By Morf Morford
Tacoma Daily Index
A key principle in any business transaction is Return on Investment (ROI).
It’s a very simple premise – a proposed transaction should have a margin of profit that allows – if not facilitates – stability and the possibility of expansion.
After all, a business, any business, needs to survive. It needs to continue to exist, and one way or another, through dollars, expanding personnel or over time, needs to grow.
I’m a huge fan, almost an evangelist, for capitalism – at least how it was originally formulated and intended. How it is currently applied and practiced should make any “free market” advocate shiver and toss and turn all night.
Here’s one example; I am all for government support like tax abatements and subsidies in the fragile early years of a technology or industry.
Subsidies in an industry in its maturity – or even worse – in its decline – is a preposterous waste of money and a definite blockage of emerging and, almost always vastly more efficient and productive competing technologies.
This pledge of allegiance to legacy industries is a nostalgic sinkhole for limited investment funds.
Venture capitalists know better – or at least most of them do. Commercial lenders tend to be suckered into investments in the past – sometimes by local community interests, sometimes by a sense of misplaced loyalty.
Dead end investments are too many to list, but one major category is fossil fuels.
One of the ironies of oil, for example, is that the cost of oil on the open market, presumes that the oil itself is free. The bench market price of oil is based on the cost of extraction and delivery. The material price of oil, and the supply of oil (remember yet another basic principle of capitalism – the law of supply and demand?) barely ever changes.
More efficient uses of oil (as in conservation when prices are high) and problems with the supply lines may drive prices up or down, but the amount of oil in the (literal) pipeline rarely changes.
The coal industry is an even better example. The reality is that there is coal almost everywhere. Coal is cheap and plentiful. Almost every hill and mountain in North America (and most of Europe, Asia and the UK) is on a foundation of coal.
Compared to burning wood, coal is far more efficient, affordable and productive. (1*)
Coal is also unbelievably filthy and toxic – especially to those people who work with it directly and the landscape, flora and fauna from where it was sourced.
Coal mines, coal ash tailings (2*) and “mountain-top removal” are permanent toxic scars from an industry that created generations of jobs and the steel that literally built America.
Coal, steel and the sweat of workers combined to build the infrastructure we see and use and is all around us. Most of the steel rails and bridges we use every day were built by a process and technology we could not conceive of today.
Look closely at almost any bridge. Large or small, it is composed of thousands of parts – bolts, cables and steel or concrete slabs made, shaped, shipped and placed by human hands.
Those tunnels we drive though to cross our mountain passes were dug through solid rock with human hands barely a hundred years ago.
We would never consider using human labor for such a purpose today – at any price. Why would we subsidize a fuel as cumbersome, poisonous and dirty as coal? Yes, coal has been used as fuel for millennia – but that does not mean it is appropriate or optimal for us.
Just because a process worked before, or even made economic sense, or served a greater purpose, has no bearing on whether the technology serves us – or future generations well.
I am convinced that the best investment we can make – in technology, infrastructure or industry – is in the future.
Future generations may thank us for our investments and our forethought – in parks for examples.
They may drive over our bridges or through our tunnels without a thought of the labor, cost or planning – or even lives lost – in their construction.
I am fine with that. Taking for granted the work and sacrifices of previous generations is what every generation does.
What I don’t want is for future generations to marvel at our short-sightedness and stupidity – and the cost we have passed on to them for our carelessness.
I live in the North End of Tacoma. In many ways it is a wonderful place to live. My neighborhood is filled with historic craftsman homes. Stunning views of Commencement bay and Mt. Rainier are almost routine.
But thanks to the ASARCO smelter (on the site of what is now one of the crown jewels of Tacoma, Point Ruston) there is a continuing legacy of lead and arsenic in the soil. Even decades after the demolition, those of us who live in the approximately 1,000 square miles of southern Puget Sound need to be careful when we dig in our yards and few of us have gardens. (3*)
I love Point Ruston, but I’d bet that the cost of development (particularly the cost and delay due to toxic soil remediation) has at least doubled or even tripled the costs of development.
An even more glaring example is the Berkeley Pit outside of Butte, Montana. It’s a pit of greenish poison a mile and a half wide and over a third of a mile deep. (4*)
It is so toxic that even weeds don’t grow around the “lake.” No fish live in it and birds die from contact.
It was abandoned in 1983 and left to fester in the landscape. Scientists give it 20 years before its noxious elements make their way into the groundwater – and eventually the Columbia River and then the Pacific Ocean.
This is precisely the kind of legacy I do not want to leave behind.
The Boomer generation, rightly or wrongly gets the blame for “ruining everything” from affordable housing to the environment.
Some of that accusation is fair, but much of it isn’t. Most of the lethal residue was in use long before the Boomer generation was born, but much of it (like plastics) became widely used by that generation.
And, to be fair, many of us never liked plastics even as we found ourselves besieged by plastic packaging, toys and furniture.
But plastic, like coal, is cheap, convenient and ubiquitous. Few of us can imagine a life without it.
The reality is that human beings have lived for thousands of years without plastic straws and bags – and now, and from now on, sea life – and the fish we eat – and even our blood, will pulse with nanoplastics forever. (5*)
My sense is that no convenience is worth the death of orcas or the contamination of salmon.
What will future generations think of fracking and our networks of gas and oil pipelines that criss-cross our nation and it is never a question of “if” a pipeline will break, or leak,or explode, but “when” and “where.”
Much of our infrastructure, from pipelines to bridges, is rapidly reaching the end of its usable (and safe) lifespan.
I hope future generations will look at most, or at least some of our work and marvel, as we might at the craft and care put into cathedrals built centuries ago.
Besides, I’d far rather have future generations thank us than curse us for what we have left behind.
Their thanks would be the ultimate return on investment.
(1*) Like many who grew up in Tacoma in the 1950s and ’60s, my family home had a coal furnace for heat.
(2*) Dense with carcinogens and neurotoxins including arsenic, boron, cadmium, mercury, lead, selenium and other contaminants.
(3*) To see the details on this particular legacy, look here – https://ecology.wa.gov/Spills-Cleanup/Contamination-cleanup/Cleanup-sites/Toxic-cleanup-sites/Tacoma-smelter
(4*) https://www.damninteresting.com/the-pit-of-life-and-death/
