Tag Archives: economy

Biggest Threat to the Economy Could Come From Outer Space

Spaceweather

Imagine waking up just after midnight to a sky so bright you swear it must be early morning. Imagine seeing the Northern Lights as far south as Cuba or Hawaii. Imagine that the same phenomena behind both has also generated electric fields in the ground strong enough to power small electronics. That’s what happened in 1859, when the earth was struck by the most severe geomagnetic storm ever recorded.

Forget asset bubbles, recessions, or hurricanes—space weather could prove far more economically harmful. A severe geomagnetic storm—a sudden, violent eruption of gas and magnetic fields from the sun’s surface—could prove particularly devastating. If the 1859 storm, known as the “Carrington event,” were to recur today it could cause trillions of dollars in economic damage and take years to recover from, according to estimates.

The sun would sneeze and the economy could shatter.

That’s a worst-case scenario, of course. NASA Administrator Charles Bolden was less dramatic at a space-weather conference hosted by the agency last week, though he did say such events can be “just as punishing as a tornado” and are “a problem that crosses all borders.” Magnetic storms can force Earth’s magnetic fields to go temporarily haywire, overwhelming power grids.

The 1859 event didn’t cause as much damage as it would today—electrical engineering was in its infancy—but it was globally felt. Here’s how a 2008 space-weather report from the National Academy of Sciences described that year’s storm:

From Aug. 28 through Sept. 4, auroral displays of extraordinary brilliance were observed throughout North and South America, Europe, Asia and Australia, and were seen as far south as Hawaii, the Caribbean and Central America in the Northern Hemisphere and in the Southern Hemisphere as far north as Santiago, Chile.

Even after daybreak, when the aurora was no longer visible, its presence continued to be felt through the effect of the auroral currents. Magnetic observatories recorded disturbances in Earth’s field so extreme that magnetometer traces were driven off scale, and telegraph networks around the world—the “Victorian Internet”—experienced major disruptions and outages…. In several locations, operators disconnected their systems from the batteries and sent messages using only the current induced by the aurora.

In other words, they literally ran the telegraphs from the electrical fields generated by the storm.

The 1859 event may be an extreme case, but there are more-recent examples of such space weather: In March 1989 a geomagnetic storm took down northeastern Canada’s Hydro-Quebec power grid in just 90 seconds, leaving millions without power in the cold for up to nine hours. And a set of “Halloween” solar storms between October and November of 2003 sparked a National Academy of Sciences-led meeting on the societal and economic impact of space weather, which served as the basis of the report.

But it’s not just scientists who are concerned about space weather. Lloyd’s of London, the giant insurer, issued a report on the issue in 2010. In the foreword to the report, Lloyd’s Tom Bolt warned of a scientist-predicted spike between 2012 and 2015. “In terms of cycles, we are in late autumn and heading into winter,” he wrote then. A severe space-weather event could prove devastating, according to the Lloyd’s report.

In the worst case it can permanently damage transformers. In most cases, systems protecting power grids will detect problems and switch off before serious damage occurs. However, this may lead to a cascade effect in which more and more systems are switched off, leading to complete grid shutdown. In these situations it will take many hours to restore grid operation, causing disruption to operations and services, and potential loss of income.

The 1989 storm permanently damaged a $12 million New Jersey transformer. In 1921, a storm 10 times as bad struck. Today, that storm would permanently damage roughly 350 transformers, causing blackouts that would affect as many as 130 million people, according to a Metatech estimate.

An outside analysis conducted by Metatech for the Electromagnetic Pulse Commission and the Federal Emergency Management Agency found that the effects of a severe geomagnetic storm would not only be widespread, but long-lived. Such an event has “not only the potential for large-scale blackouts but, more troubling … the potential for permanent damage that could lead to extraordinarily long restoration times,” Metatech’s John Kappenman told the NAS report’s authors.

In a globalized world, all kinds of sectors would be impacted by a power failure. Fuel, food, water, sanitation, communications, medical/health, finance, and transportation would all feel cascading effects. Many businesses rely solely on satellite navigation for transportation on land and sea, and cell phones would be vulnerable to interference.

“Impacts would be felt on interdependent infrastructures, with, for example, potable water distribution affected within several hours; perishable foods and medications lost in about 12-24 hours; and immediate or eventual loss of heating/air conditioning, sewage disposal, phone service, transportation, fuel resupply, and so on,” the NAS report found.

Hurricane Katrina caused roughly $80 billion to $125 billion in damage, according to the report. A future geomagnetic storm like the 1859 event could cost 10 to 20 times as much and take up to a decade to fully recover from, according to Metatech’s estimates.

Image courtesy of NASA

This article originally published at National Journal
here

Read more: http://mashable.com/2013/06/13/threat-economy-outer-space/

Technology Can Fix the Budget Crisis

Circuit-640x360

A pair of Clinton-era telecom regulators and “card-carrying Democrats” want to bring back some of the economic magic of the go-go 1990s with an ambitious plan to accelerate growth, shrink the national debt while revolutionizing the delivery of government services and help slow global warming.

The plan from former Federal Communications Commission Chairman Reed Hundt and his former chief of staff, Blair Levin, is outlined in an e-book called The Politics of Abundance: How Technology Can Fix the Budget, Revive the American Dream, and Establish Obama’s Legacy. It modestly proposes that huge economic growth can be spurred through reconfiguring the way energy is produced, purchased, and consumed. At the same time, the government can generate new efficiencies and savings using broadband applications in health care and education.

All it’s going to take is a grand bargain between Republicans and Democrats in which revenue from a big new emissions tax that targets energy generated by nonrenewable sources and from utility regulation reform is swapped for lower personal and corporate tax rates and a reduction in taxes U.S.-based multinationals pay on repatriated foreign profits.

It sounds like a pipe dream, but Hundt and Levin think it’s possible. “We did not put one thing in that we thought Republicans would overwhelmingly oppose,” Hundt said Tuesday morning at the Hudson Institute in Washington.

The two are shopping their plan to policymakers, lobbyists, industry leaders, and think tankers. Rep. Chris Van Hollen, D-Md., recommended it to his caucus in a letter, calling the book, “a thoughtful, forward-looking, and optimistic prescription for President Obama’s second term, and I commend it to your consideration.”

On the technology side, the plan calls for raising $45 billion thorough a spectrum auction and spectrum management fees. Some of these funds will go to an effort to digitize all government information and move it to a cloud-based system. “The government should not be the last institution in the social landscape to know which way the digital wind is blowing,” they write.

They offer a laundry list of recommendations for executive actions to push government services online, including the elimination of paper from government, creating a secure system for digital voting, new standards for making online medical records interoperable, new telemedicine rules that allow for delivery of services across state lines, and rewarding school districts that use digital course materials including electronic textbooks. They would also centralize all government spectrum leasing through the Office of Management and Budget, taking that role away from the military and government agencies that currently hold the spectrum.

Hundt said he and Levin wrote the book in anticipation of an Obama victory in the November elections. He offered another prediction — that the Obama administration and Congress will come to terms on a compromise to avert the combination of tax hikes and spending cuts known as the fiscal cliff. He expects a deal to include tax hikes on top earners, and a postponement of a reckoning on taxes and entitlements. As Obama pivots to his second-term agenda, Hundt said that the president will find a Congress “that will want accomplishments.”

The two faced a skeptical audience. Seth Bloom, general counsel on the Senate Antitrust Subcommittee, said that such transformative legislation faces strong headwinds in Congress. Filibuster reform, he said, “could be the most important thing in getting stuff like this to move.”

Image courtesy of Flickr, BotheredByBees

This article originally published at National Journal
here

Read more: http://mashable.com/2012/11/27/technology-budget-crisis/

The Crazy Economics of Mining Asteroids for Gold and Platinum

Asteroid-mining

Not one but two companies have now decided that they’re going to mine asteroids to collect gold and platinum.

The aptly named Deep Space Industries joins Planetary Resources in the competition for meteor material. But we’re a little concerned here; a NASA mission to an asteroid to bring back 2 kilograms of material in 2021 is expected to cost the space agency $1 billion.

Before we turn over billions of dollars as angel investors, we’d like to run some math on this venture.

These mining ventures aim to bring back resources like platinum, water and gold. At market close Jan. 24, 50 troy ounces of platinum sold for $1681.30 (32.15 troy ounces equal 1 kilogram). Even if NASA could bring back 2 kilograms of pure platinum, it would only net $108,107.59.

Clearly that’s not going to bring in the big bucks. But we’re going to consider that private companies might be able to mine galactic material more cheaply — U.S. government spending is hardly known for its efficiency — so bear with us.

Now, the risk of an asteroid being steered off course and crashing into the Earth, though unlikely, is not one we’d really like to run. So we capitalists would rather not screw around with anything remotely close to the size of the Chicxulub meteor, which killed off the dinosaurs 65 million years ago and was probably about 15 kilometers wide.

For this reason, Deep Space Industries has said that it will initially target very small asteroids of 10 meters or less:

These sorts of asteroids hit the Earth every day, but disintegrate and burn up high in the atmosphere. The meteorites that do survive passage to the surface generally come from much larger objects, 30 or more meters, and even those are blasted into smaller pieces before they reach the ground. It takes a really large meteorite (50 or more meters in diameter, depending upon its composition and structure) to actually impact the Earth hard enough to make a crater.

So if a mining operation could mine a roughy spherical asteroid with a diameter of 10 meters, and if the entire asteroid were made out of material that can be mined (we’re going to say platinum), how much money would that company be able to bring back?

The density of platinum is 21.45 grams per cubic centimeter. (OK fine, science nerds — that’s at room temperature, but in space we’re going to assume it’s still a solid and therefore reasonably similar.) If we assume that an entire spherical asteroid with a 10-meter diameter (about 523 cubic meters) is made of platinum, and that one of these asteroid miners could harvest the whole thing, they’d get about 11.2 million kilograms of platinum. At current market rates, that comes out to $12.1 billion.

Of course, this is wildly optimistic. Although asteroids of pure metal exist, they’re most likely to be mixes of roughly 90% iron and 10% nickel. A tenth of our asteroid (52.3 cubic meters, or 466,000 kilograms) made of nickel would be worth about $8.1 million at last month’s market rates. The iron — well, iron ore is so cheap that it hardly adds anything.

So it’s a little harder to make the commercial case. It’s also likely that a massive influx of any of these materials would deflate its market price. Still, this is not the same order of crazy as building a Death Star (price tag: $850 trillion). What’s more, private companies are taking a bigger role in space exploration and galactic commercial ventures; SpaceX has already delivered commercial cargo to the International Space Station.

The plans proposed by Deep Space Industries and Planetary Resources may seem laughable. But hey, who knows? No wonder the latter counts Google Executive Chairman Eric Schmidt, Google CEO Larry Page and one-time U.S. third-party presidential candidate — and Texas billionaire — Ross Perot as its investors.

Image courtesy of NASA

This article originally published at Quartz
here

Read more: http://mashable.com/2013/01/28/mining-asteroids-gold-platinum/