It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, December 20, 2020
OPINION: Why the US still has mask and glove shortages
By Doyle McManus Sunday, Dec. 20, 2020
There’s been some good news about the pandemic this week along with all the bad: A first vaccine is being rolled out, and another is on the way.
But a long, hard winter still lies ahead, and we’re facing a serious — and completely avoidable — problem: Health care workers once again don’t have enough of the masks, gloves and hospital gowns they need to protect them while they treat COVID-19 patients.
Demand for those mundane but essential items is soaring because of the surge in COVID-19 cases, and it will grow again as the vaccination campaign escalates. But 11 months into the pandemic, the world’s greatest industrial power still hasn’t found a way to meet the need.
In a survey last month, more than half of hospitals’ infection prevention specialists reported that they were wearing their N95 protective masks designed for one-time use five times or more.
A charitable group that distributes supplies to struggling health facilities, Get Us PPE, reports that incoming requests for help are 200% higher than in mid-November.
And in an AARP survey of nursing homes, 19% of facilities reported last month that they were down to less than a one-week supply of PPE.
“The U.S. continues to face shortages of personal protective equipment, testing supplies and other medical supplies needed for the COVID-19 pandemic,” the nonpartisan Government Accountability Office reported Nov. 30.
“Big hospitals, well-funded facilities with buying power, are doing OK,” said Dr. Shikha Gupta, Get Us PPE’s executive director. “The problem is worst in non-hospital facilities — independent clinics, rural providers, nursing homes, homeless shelters. Those are the groups that are struggling. There’s no central place for them to find suppliers and supplies that have been vetted.”
When the pandemic arrived in the United States in January, President Donald Trump called for an “industrial mobilization” to meet the country’s medical needs.
At first, the effort was impressive. Congress quickly provided more than $2 trillion in funding. The Trump administration launched a crash program to manufacture ventilators and deliver them to states.
Private industry responded, too. When the pandemic hit, the United States produced about 20 million N95 masks a month; now production is running at about 150 million a month.
But that still isn’t enough to meet demand in a surge, and industry leaders say they can’t get there — not without government funding to pay for production lines that might turn out to be unnecessary if the pandemic ebbs next year.
“We have more demand than we can supply,” the CEO of 3M, the country’s biggest N95 maker, told the Wall Street Journal last month.
How has this happened? Blame the Trump administration.
The administration could have used the Defense Production Act, a law that allows the president to grant or loan money to industries to build factories for critically needed goods.
But the U.S. Chamber of Commerce lobbied against the idea, and Trump agreed, saying that it would amount to “nationalizing our businesses.”
So after a handful of initial investments in PPE production in April, the administration’s attention turned elsewhere — to vaccines, a more exciting crash project that captured the president’s imagination.
Besides, why invest in more protection for doctors and nurses when the crisis would soon be behind us? Trump and his aides spent most of the presidential campaign assuring voters that the pandemic would soon be over.
Another GAO report last month found that by the end of September, the administration had used less than half of the $1.5 billion initially allocated for PPE and other medical equipment.
The administration hasn’t even met its own targets for replenishing the Strategic National Stockpile of medical equipment, the GAO found. In May, the White House said it planned to increase its reserve of N95 masks to 300 million, but by mid-November the stockpile had only 107 million of the masks.
During his presidential campaign, Joe Biden said he wouldn’t hesitate to use the Defense Production Act to provide more medical gear. But the time for investing in production and supply chains was last summer, when the pandemic briefly slowed down.
Trump and his aides deserve credit for getting ventilators to hospitals last spring, for pushing for vaccine research, and for organizing a massive operation to distribute the antiviral shots.
But the rest of their response to the pandemic — their failure to organize the national testing program Trump promised, the abandonment of any effort toward contact tracing and, most painfully, the failure to ensure a reliable supply of simple items like masks and gloves — will be remembered as studies in public mismanagement. Doyle McManus is a columnist for the Los Angeles Times.
CRIMINAL CAPITALI$M; THE MODI MOB Nirav Modi’s brother Nehal charged with USD 2.6 million diamond fraud in NY He has been charged with Grand Larceny in the First Degree
Nehal Modi, the younger brother of fugitive diamantaire Nirav Modi, has been indicted in New York for fraudulently obtaining diamonds worth over USD 2.6 million from one of the world’s biggest diamond companies in Manhattan.
Nehal, 41, is charged in a New York Supreme Court indictment with Grand Larceny in the First Degree, Manhattan District Attorney Cy Vance Jr said.
“While diamonds maybe forever, this flawed scheme was not, and now Modi will face the clarity of a New York Supreme Court indictment. My Office will not allow individuals who have the privilege of soliciting business in Manhattan’s iconic diamond industry to defraud our businesses or consumers,” Vance said in a statement on Friday.
According to the indictment, court filings, and statements made on the record in court, between March 2015 and August 2015, Nehal, a former member of Noble Titan Holdings, made false representations to obtain over USD 2.6 million worth of diamonds from LLD Diamonds USA on favourable credit terms and consignment, and then liquidated the diamonds for his own ends.
The statement said that Nehal, “who comes from a well-known family in the diamond industry”, was initially introduced to the president of LLD Diamonds through industry associates.
In March 2015, he approached LLD, claimed that he was pursuing a relationship with Costco Wholesale Corporation and asked the New York-based diamond company to provide several diamonds, worth nearly USD 800,000, to present to Costco for a potential sale.
After LLD provided the diamonds, Nehal falsely informed the company that Costco had agreed to purchase them. Subsequently, LLD allowed him to purchase the diamonds on credit, with full payment required within 90 days. He then pawned the diamonds at Modell Collateral Loans to secure a short-term loan, the Manhattan District Attorney’s office said.
Between April and May 2015, Nehal returned to LLD three additional times and took more than USD 1 million worth of diamonds for purported sales to Costco. He made a series of payments to LLD, but used the majority of the proceeds for personal use and other business expenses.
To cover his fraud, Nehal falsely claimed that he was encountering payment issues due to a “Costco fulfillment error” and made repeated promises to satisfy the balance, the statement noted.
In August 2015, Nehal returned to LLD again and falsely claimed that Costco wanted to purchase additional diamonds. This time, LLD permitted him to take the additional diamonds on consignment, with terms explicitly stating that he did not have the authority to sell the diamonds without authorisation by LLD.
LLD also required a partial payment upfront in the event of a sale, as Nehal’s outstanding balance was nearly USD 1 million at that time.
Nehal had already contacted Modell to arrange an additional loan. After picking up the diamonds from LLD, he pawned the majority of the diamonds at Modell to secure two separate loans and sold the remainder of the diamonds to various retailers at a steep discount from the listed consignment price.
LLD ultimately uncovered the fraud and demanded that he immediately pay his outstanding balance or return the diamonds. However, he had already sold or pawned all of the diamonds and spent most of those proceeds. LLD subsequently reported the fraud to the Manhattan DA’s Office.
Nehal’s brother Nirav, 49, is wanted in India on charges of fraud and money laundering in the estimated USD 2-billion Punjab National Bank (PNB) scam case. He remains at Wandsworth Prison in south-west London where he has been lodged since his arrest in March last year.
The Interpol has issued a Red Corner Notice (RCN) against Nehal on charges of alleged money laundering that is being probed by the Enforcement Directorate. Nehal was born in Antwerp, Belgium in 1979, and he knows languages such as English, Gujarati and Hindi, according to the RCN issued by Interpol.
The New York Post quoted Nehal’s defense lawyer Roger Bernstein as saying: “This is a commercial dispute” and that “Nehal is not guilty”.
A video on The Post website shows Nehal walking with Bernstein, who said “we are not discussing anything about the case” when asked about the Interpol notice.
£122m of PPE supplied by PPE Medpro to the NHS
has never been used
That's 25 million kilos of haddock in today's money.
PPE Medpro was started up by Anthony Page on the day he quit as the secretary of the company that deals with Baroness Mone’s brand. Just 44 days later it had won a Department of Health contract – not advertised to other bidders – to supply 25 million gowns for health workers.
As Jolyon Maugham of The Good Law Project noted at the time it was an example of “another hugely lucrative PPE contract awarded to a firm with no obvious qualification beyond links to very substantial donors to the Conservative Party.” But the real kicker seems to have come a few months later after it was revealed £122 million of its stock has never been used.
The DHSC told the BBC that contracts for the gowns must meet the British Standard for the sterilisation of medical devices or a “technical equivalent”.
PPE Medpro followed this second route. This required the DHSC to seek approval from the health regulator, the MHRA, for them to be used in the NHS.
The DHSC and MHRA declined to comment when asked for details of the approval application made for the Medpro products. There is as yet no record of PPE Medpro or either of its two Chinese suppliers on the regulator’s exemptions list, although it is understood the evaluation process is now under way.
PPE Medpro say they delivered 100 per cent of the contract to the terms specified.
The company said it supplied the equipment “fully in accordance with the agreed contract, which included clear terms as to technical specification and performance criteria of the products”.
“We did so in very challenging circumstances earlier this year and are very pleased to have been able to assist DHSC fully and properly at a time of national crisis,” it added.
Rupert Murdoch receives the Covid-19 vaccine in the UK
THE 1% GET THEIR VACCINATIONS FIRST AT TAXPAYERS EXPENSE “I strongly encourage people around the world to get the vaccine as it becomes available," Murdoch said.
The pay gap between companies and their chief executives is “shocking”, unions have said, calling on ministers to end the “runaway train” of inequality in British firms.
A report by the High Pay Centre think-tank revealed that online supermarket Ocado had the biggest pay gulf between those at the top of the company and those on the shop floor.
The company’s chief executive, Tim Steiner, was paid £58.7 million last year – 2,605 times the £22,500 paid to the average staff member. Steiner was therefore paid as much as the average Ocado worker’s yearly salary for just one day of work.
JD Sports was in second place, with its chief executive Peter Cowgill paid £5.6 million – but staff an average of just £18,300. Tesco meanwhile paid its outgoing chief executive 305 times the median pay at the supermarket chain.
Laurence Turner, head of research and policy at the GMB union, said: “This shocking and important report provides a vivid snapshot of the staggering inequalities and exploitation in the world of work on the eve of the coronavirus outbreak. “There is no business or moral justification for paying an executive an obscene ratio of more than 2,000 times the average worker.
“Action is needed, especially at a time when hundreds of thousands of jobs are under threat and households are struggling to make ends meet. Ministers, employers, and shareholders must all put an end to this runaway train.” ‘Improve fairness at work’
The report found that, across the UK’s 100 biggest stock market listed companies, chief executives earn 73 times the amount paid to workers on average.
Luke Hildyard, director of the High Pay Centre, said the findings provided “valuable new insight into the corporate cultures and working practices of some of the UK’s biggest employers”.
“These findings show that quite low levels of pay are commonplace for large numbers of workers at many of our major companies,” he added.
“Hopefully the disclosures can help investors, policymakers and of course the companies themselves think more deeply about how to improve fairness at work, and pay for low-paid workers in particular.”
An Ocado spokesperson said: “The pay ratio is particularly high for 2019 due to the inclusion of the growth incentive plan (GIP), which was a five-year award granted in 2014 and vested in 2019.
“The level of the GIP payment recognises the extraordinary performance of Ocado during this period when the business grew from a circa £1.5bn business to the multibillion pound technology-led global business we are today.”
WHY WE NEED SOCIALISM
UK
Health gap between rich and poor is widening,
Prof Chris Whitty says
“Ill health and disease concentrating in areas of deprivation is long-standing and needs to be tackled," Whitty said. The Chief Medical Officer’s Annual Report showed that poorer populations spend a greater proportion of their life in ill health; that women are having children later in life, and cases of dementia and mental illness are on the rise.
A gulf in life expectancy between the most and least deprived areas in England is widening, according to Professor Chris Witty.
The Chief Medical Officer’s Annual Report showed that poorer populations spend a greater proportion of their life in ill health; that women are having children later in life, and cases of dementia and mental illness are on the rise.
Life expectancy was the lowest for people living in north Cumbria, County Durham, and in areas of Lancashire and Yorkshire in 2019, where the average age of death was between 74 and 79, compared with southern areas where it was between 81 and 85.
On average, people in England spend 20 per cent of their life in poor health, and people in deprived areas of the North spend an even larger proportion of their life in ill health. ‘We have to improve it’
The report also showed that babies are more likely to die at birth in the most deprived areas of the UK, and among some ethnic minority groups.
Pakistani and black-Caribbean babies were more than twice as likely to die at birth compared with white babies, according to the latest data available – though the infant mortality rate for all ethnicities is lower than seven infant deaths per 1,000 live births.
Professor Whitty also described it as “striking” that “extraordinary improvements in life expectancy everywhere stalled relatively recently” – though this trend is also echoed in other developed countries.
He said in the report: “Ill health and disease concentrating in areas of deprivation is long-standing and needs to be tackled. Describing and deploring it is not enough, we need to have actionable plans to improve it.”
Speaking about the findings, Prof Whitty added: “Although Covid-19 has dominated the news, and remains an urgent priority, other diseases and health problems such as cancer and cardiovascular disease continue to take a major toll.
“There is wide variation in ill health across the country, and much of this is avoidable. It is possible to raise the health outcomes of the least healthy closer to the outcomes of the healthiest – we should be aiming for that.”
More people are also suffering from multiple chronic conditions, which particularly affects rural parts of the country that have large elderly populations and less accessible health facilities, according to the report.
Heart disease and dementia
The report also showed that women are having less children than in previous years, and parenthood is being delayed as women are increasingly becoming mothers over the age of 30.
It said that heart disease is the leading cause of death in men, while dementia is the leading cause of death in women, and dementia deaths have risen while mortality caused by heart disease and strokes has fallen.
Prof Whitty’s report also showed that suicide rates increased sharply among men and women in 2019, following decades of gradual decline, and highlighted how cases of severe mental illness such as schizophrenia and other psychoses are most concentrated in some coastal and urban areas including London.
Cases of self-harm among young people also increased between 2016 and 2019, with up to 1 per cent of people aged under 24 having been hospitalised due to this in some regions of the South West and the north of the country.
AUSTERITY ECONOMICS
UK
Use your household savings to bail out the economy, Rishi Sunak says
Some noted that Sunak - believed to be one of the richest members of the Cabinet - has more money to spend than most.
Workers who have saved heavily during coronavirus lockdowns must start spending next year to rre the British economy, Rishi Sunak has said.
Parliament warned that nearly three million people could have been excluded from the Treasury’s various support schemes throughout the pandemic.
But, speaking at an online event for Tory party members last weekend, the Chancellor said he “felt good” about the prospects of the UK economy recovering once the pandemic eased.
“I feel good about the bounceback – I think people have been sitting at home, building up some savings hopefully and we would like to go and spend them when we get back,” Sunak said.
His remarks drew swift rebukes – with some criticising the Chancellor for seeking to use household savings to do the Treasury’s job.
Others were quick to point out that Sunak – believed to be one of the richest members of the Cabinet – has more money to spend than most. It emerged recently that his wife and her family hold a multimillion-pound portfolio of shareholdings that are not declared in the register of ministers’ interests.
Akshata Murty – who married the chancellor in 2009 – is the daughter of one of India’s richest men. Her father co-founded tech giant Infosys, and she has shares in the company worth £430 million – making her richer than the Queen.
The ministerial code complex Sunak to declare any financial interests “relevant” to his job that might constitute a conflict of interests. Ministers are also supposed to declare the interests of close family members.
A report earlier this month, from the Centre for Business and Economic Research, found that households might have saved as much as 19 per cent of their disposable incomes in 2020.
That could equate to as much as £7,100 per households – or £197bn across all households, the Telegraph reported. The CEBR said: “The £197 billion question, therefore, is what will households do with this money that they have accumulated in 2020 when restrictions ease.
”Of course, a large chunk of these savings will have gone into pensions, which will not be available for spending for some time.”
No prizes for stating that the economy is in crisis. By late-June, government debt was £1.9 trillion, more than the entire national GDP; a debt not seen since 1963, following six years of Tory mismanagement under Chancellor and later PM, Harold Macmillan. In the second quarter (April to June), GDP dropped by more than 20 percent. Another record was broken when government borrowing exceeded £127 billion. Economists predict that the deficit–i.e., expenses exceeding revenue–could top £370bn.
Analyst Nick Hubble calls the Tory solution a potentially “limitless stimulus” (paraphrasing). Others say that this approach amounts to a type of management called financial repression. And guess who will pay the price… again?
AUSTERITY AND COVID: “A MATCH MADE IN HELL”
Britain was the hardest hit of the G7 nations. The ex-hedge fund managing millionaire Chancellor, Rishi Sunak, claims that the UK tanked so badly because: “Social activities, like eating out, going to the cinema, shopping … comprise a much larger part of our economy than they do for most of our European comparative countries.”
So, by these measures Sunak’s claim is false. The BBC parroted the assertion regardless. A more plausible explanation is that the deep cuts imposed by the Tory-Liberal regime (2010-15) after the Financial Crisis (2007-09) weakened the UK’s resilience. An article by the Oxford Research Group calls COVID off the back of austerity “a match made in hell.”
After the Global Financial Crisis (2007-09), austerity was imposed across the European Union, but the UK’s measures were particularly harsh. The French government continued to fund its health system, introducing new taxes to pay for the budget. It “took steps to protect people with low incomes,” says the World Health Organization, for instance by increasing the national insurance contributions of wealthy people. In Germany, according to the Centre for European Economic Research: “the increase in the debt ratio overstates the cost of banking sector stabilisation because the public sector also acquired significant assets,” thereby preventing long-term austerity.
In the UK, Chancellor Osborne (who was almost certainly a millionaire at the time) cut the top rate of income tax, reduced the National Health Service budget, and decimated social security. By the time COVID struck, two-thirds of the so-called job recovery market comprised of what the Resolution Foundation calls “atypical work”: precarious small business ownership or unstable gig economy-type jobs.
So, how will the government—which is comprised of millionaires and funded by billionaires—manage the unfolding COVID crisis? Barclays notes that policymakers “will have to choose from overt debt reduction policies, such as austerity and taxation, to covert ones, such as financial repression and inflation.”
“Repressionomics” sees funds borrowed from the private sector to reduce government debt. The acquisition of private funds facilitates the continuation of low-interest rates for government spending. The measures are “repressive” in that savers earn less than at the rate of inflation. Ideologues are already pushing for this as the least-worst option. The Telegraph, for instance, finds reasons not to re-nationalise the Bank of England or spend on a massive, post-WWII-type infrastructure project, backed by government-secured jobs and housing. “That leaves the last option: financial repression.”
Contrary to the impression given by Barclays, financial repression and austerity are not mutually exclusive. Ad van Riet of the European Central Bank (ECB) confirmed that European technocrats “applied the tools of financial repression to restore stability after the euro area crisis,” following the Crisis of ‘07-09. But that didn’t stop the ECB from imposing austerity in the form of public spending cuts.
Corporations are not in the business of having their profits repressed. They will likely continue to defer the cost of lost profits to lower-level employees and pension holders. With embedded public spending cutbacks resulting from policies undertaken during the last decade, social security will continue to be meagre for the recently-redundant and retired. Nearly nine in ten pension funds saw a drop of up to 15 percent in the first quarter.
Harvard economist, Professor Lance Taylor, predicts that “profits from job losses will finance government borrowing for COVID-19 bailouts.” The former Chief Economist at Citi, Willem Buiter, says that even without protectionism, “the organisation of production and trade will emphasise planned redundancy.” Buiter cites only “painful ways to restore fiscal sustainability.” The rich and powerful have ways to offset the “pain” of lower-than-expected returns. “That leaves the familiar tools of public spending cuts and higher taxes,” says Buiter. However, corporations and wealthy individuals already create a “tax gap” of £35 billion.
PUSHING FOR A NEW AUSTERITY
In late-2019, the Institute for Fiscal Studies reported that “an awful lot” of austerity was “baked in” to the Tories’ supposedly generous manifesto. In April this year, millionaire Boris Johnson said: “I think this government will want to encourage that bounce back in all kinds of ways, but I’ve never particularly liked the term [austerity] and it’s certainly not part of our approach.” Notice that Johnson said he didn’t like the “term,” not the practice. Media read this as a pledge not to continue the trends set by millionaire PM David Cameron in 2010. But in reality, Chancellor Sunak has already confirmed that “tough times are here,” though not for people like him and Tory donors.
Talking to the Confederation of British Industry, former Chancellor and millionaire, Philip Hammond, says: “My personal view is that this government will be extremely reluctant to either increase taxes or reduce public spending.” Hammond concludes that this will push austerity further down the road: “I expect that the great majority of the burden of this crisis is going to be absorbed through increased borrowing and left on the table for future generations.”
THE USUAL SUSPECTS ARE LOBBYING FOR BELT-TIGHTENING
Matthew Lesh, head of research at the Adam Smith Institute, claims that government spending is too generous: “The Tories are caring less and less about fiscal responsibility. They are instead looking for a magic money forest.” Sajid Javid, the millionaire ex-banker and former Chancellor, recently published a report for the Tory-backing Centre for Policy Studies, recommending VAT and national insurance relief for employers, and “[n]ew fiscal rules to gradually eliminate the current budget deficit after the economy recovers.” Javid concludes: “When things have returned to some form of normality, fiscal conservatives may have to win the argument all over again.”
To prevent another decade of austerity, the grassroots must ensure that the Labour Party remains committed to socialist policies, otherwise it will repeat the mistakes of the austerity-lite leader Ed Miliband in 2015 and fail to gain a significant number of seats whenever the next General Election comes.
Nigel Farage was locked into battle with China Daily reporter Chen Weihua after he told him to “stop talking sh*t” on social media.
The reporter, who works for the newspaper owned by the Publicity Department of the Chinese Communist Party, hit out at the Brexit Party leader after he outrageously blamed the country for Christmas being cancelled.
The comments came shortly after Boris Johnson issued a new “stay at home” order covering London and most of the south and east of England, and drastically restricted plans for Christmas mixing, in response to a new, fast-spreading strain of coronavirus.
“We cannot continue with Christmas as planned,” he said, much to the bemusement of Farage, who pointed the finger at China.
But he was quickly reproached by Weihua, who called him “Trump’s puppet” and a “big joke in Europe”.
He was widely lauded for the comments, with Meurig Parri saying “I don’t know who Chen Weihua is but he’s hit the nail on the head!”
Philip Wilmann added: “Well said from China with love… Wear a mask Nigel …. for the love of God!”
Geothermal is the electricity combating climate change
Jason Czapla is walking across a former lake bed in the middle of southern California. The ground simmers at our feet as little mud volcanoes disgorge piles of hot, sulfurous muck. The Salton Sea glitters in the distance, beckoning as the morning temperature approaches 106 degrees Fahrenheit.
Everything about this place, around a hundred miles from the Mexican border, feels like it’s about to combust. But for Czapla, a former petroleum engineer, there are few places he’d rather be.
“It’s the perfect storm in terms of a renewable energy project,” says the chief engineer for Controlled Thermal Resources, wearing a white polo shirt and dark sports glasses that hide the excitement in his blue eyes. “This is the best resource in the world.”
Czapla is in charge of a 7,380-acre plot owned by Controlled Thermal Resources (CTR). It’s a barren scrap of desert that ends abruptly in the great saline sea east of San Diego. For a geothermal engineer, it’s paradise.
Two kilometers below the surface lies a mineral-rich cauldron of hot water where temperatures can exceed 390°C. As the Salton Sea recedes, opportunities to turn that into energy and profits are emerging. If California approves its permit, CTR will start operating its Hell’s Kitchen Lithium and Power project in 2023, one of the first new US geothermal power plants in almost a decade.
And it almost certainly will not be the last. Although the shores of the Salton Sea already hosts 10 geothermal plants—most of them built in the 1980s—geology, politics, and energy demand have aligned to make Hell’s Kitchen, and projects like it, a hot investment once again.
Over the last decade, California has poured billions of dollars into its renewable energy goals. It has scaled up wind and solar power beyond expectation, while virtually ignoring geothermal plants despite possessing the most productive geothermal fields in the US. Today, wind and solar provide more than 86% of California’s renewable capacity, while geothermal sources provide virtually the same amount as two decades ago.
But in a climate constrained world, geothermal, the “forgotten renewable,” is getting a second chance.
Subterranean’s shot
At the Earth’s iron core sits a nuclear furnace. Thanks mostly to decaying radioactivity left over from the birth of the planet, temperatures in Earth’s center, 4,000 miles below the surface, exceed those of the surface of the sun (6,000°C or 10,800°F). Over time, this heat migrates upward. Molten rock known as magma approaches the surface, carrying enormous heat.
MIT estimated just how much extractable energy lay below the US in 2006. Their best guess—200,000 exajoules—was so large that even releasing 2% could supply 2,000 times the primary energy needs for the entire country, without any technological improvements in drilling technology. All we have to do is tap it.
That was the hope when the geothermal industry began. In 1960, the first commercial geothermal plant in the US opened at The Geysers in northern California. The 11-megawatt turbine, which drew up steam from natural formations, soon inspired other plants in Hawaii, Utah, Nevada, and—of course—California’s Salton Sea, a hotbed of early activity.
While the first geothermal plants drained reservoirs of their steam or water—and thus their generating potential—a new design in the 1980s, known as “binary plants,” let operators extract the heat while maintaining the generating potential. The average plant size was small (about 5 megawatts, just 3% the size of the average US coal plant), but capacity grew fast as Congress supported the technology amid the oil crisis of the 1970s. In spite of its enormous potential, the geothermal option for the United States has been largely ignored.
Then, everything seemed to lose steam. Coal prices fell, leaving geothermal less competitive. Federal funding lagged behind. In 1980, the DOE requested $111 million for geothermal but received only $15 million. Between 2006 and 2019, the US spent only $1 billion on geothermal technology, roughly a tenth of what was spent on fossil fuels, and a third of the investment in solar. “In spite of its enormous potential,” say researchers at MIT, “the geothermal option for the United States has been largely ignored.”
Today, geothermal is a bit player in the US energy industry, supplying just 0.4% of the country’s electricity in 2019. Even California, home to the largest geothermal resources of any state, generates only 5.5% of in-state electricity from the resource.
But the renewables revolution that once scorned geothermal is now making it essential. Wind and solar, as cheap as they have become, can’t generate electricity all the time. Even paired with energy storage such as batteries, it can’t supply electricity long enough during peak periods.
A brief interruption in energy supply can cause a grid to collapse. So as more bargain-basement solar panels and wind turbines are installed, grid operators must find ways to ensure steady electricity, even if peak demand only occurs a few times per year. For states like California transitioning to a 100% clean power grid, finding a round-the-clock supply of electrons has taken on new urgency
On Aug. 14, 2020, California’s grid was on the verge of collapse. The hottest August day in more than three decades meant demand was rapidly outstripping supply. Thousands of megawatts of solar and wind power went offline as dark fell and the winds stalled. Natural gas plants failed to turn on as expected. Electricity imports from neighboring states dwindled amid the heatwave.
To prevent California’s grid from collapsing, operators in the control room of CAISO, California’s Independent System Operator managing the state’s electrical grid, were desperately dialing for megawatts, working the phones to secure spare power. Operators asked the US Navy to unplug ships from shore power and Tesla dialed back power to its factory.
It wasn’t enough.
That night, California endured its first rolling blackouts in nearly 20 years. Two million people saw their power cut off, and the state narrowly averted an even worse disaster. What happened on Aug. 14 is totally unacceptable. We are going to build the most reliable electrical grid in the country.
The near-catastrophe seized the attention of policymakers who saw the grid’s instability as a threat to the state’s economy and decarbonization goals. The whole system, it seemed, was more fragile than previously believed. “What happened on Aug. 14 is totally unacceptable,” says David Hochschild of the California Energy Commission. “We are going to build the most reliable electrical grid in the country. As we move toward clean energy, one of the guiding principles going forward is a diversity of renewables.”
California aims to generate 60% of its electricity from renewable sources by 2030, and eliminate all greenhouse gas emissions by 2045. To meet that goal, its grid needs far more carbon-free energy that’s available on demand. Two common options—nuclear and hydroelectric—face fierce political opposition. Few dam sites remain. California’s last nuclear plant, the 2,240-MW Diablo Canyon, will be decommissioned in 2025 (its second, the San Onofre nuclear power plant, was closed in 2013).
That has forced the state to build more natural gas plants or lithium-ion batteries to ensure a steady supply. Neither is ideal. Gas plants mean decades of higher emissions, while batteries can’t yet supply power for more than a few hours. That’s complicated California’s plans. Despite ordering 3,300 megawatts of new power capacity, the Public Utility Commission (PUC) has delayed the closure of four natural gas plants in 2019 to allow time for more generation and storage to come online.
Utilities weren’t prioritizing low-carbon baseload until now. “Geothermal fills a critical gap to complete the energy transition,” says Jesse Jenkins, an energy systems engineer at Princeton University, who estimates it could one day exceed the capacity of nuclear and hydropower. “Technical potential is not really the question. It is the economic question.” Show me the money
Controlled Thermal Resources thinks it knows how to make money. Utilities, after years binging on cheap solar and wind, are scrambling to fortify the reliability of their power systems without adding to emissions.
Historically, geothermal looked like the expensive option. Geothermal power can cost about $140 per megawatt-hour, double the price of onshore wind, and nearly five times more than solar, according to the California Energy Commission. In 2017, Warren Buffet’s Berkshire Hathaway, which holds rights to much of the Salton Sea’s geothermal field, finally abandoned a permit for a 215 MW plant after years of struggling to find buyers for its electricity. Geothermal is actually the cheapest when you add the externalities in.
But that calculus ignored something critical: Wind and solar can’t provide baseload energy. A better way to calculate the cost to utilities is to measure the price of adding a particular megawatt to the grid. Electrons that can be turned on or off are worth more than those that can’t. Using this approach, the US Energy Information Administration says, new geothermal capacity in 2025 should cost just $37 per megawatt/hour, cheaper than almost every source besides solar photovoltaic ($36 per MWh).
“Geothermal is actually the cheapest when you add the externalities in,” says Dennis Kaspereit, vice president of the Geothermal Resource Group. Suddenly, new geothermal deals are being signed despite record low prices for wind, solar, and natural gas. Geothermal producers announced three agreements in California in 2020, and the largest—a 25-year, 40-megawatt deal valued at $627 million (pdf)—is for CTR’s Hell’s Kitchen project.
And that revenue is just the icing on the cake, says CTR’s Czapla. The company expects to make even more by extracting minerals. After CTR pumps up hot brine to generate electricity, it will extract lithium, absorbing the mineral like a sponge using a chemical process developed by a startup, Lilac Solutions, backed by Bill Gates’ Breakthrough Energy Ventures. The water is pumped back underground into the same reservoir. Demand for lithium, critical for electric car batteries, is expected to grow 10-fold by 2030.
While the time for profitable geothermal plants may finally have come for California, not every location is as lucky as the Salton Sea. The site sits above an accident of geology: More than 5 million years ago, a rift above the San Andreas fault slowly filled with layers of silt and sediment. This wedding cake of porous rock happens to lie above a red-hot magma chamber, creating the hot, salty brine suited to turn turbines and mine minerals.
Since engineers can’t wait millions of years for another Salton Sea to generate clean power, they’ve been working for decades on ways to do it themselves. They’re finally succeeding. DIY geothermal
In 1974, the quest to create artificial geothermal fields began (pdf) officially kicked off when the Los Alamos laboratory patented a method to construct geothermal reservoirs in hot dry rock. They called it an Enhanced Geothermal System (EGS). Just three years later, engineers were drilling and blasting under Fenton Hill, New Mexico, laying the groundwork for every EGS effort to follow.
Creating new geothermal fields, it turns out, requires just the right mix of rock and heat. Luckily, those conditions exist almost anywhere—if you’re willing to drill. For every kilometer down into the Earth’s crust, temperatures rise about 25°C. “If you can figure out a way to tap that, you can get a phenomenal amount of energy,” says Will Fleckenstein, an engineering professor studying unconventional drilling at the Colorado School of Mines. “It’s essentially everywhere.”
When engineers at Fenton Hill drilled about 1 kilometer down, fractured the rock formations, injected water, and collected it again, they mimicked the natural process of extracting steam in water-rich formations like the Salton Sea. Over nine months, the system powered a modest 60 kW turbine from geology that had never produced electricity before.
Early efforts in the UK, Japan, and France, plagued by water losses and inadequate fracturing, struggled to replicate the feat. It wasn’t until the late 1990s, when Australian engineers drilled into even deeper rock with existing horizontal fractures, that EGS seemed feasible. Since then, researchers have successfully created huge EGS reservoirs. Projects at Desert Peak, Nevada (2013), Raft River, Idaho (2011), and Soultz-sous-Forets, France (2010) are now supplying a controlled flow of superheated water generating electricity at close to commercial prices. And existing geothermal fields are seeing output rise using these techniques.
Invest has followed these demonstration projects. DOE’s geothermal division saw its budget exceed $1 billion for the first time this year. The US has earmarked about $200 million through 2024 to commercialize EGS technology through its Frontier Observatory for Research in Geothermal Energy (FORGE) program.
Private investment has started ramping up in anticipation. In the first half of 2020, global geothermal investments exceeded $675 million, six times more than the year prior, according to Bloomberg New Energy Finance (renewables investments overall rose only 5% during that time). Within five years, global geothermal production capacity is predicted to rise from 16 gigawatts to 24 GW, according to Rystad Energy.
CTR and its competitors alike stand to benefit if they can commercialize this technology. But the Breakthrough Institute, an environmental research group, argues it’s not enough to secure geothermal’s role in the renewable energy mix. The industry needs far bigger projects, and far more of them, to travel down the experience curve, the steep price drop enjoyed by wind and solar as their industry went global. “We need five or 10 FORGE projects to sufficiently build on technological developments and to fail, innovate, succeed, and demonstrate—bringing down costs along the way,” it argues. “Geothermal energy isn’t limited by the potential resources, but by the cost of the technology to retrieve it.”
The success of geothermal is likely to mirror the story of fossil fuels it is poised to replace—particularly natural gas. The US shale oil boom, which turned the US into one of the world’s largest oil producers, only succeeded after decades of federal funding helped refine unconventional drilling and hydraulic fracking techniques. Once costs came down enough for companies to profit, the industry took off. Last year, unconventional oil accounted for 63% of total domestic production.
Today’s geothermal technology is in a similar spot. Shifting from conventional to enhanced geothermal demands public support that bring down the costs and incentivize more carbon-free electricity. Assuming the cost of unconventional drilling for heat falls (as it did for oil), geothermal energy’s practical potential could rise by a factor of 10, the DOE estimates. Without this support, the industry could remain a fringe player, expanding in a few states with strong renewables policies and easy accessible reservoirs, but never becoming the universal resources its advocates envision.
Those kinds of policy risks are the reason Controlled Thermal Resources is staking a claim in the US at all. “Our intent was originally to be part of the emerging geothermal industry set to happen in Australia,” Czapla says. But Australia saw four prime ministers cycle through in just five years, ending up with a conservative government that backed the fossil fuel industry and abandoned major climate efforts. “All the commitments to support renewable energy development went away,” says Czapla. “About two dozen companies publicly listed in Australia for geothermal development are not listed anymore.”
Without a welcoming home, CTR scoured the world for a place to set up shop. California offered a haven: rich geothermal reservoirs, major cities, plenty of transmission lines, and a legislative target to eliminate emissions ensuring decades of demand.
“Here,” Czapla adds, “you don’t have political risk.” All the company needs now, he says, is time.
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