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Thanks for checking out this week's Economic Perspective! On October 27th, Valerie Seidel and Mallory L. Dimmitt (CEO, Florida Wildlife Corridor) will be giving an important talk on transformational economic and policy trends affecting Florida transportation, including construction costs, funding, resilience, alternative vehicles, Justice40 and the Florida Wildlife Corridor Act at Team Florida's Quarterly Meeting.
This week we have some interesting articles on the consequences of the low water levels seen at the Mississippi River, contractor costs and air quality in the Pacific Northwest. We also have different perspectives on energy topics, including wave energy in Europe, renewables in India and costs in the U.S.
Hope you enjoy the read and enjoy your weekend!
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Low MS River Levels Means Expensive Barging
The Mississippi River is at record low levels: about 11 feet below normal at the gage in Memphis, TN. The shallower river means there is less room for barge traffic, and barges can’t carry loads of typical size. Fewer barges and smaller loads mean big price increases for barge transport. This is hitting midwestern farmers especially hard, with barge rates being 4 times what they were about a year ago. This gets passed directly on to farmers in the form of lower prices. It’s peak time for exports of U.S. grain, and much more of that is now going to have to go out of Pacific Northwest ports due to the MS River levels being so low. Read more at Brownfield Ag News
A New Four-Year Project Will Test the Viability of Large-Scale Wave Energy in Europe
A $19.3 million initiative to test the viability of ocean wave energy is launching on Wednesday of next week. OceanEnergy has developed the OE35, a piece of tech to help collect energy from waves. The testing phase will last 4 years, followed by a test site being set up in Scotland. The end goal is to improve wave-based energy tech and increase its viability across the world, but in the short term the deployment of a 20 MW farm. They are hopeful that the levelized cost of energy (a measure of the device’s lifetime costs divided by energy production) will be reduced by 30% with the advancements in this initiative. Read more.
Contractor Profit Margins and Labor
According to Dodge Data & Analytics, surveyed contractors report several factors impacting profitability, including labor shortages, supply chain disruptions, rework, and unbillable change orders. The survey found that 33% of the concrete, steel, electrical, mechanical, and plumbing workforce is likely to retire within the next five years. There are currently 407,000 unfilled jobs in the construction industry. In addition, the Infrastructure Investment and Jobs Act, CHIPS Act, and the Inflation Reduction Act are expected to create millions of new construction jobs that will need to be filled. Without policy changes, skilled labor shortages may worsen as demand rises. Read more here and here
Pacific Northwest Air Quality Plummets due to Nearby Wildfire Smoke
Nine large forest fires are burning Washington state and Oregon, causing diminished air quality warnings, prompting recommendations for public school children to stay indoors, and encouraging communities in Seattle, Portland, Eugene, and Vancouver BC, to limit outdoor exposure. Seattle hit some of the most dangerous air pollution levels in the world on Wednesday and Thursday, passing Lahore (Pakistan), Delhi (India), and Chengdu (China) AQI levels. Adding fuel to the fire (literally), Seattle also broke the record on Sunday for hottest temperature this late in year, with the official high reaching 88 degrees. Luckily, relief is coming as the rainy season is forecasted to begin this weekend. USA Today; MyNorthwest; Photo Credit: Meegan M. REID/KITSAP SUN
Achieving Climate Goals First Requires Solving the Storage Conundrum
To meet its 2030 climate goals, India is looking to rapidly boost its renewable energy generation from the current 12-13% to over a third of total generation, which will add about 300 GW of renewables electricity capacity. To achieve this, they will need to integrate battery storage to their grids as storage systems’ costs continue decreasing from over $1,000 in 2010 to $137 in 2020. However, they face many challenges to keep up with expansion, including raw materials and financial viability. World Economic Forum Read More
Data Visualization of the Week
U.S. Heating Costs Expected to Tick up this Winter
According to the EIA’s Winter Fuels Outlook, a colder-than-average winter forecast and high energy prices will quite significantly raise heating costs in the U.S. The average household expenditure between October and March will range between $931 and $2,354 depending on the fuel type. Natural gas and heating oil are expected to see the highest cost increases with 28% and 27%, respectively. If the winter were 10% colder, the costs are expected to rise by 51% and 37%, respectively. The Midwest is expected to see the largest increases for natural gas users, while the South is expected to see largest increases for electricity users. Statista
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