Tuesday, August 14, 2007

Our Dangerous Infrastructure

See these other articles in the blog related to infrastructure maintenance;
The myth of permanence: post-peak infrastructure maintenance
The Emerging Global Freshwater Crisis
Lake Ontario & St. Lawrence River after Peak Oil
Post Peak Dam Maintenance, or Lack Thereof

This article concerns the post peak oil dangers represented by the decay of our modern infrastructure. Of all the implications of peak oil and the energy downslope on the other side this is the one least present in the public consciousness or, for that matter, even in the minds of most of those who are peak oil aware. I understand that. Infrastructure is not something we think about. It doesn't grab our attention. It is just there. The only time we are really conscious of it is when it fails, when the levees break in New Orleans or an overpass collapses in Montreal or a bridge falls into the Mississippi in Minneapolis or the grid dies in the entire northeast or an ice storm collapses hydro transmission towers in Quebec.

Very few of us have any connection with the infrastructure that underlies the smooth working of our society. It is invariably designed, built and maintained by an army of people with very specialized knowledge and skills that are outside the purview of the average citizen. That is part of what keeps it invisible to us. Even the infrastructure in our homes is invisible to most of us, the foundation, the framework inside the walls, the plumbing and electrical wiring running through the walls, floors and ceilings, the structure that supports the roof, the little details that let our house breathe. These are all someone else's concern, the hired plumber or electrician or handyman or builder or whoever. We pick up the phone, unconscious of the massive infrastructure that allows that system to work, and call somebody to come fix whatever it is that is broken. We don't care how they do it, just that they do.

But how much of society's resources are tied up in that dependable, invisible infrastructure? What does it cost us all every year?

Take a single piece of infrastructure, a bridge for example. It is designed and built with a planned serviceable lifespan of fifty years. The annual cost of that structure amortized over the planned lifespan is manageable. For the sake of argument, let us say the bridge cost $50-million to build. The annual cost spread over that planned fifty year lifespan is only $1-million per year. During the first half of that lifespan the annual inspection and maintenance costs are minimal. They may be, let's say, between $200,000 and $300,000 each year, averaging $250,000 annually (about one quarter of the annual amortized construction cost) over the first 25 years. From the midway point of the designed lifespan, however, inspection and maintenance costs normally begin to rise steadily. Anyone who has ever tried to keep an aging car on the road understands this. Let us assume that costs rise 4% per year. By the fiftieth year, at a steady rate of increase in maintenance cost, the annual cost will have risen to $666,000, two thirds of the amortized construction cost. If at that stage it is decided to continue to maintain the bridge rather than decommission it or replace it, the annual maintenance costs will rise over the next 25 years to $1,778,000 per year, nearly double the annual amortization cost during the designed lifespan of the bridge.

In a constantly growing economy the amount of newer infrastructure is always greater than the amount of aging infrastructure, the average age generally half or less than the overall average designed lifespan. Under such circumstances prioritizing and paying for the cost of maintenance for the relatively small amount of aging infrastructure is not a big issue, particularly where there is some form of centralized or collective budgeting (government?) for that cost to be spread over the whole infrastructure budget. The percentage of the overall infrastructure budget committed for maintenance is relatively low. In a declining economy, however, where the infrastructure is always pushed just a little bit further, expected to last just a little bit longer, where the average age of the infrastructure inventory steadily increases toward and then beyond the designed service life, not only does the ratio of maintenance cost to development cost increase but, as the overall infrastructure inventory exceeds its design lifespan the cost of proper maintenance will actually reach the point where it exceeds what would have been the amortized construction cost of new infrastructure. The decision to push the infrastructure to stay in service longer, because of the declining economy, is not made with a clear and honest understanding and admission that the maintenance costs will continue to grow. In fact, more often than not such decisions are probably made concurrent with a decision to decrease or, at best, hold the line on the maintenance budget. This should not be surprising to anyone. Even in this age of a constantly growing economy maintenance budgets are invariably underfunded and maintenance short cuts are the norm rather than the exception.

The reason that the amount of new infrastructure developed in a shrinking economy decreases is not because the infrastructure is any less needed than it was when the economy was growing. It is because the cost of new infrastructure is higher than can be justified in a shrinking economy. The cost exceeds the need. In a declining economy the overall infrastructure budget shrinks. Why, then, would one expect those budgets to suddenly and miraculously increase to meet the escalating needs of infrastructure maintenance when those maintenance costs rise above the level it would take to develop new infrastructure? The budget for infrastructure maintenance in that declining economy will have shrunk proportional to the budget for new infrastructure because "everybody knows" maintenance is always a proportion of the cost of new infrastructure. If the amount of new infrastructure is declining, obviously, so too should the amount set aside for maintenance. This is a mindset that is not likely to be easily changed just because the economy is shrinking.

The current U.S. infrastructure maintenance/renewal backlog is estimated at $1.6-trillion, Canada's between $60-125-billion. The dollar value of the infrastructure in need of that maintenance is probably inestimable at this stage, with over 600,000 bridges and 75,000 dams in the U.S. alone. They were essentially all designed and built with a planned service life of fifty years. The average age of all of that infrastructure, as a result, most of it built between 1950 and the late 1970s, has now exceeded half the serviceable lifespan with as much as one quarter of that infrastructure having already exceeded its full designed service lifespan. And the maintenance backlog continues to grow and the infrastructure inventory continues to age. Canada's maintenance backlog is estimated to be growing by $2-billion annually, the U.S. backlog between $25-50-billion, almost equal the total of the $30-billion annual infrastructure maintenance budget.

As the age of any unit of infrastructure increases and the maintenance costs begin to climb there will most often be a period of time when those rising costs are absorbed through a process of "creative accounting". This is generally done on an assumption that the higher costs are a temporary aberration. As the cost increases develop into a trend, however, it becomes increasingly difficult to "hide" and absorb the rising costs. Those increases must be dealt with, and are usually dealt with by recommending that the unit be upgraded or replaced and/or imposing limits on the maintenance that will be done in order to keep the maintenance costs within budget. It's not unlike what you do when the maintenance costs on your aging car suddenly shoot up. At first you just absorb it, figuring it is a temporary situation. As it becomes a regular event, though, you suddenly have some decisions to make. Do you continue to absorb the cost? Increase you vehicle maintenance budget? Decide to avoid certain types of maintenance that you decide is non-critical? Or decide to start looking for another car? Or do you consider leasing rather than buying? If you are confident your job will continue and your salary will continue to increase you probably decide to replace. But if your job is threatened or the company is imposing salary limitations or salary cuts or your confidence in your future earnings potential is otherwise shaken, you may be forced to consider other options.

That is the situation our society, national and global, will be facing as we pass peak oil and it begins to have a destructive impact on the national and global economy. The first victim of budget cuts is almost invariably maintenance. Investigations following most major infrastructure failures, even in a vibrant economy, highlight insufficient or ineffective maintenance as the key factor in the failure. That is followed by design flaws, either from an engineering perspective or from an insufficient understanding of the failure criteria.

Let us be clear. Neither design flaws nor shortcomings in infrastructure maintenance are a guarantee that the infrastructure will suffer a catastrophic failure. Considering the nearly 700,000 bridges and dams in operation in the U.S. the number of catastrophic failures are surprisingly low. They stick in the public consciousness because they are catastrophic, like a plane crash that kills three hundred people compared to the same number dying in two hundred different car accidents. The plane crash is global news. The two hundred car accidents are buried on the inside pages of two hundred local newspapers.

But this is the nature of air travel and of major infrastructure. When it fails it is serious business. People die, often in large numbers. When the levees failed in New Orleans after Hurricane Katrina thousands of people perished. The 1963 failure of the Vajont dam in Italy claimed 2,500 lives. In the catastrophic dam failure in China in 1975 over 85,000 people died. The Val di Stava dam collapse in Italy in 1985 took another 268 lives. Railway crashes, often due to infrastructure failure, regularly take hundreds of lives. Even as you read this the so-called Saddam dam that holds back the waters of the Tigris River in northern Iraq is in imminent danger of collapse and under constant surveillance. It is no longer a question of if the dam will fail, just a question of when. When it does fail, a wall of water will sweep into Mosul, Iraq's third largest city with a population of 1.7 million, 20 miles to the south. Once the dam fails evacuation will no longer be an option. That wall of water will reach Mosul in minutes.

Our major infrastructure, especially that like dams, levees and bridges that deal with water, are very dangerous when they fail. Unfortunately, without proper maintenance and timely replacement or decommissioning failure is an eventual certainty. The only uncertainty is when that failure will occur. In that regard it is important to note that all of our infrastructure, especially that designed and built since WWII, has a designed life-span. That life-span is generally planned to be fifty years. In fairness, generally infrastructure can be retained in service safely for an extra half of it's designed life-span. In general, therefore, with proper maintenance that infrastructure designed to last fifty years can be safely operated for seventy-five years. Some can and does function much longer than that. The Brooklyn Bridge, for example, was opened in 1883 and is still in service today 124 years later, despite both design and construction flaws. The bridge has, however, failed its latest safety inspection and its days may be numbered. It is important to note that the Manhattan tower of the bridge has always rested on sand, thirty feet short of the underlying bedrock. With hundreds of thousands of vehicles crossing the bridge daily and hundreds or even thousands on the bridge at any given time, the risk of any failure being catastrophic is simply too great to continue to push the limits.

If peak oil results in the economic failure that most analysts expect and if it occurs within the next ten to fifteen years, which is almost guaranteed, it could not come at a worse time when looking at the aging infrastructure around us. Over 80% of our current, major, functioning infrastructure was built in the quarter century beginning in 1950 or earlier. Over 50% of that infrastructure will have exceeded its designed service life by 2025. By the middle of this century almost all of that infrastructure currently in service will have reached or exceeded its designed lifespan. In this same timeframe, unfortunately, the national and global economy will probably be in a period of severe contraction due to the impact of global peak oil. It is unlikely in a contracting economy that infrastructure, regardless of it's age, will be replaced or, perhaps, even properly decommissioned. Efforts will be made to keep that infrastructure in service as long as possible, or longer. But peak oil will hit, the global economy will go into terminal decline at the very time when most of our infrastructure seriously needs replacement or decommissioning.

Major infrastructure is increasingly dangerous as it ages beyond its designed service life, even with proper maintenance. Every dam represents a serious danger to those living or working downstream from it. Every major aging bridge crossing any waterway is an increasing risk to those who continue to use it when it has surpassed its reasonable age of serviceability. But by the middle of this century virtually all of our major infrastructure will reach that age, and will probably do so without proper maintenance performed on it possibly for decades.

If a bridge gets too old and too unsafe to use ultimately it can simply be closed off and left to fail. Unless something happens to be under it at the time of collapse it probably won't be a catastrophe. Dams and levees, however, are another matter. They don't pass over water. They hold back water, tremendous volumes of water. If those structures failure the sudden unleashing of all that water will be catastrophic, regardless of where that structure is. Over ten percent of our dams and levees hold back water from major population centers, many from cities of millions of people, like the risk posed to Mosul by the Saddam dam. When they fail, which they will if not eventually decommissioned or replaced, the results will be unquestionably catastrophic. Unlike bridges, dams and levees represent an ongoing and increasing risk regardless of whether we are "using" them or not. They can't simply be blocked off and left to fail with no resulting loss of life or property. A bridged blocked off no longer has traffic crossing it to be at risk. A dam blocked off still holds back billions of gallons of water capable of inundating the land downstream and potentially destroying anything or anyone in its path.

If we enter the anticipated era of declining global economy with a general and, more importantly, leadership mindset that still believes the invisible hand of the markets will right all problems, our infrastructure woes and the risks involved will continue to worsen. That belief in the ability of the markets to correct themselves is based on an assumption that the state of normalcy to which the markets will eventually return is one of growth. That assumption is, however, based on endless consumption of resources supported by an endless and reliable supply of energy. Once we pass peak oil neither will possible. The state of decline, for all practical purposes, will be permanent.

The first victim in any budget cuts is almost always the maintenance budget. The first priority for business, and probably government as well, in a declining economy will be to do whatever is necessary to keep profits up while sales are declining, again based on an assumption that overtime sales will return to a pattern of growth. This invariably means cutting costs. Profits invariably mean growth, the willingness of a society to pay more for goods than their real value (the profits) in a belief that that value will increase with time. In an environment of perpetual economic decline this will not be possible. The longer any business or nation tries to hold on in a belief that things will get back to normal the more assured is their eventual collapse.

The cutting of maintenance budgets in a downturn is, like all other cost-cutting measures, assumed to be a necessary and temporary adjustment. It is assumed that when things turn around that deferred maintenance will be caught up. But when there is no turn around, no correction, no return to normal growth on the horizon, the maintenance deficit and the risks implicit in that deficit continue to worsen. When the infrastructure with which those risks are being taken, for which maintenance is being "temporarily" deferred, is already near, at or beyond its designed service life those decisions put society in general at serious risk. This is critically so with dams, levees, bridges and other water management infrastructure.

Facing the reality of peak oil and the implications for our economy and society is no longer an option, no longer something that can be denied or avoided. There is far too much risk to society in a do-nothing, laissez-faire approach. Doing nothing simply increases the risk and threat. We need to face that reality, face the implications, make the decisions and begin the corrective action necessary before peak oil is upon us and before the global economy slides into a state of perpetual decline. The resources, particularly financial, will simply not be available to take the appropriate action if we wait for that event to push us into action.

I am not optimistic that we will do what needs to be done. All of the historical evidence suggests that we will not. One can only hope and add one's voice to the demands for appropriate and timely action.


Anonymous said...

This doesn't bode well for Nuclear power, does it?

denisaf said...

this article looks realistically at the problem of finding the finances to cope with the necessary maintenance of the infrastructure of civilization as the economy goes into the inevitable decline as the available energy, particularly from oil, becomes scarce. It gives some indication of the dire peril if this maintenance is not carried out.A more practical concern, however, will be the decreasing availability of all forms of natural resources needed for the conduct of this maintenance. Money will not be the deciding factor when the time comes to replace the seventy year old Sydney Harbour Bridge.