The previous post, “Balancing California’s Budget,” recommends spending cuts that extend well beyond incoming Governor Brown’s proposed budget (ref. Full Budget Summary), especially in the areas of (1) entitlements, (2) prisons, and (3) education. In all these areas, the case is made that thoughtful restructuring and downsizing of these institutions will actually improve societal outcomes. At the same time, as Governor Brown himself has included in his own budget proposal, state worker salaries and benefits need to be lowered to competitive market rates. But making these reforms to put California into a situation of budget surpluses is only half the battle to revive California’s economy. At the same time, new government initiatives combined with new private investment – spurred by deregulation – are necessary to maximize the speed of California’s economic recovery, and lay the groundwork for a new golden age in the golden state.
Here are some projects – public or private or both – that will make California great again. They are based on a simple premise: It is the job of government to invest in infrastructure that will make energy, water and transportation less expensive, not more expensive.
(1) Build nuclear power plants:
The latest generation of nuclear power technologies are safer than ever, and there is an abundant supply of nuclear fuel within North America. Adding a few nuclear power stations in California would have a dramatic impact on the price of electricity. Claims that nuclear power is more expensive than alternative energy are based more on the cost to overcome regulatory hurdles and lawsuits, not the actual construction costs, and certainly not the fuel costs. Nuclear power development is a key element towards delivering cheap energy again in California.
(2) Build an LNG terminal off the California coast:
Along with new North American sources of natural gas from shale, there is abundant natural gas around the world, and a global market exists for liquified natural gas that is transported by tanker. A few years ago an LNG terminal was proposed to be built fourteen miles off the coast in Ventura County, but was nixed by California’s legislature. By receiving LNG tankers 14 miles offshore, and piping in the less hazardous gaseous fuel, this terminal would not have posed any threat, however remote, to onshore communities, and would allow California to diversify their sources of this abundant and clean fossil fuel.
(3) Build desalination plants off the Southern California coast:
Desalination technology has advanced to the point where it is now possible to desalinate a cubic meter of seawater using less than 2.0 kilowatt-hours of electricity. Put another way, the energy necessary to desalinate seawater is now less than the energy currently required to pump an equivalent unit of seawater over the mountains from the California aqueduct into the Los Angeles basin. Because the California current is one of the biggest ocean currents in the world, the brine that would be discharged from 10 million acre feet of fresh water recovered from seawater would have an insignificant environmental impact. The brine could be discharged through pipes that would run atop the seabed with the outfall 10 miles offshore where the California current would disperse it immediately. Desalination is a key element towards delivering cheap water again in California, and like nuclear power, claims that desalination is prohibitively expensive are based more on the cost to overcome regulatory hurdles and lawsuits, not the actual construction costs, and certainly not the operating costs. For more on desalination at scale, ref. “Sverdrups & Brine,” and “Affordable Desalination.”
(4) Develop new surface storage and aquifer storage for storm runoff:
California’s system of reservoirs provide ample fresh water to agriculture, industry and residential/commercial users in years with normal rainfall, but inevitably there are cycles of drought when the existing water storage infrastructure is inadequate. It is probably possible to add another 5 million acre feet of storage without resorting to high dams by identifying areas within the Central Valley where runoff can be collected in great bulk and kept there until spring irrigation draw-downs begin, or systematically transferred to underground aquifers. The capacity of underground aquifers to store water in California is still poorly understood, but California’s water commission estimates there could be 10 million acre feet or more of underground water storage capacity in California. There is plenty of runoff, even in drought years, that isn’t being harvested. To allow California’s agricultural industry access to cheap, abundant water (agriculture consumes well over 80% of the fresh water diverted in California), better storage of storm runoff is essential. For more ref. “California’s Water System.”
(5) Widen and upgrade interstate freeways:
Along with freeway upgrades, widen and upgrade all major freeways, highways and boulevards in California. Widen and retrofit bridges and tunnels. California needs smart lanes on upgraded roads, not the “bullet train.” As energy becomes abundant and cheap – and technology guarantees this will occur – the most convenient personal transportation appliance ever conceived, the automobile, will become even more indispensable. Cars of the future will be not only clean operating and fuel efficient, but will go faster than ever and be capable of operating on autopilot. To participate in this revolution in transportation, Californians need to upgrade their roads, not attempt to discourage people from using them by neglecting their maintenance, upgrades, and expansion.
(6) Upgrade existing rail corridors:
It is not necessary to develop bullet trains for passenger transportation in a state that will never have more than 50 million people living along an 800 mile corridor. But fast intercity rail, using existing track that is upgraded to tolerate speeds of 120 MPH is a viable proposition, particularly if these upgraded rail lines are also still utilized for faster freight transportation, which will always be more efficient via rail. Diverting public funds into bullet trains and light rail is folly, when immediate returns would accrue to investments in better roads and better existing rail. For more on the economic futility of a bullet train in California, ref. “Bullet Train Boondoggles.”
(7) Streamline permitting process and allow more mines and quarries:
California has abundant mineral resources, but nothing can be developed without years of permit applications and legal battles. As a result, basic raw materials have to be imported at far greater cost than necessary. Making development of mineral resources in California more expensive than virtually anywhere else on earth robs Californians of jobs, and constitutes a drain on every facet of California’s economy that relies on these resources.
California has a gigantic, diverse economy – nearly 2.0 trillion in economic output each year. But California has an energy, water and transportation infrastructure that was built for 20 million people, in a state that now approaches 40 million in population. It is ironic that the Governor who once sold the freeway corridors owned by the state, held in reserve for future transportation corridors, is the same man who has just taken office again. Back in the 1970′s, Jerry Brown presided over the dismantling of California’s plans for infrastructure development, at the same time as he signed legislation enabling unionization of California’s government workers. Today we are suffering the ultimate consequences of this decision, as we live in a state where overpaid state and local government workers collect the tax revenues that should be put to use to maintain and expand our energy, water and transportation infrastructure.
Compounding California’s policy decision to fund over-market government employee compensation instead of infrastructure investments is the crippling impact of environmental regulations. Realistic, ongoing revisions to regulations enforcing environmental quality are desirable, but the current fixation on regulating anthropogenic CO2 emissions is a tragic mistake. Global warming “mitigation” is environmentally useless (ref. “Investigating Climate Alarmism“), and it ignores the following: Less expensive energy, water and transportation form the basis of increased prosperity, and as prosperity increases, literacy increases and birthrates decrease. This, in-turn, leads to a lower maximum population globally, which results in reduced pressures on resources and wilderness.
Spending taxpayer’s money on infrastructure development that will yield cheaper energy, water and transportation, causes a lower cost of living at the same time as it stimulates more rapid economic growth. This translates into higher tax revenues which can then be used to pay higher wages and benefits to government workers. By enacting policies that deliberately make resources more expensive, while paying over-market wages and benefits to government workers, policymakers have put the cart in front of the horse. They have gotten their priorities reversed.
California is a truly exceptional place, a land of staggering resources and breathtaking natural wonder, with world leadership in art and technology. California’s high-tech entrepreneurs should abandon their lobbying for global warming mitigation legislation, which will force people to consume needlessly expensive energy, rationed water, and inefficient transportation. Instead they should lobby for the projects set forth here, which will put money back in the pockets of consumers, enabling them to buy high tech innovations still barely imaginable – from geriatric cybernetics to space tourism. If energy, water and transportation were cheap instead of “green,” rationed, and expensive, California’s technology industry can direct itself towards providing qualitative improvements to the lives of an aging, prosperous population.