From the TSHA: Historic World War II pipelines sold

The Texas State Historical Association tells us that on this day in 1947 the Big Inch and Little Inch pipelines were sold by the US government to a private company - Texas Eastern Transmission Corporation, which was headquartered in Houston. Both pipelines also connected Houston with the northeast, which helped solidify Houston as the center of the oil and gas industry.

This might be an interesting read for both 2305 and 2306 students. 2305 students should consider the interplay of interests involved in the construction of the pipeline before and during WW2, and the decision about what to do with the pipeline once the war was over. 2306 students ought to think about the role government policies played in the development of the local area and the degree to which local power brokers were able to ensure that these policies benefited them, as well as the local area.

WW2 was very good for the local economy and the business interests located here.

Here's the note sent out by the TSHA:

On this day in 1947, the Big Inch and Little Big Inch, two strategic pipelines laid during World War II from East Texas to the Northeast, were sold by the U.S. government to a private company. Secretary of the Interior Harold Ickes realized as early as 1940 that shipment of petroleum to the Northeast by tankers would be impossible in time of war because of German submarines. In 1941, at Ickes's urging, oil industry executives began to plan the building of two pipelines. One, twenty-four inches in diameter, called the Big Inch, transported crude oil. The other, twenty inches in diameter, called the Little Big Inch, transported refined products. The Big Inch ran from Longview to Southern Illinois, thence to Phoenixville, Pennsylvania. Twenty-inch lines continued from there to New York City and Philadelphia. The Little Big Inch began in the refinery complex between Houston and Port Arthur and ended in Linden, New Jersey. Together the pipelines carried over 350 million barrels of crude oil and refined products to the East Coast before the war in Europe ended in August 1945.

And from the TSHA entry on the Big Inch and Little Inch Pipelines:

After the war, the pipelines became the focus of a clash of interest groups, with the oil and gas industry wanting to convert them to natural-gas pipelines and the railroad and coal industries opposing this. The Surplus Property Administration, given the task of determining future use, hired an engineering firm to study options; this study recommended that the pipelines be converted to natural-gas transmission. At the same time the United States Senate held hearings on their future use. In January 1946 the SPA recommended that first preference should be to continue use as in the war to ensure availability of the lines in a national emergency. However, by June 1946 the War Assets Administration announced an auction for the lines. All bids were ultimately rejected because no defined use preference had been established. After a strike by coal miners in November 1946 the WAA solicited bids to lease the lines, with Tennessee Gas and Transmission Company awarded a lease for natural-gas use to run from December 3, 1946, to April 30, 1947. Once it was established that the lines were viable for natural-gas transmission, the WAA again offered them for auction. The high bid of $143,127,000 came from a new corporation, Texas Eastern Transmission Corporation, formed by George Rufus and Herman Brown and their partners. The purchase was final on November 14, 1947. As of 1993, Texas Eastern had its headquarters in Houston.

A look at the current state of the oil and gas industry

Restaurants and cultural offerings are icing on the local cake - oil and gas still power the local economy. Here's a look at the current state of the industry, taking into consideration boom underway as a result of fracking.

Was the Super Bowl blackout an agenda setting event?

Maybe so. From the National Journal:

If there's a silver lining to be found to the partial blackout, it's this: the way the stadium's electrical system worked, at least according to an early official statement, shows how improvements to energy infrastructure can contain damage.

“Power outages cost our country over $70 billion a year,” said Richard Caperton, an energy expert at the Center for American Progress. “Anything that draws attention to that problem and helps motivate people to deal with it is helpful.”

. . . The game, which drew an average of 108.4 million viewers, was another in a series of high-profile power outages during the last year. During Hurricane Sandy in late October, thousands up and down the Eastern Seaboard (and beyond) lost power for periods stretching from days to weeks. Lawmakers in Washington, D.C., found themselves hamstrung during this summer’s fast-moving “derecho” storm, which knocked out power throughout the Washington region.

The American Society of Civil Engineers gave the country’s energy infrastructure a D+ in an infrastructure report card released in 2009. The U.S. “quality of electricity supply” is ranked 33rd globally by the World Economic Forum’s 2012-2013 Global Competitiveness Report. Proponents say improvements to the nation’s infrastructure will create jobs.

Last year, President Obama called for repairing the nation’s infrastructure in his State of the Union address. “Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt,” he said. The president’s next State of the Union address, set for Feb. 12, will set the agenda for the next four years. Obama's a big football fan; perhaps the Super Bowl outage will spur him to take renewed action on infrastructure.

From the Atlantic: Amid Partisan Bickering, Everyone Agrees: ARPA-E Is a Fascinating Experiment

ARPA-E is an attempt by the Energy Department to replicate for renewable energy what DARPA did for computing and digital technologies:

In previous decades, the Department of Energy drove basic research by operating giant government-funded labs, but under the leadership of Energy Secretary and Nobel Laureate Steven Chu, the agency has transformed itself into something different: the biggest, greenest venture capital firm in the world.

After receiving an unprecedented surge in funding for renewable energy courtesy of the American Recovery and Reinvestment Act, Chu set to work hiring big names from the nation's top research laboratories, in order to staff a new agency called ARPA-E, modeled after DARPA, the R&D wing of the Pentagon. In just three years, ARPA-E has made more than 180 investments in basic research projects in renewable energy, and that's in addition to grants issued by the Department of Energy proper, like the one that funded the Ocean Power Technologies project in Oregon.

A Window of Opportunity for Non-Carbon Energy?

We've had two tragedies in rapid succession involving standard carbon based energy industries, the coal mining disaster and the Off shore oil well explosion followed by the spill. Might this create an opportunity for proponents of wind/solar and other non-carbon energy sources to generate support for their efforts to develop them? David Brooks argues that governments have always played a role in jump-starting new technologies and should do the same for clean energy.

In 2302 we discuss agenda setting, and the role events can play determining what governments do. Here's a current example.

5/3/10: Paul Krugman agrees with me.

Interest Groups Split Over Energy Bill

From the NYT:

As the Senate prepares to tackle global warming, the nation’s energy producers, once united, are battling one another over policy decisions worth hundreds of billions of dollars in coming decades.

Producers of natural gas are battling their erstwhile allies, the oil companies. Electrical utilities are fighting among themselves over the use of coal versus wind power or other renewable energy. Coal companies are battling natural gas firms over which should be used to produce electricity. And the renewable power industry is elbowing for advantage against all of them.

...

Do U.S. Regulations Inhibit the Development of a Domestic Solar Energy Industry?

Thomas Friedman argues that solar power shows signs of booming in countries where regulations allow it to grow. He suggests that existing regulations in the United States do not, and continue to favor the oil, gas and coal industries that have dominated the energy sector for years.

The reason that . . . other countries are building solar-panel industries today is because most of their governments have put in place the three prerequisites for growing a renewable energy industry: 1) any business or homeowner can generate solar energy; 2) if they decide to do so, the power utility has to connect them to the grid; and 3) the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop.

Regulatory, price and connectivity certainty, that is what Germany put in place, and that explains why Germany now generates almost half the solar power in the world today and, as a byproduct, is making itself the world-center for solar research, engineering, manufacturing and installation. With more than 50,000 new jobs, the renewable energy industry in Germany is now second only to its auto industry.

. . .

If you read some of the anti-green commentary today, you’ll often see sneering references to “green jobs.” The phrase is usually in quotation marks as if it is some kind of liberal fantasy or closet welfare program (and as if coal, oil and nuclear don’t get all kinds of subsidies). Nonsense.

This is another example of demosclerosis, covered below and in our lectures on Federalist #10. It also illustrates the concept of agency capture, the process by which an interest group can effectively capture a regulatory agency and ensure that any regulations it issues will favor the industry, not the general welfare.