Note: A shortened version of this blog appeared in the Buffalo News “Another Voice” section on November 8, 2015
In one of those strange ironies of history, the automobile arrived as a response to an environmental issue of the time. In 1900, there were more than 100,000 horses in New York City and Brooklyn, creating about 4000 tons of manure and urine daily that had to be removed. Hundreds, if not thousands, of workers toiled daily to cart off that mess. Horse manure had become a significant health hazard for urban dwellers. There were even reports of a haze of manure and urine in the air in poor neighborhoods where the cleanup was not as effective.
A Rich Man’s Toy
Some saw the automobile as a potential solution to this problem. However, this was a time when automobiles were still in their infancy and could only be afforded by the wealthy. I bet those workers who mopped those city streets, along with buggy and buggy-whip makers, led those who derided these newfangled toys, with shouts of, “Get a horse!” when an early automobile drove by. Yet there was enough interest in the nascent automobile industry to spawn hundreds of automobile companies, each trying to build a better car and create a new market. Most of those companies came and went as they failed to find the magic elixir to excite the public. This is often the case with the introduction of new technologies. Witness what happened in the dot com mania of the nineteen-nineties when many of the companies touting a new business paradigm failed to succeed and create that paradigm. I bet the owners of the buggy whip makers probably pointed to failing early automobile companies as showing the folly of automobiles, just as the owners of brick and mortar establishments did during the rise of the Internet, and just as the fossil fuel companies and other opponents of global warming are pointing to the failure of solar energy companies like Solyandra as proof that renewable energy is doomed. In the first decade of the last century, the automobile seemed relegated as a toy, a plaything of the rich, much as the Tesla electric car is considered by some today.
Henry Ford: Game Changer
Then, in 1909, along came Henry Ford with his Model T automobile and everything changed. Ford touted the Model T as the “every man’s” automobile, while paying the highest wages to enable his workers to afford their own car. Sure, at the time, the Model T was probably more expensive to purchase than a horse, but what you could do with it! Suddenly the average worker could afford cars and the horse manure problem was solved. The automobile took off and became a huge industry employing thousands.
And what do you think happened to those workers who cleaned the manure off city streets when there was no more manure to remove? They probably ended up paving those streets for automobiles or they became automobile mechanics and gas station attendants. What about those workers at the buggy whip makers who lost their jobs? They found higher paying ones in automobile factories.
One man’s risk is another’s opportunity. Economists and historians have a term for this process of new industries and technologies replacing older ones: creative destruction. It’s happened time and time again in history. Prime examples include the supplanting of 19th century individual artisans with corporations driven by the Industrial Revolution-developed machinery and the aforementioned development of the Internet. In such instances there were winner and loser companies, but the winners always drove the economies to greater heights.
I’m reminded of that wonderful diatribe by Danny DeVito in the movie “Other People’s Money” (https://www.youtube.com/watch?v=62kxPyNZF3Q) where he played a 1980s style corporate raider, Larry the Liquidator, trying to take over a family-run wire-making manufacturing firm in New England. In his diatribe he talks about buggy whip makers. “You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw.” Then came the zinger. “Now how would you have liked to have been a stockholder in that company?” Isn’t it time to replace the 20th century source of energy with a 21st century source?
Do You Want to Own a 21st Century Buggy Whip Company?
Yes, there will be some disruption as we switch to renewable energy and sustainable manufacturing. However, in the long run, new industries will be created along with new jobs, and the economy will grow based on those new industries. Germany already gets about forty per cent of its electricity from solar and other renewable sources, and still remains a competitive world industrial power. Today’s fossil fuel companies are the buggy whip makers of the 21st century.
And, yes, the automobile ultimately played a significant role in another environmental problem, but along the way it contributed to a huge leap in prosperity, helping to create the richest country in history. So now we’ll use technology to solve the problem created by automobiles and fossil fuel electricity generation. Along the way we’ll spawn whole new industries with new opportunities. That’s just how the world works. The whole arrow of human history points that way. Who knows if Solar City, Elon Musk’s and other’s bet on solar energy, is the next Ford Motor Company? Only time will tell, but it’s a step in the right direction.
More importantly, by adopting renewable energy, we may save the world for our children and grandchildren, but that’s a subject for another day.
The recent Space-X Falcon 9 launch failure provides new ammunition to the critics of the new space launch commercial industry. These detractors point to the United Launch Alliance’s perfect launch record and shake their heads sadly at the entrepreneurial upstarts like Space-X. “See,” they say, “we warned you. You can’t take shortcuts.” Of course, those ULA launches cost two or three times more than a Falcon launch, and are using proven rocket technology, much of which has been in place for decades.
The space industry, which includes space launch, is no stranger to failures, many of them quite spectacular and public. It comes with the territory. Some failures occur because a technology is new and you don’t know what you don’t know. People forget about Vanguard and its early failures in its attempts to launch a satellite. Sometimes rockets fail due to a hidden design flaw that may not reveal itself for many missions, e.g., the shuttle Columbia. Often design flaws result from compromises driven by outside forces such as budget. One can argue the shortcomings of the shuttle program were due to budget cuts early on. Another type of failure can be attributed to a process breakdown, The NASA Mars Climate Observer is an example of this sort, where the ground-based software used English units for the force of gravity instead of SI (Metric) units.
For Space-X, a failure at this juncture of their program is worrying because their launch history is relatively short compared to their older competition. Coming on the heels of Orbital’s Antares launch failure and the Russian Progress failure, there are additional pressures to deal with in relation to the space station resupply.
My hope is this is something Space-X will learn from and move on, but it may not be that easy. Recent interviews with Elon Musk, Space-X’s founder, indicate the cause wasn’t something simple and straightforward. Sometimes in a root cause failure investigation you get lucky, the answer pops right out, and it turns about to be something simple. Other times it takes much more digging and painful probing. Those are the ones from which you really learn something about your product or your processes. Occasionally, you may even uncover a new fundamental aspect of engineering. I find we often learn more from our failures than from our successes. And, sometimes, the deep probing reveals something basically wrong with your approach.
Not the First
There’s much at stake here beyond just resupplying the space station, or even Space-X’s future. The space launch industry is at a cusp. The industry spent the first five or six decades of its life as a government entity or at least dependent on and controlled by government agencies. Now we have a true nascent industry, one approaching the business as a commercial enterprise where the aim is to make money. Of course, the prime contractors building the vehicles and conducting the launches in the past were in business to make money, but they were doing it under the control and dependency on of government agencies such as NASA and DoD. Now the new space entrepreneurs are trying to do it on a commercial basis, in a competitive market.
This isn’t the first attempt to reduce the cost of space projects. NASA in the 1990s under Daniel Goldin attempted a “faster, better, and cheaper” approach. Sixteen projects were conducted under this umbrella. Ten successes, some spectacular (e. g., the small rovers Opportunity and Curiosity designed for a 90- day life that ran for more than a decade, and one is still operating). Six failures, all spectacular in the sense of riveting news stories. Six out of sixteen missions failures. The same detractors as those criticizing Space-X pointed to those six failures with an “aha!” and things returned to the way they were always done: near 100% success but at higher cost. However, what those detractors often ignore is that those sixteen projects under Daniel Goldin cost less than one traditional NASA project. It’s just that we live in a society where public failure is unacceptable and those with the best PR and who scream the loudest win.
History May Repeat
Reducing launch costs is one key to democratize access to space beyond a few governments and large multinational corporations. In some ways, I liken the space industry’s current status to the early years of the automobile industry or even the personal computer industry. By the early 1900s there were almost 200 automobile companies in the world, each catering to the wealthy, providing them with a new play toy: the automobile. Then along came Henry Ford and the Model-T, and things changed. Suddenly the middle class, and, later, the lower class, could afford a car. The rest, as they say, is history. Only a few of the early automobile makers survived the churn Ford caused, but the automobile became a mainstay of American life.
The computer industry has a similar history. In the early 1980’s, the personal computers made by Atari and Commodore were viewed as little more than game consoles, until Steve Jobs with the Mac and Bill Gates with MS-DOS arrived on the scene. Then computers became capable of doing office work, and, once again, the rest is history. You can point to a similar path in the development of railroads and aviation. Someone had to step up and take the risk to open up the technology to everyone.
Space Industry at a Cusp
That’s exactly where we are in the space launch industry. I’m not saying that Space-X’s Dragon capsule or Virgin Galactic’s Spaceplane 2 are today’s Model T (as much as Richard Branson might like us to believe). After all, a flight in Spaceplane 2 will run a quarter of a million dollars. Not exactly the stuff for everyman. I liken these vehicles more to Oldsmobile’s “Curved Dash”. Contrary to popular belief, Henry Ford did not discover the assembly line. That was done by Ransom Olds building his Curved Dash Oldsmobile in 1901. Ford took Olds’ concept one step further with interchangeable parts and created a vehicle better priced for the average person (as well as his attitude toward paying workers a living wage so they could afford to buy the Model T.) The Model T spelled the death knell to many industry stalwarts like the buggy whip makers who had spent so much time belittling the automobile. Economists and historians call this creative destruction. (See Danny DeVito’s rant in “Other People’s Money).
Where Do We Go From Here?
The findings on the Falcon 9 failure may prove to be critical in this evolution of our access to space. I believe Space-X is making the leap forward in launch cost reduction mainly through process change and through a less top heavy organization. Yes, Space-X has made advances in thrust-to-weight ratios of their engines but those advances are hardly revolutionary. They’re using decades-old liquid rocket engine technology that they’ve updated. They’re relying on process changes and a leaner organization for the big step in dropping costs. They’ve pulled as much fabrication and assembly as is feasible in-house so they have better control of the processes and the cost. They’re treating space launch as a business, not like the launch of the next space probe to Mars. If the cause of the failure is discovered to be something basic to their processes then the march toward everyman’s space may be diverted for the time being.
Virgin Galactic, another startup company that is focusing on space tourism, doesn’t have the final answer, either, to low-cost access to space. While their “fares” for their suborbital flights are predicted to cost $200K or more, they may still eventually commercialize suborbital flight and move it toward a more democratic availability. That will provide some commercialization success to space access but will not address the 800 pound gorilla in the room: low cost access to earth orbit which is the key to a true commercial space industry. There is a factor of sixty or more difference in the energy required to achieve orbital velocity of a sustainable orbit as compared to Spaceship 2’s Mach 2 or so. That is still the challenge everyone faces.
Still, Space-X’s attempt to bring down launch costs and to commercialize space is the next required step in the evolution of the access to space. In the commercial world perception is everything. If the cause of Space-X’s failure is proven to be intrinsic to Space-X’s commercial approach, then we’re back to the old way of doing things and space access for everyman is a long way off. We may find ourselves waiting for a truly revolutionary technology to achieve low cost space access – something like antigravity – that may never come along, or at least not for decades. On the other hand, if Space-X can find the cause of the failure and move on, then the process of creative destruction will continue. Without a revolutionary technology we may never achieve the $1-$5 per pound cost of the current airline industry (Falcon 9’s estimated launch cost are in the $1800-2500/lb range), but the launch costs still may come down enough to mimic the aviation industry of the mid-1950’s where inflation-corrected airfares were about five time higher than now. The average person flew less frequently but they still flew. So I’m watching the outcome of this failure investigation with interest.
I’m a trained project manager with a project management certification or PMP. As such, part of my PMP training includes risk management, a process used in industry to manage the prospective risks or uncertainties encountered during a project. After reviewing the discussion on global warming I’ve come to a conclusion that risk management needs to be applied to the global warming debate. Risk management provides an approach to dealing with an issue that has some probability of occurrence and has the potential for devastating consequences. If you know something is definitely going to happen it’s easier to weigh the costs and make a decision to deal with the consequences if they’re bad enough to warrant action. It becomes more difficult to deal with the consequences of something that might happen. In the latter case, you have to weigh the costs of mitigating something that might not happen (and therefore you’ve wasted the money) versus not doing something and dealing with the consequences. The tradeoff is like determining to purchase insurance.
The idea of my applying risk management to global warming came about during my involvement in a number of LinkedIn group discussions centering on whether global warming/climate change is real or not, and to what degree humanity is responsible for it. Some of the discussions occurred in LinkedIn discussion groups representing science organizations, or at least people interested in science, and were quite technical in nature. The discussions delved into interpretation of geological data particularly from ice cores and evidence of past climate cycles. In the discussions, it seemed to me the term global warming referred to human-influenced changes in climate, while climate change is used for natural, long term changes in climate.
The media has reported that a majority of climate scientists support the idea of human-influenced global warming. In these LinkedIn discussions I observed the scientific opposition centered on the interpretation of geological data, and the lack of validation of climate models. It was pointed out in the LinkedIn discussions that the primary climate prediction model is in its 11th generation of iteration and we’re still not accurately modeling what has occurred already, no less the future. A recent article in the NY Times confirmed that the simulations are struggling, not because they’re wrong, but because they are limited by the complexity of the system and also by current computer capabilities.
To me, with my experience as an engineering project manager, it comes as no surprise that computer models and simulations sometimes don’t match measured data perfectly. The more complex a system, the more difficult it is for a computer model to perfectly match real world data. In some instances, as in the case of climate modelling, it becomes an iterative process, where each successive version of the model gets closer to the data as the modelers gain a better understanding of the physics, i.e., the response, of the system to various inputs. Sometimes, if a system is complex enough, it becomes a matter of available computer power. However, even when the model correlation to the data isn’t perfect, the simulations can be used to predict data trends. The models then become qualitative tools to help make decisions concerning a course of action.
Climate models are among the most complicated of all technical simulations, requiring the most powerful computers we have. I expect it will be a while before we can solve these models with a fine enough grid to get us the answers we need. Problem is, while we’re waiting, the Earth may be changing.
Prompted by the discussions and my thought of applying risk management to global warming I did research into the consequences of global warming, focusing on the potential impact to the coast of the United States if the oceans rise 7-10 feet as predicted. This is one of the primary outcomes described by climate scientists. Note, I was dealing with these as potential outcomes. So if the seas rise by the levels expected, a good portion of Manhattan would be under water, as would parts of the Carolinas, the Florida peninsula, and parts of Texas. The West Coast, with its higher shorelines, at least north of Los Angeles, would be less impacted. If you look at these consequences worldwide it gets even worse. Coastal flooding due to storm surge will also increase significantly. There will be many more Hurricane Sandys, and they will become more violent.
I also investigated the predicted weather pattern shifts across the US. Increased droughts are projected for the West Coast, including more forest fires and water shortages. Parts of the Midwest would also face severe droughts, key habitat changes, and higher temperatures severely impacting its ability to continue acting as the breadbasket of America. Alterations in habitats to birds and other animals will have major consequences on the insect population. There is also an expectation for the East Coast of increased occurrences of storms like Hurricane Sandy, possibly with even more increased intensity. Weather over the Midwest is also expected to turn more violent.
These were indeed dire predictions. Even if they’re only half right, the negative impact on our economy, and the potential for loss of life are still very high. Project management practices dictate that when identifying a risk with consequences to the project potentially as dire as the global warming predictions, even if the engineering simulations were mixed or uncertain, a risk mitigation plan is required. Even if you believe the probability is only 20% that global warming is real, the consequences are significant enough to require a plan and a response.
So how do we deal with a risk like this? In industry, risk management provides a process to address risk. A quick sidelight. I received my PMP certification from the Project Management Institute, which is recognized worldwide. PMI publishes the Guide to Project Management Body of Knowledge (PMBOK®) which summarizes the best processes involved in project management. Risk management is one of those processes included in the PMBOK®. There are four methods of dealing with risk:
- Accept the risk: Acknowledge the risk and accept the consequences.Let’s look at the four options of dealing with the risks of global warming and climate change:
- Avoid the risk: Remove the risk by eliminating whatever is causing the risk
- Transfer the risk: Pass it on to someone else, e.g., purchasing insurance
- Mitigate the risk: Make changes to reduce the probability of the risk occurring or prepare plans to ameliorate the consequences once they happen
Let’s look at the four options of dealing with the risks of global warming and climate change:
- Avoiding the risk involves eliminating the causes of the risk. I don’t believe we have a really good option for avoiding global warming/climate change at this point. If the changes are the result of natural climate processes, as some advocate, there is little we can do to avoid them. If they’re due to human influence, I think it’s impractical to expect an instantaneous change to less polluting energy sources. It’s unreasonable to expect every country in the world, or even the major polluters, to stop using fossil fuels immediately. It will take a decade or more to get the plan in place and to begin making all the changes. Politically, it just isn’t going to happen. Besides, we’re already seeing some of the predicted effects. I believe we’re just too far along to avoid at least some of the global warming/climate change consequences. (This is different than mitigating them which will be described later).
- Transferring the risk is the next method of dealing with risk. To me this method is unacceptable because the consequences are even half as bad as predicted, there isn’t enough insurance money in the world to pay for the consequences, not to mention the cost in lives lost to flooding and famine. The only thing we’d be doing is transferring the consequences to our children.
- Accepting the risk signifies indicates the risk is acceded to because the cost of risk avoidance is unacceptable compared to the cost of the consequence. This category is usually used only for risks with low impact consequences or for risks with damaging consequences but with an extremely low probability of occurrence. Opponents of global warming will obviously favor this approach. It’s the one seen as having the least near-term impact on the economy because we continue on our path of utilizing fossil fuels.
- Finally, the fourth method, risk mitigation. This involves taking action to reduce the probability of occurrence of the risk or to reduce its impact. Risk mitigation, then, requires we start addressing those consequences regardless of cause (natural or manmade). For example, we can begin planning our response to coastal flooding on a national scale. If there is a significant probability that human-induced component to changes in climate, then it may also not be too late to reduce the impact and perhaps even influence the degree to which it occurs (as opposed to completely avoiding it). We can accomplish this by reducing the emission of greenhouse gases by increasing the use of alternative energy sources. Replacing old industries with new is part of the creative destruction process that has occurred throughout human industry. (See my LinkedIn Pulse post Horse Manure, Buggy Whips, and Global Warming) In creative destruction, the displaced workers often find work in the new industry.
In my opinion, it comes down to which is worse:
- Accepting the impact of global warming/climate change happening and we aren’t prepared for it with all of the consequences because we wanted to keep the status quo, or
- Waiting for 100% proof that global warming is real in order to protect the status quo and then finding out that it’s too late for many of the mitigations identified, or
- Begin the mitigations identified to reduce the effects of global warming/climate change (and accepting the cost of near-term economic dislocations) and then finding out climate change is a false alarm.I guess your answer depends on whether you care more about yourself or your grandkids.
The process of creative destruction is often ignored in the debate about global warming, climate change, or whatever people decide to call it, Opponents focus on the costs of making changes as we convert to renewable energy and the reduction in our carbon footprint. They claim these technology changes will damage the economy while insisting the supposed high costs of renewable energy and sustainable manufacturing will cost the United States millions of jobs and weaken our economy. To that I say balderdash.
The introduction of new technologies is accompanied by something called creative destruction when leading companies, or even industries, apparently successful at the time of the introduction, disappear. For example, the arrival of the industrial revolution brought about an end to those magnificent artisans of the pre-industrial economies. e.g., the blacksmith, the shoemaker, the weaver, etc. While those old jobs disappeared and were replaced, instead, by factory and white collar positions. We moved from a rural society to an urban society.
Along with that change came a new set of issues. In 1900 there were 100,000 or more horses in New York City, creating thousands of pounds of manure that had to removed. Hundreds if not thousands of workers toiled daily to clean up that mess. When it was introduced, the automobile was touted as a means of cleaning up the cities (among other things). I bet t the workers who cleaned those city streets along with buggy whip makers were among those who derided these new fangled toys, and probably shouted, “Get a horse!” With the introduction of the car came hundreds of companies trying to make them and capture the market. The manure workers and buggy whip makers probably also pointed to the failing early automobile companies as showing the folly of this technology. (Just like the opponents of global warming are decrying the failure of companies like Solyandra). And true to form most of these companies went out of business or were bought out. The car seemed to be a toy, a plaything of the rich, much as the Tesla electric car is today.
Then along came Henry Ford and the Model “T” automobile and everything changed. He made the Model “T” “everyman’s” car while paying the highest wages in the industry to enable his workers to afford to own their own car. Sure, at the time, it was probably still more expensive to purchase than a horse, but what you could do with it! Now the average worker could afford cars.
What do you think happened to those workers who cleaned the manure off city streets? They probably ended up with jobs paving them. And those who worked for the buggy whip makers? They found higher paying jobs in automobile factories. One man’s risk is another’s opportunity.
I’m reminded of that wonderful diatribe by Danny DeVito in the movie “Other People’s Money” where he played a 1980s style corporate raider, Larry the Liquidator, trying to take over a family-run wire-making manufacturing firm in New England. In his diatribe he talks about buggy whip makers. “You know, at one time there must’ve been dozens of companies makin’ buggy whips.And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw.” Then the zinger. “Now how would you have liked to have been a stockholder in that company?”
Yes, there will be disruption as we switch to renewable energy and sustainable manufacturing. But in the long run, new industries will be created and the economy will grow based on those new industries. That’s just the way the world works. And, better yet, we may have saved the world for our children and grandchildren, but that’s a subject for another day.