference, pretty soon you’re talking about real money.

Take, for a quick example, the ‘dry hydrant’ issue, which I’ll get in more detail to below.

The estimate of the Los Angeles Department of Water and Power (DWP) is that ‘only’ 20% of the hydrants in the Palisades area ran out of water, mostly those at higher elevations. At lower elevations, most hydrants worked, according to DWP.

A hard-ass boss would say — and I’ve had some — the acceptable number for that is 0%.

Clearly, not 20% of the homes that burnt in the Palisades would have been saved if there had been water in higher elevation hydrants.

But some would have.

Which is my point about kaizen. There’s no One Big Thing.

It was death by a thousand cuts, a totality of mistakes of in different sizes. I’m going to try to collect them into one place.

So I will be brave and ignore Substack’s length limit warning.

And update this post from time to time, as needed.

Which feels like the least I can do.

Many reporters are doing excellent investigative work on the fires, especially those at the L.A. Times.

But it’s the nature of newspaper stories to focus on one thing at a time.

When you put the puzzle pieces all together, the image that emerges is more disturbing: a Los Angeles smothered in a smog of institutionalized ineptitude.

There are notable exceptions, of course. A number of people and organizations, such as the Firehawk helicopter pilots, rightfully deserve high praise.

But official Los Angeles had its eye off the ball.

Or was watching the wrong ball.

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Let’s start with the wind

The hot, dry Santa Ana winds are a fact of Los Angeles topography.

That hasn’t changed in millennia.

Or decades. Raymond Chandler talks about them in his 1940s noir detective stories.

In 1969, essayist Joan Didion, interested in the folk wisdom that the Santa Anas can make people go crazy — or at least nervous and irritable — pointed out their similarity to other famous malevolent winds, such as Föhn of Switzerland and the hamsin of Israel.

That observation is correct, but her meteorology is technically not quite right. The Santa Anas are katabatic winds, which importantly relates to their dryness. In Southern California, unlike Switzerland, they’re not coming off glaciers.

The basic winter weather pattern that creates them is:

L.A. topography turns some of its canyons, especially those running diagonally northeast from the ocean, into wind tunnels:

It takes wind + ignition

A Santa Ana wind is a necessary — but not sufficient — condition for a bad fire in Southern California.

Over 75% of Santa Ana wind events generate no fire.

The additional necessary condition is ignition, as concluded in one 2021 study:

Temperature during the event and antecedent precipitation in the week or month prior play a minor role in determining area burned. Burning is dependent on wind intensity and number of human-ignited fires.

Here’s the link to that paper.

It’s an article of faith for some that climate change — not unlike the Hand of God in Medieval theology — can be seen in every disaster.

I have some complicated, nuanced views on climate that I won’t bore you with here.

But I’m happy to acknowledge that California’s climate has changed in the last century or so.

Just as long as the other baggage of the climate change orthodoxy doesn’t get pulled along with that.

In any event, it’s the Santa Ana wind, not global warming, that dries out the readily combustible brush in Southern California.

The Santa Anas can do that in as little as a few hours, which is why ‘antecedent precipitation’ was found to be a minor factor in the study mentioned above.

California’s climate has changed.

Which is important, but not for the reasons assumed by the climate faithful.

Expressed in math, California precipitation has changed in variation or volatility, but not much in absolute amount.

That’s been going on for a long time, a century maybe, and well predates the modern CO₂ scare.

Put graphically, the area under the curve, integrated over enough time, is the same, but the up-and-down peaks are more extreme:

The feast-or-famine nature of California precipitation was well understood by previous generations.

It’s why the reservoirs got built, and why the level of the Sierra snowpack is so important. The Sierras are California’s natural reservoir.

Aside: I won’t get into the state’s water wars. About water, let’s just say ‘catch it when you can’, an ethically sound principle, has at times morphed into ‘steal it when (or where) you can’.

A newly fashionable term, ‘whiplash weather’, basically sees the increased volatility in precipitation and adds worries about the vegetation cycle. A lot of rain one year can spur plant growth that can dry out and become fire fuel the next.

Fine. But not a terribly new observation. Mike Davis said that — and much more — in his 1998 classic Ecology of Fear: Los Angeles and the Imagination of Disaster. Here’s a link to that on Amazon.

Being overlooked in the current moment is the possibility that the rain, if it finally does show up in Southern California in the next months, could be heavy enough that the runoff from the fire-burned areas will make for some nasty flooding and mudslides:

That flooding, too, would not be new.

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The warning

The Palisades fire flared up the morning of Tuesday, 7 January 2025.

The Eaton Canyon fire started early that evening, at 6:11 p.m.

There was no question that Tuesday would be what the Los Angeles Fire Department (LDFD) calls a ‘high-hazard day’. The National Weather Service—Los Angeles posted this on X on Monday afternoon at 1:00 p.m.:

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Ignition

In California, power lines are — rightfully, but sometime wrongly — almost always the Prime Suspect for a wildfire ignition source, if there’s no stupid-human thing or arson as an obvious cause.

In what are called Public Safety Power Shutoffs (PSPS), a utility will intentionally turn off the power on its transmission lines — ‘de-energize’ them — in high fire risk areas when winds are bad.

That prevents bare wires — more on those below — from whipping around into contact with each other, which causes sparks, or from coming into contact with vegetation.

PSPS are politically charged in California.

No voter enjoys having his or her power turned off, especially if they don’t receive a warning or explanation.

Aside from being a nasty inconvenience for residential utility customers, power shutoffs cost business customers money.

One study — admittedly sponsored by Southern California Edison (SCE), and thus perhaps on the high side — estimated small or medium–sized businesses — all of them in the affected area — lose $21 per minute the power is off.

In January 2022, the California state legislature passed what was informally called the “shutoff reduction law”, which had the express intention of making Public Safety Power Shutoffs less frequent and harder for utilities to do.

PSPS were to be the last-est of last resorts.

That’s because the ‘Energy Safety Office’ of CPUC hates Public Safety Power Shutoffs.

According to the California State Auditor, it has called them ‘intolerable’, although I’m not sure if that’s his word, or one actually used by the Energy Safety Office.

They’re intolerable not because Energy Safety Office cares so much about utility customers being inconvenienced.

It’s afraid those customers might start using diesel generators during power shutoffs.

Which, of course, is contrary to California’s climate goals.

Burdensome paperwork is known to be an effective tool in any regulatory arsenal.

A utility that does a PSPS is now required to file a ‘post-event’ report with the California Public Utilities Commission, the CPUC, listing the alternatives it considered before it initiated the power shutoff.

It must also detail its thinking process in how it determined the benefits of the power shutoff outweighed ‘potential public safety risks’.

‘Public safety’ is one of those bureaucratic trump cards which, when played, squelches all further discussion.

Oddly, every police station, firehouse, hospital, and water pumping station actually looking out for the public safety knows it has to have a standby generator.

Utility electricity is just too unreliable. And getting worse.

I also suspect anyone at home with a medical condition that requires 24/7 electricity has already made some arrangement for backup.

To which it will be objected that some people can’t afford that.

After a quick switch to Google, I see Generacs selling at Lowe’s for $899.

For the ecologically-minded, it looks like you can pick up a Tesla PowerWall 3 for $9,500.

Perhaps one of those should be a standard MediCal benefit.

The cost would be a tiny fraction of the one coming due from the fires.

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Palisades

The Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the source of ignition of the Palisades fire.

If the ATF’s investigation of the August 2023 Maui fire is any guide, that will take some time. The ATF’s National Response Team issued its findings about the Maui fire in October 2024, over a year later.

But at risk of rushing the AFT to judgement, the ignition source of the Palisades fire is very likely to prove — a bit eerily — the same as that of the Lahaina fire. Here’s a link on the Maui one.

An earlier fire was thought to be out, but got reignited by the wind.

The Palisades fire started near a hiking trail, the Temescal Ridge Trail, which leads to Skull Rock, a popular destination for both respectable hikers and various ne’er-do-wells:

On New Year’s Eve, someone started a fire just west of the Trail when setting off fireworks.

That fire was put out, or so it was thought. These side-by-side photos were put together by the New York Times [link]. The ‘burn scar’ was left by the New Year’s Eve fire:

On the Tuesday morning of the Palisades fire, several people walking the Ridge Trail noticed some weird smokiness, but assumed it was the wind kicking up ash from the earlier fire.

The re-ignition phenomenon — noted in the 19th century by pioneers who swore prairie fires were traveling underground — is more common than thought.

It was the source of the Maui fire, which killed 102 people, and also caused the 1991 Oakland, California hills fire that killed 25.

The ‘nearby power poles’ are a complicating factor. The lines belong to the Los Angeles Department of Water and Power (LADWP).

It’s the LADWP’s stated policy not to shut off power to customers during dangerous winds: “the adverse impact on health, safety, and quality of life of its customers outweighs the perceived benefits derived from preemptive power shut-offs.”

Your CPUC Energy Safety Office at work. Although why the LADWP uses the word ‘perceived’ in that last sentence is beyond me.

But the LADWP told a Washington Post reporter the power lines near Skull Rock had not been live in five years.

If that’s true — I assume the ATF investigators will find out — that will get the LADWP off the hook.

Which will not be the case for Southern California Edison.

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Eaton Canyon

The Eaton Canyon fire, which started on Tuesday, 7 January 2025, was pretty clearly caused by a large transmission line.

Matthew Logelin, who lives at the base of Eaton Canyon in Pasadena, heard a loud bang about 6:11 p.m. Tuesday as he was preparing dinner for his children, and called 911.

“It’s clear that’s where the fire started,” he said later. “It was right under the power lines.”

There are photos and videos:

Southern California Edison (SCE, sometimes ‘Edison’) owns the transmission line in question.

SCE lawyered up very quickly.

Which is entirely understandable, given California’s somewhat singular legal practice of holding utilities liable for the totality of follow-on damage caused by power line–sparked fires.

The November, 2018 Camp Fire, which killed 82 people in the Northern California town of Paradise, led within two months to Pacific Gas & Electric (PG&E) filing for Chapter 11 bankruptcy. PG&E listed its potential liabilities in that filing at $30 billion.

On Thursday, January 9, SCE filed an Incident Report.

Taken literally, it’s probably all true:

To date, no fire agency has suggested that SCE’s electric facilities were involved in the ignition or requested the removal and retention of any SCE equipment.

But note that on Thursday the ‘fire agencies’ were probably too busy fighting the fires to get around to requesting the SCE equipment’s removal.

What has emerged since is:

• The smaller power distribution lines that serve homes in Altadena were de-energized about two hours before the fire started.

• The larger transmission line that runs down Eaton Canyon was not.

In an interview, the chief executive of Southern California Edison's parent company said that while power distribution lines that serve homes were de-energized about two hours before the Eaton Fire started, the transmission lines in Eaton Canyon were not shut off because those towers are stronger and can operate at heavier winds. Gusts in the region that evening approached 100 mph.

SCE says its telemetry shows no anomalies on its main line until well after the fire was established.

This one will head to court — if it doesn’t get settled first — where SCE’s lawyers will argue its side, and the trial lawyers will argue that of their Altadena clients.

The truth might come out in the courtroom fireworks.

But I wouldn’t hold my breath.

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Ounces of prevention

Clearly, if those power lines had been underground, they wouldn’t have sparked in the high winds.

Likewise, they wouldn’t have sparked if the lines had been covered with insulation, which prevents them coming into contact with each other, or with vegetation.

Since 2016 or so, the CPUC has granted the state’s utilities large rate increases to finance various forms of ‘wildfire mitigation’.

Those costs now make up around 13% of customers’ monthly electric bills.

There’s also other state money going into this.

Putting power lines underground is expensive, between $2 and $4 million per mile, depending on terrain.

If California insists on having a gold-standard final solution to the utility line wildfires, the scale of the problem is enormous.

There are 277,000 miles of utility power lines in the state. About 54% of those are bare lines.

About 40,000 miles of bare lines run through areas Cal Fire rates as high fire-threat.

After some years of wildfire mitigation, only 27% of power lines in high fire-threat areas are underground or covered.

California voters — this is my opinion here — need to approve a very large, multi-decade bond issue to finance this, and stop trying to finance wildfire mitigation out of utility rates.

Which would have another big advantage: it would get the CPUC, which regulates the utilities, out of the picture.

On wildfire mitigation, the CPUC has been missing in action for the oldest of bureaucratic excuses, not really our department.

The CPUC, apparently, only works with paper. The utilities must deal with the physical world.

The CPUC’s job is only to see that the utilities have an acceptable ‘wildfire mitigation plan’ on file.

Unfortunately, the utilities know the CPUC is going to give them a pass on their plans.

The CPUC grades them using a number of very squishy criteria, such as an assessment of the utility’s ‘safety culture’.

According to a report by the State Auditor, the CPUC does not even go back and check to see if the utility actually did what it said it would do in last year’s plan.

Here’s the link to that report, number 2021-117 dated March 24, 2022.

The utilities are the ones who have to prioritize which lines to ‘harden’ and which to let slide.

One would think that top priority for lines to ‘harden’ would go to those most likely to create dangerous fires in the future. The classic risk equation is likelihood × potential impact.

I’m sure some of the utilities do this correctly in-house, on their own initiative.

Yet somehow a transmission line in a windswept canyon near a major population center didn’t get SCE’s attention.

Or did, and SCE made made a very bad miscalculation.

One problem is that the CPUC pushes an odd metric on the utilities, one that is backwards-looking and is only indirectly related to real-world fire risk.

The priority goes to lines that have inconvenienced customers with shutoffs in the past, not those potentially most dangerous in the future.

California’s bureaucracy generates a lot of paper.

It’s a fire hazard.

Astragalus brauntonii derails a steel pole solution

For smaller distribution power lines — as opposed to the larger trunk lines — a related option is to replace old wooden poles, which burn and fall down, with steel ones, which don’t.

Down power lines become a big thing during actual fires. Firemen are trained not to drive over them, since there is no way of knowing if they are live.

Robert Kerbeck quotes one of the L.A. Country Fire Department’s top commanders, Deputy Chief Vince Pena on this:

Pena explained how much time had been wasted trying to get resources into Malibu during the fire. Kanan Dume Road was the major thoroughfare that led into western Malibu, but it was closed due to the fallen poles. Resources had to be detoured down Malibu Canyon road, which had steel poles, and then up the PCH [Pacific Coast Highway], an additional forty minutes of drive time. Multiply that number by every trip first responders made, and an astronomical amount of time was lost; time that firefighters could have been saving homes. At the very least, Pena believed the poles on Kanan Dume Road should have been replaced with steel ones.

In July 2019, crews working for the Los Angeles Department of Water and Power (LADWP) were replacing 200 wooden power poles installed between 1933 and 1955 in Topanga State Park with new steel ones.

LADWP used a bulldozer to clear and widen a graded road as part of a wildfire prevention project stretching from Pacific Palisades to Lake Encino.

That project came to a screeching halt when a concerned citizen discovered the bulldozer had taken out some stands of Astragalus brauntonii, common name Braunton’s milk vetch. Here’s a link.

Astragalus brauntonii is federally listed as endangered.

In an abundance of irony, Astragalus brauntonii is, according to its Wikipedia entry, “a short-lived perennial shrub with lilac flowers that is typically found on carbonate soils in fire-prone areas.”

It has beanlike seeds require scarification from fire or mechanical disturbance to break down their tough seed coats before they can germinate. The seeds persist for years in the soil until fire or disturbance allows them to sprout, with populations of the plant springing up in an area that has been recently swept by wildfire.

A relative of the Topanga kind grows in Baja. Wikipedia’s photo of that plant shows it growing in disturbed soil next to — guess what — a graded dirt road:

Another relative, the Humboldt milk vetch, Astragalus agnicidus, was thought to be extinct until 1989, when a passing bulldozer outside Phillipsville, Calif. disturbed some soil and its seeds sprouted.

Aside: Fire is a natural player in California ecology. The Giant Sequoia, for example, have evolved over millennia in the presence of fire. Its seeds, which can germinate years later, are sealed in the pine cones by a resin that melts only when exposed to high heat.

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Fire detection

Luckily, both the Palisades and Eaton fires were reported quickly.

That didn’t have to be the case.

There’s an interesting technology for fire detection that uses a face-recognition-style AI to bring possible fire starts to the attention of human monitors in a control room:

The AI is usually faster to spot a fire than 911 callers, but false alarms can be seriously expensive. Humans are necessary to make the final call.

ALERTCalifornia is a University of California at San Diego project that’s been evolving for several decades. It started out doing seismic monitoring but later branched out into fire-spotting, especially in remote areas.

As of 2023, it had 1,060 monitoring cameras and sensor arrays installed across California. A two-camera system is commercially available from a Chico, California firm, ALERTWest. Here’s a link.

There are actually a number of ALERTCalifornia cameras in Southern California, including one operated by Southern California Edison.

But there probably needs to be a lot more, especially in the more remote canyons.

Rapid response, or lack thereof

A Los Angeles Fire Department (LAFD) operations publication states:

Our first-alarm brush response is based on a ‘hit it hard and fast’ concept. … If it is a high-hazard day, (fire) companies will be pre-deployed.

As von Moltke said, no plan survives contact with the enemy.

Rapid response - by air

The obvious best way to put out new fire is to dump a lot of water on it quickly, while it’s still small. Or dump a lot of water plus retardant just downwind, to pen it in.

Speed and water carrying capacity are of the essence.

For fires breaking out in the canyons, that means an air drop. The New Year’s Eve Skull Rock fireworks fire was put out — sort of — by helicopter drops.

Ideally, on a high-hazard day, you’d want a flight line of helicopters (the S-70A Firehawk is one) loaded and ready to go.

Fixed-wing aircraft have greater carrying capacity, but the drops are not as accurate.

The pilots are legitimate heroes of this story. Those same gusting Santa Ana winds — coupled with unpredictable up- and down-drafts from the fire itself — made flying over the fires dangerous.

The New York Times ran an excellent story about a helicopter pilot who happened to be in the air with a load of water and tried to get it on the Eaton Canyon fire after dark on the Tuesday. He came with an inch of crashing. The link is here.

After the fires get established, of course, the air drops still make a big difference. They saved Brentwood when the Palisades fire was headed its way. [Link]

The ‘pre-positioning’ controversy

If the helicopters can’t fly, the next best option is a fire truck with a load of water.

That was a road not taken, at least according to the L.A. Times: “L.A. fire officials could have put engines in the Palisades before the fire broke out. They didn’t.” [Link]

No one is going to criticize a fire chief for not guessing correctly where a fire is going to break out.

Although there’s technology — not used — that could have helped make that decision.

Ting sensors are bought by homeowners and plugged into an AC outlets:

They are normally used to detect voltage irregularities that may indicate the wiring in the house needs fixing.

But when there are enough Ting sensors in an area, that data collectively says a lot about the local electrical grid.

When the wind is whipping around the power lines, it generates lots of little but detectable voltage irregularities.

In Altadena — downwind from the Eaton fire — 317 grid faults were detected in the hours before the ignition. Normally, there are very few faults.

The utilities, such as SCE, presumably have comparable or even better data.

But California liability law makes them reluctant to share it. Trial lawyers will present it to some jury as a preemptive confession. They knew, or should have know, etc.

As with video AI fire detection, a ‘filter room’ with the skill process raw data is a critical component. That was one of the under-appreciated discoveries of the British when they deployed their early radar system prior to World War II.

Given the severity of the weather warning, one would assume the Tuesday of the fires would have been an all-hands-on-deck day.

For the Los Angeles Fire Department, somehow, it wasn’t.

That’s based on looking at the number of (a) firefighters and (b) fire engines that were ready to go, compared to number that could have been.

The details, as reported by the L.A. Times, (link) are complicated, but:

The department only started calling up more firefighters and deploying those additional engines after the Palisades blaze was burning out of control.

LAFD Fire Chief Kristin Crowley gave a reaction to the Times story. But allow me to add an emphasis:

Fire Chief Kristin Crowley defended her agency’s decisions, saying that commanders had to be strategic with limited resources while continuing to handle regular 911 calls.

“Regular 911 calls” needs expanding. What are those?

In the first half of 2024 (up to August) the Westlake Fire Station 11 — whose area admittedly includes sketchy MacArthur Park — made 36 runs for structure fires as opposed to 599 drug overdose calls.

In 2023, the city had a pilot program that sent mental health workers instead of firefighters out on non-emergency 911 calls in a special ‘therapeutic van’.

Fire and ambulance crews were spending too much of their time being Door Dash for naloxone. The idea was to free them up.

LAFD firefighters are represented by two strong — and politically potent — unions.

The pilot project, not unpredictably, got the kibosh.

Those mental health workers were ‘insufficiently trained’. Not strong enough to wrestle those overdosing drug addicts into the van, and so on.

For 2022, LAFD officials said their records showed 64 employees made over $400,000 in salary, overtime, and other pay — not including benefits. Several of the captains made more than $500,000.

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Alert system failures

On Wednesday [23 January 2025], the lead story on the front page of the L.A. Times ran under the headline “Alert came hours into blaze.”

After reading it, I conclude the old 1950s civil defense air raid sirens had something going for them.

For government agencies, sending out emergency alerts by wireless no doubt sounds very with-it and high tech. You’ve got the Amber Alert-style warnings that can be sent to cellphones, and federal government’s Wireless Emergency Alert system, known as WEA.

But when people have their power out, as most did in Altadena, their cellphones, internet routers, and laptops are living on borrowed time.

As are, I assume, the local cell phone towers. Signals will be nonexistent or spotty.

Not everyone, of course, sees those messages.

Or should. On the Friday, erroneous evaluation notices were sent out to thousands of people nowhere close to any fires.

The wireless notification system in Altadena also failed to cross over that community’s historic racial divide, North Lake Avenue.

In the bad old days, Lake Avenue was one of those infamous 'red lines' used by mortgage lenders to sort minorities to the west, others to the east.

Altadena neighborhoods west of North Lake Avenue did not get electronic evacuation orders until 3:25 a.m. Wednesday, well after structure fires were burning there.

Those east of North Lake Avenue received evacuation orders more than 10 hours earlier, at 7:26 p.m. Tuesday.

In was not until 2 a.m. Wednesday that Los Angeles County Sheriff’s Department patrols started driving down streets in west Altadena using bullhorns to urge people to evacuate.

All of the 17 confirmed deaths in the Eaton fire were in west Altadena.

Dry hydrants

A fire truck, of course, carries only so much water.

In the Malibu fire in 2018, as in the recent ones, some fire hydrants went dry.

The pertinent quote here is from Marty Adams, a former general manager and chief engineer at the Los Angeles Department of Water and Power.

The pump-and-storage system was designed for a fire that might consume several homes, not one that would consume hundreds.

“If this [the January fires] is going to be a norm, there is going to have to be some new thinking about how systems are designed,” Adams said.

I couldn’t agree more.

Three gravity-fed water tanks near Palisades were duly topped up prior the blaze. They hold 1 million gallons each. Here’s the map;

The missing piece in that puzzle is Santa Ynez Reservoir. It was empty in January, and had been since February 2024:

Santa Ynez holds 117 million gallons. Compare and contrast with the 1 million in each of the three water tanks.

The LADWP emptied the reservoir after it found a several-foot-long tear in its floating cover. The tear might allow “debris, bird droppings and other objects” to enter the water.

The image of a few bird droppings in the water is definitely icky, but we are talking about 117 million gallons here.

The LADWP’s employee union said the tear was minor and offered to do the repair in-house, presumably for a bit of overtime.

Instead, the Department put out the job out for bid. After many delays, it eventually accepting one for $130,000 in November.

One year on, the repair still hasn’t been made.

The idea that a municipal reservoir needs a cover at all is, by the way, a relative recent manifestation of our contemporary chemphobia.

Santa Ynez didn’t have one until 2012. Here it is before:

So maybe — before fire season — you could just keep it filled whether it had a tear in the cover or not. Worked between 1968 and 2013.

There are a number of ways to disinfect drinking water, including UV light, but following the conventional treatment process, chlorine and ammonia (nitrogen) are added to the water to form chloramine, which is a disinfectant that stays in the drinking water.

Chloramine is EPA-approved, but in 2005, the EPA decided to crack down on chemical byproducts of the disinfectants that can be produced in exposure to sunlight.

I assume EPA science found that massive doses of those byproducts could create cancer in rats, or something.

Which, if true, means the generations who’ve been drinking chlorine-treated water for decades are in for big surprise.

The LADWP, in an abundance of caution, decided to put covers on all its reservoirs.

Which was probably less expensive than getting into a fight the Feds.

In any event, Santa Ynez was missing in action.

On Friday 10 January 2025, California Governor Gavin Newsom sent a letter to leaders of DWP and L.A. County Public Works asking for an explanation for the loss of water pressure and the empty Santa Ynez Reservoir. Newsom called “deeply troubling.”

Hydrant pressure was only one thing.

The reservoirs played a different, and more vital, role in fighting the fires. They were the water source for the helicopters and ‘Super Scoopers’.

Santa Ynez would have been much closer in flying time to Palisades than, for example, the Encino reservoir, which got a lot of use.

There’s a fascinating animation on X concocted out of flightradar24 data showing helicopters flitting back and forth to the Encino reservoir like a bunch of busy bees.

I always thought — still do — Robert Kerbeck’s book would make a great TV series.

It has the right structure. Each short chapter is focused on the response to the fire by the some different slice of the Malibu community.

And, it has animals.

Which would give it some kids appeal, and great visuals.

I can picture this scene from my old hangout, Zuma Beach: “Seeing large animals like alpacas and llamas walking on the sand was breathtaking, as if a zoo had burned down.”

That was according to Jennifer.

Katie “saw the same horses, donkeys, and llamas that I did tied to lifeguard towers. They’d been evacuated by their owners, who had spent the night in their nearby cars.”

In my mind, Malibu Burning — the miniseries — would be welcome antidote to CBS’s soap opera Fire Country, which delights in the quasi-militarized culture of Cal Fire.

In many Fire Country episodes, it’s those damn civilians — the hikers, homeowners, and so on — who are the panicked idiots who need take orders from the trained professionals.

Military cultures, however, also become a haven for complacent ‘lifers’. The ones who have learned to get by exercising a minimum of effort.

Lifers also exist in state and local bureaucracies, and political life.

From time to time, the deadwood needs to be cleared.

Just saying.

I hesitate to add to all the commentary on the Los Angeles fires.

But this one was pretty close to home.

At night, from his house, my brother could watch the flames of the Eaton Canyon fire. His place was just outside the evacuation zone.

During the day, he said, all you could see was smoke.

This satellite photo was taken Tuesday night a few miles from his house:

From his office, closer to downtown, my brother could see the Palisades fire. That one burned up the house belonging to his boss.

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It’s a hard to figure out how to react to catastrophe.

Even one death is, of course, a tragedy. As I write, the toll is ten.

That, in my opinion, is a blessing — and to L.A.’s credit — given the speed at which the fires spread. It could have been much higher.

It also feels callous to discuss property damage, at last estimate in the neighborhood of $150 billion, exceeded only by Katrina.

A decent interval, as they say, should pass.

But that will have to be done, and probably better done sooner than later.

One additional causality of the fires is almost certain to be California’s insurance industry.

If history is any guide — I’m thinking about the 2001 electricity crisis, in which the State of California decided to step in and cover the shortfall— that crisis in turn will have the potential to take down the state government, financially speaking.

The seriousness may explain why some of the facile commentary annoys me.

On Wednesday (1/8/2025), from the safe remove of London, the BBC opined that “climate change … is fuelling the Los Angeles fires…”

Anyone expecting True Believers in the eschatology of climate alarmism to be in touch with reality is, I know, asking a lot.

I could make the exact opposite point: there were fires in Los Angeles last week because California’s climate hasn't changed.

If you know any one thing about California ecology, it should be that its intimate relationship with fire goes back at least 1,000 years, and no doubt farther.

What has changed is the number of people living in, or in proximity to, the so-called woodland-urban interface.

On California climate for the last 1,000 years, I prefer the science studies of the good old days, before Michael Mann muddied the waters with his hockey stick.

Or the climate orthodox — as documented in the Climategate e-mails — decided among themselves to ‘get rid of’ the Medieval Warm Period and Little Ice Age.

In 1993, Science published a study concluding that burn scars on California’s giant Sequoias indicate “frequent small fires occurred during a warm period from about A.D. 1000 to 1300, and less frequent but more widespread fires occurred during cooler periods from about A.D. 500 to 1000 and after A.D. 1300.”1

Another 1993 study, of the tree-rings of subalpine conifers (no bristlecones!) in the Sierra Nevada, showed that rainfall in California follows decadal-scale oscillations. It also showed two major drought periods in the last millennium.

As for California’s recent upward temperature trend, that study noted the state only started to come out of its Little Ice Age around 1850, a heartbeat in climate time.2

Cycles and oscillations are undeniable facts of California’s climate.

Which get denied when they don’t fit the alarmist narrative: the modern warming trend is all that matters.

In mid-2022, the End of Days was upon California because there had been two years of drought.

Then, that November, the rains came. Some areas of the state got 50 inches in 3 weeks.

If you’ve actually lived in the state, it only takes a few years to grasp the importance of the El Niño/La Niña cycle, about every 2 to 6 years.

Warm-wet years alternate with cool-dry ones.

For the forests and grasslands, vigorous growth leads to a fuel buildup, which is then followed by a dry-down.

From that, of course, comes the fire risk.

In most years, Los Angeles would have had some rain by Thanksgiving. The fire danger after that would have been much reduced.

Last year, it didn’t.

I would call that, along with the extraordinarily strong Santa Anna winds, a serious piece of bad luck.

I’m not trying to be flip.

California being California, that issue is going to be litigated.

The insurance policies of those homeowners whose houses burnt down may well contain that boilerplate phrase, ‘Act of God’.

That’s the legal phrase for an event caused by no direct human action.

On April 8, 1966, Time magazine ran a famous all-black cover — its first ever without a photo or image — with the question “Is God Dead?” in large red text. A previous article had investigated a trend among 1960s theologians to write God out of theology.

There’s a trend among some California legal scholars to declare ‘Acts of God’ dead.

Based on those legal scholars’ certain knowledge that climate change is anthropogenic. Right down to last week’s weather, apparently.

Indulging that bit of human hubris is going to put a lot of people out of business.

And playing the liability lawyer blame game — like playing pickleball — will become a serious distraction from real work.

In the high winds, tree limbs hit electrical wires or the wires hit each other, causing faults and sparks.

So one or more the Southern California utilities will go bankrupt, as PG&E did in 2019.

Ralph Nader’s Proposition 103, which barely passed in 1988, limited the ability of insurance companies to raise homeowner policy rates in California.

In May 2023, State Farm stopped accepting new applications for property and casualty coverage in California because of soaring wildfire and construction costs and “a challenging reinsurance market.”

Allstate had stopped selling new policies the year before.

That pushed more homeowners — who must have insurance if they have a mortgage loan — into the FAIR Plan, a state-mandated insurance pool. Between 2019 and 2022, enrollments in FAIR plans increased 70%.

The FAIR Plan Fact Sheet is wort of a quote:

The FAIR Plan exists to provide insurance to Californians who cannot find coverage through no fault of their own. The FAIR Plan serves as a temporary safety net for property owners until traditional insurance coverage becomes available.

The temporary safety net is not going to hold. As of September 2024, the California FAIR Plan had more than $5,984M in coverage exposure in Pacific Palisades alone.

Fire mitigation — aka clearing brush — is hard work.

And a bit boring. So spending time playing pass the blame parcel on Twitter or X has its appeal.

I lived, for a short time, in one of those quasi-rural California ‘woodland interface zones’.

My city friends concluded I had vowed to become a hermit. My excuse was that I was working on something that needed a lot of concentration.

Anyway, out in the country I learned about fire.

On a cold morning, it’s definitely your friend.

It’s also, potentially, an enemy.

I would put it to a child: “Don’t be afraid of fire. But respect it.”

The sylvan view out my window was great, but that in fact was a problem. I checked the minimum distance recommended/required between tree line and house. Some of that sylvan shrubbery had to go.

You need the proper tools. A gas-powered chainsaw, for one.

If God made teenage boys for any reason, clearing brush is it. One of those and a checkbook is an excellent choice.

The property, as all did, had a ‘burn pile’.

The burn pile, of course, needs located away from any structure and have a big ring of clear dirt around it, like a Smokey the Bear campfire.

For ‘burn days’, on which you could burn the burn pile without the Fire Marshall showing up, you had to check the hotline of the local volunteer department, where I sometimes helped out.

A good burn day was a Goldilocks thing: not too much wind to blow sparks, but enough to dissipate the smoke for air quality.

When you finally got around to burning, you had to gear up: heavy gloves, sturdy boots, eye protection. A shovel and garden hose within reach. You need a glug of diesel to get the fire going.

When the burn pile is burning, you keep an eye on it.

And you keep your cool. Mesquite could go up like a scary torch.

Like it apparently did in Pacific Palisades.

I don’t have the answers.

I wish my old home state some good luck.

By my calculations, it’s due up.

You would not want to take a road trip with me.

First, no eating in the car.

Second, no big debates about the best way to get somewhere. I cut people off on that.

That’s because the lady trapped inside my car’s navigation system is (a) really smart (b) has a nice voice and ( c ) has the infinite patience of my favorite grade school teacher, Miss Nordquist.

If I screw up and miss a turn — which, I confess, has happened — She evinces no blame, shame or recrimination.

Just “Recalculating route.”

So we follow Her orders. No talking back.

Last June, on a drive from Austin to Los Angeles, I discovered Her knowledge base goes deeper than I thought. It evidently includes seismology.

The tank was running low, so when approaching Midland, Texas, I asked Her to “Find gas near here.”

She took me down a series of gravel roads to an industrial fracking site.

Aside: Judging from amount of truck traffic I encountered on those gravel roads the oil patch is doing just fine.

She had no problem landing me at my other off-beat stops, such as the International UFO Museum and Research Center in Roswell, New Mexico:

You have to admit there are a lot of unanswered questions about UFOs.

One I have is: Why ‘International’ UFO Museum, anyway? Shouldn’t it be ‘Interplanetary’ or something like that?

She could only get me close to Ground Zero of the Trinity atomic bomb test site in New Mexico. I had to get out of the car and start hoofing it across the White Sands.

Only to get stopped in my tracks by a very polite, and very bored, female military police person.

At least we had a nice chat. Turns out the public is allowed to walk on Ground Zero only two weekends a year. Mine wasn’t one of them.

I make a point of stopping at any nuclear power plants along the way. She’s not too bad at finding those.

I took the photo at the top looking toward the Palo Verde Generating Station just west of Phoenix, Arizona.

If you look closely, some those bumps along the skyline are symmetrical — the containment domes.

But the most interesting roadside attraction of my June trip is right there in the foreground.

I hadn’t driven Interstate 10 in a few years.

The desert landscape has changed.

What you see heading west, starting in Arizona, are miles and miles of solar panels.

I mean miles.

Getting an elevated view helps appreciate it. Here’s a drone shot from Nevada:

My road trip came to mind on November 24th, when I read a article in the Los Angeles Times under the headline: “Solar power glut boosts California electric bills. Other states reap the benefits.”

The L.A. Times is paywalled, but here’s the link.

News stories need a hook to catch readers’ attention.

The writer, Melody Petersen, has a good one.

CASIO, California’s grid operator, is paying to have surplus solar electricity taken off its hands.

The lucky beneficiaries of this largesse include nearby states, such as Arizona and Washington, and some shadowy figures described in the article only as “electricity traders, including banks and hedge funds.”

For Times readers old enough to remember California’s 2001 energy debacle, that last bit was certain to summon up the ghost of Enron past during the holiday season.

Ms. Petersen’s readers of all ages will undoubtedly be painfully aware that California has the highest electric rates of any state in the country.

Excluding Hawaii, which, being a bunch of islands way out in the ocean, is weird.

Electricity-wise. Otherwise, a great place.

Actually, in November 2024 customers of San Diego Gas & Electric (SDG&G) had the dubious honor of having their electric rates go higher than those of ‘urban’ Hawaii.

According to the Bureau of Labor Statistics (here’s the link), the SDG&G rate is now 42¢/kWh, as opposed to 39¢/kWh in Hawaii.

In general, California residential rates are 50% higher than the U.S. national average, which was 17.6¢/kWh in November.

And California rates are going up faster. I suspect this year we’ll see at least one California utility’s rate break 50¢/kWh, a psychological barrier of some sort.

So whatever CASIO has been doing with all that cheap solar, it hasn’t done anything to bring utility rates down.

This post will require me to translate certain non-English idioms from the California Newspeak.

I’ll do my best. I did grow up there.

When CAISO when pays those neighboring states to take its surplus solar, it credits itself for ‘negative carbon emissions’.

That’s on the theory those states use it to reduce their fossil generation.

Sadly, not entirely true. Those neighboring states are happy to cut back on their own renewable generation, if California’s offer is right.

An interesting factoid in Ms. Petersen’s article is that Arizona Public Service, the utility, operates a 24-hour trading floor in Phoenix always on the lookout for dirt-cheap or negatively-priced solar power.

But you don’t need a complex economic model to explain what’s going on here.

If you subsidize something long enough, you end up with a lot of it.

If you keep on subsidizing it, ‘a lot’ becomes ‘enough’.

Keep on, and ‘enough’ can become ‘too much’.

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In the spring of 2024, California electricity crossed a line into new territory.

It’s a ‘fuzzy’ line, to be sure. But a significant one.

Aside: At U.C. Berkeley, one of my math professors was Lotfi Zadeh, inventor of ‘fuzzy logic’. It was always hard to explain to people exactly what I was studying.

April is the kindest month for renewables generation in California.

It’s bright and sunny, but not so hot that people have to turn on their air conditioners.

The snow melt off the Sierras is running hydropower at full flood.

And there’s enough March wind left over that the turbines are spinning madly.

It always helps to visualize ‘fuzzy’ things.

Here’s the line. From ‘100% of load’ on the left, trace right:

Over that line, renewables, mostly solar, were making more than 100% of the electricity that was actually needed, the ‘load’.

An advocacy group, Environment America, which has a ‘Campaign for 100% Renewable Energy’, is presumably no stranger to fuzzy thinking.

They noticed this, too. In July [2024], they held a Zoom jamboree celebrating California passing a ‘milestone’. The star of show was Stanford professor Mark Z. Jacobson, well-known advocate of all-renewables, all the time.

California was once again leading the way, and so on.

Now, I don’t pretend to understand the group’s math.

The Diablo Canyon nuclear plant was running — I checked — and quietly putting out its usual 9% share of California electricity, day and night.

For all of 2023, thanks to Diablo Canyon, Pacific Gas and Electric (PG&E) delivered its customers in northern California electricity that was generated 53% by nuclear and 13% by large hydropower.

Nor is it clear how the group handled California’s imports of electricity. Those meet 30% of the state’s demand.

Not all of those imports are clean hydropower from the Pacific Northwest.

Electricity generated by coal-fired plants — mostly in Wyoming and owned by Warren Buffett’s Berkshire Hathaway Energy — tends to get buried in the state’s official statistics under ‘unspecified imports’.

It takes some digging to bring them to the surface. But for of all of 2022, coal produced about 9% of California’s imported electricity and 2.15% of its total power.

The Palo Verde Generating Station — the same I took the picture of — is an under-appreciated, hidden hero of California electricity, by the way. It has bailed out L.A. on many a hot summer day.

Indeed, I suspect the reason so many solar farmers homesteaded along Interstate 10 was to take advantage of the whopping fat high-capacity transmission line built years ago to carry electricity from Palo Verde to Southern California.

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Still, bad as their math might be, the zealots are on to something about Californians leading the way.

Although I would phrase it differently.

I would call California’s ratepayers the first canaries being sent into the all-renewables coal mine.

California is about to demonstrate what happens when a state — or country or other jurisdiction of your choice — is hell-bent on increasing solar.

The pioneers are the ones with the arrows in their back.

Or, as William Gibson said, “The future is here, it is just unevenly distributed.”

The dawn of the solar future breaking in California.

It won’t be all sweetness and light.

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I always hesitate before writing the phrase ‘California’s energy policy’.

That’s because people will assume there's an intelligence behind it.

There isn’t.

It’s an emergent phenomenon which evolves, like some swamp creature, out a potent mash of mandates and market.

The market part appeared after 1996, when California became the first state to deregulate its electricity market.

Some of swamp creatures of that era you would recognize today, although a few are diminished in size.

California’s electricity, then as now, came from (a) one of the three big investor-owned utilities — Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) — or (b) one of a municipally-owned utilities, of which the Los Angeles Department of Water and Power (LADPW) and the Sacramento Municipal Utility District (SMUD) are significantly large.

The LADPW is the largest municipal utility in the U.S.

Here’s a list of the ‘load serving entities’ sorted by average rate. The big three investor-owned utilities have the highest:

Aside: ‘Investor-owned utilities’ is sometimes abbreviated IOU. That may relate to either (a) the considerable number of customers they have who are behind on their bills, or (b) short for ‘intransigent, obstinate, and unwilling’.

The utility monopolies, then as now, were regulated by a public utilities commission, whose acronym in California is the CPUC.

It's a bit lazy to dismiss the CPUC as a ‘captive’ of the industry it regulates. But it definitely tends to be sympathetic.

California’s state politicians are definitely denizens of the swamp.

In 1996, they were gung-ho — at least verbally — in favor of deregulation and a market.

Deregulation under Carter and Reagan had worked in certain industries. Consumers got lower airfares. They got to choose a long-distance company.

A trading market for electricity in California would drive down utility rates for consumers and save billions. Or so Enron executive Jeffrey Skilling testified to the CPUC in June 1994.

Consumers would get ‘retail choice’. They’d no longer be compelled to buy from a monopoly utility.

Which fell on willing ears.

By the mid-1990s, decades of anti-establishment politics had built up a lot of hate toward the utilities.

They were complacent and haughty. The investor-owned ones mainly cared about making their quarterly dividends for shareholders.

As for business culture and efficiency, they eventually got the job done, but more in the way the U.S. military or the Post Office does than Amazon or Federal Express.

Anyway, definitely part of The Establishment.

California’s Greens really, really hated the utilities for one more reason: they had built the nuclear plants.

San Onofre was opened by SCE in 1968 and Diablo Canyon was opened by PG&E in 1985, after 15 years of delays from various protests and legal challenges.

The Greens were all-in for deregulation, right alongside Enron.

Deregulation would split up the vertically-integrated utilities into three layers: generation, transmission, and retail distribution.

Enron’s interest, at least, was transparently mercenary.

The company had its eye on the tens of billions of dollars that flowed from the ratepayers into the utilities. It wanted to cut itself in on that.

The Green’s thinking was more subtle.

The ‘book’ on electricity deregulation had been written in 1983 by two MIT economists, Paul Joskow and Richard Schmalensee: Markets for Power: An Analysis of Electric Utility Deregulation.

The two famously predicted that deregulation would create a ‘missing money problem’.

It’s complicated, but take their word that “a short-run marginal cost market will not support capital investment.”

For the Greens, the ‘missing money’ was an opportunity.

They would starve the utility beast.

No utility in California would be able to finance a nuclear plant again.

And none did.

Aside: The ‘missing money’ showed up 20 years later, when two decades of under-investment by the utilities in their transmission lines started sparking off wildfires.

California state politicians, then as now, were a bit wishy-washy in their free-market faith.

From the class notes to Econ 101, they vaguely remembered that a market, when supply is inadequate to meet demand, will raise prices.

The voters might not like that.

So they wanted to keep their hand in the market, in case Adam Smith’s invisible one got out of hand.

For California Power Market Version 1.0, they put on retail price controls.

That didn’t work out well.

But it’s a long story you can read about in the Wikipedia entry for “2000–2001 California electricity crisis” if you’re interested.

Long story short, the ‘market’ that emerged from the swamp was neither fish nor fowl.

It looked like a market, but one getting a lot of ‘guidance’ from the state.

With a nod to China, I like to call it “a market with California characteristics.”

We can make a short case study of how the mash-up of market and mandates leads to higher costs for the utilities.

Which translate pretty directly to higher rates for the utilities’ customers.

California’s 2013 battery storage mandate, AB2514, instructed PG&E, SCE, and SDG&E to procure 1.325 GW of energy storage by 2024.

The mandate could be satisfied either by the utilities (a) buying something like batteries themselves, or (b) by contracting for storage with third-parties.

So there’s new action in something that looks like a ‘market’ for storage.

But it’s a market in which the utilities are under orders to buy a certain kind of thing, instead of some other thing that might be less expensive.

A market with California characteristics.

For example — in utility jargon — a time slot of the day (and sometimes at a location) for which generation is deficient is called a ’gap’.

There are several ways to plug a gap.

One way to ‘plug’ a gap is to throw in a small amount of generation — a natural gas ‘peaker’ plant, for example.

For short gaps, utility-scale battery farms compete with natural gas peakers.

Under normal circumstances, a utility would probably make the business decision mainly on price.

Under the mandate, on the utility’s list of potential vendors, the battery farms will have a little gold star: this one will help us meet our quota.

Aside from shaping who gets considered, the mandate also weakens the bargaining position of the utility when it gets down to negotiating with the favored vendor.

That might otherwise involve a haggling over price.

When both sides are aware there is a quota to fill, the priority tends to be, just get a deal done.

Fortunately for them, California utilities aren’t terribly bothered when they have to pay vendors higher prices.

That’s because, to justify a rate hike, the best argument in the world they can take to the CPUC is: You — or the legislature — told us to do it.

We were just following orders.

California state politicians never met a Renewables Portfolio Standard (RPS) they didn’t like.

Or at least dared to vote against.

The first one passed in 2002.

It listed in detail the preferred technologies from which the utilities were required get 20% of the electricity they sold to customers: solar, wind, biomass, geothermal, small hydro, tidal currents.

Nuclear, of course, didn’t make the Nice List.

A metric many of us have watched for years has a slightly sexualized name: renewables penetration.

In 2008, the National Renewable Energy Laboratory (NREL) did a theoretical study of the consequences of “High Levels of Photovoltaics Penetration”.

The NREL’s 2008 idea of a ‘high’ level of solar penetration was 10%.

It concluded that existing grids could handle 10% renewables, mainly because the renewables could free ride on the stability and reliability of the other 90%.

In 2014, with the 20% 2002 RPS set to expire, California state politicians started debating a new one. They kicked around levels of 30% and 50%.

The state’s utilities had a shouting interest in the RPS, since they would be the ones receiving the diktat about what they had to deliver to their customers.

They got together and commissioned a consulting group, Energy+Environmental Economics (‘E3’), to study the likely impact of 30% and 50% RPS levels.

Just for the record, the E3 study was funded by the Los Angeles Department of Water and Power (LADWP), Pacific Gas and Electric Company (PG&E), the Sacramento Municipal Utilities District (SMUD), San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company (SCE).

That 2014 (December 2013) study is still worth reading today. Here’s a link.

The prose is bit dense and takes some close reading, but I’ll quote a few bullet points:

• This study finds that overgeneration is pervasive at RPS levels above 33%, particularly when the renewable portfolio is dominated by solar resources.

• The quantity of managed renewable energy curtailment increases exponentially for RPS requirements that move from 40% to 50% RPS.

• Rate increases are expected to be significantly higher under the 50% RPS scenario […] due to the exponential increase in renewable curtailment as the RPS target increases towards 50%, requiring a significant “overbuild” of the renewable portfolio to meet the RPS target.

None of that hard-to-understand stuff scared off the California state legislators. They voted for the 50% RPS.

In 2018, the politicians upped the ante to 60% renewables by 2030.

And by 2045, the state is supposed to go Full Monty: 100% from renewables.

Aside: If you’ll allow me to be crude, I can put the thesis of the rest of this post in a one-liner: Allow renewables penetration to go too far, and you're screwed.

In the decade after 2014, solar raced ahead of the other renewables on the Nice List.

Wind, for example, basically went nowhere:

Since the 1970s, the energy discussion has dominated by some notion that we don’t have ‘enough’ of something.

Back then, it was of oil.

If you listen to renewables advocates today, we don’t have near enough wind and solar, because, as gets endlessly repeated, we won’t be able to meet our climate goals of [whatever] by [whenever].

In the last fews years, we’re starting worrying about whether there is going to be ‘enough’ for data centers.

The unreliability and weather-dependency of renewables has led to near or actual blackouts, and those shortfalls are also about having ‘enough’.

In a medical diagnosis, you can see the acute incident, but miss the chronic disease.

The which is the result of force-feeding California’s grid a diet of solar.

Think fatty liver disease. Or foie gras.

That last comes to mind because the symptom of the disease is the so-called ‘duck curve’. Here’s an X-ray of the duck from mid-2023:

Over the years, the duck’s belly has grown fatter and deeper.

Which — to be fair to the duck — is something anyone might conclude while looking in a mirror.

The fuzzy line that gets crossed more often now by the duck’s extended belly is the horizontal one at the bottom.

Here’s another helping of duck, with day-ahead power prices, around Thanksgiving 2023, a time of year not traditionally associated with either duck or solar. Note the dips below zero into negative price territory:

‘Negative pricing’ is now happening in an average of 18% of all sales, versus about 2.5% in 2014.

Negative prices are a polite way of saying you have so much of something, you have to pay somebody to take it off your hands.

Aside: Don’t attempt to explain this advanced concept to a child. They just won’t get it. Wait until they’re older. The small ones will agree to sell you something they’ve got at a ‘negative price’, and then start crying when you demand their lunch money.

Inquiring minds may wonder what kind of business remains in business if it has to pay its customers to take its product.

Solar farms, for one. They have an incentive to put electricity on the grid even when the price is negative: the production tax credit (PTC).

As I write, the federal PTC is 2.6¢ per kilowatt-hour.

With optional ‘adders’, which depend on a lot of things, such as domestic content, low-income community, and so on. It’s something only an accountant can love. Or understand.

If I’ve kept the decimal places right, a solar generator can still come out ahead even paying someone $26/MWh to take the generated electricity off his hand.

I’ve seen an actual market transaction recorded at -$25/MWh, so perhaps I did keep them straight.

A business in which negative prices appear regularly might also — one might think — give pause to those contemplating getting into it.

That seems to be happening to some extent in Europe. Utility-scale solar is slowing down a bit there.

But here in America, we have the IRA.

I don’t really trust the ‘growth in capacity’ statistics that get bandied about, for reasons I’ll get to below.

Let’s just say the capacity of a solar farm at midnight is exactly zero.

So I keep a folder crammed with announcements about new California solar projects.

From that anecdotal evidence, utility-scale solar — now plus batteries — is being added in California at a rapid clip.

In the jargon, a bunch of big batteries, often co-located with the solar farm, is called a BESS — battery energy storage system.

The unit for the ‘nameplate capacity’ of a solar farm, the one to be taken with a grain of salt, is in MW, megawatts that could be generated by the panels under ideal conditions. Such as it’s a sunny day and the panels are not old or dusty.

The unit for batteries is MWh, megawatt-hours.

Utility-size batteries crossed a fuzzy line of their own at 8:10 pm on April 16, 2024, when, according to CASIO, more electricity (6,177 MW) was fed into its grid in a 5-minute time slot from batteries than from any other source, such as natural gas (5,121 MW), renewables (presumably wind) (4,603 MW), large-scale hydroelectric 4,353 MW), and imports (3,936 MW).

Right now, adding utility-scale batteries to a solar installation approximately doubles its cost.

Now, I’ve got nothing against batteries. I’d like to see research into every possible battery technology.

And if — and only if — you assume we’re stuck with a grid like we have now — a political question — there’s some free-market juju working on behalf of batteries.

A few years of robust sales, maybe with some technology innovation, will probably bring battery costs down.

Aside: Some recent talk about a battery ‘surplus’ and batteries falling very far in price seems to relate to EV batteries, not utility-scale ones.

The monetary opportunity of batteries derives from a simple time arbitrage: store electricity when it’s free or cheap, sell it later when it’s more expensive.

Although I would caution that, as Wall Street traders know, it’s the nature of arbitrage opportunities to self-extinguish. The price differentials don’t last.

So when enough batteries on the grid, the duck will develop a ‘flatter’ shoulder on the evening end.

I don’t know what you call a hunch-backed duck.

And how broad the duck’s shoulders get may depend on which state he’s from.

In California, CASIO’s ‘resource adequacy (RA)’ market for battery-supplied electricity is structured to work in blocks of 4 hours.

Which is different in free-wheeling Texas, where battery power sells in 1- and 2-hour increments.

Anyway, there’s a lot of utility scale solar + storage getting built.

This from a representative December 10, 2024 story on the top of my pile:

• Arevon’s Eland 1 solar-plus-storage project near Bakersfield has begun commercial operations.

• That solar farm can generate 384 MW of electricity.

• The batteries at that Eland 1 site can store 600 MWh.

• Eland 2, a second phase of the project, will come online in early 2025. The capital cost of both sites combined is over $2 billion.

If you follow the money in these announcements, you inevitably come across something like this:

The financing was completed using a combination of debt financing and tax credit transfer, which is possible under the Inflation Reduction Act (IRA). Arevon secured a deal with JP Morgan to purchase US$191 million worth of investment tax credits (ITC) and production tax credits (PTC) in one of the first examples of credit transferability in the US.

If they build it, someone is supposed to come.

Some economists say negative prices show a market is working.

Being mean, I’d sentence those economists, Red Guard–style, to a spell of rural re-education.

The historian in me says negative prices show a market being destroyed.

In the early days of the Great Depression, milk prices got so low it wasn’t worth the time of dairy farmers to try and sell it. Here’s a 1933 photo of some in Wisconsin dumping it on a road:

Farm surpluses are not an altogether fanciful analogy for solar surpluses.

If I’d been driving along the Interstate in Iowa, I would have seen miles and miles of corn converting sunlight into starch.

In Arizona, I saw miles and miles of solar panels converting sunlight into electrons.

They’re called solar ‘farms’ for a reason.

If farm policy is any precedent, the solar surplus is going to be an expensive one.

The renewables lobby, as the farm lobby does, will fight any change in the status quo.

So the politicians, as is their wont, will take the easiest way out: throw more money at it. Come up with new subsidies to fix the old ones.

Corn ethanol was a perversely brilliant 1970s solution to an intractable overproduction problem that had plagued U.S. farm policy for generations.

Corn ethanol, of course, has nothing to do with energy independence or greenhouse gas reduction.

It’s ag policy.

Ethanol production now gets rid of 45% of the U.S. corn crop.

Problem solved. But not cheaply.

Not too many years ago — 2010 — the annual ‘tax expenditure’ on corn ethanol was $5.16 billion, by far the largest one in the entire federal budget, according to Congressional Budget Office.

Aside: Politicians love tax expenditures, because the taxpayers never notice them.

The ethanol subsidies have come down a little from that scandalous 2010 level.

And since, in an effort to make that corn alcohol go down smoother, it’s been rebranded green.

But we’re still paying for firms like Archer-Daniels-Midland to make ‘sustainable’ fuel.

And hoping they will figure out how to turn corn into ‘SAF’, sustainable aviation fuel.

If you have a lot of lemons, make lemonade.

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The equivalent of dumping milk on the ground is called ‘curtailment’ in solar.

Curtailed power isn’t used by anybody, and — importantly — doesn’t make it into the usual grid statistics. It’s not transacted in CASIO’s market.

I sometimes think of it as ‘dark solar’, but that’s probably just me.

CASIO, the California grid operator, has its own method estimating how much wind and solar are curtailed.

CASIO’s method — in my humble opinion — produces an understated number, but I won’t bore you with that.

CASIO’s data is worth looking at, if only to see the trend:

CAISO normally treats transaction price details as confidential.

But a few years back, two professors of computer science at the University of Chicago, Andrew A. Chien and Liuzixuan Lin, were given access to some older CAISO transaction data.

In the time that data covered, Chien and Lin saw curtailment going up 40% a year.

And scant evidence that the commonly discussed ‘solutions’ for curtailment — batteries and exports — were making any dent in that growth rate.

That bit of math, at least, is not complicated.

After the amount solar generated exceeds 100% of what is needed — crosses over my fuzzy line — all additional solar gets curtailed.

Okay, now I’ll make it complicated. The rate of curtailment for solar overall approaches, as to an asymptote, the rate of solar’s growth.

That’s what E3 was talking about in 2014 when it used the word ‘exponential’.

Curtailment also starts to metastasize, showing up at unexpected times and places. A recent new one is summer mornings. Think of a pond overflowing first at the lowest spot on the bank, then in more and more places.

In a January 2024 update of their paper, Chien and Lin guessed that, if the current trend holds up, California might throw away as much as 18.4 TWh of solar-generated electricity in 2028.

That, for scale, is almost equal to California’s current installed solar capacity, 19.85 TWh as of November 2024.

For more scale, California’s in-state actual electricity generation in 2023 was 203 TWh. So throwing away about 10% of that.

Some ideas put forward to take advantage of excess solar, such as green hydrogen, definitely belong in the same idea bucket as corn ethanol.

More transmission will not solve a duck problem.

The duck problem, as they say in animal husbandry, is a feeding problem, not a problem with the fencing of their pen.

As long as the ducks can gorge on surplus solar, they multiply.

More transmission just makes it easier for the ducks to spread around.

Cutting a hole in the hedge so the ducks can get into your neighbors’ yard might help reduce your duck problem.

But then you’ll both have ducks.

In Europe — even among countries not well-integrated on the grid —the duck curve is showing itself to be highly contagious.

There are stirrings of energy nationalism there.

Of which one slogan might become: “Your duck? Your problem.”

To the extent that California’s swamp creatures have a plan, massive overbuilding seems to be it.

The California Air Resources Board says the state needs to add about 10 GW of solar per year.

In a unit I use, that’s five Vogtles.

The California Energy Commission is on the same page: “To provide 100% clean electricity by 2045, California will need to build an unprecedented amount of new utility-scale clean energy.”

The Solar Energy Industries Association (SEIA) — which, being the trade association, may be over-optimistic — thinks California’s solar capacity will grow 50% in the next five years.

While researching this piece, I started to have a suspicion I was missing something.

Perhaps my thinking had taken a wrong turn.

It happens. I try keep an open mind.

“Recalculating route,” as She would say.

I had started out thinking: Because of the subsidies, California has too much solar.

After a course correction, I now think two things at once:

1. Because of the subsidies, California has too much utility-scale solar.

2. California is going to get a lot more rooftop solar + batteries, with or without subsidies.

I failed to see the street sign marking a long-term technology and business trend.

In defense of that wrong turn, my attention was distracted by the grid.

I collect numbers the way some people do Lepidoptera.

CASIO’s numbers for the grid float around in great profusion.

The rare number I should have been looking for was: actual electricity consumption whatever its source.

Energy punditry is so grid-centric.

It doesn’t occur to the pundits that electricity can come from anyplace else.

Or, if it can, that it could be all that important.

The surprise Lepidoptera factoid for me was: 10% of all electricity actually generated in California comes from rooftop solar.

Aside: By which I mean solar from residences, schools, businesses, and ‘community’ installations, wherever the panels are physically located. In ‘community’ solar, they might be on the ground in lot nearby and shared by an apartment complex. Policy wonks sometimes use a very unenlightening acronym for such ‘distributed energy resources’, DER. I’d prefer to speak English.

That compares to 14% actually generated by large solar farms.

Once I knew what to look for, I caught some other numbers.

About 20% of single-family homes in California, approaching 2 million, have rooftop solar panels.

And, since 2020, California has required newly-constructed homes to come with solar panels installed.

The burdensome paperwork imposed by the utilities on rooftop solar has one backhand benefit: a good statistic.

A ‘net’ meter allows electricity to flow both to and from the public grid. About 99.5% of California solar is net-metered. Here’s that chart:

A new picture of the duck appears in light of California’s all-in electricity demand, not just demand as witnessed on CASIO’s grid.

The duck doesn’t go away. His morning and evening shoulders are still visible in the blue band. But the curve is bridged over:

Aside: The chart, to be sure, comes from the California Solar+Storage Association. But I suspect it’s accurate enough.

Which makes simple common sense to me: In the summer, in California, electricity demand is highest during the day, when shops, schools and offices are open and air conditioning is on. Duh.

CASIO’s grid statistics can get misleading to the point of being dangerous.

For example, the increase in rooftop solar in California shows up in them as a reduction of the state’s electricity demand in the official statistics.

That’s because rooftop solar — ‘duh!’ again — doesn’t get put on the public grid.

Conclusions about the efficacy of energy conservation programs may be getting it all wrong.

The official chart as published by California Energy Commission shows a flatline or even mild downtrend. The webpage with this chart is here.

The flatline always been a bit mysterious. Are all those virtuous conservation programs working? Is the state de-industrializing?

Maybe both, but I think a more obvious answer can be found in a footnote to that chart: “does not include behind-the-meter rooftop solar photovoltaic generation.”

That down trend is the inverse of the up trend in California rooftop solar.

People from outside the state are prone to explaining the behavior of Californians with the clichés of popular psychology.

Those Californians want to be conspicuously virtuous consumers.

Aside: Sometimes called ‘prosumers’.

It’s even hinted that’s why they mount the solar panels on the roof. They want the neighbors to see them.

My prosaic, business-writer explanation is different.

Where others see posers, I see utility customers jumping ship.

To the extent they are able.

Which turns out to be a trend the utilities have seen coming since 2014.

That was the year the Edison Electric Institute (EEI) — which represents the investor-owned utilities nationally — concluded that rooftop solar was a threat to the utility business model, and commenced a lobbying campaign against it.

Denizens of the political swamp are not terribly choosy about their bedfellows.

The EEI turned for assistance to the American Legislative Exchange Council, ALEC, that creature of the Koch brothers.

ALEC specializes in drafting model legislation state legislators can copy-and-paste into law.

Last year, California state legislators, to some surprise, did just that.

In California, that was the result of an unlikely alliance among swamp creatures.

The utilities got an assist from some think-tank nerds, who got the ear of the CPUC and the governor.

Aside: I’m a bit chagrined to admit the many of the think-tank nerds inhabit the U.C. Berkeley Haas School of Business.

Now, it’s possible to feel sorry for think-tank nerds.

There’s a syndrome common among energy pundits I call central planning envy.

Lenin’s 1902 book was called What Is to Be Done?

The pundits love to weigh in on that question. It’s always fun to opine about what you would do if you were the boss of things.

The unmistakable sign appears in speech: all those sentences that begin with ‘What we need to do is…’ or ‘We should…’ .

In a different world, the pundits would have good jobs in the department doing ‘integrated resource planning’ at a state-owned utility monopoly, as in Europe.

Or even in one the California utility monopolies prior to deregulation. In 1996, the nerds were told to pack their slide rules, take their Eversharp pencils, and go home.

The market had it from there.

The economist nerds, of course, would favor utility-scale solar over rooftop. The cost to generate electricity per kilowatt is less. Thus if you were building the state-owned power system from scratch, it would be the economically ‘efficient’ choice.

Sadly, the wonks have to settle for an ersatz, indirect version of central planning.

They can’t dictate the actual hardware to be used in the power system. All they can do is recommend tweaks to the market.

At least the market becomes an endlessly fascinating science experiment for them.

Complete with lab rats, otherwise known as California ratepayers.

The wonks must work out incentives to get the rats to Do the Right Thing.

Which the wonks are confident they know, but the rats might not.

The rats can get a bit confused about the Right Thing.

They need to use less electricity, but still go out and buy electric cooktops, heat pumps, and EVs.

The first lesson the rats need to learn is: they’re just going to have to conform their schedule to that of the duck.

Rats need to do laundry at noon. And make sure the dishwasher finishes up before 4 p.m.

Aside: Since mid-day dinner was once the big meal of the day, the right food pellet incentive might get them to go back to that.

And the rats need to understand the deep shame of coming home from work and turning on a flat-screen TV at 6:30 p.m. Don’t they realize that’s when the sun is going down?

Earnest policy debates revolve around issues like: How many Time Of Use (TOU) periods to have? Are three better than two?

Of course there’s got to be ‘critical peak pricing’, CPP. But maybe be nice about it and offer ‘peak time rebates’, or PTRs.

All of which makes choosing a utility rate plan about as baffling as buying an airline ticket.

I know it’s unthinkable, but try to perform a thought experiment in which there’s an all-nuclear grid.

None of that time-of-day stuff, or seasonal stuff, would matter.

The rate plan would something like: the more you use, the more you pay.

Or even — as is true for rooftop solar owners in the afternoon — use as much as you like. There’s plenty.

What a concept.

Aside: I’ve experienced a version of this in the real world, if you consider France to be the real world. My French friends were quite proud of the nuclear plants. For them, worrying about switching the lights off all the time was a behavioral quirk to be tolerated in foreigners, who were known to be a little weird.

The think-tank wonks have made other contributions the utilities’ bottom line, not just by assisting the marketing department sell heat pumps and EVs.

One think tank notion, quickly taken up by the utility lobby, is that there is a ‘solar tax’ being paid by non-rooftop solar owners.

Which the utilities might as well pocket.

The think-tank wonks understand how to appeal to California liberal sensibilities. They spun this as an ‘equity’ issue.

Rooftop solar owners aren’t, according to their calculations, paying their ‘fair share’.

Of something. It’s not entirely clear what.

Anyway, a reverse Robin Hood thing seems to be going on. Those affluent rooftop solar owners are stealing from the poor to give to the rich. They’re parasites.

The title of a 2018 Haas blog post gives the idea: “Why Am I Paying $65 a Year for Your Solar Panels?”

The $65 came by totaling what the utilities spend on things that, in the wonks’ wisdom, are good things, including carbon costs and maintaining the transmission lines, and dividing by the number of customers. That was the ‘fair share’.

‘We’ all need to chip in and do our bit.

All sounds very egalitarian.

It was something like a ‘Go Fund Me’ for the utilities.

Thing is, California’s ratepayers have already given very generously to that one.

The wildfires, starting with the Camp Fire in 2016, were one of those tons-of-media issues that inspire California politicians to get out and do something about it.

Although I suspect not many joined CalFire crews on the ground. Or in the air, by helping dump fire retardant.

The legislature sees its job as throwing a large pot of money at the problem.

Normally, a state passes a bond issue to deal with a huge, multi-year infrastructure project, such as burying power lines.

In California, no.

It’s now on the utilities, which means on their ratepayers, at about $5 billion per year.

Wildfire mitigation costs are, last I looked, 13% of the typical California electric bill.

I’ve got nothing against wildfire mitigation.

But it’s like buying insurance. It’s very difficult to decide how much you really need.

The utilities — and their labor unions — have been happy to sell the state a whole lot of it.

Since the ratepayers will end up covering the cost, there’s no burning incentive to see it done cost-effectively.

Doing it cheaper might involve such things as just putting covers over the existing lines, to prevent them coming into contact with trees or other vegetation, as opposed to digging trenches to bury them.

Or maybe there’s something that’s out-the-box innovative, such as helping CalFire put up a rapid-response drone fleet to patrol the transmission lines. A private pilot called in one fire just as it starting after seeing a big blue flash from the air.

Not all of the money is going to backhoe operators burying power lines in fire-prone areas.

The big three utilities have also paid $10.5 billion into a wildfire insurance fund.

I won’t come right out and call it one, but the wildfire insurance fund comes pre-packaged with plenty of boondoggle potential.

That’s thanks in part to a singular quirk in California liability law.

In most states, when a government agency takes a right-of-way by eminent domain (paying whatever compensation eventually gets haggled out), owners of nearby property can’t claim the agency damaged their property.

Eminent domain always has a mean aspect, but it’s supposedly for the greater good. As a practical matter, you have to draw a line somewhere.

Not so in California. A 1990s court decision opened the way for property owners to sue a utility even if they live beaucoup miles away from the power line.

That means PG&E was, legally, on the hook for the wildfire damage to any and all of those vast acres reported in the news.

PG&E’s most recent bankruptcy filing was one inevitable result.

Aside: Both of PG&E’s bankruptcies raised an interesting question: maybe the state of California should just buy/takeover/nationalize the blasted company. That’s a tough one.

Some of the ratepayer billions are going to the trial lawyers, who represent claimants who lost houses in fire-prone areas, who want compensation so they can rebuild their houses in those fire-prone areas.

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The Haas calculations about ‘equity’ also neglected a surprising — to me — factoid: 30% of California utility customers get ‘low-income’ assistance.

California’s official poverty rate, as calculated by the Census Bureau for 2021-23, was 11.7%.

The low-income programs have acronyms like CARE (California Alternate Rates for Energy), REACH (Relief for Energy Assistance through Community Help), and FERA (Family Electric Rate Assistance).

CARE is a pretty generous program:

California is an expensive state.

When I’m there, I feel my dollars were converted to Italian lire or something when I crossed the state line.

In June, I paid $98 for four beers at Dodger Stadium. Before tip.

Aside: Woody Allen’s great line: “We grew up so poor we had to steal to eat. Then we had to go out and steal again. To tip.”

I’ve got nothing against helping the poor. But how you do it matters.

A household of 1 or 2 qualifies as ‘low income’ for CARE it they make less than $40,880 a year.

The money for the low-income subsidy is collected from those ‘other’ utility ratepayers.

So the ‘equity’ debate is going on in a two-class, or two-tier system.

For utility ratepayers caught in the middle, those just above the line, the CARE-type fees definitely work out to be a regressive tax.

Most anyone in public policy will tell you that transfer payments, aka welfare, ought be paid out of the income tax, which at least tries to be progressive.

But California state politicians really don’t like having to go on the record and vote for higher taxes.

It’s much less risky, politically, to put the costs of social programs on utility ratepayers.

The generosity of these programs tends to creep up, until some other politician comes along and gets elected by promising to whack them back.

California is a notoriously high-tax state, but people sometimes forget it’s also the state that elected Ronald Reagan governor in 1967 and passed Proposition 13, the infamous property-tax freeze, in 1978.

The politics of the high-utility-rate issue, I think, feature the same sort of simmering dissatisfaction — or disgust — that boiled over in tax revolt of olden days.

But technology may be those disgusted utility ratepayers another option.

They’ll be able to vote with their feet.

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The ‘solar tax’ issue comes down to the utilities insisting rooftop solar owners share the pain of the duck.

The original net-metering tariffs went back to early days.

Importantly, before the duck was hatched.

The tariffs were designed to get rooftop solar solar off the ground.

They were generous, to be sure. But not crazy.

Under the old tariff, a rooftop solar owner could sell electricity to the utility for maybe 20¢/kWh at any time.

That figure was based on a guesstimate of what costs the utilities were ‘avoiding’ by not having to build additional generation and transmission for those customers. It’s a very hard calculation to make.

As a reality check, the number was in the ballpark, maybe a little less, of what the customer was paying per kilowatt hour.

Under the new tariff, which went into effect in April 2023, rooftop solar owners get the wholesale price at the time interval.

Which is at best maybe 4 or 5 cents per kilowatt during daylight hours.

Percentage-wise, it was a sudden draconian cut of about 75%.

Not surprisingly, the new tariff put a big hit on the rooftop solar installation business.

Which employs many thousands in the state. So much for those green jobs.

It’s a little too soon to tell the long-term impact. There was a big rush to get grandfathered-in before the new tariff took effect.

One consequence is already clear: rooftop solar owners are now buying a lot of batteries. What’s called the ‘storage attachment rate’ is up to around 60%:

Like it or not, rooftop solar owners will have to get into the time-arbitrage game played by the big boys.

A related CPUC edict also reduced commercial net-metering rates.

Which affected not just small businesses — for whom rooftop solar is vital in keeping the air conditioning on in hot parts the state — but also schools. After staff salaries, energy costs are the second-biggest expense of most school districts.

The ‘solar tax’ argument spun so well the utilities used the same argument to add a fee on non-rooftop solar owners.

On May 9, 2024, the CPUC approved the utilities charging a flat fee on everyone who connects to the grid, the fixed monthly fee being $24.15 for most customers.

At those things will be good for utility profits in the short term.

But the utilities seem blind to what’s coming.

And could learn a lesson by looking at the past, specifically revisiting some of the issues that came up in the deregulation debate of the 1990s.

It was not written in stone that deregulation had to do away with vertical integration.

A road — not taken — would have been to allow different vertically-integrated entities to compete among each other, in the monopoly utility’s previously exclusive territory.

Virtual power plants, VPPs, are a new fashion that seem to be rediscovering of the virtues, on a local basis, of vertical integration.

But I think the issue of the 1990s that will come back to haunt the utilities is ‘retail choice’.

Retail choice sometimes doesn’t matter much. Mobile phone providers are all selling more or less the same thing.

But rooftop solar owners want to buy a different class of thing than what’s on offer from the utilities.

They do still have to buy some electricity, so utilities can pretend that’s what they want.

But what rooftop solar owners really want to buy is better thought of as an insurance policy, not electricity.

No rooftop solar owner — at present — thinks their system, even one with a good-size battery, can run everything in their house all the time in every season.

But the utilities’ business model, as the Silicon Valley cliché goes, is just a few steps away from ‘disruption’.

It would only take one entrepreneur to come up with a cheap, all-day, whole-house battery to kick off utility cord-cutting in earnest.

The idea of the going without electricity supplied by a utility may sound improbable.

But not too many years ago everyone had to have a land telephone line.

Paradoxically, the politicians, by forcing the utilities to put all their eggs in the renewables basket, are not doing them any favors.

The mandates are busy eliminating the one thing that would give the future grid some real utility. That would be a grid that’s not erratic, undependable, and prone to price wild swings.

I suspect that by 2045, when California goes Full Monty on renewables, most utility customers will have gone full Ted Kaczynski. They’ll be off the grid.

There are other signs of a trend to ‘grid defection’.

The recent round of data center announcements have one thing in common: none of the companies making them are looking to the public grid for be their solution.

When grid defection happens at sufficient scale, the legacy of today’s politicians, a limping public grid, will go the way of public transportation.

Those who can afford it will have a private option.

Everybody else will get to take the bus.

We see the a similar dynamic at work in private versus public schools, and health care.

I’m not endorsing this two-class outcome. I just see it coming.

In California, questioning the urgency of the Net Zero Transition gets you branded a heretic.

And there’s the omertà under which the centrality of natural gas in real-world electricity generation is not be mentioned.

Don’t say its name and maybe it will just go away.

As for believing, as I do, that CO₂ is not a ‘pollutant’… Heaven help the benighted.

That’s probably why I keep my mouth shut when I’m out there.

For my next road trip, the iPhone app I want is called: “Is This Thing On?”

That brainstorm came to me driving east on I-580, departing the Bay area, while going through Altamont Pass.

I can tell if something is growing in a corn field, or if the farmer is leaving it fallow.

Altamont Pass has some of the original wind turbines put up in the late 1970s and early 1980s.

Their blades turn once in a while, but they don’t seem to be doing much.

And whizzing past those solar panels in the Mojave, you also have no way of knowing what they’re up to.

Are they on? Has the owner switched them off because CASIO asked him, to or because the price of electricity is negative?

You don’t really know.

If my Fitbit can detect when my cold heart beats, some tech gizmo ought to be able to sense when electricity juices are flowing.

And those old Altamont Pass wind turbines at least deserve an historic marker.

I’d volunteer to draft some text.

My first thought was some variant on an alluring alliterative: “monument to malinvestment” or some such.

But my second thought was to keep it short and polite.

So maybe: “Seemed like a good idea at the time.”

Which it wasn’t.

And neither is all the solar.

I know this post is long.

So in more ways than one, allow me to say: “Enough, already!”

In 1987, British military historian Paul Kennedy published The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000.

It seemed a bit odd for a military historian to concern himself with ‘economic change’.

The answer could be found by a glance at Kennedy’s previous book, The Rise of the Anglo-German Antagonism, 1860-1914. The naval arms race between those two countries prior to World War I was premised on steel, the prerequisite for building the massive Dreadnought-style battleships of the day.

Germany (as did the U.S.) underwent almost astonishingly rapid industrialization in the last few decades of the 19th century. Germany’s production of steel surpassed that of Britain in 1895.

Kennedy’s point in The Rise and Fall of the Great Powers was that “all of the major shifts in the world’s military-power balance have followed alterations in the productive balances.”

Kennedy (still alive, age 87) originally planned to publish The Rise and Fall of the Great Powers the year before, in 1986.

But he decided to take some more time and add a chapter at the end with some predictions, and precautions, for U.S.

Aside: A decision he came to regret, mildly. “[Rise and Fall] was actually a study of more than 500 years of global empires,” he told an interviewer later. “But I don't think many people read more than the final chapter on the U.S.”

Kennedy cautioned that ‘imperial overstretch’ might catch up with the U.S. of the 1980s. Ronald Reagan was then trying to outspend the Soviet Union on things like the ‘Star Wars’ anti-missile program.

Kennedy also predicted it was ‘only a matter of time’ before China became a great power.

After 1987, Kennedy’s points got lost.

The dissolution of the Soviet Union in 1991 led to a brief decade of triumphal thinking in West.

The United States was the sole superpower left standing.

The new ‘unipolar’ world, under its guidance, would enjoy a era of peace and prosperity comparable to the Pax Britannia of the 19th century.

That didn’t last.

After 9/11, ‘imperial overstretch’ returned to mind. The cost to the U.S. of the wars in Iraq and Afghanistan approached $6 trillion.

And the ‘matter of time’ it took China to become a great power proved much shorter than anyone imagined.

The rivalry between the U.S. and China has become the great power contest of our time.

It has been, blessedly, so far confined to the economic realm.

This is the second of two posts inspired by the US-China trade war.

The first looked tariffs.

This one looks at industrial policy.

There was no simple answer about whether tariffs are ‘good’ or ‘bad’.

In economic theory, tariffs are almost always ‘bad’. They increase costs to consumers.

Here’s a New York Times headline from April 2015: “Economists Actually Agree on This: The Wisdom of Free Trade.”

Yet historically, high protective tariffs were the norm for the United States from 1816 to 1945.

The U.S. economy had some up and downs in those years, but it did okay.

Something needs explaining.

Were earlier generations of American politicians unenlightened? Were they in the grip of special interests? Maybe just plain dumb?

The tariff debate is one of the oldest in American history. In my piece on the tariff, I tried to use actual voices from it.

Whatever they were, they weren’t dumb.

My modest suggestion: ignore academic economic theory.

Or, more precisely, what the rest of the world calls ‘Anglo-American’ economics.

First off, it’s a value system.

Although a well-disguised one. Its concepts have come to permeate our thinking.

But, as with an Orwellian Newspeak, that limits our range of thought. It does not extend it.

Some of the concepts of academic economics sound great.

Take ‘efficiency’.

Who can be against efficiency?

But academic theory has always been a bit murky about who all, exactly, benefits from all that efficiency.

There’s ‘Pareto optimality’. Optimal how? The ‘optimum’ is just a nodal point produced by a mathematical equation. Calling it ‘optimal’ sneaks in a whopping value judgement.

Second, Anglo-American economics tends to work by deduction from first principles.

Let’s pick two: the (1) desirability of consumer welfare and (2) Adam Smith’s concept of comparative advantage.

Aside: An emphasis on consumption, as opposed to production, as the best measure of how a society is doing follows from a different bit of theory: point of having production in the first place is to enable its ultimate consumption, so why cut downon the number of variables and just use it?

If we follow the chain of deductions to the end, we can get results that are certainly intellectually provocative, but progressively unmoored.

Consider this one on the merits of free trade:

• Competition is good. It kills off overpriced producers.

• Killing them off is good, because more efficient suppliers will give the consumer a better deal.

• Unrestricted foreign trade is best of all, since it allows the most efficient suppliers in the entire world to compete.

• It doesn't matter why competitors are willing to sell for less.

• They may be genuinely more efficient. Or they may be willing to sell below cost for reasons of their own.

• In either case, the consumer is better off.

Thus if Chinese manufacturers are selling solar panels below their manufacturing cost (an empirical proposition ‘not proven’, despite what the U.S. Trade Representative says), we should thank them and buy all the panels we can get our hands on.

In 1979, Milton Friedman, who won the 1976 Nobel Memorial Prize for economics and was definitely something of a provocateur, coined a term for this: ‘foreign philanthropy’. Friedman advised taking advantage of it while it lasts:

If foreign governments want to use their taxpayers’ money to sell people in the United States goods below cost, why should we complain? Their own taxpayers will complain soon enough, and it will not last for very long.

The ‘historical school’ of economics is an alternative to deductive economics.

Like history, it gets a bit messy. It’s inductive. Not so logical and neat.

Jettisoning ‘Anglo-American’ economics may sound unpatriotic.

But the patron saint of historical school is our own Alexander Hamilton, so no worries there.

Hamilton himself decided to ditch the theories of Adam Smith, the Anglo-American economist of his day.

To run the pertinent stream of economic history backwards: we have China today; Japan, South Korea and Taiwan after 1945; and, in the 19th century, Meiji Japan and Prussia.

All leading back to the fount, Alexander Hamilton.

The American War of Independence was the first successful anti-colonial war.

Something the world hadn’t been seen before.

Colonies, from the beginning, were meant to be subordinate to the economic and monetary interests of the mother country.

‘Colony no longer’ raised a question: Now what?

The young United States had an opportunity to re-invent itself.

If it wanted.

One option was to continue the old colonial economic relationship with Britain, just under the new country-name rebranding.

That’s what the Southern agricultural faction in the U.S. expected to happen.

They’d go on growing cotton and tobacco (with slave labor — I am aware) and trade it for any British-manufactured items they needed.

Agriculture was obviously the future of the United States. There was so much land available.

Aside: Yes, I know. After ‘stealing’ it from the Indians. European settler societies have a lamentable track record in dealing with people living on land they coveted. Add South Africa, Australia, and Israel to a long list.

Jefferson took it a bit farther. Agriculture should be the future of the United States. Independent yeoman farmers would be the moral backbone of the new republic.

A Northern and urban faction had a more expansive idea of what independence from Britain would require. New England had been starting to act more like a competitor to England than a subordinate partner.

Independence for shipping and commerce meant the new nation would have to have its own navy. The young United States was a bit slow off the mark on that.

Making the overall U.S. economy independent was a very hard ask.

Intellectually, it required inventing a theory in of development economics.

Which is what Alexander Hamilton did.

One great power conflict, the one between Britain and France, was settled at Waterloo in 1815.

The Duke of Wellington famously called that battle “the nearest run thing you ever saw in your life.”

Another near-run thing was the outcome of the American War for Independence.

Which can be viewed as a major sidebar in that same decades-long Anglo-French conflict.

There were as many French regulars as Continental soldiers at the deciding battle at Yorktown in 1781.

And it was the French fleet on the York River that had trapped Cornwallis.

In John Trumbull’s The Surrender of Lord Cornwallis, now hanging in the Capitol Rotunda, the surrendering British officer, General Charles O'Hara, rides out between the French on the left and the Americans on the right:

Hamilton is in the painting. He had been in the battle.

Had he not been, Hamilton would be a footnote in American history. We’d have been deprived of an entertaining Broadway musical.

Hamilton spent four years as George Washington’s invaluable number two, effectively his chief of staff.

Hamilton was a super-competent aide de camp.

And, thanks to his Huguenot mother and boyhood in the (British) West Indies, he was comfortably fluent in French. Washington didn’t speak the language, and considered himself too old to learn.

When France came into the war, Hamilton was an essential go-between, a nexus.

But as staff officers do, Hamilton itched for a combat command.

As the plan to trap Cornwallis evolved in early 1781, Yorktown looked to Hamilton like it might be his last chance to see action.

Hamilton lobbied Washington hard. He threatened to resign his commission. He made a nuisance of himself.

Washington had near-paternal affection for his ‘family’ of aides.

His apprehensions about losing them were not without foundation.

Officers led from the front in those days. Under fire, the ‘code’ called for them to display a cool disregard for their personal safety.

Washington lamented the deaths of several of his young officers who exhibited “intrepidity bordering on rashness.”

Hamilton’s best friend, John Laurens, was senselessly killed in August 1782 when, against orders, he led charge into a waiting British ambush. Laurens appeared destined for great things. His rising political star may well have outshined Hamilton’s.

Washington finally relented and put Hamilton in charge of a New York battalion of light infantry.

On October 14, 1781, after yet more lobbying, Hamilton led that battalion in a night-time, bayonets-only capture of British Redoubt No. 10.

Hamilton was lucky. The French battalion that stormed Redoubt No. 9 took heavy casualties.

In the event, Hamilton was made.

“At Yorktown,” Hamilton biographer Ron Chernow writes, “Hamilton established his image as a romantic, death-defying young officer, gallantly streaking toward the ramparts. Take away that battle and Hamilton would have gone down as the most prestigious of Washington’s aides, but not a hero.”

Hamilton had extraordinary self-discipline and a prodigious capacity for what we now call ‘self-directed’ study.

As a teenager in the West Indies he read deeply, if eclectically.

When Hamilton arrived in New York in 1772, he talked the president of King’s College (later Columbia) into letting him make up the formal deficiencies in his education with a self-study program.

That took him a little over two years. Hamilton was just finishing up when British troops arrived in New York.

Hamilton’s student anti-British speeches and newspaper articles thrust him on the political stage for the first time. Hamilton also organized and drilled a student militia troop.

Hamilton was soon recruited to serve as a private secretary for Washington. Most of Washington’s wartime letters and written orders are in Hamilton’s hand.

Hamilton’s mother had put him out to work at age 12 in an import-export firm in Nevis. He was well-organized and good with figures.

Hamilton soon got involved in the difficult business of obtaining provisions for the Continental army.

Washington wrote at Valley Forge in February 1778, “For some days past there has been little less than a famine in the camp.”

Almost a quarter of the army, some 2,500 men, perished from disease, famine, or cold. The snow was stained with blood from the bare feet of the Continental soldiers.

Boots, tents, blankets, muskets, and gunpowder were ‘manufactures’ that had previously been imported from Britain. They were in perennial short supply.

Food was a different scandal. Soldiers were dying of malnutrition while encamped in the middle of fertile American farmland.

That, in part, was because farmers and merchants refused to take the paper currency and IOUs issued by the Continental Congress and the various States.

They could do much better selling to the British in nearby Philadelphia. The British also paid in paper currency, but it was good for ‘specie’, gold or silver coin.

Continental soldiers were forced to take their pay in IOUs.

They did more than grumble about that. Desertion was common. On several occasions there were near-mutinies.

The sorry situation prompted another one of Hamilton’s self-study bouts. He read everything every European writer had written on the theory of money and banking.

He developed a mentor-mentee relationship with wealthy Philadelphian Robert Morris, the ‘financier of the Revolution’.

In 1781, Morris started the Bank of North America in an effort to fix the Continental paper currency problem. Hamilton helped Morris write the plan for that bank.

During the War, in 1780, Hamilton married well, to Elizabeth Schuyler, the second daughter of Philip Schuyler, a wealthy upstate New York landowner. Philip Schuyler was one of Washington’s Generals.

The Schuylers were a old-line New York Dutch family. Elizabeth’s mother was a Van Rensselaer, as in the polytechnic institute in Troy, New York.

A parvenu is a person of ‘obscure origin who has gained wealth, influence, or celebrity’.

Hamilton’s origins were not obscure, but he was legally illegitimate. And he had been ‘in trade’, a merchant.

Certain society snobs sniffed.

What mostly bothered them was that the American Revolution, as revolutions do, had raised up some ‘new men’. And tossed down a few others.

Hamilton was one of Washington’s dashing young officers. That was good enough for Elizabeth Schuyler.

The couple, by the way, had eight children and a largely happy family life, if marred by an infidelity on Hamilton’s part revealed in a very public political scandal.

Elizabeth lived into her 90s. She was a ‘famous widow’ in the Washington, D.C. of the 1850s, the last link to the Founders.

Hamilton’s combative, ‘outsider’ psychology makes good material for a musical.

But, in fact, Hamilton slotted easily into New York’s post-War financial and legal elite.

Hamilton passed the New York bar after one of his self-study bouts. That one took six months.

Most of the Founders had ‘read’ the law, but as a prerequisite for going into politics.

Hamilton actually was a practicing lawyer. That’s important in appreciating his ‘realistic’ — some would say ‘compromised’ — approach to issues.

Chernow, I believe, somewhere puts it nicely: Jefferson wrote the poetry of the American Revolution. Hamilton, the prose.

Hamilton’s ‘network’ was large. It included his fellow officers from the war. And, of course, George Washington. Those even had a fraternal organization, the Society of the Cincinnati.

In 1784, Hamilton’s brother-in-law, John B. Church, had the idea of starting what became the Bank of New-York.

As the lawyer-organizer, Hamilton ended up taking some founders’ shares. He also became one of its directors.

One of Hamilton’s many friends — Alexander McDougall, a former fellow officer and Society of the Cincinnati member — became the Bank’s president.

The Bank of New-York would become throughly entwined in the finances of the new federal government after Hamilton became Secretary of the Treasury.

Despite being a parvenu — or possibly because of it in some reverse-psychology way — Hamilton was most definitely an elitist.

It’s worth trying to make the case in his defense.

To his credit, Hamilton favored the abolition of slavery and the end of the slave trade.

Among the other Founders, only John Adams, Benjamin Franklin, John Jay and Governeur Morris had comparable views.

The Founders had all read the classics of political theory. Those started with Plato and Aristotle.

For the Founders, the philosopher’s question “What is the best form of government?” was not an intellectual speculation. It was an operative choice, one they had to make.

Direct democracies and republics, the philosophers all held, could fall victim to ‘excess’ democracy.

They could degenerate into ‘mob rule’. Or the dêmos could fall for a demagogue and elect a dictator.

The Founders limited the franchise in their new republic to propertied white men.

As for having an ‘aristocracy’, America would try to avoid developing a hereditary one.

The literal meaning of ‘aristocracy’ is neutral: ‘rule of the best’.

The new republic would draw its best from the educated and propertied classes, on the basis of merit.

It was, additionally, hoped — for a time around the Revolution anyway, the idea didn’t last — that the best would display the non-partisan, disinterested public ‘virtue’ of the great figures of Roman Republic, such as Cicero and Cincinnatus.

Hard as it may be to appreciate today, Hamilton had that.

In his five years as Secretary of the Treasury, Hamilton displayed the probity and financial rectitude you would expect from a Swiss banker.

The system — including parts of it Hamilton designed — may have benefited the mercantile elite of which Hamilton was a part.

That was controversial enough in the politics of the day. But Hamilton didn’t profit personally.

In 1795, after he announced he intended to resign as Secretary of the Treasury, Hamilton wrote a letter to his sister-in-law in which he joked about how he would be leaving public office poorer than he went in.

He estimated it would take him 4 or 5 years back working as a New York lawyer to get his family’s finances in shape.

The political muckraking of the time was positively vicious. If there had been anything ‘there’ there to find about Hamilton, presumably somebody would have found it.

By our standards, a remarkable figure.

When Congress met for the first time in 1789, it had to play fill-in-the-blanks with the Constitution.

Article 2 had vested executive power in “a President of the United States of America.”

That one was easy: George Washington.

The Constitution had little to say about what the rest of the executive branch should look like.

After the usual drawn-out debate, Congress created three departments: State, War, Treasury.

Thomas Jefferson, newly returned from Paris, would be Secretary of State. Henry Knox, one of Washington’s former generals, would be Secretary of War.

Washington’s first choice for Secretary of the Treasury was Hamilton’s former mentor, Robert Morris, financier of the Revolution.

Morris declined and recommended Hamilton instead.

Hamilton took the job in September 1789. He started right in.

Conflict of interest wasn’t much of a thing in those days.

Two days after becoming Treasury Secretary, Hamilton arranged a loan to the new government from the Bank of New-York.

That loan, and subsequent ones, paid among other things the salaries of George Washington and Congress.

The first Congress operated in ‘100 days’ mode. Everything had to be invented from scratch, all at once.

Fortunately, Hamilton had phenomenal energy. And his famous ‘plans’ at the ready.

The American economy was in miserable shape during the Articles of Confederation years, 1781-1789.

There had been a momentary boom at the end of the war when trade resumed with Britain.

After that, it was all downhill. The depth of the depression, percentage-wise, was comparable to that of the 1930s.

Economists still debate the causes of the Great Depression.

The one from 1781-1789 was clearly monetary in nature.

There wasn’t any. Or much.

‘Real’ money was silver or gold coin, ‘specie’.

One goal of British mercantilism had been to manage trade with its colonies so that silver and gold accumulated, and remained, in the mother country.

It was mostly still there.

The fundamentals of the American economy were sound.

That is to say, agriculture. In the South, people used warehouse receipts for tobacco as paper currency.

Farmers might have wealth, as in land, but had trouble laying their hands on money.

They could, of course, always barter.

On 2 January 1779, Abigail Adams wrote her husband about the household accounts:

I have not a single six pence can I get of substantial coin. … Remittances made in goods … will fetch hard Money ….

Farmers with bank loans and back taxes couldn’t come up with enough ‘specie’ to make their payments.

Shay's famous rebellion (1786) is commonly misconstrued an attempt to overthrow the government. It was actually an attempt to close a country courthouse so it couldn't issue bankruptcy writs and foreclose on farmers' land.

The U.S. government under the Articles of Confederation was also a deadbeat. The Continentals had received loans from France during the War.

Congress stopped making interest payments on those in 1785. Two years later it gave up pretending to pay at all.

Like someone using a cash advance on one credit card to pay off another, Congress kept current only on the loans it was getting from the Dutch. Amsterdam was the one place remaining where it still might get future ones.

To appreciate Hamilton — and aspects of later economic development in Asia — we need to abandon some our contemporary shibboleths about merits of ‘innovation’ and demerits of ‘copying’.

Steve Jobs said — at least in the 1999 TV film Pirates of Silicon Valley — "Good artists copy, great artists steal."

The original quote, from Goethe, is more insightful. In 1827, talking about the workshop training system of Renaissance artists, the German poet said “If you see a great master, you will always find that he used what was good in his predecessors.”

As the first Treasury of the Secretary, Hamilton produced a triad of enormously consequential reports, his famous ‘plans’.

The first and most important was Hamilton’s plan for dealing with the Revolutionary War debt. That was laid out in his January 9, 1790 Report on the Public Credit.

The second was his plan for a National Bank. That was submitted to Congress on December 14, 1790.

The third was his Report on Manufacturers, turned in on December 5, 1791.

For his two big financial innovations, Hamilton had a working model he could copy right in front of him — Great Britain.

The Dutch had been the first to stumble upon the secret for dealing with large debt. William of Orange had carried the recipe with him when he became King of England, Ireland, and Scotland in 1688.

The Bank of the United States, which opened its doors in Philadelphia in December, 1791, was Hamilton’s copy of the Bank of England, 1694.

‘National debt’ had once been synonymous with the monarch’s personal debt.

Its details were often a state secret.

The monarch, on a whim, might decide not to pay it. Or not pay one particular person he didn’t like.

The ingredients of the Dutch secret sauce were:

• The national debt would no longer be the monarch’s secret. The title of Hamilton’s report is on the Public Credit. The debt would be ‘sold’ to well-off members of the public.

• The government had to commit to religiously servicing the debt.

• The target market had to be convinced of that. The root of the word ‘credit’ is ‘to believe’.

• The debt instruments, the bonds, had to be transferrable and tradable in a public market. The price of the bonds would measure how much trust investors had in them.

There was, happily, a tonic — perhaps a better term is miracle cure — ready-to-hand for the anemic U.S. economy.

The vast ‘stock’ of old Revolutionary War debt was still around.

It was of uncertain and varying value. A few states had actually been conscientious about servicing their war debt.

Others had not.

Hamilton’s plan was for a debt restructuring, of the sort we now associate with a country like Argentina.

‘Assumption’ meant the new federal government would exchange all those miscellaneous old IOUs for new ones.

For simplicity, I’m going to call the new ones U.S. Treasury bonds.

Controversially, the old IOUs would be credited at original face value, not ‘discounted’.

It was an exchange of paper, new for old.

The hoped-for difference was that the new paper be good paper.

That was why Hamilton was so keen on a ‘just right’ tariff. The first tranche of the tariff revenue would be dedicated to paying interest on the debt.

The first stage of the miracle cure came from a ‘wealth effect’.

Holders of the previously near-worthless paper suddenly felt a lot richer after they exchanged it for the new.

That included those who had, over the previous years, picked the old stuff up on the cheap as a speculation.

Continental soldiers, for example, had been forced to take part of their pay in IOUs.

Those IOUs would be good — maybe — after the War. If the Americans won.

During the War, Hamilton’s friend William Duer had been a wheeler and dealer — a sort of scrounger — in provisions for the Continental Army.

Duer was the guy to whom a solider could take his IOU and sell it for a little bit of coin right now. At a deep discount, of course.

Many played the game. Abigail Adams took a flutter in the Continental paper. She instructed her business agent to pick some up on possibility it would become worth something someday.

In the day, ‘speculators’ were tutted about, but not stigmatized.

Before the eighteenth century, a ‘speculator’ was a spectator, as in sports. A speculator was a contemplative type, a ‘watcher’.

A speculator tried to buy low and sell high.

But then so did ordinary merchants.

In The Wealth of Nations, Adam Smith tried to work out a distinction:

The speculative merchant exercises no one regular, established, or well known branch of business. . . . He enters into every trade when he foresees that it is likely to be more than commonly profitable, and he quits it when he foresees that its profits are likely to return to the level of other trades.

But there was a more important stage in the miracle cure: the Treasury bonds would be a magic money multiplier.

Treasuries were the sort of ‘sound collateral’ bankers loved.

They would lend on them. That would put bank-created money in circulation.

It was indeed magical, almost alchemical. You could walk into a bank with the right piece of paper and walk out with a bag of gold or silver coins.

Estimates of the magnitude of the wealth effect are difficult to make, but have been attempted.

In 1913, Columbia historian Charles A. Beard outraged his contemporaries by suggesting the Founding Fathers had economic, as well as purely philosophical, motivations.

In his An Economic Interpretation of the Constitution of the United States, Beard estimated “at least $40 million gain came to the holders of securities through the adoption of the Constitution and the sound financial system which it made possible.”

For scale, $40 million was about 8 times the annual federal budget in 1792.

Land ‘speculation’, by the way, was practically a national pastime among the well-to-do.

Nearly all the founding fathers, including Hamilton, were involved in land ventures of some sort. George Washington, recall, was a surveyor.

Land — whether acquired by treaty, contract, or outright theft — was the backbone of the colonial experience.

And was one of the few things in which someone with some surplus funds could invest.

Doing so was vaguely patriotic. Buying tracts of undeveloped Western land showed confidence the new nation would grow.

Huge tracts of land, the so-called the western reserves, were the principal assets of the states and the new federal government.

Land is a great thing to own.

But it’s a notoriously illiquid asset.

Hamilton’s Treasury bonds, the ‘U.S. Sixes’ went on sale in October of 1790.

The entire issue sold out in a few weeks.

The Sixes, as the name suggests, paid 6% interest per year.

There were two others: the 3 percents, and the ‘deferred’.

But the Sixes were the most important.

The ‘deferred’ were the result of the new government’s cash flow problems. It would not have to start making interest payments on those for ten years.

Like British ‘consols’, the Sixes were perpetual bonds with no fixed term.

The concept of ‘perpetual’ bonds had made Congress uncomfortable.

It wanted the national debt to get paid off.

Eventually.

Just not now, as the prayer for chasteness goes.

Aside: the U.S. national debt would hit zero only once, during Andrew Jackson’s presidency, That came along with an unanticipated and nasty deflation.

So a ‘sinking fund’ was made part of the deal. It would allow the government, over time, buy its own bonds out of the market and retire them.

Hamilton would raid the ‘sinking fund’ far sooner than Congress had anticipated.

The bonds were purchased by a surprisingly broad public. A well-off tradesman might have picked up a few. The smallest denomination was $100.

Estimates vary, but a good guess is that perhaps 10,000 ‘economic entities’ (individuals, partnerships, corporations, municipal governments, trusteeships) soon owned the bonds.

Hamilton didn’t want the public to ‘buy and hold’ Treasury bonds.

Only.

The Dutch recipe required the bonds become actively traded in the secondary markets.

At the time, those were in New York, Philadelphia, and, to a lesser extent, Boston.

In New York, secondary market was in the Merchant's Coffee House.

Hamilton and his family lived nearby, in a small house at the corner of Wall and Water Streets.

In Philadelphia, the secondary market was in a coffee house on Chestnut Streets.

Communications were a little slow in those days. During one upcoming bout of market frenzy, there were as many as 40 stagecoaches a day racing between Philly and New York.

‘Outcry’ auctions of securities were held on a flat block out in front of the coffee houses, typically one at noon and another around 7 p.m. That same block might have been used a few hours earlier to auction slaves.

Auctions had been an interesting development from an information-theoretic point of view.

Some holders of the old Revolutionary War IOUs had no clue what they were ‘really’ worth. They might be tempted to take the first offer they got, such as one from Duer.

Auctions were perceived as more fair.

And, state and local governments liked securities auctions. They provided a convenient nexus at which financial transactions could be taxed.

In March 1789, recent bid/ask prices started to appear in print. Massachusetts Magazine started a regular column for those of Boston.

On May 17, 1792, twenty-four New York’s broker-dealers met under a buttonwood tree on Wall Street and signed an agreement to trade with each other on preferential terms. That was the origin of the ew York Stock Exchange.

The acid test for the new U.S. Treasuries would be how well they did in London and Amsterdam.

Aside: A few years on, with Britain back at war with (now) post-Revolutionary France, United States government debt would prove very popular indeed with European investors. It was a conveniently remote ‘safe haven’.

If Hamilton were a contemporary Wall Street guy who wants know a single market price when he walks into the office each morning, it would be that of his ‘U.S. Sixes’.

That market price of the Sixes were the metric for how much faith people had in the new U.S. government.

If the bonds were selling above ‘par’, 100, all was good.

If they dipped below ‘par’, that was not so good.

Hamilton took the price relative to 100 personally.

It was like the grade on his report card.

Dipping below ‘par’ was was just not a ‘D’ for Hamilton, it was something of an affront to the new nation. The Europeans might be laughing at us behind their lace-cuffed sleeves.

Hamilton would take steps to make sure below ‘par’ didn’t happen.

He invented the ‘Greenspan put’.

Which we’ll have to call the ‘Hamilton put’. Or name it after the central banker of your choice.

Starting in September 1790, one month after the ‘sinking fund’ law was passed, Hamilton started instructing William Seton, cashier of the Bank of New-York, to buy Treasuries out of the market a times when Hamilton feared they might fall below what he called their ‘proper’ or ‘due’ value.

It was a price floor.

Hamilton believed it his prerogative as Secretary of the Treasury, and quite possibly his duty, to prop up his bonds in the market when they needed it.

Hamilton’s ‘open market’ operations had nothing to do with retiring the bonds.

The ‘sinking fund’ was not yet in funds.

Hamilton’s Treasury had to take on new debt from the Dutch to make purchases of its own debt.

Hamilton’s two big financial plans had gotten through Congress only after some intense politicking.

Hamilton got one thing he wanted very much — for the new federal government to also ‘assume’ the leftover Revolutionary Wars debts of the individual states — only after a special side deal was negotiated with the South.

That resulted in Washington, D.C. being where it is today.

President Washington had been forced to get involved, in a slightly king-like manner.

Madison and Jefferson relied, unsuccessfully, on a Constitutional objection to slow down Hamilton’s big plans.

Hamilton’s second big financial innovation, the Bank of the United States, was another near-run thing.

Starting a National Bank was not among the powers explicitly granted to the new federal government by the Constitution.

If the Framers had wanted a big national bank, they would have said so.

Aside: It was a convenient time to be ‘originalist’. If you wanted to know what the Framers had intended, you could just ask them.

Benjamin Franklin, aware an objection like that might come up, for the longest time tried to get a power to ‘cut canals’ written into the Constitution.

Congress passed the bill authorizing the Bank’s creation on Feb 1, 1791.

But it looked like Washington intended ‘pocket veto’ it — not sign it within ten days.

Washington heard out Madison and Jefferson about it being unconstitutional.

That was also the opinion of the Attorney General, Edmund Randolph.

Washington asked Madison write down his objections. Madison assumed those might get incorporated in Washington’s veto message.

Hamilton, at the last minute, pulled an all-nighter. He wrote his former boss an lengthy, impassioned pleading on behalf of the bill.

Hamilton’s logic inverted that of Madison and Jefferson.

They argued that no power was available to Congress unless specified in the Constitution.

Hamilton argued that no power was not available to Congress unless so specified in the Constitution.

Washington was not fully convinced, but signed the Bank bill anyway.

For him, the simple way to resolve the deadlock was to accept the opinion of the cabinet officer in whose department the measure fell.

Which, of course, was Hamilton, the Secretary of the Treasury.

Madison and Jefferson lost that argument.

As we learned in civics class, the federal government has broad ‘implied powers’, and so on.

But focusing on the failed legal objection risks ignoring their other arguments.

A lot of Americans at the time didn’t much like banks, especially big banks.

Some still don’t.

John Adams groused in his old age in 1819: “Banks have done more injury to the religion, morality, tranquillity, prosperity and even wealth of the nation, than they can have done or ever will do good.”

The Puritan days were past, but America was still a religious nation. Usury, especially when it took advantage of the poor, was a sin.

For the more secular, even Aristotle had noticed there was something unnatural about interest, ‘money giving birth to money’. How did it do that?

Jefferson, a classicist and persistent debtor himself, called profits from purely financial speculation ‘barren’. It was morally inferior to investing to bring forth ‘real’ things.

Then there was the size of Hamilton’s national Bank of the United States. It was authorized to sell common stock to raise 10 million dollars.

Hamilton never thought small.

That was a staggering figure at the time. The combined capital of the five state banks then in existence totaled only $3 million.

In 1792, the total income of the federal government was $3.67 million, with outlays of $5.08 million.

Such a behemoth national bank might have monopoly power.

The state-chartered banks wouldn’t be able to compete. The big national bank would be able to set interest rates wherever it liked.

If it decided to set them high, farmers and trading merchants, who needed to take out loans routinely, might find themselves at the mercy.

On the other hand, the Bank might go in for easy money, and lend too freely to speculators and Wall Street types.

Which is what it did.

Aside: I can’t resist including a trick quote, written by Tobias Smollett in 1804, summarizing opposition to a national bank:

“The project was violently opposed by a strong party, who affirmed that it would become a monopoly, and engross the whole money of the kingdom: that as it must infallibly be subservient to government views, it might be employed to the worst purposes of arbitrary power: that, instead of assisting it would weaken commerce, by tempting people to withdraw their money from trade and employ it in stockjobbing: that it would produce a swarm of brokers and jobbers to prey upon their fellow creatures, encourage fraud and gaming and further corrupt the morals of the people.”

The trick: Smollett was actually writing about the Bank of England.

By late 1791, Hamilton’s monetary tonic was starting to work wonders.

After seven lean years, the animal spirits were back.

The stock market, such as it was, was on a tear. It was happy days for those on Wall Street who were bullish on America.

Aside: Merrill Lynch’s famous 1971 TV commercial was filmed in Mexico, to lower its cost.

All sorts of new ventures, such as toll-road and canal companies, were offering stock. There were as many new corporations formed in 7 months as there had been in the previous 7 years.

Especially new banks. Shares offered for the Rhode Island-chartered Providence Bank sold out in an hour, three times oversubscribed.

John Adams wrote: “The sudden accumulation of wealth in the hands of individuals has induced a mania.”

The word ‘mania’ became the root of the hashtags of the day. There was ‘bankomania’, and later ‘scrip mania’.

The new Bank of the United States, the product of Hamilton’s second plan, was responsible for the scrip mania.

On the English model, the ‘national’ bank would in fact be owned by private investors.

Eighty percent of it, anyway.

Wealthy investors would buy what was, legally speaking, common stock. The proceeds would give the Bank enough capital to get into business and start lending.

The other 20% would be owned by the government, which it paid for by transferring some of Hamilton’s Treasury bonds.

The initial offering of Bank of the United States stock took place on an auspicious date, July 4, 1791, in Philadelphia.

It was heavily oversubscribed.

Among the stock-buying public, however, cash was still tight.

So ‘subscriptions’ to the stock were sold on an installment plan. The down payment on one share was $25.

That had to be paid in hard ‘specie’, gold or silver coin.

The down payment bought a ‘scrip’, a right to own a share after making the scheduled payments over the next two years. The final share price would total $400.

Scrips were tradable.

Which essentially made them futures options.

They offered great leverage. As long as they were going up.

A scrip that required only the $25 down could be sold for $300 a few months later.

Hamilton was endlessly inventing creative uses for precious Treasury bonds.

The more action in the bonds, the better. That kept the market liquid.

And — probably — helped keep their price up.

For large transactions, the bonds themselves could function as paper currency. They could be signed over.

Hamilton made sure that private investors in the Bank could make their subscription payments, if they liked, using Treasury bonds.

That would take those Treasuries out of the public market. The reduction in supply would help keep the price up.

The dates on which everybody’s Bank subscription payments were due were public knowledge.

A few clever Wall Street types figured that would induce predictable price jags they could time and trade.

Bank scrip became the tail wagging the Treasury bond dog.

The various ‘manias’ soon became more general.

Men and women “of all sorts and conditions” got into the market, from “the small merchant tempted out of his line and the even smaller clerk or artisan who dreamed golden dreams of getting rich quick.”

The nearest thing to it in the history books was England’s South Sea Bubble, and that had been a long time ago, 1720.

Some observers tutted and clucked.

Jefferson worried the all that action in the stock market was seducing his yeomen farmers. They had lost in their cows: “his cattle & crops are no more thought of than if they did not feed us. Scrip & stock are food and raiment here.“

The curmudgeonly John Adams looked forward to enjoying a bit of schadenfreude. The mania will “be cured by a few bankruptcies which may daily be expected, I had almost said, desired.” 

Jefferson groused that “the fate of the nation seem to hang on the desperate throws & plunges of gambling scoundrels.”

As the bubble expanded, so did populist opposition to Hamilton’s big financial plans.

The window of bipartisan good feeling that had been open during the ‘100 days’ had definitely slammed shut.

The populist opposition would take a little time to coalesce.

When it did, the deepness of the divide would create the first two political parties. Political parties were something the Founders hadn’t anticipated, nor had they wanted.

The populists of the day may or may not have understood the fine points of Hamilton’s financial plans.

But they (correctly) suspected Hamilton’s plans probably favored his class, the financial and mercantile elite, over them.

The odds of Hamilton getting another one of his big plans through Congress were growing small.

As it so often does in the United States, military considerations had prompted Congress to consider compromising its laissez-faire inclinations.

On January 8, 1790, in his first message to Congress, Washington asked it to come up with a plan “for the encouragement and promotion of such manufactories as will tend to render the United States independent of other nations for essential, especially military supplies.”

The House passed that chalice on to Hamilton.

Hamilton submitted his third report, The Report on Manufacturers, in December 1791.

Unlike his first two plans, Congress filed it away.

I don’t think Hamilton cared.

He no longer needed Congress. Or so he was convinced.

And I’m sure he was tired of arguing with them.

Hamilton could kick off U.S. manufacturing on his own.

Just Do It.

Show, not tell.

Its was a very ‘hands-on’ approach to a research report.

It would get him mixed up in industrial piracy, patent infringement, talent poaching and a venture-capital-style start-up of a ‘National Manufactory’.

All while serving as Secretary of the Treasury.

Hamilton had a secret weapon: his beloved U.S. Treasury bonds.

Aside: There are a few tantalizing paragraphs in Hamilton’s Report in which he suggests a 'Board' — independent of Congress — should be in charge of promoting "the arts, agriculture, manufacturing and commerce." In an alternative history, we can fantasize Hamilton’s ‘Board’ evolving into something akin to Japan's MITI, its Ministry of International Trade and Industry.

Charity was oddly intwined with early manufacturing in the colonial America.

The ‘Societies’ of the day have no exact modern equivalent.

Many were voluntary civic associations founded to promote some publicly virtuous thing.

Others were that, but more closely resembled modern-day corporations. They sold stock — ‘subscriptions’ — and went into business.

Not necessarily with a burning profit motive, but to help them do the publicly virtuous thing.

Benjamin Franklin’s pre-War ‘Philadelphia Silk Society’ is an good example.

Franklin talked civic-minded Philadelphians into subscribing as a way of assisting the city’s poor.

The Society set up what’s called a ‘filature’ for unspooling thread from silkworm cocoons. It hired women spinners “chiefly of the poorer sort.”

Hamilton had taken a bit of a flyer in textiles in 1789, not many months before becoming Treasury Secretary.

Hamilton the lawyer had organized, and taken some founders’ stock in, the ‘New-York Manufacturing Society’.

The New-York Society, on the earnest Philadelphia model, was formed “for the purpose of establishing useful manufactures in the city of New-York, and furnishing employment for the honest industrious poor.”

It had 246 subscribers who paid £10 — in ‘New York state currency’ — for each share. A share receipt signed by Hamilton:

The Society constructed a large brick building on Vesey Street. It bought “reels, looms, carding machines, spinning jennies, with every other machinery necessary and compleat for carrying on the cotton and linen manufacture.”

Another idea was to weave cloth out of wool. Merino sheep were a big at the time.

The looms were supposed to be run by a waterwheel in one of the small streams that (then) ran aboveground in lower Manhattan.

The stream proved unreliable. It ran dry in the summer. Anyway, it didn’t have much oomph.

The stream was replaced by a more dependable ox, who walked in a circle.

Women were involved in a different impetus for America doing its own manufacturing. That one was an anti-British negotiating tactic during the run-up to 1776.

The American colonials, mostly in Boston, adopted ‘nonimportation’ as a strategy to get the British to back down on things like the Stamp Tax.

‘Nonimportation’ didn’t make much of an impression on the British.

But it did result in an endearing fashion fad for ‘homespun’, the rough, scratchy fabric made by colonial women at home. Wearing homespun was virtue-signaling in extremis.

Homespun managed to resonate with both latent Puritanism and mercantile economic theory.

Wearing expensive imported fabrics, especially silks — even black silk for mourning — was a sinful luxury. And the ‘specie’ spent to buy them exited the country.

For Jefferson, European-style factory manufacturing was not only unnecessary in the new republic, it was undesirable.

Some small-scale artisanal manufacturing, of course, was need in support of Jefferson’s beloved agriculture. Otherwise, factories had no place in his New World:

Carpenters, masons, smiths, are wanting in husbandry: but, for the general operations of manufacture, let our work-shops remain in Europe.

Aside: that quote dates from 1785. Later, after some manufacturing had gotten established in the U.S,. Jefferson would moderate that view, saying we could have both.

The workshops of Europe were not quite yet Blakes’s ‘Satanic Mills’.

That would come a few years later, when they started burning coal.

But factories already had a bad reputation.

For English workers of the time, the large textile mills were cut from the same cloth as prisons and workhouses.

In Europe, what with its ‘surplus population’ — to quote Ebenezer Scrooge — prisons, workhouses and factories might be necessary for social control.

The urban poor were an unruly and potentially revolutionary lot. They would prove that in France a few years on.

A widely-held economic theory of the time was that factory manufacturing had a natural, Malthusian-like tendency to reduce workers’ wages to subsistence level. That ‘law’ would later be formalized by David Ricardo and picked up by Karl Marx.

The young United States had the opposite problem. It was relatively underpopulated. Its labor was more expensive than Europe’s.

A writer at the time: “manufactures can only be carried on to advantage in states full of people, and whose labour is low.”

Working a farm that you owned was widely perceived as infinitely preferable to working for a wage in a factory: "So much more agreeable is that profession!"

Factory workers, even skilled ones, would find cheap western land a fatal attraction. They’d be off for the frontier just as soon as they saved up a down payment.

That actually happened. A postmortem of a failed New York factory venture circa 1795 listed one of the problems as:

The English workmen are dissatisfied, and ready to leave the factory as soon as they have saved up a few pounds, in order to become landholders up the country, and arrive at independence. 

The Report on Manufacturers, as it was submitted, is bit of a disjointed document.

There’s a ‘theory’ section, clearly written by Hamilton.

The rest is a business plan.

That part was drafted by Tench Coxe, Hamilton’s Assistant Secretary of the Treasury, and worked over by Hamilton, so consider it co-written.

More about Coxe in a minute.

First, some terms of the day require translation.

‘Bounties’ were one idea for encouraging ‘manufacturers’.

Bounties were mostly like prizes, but a bit like subsidies.

For example, in 1784 the Connecticut assembly, to encourage a silk industry, offered any farmer who planted 100 mulberry saplings a ‘bounty’ of 10 shillings a year for 3 years. Connecticut also guaranteed a price of 3 shillings an ounce for raw silk.

In the theory section, Hamilton, ever the even-handed lawyer, first gives time to the opposing views.

In The Wealth of Nations (1776), Adam Smith had openly stated that the American Colonies should not attempt manufacturing:

Were the Americans … to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.

Hamilton’s own restatement of the argument against government trying to promote manufacturing — call it the laissez-faire position — is actually rather eloquent:

To endeavor, by the extraordinary patronage of Government, to accelerate the growth of manufactures, is, in fact, to endeavor, by force and art, to transfer the natural current of industry from a more, to a less beneficial channel. Whatever has such a tendency must necessarily be unwise. Indeed it can hardly ever be wise in a government, to attempt to give a direction to the industry of its citizens. … To leave industry to itself, therefore, is, in almost every case, the soundest as well as the simplest policy.

Aside: A few decades on, Frederick List, the hugely influential 19th century German economist (who had studied Hamilton’s Report closely), would mock British economists like Smith who preached the gospel of free trade to developing nations.

They were hypocrites: Do as we (now) say, not what we (once) did. In List’s evocative phrase, what they were trying to do was ‘kick away the ladder’. Britain, having climbed up the ladder of economic development, had no interest other nations following it. They might become its competition.

Hamilton spent much of the theory section of his Report trying to come up with answers for the high cost of labor in the United States.

One answer, then as now, was automation: labor-saving machinery.

Another answer, then as now, was immigration. For Hamilton, immigrants were preferably skilled and English, or at least white European. At the time, even the Irish need not apply.

Another solution was to copy a recent British innovation. The textile mills could be filled with children.

For Hamilton, what trumped all other arguments was Great Power competition.

Hamilton, the realistic lawyer, simply looked at what other countries were doing: “the bounties premiums and other artificial encouragements, with which foreign nations second the exertions of their own Citizens.”

The young United States, if it wanted to match those foreign nations in power and prestige, had no choice but to adopt similar measures.

However unpalatable those might be to believers in laissez-faire.

Hamilton was an early practitioner of Realpolitik.

But what sort of ‘artificial encouragements’?

Madison, in 1789, doubted politicians had the requisite knowledge to ‘pick winners’:

it is also a truth, that if industry and labor are left to take their own course, they will generally be directed to those objects which are the most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out.

Aside: Ninety years before Friedrich Hayek was born. A condensed version of Hayek’s ‘knowledge problem’: knowledge is dispersed across individuals. No single authority can possess or process all of the information necessary to manage a complex system.

States wanting to hand out prizes was not terribly controversial.

But it would be another thing if legislatures got into the habit of handing out money to private interests. That was a recipe for the corruption of political ‘virtue’.

Jefferson, in his private notes on Hamilton’s Report, opined:

Bounties have in some instances been a successful instrument for the introdn. of new and useful manufactures. But the use of them has been found almost inseparable from abuse.

Aside: In the last half of the 19th century, the land-grant subsidies for railroad building proved poisonously corruptive to the body politic. The corporations formed to take them were dependably looted by their private owners, who then devoted a portion of their gain to purchasing politicians. That keeping the subsidy cycle going. Competition among the railroads was not only about laying down miles of track.

If a ‘society’ had a sufficiently appealing public purpose and the right political connection, it could hope to get a charter from a state government. That would make it legally what we now call a corporation.

Getting a charter then required a state legislature to pass a law and have it signed by the governor.

Those laws often granted special benefits. The states had a pretty common menu.

The society’s land and buildings might be exempted from property tax. Its workers could be exempted from the poll tax. Or from having to serve in the state militia.

Other benefits were more in the realm of zoning, eminent domain, canal privileges, and water rights.

An unusual one was that a state could give a society the right to run lotteries, keeping the proceeds after prizes.

Federal charters were rare, and controversial.

Hamilton’s Bank of the United States, of course, had one.

The House of Representative, in its 1790 charge to Hamilton, had asked him to make a survey U.S. manufacturing as it then stood.

There wasn’t much.

In 1794, diplomat Charles Maurice de Talleyrand was hiding out in America.

Talleyrand was then on the lamb from both the British and his fellow French Revolutionaries. His diplomatic passport had been signed by Danton, and presumably expired with Danton’s famous death.

Talleyrand sniffed that America:

is but in her infancy with regard to manufactures: a few iron works, several glass houses, some tan yards, a considerable number of trifling and imperfect manufactories of kerseymere and, in some places, of cotton…

Hamilton sent around a circular letter asking anyone who knew about manufacturing to write back.

He collected samples from textile mills. Later, Hamilton would lay them out for members of the House to inspect, as if at a trade fair.

Hamilton got one very detailed response from Tench Coxe in Philadelphia.

Coxe was from an old and well-connected landowning family. His great-grandfather had been court physician to Charles II and had been ‘favored’ in the early Colonial land grants. His descendants at various times owned most of New Jersey and ‘The Carolana’.

Aside: Daniel Coxe III, Fellow of the Royal Society, famously poisoned a cat with tobacco in a lecture-demonstration described by Samuel Pepys in his diary entry for 3 May 1665.

Tench Coxe’s politics during the Revolution were a bit confused. Some thought he was pro-British, a Tory.

But after the War he was a very public advocate of U.S. textile manufacturing.

Coxe headed up something called the Manufacturing Society of Philadelphia.

Tench Coxe had published various ‘visionary’ articles about the future of U.S. manufacturing in the Philadelphia papers. He included his newspaper clippings in his letter to Hamilton.

Tench Coxe had been involved in a flyer in textiles before.

The ‘Pennsylvania Society for the Encouragement of Manufactures’ opened a small factory in 1787.

In best Philadelphia tradition, one of its goals was to provide jobs for the unemployed.

During the winter of 1787 and spring of 1788, it gave work to perhaps two hundred women who spun linen into yarn.

It also conducted one successful and ultimately very consequential experiment: it was able to spin short-staple American-grown cotton into usable thread.

After improved cotton gins came into use after 1793 — Eli Whitney gets a little too much credit as the ‘inventor’ — slave-picked King Cotton would come to dominate Southern agriculture. And British textile manufacturing.

Which would tee up the Civil War.

Two years later, the both the New-York and Philadelphia societies would fade and fail..

Textiles were a tough business to break into.

They’re not exactly high margin.

And cheap British imports were keeping prices down. A writer summed up what caused the Philadelphia society too fail with a single word: ‘Manchester’.

The early manufacturers would not get the high protective tariffs they wanted for their ‘infant’ industry until 1816.

Capital was needed for buildings and machines. But if a ‘society’ had to take out loans, the interest payments could become killer.

In March 26, 1789, the Pennsylvania state legislature tried to help.

It bought 100 shares in the Philadelphia Society, saying "the sums subscribed [by private investors are] inadequate to the prosecution of the plan upon that extensive and liberal scale, which it is the interest of this state to promote."

None of those of measures helped.

At least not enough.

“A Citizen of Boston” wrote on January 18, 1792:

I am sorry to say, that very few enterprizes in the manufacturing line, in this town have ever been fraught with other consequences than those of disappointment, and absolute loss.

Hamilton’s first Assistant Secretary of the Treasury had been William Duer.

In March of 1789, Duer resigned his job at the Treasury to pursue, as his statement would say today, ‘other interests’.

Duer’s ‘other interests’ were speculation, land and financial.

Duer is a fascinating character.

He’s routinely referred to now as “America’s First Wall Street Villain”, a sort of early days Bernie Madoff.

I rather like him.

Duer was one of Hamilton’s many ‘friends’ from Revolutionary War days.

He was a close one. Their wives were cousins.

Duer was rich, successful, and popular among his large acquaintance.

When Duer married Kitty Alexander, daughter of a wealthy trader and veteran of the French and Indian War, George Washington gave away the bride.

Duer arranged for George and Martha to live in a friend’s ‘mansion’ at 39 Broadway during the short time the government was in New York in 1790.

Duer and his wife lived well. They ‘cut a figure’ in New York society.

Which made him a natural target for envy. And, later, hate.

But a testimonial — admittedly from someone who had just concluded doing some bit of business with Duer — is worth recording:

He is a gentleman of the most sprightly abilities, and has a soul filled with the warmest benevolence and generosity. He is made both for business and the enjoyment of life, his attachments strong and sincere, and diffuses happiness among his friends, while he enjoys a full share of it himself.

Aside from being his friend and cousin by marriage, Duer was also Hamilton’s predecessor in office.

Duer had been the Secretary of the Continental Congress’s three-man Board of Treasury.

Duer sold supplies to the War Department, and before that to the Continental Army. He sold the infant U.S. Navy the timber masts used for its new ships, for example.

General Henry Knox, Washington’s Secretary of War, who approved Duer’s contracts, was also Duer’s partner in some land deals in Maine and Ohio.

Like I said, conflict of interest wasn’t much of a thing back then.

During the War, Duer had developed a prudent habit. He rarely put any of his deals down in writing.

He was apparently a whiz at keeping numbers in his head and doing mental arithmetic.

Another Duer habit was to made sure he got a ‘taste’ in any deal. Call it his commission, if that makes you feel better.

Duer’s job put him in the unique position to accumulate a collection of the miscellaneous state and continental warrants, ‘specie certificates’ and the like, with which payments for public supplies were made.

When those were exchanged at face value for U.S. Treasury bonds, Duer did very well indeed. When people complained about ‘speculators’ benefiting from federal assumption of the debt, it was Duer they had in mind.

In the bull market of 1791, Duer was a bull’s bull.

Duer was not on TikTok, but he was an ‘influencer’. Where he led, others followed.

Duer’s thinking was the subject of a great deal of public speculation then, and still is.

Duer was famously ‘long’ on Hamilton’s U.S. Treasury bonds.

He had worked at the Treasury with Hamilton. So he may have had a sincerely high opinion of them.

Duer was certainly aware of the ‘Hamilton Put’. His downside risk was limited.

Should the bonds he held sink too far, Hamilton’s Treasury could be counted on to buy them off him.

Duer bought all the Treasuries he could afford, then borrowed to buy more.

That’s not the worse trade — a ‘carry’ — if you can borrow cheap. The Bank of New-York was lending at 5%. The bonds paid 6%. Duer could pocket the 1% difference.

Outsiders fumed about what looked to them like insider trading going on in Hamilton’s Treasury Department.

Conspiracy theories were as popular then as today. There were many about Duer. One was that Duer planned to buy up all the Treasury bonds, then ‘squeeze’ the market.

The problem wasn’t that Duer was a bull.

The problem was that Duer was a highly leveraged bull.

Hamilton replaced Duer by hiring Tench Coxe.

They became business partners, of a sort.

Coxe had given Hamilton a list of things he thought were holding back manufacturing in the United States.

There were two bigs ‘lacks’: lack of capital and lack of knowledge.

Hamilton, the financial engineer, had a brilliant solution for the lack of capital.

The plan outlined in the Report on Manufacturers was in motion by mid-1791.

As business plans go, it outlined an odd sequence of events.

The first thing they would do is raise a whole lot of money.

Aside: In some ways, more akin to a starting venture capital fund than a venture capital venture.

The name of the new venture would be the Society for Establishing Useful Manufactures, usually shortened to S.U.M.

Wealthy people, nearly all from Philadelphia or New York, would ‘subscribe’ — pledge to buy — stock in S.U.M.

Hamilton uses a charming word for them — the ‘adventurers’.

Hamilton again wanted to go big.

The authorized capital of the National Manufactory would be $1 million.

Aside: Coxe’s original plan called for $500,000. Hamilton apparently doubled it.

That number was intended to raise eyebrows, and it did.

The largest canal-construction company of the day was authorized to raise only $400,000 in capital. And it had not been able to raise that much. 

Word about Hamilton’s new venture got out in August, 1791.

What with Hamilton’s network of contacts, his good name, and the vague impression that S.U.M. was blessed by the government, the initial subscriptions sold themselves.

A lot got pledged quickly. Not all of that, of course, was collected in cash.

When the scrip-holders — stockholders to be — were known, they got together and elected a board of directors. That happened on November 25, 1791, in Philadelphia.

To be clear, Hamilton himself never was a stockholder. He clearly felt that would have been inappropriate while he was Secretary of the Treasury. Hamilton was elected to S.U.M.’s board of directors after he left office in 1795. It’s unclear if he ever attended a meeting.

Hamilton’s intimate friend William Duer was the obvious choice to be ‘Governor’ of S.U.M.

The ‘Governor’ was not the CEO, but the chairman of the board.

The money guys assumed they would hire a “Superintendant-General of the Works of the Society” — on salary, no equity — to run things.

He’d have to live at the site, so maybe they’d build him a house.

To modern eyes, a missing figure in the business plan is a driven entrepreneur: one person who had a basic grounding in the technology; could exert a reasonable amount of control; and had some financial skin in the game.

The first candidate for Superintendant-General was Nehemiah Hubbard of Middletown, Conn. He was offered $2,000 per annum, about $68,000 today.

Hubbard turned it down.

Hubbard had been deputy-quartermaster-general for Connecticut during the war, and in 1792 was engaged in foreign trade.

Hubbard didn’t think he was qualified for the job. The risks involved in being a trading merchant, he understood. This manufacturing thing was too new for him.

So in early days Duer and Hamilton, plus the board, were what S.U.M. had by way of management.

Both Duer and Hamilton were, of course, busy guys.

Hamilton had the Treasury to run. Duer had his ‘other interests’.

In January 1792, Duer’s ‘other interests’ started to heat up.

Aside: Hamilton did apply his famous self-study skills to trying to master the complicated mechanical workings of the looms and similar devices of the day. Some pages in his papers display some very nerdy fascination with them.

It took some time to decide where, exactly, the ‘National Manufactory’ should be located.

New Jersey had the inside track. Coxe’s family still owned parts of it. And it was halfway between New York and Philadelphia, where the ‘adventurers’ lived.

Hamilton negotiated a corporate charter for S.U.M. with the governor of New Jersey, William Paterson in November 1791.

Aside: Present-day Paterson is called that for a reason.

The state charter authorized a ‘district’ — somewhere in New Jersey — “not exceeding in contents, the number of acres contained in six miles square for the purpose of establishing within the same, the principle seat of the Society for useful Manufactures.”

Duer, no stranger to hype, tried to get parts of state competing against each other for the honor of hosting S.U.M.

On Dec. 12, 1791, Duer put an ad in the New Jersey papers touting (his caps): “The advantages to be held up to the Society for employing within the proposed district, an active capital of ONE MILLION OF DOLLARS.”

Friendly boosters in the press pontificated that the winning location would become the future manufacturing capital of U.S.

It would be as important as the new political capital then being laid out on the Potomac.

The site needed a waterfall. They sent people out to look for one.

An excellent one was found on the Passaic River.