Fox Valley Sierra Group Archive From The Chair

02/28/2002

"Where has all the water gone?"

The Great Lakes water levels are heading toward record lows. The explanation I heard at a February 5th seminar at Lawrence University by Linda Mortsch of Environment Canada is that the increased air temperatures are causing increased lake evaporation both directly and due to the reduced ice cover in winters. Further there has been a reduction in precipitation associated with the rise in atmospheric temperatures.

Out West the Colorado River long ago stopped flowing to the sea because of diversions for cities and agriculture and the increased evaporation off lakes behind dams because of the dramatic increase in surface area. I read in the February issue of "High Country News" that this year the Rio Grande also quit flowing before it reached the Gulf of Mexico --- similar reasons: cities, agriculture, and industry.

The Sahara Desert continues to expand due to the dryer weather and the impact of people stripping the remaining vegetation for firewood. We read that that the rain forest of Brazil is rapidly shrinking as the timber is harvested and the residue burned to clear the land for agriculture for a few years until the land is spent. Further we are told that the stripping away of the rain forest has the effect of reducing the amount of rainfall. Are the ocean levels rising? Is all this extra water circulating in the atmosphere? More improbably, are water molecules breaking down into oxygen and hydrogen and flying off into outer space?

We have 1472 members in the Fox Valley Sierra Group, all of whom get this newsletter. In think this is a well-informed segment of the population. Maybe someone has an explanation or hypothesis that he or she would like to share.

So where or where has all the water gone?

01/05/2002

"Pollution Economics 101"

As an instructor in Engineering Economics I am puzzled by the foot dragging we have seen from the paper companies in addressing the cleanup of the PCB's from the Fox River. Everything I see says they would be better off to go faster, unless they still hold out some blind hope that the problem will just go away.

If you read the mission statement of any large American company you will see words stating the corporation's intention is to impact positively on the communities in which they reside and the environment. However, I can tell you after 30 years as a engineer in corporate America, that when it comes time to make choices, the unstated driving principle is to do as little as possible as late as possible. This should not be a surprise, because it generally makes good economic sense. Fixing pollution problems generally takes a capital investment followed by ongoing operating costs. If your company operates in a mature highly competitive industry and is polluting the river, you don't want to fix the problem because it will add to your cost of manufacture. If and when your competitors have to do likewise, this will level the playing field; but the longer you wait the better.

The PCB's in the Fox River are however a wholly different matter. The pollution was released into the river in the 50's, 60's and early 70's. Now the companies face the liability. There is no ongoing cost advantage of delay.

One could say, "how about the time value of money." If the companies hold onto their money and spend it later, it will cost less because they have the earnings growth on that money for a longer period of time. Well, how about the increasing cost of the cleanup. Does anyone think it isn't going to get more expensive to dredge rivers and dispose of sediment? On top of general inflation and diminishing landfill site availability driving up the costs over time, we have the fact that PCB's are washing into Green Bay where the dredging costs will be higher than the Fox.

And what about the costs of litigation associated with determining how a contaminated site will be cleaned up and who will bear the costs. Costs of litigation and associated transactions have been reported to reach as high as 40% of the cleanup costs at Superfund Sites. The longer the proceedings drag on the higher the lawyer bills will become.

More about Superfund Sites: What if the "do as little as possible, as late as possible" mentality wins out and the EPA has to step in and declare the Fox River to be a Superfund Site (CERCLA, 1980; SARA, 1986). The liability is very broad under this statute. It is "retroactive, strict, and joint and several." Any one of the paper companies could be held responsible for the whole cleanup bill. As manager of a company, I wouldn't want to put my shareholders in that much risk. Just the threat of a potential Superfund Status affects the cost of running a company. Bond ratings and stock prices are effected. Garber and Hammitt in their article in Journal of Environmental Economics and Management 36, 267-294 (1988) estimate that the increase in the cost of capital is between .25% and .40% for large companies who are exposed to Superfund liability.

My comments to the DNR/EPA public hearing on the proposed Fox River Remedial Action Plan on Oct 29 in Appleton were published in the Dec-Jan It's Our Nature. I gave examples of the large capital investments the paper industry periodically makes to replace their equipment (e.g., $250+ million for a new high quality printing paper machine). My point was that companies in this capital-intensive industry regularly make very large financial commitments. Also, I pointed out that they should have been (and probably have been) accumulating money into reserve accounts for years. Furthermore, I would expect that these companies have and had liability insurance in place that will cover much of the damages.

There are seven paper companies on the hook to pay for the PCB cleanup. While they will not all pay the same share, it is worthwhile to divide by seven to get some idea of the impact on each company. The $308 million for the cleanup becomes $44 million each. These payments will be made over time -- probably at least 10 years. That is $4.4 million per year per company. Perhaps this is a little more than the CEO makes. Like CEO pay this is a tax-deductible expense, so the Federal Government will shoulder ~40% of the cost in lost income tax. Now we are down to $2.6 million per year.

And as for the rebuttal that workers in the valley will lose jobs - that is hooey. That fear tactic was valid in the early 1970's when the problem was an ongoing pollution problem that would cost a lot to correct. There is no ongoing PCB problem coming out of the mills. If the mill is making money for the company, why would the company shut it down? That thinking would only make sense if the payment caused the company to go bankrupt. Most of the companies are very large global corporations and the largest are those with the greatest percent of liability.

So, if I were to develop a course entitled Pollution Economics 101, these are some of the thoughts I would include in the session on "Cleaning Up for Past Damages." I welcome your feedback at 920-830-8553 or at a Group Meeting at Buboltz.

10/19/2001

Please, don't let any of my comments cause you to believe I am anything other than a total patriot. Dealing with the Attack on America and insuring the safety of our people must be our most urgent national concern. However, I am wondering how these tragic events and our response are going to effect the environmental movement. Our President seems to be doing a good job in dealing with this crisis. As I write this, his rating among Americans is at an all time high. This could make it more difficult to challenge his not-so-admirable plans for the environment (such as the restudy of the Clinton administration's exhaustive evaluation of the need for lower arsenic limits in drinking water, reevaluation of the National Monuments, drilling the ANWR, etc.).

This War on Terrorism could spread to oil producing countries such as Iraq, thus triggering an oil crisis, which could make it more difficult to stop the drilling in the Arctic National Wildlife Refuge. But conversely, a serious oil shortage could trigger conservation moves (e.g., more stringent CAFE standards). Mostly I am wondering about President Bush's plea for worldwide support to fight terrorism. When he made his plea to the world it struck me immediately that we had just refused to participate in the worldwide push to reduce Greenhouse gas emissions as outlined in the Kyoto treaty. The parallel is striking. President Bush seems to be getting the support he wants, as well he should, it is in the best interest of all peace-loving people in the world. But when the Global Warming issue is back before the world community, the United States' current position will be difficult to defend. Not just Global Warming -- the US may have to rethink some other positions we have taken --- the use of land mines, biological warfare.

When you are the biggest guy on the playground, you tend to go along with the other kids as long as it is in your best interest, but when it isn't, forget it. You don't feel you need to compromise. It is difficult to be the biggest and not be a bully. Where did that expression come from - power corrupts and absolute power corrupts absolutely?

We are still seen in much of the world as the Ugly American, even though the book was published in 1958. In my corporate life I traveled the world extensively for six years and was always struck by the different views of people elsewhere. We are seen though our movies, our music, our drug addiction rates, our crime statistics, and yes the impression we make as tourists and business people abroad. All the world knows of our consumerism and our gluttony for fuel. We are seen as self obsessed, indulgent and decadent. And we are known as the only major industrial nation that refused to agree to the Kyoto protocol. Will we recognize a need to change this inflexible position in light of our need for cooperation and support by the rest of the world to fight terrorism?

There are some right-minded people who have been working along these lines. In 1987 the United Nations World Commission on Environment and Development issued a call for creation of a new charter that would set forth fundamental principles for sustainable development. The final version of the Earth Charter was approved in 2000. The Earth Charter is the product of a decade long, worldwide, cross-cultural conversation about common goals and shared values. The preamble reads:

"We stand at a critical moment in Earth's history, a time when humanity must choose its future. As the world becomes increasingly interdependent and fragile, the future at once holds great peril and great promise. To move forward we must recognize that in the midst of a magnificent diversity of cultures and life forms we are one human family and one Earth community with a common destiny. We must join together to bring forth a sustainable global society founded on respect for nature, universal human rights, economic justice, and a culture of peace. Towards this end, it is imperative that we, the peoples of Earth, declare our responsibility to one another, to the greater community of life, and to future generations."

If you would like to read the whole Charter, you can go on the Internet at www.earthcharter.org.

07/26/2001

In the last "From the Chair" I talked a lot about the emerging water crisis. While the Water Wars of the future can be seen on the horizon in their growing intensity, Sprawl seems to be emerging as the crisis of the first decade of the 22nd century. While traveling in Minnesota in July I read a well-written editorial on Sprawl in the Star Tribune of the Twin Cities. While much of the article would be of interest only to Minnesotans, much seems very relevant to our situation in the Fox Valley. The following has been excerpted from the July 15, 2001 Star Tribune editorial Metro Sprawl and reprinted with permission, Star Tribune.

[The articles were printed in our group newsletter.]

04/06/2001

I promised in my last letter to tell you how I became your chairperson and how I was happier before I gave the environment any thought.

Let's start in 1950. I was 10 years old and living in Decatur, Georgia in a middle-class neighborhood. My dad always had me assist him on his weekend projects. We were building a stone wall in the back yard and I had several jobs, one of which was to mix the cement, sand and water to make the mud for his application to the wall. When he was showing me the procedure, he would throw the hose on the ground between steps and just let it run. I inquired about the waste and he said "Don't worry about it, water is free". Well, I questioned how that could be so and he just said "It is so cheap, it might as well be free." Understand my father was a very frugal man. We didn't pay anybody to do anything. There were lots of weekend projects, which is the excuse I used later to explain why my acumen in the area of sports was so poorly developed compared to my peers.

Our perception of the value of our natural resources has changed a lot in the past half century, and will continue to change ever more rapidly. For example, some of us can remember gasoline for $.25/gallon (leaded of course). As an engineer working in a paper mill in the early 1970's we woke up one morning to an energy crisis. OPEC was driving the price of a barrel of crude through the roof. As we were standing in gas lines for our personal autos the emphasis in the mill rapidly shifted from productivity to energy conservation. There was little elasticity in demand for fuel in the short term, but over years we started driving smaller cars and making the energy conservation moves in the mill and oil prices started to fall. This was possibly the dawning of environmental consciousness for many of us.

For me the real jolt into reality came in 1987. In that year we (my wife and I and son -- age 5) were transferred by my employer to Mexico City. Many of you have been there and you know what is coming. Every Gringo knows not to drink the water or even eat the vegetables unless they are soaked in iodine solution to kill the bacteria. In addition to the famous Montezuma's revenge, our team of los Americanos contracted amebas, salmonella, typhus, and hepatitis. But the real problem was in breathing the air. My wife developed asthma, which persists to this day. Mexico City at that time had 30 million inhabitants and 5 million autos, all running unleaded gas and belching out fumes like you have never seen - no auto emissions standards there. Factories in the city had no air standards that were enforced. A bribe in the right place took care of things more cheaply. For our home we brought air cleaners with hepa filters from the US, which made it possible to breathe at night. Outside our eyes burned continually from the ozone. We never saw a wild bird the whole time we lived in Mexico City. While we loved many aspects of our stay there, the pollution drove us out after a year and a half.

My training in business had made me a strong believer in free enterprise, but I came back from Mexico with the knowledge that man really could and would poison himself and everyone around him, if no higher authority exerted control. I saw needs for governmental control where I hadn't seen them before and saw that sometimes government needs a little wake up call. This is when we joined the Sierra Club. I wish I could be like my dad and just let the water run, but things have changed and now control of fresh water shows signs of developing into a major environmental/political battleground.

02/13/2001

As the new group chair I am a bit overwhelmed with several things: the amount of communication required and the number of issues facing us.

Penny and I wrote about the need for some additional cash infusion in the last newsletter, so I won't deal with that again here except to express thanks for those people who have sent in checks - they are highly appreciated and greatly needed.

We have the annual Fox River clean up coming just around the corner in April. Jim Parker and his group of site leaders will handle that with great proficiency. We will be sponsoring the annual statewide Sierra Chapter meeting in our area during October. Dale Schaber and his team have that under control. This promises to be a fun learning experience. Hope you plan to participate.

We have great committee heads (some new and some veterans) who have grabbed hold of their responsibilities with vigor and enthusiasm. So what am I worried about? Well, maybe its just anxiety about trying to effectively lead this group, but I think we have some real concerns and I don't know how they will play out.

On the local level we face the ongoing saga of the PCB's in the Fox River. I have studied the long history of this struggle and we always think the final solution is just around the corner. With each passing year some new wrinkle comes along and adds to the complexity. It has been studied to death. Will we finally start to see the light at the end of the tunnel during my watch - I hope so.

Also local, the emergence of mega-farms in Calumet County is a new concern. We are struggling to ensure that the potential environmental impact will be thoroughly evaluated prior to approval, but I sense we are losing this one. My personal belief is that a large dairy farm should be looked at as a biochemical processing plant. The cows are simply chemical reactors turning grass and corn into milk. The fact that these reactors are alive shouldn't cause the factory to be treated any differently than a pulp mill or a plastic plant.

Statewide we face the wetland emergency caused by the US Supreme Court's decision that the US Army Corp of Engineers did not have the authority to regulate the filling of wetlands that are not adjacent to navigable waters. This leaves 80% of Wisconsin's wetlands without protection. Hopefully this issue has been effectively addressed by state government by the time you read this.

On the national level, we lost in our battle to convince the Senate not to confirm Gail Norton as new Secretary of Interior. Who knows what is coming in the Arctic Wildlife Refuge and elsewhere? We can expect to be writing lots of letters and making phone calls to our senators and congressmen in a constant defensive fight to not lose our national treasures.

On a national level, but local as well, there is the ever-worsening urban sprawl issue. We are covering our land with concrete and asphalt at an alarming rate and much of it in a not very intelligent fashion. This seems like a battle of the "goods things" of modern life in a free world. Striving for a better quality of life for oneself and family is natural and we all engage in this pursuit. We believe we have a God given right to buy and alter land to meet our needs. With increasing population as an additional driver, there is tremendous pressure on our natural resources --- land, water, fossil fuels --- and urban sprawl is just one symptom. This is going to be a tough battle, because most of us aren't even sure yet where we stand.

On a worldwide level, we have the issue of global warming. The build-up of green house gases marches on as the world population grows and countries hurry to catch up with our standard of living. Can we blame them? I feel we are a species that is growing out of control. This is the greatest concern of them all. The consequences are going to be devastating and our ability to effect any remedy seems remote at this point.

Of course, I know it isn't my job or our job alone to solve all these problems. But these are some of the games we are playing and losing is not a viable option. This is deadly serious stuff. I hope I haven't left you all depressed. The Serenity Prayer seems appropriate when in this state of mind:

God grant me the serenity To accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference.

Perhaps in my next letter I will tell you how I ended up here and how I was happier before I gave the environment any thought.

Responses are appreciated.

John C. Howard --- 920-830-8553 or JCarterH@aol.com

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