Esri - helping the world find common ground

“What you do and how you do it matters. No one else understands things like you do or is equipped to provide the solutions you can. You are being called upon at this most critical point in human civilization to provide the language, methods, and infrastructure for helping the world find common ground.” – Jack Dangermond, co-founder and president of Esri, to users at the annual 2022 Esri User Conference.

The Political Divide

Understanding the OPEC+ decision to cut oil production

“The decision of OPEC+ to cut production is not simply about prices. It is about the ongoing struggle over democracy playing out in Ukraine, as the Ukrainians fight off the Russian invaders. The Russian economy depends upon oil sales, and the U.S. and European Union have sought to cut into that money to hurt Russia’s ability to continue its attack in Ukraine. A day ago, after Russia illegally annexed four regions of Ukraine, the 27 member nations in the European Union joined the G7 (which is made up of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) to set a price cap on Russian oil, in addition to another round of sanctions. Theoretically, this plan should have enabled countries that need Russian oil for heat this winter to get it, while keeping the prices low enough to starve Putin’s war efforts. Russia is co-chair of OPEC+ and is desperate for oil money, on which its economy depends. That economy is crumbling under international sanctions, and Russia’s oil production has dropped about a million barrels a day at the same time that the country has been forced to discount its oil to sell it. As Russia’s invasion of Ukraine is failing, it needs more money, and Russia asked for OPEC+ cuts to increase prices.” - Historian Heather Cox Richardson, in the October 5, 2022, issue of her newsletter Letters from an American on Substack.

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Adrift – 100 charts about America

Scott Galloway, a clinical professor of marketing at the New York University Stern School of Business, has published Adrift – America in 100 Charts. According to GoodReads, "in Adrift, Galloway looks to the past - from 1945 to the present day - to explain just how America arrived at this (post-pandemic) precipice.” These are some facts from the book that the September 29, 2022, edition of CEO Daily found compelling:

• “For roughly every 10 citizens in developed nations, six believe the U.S. used to be a good example of democracy but no longer is.”

• “In 1958, 75% of Americans trusted the federal government to do the right thing almost always or most of the time. That percentage hasn't surpassed 30% since 2007.”

• “Since 1960, corporate profits have grown 85-fold; employee compensation, 38-fold.”

• “Sixty-four percent of people who join extremist groups on Facebook do so because the algorithm steers them there…In reality, what social media favors is that which divides us.”

Climate Change

Video: what storm surge really looks like

Those of us who follow climate change impacts understand that a combination of high tides, sea level rise, and storm surge can wreak havoc on low-lying coastlines. When Hurricane Ian tore through Fort Myers, Florida, this timelapse video vividly captured what storm surge looks like even without future sea level rise.

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Climate change and energy security bring up nuclear discussion

A thoughtful article in Fortune on September 30, 2022, brings up the emerging debate about the role nuclear energy could play in the future. This has happened in part because of nuclear energy’s “potential to address the twin crises that define our time: climate change, which has for decades led some environmentalists to champion nuclear as a cleaner alternative to fossil fuels, and the energy crunch that was sparked by Russia’s invasion of Ukraine and Vladimir Putin’s subsequent decision to strangle natural-gas flows to Europe.”

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Who is really using most of the water in the American West?

A September 26, 2022, video produced by Vox, details water use in the American West. Here are the facts.

• 6% - residential use
• 8% - industrial and commercial use
• 86% is used to grow crops
• 32% of the total used to grow crops is for alfalfa, hay, and corn silage – animal feed, almost exclusively for cattle.
• At least 10% of this animal feed is exported to feed cows in China, Japan, and the Middle East.

The video explores city users paying farmers to fallow fields and then sending the saved water to cities, and the winners and losers in this kind of agreement. An example is the 2003 Quantification Settlement Agreement (QSA), a water transfer agreement between the San Diego County Water Authority, Imperial Irrigation District (IID), Metropolitan Water District of Southern California (MWD), Coachella Valley Water District (CVWD), the California State Water Resources Control Board (SWRCB), and the U.S. Bureau of Reclamation (USBR).

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California commits to reduce Colorado River use

Since the last issue of The Nett Report, some progress has been made in reducing the use of Colorado River water. In an October 5, 2022, letter to the U.S. Department of the Interior, the California Colorado River Board proposed “to conserve up to an additional 400,000 acre-feet of water in Lake Mead each year, beginning in 2023 and running through 2026. This water, which would otherwise be used by California’s communities and farms, will meaningfully contribute to stabilizing the Colorado River reservoir system.” Participating agencies include MWD, IID, CVWD, and the Palo Verde Irrigation District. The state requires the use of funds from the recently passed Inflation Reduction Act and other federal funding to enable water conservation. California also requires a clear federal commitment to “contribute meaningfully to stabilization efforts at the Salton Sea.” California is allocated 4 million acre feet (MAF) from the Colorado River each year. IID receives 3.1 MAF or 70% of California’s Colorado River allocation.

Future of Work / The Economy

“Only when the tide goes out do you learn who has been swimming naked.” - Warren Buffet

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Debt-ridden companies to be hit by rising interest rates

According to a story in the October 3, 2022, edition of CEO Daily, “real interest rates have been negative for the past 15 years, with only a few brief months of exception. So no surprise many companies have loaded up on debt. Now the Fed is determined to reverse the process. And as rates rise, the ‘zombies’ will find they aren’t making enough money to service their debts.” Goldman Sachs has estimated that 13% of U.S. companies could be considered zombies. Companies considered in that category could include Carvana, Peloton, AMC, and GameStop, according to the investment firm New Constructs. The story suggests that the Fed is increasing rates too quickly but points out that reversing the “impact of easy money doesn't happen without pain.”

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Investor Dalio sees trouble ahead, but we can innovate

In the September 28, 2022 issue of CEO Daily, there is a report from an interview with investor Ray Dalio “who has analyzed data from the last several hundred years of human history, and concluded today’s data portends a significant possibility of 1) a global financial crisis, 2) a U.S. civil war, and 3) a serious U.S.-China confrontation, all layered over with a climate crisis.” He does have good news about the “amazing ability of humans, and Americans in particular, to innovate their way out of difficult problems.”

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The economy is cooling quickly

Former Labor Secretary Robert Reich in his October 7, 2022, newsletter on Substack says the economy is cooling quickly and that mainstream media coverage makes it seem “as if the economy is bounding ahead.” His thoughts come in response to coverage of the September jobs and wages report. Here are the points he makes to substantiate his position:

• Average hourly earnings again failed to keep up with increases in the costs of living. Hourly earnings climbed 5 percent from a year earlier, while prices rose 6.3 percent.

• Unfilled job offerings fell sharply in August. As Goldman Sachs puts it, almost half of the gap between jobs and workers has been eliminated over the past few months.

• Filings for unemployment benefits last week also rose.

• The Fed's rate hikes will eventually hit corporate profits because corporations depend on workers (who are also consumers) to buy their goods and services. But by the time the rate hikes hit profits, jobs and wages will likely have been crushed in a recession.

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Zelman predicts housing price drops in 2023 and 2024

Analyst Ivy Zelman, who predicted the 2008 housing bubble and crash, is forecasting a decline in housing prices in both 2023 (4%) and 2024 (5%). As reported in Yahoo News on September 6, 2022, Zelman says the market is poised for a significant price correction due to rising interest rates and inflation. “As fast as [inventory levels] are rising and demand is plummeting, we could see pretty substantial [home] price corrections. But it’s going to vary by market,” she says. “Inventories in certain markets—mostly on the West Coast, Southwest, and Mountain states—are rising at Mach speed.”

Covid-19

Covid mutations converging to avoid immunity

A new study reported by New Atlas on October 9, 2022, says researchers have “started noticing something strange.” No single new Covid variant is taking over but instead “a variety of different subvariants seemed to be accumulating the same mutations … these mutations all seemed to be converging in a way to evade our pre-existing immunity, and a striking study recently appeared speculating the virus has the potential to completely escape our current immune responses.”

The Nett Light-Side

Chernobyl frogs change color and melanin levels

Scientists studied Eastern tree frogs in 12 breeding ponds along “a wide gradient of radioactive contamination” from the Chernobyl nuclear power plant. As reported in Futurism on October 3, 2022, the frogs are normally a “snazzy green” color, those closer to the plant “seem to have undergone a sort of rapid evolution that caused them to develop more melanin in order to withstand the heightened and prolonged radiation from the disaster.” The ones closer to the plant are now black and there is a gradient of color between the black frogs and the green ones.

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TSA Instagram posts lighten the messages

We all hate having to wait in the TSA lines when we travel, but now the agency’s social media team uses puns and dad jokes to make its messaging more fun. Check it out on Instagram along with their 1.1 million followers!

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Photo awards for weather and the ocean

We always love good photography at Nett Strategies. So, check out this year’s award-winning photographs for weather and the ocean.

About Carl Nettleton

Carl Nettleton is an award-winning writer, speaker, thought partner, facilitator, and subject-matter expert regarding water, climate, sustainability, the ocean, and binational U.S. Mexico border affairs. Nettleton Strategies, the consultancy he founded in 2007, is a trusted source of analysis and advice on issues at the forefront of public policy, business, and the environment. He helps people to think strategically about their options for change. He is also the founder of OpenOceans Global, a nonprofit addressing ocean plastic in a new way.