Honolulu’s Poor Economic Growth and What to Do about It

The Brookings Institution, rated No. 1 think tank in the world, published the Global Metro Monitor update which “provides economic growth data.” Where does Honolulu rank among 300 cities? It ranks 284th for the 1993 to 2007 period, and 217th for the 2007 to 2011 period. Honolulu ranks 54th in terms of population in the U.S.

While Honolulu ranks 284th, for the same period Portland ranks 93rd, Tucson ranks 100th, Tampa ranks 106th, Salt Lake City ranks 130th and depressed Cincinnati ranks 206th. Honolulu is much closer to 297th ranked New Orleans than any of its peer cities.

Why is Honolulu ranking so low? In large part because of the excessive waste of funds on unproductive endeavors. Unfortunately, this is a lesson that has not been learned. Here is a list of 10 large mistakes:

1. We invested in the 2nd city and more housing. As a result we get worse congestion and continuously escalating housing prices because of land controls. Creating a 100,000 population city on prime agricultural land is a mistake that Honolulu county will be paying for, for centuries.

2. We invested in buses: 200 more buses, express buses, and HandiVan in the last 30 years. Yet we got flat ridership. In 1980 Honolulu had 760,000 residents and TheBus carried 71.6 million trips, or 7.5 trips per resident per month. In 2010 Honolulu had 960,000 residents and TheBus carried 73 million trips, or 6.4 trips per resident per month, a 15% drop in per capita productivity. Transit is a declining business.

3. The last thing we need is a multi‐billion dollar investment in transit. But that’s a local priority!

4. We invested in high-occupancy and zipper lanes but we don’t do anything to manage the flow on them.  As a result drive alone and carpool share was 81% in 1990 and 81% in 2012. More people drive alone now than 20 years ago, despite the tripling of fuel prices. Carpooling has lost share because the freeway HOV lanes provide a low travel time benefit.

5. We invest in government. As a result we get over-regulation and slow innovation. Many government operations in Hawaii still use carbon copying and physical walking of papers from place to place, then pay extra workers to enter the information on a computer.

6. A private consortium launched the Superferry. The supermajority of people loved it.  Corporatist politicians and special interests killed it.

7. We invest in junk renewables like concentrated solar. Taxpayers paid millions in tax credits to a company on the Big Island that installed 1,008 panels on four acres of land to produce 0.1 MW which is mostly used internally and no power is sold to HELCO!

8. We do not invest much in tourism, infrastructure upkeep, congestion relief and park cleanliness. Despite the brouhaha about our banner 2012 year for tourism, the fact is that growth in tourism has not kept up with Honolulu’s modest growth in population: In 1990 we had about 8 visitors per local resident. In 2010 we had 7.25 visitors per local resident. Taxes generated from tourists do not keep up with local needs for services on a per capita basis.

9. Now we want to invest in "one iPad for each public school student" as if Apple can stuff knowledge in pupils’ brains.

10. We also want to invest in one super-casino so we can collect voluntary money losses from gamblers. We seem to know how to get from 284th to 300th.

What if we wanted to improve our ranking (and our quality of life)?

First we need to place our trust on data and not on “visionaries.” Given Hawaii’s great loss in Congressional seniority, an economic decline followed by bumpy stability will be the trend as I explained previously. Honolulu’s basic 0.5% annual growth will be flattened by local, national and international pressures.

Then proceed with this sample half dozen of economically productive actions:

1. Plans focused on growth for Oahu must be abandoned.
2. Top Priority: Maintain, Rehabilitate, Replace, Modernize.
3 Scrap rail. Use $3 billion to fix roads and add express lanes and urban underpasses.
4. Scrap wind. Focus on natural gas, waste‐to‐energy and geothermal.
5. Scrap the EPA agreement for secondary sewage treatment. (Many cities are taking EPA to task for its unreasonable consent decrees.) Focus on accelerated replacement of water and sewer lines.
6. Manage current and future budgets to sustain item 2.

[Also published in Hawaii Reporter.]

China Develops the Ultimate Definition for Fake

Very few things blow the wind out of me these days, but last night's 60 Minutes story on China's real estate was an astounding surprise.

Whole cities, countless of highrises with thousands of mid- and upper-luxury apartments, thousands of parking stalls, hundreds of miles of landscaped and illuminated city streets, and multistory shopping centers.  All brand new and ALL EMPTY.  Totally vacant. Never occupied.  AND NEARLY 100% SOLD!

Welcome to the fake world of development of resources that few need and much much fewer can afford. The article China's Ghost Cities provides a summary but you need to watch the 60 Minutes story.

There could be well over 100,000 people in this town. There is nobody there. Such an unabashed waste of effort and resources!

Poop Powers Zoom Zoom!

Furthering the efforts of recycling, re-use and sustainability, Bristol, UK water and sewer company has developed infrastructure to produce methane-based biogas from sewage waste, clean it from its high content of CO2 and fuel cars with it.

 Remarkably, they claim that... poop from 70 homes can power this Bug for 10,000 miles!

Compressed Natural Gas is not new as a fuel for vehicles. Just to name a few, Athens, Rome, Seattle-Tacoma and Seoul use GNG in all or most of their public transit bus fleets.  Australia has tens of thousands of private cars powered by CNG or LPG, which is liquefied petroleum gas.

The main sources are, as their name implies, Natural Gas and Petroleum Gas. A third source of methane is organic matter decomposition (which actually created natural gas in the strata of the earth over the millennia.)

Renewable sources of organic matter include biomass, food waste and ... poop. Sludge, the accumulation of solids at waste treatment plants, is often problematic even for cities like Honolulu which has two Waste-to-Energy facilities, so it typically up in the landfill. (Honolulu had a contract to develop fertilized pellets from it, but the venture was not successful.)

The dumping of thousands of tons of sludge is, of course, a lose-lose situation because of the loss of land and the loss of an energy source at the same time. Bristol's Wessex Water has developed and biogas and demonstrated the Bio-Bug, which other than a simple modification to the fuel supply and storage system remains a conventional Bug with the original engine (and in most similar applications the car is switchable on-the-fly between gasoline and methane/propane/butane.)

Where is Hawaii Transportation Headed?

Remarks to the Hawaii Venture Capital Association and ThinkTech Transportation Panel, Plaza Club, February 28, 2013.

Aloha and thank you for the opportunity to present you my take on the future of transportation in Hawaii.

• Honolulu has among the nation's worst quality roads.
• Honolulu has among the worst traffic congestion particularly among peer cities.
• Hawaii has among the highest rates for drunken driving.

To solve all these highway related problems, Honolulu ordered a 5 billion dollar train.

The unquestionable and predictable result is that all these problems will get far worse by the time the train is installed. And by that time Honolulu will be short on transportation funds.

With less funding, there is no doubt that the congestion, maintenance and safety problems will get even worse.

In December 2007 Hawaii got the private Superferry. This was a means to get bulky items, equipment and vehicles between islands in 3 to 6 hours instead of 3 to 6 days. However, Hawaii did its best to preserve its way of moving bulky items, equipment and vehicles between the islands in 3 to 6 days.  A key supporter of the Superferry's execution is now Hawaii’s Representative in Congress.

Hawaii is probably the most oil dependent place on earth. Sure many Greek and other small islands depend on diesel generators to make power but their winter population is usually 1,000 to 10,000 people. Here we have 1.5 million people in the middle of the Pacific and we are about 80% dependent on oil and its volatile pricing.

Instead of investing in solid alternatives like coal, natural gas, trash and geothermal, we are now approaching the waste of one half billion dollars on flaky wind and solar.

Worse yet, we are extremely fuel dependent for land, air and sea transportation. Smart government should have found means to develop gobbles of cheap electricity so that we can extract fuels from algae and biomass to fuel vehicles, boats and airplanes.

But our flaky government is concerned with plastic bags and shortcuts to development, like the PLDC. And we are losing the Tesoro refinery.

The Tesoro plant used to make asphalt, but county and state government wouldn’t commit to a schedule of road repairs. So about 10 years ago Tesoro stopped making cheap asphalt. So now we need to bring it in and store it.

Hawaii government promotes EVs by making expensive, anti-business mandatory parking and charging regulations. At the same time Hawaii offers EV buyers the highest electricity rates in the nation, to punish EVs as much as possible.

The cost of power in Hawaii is three times the US average. So the 90 MPGe Nissan Leaf is 30 MPGe in Hawaii. Do you know how many conventional cars you can buy that deliver 30 mpg or more, and have a much lower price, and require no subsidy like the five grand we dole out for each EV?

And answer me this. Why are we even promoting EVs when 90% of our electricity comes from oil and coal? Each EV that clocks about 50 miles per day consumes as much electricity as a modest house with 4 people. Isn't this a fake and indeed disastrous oil independence policy?

Again thanks to our silly renewable mandates the KWh rates will only go up, so we will get less power, less reliability, and higher rates.

What's the future of transportation in Hawaii you ask?  In the past quarter century, transportation (except for TheBus,) public education and energy performance in Hawaii have ranked in the bottom half in the US or very near the bottom. I expect that this level of poor performance will get worse.

Although there are great alternatives, Hawaii is actively burying its potential for a bright future. Cost-effective decision making, long term sustainability planning, and accountability with stiff penalties are all absent. And so is our chance for improvement.

Mahalo!

Transportation and Economy

This is a 22 minute lecture on the very many facets of Transportation and its effect in the regional, national and world Economy.

It's in the format of a movie for my public access TV show Panos 2050: Sustainable Solutions for Hawaii on Transportation and Economy.

Click the link and wait a few seconds for the movie to load.

Energy from Trash Should Be a Priority for Hawaii

Read the full article in Honolulu Civil Beat. Selected highlights:

The long term economy of Waste to Energy (WtE) plants is very good. There is plenty fuel (trash, waste and biomass). Municipalities pay the WtE plant to take their trash. The utility pays the WtE plant for the mega-watts of electricity it produces. Trash volume reduces 6 to 10 times so landfill demand is minimized.

• Sweden imports waste from other Europe to fuel its WtE program. Maui should install a WtE plant and bring in trash from Big Island, Lanai and Molokai. Oahu should plan for another 100 MW of WtE (about half of it tuned to burn biomass, sludge and manure) and bring in trash from Kauai. Barges return to Honolulu from Kauai practically empty.
• Both Oahu and Maui should consider ordering a sophisticated MRF, or Materials Recovery Facility, to better sort materials such as glass (by color), stones and similar inert materials, and all types of metals out of the trash. This would result in a cleaner burn at the WtE plant and revenue from recyclables, e.g., mixed glass is nearly worthless but glass sorted by color has value. So do sorted metals.
• To make Oahu more sustainable we should revise what we currently trash and what we recycle at home in the BLACK, GREEN and BLUE bins, as detailed in the post below.

Last but not least, The Economist notes that "Energy from waste plants that use trash as a fuel to generate electricity and heat continue to have an image problem. That is unfair, because the technology has advanced considerably and has cleaned up its act." As depicted in the image blow, very large part of modern WtE plants is devoted to pollution control.

Oahu Household Recycling

• Honolulu has the most expensive electricity rates among U.S. metro areas, by far.
• Oahu makes about 8% of its electricity from trash. It should plan to make 20% by 2020.
• Oahu generates thousands of tons of paper, plastic, and cardboard trash. This is free fuel for the production of electricity. Instead of making power with it, we waste energy to bale it and ship it out. That’s nuts!
• The next four slides explain what to recycle and what to throw in the trash.

 

Americans With No Abilities Act

I could not resist posting this hilarious chain email. Of course it does not apply to 50% of the Americans, but it does portray quite a few...
.................................

The Americans With No Abilities Act is being hailed as a major legislative goal by advocates of the millions of Americans who lack any real skills or ambition.

"Roughly 50% of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society," said California Sen. Barbara Boxer. "We can no longer stand by and allow People of Inability (POI) to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of workers, simply because they have some idea of what they are doing."

In a Capitol Hill press conference, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid pointed to the success of the U.S. Postal Service, which has a long-standing policy of providing opportunity without regard to performance. At the state government level, the Department of Motor Vehicles also has an excellent record of hiring Persons with No Ability (63%).

Under the Americans With No Abilities Act, more than 25 million mid-level positions will be created, with important-sounding titles but little real responsibility, thus providing an illusory sense of purpose and performance.

Mandatory non-performance-based raises and promotions will be given to guarantee upward mobility for even the most unremarkable employees. The legislation provides substantial tax breaks to corporations that promote a significant number of Persons of Inability (POI) into middle-management positions, and give a tax credit to small and medium-sized businesses that agree to hire one clueless worker for every two talented hires.

Finally, the Americans With No Abilities Act contains tough new measures to make it more difficult to discriminate against the non-able, banning, for example, discriminatory interview questions such as, "Do you have any skills or experience that relate to this job?"

"As a non-able person, I can't be expected to keep up with people who have something going for them," said Mary Lou Gertz, who lost her position as a lug-nut twister at the GM plant in Flint, Mich., due to her inability to remember righty tighty, lefty loosey. "This new law should be real good for people like me. l finally have job security." With the passage of this bill, Gertz and millions of other untalented citizens will finally see a light at the end of the tunnel.

Said Sen. Dick Durbin: "As a senator with no abilities, I believe the same privileges that elected officials enjoy ought to be extended to every American with no abilities. It is our duty as lawmakers to provide each and every American citizen, regardless of his or her inadequacy, with some sort of space to take up in this great nation and a good salary for doing so."

We have kick-started this program by having a POI in the White House.

Honolulu at the Bottom of Top 300 Cities

Shortly after publishing the post on Honolulu's and Hawaii's "no change" situation of the last three decades, I saw the Global Metro Monitor update of the Brookings Institution (a think tank.) Yet another non-flattering economic statistical outcome for socialist-heavy (Democrat) Honolulu.

Blue cities (Democrat majority) are actually mostly red (weak economy).

Hawaii Over The Past 20 Years: Minimal Change, Minimal Growth. What Should Hawaii Plan For?

Annual U.S. Bureau of the Census data strongly suggest that Hawaii, and Oahu in particular, are stable communities with very mild growth and change particularly after the turn of the millennium.

The data suggests that mega-projects such as rail and "big wind", and mega-developments such as Ho'opili and Koa Ridge are ill conceived and unnecessary.

This slideshow provides both data evidence and brief discussion.

Politicians have engaged in biased or data-free decision making for decades. The mounting debts are sufficient proof that ignoring the trends and serially engaging in unproductive activities simply digs a deeper hole. Both Hawaii and the US are approaching the danger of the hole walls caving in and burying them, much like the PIIGS* and other countries.

What should Hawaii do in the next two decades?  The last slide provides the answer. In three sentences:

• Decline followed by stability will be the trend.
• Send “visions” and mega-projects to the cemetery.
• Maintain, Replace, Modernize should be Priority 1.

(*) Portugal, Ireland, Italy, Greece, Spain

Transportation and Energy Infrastructure Projects: Forecasting is Unnecessary

I enjoyed Dr. Martin Wachs' brief article Planning for High Speed Rail (HSR) in California. It centers around planning and forecasting: "The current debate is divisive precisely because improved data and models cannot provide a better glimpse into the future" Wachs says.

After nearly three decades in planning and policy, and six years involvement in local politics I have come to believe that forecasting is unnecessary as a primary decision making tool. Why?

Because transportation infrastructure deployment lags demand by decades. Why do we need to forecast 20+ years into the future? The need is present (or not.) Current data are the best quality data we have. So instead of making numerous uncertain assumptions about a future we do not control, let's assume that the project is built overnight and assess its benefits at the present time.

In the case of Hawaii, when I first relocated here in 1990, traffic congestion was the No. 1 issue and has remained in the top 10 ever since. Twenty three years later, roadway capacity addition has been marginal and most major bottlenecks have not been addressed. So why does the city's planned rail project have a 2030 horizon?

I think the answer is this: The proposed rail does not generate enough ridership with the current population so artificial demand balloons for population and jobs in 2030 are "forecast" to justify the system.

Similarly California has a population of 38 million with huge concentrations in Los Angeles and San Francisco metro areas. If HSR does not work for 38 million, then it won't work. Why is a 20 to 50 year projection needed?

Worse yet, the typical  planning models lack credibility because they are never tested with back-casting.  If Parsons Brinkerhoff's model is trusted to predict transit ridership (bus and rail) in Honolulu with year 2006 as baseline and 2030 as the horizon, does it also predict transit ridership for 1982?  In other words, we should check the model's ability to project forward by using the 24-year period from 1982 to 2006; for which we have perfect information. How does the model do?

I think the answer is this: It does very poorly and for this reason back-casting is never applied.(1)

Obviously, since the inception of a project, several years go by for environmental studies, design,  engineering, funding, bidding and construction. So a 10 years-out plan and forecast is needed. But multi-billion dollar energy and transportation infrastructure projects should be justified by their "now" value and not by future demand balloons.

If the projects are beneficial "now" then long range forecasts can be performed for selecting the proper size for them. For example a reversible highway sized at two lanes for sufficient congestion relief may need to be built with three lanes to accommodate future demand. Similarly a 1,000 MW power plant may be engineered with a 1,200 MW capacity for the future.

Projects funded with private capital, fully or partly as in Public-Private Partnerships, sophisticated risk analyses that protect investment from foreseeable risks are conducted. These meticulous and carefully inspected forecasts of project costs and revenues have little in common with the manipulated forecasts for taxpayer funded and subsidized systems, primarily transit systems.

For taxpayer funded projects forecasting is unnecessary and indeed misleading for decision making. It is commonly used a tool for deception, particularly for rail projects.(2)


Endnotes

(1) My students and I investigated the accuracy of traffic volume forecasts primarily in the agriculture-to-residential mega developments in Ewa between 1976 and 2002. We found this:

The study compared forecast traffic levels from Traffic Impact Analysis Reports prepared between 1976 and 2002 to actual traffic volumes recorded by the Hawaii State DOT in the city and county of Honolulu. The information extracted uniformly from 11 reports included year of report, consultant, type of project, location, movement, forecast horizon, forecast traffic volumes and forecasting method.

This study focused on road and residential developments and examined the accuracy of traffic demand forecasting, the conservative or optimistic tendency in traffic forecasts and the potential factors affecting accuracy. The results revealed that traffic forecasts are on average overestimated by 35% and there is a clear tendency to overestimate future traffic volume. Errors ranged from -40% to +200%.

SOURCE: Caroee, Maja, Panos D. Prevedouros and Alyx Yu, Volume Forecasts for Environmental Impact Statements and Traffic Impact Analysis Reports: Accuracy of Road and Residential Developments in Honolulu, Paper 13-1398, 92^nd Annual Meeting of Transportation Research Board, Washington, D.C., 2013.

(2) Flybjerg, Bent, et al., Delusion and Deception in Large Infrastructure Projects (2009)