Homeland Security Watch

News and analysis of critical issues in homeland security

February 23, 2010

How to create a resilient infrastructure in 20 years for 1 trillion dollars, create millions of jobs, transition to green transportation, and do all of this at no cost to government.

Filed under: Budgets and Spending,Infrastructure Protection,Technology for HLS — by Christopher Bellavita on February 23, 2010

The title of this post is a bit big.  But nowhere near as huge as the idea behind it.

The basic concept is to build new underground electric power transmission lines, natural gas pipelines, and telecommunication, cable TV, and Internet communication lines on rights-of-way already established by America’s 40,000 mile Interstate Highway System. The Interstate Highway System reaches nearly every part of the nation, and states own the rights-of-way along these roads. It makes sense to leverage this asset.

The idea — called the National System of Resilient Infrastructure (or NSRI) — was developed by Ted G. Lewis, at the Naval Postgraduate School.  Here are the details of this $1,000,000,000,000 idea:

—————————————-

Proposed

Electric power, energy for transportation, and telecommunications capacity are three major economic drivers for the future economy of the USA.  But these sectors are in trouble, for a variety of reasons, including NIMBY (not in my back yard), lack of investment, and lack of vision.

To overcome these barriers, stimulate the economy, and develop a resilient infrastructure for the 21st century, the author proposes a “moon shot” scale effort to build a national system of resilient natural gas, electricity, and telecommunications infrastructure along the 40,000 miles of Interstate Highway.

This 20-year, $1 trillion project would be implemented by a public-private partnership structured much like a GSE (government-sponsored enterprise), and mainly funded by the private sector. Besides creating millions of jobs, enhancing our ability to transition to clean cars, trucks, and buses, the national system would be immediately self-sustained by usage fees, and therefore profitable. It would not cost the government any money, and would have an immense impact on the economy.

Infrastructure Equals Prosperity

The Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly called the Interstate Highway System (or simply the Interstate) is the largest highway system and largest public works project in the world. More importantly, it propelled the United States into a new era of prosperity. Today, virtually all goods and services are distributed via the Interstate, which is still expanding.

In the 1990s the 25-year old Internet was commercialized, stimulating economic growth so much that it produced a bubble in 2000. Yet, the federal government’s $200 million investment has already returned 100-fold on investment, after less than 20 years of growth. The future of the global economy increasingly depends on the Internet.

It is clear that relatively modest investments in infrastructure reap exponentially large returns due to economic growth, job creation, and innovation. Since ancient Rome, no nation on earth has achieved or maintained greatness, security, and prosperity, without plentiful energy, robust communications, and transportation capacity.

The economy of the 21st century will run on electrical power and Internet packets. Without these, the USA will slip into fourth or fifth place among nations.

The Challenge

The United States faces an “infrastructure challenge” and an equally big opportunity, today. The challenge is to rejuvenate our failing basic infrastructures: water, power, telecommunications, and energy.

Progress in green energy generation is stalled because of inadequate transmission capacity. Telecommunications capacity must be greatly increased to accommodate global 3D virtual reality, multi-party conferencing, and high-performance research and development in medical, environmental, and technical industries. Think of the possibilities of telemedicine piped directly into your home, or corporate meetings conducted with 100,000 participants from around the globe.

Advances in material science, bioengineering, medicine, green energy, revolutionary telecommunications, and green transportation will present great opportunity over the next 20 years to those nations prepared to capitalize on them.

These are the economic drivers of the future, but they require advanced infrastructure.

We know how to turn sunlight into electrons, but lack the distribution channel to transport electrons produced in New Mexico to markets in New York. We know how to telecommute via our computers, but lack the bandwidth for two-way, 3D telecommunication between grandmother and granddaughter across the continent. We know how to automate transportation systems to reduce auto accidents and congestion, but our highways are “dumb.”  In the next 20 years, cars will run on electricity and natural gas, but we lack the infrastructure to refuel them while achieving energy independence.

Venture capital is pent up, waiting for government to stimulate a “green economy,” but we do not currently have the market distribution infrastructure to make it possible.

We need a National System of Resilient Infrastructure (NSRI) to take advantage of opportunities that will create jobs and keep America economically strong.

The Solution

The National System of Resilient Infrastructure plan (NSRI) is designed to address two roadblocks in the way of the next stage of economic growth: NIMBY, and the enormous cost of rebuilding the power and telecommunications infrastructure of the 21st century.

NIMBY (Not-In-My-Backyard) is currently blocking many projects because people do not want power lines in their backyards. In addition, infrastructure is enormously expensive and unattractive as an investment because it does not give companies a competitive advantage. For example, the current 1 trillion dollar electrical power grid is fragile due to a lack of transmission capacity. It is also based on 1940′s technology. But who can afford to invest 1 trillion dollars to rebuild it?

NSRI proposes to avoid NIMBY by placing critical infrastructure underground. NIMBY can be avoided by building underground electric power transmission lines, natural gas pipelines, and telecommunication/CATV/Internet communication lines on rights-of-way already established by the Interstate Highway System. States already own these rights-of-way, and the Interstate Highway System reaches nearly every part of the nation. It therefore makes sense to leverage this asset even more so.

Energy, Power, and Communications infrastructure also requires storage nodes (for surge resilience), “service stations” (for distribution), and several network operation centers. The NSRI will be resilient because of its storage, security, and distributed architecture [decentralized assets].

Robust and redundant, able to transmit commodities such as Internet packets, electrons from solar farms, natural gas for future cars, trucks, and buses, and bountiful electrical power for future cyber businesses, the NSRI will be a quantum step forward for the nation and the economy.

NSRI is America’s 21st century “moon shot.”

How to Pay for It

The NSRI network would be constructed much like the Interstate Highway network, over a 20-30-year period at an estimated cost of $50 billion per year.

The author estimates it would cost $25 million/mile to build the necessary tunnels, pipes, wires, etc. The Interstate is 40,000 miles long, hence a total estimated cost of $1 trillion over 20 years.

This may seem high, but it represents 3.6% of the combined revenues of the natural gas, electrical power, telecommunications, gasoline, and broadcast industries, see Table I.

infrastructure-sector-revenues

The Interstate Highway System is “pay-as-you-go”, with 90% of the funding coming from the Federal government, and the remaining 10% from the States. In its first year of construction, 1958, total costs were $37.6 billion. By 1991, the cost was $128 billion. But these billions contributed nothing to the national debt because they were paid for by a 40 cent per gallon tax on gasoline. Title II of the Highway Revenue Act of 1956 created the Highway Trust Fund to collect and dispense funding for the Interstate System.

Similarly, the NSRI would be financed through a Trust Fund established by Congress to create and operate NSRI. The NSRI financing plan needs to be worked out in detail, but two attractive options are: Option I: GSE (Government Sponsored Enterprise), and Option II: excise taxation, similar to the model used by the Highway Revenue Act of 1956.

Ultimately, the NSRI must be self-sustaining, through revenues generated by its use. A toll fee would be charged for use of the pipelines, communication lines, storage facilities, and service stations. These fees can be based on current regulated fees charged by telephone, utility, and pipeline companies – a familiar fee structure for these industries.

Option I: GSE: Ginny Mae, Sallie Mae, Fannie Mae and Freddie Mac are GSEs, i. e., government-backed enterprises listed on stock exchanges, and therefore, investor supported. The idea here is to raise the major portion of funding from investment banks, retirement funds, and personal investors through an IPO [initial public offering]. Like a GSE, the NSRI Trust Fund would be backed by the Federal government, and at some point reach a self-sustainable level through usage fees. This model, however, would probably require temporary taxation to raise the full $50 billion needed to initiate NSRI.

Option II: Excise Taxes: The Interstate Highway System was funded by a $0.40/gallon tax on gasoline (part Federal and part State). This tax can be rolled back as expenses are replaced with usage fees. Consider this: a 3.6% excise tax on revenues shown in Table I would raise $50 billion per year. Alternatively, an additional $0.40/gallon excise tax would raise $56 billion per year.

Both options are no-cost options for the Federal Government. Both options follow the Interstate Highway model whereby States own the infrastructure. Unlike the Interstate Highway model, however, the NSRI can easily achieve sustainability through an industry-accepted fee structure.

—————————————-

Dr. Lewis can be reached at tlewis[at]nps.edu

Share and Enjoy:
  • Digg
  • Reddit
  • Facebook
  • Yahoo! Buzz
  • Google Bookmarks
  • email
  • Print
  • LinkedIn

9 Comments »

Comment by William R. Cumming

February 23, 2010 @ 1:23 am

Sounds like a great idea but there always are devils lurking in the details. Hey Mexico could build a sea-level canal too.

Comment by Clinton J. Andersen

February 23, 2010 @ 1:25 am

I don’t think the cost is that simple. If the ultimate goal is to upset Americans, for a period of years, and go green, then sure, why not. But the ‘pay-as-you-go’ system will affect more than drivers. It’ll affect the economy as a whole. All the goods and products that are transported and have to pay the fee will pass on that fee to the consumers.

Not only that, but what happens when the NSRI faces a major corruption scandal like Fannie Mae and Freddie Mac? Would the highway remain sustainable?

And finally, in order to accomplish this the politicians are going to have to upset their constituents. The people aren’t going to sign off on a 40 cent tax nor are they going to sign off on a trillion dollar project that is just going to continue to cost them in the long run. Therefore, the policy makers would have to take action without the majority approval, and thus upset the people.

Besides that, I think it has potential. :)

Comment by Dan O'Connor

February 23, 2010 @ 1:39 am

Well done Sir. There is elegance to your plan as well as concrete critical thinking and an over the horizon strategy.

Some additional thoughts; Although I would not consider myself a cynic, there are some constraints that come to mind to ensure this does not become debt ad infinitum… Legislation and enforcement would be necessary to ensure the funding and revenue were placed directly against the project. The downside of this is injecting bureaucracy that terminally jacks up the price.

Also, exceptional leadership would be required to make this happen and not become some hybrid gerrymandering tool to meet needs of Congress. Wonderful, breath taking ideas can become just that; ideas. There is a very large gap between idea people and executors. I use the World Trade Center rebuild as case in point number #1. The plan to replace the towers was an amazing feat of architecture and planning. It was also to be complete by September, 2011. That project is woefully over budget and decades behind schedule.

From a sociological point of view, do we currently have “the right stuff” to undertake a project of this magnitude? It’s a real question that I believe must be asked. Hoover dam, the Interstate system, the Empire State building and ALCAN highway all were grand projects done very quickly and effectively. Can we name any significant infrastructure improvement to this Nation in the last several decades that compares favorably? The effort and zeal to complete this undertaking would be vast.
I hate posing the question, but one can make the case that the kind of can do attitude and work ethic required for a project of this scope and magnitude is perhaps wanting. Hence, leadership again becomes an essential component. One of the key components of a successful project is on time and under budget. Its been a while since these principles have been held to, at least by Federal Government Standards. Perhaps I am overstating or inflating some of the friction points. What an opportunity nonetheless.

Would you also have to comply with current and potentially emerging environmental laws and eminent domain laws? Do you also think geologists would be concerned with current plate tectonic data? Probably a little deep in the weeds, but it has such breadth that I’d imagine there’d be quite a bit of discussion.

From another point of view, would you try to include a more robust and efficient National mass transit system as part of the program? Would you even consider it as an auxiliary or supplemental critical infrastructure? Is there a market for that or do you stand by the premise that the individual identity of Americans is to get in their car and go? Would you capture, re route, and treat rainwater as part of your plan as a means of irrigation redistribution or simply let nature run its course? Also, would wind play a part in supplemental or surge capacity in your plan?

It is an excellent plan and demonstrates the kind of thinking required to meet our energy and telecommunication needs as continue into the 21st century. thanks for taking the time to prepare it.

Really very well done.

Comment by William R. Cumming

February 23, 2010 @ 10:15 am

Reference Dan’s comment. Even when constructed and opened WTC Bldgs one and two did not make ecomonmic sense which is one reason occuppied by government offices including STATE and LOCAL EM ops centers.

Hey at least the idea in the post makes targeting more not less difficult as opposed to say location of new DHS headquarters on promontory overlooking the rest of DC. Perfect for tactical missle launch or even SLBM!

Comment by Andrew William

February 23, 2010 @ 10:32 am

Andersen has it right on this one – the plan has too high of costs in the short run for “the masses” to want this.

A .40 cent gas tax will never pass – they’ve been trying to pass a gas tax for clean energy for years, and even .05 cent increases are voted down strongly.

Additionally, with all the huge projects (healthcare, stimulus bills, and the horizon holds this new jobs bill…)the current administration is tackling, the political environment is just not right for this project.

Instead of focusing on pipe dreams (har har), its much more plausable to start thinking small scale projects within reason that could actually gain legislative approval.

Comment by Pat Longstaff

February 23, 2010 @ 6:46 pm

I am not seeing how this is resilient. If the lines are all along very obvious routes aren’t they open to damage from people with bad motives? You don’t have to dig them up to damage them. To isolate a critical geographic or economic sector you just incapacitate all the lines going in there. What am I missing?

Comment by James W Warren

February 24, 2010 @ 12:18 pm

Three points:
1) Having worked in the construction industry for several years, it may appear most interstates have wide expanses of useful right-of-way, but that’s a gross over simplification of a very complicated issue. In some cases the existing right-of-way can be used, but there would be numerous drainage issues that would have to be addressed. In some cases, the existing right-of-way are simply un-usable due to the fact that conventional construction methods could not be used in many places (e.g. excessive slopes, unstable ground, bridge & over passes,etc…). I can just imagine the engineering consultants that are salivating over the thought of the fees that would roll in if the policy mentioned were implemented.
2) One of the most expensive parts of construction is digging the trench the utility is to be placed in. One sand or dirt, this is no problem. But rock excavation is an entirely different matter. and
3)Comparing an institution after the Macs (Freddie, Fannie, & Sallie) is probably not a good idea (due to corruption & insolvency). In my opinion, a far better example would be the Tennessee Valley Authority.

Comment by Ted Lewis

February 24, 2010 @ 1:34 pm

Wow! These comments are great! Thanks. May I make a couple of replies:
1. This is big, but not as big as the original Interstate Highway proposal or Kennedy’s Moon Shot idea. Have we lost our will?

2. Engineering problems abund, but probably not as far-out as the Moon Shot, which even in hindsight, seems fantastic.

3. I am a free-market kind of guy, so I DO NOT propose taxation as a way to pay for it. Look at Option 2. I analyzed taxation as a means of showing how cheap it is relative to the 40-cents/gallon tax we are now paying. But my proposal is essentially a toll road, so it can be paid for my usage fees, not taxes.

4. It is a partnership because government has to legalize the right-of-way, promote standards, and lead. The private sector has to realized there is money to be made by being able to send an electron generated in the desert to a home in New York. I don’t think that will take much convincing.

Pingback by Homeland Security Watch » End dependency on fossil fuels by driving on solar panels

August 10, 2010 @ 1:11 am

[...] In February, I wrote about a colleagues idea in a post titled “How to create a resilient infrastructure in 20 years for 1 trillion dollars, create millions of jobs, transition to green transportation, and do all of this at no cost to government.” That post is here. [...]

RSS feed for comments on this post. TrackBack URI

Leave a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>