Dean Barber

Red Army, Red Dots and the Wind Cries Rhode Island

In Corporate Site Selection and Economic Development on August 1, 2015 at 10:32 pm

As my regular readers (my mother and some guy in India) know, I write primarily for a business audience, tackling topical issues that I think would be of interest to corporate executives, economic developers and just regular folks.

In doing so, I do my best to write in plain English and avoid jargon and gobbledygook, which too many business people use in an attempt to impress others as to how smart they are.

More often than not, they are just muddying the waters, although some people fall for their shtick.

“We’re going forward with our plans to implement optional third-generation matrix approaches.”

“We need a more blue-sky approach to dot-com organisational contingencies.”

“We’re going forward with our plans to implement parallel relative mobility.”

I have been in meetings where such management speak was being inflicted on entrapped souls. If I find myself in such a setting, where someone, typically a consultant, is obviously obfuscating, I might lean over to a trusted colleague and say, “What is this person talking about?”

The Plain English Campaign is a website worth visiting. It’s British but still appropriate for a U.S. audience, as we have our share of people who speak much and say nothing.

It’s time now to revamp and reboot our total organisational time-phases. So let’s look at some business news stories of the past week that should boost our parallel relative matrix approaches.

Red Army, Red Dots

NBC News obtained a National Security Agency map that show that the Chinese government has engaged in a cyber-assault on all sectors of the U.S economy, including major firms like Google and Lockheed Martin, as well as the U.S. government and military.

More than 600 corporate, private or entities were attacked over a five-year period, with clusters in America’s industrial centers. The map shows the entire Northeast Corridor, from Boston to Washington, D.C., blanketed in red dots.

Each dot represented a successful Chinese attempt to steal corporate and military secrets and data about America’s critical infrastructure, particularly the electrical power and telecommunications and internet backbone.

What was electronically pilfered included everything from specifications for hybrid cars to formulas for pharmaceutical products to details about U.S. military and civilian air traffic control systems, according to the NBC report.

Other targeted areas included California’s Silicon Valley, Los Angles, Dallas, Miami, Chicago, Seattle, and Detroit. The highest number of attacks was in California, which had almost 50.

A Growing Industry

As I reported in my June 16 blog, an entire cybersecurity industry has been born in response to cyber attacks, with much of the growth centered in and around the nation’s capital.

And for once, Washington lawmakers appear to be acting. The Senate plans to vote on two cyber security bills before the August recess — the Cybersecurity Information Sharing Act (CISA), to increase sharing of public and private data on hackers, and the Federal Cybersecurity Enhancement Act, to require agencies to adopt cybersecurity best practices and speed the implementation of the government’s anti-hacking shield “Einstein.”

Both bills have strong bipartisan backing and potential White House support.

A Cyber Pearl Harbor?

So why is this important to you?

The experts are saying that more attacks like one on the U.S. Office of Personnel Management are coming with something akin to a “cyber Pearl Harbor” a distinct possibility.

A cyberattack which shuts down parts of the United States’ power grid could cost as much as $1 trillion to the U.S. economy, according to a recent report from the University of Cambridge Centre for Risk Studies and Lloyd’s of London.

The report insurance market outlines a scenario of an electricity blackout that leaves 93 million people in New York and Washington, D.C., without power.

The U.S. government said that two cyberattacks on the OPM compromised more than 21 million Social Security numbers, 1.1 million fingerprint records, and 19.7 million forms with data that could include a person’s mental-health history.

In May 2014 a Federal grand jury indicted five officers of the Chinese People’s Liberation Army Unit 61398 on charges of theft of confidential business information from U.S. companies and planting malware on their computers.

A First for Rhode Island

Last week, I wrote about how wind energy will power a next generation of large data centers to be built by Facebook and Google.

And now construction has begun off Rhode Island’s coast on the nation’s first offshore wind farm. Deepwater Wind is building a five-turbine wind farm off Block Island. It hopes to power 17,000 homes as early as next year.

While European and Asian countries have built vast offshore wind farms to convert steady ocean breezes into electricity, no comparable U.S. projects have begun construction until now.

“Block Island Wind Farm will not only tap into the enormous power of the Atlantic’s coastal winds to provide reliable, affordable and clean energy to Rhode Islanders, but will also serve as a beacon for American’s sustainable energy future,” said Interior Secretary Sally Jewell, who traveled to the resort Island for the event.

The project, located in state waters just under three miles from the island’s southeast coast, is being viewed as a hopeful, if modest, new beginning for an industry that has stumbled in recent years, beset by legal battles and financial difficulties.

Block Island Wants Relief

Proposed wind farms in coastal Massachusetts, New Jersey and Delaware have stalled because of problems with financing, regulatory approvals or opposition from local landowners.
Block Island, however, wants to replace its expensive source of energy.

“We are one of the highest rates in the country,” David Milner, general manager for the Block Island Power Company, told National Public Radio. “We got up over 50 cents per kilowatt-hour, which is a huge burden on the businesses out here and the individuals.”

In New England, the average rate is 16 cents per kilowatt-hour for all sectors.

I Want My PTC

A vote by the Republican-dominated U.S. Senate Finance Committee in mid-July overwhelmingly re-upped the wind Production Tax Credit (PTC) and policies that support wind farms.

Each time the PTC comes up for a vote to be expanded or renewed, the future of American wind energy has always come into doubt. And that has happened numerous times since it was originally enacted in 1992.

The PTC expiration date in January had brought to an end a $23 tax credit for every megawatt-hour of electricity a wind turbine generates.

A megawatt-hour is enough to power about 1,000 homes for one hour, according to Bloomberg. The credit, which was worth about $2 billion for all US wind projects in 2013, has brought down the price of electricity in areas of the country where wind power flourishes, since wind farms can charge less and still turn a profit.

According to Bloomberg, “In Texas, the biggest wind-producing state in the US, wind farms have occasionally sold electricity for less than zero – that is, they’ve paid to provide power to the grid to undercut the state’s nuclear or coal energy providers.”

According to American Wind Energy Association, when the tax credits expired briefly in 2013, installations of new wind farms in the U.S. fell 92 percent, causing a loss of 30,000 jobs across the industry that year.

After Congress renewed the PTC, the industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.

And Stable Means?

A Department of Energy report released earlier this year projected that with a stable policy, wind has the potential to supply 10 percent of the nation’s electricity demand by 2020, 20 percent by 2030, and 35 percent by 2050.

Of course, it is apparent that a “stable policy” means federal tax credits. Without them, the industry has proven that it will come to a virtual halt.

Which begs the question, if wind energy is indeed the way of the future, which it very well might be, then why does it need subsidies? And for how long?

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

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