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The trouble with infrastructure


The trouble with infrastructure is that it breaks down and needs to be repaired, it wears out and needs to be replaced, and it gets destroyed and needs to be rebuilt. All that requires energy, resources, labor and money.

Conceptually, here’s the problem we face. The bigger we make any part of our infrastructure–roads, pipelines, electricity grids, water and sewer systems–the more expensive it becomes just to keep it in operating order. The same is true for our industrial plant, transportation system, commercial buildings and private homes. Things fall apart over time; entropy makes sure of that. To keep things from degrading to the point where they cannot function requires resources, labor and money–all of which cannot be spent on new infrastructure or productive investment, that is, all of which must go to maintain what we have rather than grow the economy.

The ancient Romans came face to face with this reality. Expansion of the empire had been paid for with booty seized from conquered populations. But once the expansion stopped, so did the booty. The Romans increasingly had to tax themselves in order to pay for large armies to protect the now very long border and for the necessary improvements in roads and other infrastructure to maintain their administrative and military presence throughout the empire.

It didn’t last. Eventually, the Romans had to pull back. They had to shrink the empire.

Today, we don’t think so much in terms of territory as Gross Domestic Product (GDP) when evaluating our material progress as nations. It turns out that one of the ways to keep the GDP growing is to skimp on maintenance.

In the United States, water systems have been a good place to skimp. After all, much of that infrastructure is underground or at sites remote from the cities it serves. Few will notice. Here’s what the experts are saying about the silent degradation of America’s water infrastructure:

Estimates of current investments in water infrastructure indicate that the backlog of deferred investments is increasing and renewal cycles are close to 200 years across the range of utility sizes. Resistance to rate increases combined with lack of appreciation of the buildup of renewal needs reinforces the need for effective business cases for pipe renewal. Based on these and other evaluations, it appears that a substantial gap exists between current expenditures on water main renewal and the investment levels needed to sustain system integrity. (emphasis added)

The American Society of Civil Engineers (ASCE) has given near failing grades to the American infrastructure. In a report the ASCE describes the problems with the drinking water infrastructure this way:

Drinking water is delivered via one million miles of pipes across the country. Many of those pipes were laid in the early to mid-20th century with a lifespan of 75 to 100 years….While water consumption is down, there are still an estimated 240,000 water main breaks per year in the United States, wasting over two trillion gallons of treated drinking water.

But drinking water is just one example. A friend alerted me to recent train derailments at New York City’s Pennsylvania Station. The derailments caused enough damage to curtail train service for days. The problem is a 100-year-old infrastructure not built for the increasing demands put upon it. The governors of New York and New Jersey want Amtrak replaced as the station’s operator.

It’s no wonder that the perennially underfunded Amtrak is having trouble keeping up with needed maintenance. But putting someone else in charge doesn’t solve the problem of skimping on maintenance unless there is extra money. So, will the governors provide it?

Then there is America’s oil and gas pipeline infrastructure. Most of those pipelines are more than 50 years old. We seem willing to pay for rapid expansion of this system as is evidenced by 125,000 miles of new pipeline built since 2010 to accommodate the oil and gas drilling boom in the country.

But maintaining that infrastructure is just a drag on profits–until the consequences become so big that the clean-up and repair costs dwarf the phantom returns which deferred maintenance makes possible.

To be fair pipeline operators don’t want leaks or breakdowns. But neither do they want to spend more than they have to to maintain their systems. Who decides how much that should be is a problem regulators and companies are going to be hashing out as pipeline accidents continue to make the news.

All of this brings us back to the conceptual framework I presented at the onset of this piece. Here I turn to the much maligned and much misunderstood project called Limits to Growth. Limits to Growth, of course, refers to modeling of the trajectory of worldwide economic growth in the early 1970s and updated twice since then as detailed in three separate books.

The most frequent outcome of that modeling is the collapse of industrial society starting somewhere in the middle of this century. A common misunderstanding of that model is that collapse is the result of “running out” of resources. But a close reading of Limits to Growth produces a more nuanced and troubling answer.

It is the lack of capital needed to grow which produces the limits referred to in Limits to Growth. We will end up spending so much just to maintain our continually bloating infrastructure (in the broadest meaning of that word), to extract the needed natural resources to do that, and to fight the effects of pollution (through, for example, water and sewage treatment) and now climate change (through, for example, the building and maintenance of seawalls), that we won’t have anything left over for investment. When that happens, growth stops. Eventually, the economy shrinks as poorly maintained infrastructure become less productive. This is a collapse, but perhaps not a rapid one.

Infrastructure investment is lauded as the gift that keeps on giving. And, long-lived public and private infrastructure can and does increase economic productivity. But infrastructure can also become the leech that keeps on sucking when it becomes overly large and when we choose temporary economic pain relief and stimulants over the true medicine of forging a new trajectory for our infrastructure which requires deference to the limits we face.

Resource Insights by Kurt Cobb

50 Comments on "The trouble with infrastructure"

  1. Cloggie on Sun, 14th May 2017 10:13 am 

    The infrastructure in Europe is pretty good. Europe doesn’t have an empire. Not an more at least (thanks America).

    A quiet, friendly hint.

    It is time that we in Europe learn to stand on our own feet again, because old enemies are already preparing for the battle:

    Even the NYT has its doubts about the sustainability of the US empire… the f* NYT!

  2. penury on Sun, 14th May 2017 10:43 am 

    Cloggie. one reason why EU has fairly good infra=structure is that most of it has been replaced in the last seventy years.

  3. Hubert on Sun, 14th May 2017 10:49 am 

    No way they can fix all the infrastructure in this country. It’s bankrupt with government employee unions steal all the fund.

  4. Davy on Sun, 14th May 2017 11:39 am 

    US infrastructure is great in places and bad in places. We have among the best freight rail system in the world and one of the worst passenger rail. Much depends on where you go and when you go to a place where and what you look for. Some places have different priorities. States have a big impute on what get fixed. Businesses have their own infrastructure and some businesses are in excellent shape others are part of the rust belt industries. Too much was built too quickly during earlier decades and now the replacement is not keeping up. The US is also good at getting its money worth out of what it has. We don’t rebuild until it needs it then it gets done eventually. We have a dramatic rich and poor divide. Go to any rich part of the US and the infrastructure is excellent. Nowadays the Universities and Hospitals are all brand new. Most of these infrastructure articles are overblown either because of developers wanting more money thrown their way or anti-Americans wanting to make American look bad. Do we have problems, YES. Are they as bad as the overblown articles, NO.

  5. rockman on Sun, 14th May 2017 11:44 am 

    “But maintaining that {oil/NG) infrastructure is just a drag on profits”. No, it isn’t a “drag on profits”…it’s the source of profits. LOL. How much profit is there in drilling 30 great Marcellus Shale wells if there’s no pipeline to haul the gas to consumers? That dynamic is very different then a residential water distribution system…little to no profit for the municipality.

    Likewise maintenance costs for petroleum infrastructure has a payback: keeps revenue flowing. Of course once the maintenance gets too high compared to the revenue that infrastructure is abandoned…just as was planned when it was originally built.

    Commercial infrastructure dynamics are very different then public utilities including roads, bridges, etc.

  6. Davy on Sun, 14th May 2017 11:52 am 

    Combine this with the fizzling credit fueled expansion we have seen in China since January and you see why this fall may be ugly when all this negativity combines and multiplies.

    “It Fell Off A Cliff”: Morgan Stanley’s Macro Indicator Just Crashed The Most Since Dec. 2008”

    “Step aside Citi US Economic Surprise Index, which after a “surprising” streak of negative economic data, recently crashed to the lowest level since October 2016 and make way for Morgan Stanley’s ARIA, a monthly US macro indicator based on data collected through primary research on key US sectors (consumer, autos, housing, employment, and business investment). The reason why this particular index will likely feature prominently in financial commentary in the coming days and weeks, is that as Morgan Stanley’s chief economist Ellen Zentner writes, “ARIA appears to have fallen off a cliff in April, with a 0.72% decline, the largest since December 2008.”

  7. Anonymouse on Sun, 14th May 2017 3:05 pm 

    You hear that mak? ‘Asia’, and by Asia he really means China, and for some reason, he always makes sure to include the Philippines in his Asian apocalypse scenarios as well. It sounds as if, at least according to the exceptionalist anyhow, that the rest of Aisa will likely be just fine. But China and the Philippines, doomed. After China and the Philippines both slide into the sea, amerika will still be riding high.

    Very reassuring.

  8. Davy on Sun, 14th May 2017 3:45 pm 

    Another Canadian with a madkat idolatry. You might notice any mouse that I reference the Philippines only becuase it is discussed way beyond proportion here becuase of your idol. The Asian apocalypse is your apocalypse too any mouse. You just have zero economic understanding of globalism. Your idea of an apocalypse is only an American one and one your stupid little Canada will some how prosper after.

    I witnessed how bright you were when you were pushing the idea the Canadian tar sands was an American phenomenon. That is until I explained it to you with references. Notice how lately you avoid that line of thought. Lol.

  9. GregT on Sun, 14th May 2017 4:42 pm 

    “That is until I explained it to you with references.”

    You did nothing of the sort Davy. More delusion on your part.

  10. Davy on Sun, 14th May 2017 4:49 pm 

    I knew I would flush your dumbass. You were the one trying to defend the issue becuase your young friend any mouse dropped out. Greg, who is delusional. Canada is a sovereign nation and it controls its resources. If Americans recently bought out some Canadian companies who started this phenomenon that is a subject of markets. I will also add this is a multinational activity with Chinese and Europeans. To call Canadian tar sands American is just more delusions.

  11. Ghung on Sun, 14th May 2017 5:43 pm 

    As long as BAU holds, it is impressive how quickly things can come together to repair critical infrastructure. The Interstate 85 sections in Atlanta that collapsed @ six weeks ago has been repaired and opened this weekend, well ahead of best estimates. Resources were pulled from other projects in the area, millions in bonuses offered (and paid) for beating deadlines, and workers were on the job 24/7. Every bridge beam, etc, on this repair was unique and custom-built. Here’s a time lapse of the repairs:

  12. Anonymouse on Sun, 14th May 2017 5:48 pm 

    ‘Delusional’ is putting it politely in this instance. Greg is 100% correct when he says you did nothing of the sort, you provided no ‘references’ or anything resembling them. You did however, provide plenty of your useful bluster, faux-outrage and blew copious amounts of smoke in place of anything like ‘references’. Not the same thing, but a delusional mind could be excused (I suppose), for conflating the two as somehow being equivalent.

  13. Davy on Sun, 14th May 2017 6:24 pm 

    Where are your references any mouse? BTW, we can google the comment section and it will be there I can assure you. Greg had some lame references too. You can find them also You on the other hand had nothing. Your comment above describes you perfectly.

  14. makati1 on Sun, 14th May 2017 6:37 pm 

    The Philippines is still growing. It has some financial ties to China but mostly trade, (40%) not debt.

    “The Philippines is the 39th largest export economy in the world and the 57th most complex economy according to the Economic Complexity Index (ECI). In 2015, the Philippines exported $77.9B and imported $76.8B, resulting in a positive trade balance of $1.06B. In 2015 the GDP of the Philippines was $292B and its GDP per capita was $7.39k.”

    You have to keep in mind that $7,390,00 buys a lot more here than in the US:
    Haircut: $2 (US $12)
    Specialist Doctor: $15 ($35+++)
    Dental crown w/root canal: $120 ($1,200+)
    Chest Xray: $2 (???)
    Const. Laborer: $2/hr. ($12++/hr.)
    Rice: %0.30/lb. (??)

    As for the P’s finances:

    “This amount means that the debt in 2016 reached 33.71% of Philippines GDP, a 2.57 percentage point fall from 2015, when it was 36.28% of GDP.”

    “(US) Government Debt to GDP = 104.17%

    Those who think the Ps is in bad shape need to look in the mirror. A certain delusional patriot seems to to think that he resides in a relatively safe place to weather the coming storm. Whereas, I live in a most dangerous place. As I said, he is delusional. Some above agree. LOL

  15. makati1 on Sun, 14th May 2017 6:42 pm 

    BTW: China has been around for ~5,000 years. The US 1/20th the time. I would, and have, put my bet on China (and S.E.Asia) surviving the coming storm. The US, NOT surviving. We shall see.

  16. GregT on Sun, 14th May 2017 7:08 pm 

    Somebody recently suggested that you’ve lost it Davy. I couldn’t agree more, and IMA, you’re getting more unstable by the day.

  17. Davy on Sun, 14th May 2017 7:09 pm 

    “Those who think the Ps is in bad shape need to look in the mirror”
    Madkat, numbers don’t lie or embellish they are as they are. The P’s GDP is 292BIL and has a similar GDP to my state 229BIL. Your P’s has a 116,000 sq/mi and Missouri is 70,000 sq/mi. The kicker is you have 100MIL people and my state has 6MIL. Chew on that and everything falls into place.

    “A certain delusional patriot seems to to think that he resides in a relatively safe place to weather the coming storm”
    Please stop putting words in my mouth asswipe. I have always talked about my risks. You on the other hand think you have few risks and I have most of the risks. Your dangers are significant and so are mine.

  18. Davy on Sun, 14th May 2017 7:10 pm 

    Greg, that is how people talk when the argument is lost.LOL

  19. makati1 on Sun, 14th May 2017 7:29 pm 

    Sure is Davy, and you lost the Asia argument one long ago. Can we go back to some of YOUR early rants where you use grade school bullying tactics? When that didn’t work, you moved to long winded rants no one read. Now you just deny everything that does not fit your narrow little vision of the world. Delusional? A psychiatrist would have a field day with you and most brainwashed Americans. Not a sane one in 1000.

  20. Davy on Sun, 14th May 2017 7:37 pm 

    References Madkat because all I am seeing is blather. I thought I was on your ignore list. Maybe you can’t take it anymore now that your charade is exposed daily.

  21. GregT on Sun, 14th May 2017 7:39 pm 


    Your (delusional) list of gang members continues to grow, and you still don’t appear to have the foggiest idea as to why?

    If I was you, I would be taking a long, hard look in the mirror.

  22. Davy on Sun, 14th May 2017 7:50 pm 

    I know one thing I have you all hot and bothered and that means one thing…LOL

  23. makati1 on Sun, 14th May 2017 7:58 pm 

    BTW: The Ps population density is about 900 per sq.mile. Equal to: Israel, Belgium, Japan, etc..

    Where as it is less than: New Jersey (1,200) and Rhode Island (1,000) And about the same as Massachusetts (900).

    None of those U$ states can survive alone. The Ps can and has for over 1,000 years of recorded history. No comparison.

    As for cites: (2015 stats)
    Metro New York City = ~23,800,000 people (8th largest in the world)
    Metro LA = ~14,200,000 (25th)
    Metro Manila = ~12,900,000 (30th)

  24. makati1 on Sun, 14th May 2017 8:02 pm 

    “… I have you all hot and bothered…”

    No Davy, it means I am bored and poking a stick at the Missouri redneck is entertaining. A good way to waste time this morning as there is little in the news worth reading. ^_^

  25. GregT on Sun, 14th May 2017 8:03 pm 

    “I know one thing I have you all hot and bothered and that means one thing”

    You don’t have anyone ‘all hot and bothered’ Davy. That would also be delusional.

  26. Apneaman on Sun, 14th May 2017 8:04 pm 

    Anti-Americanism Anti-Americanism? I thought that was only on odd days? Must be variance being Mother’s day N all. Far be it from me not to particapate in group activities. Wouldn’t want anyone to think I’m getting all upitty and such.

    Protestors chant Nazi phrases, wield torches near Confederate statue in Charlottesville, Va.

    The Last Person You’d Expect to Die in Childbirth
    The U.S. has the worst rate of maternal deaths in the developed world, and 60 percent are preventable.

    The Laws Cities Use To Make Homelessness a Crime
    A new law gives police new power and wide discretion to arrest the most vulnerable.

    “There’s nothing shocking, really, about Houston’s new law making it easier for homeless people to be arrested simply for being homeless.

    Not when over 100 American cities have effectively criminalized everyday life for the homeless, making crimes of things from sleeping outside to brushing teeth in public.”

  27. Davy on Sun, 14th May 2017 8:08 pm 

    I sure feel entertained because you are unable to ignore me as you once tried to do and broadcast so loudly. Your agenda is easy to crack and I crack it daily and that has to hurt that narcissistic pride you project in almost every comment. You are a fake madkati and I expose that daily. That is my entertainment.

  28. GregT on Sun, 14th May 2017 8:08 pm 

    “poking a stick at the Missouri redneck is entertaining”

    I don’t find it to be entertaining at all. I find Davy’s deteriorating condition to be sad. I don’t find pleasure in other peoples’ ills.

  29. Davy on Sun, 14th May 2017 8:15 pm 

    You keep coming back with nothing to say which is my confirmation.

  30. Davy on Sun, 14th May 2017 8:18 pm 

    Greg, what kind of meds are you on. You are always reverting back to mental conditions with your arguments. Is that an unconscious way of indicates you might be in treatment. Nothing wrong with that but it is a problem if you accuse others of something that is really your issue.

  31. GregT on Sun, 14th May 2017 8:38 pm 

    You and I both know that you have issues Davy. If you would like to continue, I will also.

  32. makati1 on Sun, 14th May 2017 9:07 pm 

    Ah Davy, you keep on proving what we are all thinking here. Type some more of your bullshit so we can be entertained. I do NOT feel sorry for you. I DO feel sorry for your family and can only imagine the warped children you are raising.

  33. Davy on Sun, 14th May 2017 9:11 pm 

    dumb and dumber. You guys make a great pair

  34. GregT on Sun, 14th May 2017 9:17 pm 

    “I DO feel sorry for your family and can only imagine the warped children you are raising.”

    Davy isn’t raising any children. If he was, he wouldn’t have the time to be on this forum 24/7.

  35. Davy on Sun, 14th May 2017 9:39 pm 

    Greg, dragging the family into this just shows how low you will go and then topping it off with hypocrisy. You are here as much as I am and as long as I have been. You dirty dog greg. What’s next, are you going to call on supernatural powers;)

  36. Cloggie on Sun, 14th May 2017 10:25 pm 

    One thing is certain if you read the exchange above: peak oil has lost many of its sharp edges, now that we begin to address each others alleged issues and meds.

    For the fate of the world, this definatelly is a joyfull development.

  37. Cloggie on Sun, 14th May 2017 10:31 pm 

    “Anti-Americanism Anti-Americanism? I thought that was only on odd days? Must be variance being Mother’s day N all. Far be it from me not to particapate in group activities.”

    One wonders what these group activities might be… perhaps fighting anti-semitism on even days?

    You believe in the Sand/Koestler hypothesis?

  38. Cloggie on Sun, 14th May 2017 10:49 pm 

    I’m sure the US infrastructure is way better than in Ulraine, where a single moment of not paying attention could cost you a broken wheel axis and where it is impossible to drive at night.

  39. GregT on Sun, 14th May 2017 10:55 pm 

    ‘The’ family?

    That’s precious. If you were an involved father of twin 9 year old boys, you wouldn’t be spending the amount of time on this forum that you do.

    I call bullshit on your supposed “family” Davy. My guess is that you are fortunate to still have any visitation rights.

  40. Cloggie on Sun, 14th May 2017 10:57 pm 

    Perhaps the US can apply for membership of the New Silk Road project as China wants to invest a staggering 900 billion $ in upgrading Eurasian infrastructure.

    The West looks old, nay IS old compared to these kind of ambitionlevels.

  41. GregT on Sun, 14th May 2017 10:58 pm 

    Oh yah. Thanks Cloggie. Not to mention Mother’s day on top of twin sons.

    Right Davy.

  42. Sissyfuss on Sun, 14th May 2017 11:01 pm 

    I feel like I’m at a city council meeting that has devolved into an insult contest because nobody wants to deal with the need to raise taxes for the new sewer lines. Hey look, we’re back on topic for at least a millisecond.

  43. Cloggie on Mon, 15th May 2017 12:07 am

    Perhaps interesting to watch for both Davy and ApneaTurd, who doubt/mock my global “Euro-Empire” vision (from 14:00 onwards). Similar views exist on your side of the Pond.

    Trump is a transitional figure, but he will succeed where he will fail in MAGA: dislocating the old America.

  44. makati1 on Mon, 15th May 2017 2:12 am 

    “Dislocating the old America” sums up what I see as a deliberate plan by the elites to take America down to the rest of the world’s level. They appear to be succeeding exceedingly well. The infrastructure is crumbling into gravel roads, leaking/contaminated water systems, failing bridges, leaking gas and oil pipelines, etc. and no money is going to be available to repair or replace them. Patches are only on emergency basis. Meanwhile drugs/gangs/riots are increasing. More and more pregnant mothers are dying. Suicides are exceeding auto deaths. Obesity is increasing along with the diseases caused by same. Debt is growing. Poverty is growing. Unemployment/under employment is growing. Incomes are shrinking in purchasing power. Endless wars and their expenses dragging the wealth of America down. And on and on.

    BTW: Average world per capita income (2016) is only ~$10,000 each person vs U$ ~$57,000 each person. An indicator of how far the U$ will fall over the next few years. Meanwhile, the Ps at about $7,500 per capita, will be climbing the ladder. (CIA info)

  45. Davy on Mon, 15th May 2017 2:46 am 

    “you wouldn’t be spending the amount of time on this forum that you do.”
    The kettle telling the pot it is black and more of your very deep hypocrisy. You really are desperate

    “I call bullshit on your supposed “family” Davy. My guess is that you are fortunate to still have any visitation rights.”
    Greg, what’s the matter greg? You have a shitty family life so you want to suppose you know about mine. You know projecting your problems and conflicts on to me. You are losing it and probably in treatment but not responding.

  46. Davy on Mon, 15th May 2017 2:53 am 

    Madkati, sorry you are exaggerating the issues for your emotional agenda. You would know that if you lived here. You read too much and have been gone 10 years. You hate the place with a passion akin to mental illness. IOW, you are an extremist. In any case you have only been to a few states in your life, Pennsylvania is not the whole US.

  47. Cloggie on Mon, 15th May 2017 4:15 am 

    Come on gentlemen, views on infrastructure please.

  48. rockman on Mon, 15th May 2017 8:33 am 

    Sissy/Cloggie – IMHO all those posts that bother you just emphasize the critical need to repair this site “infrastructure”. LOL.

  49. makati1 on Mon, 15th May 2017 5:49 pm 

    Cloggie, infrastructure is dead news. All the bullshit on here is about either a lot of “Ifs and maybes” hopium or selling something to the fools. Few articles are actually facts and details of the real world and the real future we face.

    Whereas, the discussions and debates about personal views are far more indicative of the direction the human species is headed. Davy personifies a typical brainwashed American in denial. You are a typical techie acolyte . Me, I’m a typical doomer realist. The comments are much more interesting than most of the articles. They just supply the topic to start the discussion.

  50. Davy on Mon, 15th May 2017 6:03 pm 

    You stupid fuck can’t you give it a rest. Do you want to go at it again because I am fine with that. You are such a dumb fuck it is not hard to trash your arguments or we could show some respect for others. What is it butt cheese?

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