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Carey W. King Research Newsletter - June 2015

As we go full force into Summer mode, this newsletter updates you on the few items listed here:
Thoughts on recent economic indicators
Oil prices have had a dramatic decline since the Summer of 2014, and people would normally think that this would be a boon for the overall economy.  However, a recent revision to the U.S. economic growth numbers of the First Quarter show that the U.S. economy shrank during that time.  With oil prices still relatively low (less than $100/BBL but greater than $40/BBL), economists are still confused as to what is the explanation.  For us systems thinkers, we know that we must pay attention to the long-term trends to sift through the short-term fluctuations.  We need to better understand the linkages between biophysical and monetary/economic descriptions of the world because they are becoming increasingly disparate. These following trends indicate that the developed world sits at an unprecedented combination of a few major and important indicators:
  1. Energy and food were never cheaper than around the turn of the 21st Century
    1. This is evidenced by the global food costs (food = energy for preindustrial economies) trend increasing for OECD consumer spending since the early 2000s and producer costs leveling out in the late 2000s.  See data investigated by former student George McGuirk in his thesis linked on my website here.
    2. This is evidenced by global spending on primary energy hitting a low point in the year 1998.  See data investigated by former student John P. Maxwell in his thesis linked on my website here.  Journal Publication forthcoming.
  2. Central bank interest rates are at their lowest points in history (< 1%/yr), and have been there for several years.
  3. Population demographics - According to United Nations projections, the world is now at its youngest during the modern era.  This means that the slowing population growth is inevitably shifting us to an older population that will shift global spending and savings habits that will stress the ability of national governments to both provide for retirees and create economic opportunities for increased middle class participation.  
  4. Infrastructure demographics - Stuff is getting older too.  In the United States, we are more and more talking about which infrastructure to repair or replace rather that what new infrastructure to build. This is an artifact of the above factors, but also an indicator that we are in a new era that must change our habits to make more use of all existing capital rather than invest in new large capital projects.  The sharing economy is largely a response to a constraint on resources and incomes that focuses effort on making better use of information to overcome these constraints.
Forward
Thank you very much for your time.  As always, please contact me for more information about my research program and students! 

Sincerely,

Carey W. King, Ph.D.
careyking@mail.utexas.edu, 512.471.5468, careyking.com

 
My research and students seek a systems approach to describe the role of energy and energy technologies in our past and future. This approach provides the best way to both address questions about our future economy and environment as well as understand how individual technologies can and cannot affect the macro-scale and long-run trends that will frame our future options. I seek understanding of the relationships among:
  • energy resources and technologies,
  • population demographics,
  • water and food,
  • macroeconomic factors, and 
  • implications of internalizing environmental externalities.
 

In the blog I discuss the ongoing lawsuit between the Texas Farm Bureau and the Texas Commission on Environmental Quality regarding the allocation of water rights in Texas’ Brazos River Basin.  One of the issues is whether or not electric power generators should have guaranteed access to water during droughts even if they do not have water rights more senior than some farmers.  I also close with numbers about how much water is consumed for power generation in Texas, and the quantities are much smaller than stated in the Texas State Water Plan.

 

Recent Graduates and summaries of their research topics that will interest you.

  • Jesse Libra (M.S., Energy and Earth Resources) - Jesse worked with me on my project based on analyzing climate and water impacts of Brazil biofuel production and agricultural crop expansion. Jesse created a hydrological model of the Invinhema River basin, at the southern end of the state of Mato Grosso do Sul.  Jesse was able to accurately replicate the flows in this basin and show that for future scenarios of expanded sugar cane agriculture, even though irrigation would be relatively small (if employed), there are times of the year that already have low flow conditions, and thus the sugar cane might not be able to reach full yield due to some (minor) level of water stress. 
  • Alan Barraza (M.S., Energy and Earth Resources) - Alan examined the economic feasibility of desalinating brackish groundwater in the Central Texas area just south of Austin.  What he found was that it is likely not economically feasible unless the brackish water supply is used all of the time.  Thus, we should not necessarily view desalination as a backup for drought conditions because we would largely be paying for capital to sit idle most of the time.
  • Alyssa Donovan (M.S., Energy and Earth Resources) - Alyssa worked with me on getting the most of the energy data and statistics of the International Energy Agency to understand net energy. 
  • Jason A. Wible (M.A., LBJ School of Public Affairs) - Jason worked with me, and others in the Energy Institute, on a project related to examining the current and future costs of electricity.  
    • I don't yet have documents to share of Jason's work that is related to an Energy Institute study we are performing on the "Full Cost of Electricity".  You will see things come out over the course of 2015.  Jason is a very knowledgeable and thoughtful leader, and you will see this in our future documents.
    • Jason is now working as a program director at ARPA-E where he will focus on research related to the energy-water nexus.
 

The 84th Legislature was an active period for water legislation. This paper analyzes the bills that passed through the House Natural Resources Committee during the 84th session prior to May 10, 2015.  These bills cover a number of issues in water policy, including the implementation and regulation of new technologies, improving available data, and shifting the current regulatory framework. The bills concerned both groundwater and surface water (almost evenly, see figure), regulation of Groundwater Conservation Districts (GCDs), and the balance of water management strategies.  Roughly the same percentage of bills made it to the House floor across the different types of water management strategies, indicating that no one strategy for water management was championed.


 

To learn more about Carey's research, visit his website or contact him using this information:
e: careyking@mail.utexas.edu      |  web: careyking.com    |     ph: +1 512-471-5468
The University of Texas at Austin, 2304 Whitis Ave, C2400, Austin, TX 78712-1718

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