the new complexity its nature and proximity the new complexity its nature and proximity wide...

The New ComplexityIts Nature and Proximity

The New ComplexityThe New ComplexityIts Nature and ProximityIts Nature and Proximity

Wide Thinking RequiredWide Thinking Required

John Voeller, Black & VeatchJohn Voeller, Black & Veatch

Major Changes, Key Drivers, Principal Interrupts And Enticing Opportunities

For the Next Decade


So What DoesThe Future Look Like

In Which We AllWill Operate


For the Next Decade


The Context of Our SessionThe World Seems On Every Front to Be

Getting More Disrupted, More Dangerous and More Complex. Is This Our Imagination Or If It Is Not and Risk of Almost Every Form

Is Increasing What Are We Doing To Improve Our Data, Analysis, Simulation And

Interpretation Capabilities To Understand and Anticipate

Tomorrow


For the Next Decade


Our GoalTo Discuss Efforts From Industry, National

Labs And Overseas International Efforts That Are Examining the Nature of Risk Now And In The Futures We Can See Or Suggest

Are Possible And How We Can Examine Them Fully

Fundamental Concept Introduced


For the Next Decade



For the Next Decade

Our Path For the Next Hour

Risk – Forms, Sources and RepresentationsAging – Implications At A Global LevelGrowth – You Have a Billion New Customers….Energy – The Reality We IgnoreWater – Another Reality We IgnoreClimate Change? – Blind Decision MakingMinerals – Running Out Without KnowingAll Resources – A New MinimumGovernment – Trying HardIndustry – Waiting For Answers and Making DoNarrow Thinking – An International ExampleBroad Thinking – A Reasonable AttemptWide Thinking – Making Tomorrow An Opportunity

The New ComplexityIts Nature and Proximity Risk

Per

ceiv

ed I

mp

act

– B

illi

on

s o

f D

oll

ars

US

Unlikely Likely Very Likely

Size ~ LikelihoodDarker ~ More Impact

Situational Complexity

The New ComplexityIts Nature and Proximity Risk

Size ~ LikelihoodDarker ~ More Impact

Wider – Stronger Link


The New ComplexityIts Nature and Proximity Aging Situational Complexity

The New ComplexityIts Nature and Proximity Growth Situational Complexity

The New ComplexityIts Nature and Proximity Growth

Percentage of PopulationYounger Than 30 yrs Old


The New ComplexityIts Nature and Proximity Energy Resource Complexity


Lloyds 2011 World Risk Assessment1. Businesses Which Prepare For And Take Advantage Of The New Energy Reality Will Prosper – Failure To Do So Could Be Catastrophic2. Market Dynamics And Environmental Factors Mean Business Can No Longer Rely On Low Cost Traditional Energy Sources3. China And Growing Asian Economies Will Play An Increasingly Important Role In Global Energy Security4. We Are Heading Towards A Global Oil Supply Crunch And Price Spike5. Energy Infrastructure Will Become Increasingly Vulnerable As A Result Of Climate Change And Operations In Harsher Environments6. Lack Of Global Regulation On Climate Change Is Creating An Environment Of Uncertainty For Business, Which Is Damaging Investment Plans7. To Manage Increasing Energy Costs And Carbon Exposure Businesses Must Reduce Fossil Fuel Consumption8. Business Must Address Energy-Related Risks To Supply Chains And The Increasing Vulnerability Of ‘Just-In-Time’ Models9. Investment In Renewable Energy And ‘Intelligent’ Infrastructure Is Booming. This Revolution Presents Huge Opportunities For New Business Partnerships

Energy Resource Complexity

The New ComplexityIts Nature and Proximity Energy Resource Complexity

The New ComplexityIts Nature and Proximity Energy

EnvironmentalPollution Liability

Increasing Emission& Performance Stds

Renewable EnergyPolicy Uncertainty

Regulatory andEnvironmental Risks

Physical andOperational Risks

Operational ThreatsIn Unstable Areas

Harsher PhysicalEnvironments

Reputation RIsks

RegionalCarbon Pricing

Lack of Climate PolicyFor Long-term Planning

Risks for Energy Sector

Financial andInvestment Risks

Carbon PriceUncertainty

Price FluctuationsHinder Decision-making

Future DemandUncertainty

Policy Change UndermineViability of Investments

Technology andResource Access Risks

Uncertain Political CommitmentTo Technology Incentives

Infrastructure FailureVia Climate Change

Operational ThreatsIn Unstable Areas

Harsher PhysicalEnvironments

Infrastructure FailureVia Climate Change

Resource Complexity

The New ComplexityIts Nature and Proximity Energy

Carbon PriceUncertainty

Increasing Laws andStds on Efficiency

Consumer Pressure ForCO2 Emissions Labeling

Financial andRegulatory Risks

ReputationManagement

Scrutiny ofCarbon Portfolio

Services CompromisedBy Energy Disruption

Longer-TermOperational RIsks

RegionalCarbon Pricing

Lack of Climate PolicyFor Long-term Planning

Risks for Wider Business

Short-term SupplyChain Risks

Fuel and PowerSupply Disruptions

Higher and VolatileEnergy Prices

GovernmentPolicies

Policy Change UndermineViability of Investments

TechnologyRisks

Uncertain Political CommitmentTo Technology Incentives

Resource Complexity


From the national energy front, the following is fundamental:

There are 9 cars per thousand people in China todayThere are 300+ cars per thousand people in the USA today

When China goes to 11 cars per thousand people, they will consume another 71 million gallons of gasoline per day

That is 21 million more gallons than the entire US burns in a day.

The math is inescapable….

Basic Realities

Energy Resource Complexity

The New ComplexityIts Nature and Proximity Water Resource Complexity


Some Simple ArithmeticAmount of water total on Earth – Fixed

Amount of recoverable fresh water on earth – Fixed without desal

Amount of desal-based water supportable with current technology – 11% of world requirements currently

limited by energy costs

Population Growth in same period – 2-3 billion

Basic Realities

Water Resource Complexity

The New ComplexityIts Nature and Proximity Water Resource Complexity

The New ComplexityIts Nature and Proximity Climate Change? Threat Complexity

The New ComplexityIts Nature and Proximity Climate Change?

None of These And Almost All Others IgnoredThe Emissions of 31 Chemicals With Many

Times The GHG Impact of CO2 IncludingMethane Which Is 100 times the CO2 ImpactPer Cubic Foot and Ocean Emissions of This

Are Increasing At A Massive Rate Due ToOcean Warming and Current Deviations

Climate Change?

Threat Complexity


Researchers predict that supplies of

indium, used in liquid-crystal displays

and of hafnium, a critical element for

next-generation semiconductors

such as N-Core Chips

could be exhausted by 2017.

and

The world's zinc will be gone by 2037

Minerals Innovation Complexity


General Electric discovered last year that

the one mineral known to prevent high

temperature creep in their

aircraft turbine blades was unavailable

because of Chinese market control

Millions were Spent on Substitute As

Market Price Increased 13,000%



Qualcom recently examined the current cell phones and found they use

61 elements of the periodic table

up from 15 in 2002

Most are no longer under Western control and

there are no substitutes for the majority

of them.


The New ComplexityIts Nature and Proximity Minerals Innovation Complexity


China’s rare earth monopoly threatens global suppliers

Following two acquisitions in the past six months, Korean, Japanese and Western players may be locked out of the sector. With over 90% of the global rare earth resource held by Chinese companies, the country’s monopoly looks unchallenged.

China currently produces 95% of the worlds rare earth supply. Rare earth metals are needed for manufacturing of wind turbines, plasma televisions, mobile phones, hybrid car batteries meaning a China monopoly could shift the high-tech manufacturing bases from Japan and Korea to China.

China employs a three-pronged strategy; rare earth exports are restricted, imports encouraged, and outbound rare earth acquisitions actively encouraged.



"China at 10% GDP growth per year, has become the largest consumer of several key metals, generating about one-quarter of the total world demand for aluminum, copper, and steel

China consumes 25% of the world's aluminum, 22% of copper, 18% of nickel, 44% of iron ore and 31% of steel.

India is a close second with an economy that is expanding at a clip of more than 9% annually.

Economists say a growth rate of 9% to 10% is probable for China for the rest of the decade while they say 7% to 8% is sustainable in India."



Definition – Era of Insufficient Plenty

The last century starting with the industrial revolution has been characterized by two major processes. The first is the extraction and processing of natural resources to feed the product lines at a reasonable cost. The second was the finding and buying or negotiating for a commodity, device or knowledge fragment with confidence that it was available albeit at a price. What happens when things we need for our processes become unavailable at any price and we are not ready with the tools and knowledge of alternatives with full cognizance. This situation suggests that every major engineering discipline will be challenged to find alternative materials, methods and processes.

All Resources Innovation Complexity


So What Is Government Doing

Now ToIncrease Complexity

Government Rule Complexity


A new Executive Order requires agencies reduce GHG emissions

• 30% reduction in vehicle fleet petroleum use by 2020; • 26% improvement in water efficiency by 2020; • 50% recycling and waste diversion by 2015; • 95% of all applicable contracts will meet sustainability requirements; • Implementation of the 2030 net-zero-energy building requirement; • Implementation of the stormwater provisions of the Energy

Independence and Security Act of 2007, section 438; and • Development of guidance for sustainable Federal building locations in

alignment with the Livability Principles put forward by the Department of Housing and Urban Development, the Department of Transportation, and the Environmental Protection Agency.



• Aggressive moves by GSA to force strong metrics in all facilities from the CIA to the VA

• Dept. of Homeland Security looking at lack of pursuit of sustainability as a form of national insecurity that should be addressed in tandem with security

• NIST teaming with National Institute of Building Science to create very aggressive energy, materials and methods standard based on sustainability



• DOD has already adopted major metrics in future energy use from number of jeep trips across bases to placement of modular nuclear units as base load

• Dir of National Intelligence released open IDIQ with no limits on task size or number to apply sustainable solutions to all intel facilities world-wide

• Environmental Protection Agency is waiting to impose rules and regulations. A recent analysis, however, suggests the environmental agency may ultimately do more harm than good depending on how it acts.



• After a century of developing materials, standards, specs and processes, we must re-examine them in light of sustainability of all kinds

• This will demand intense discipline, personal and corporate to make sure this is a positive, not a negative value event

• We have an opportunity to return engineering to its very roots by rethinking all the assumptions on which the last century of engineering was based.



So What Is Industry Doing To

Address This

Industry Business Complexity


Plants and Facilities FutureComplexity Of Plant Devices Goes Way Up

Complexity Of Plant Economic Optimization Goes Up

Complexity Of Plant Systems and Systems Integration Goes Up

Complexity Of Plant Upgrade Path Goes Up and Cycle Accelerates

Complexity Of Process Content Goes Up

Complexity Of Sensory Systems And Their Interpretation Goes Up

Complexity Of Design And Construction’s View To Operational

And Maintenance Impacts And Consequences Goes Up

And Finally Overt Demands That Certain Tools and Functions Be

Artificially Applied With Limited Knowledge of Consequence

Industry Business Complexity

The New ComplexityIts Nature and Proximity Industry Business Complexity


An Example of HowWrong National Wisdom

Can Be As BasisFor Future Projects

Narrow Thinking Decision Complexity

The New ComplexityIts Nature and Proximity Narrow Thinking Decision Complexity

The New ComplexityIts Nature and Proximity Broad Thinking Decision Complexity

The New ComplexityIts Nature and Proximity Wide Thinking Decision Complexity


An Example of HowBad National

Awareness Of TheWorld Can Be

Narrow Thinking Decision Complexity

The New ComplexityIts Nature and Proximity Narrow Thinking

19(2008)

32(1991)

1996 – Congress PassesHelium Privatization Act

1991 – Federal Helium Reserve(billions of cubic ft)

Decision Complexity


Some ExamplesOf Advanced Technologies

With Significant ImplicationsTo Infrastructure

Wide Thinking Value Complexity

The New ComplexityIts Nature and Proximity Wide Thinking Value Complexity


What Are SomeImplications For

Projects In The Future

Wide Think Tools Making Complexity Work


Petroleum Process Model

Sector Desired FuelPurchase Rate

FuelInventory atDistributors Distributor Sales

Rate

Expected ProductReplacement Time

Maximum SalesRate

Total DesiredSales Rate

Sector FractionalAllocation

Sector FuelDemand Weight

Total WeightedDemand

Sector WeightedDemand

DistributorShortage

Distributor Effect of PerceivedShortage on Desired

Coverage Table

Distributor Effect ofPerceived Shortage on

Desired Coverage

DistributorPerceivedShortage

Distributor Time toPerceive Shortage

Distributor Change inPerceived Shortage

Desired DistributorFuel Coverage

PerceivedDemand

RateChange in Perceived

Demand Rate

Time to ChangePerceived Demand

Rate

Current DistributorFuel Coverage

Relative DistributorFuel Coverage

Effect of Relative Coverageon Indicated Fuel Price

Table

PerceivedFuel PriceChanging Perception

of Fuel Price

Effect of RelativeCoverage on Indicated

Fuel Price

Spot Fuel Price

Time to ChangePerceived Fuel Price

Fuel RetailMarkup

Fuel Retail Price

Sector Fuel SalesRate

DistributorInventory Deficit

Distributor DesiredPurchasing Rate

DistributorAcquisition Rate

Nominal DistributorFuel Coverage

Distributor/Retailer

Refiner

Refiner Desired FuelPurchase Rate

ProductInventory at

Refiners Refiner Sales Rate

ExpectedProduction Time

Maximum RefinerySales Rate

Total DesiredRefiner Sales Rate

PAD FractionalAllocation

Refiner FuelDemand Weight

Total WeightedRefiner Demand

PAD WeightedDemand

Desired RefinerInventory Coverage

PerceivedDistributors

Demand RateChange in PerceivedDistributors Demand

Rate

Time to Change PerceivedDistributors Demand Rate

Current RefineryInventory Coverage

PAD Fuel SalesRate

Refiner ProductInventory Deficit

Refiner DesiredProduction Rate

RefineryProduction Rate

Nominal RefinerInventory Coverage

Distributor DesiredImport Rate

Maximum RefiningCapacity

Product Yield perUnit Crude

Additional Yieldfrom Additives

AdditiveAvailability

Current ProductYield

Current Price perUnit Crude

Fixed Costs

Variable UnitCosts

Unit Production Costsfor Perceived Demand

Crude Price

VolumeConversion

Operation Rate forPerceived Demand

Minimum RefineryCapacity Utilization

Minimum RefineryOperation Rate

Available RefiningCapacity

Refinery CapacityDamage Indicator

Time Conversion

Product Markup

Effect of Product Markupon Capacity Utilization

Table

Effect of Product Markupon Capacity Utilization

Economic TargetOperation Rate

CrudeInventory at

Refiner RefineryOperation Rate

Refinery CycleTime

Crude Limited RefineryOperation Rate

Labor Availability

Power Availability

Inventory BasedTarget Operation Rate

Effect of PowerAvailability on Available

Capacity

Effect of LaborAvailability on Available

Capacity

Aggregate Effects onAvailable Capacity

Target OperationRate

Average TargetOperation Rate

Time to Form AverageTarget Operation Rate

Change in AverageTarget Operation Rate

Desired Crude InventoryCoverage at Refinery

Current Crude InventoryCoverage at Refinery

Crude InventoryDeficit at Refinery

Refinery CrudeInventory Adjustment

Time

Desired Crude TransferRate from Terminal

Storage

Nominal Crude TransferCapacity to Refinery

Effect of Power Availability onCrude Transfer Capacity to

Refinery

Crude Inventory atTerminals and Tank

Farms

Maximum CrudeTransfer Rate to

Refineries

Transfering Crudeto Refinery

Desired Crude InventoryCoverage at Terminals and

Tank Farms

Current Crude InventoryCoverage at Terminals and

Tank FarmsCrude Inventory Deficit atTerminals and Tank Farms

Desired CrudeAcquisition Rate

Time to Adjust Inventory atTerminals and Tank Farms

Rate of DomesticProduction

Transfer Requestedfrom Other Districts

Maximum TransferRate to Other Districts

Transfer Rate toOther Districts

Total Transfer Rate toOther Districts

Maximum Market inOther Districts

Target Transfer Rateto Other Districts

Time to Form AverageTarget Transfer Rate

Average TargetTransfer Rate Changing Average

Target Transfer Rate

Total TargetTransfer Rate

Transfer Offered toOther Districts

Minimum CrudeInventory Transfer

Time

Maximum Crude TransferRate from Terminals and

Tank Farms

Maximum Crude TransferRate to Other Districts

Total TransferRequested from Other

Districts

Fraction of RequestedTransfer Supplied

Serviceable Fraction ofTotal Target Transfer

Rate

Crude AcquisitionRate

Desired AcquisitionRate from Other PADs

Total Import Capacityfrom Other Districts

Requested ImportsFrom Other PADs Imports from

Other PADs

Desired ForeignImports

Foreign ImportRate

Time to AcquireForeign Imports

Time to AcquireTransfers for Other

Districts CrudeBuyer

NOTE: Zoom to 300% to see details



Agriculture Simulation Model

Crops

Animals: mature

Seeding

Production

Harvesting

Slaughtering

fraction humanfood crop

Processednon-consumable

animal

Human cropproduction

S earnings rate

C earlings rate

Crop DEMAND

crop adjustment

animal adjustment

EXTERNALSECTORS

Feeding

A mortality

C mortality

Total Sector Earnings

Trees: matureCutting

T earnings rate

lumber adjustment

L mortality

Lumber & treeproducts

Trees: youngPlanting Tree

maturationrate

Tree maturation time

YT mortality

Lumber DEMAND

Meat DEMAND

Animals: youngAnimal maturation rate

animal maturation time

meat production forhuman consumption

animal fraction

YA mortality

Dairy production

dairy fraction

D earningsDairy DEMAND

fruit production

fraction fruit trees

Processednon-consumable crops

crop feeding fraction

non-feed crop products



Farm Machinery

CornProduction

Corn Seed

Services

Pesticides

Fertilizer

Energy

Building Materials

Telecommunications

Autos & Trucks

Fuels

Labor

Water

Capital

Supplies

Corn

Energy

Labor

Capital WetMilling

DryMilling

Energy

Glucoamylase Enzyme

Telecommunications

Alpha Amylase Enzyme

Fuels

Labor

Water

Capital

Supplies

Yeast

Distillers Dried Grains w/Solubles

Distillers Wet Grains

Bran Products

Hominy

Condensed Distillers Solubles

Flour

Ethyl Alcohol

Standard Meal

Prime Grits

Prime Meal?

Crude Corn Oil

Energy

Telecommunications

Fuels

Labor

Water

Capital

Supplies

Ethyl Alcohol

Corn Syrup

Dextrose/Dextrin

Corn Oil

High Fructose Corn Syrup

Gluten Meal

Gluten Feed

Starch

Wet Feed

Germ Meal

Gluten

Condensed Corn Fermented Extractives

Energy

Telecommunications

Fuels

Labor

Water

Capital

Supplies

Sulfur Dioxide

WholeKernel

YeastFood Products

PharmaceuticalsIndustrial

Production

FoodProcessing

IndustrialProduction

FoodProcessing

Pharmaceuticals

FoodFood


ChemicalProduction

Textiles

Plastics

Food

FoodProcessing

Cosmetics


AlcoholicBeverages

Fuels

Pharmaceuticals


ChemicalProduction

Textiles

Plastics

FoodProcessing

Pharmaceuticals


AlcoholicBeverages

Fuels

Pharmaceuticals

Input & Output

Critical Infrastructure Dependency

Process

Commodity Flow Direction

Demand & Information Flow Direction

Consumer Marketplace

Industrial Marketplace

Infrastructure Critical Dependency

Output enters different infrastructure

Storage Process

Legend

Feed

Food

mostly feed?to be expanded

FoodProcessing

Chemicals

Pharmaceuticals

FoodProcessing Yeast

Corn OilProcessing

Corn Oil

Feed

Primarily feed or food?

Version 11/3/2003 CIP/DSS

Corn Detailed Input/Process/Output Diagram



Liquidity Simulation Model

MBa :: Liquidity

MBa :: Liquidity OutMBa :: Liquidity In

MBa :: DepositActivity

MBa :: BondInterestMBa :: Direct

Deposit Activity

MBa :: ReserveTransfers In

MBa :: CashReserves

NBa :: FederalReserve Availability

MBa :: ReserveRequirement

MBa :: PositionAfter Transfer

MBf :: ATMOperations

MXf :: ElectricityAvailability

MTf :: TransportationAvailability

MIf :: TelecomAvailaiblity

MBf :: BankingOperations

M?f :: LaborAvailability

NBa :: MarketActivities

MBf :: BankingOperationsCapacity

MBf :: BankRepair

Metropolitan Banking & Finance Sector (MB): LiquidityKEY: bold = external inputs; bold italic = external outputs; red = other sectors; blue = national model; gray = other views (subsectors)

MBf :: DamageFraction

MBa :: CashDemand

MBf :: PostalAvailability

MBf :: CashCoverage

MBa :: Cash UsageMBa :: Cash to

Consumer

MBa :: UnservedCash Demand

MBf :: FractionUnserved Cash

MBa :: IV CashOn Hand

MBa :: DesiredCash Coverage

MBf :: Lookup forUnserved Cash

MBf :: CashWithdrawelMultiplier

MBf :: Lookup forCash Withdrawel

MBa :: CreditDemand

MBf :: CreditCoverage

MBa :: Credit on HandMBa :: Credit to

Consumer

MBa :: UnservedCredit Demand

MBf :: FractionUnserved Credit

MBa :: IV CreditOn Hand

MBa :: DesiredCredit Coverage

MBf :: Lookup forUnserved Credit

MBf :: CreditWithdrawelMultiplier

MBf :: Lookup forCredit Withdrawel

MBa :: Credit Usage

MBf :: BankDamage

MBa :: Hour ofDamage

MBa :: HourBack in

Operation

MBa :: NormalInterest

MBa :: ReserveCoverage

MBa :: Lookup forReserve Transfer

MBa : NominalDirect Deposits

MBa :: Nominal Cash

MBa :: Nominal Credit

MBf :: FractionUnfilled Reserve

MBa :: Cash on Hand

MBa :: TransferRate



Decision

Constraint(D < 16”)

Input(vendor =Haworth)

Linkage(Owner =Procurement)

Consequence(Valve decisionlocked)

Action(Valve bought)

Implication(Valve_ShipDate Can BeSet)

N

1

N

N

N

N

0, 1

Example Elements of a Decision

Valve

DecisionType = Buy

Wide Thinking Making Complexity Work


Object Baseline

Attributes MethodsMessages

Perform Action

Sense alignmentCanvas constraints

Receive Input

Enable implications

Decision Made

Input needed/accepted

Link registered

Constraint sensed

DECISION

Type ConsequenceConstraint ActionInput ImplicationLinkage



Data States

Each Item of Information Has A Unique Set of States

Awareness of State Allows Assembly of SituationalUnderstanding of Next Actions

Transition From One State To Another Is NotificationTrigger and Enables Spontaneous Collaboration

No System In The World Currently Provides For This



Data States

HOLD DONEPLANNEDDO-IT

ALL-IN

OURS

MINE

THEIRS

TESTED HAND-OFF THEIRS

PUMP A - Activity Code in Schedule

PUMP A - Flow Rate

PUMP A - Inlet Size

PUMP A - Delivery Date

Transition Indicates Discipline Release and Trigger ForMulti-Discipline Review



ARIA (Automated Revision Implication Assessment)One of the greatest sources of risk in the EC realm is misalignment

between groups when changes occur in one and are not communicated to others. ARIA was developed in 1993 to ensure that the implications of change are evaluated automatically and the appropriate groups are

at minimum notified and in sophisticated implementations, actions are taken directly to prevent embracing of what appears to be positive but

isolated steps that actually destroy value in other dependent efforts.



How Does All ThisImpact Infrastructures

And People ThatCreate Them

Wide Thinking Simplifying Complexity


Integrated Infrastructure Initiative

How do we look across all of infrastructure issues and develop an integrated Model that feeds value from one solution to support addressing of another?

It is complex, requires addressing far more than engineering and construction and cannot be done by one company or level of government alone.

The following discusses what might be done and what needs to be analyzed in detail to ensure we are not overlooking a major opportunity for us and something the current Administration and both houses of Congress would find far too compelling to ignore.

The following describes several drivers including one we never consider that are must to-do’s that can feed our other needs.

Wide Thinking Making Complexity Work Simplifying Complexity


OldWater

NewWater

OldWasteWater

NewTrans

OldTrans OldTrans

OldPower

NewPower

OldNuclear

NewNuclear

NewTrans

Efficiency

Renewables

NewWasteWater

SourcesNeed to be

Rebalanced whileWe expand foodSupply and cleanThe acquifers andSurface sources

OutputsModels are based on

cost – must be moved toNew metrics and full

Implications understoodMust leverage all sources

And uses

OutputsDesigned for prior era

Cost sole focusCost and Price controlNeeds alteration and

Different managementOpportunistic owning

Needs to beexamined

FuelsSwitchover demandsMade w/o full analysis

Not all choices examinedAnd tangential impacts

IgnoredNo guarantee steps

will help

Economy

Regulations

UndergroundIncrementally plannedVery Old in some portionsRight of way is undergroundAnd not protected on surfaceMaintenance Cost Very High

SunWindNexGen BiomassAuxStoragePowerControlT&D grid accessOverall still not cost effective

Incrementally planned and not built for use of todayVery Old in some portionsNot built for changesRight of way valuableMaintenance high

Some must be converted to NG or a mix of coal and NGSome must be shut down and asset abandonedRestructure using distributedRecognize grid map may now be wrongLow VC available

Low Bond availableHigh Yield Not possibleCities brokePensions damaged or goneMust fill job needsNew knowledge needed not just replication of past knowledgeCurrent plans forward assume stranded assets are acceptable – are not

Underground and very costly to put back in same placeMany failures and increasingUse and demand map may be wrong nowOwnership by cities a questionCurrent function not enough

Chance to incorporate recycle in places of scarcityChance to change ownership model and financialsRun on surface to lower cost and speed replacement.

UndergroundUnpoweredEnmonitoredAncient in many localesRight of way is undergroundAnd not protected on surfaceMaintenance Cost Very High

Expensive to buildVery slow to constructHigh carbon footprint on contentDecades old, on extended licensesBase load valuable

Begin distributed power Rebalance map and types due to area changes and needsChange owner and value view

Based on assumptions not necessarily correct todayBuried in thousands of Codes, specs, requirements, Bid documents, work rules, etc.Current authorities beingCapricious in application

Gen II+ no better than currentPBMR lower carbon footprint and lower cost maintenancePBMR faster construction at lower costSmall nucs for power, heat, desal and hydrogen gen

Chance to incorporate recycle in places of scarcityChance to change ownership model and financialsRun on surface to lower cost and speed replacement.

Last four decades focused on cost onlyNeed new metrics and full understanding of impacts across all aspects of the business, environmental, economy and society

Ocean

Aquifers

Rivers

Lakes

Storage

Power

Drink

Treated

Industrial

Storage

Above groundIntegrated planReplace old & own differentRethink right of way with roadMaintenance cost lower and monitor/control easySupport dist. Power option

Integrated plan and ownRebalance for optionsChange use modelLeverage right of wayChange maintenance modelAdd dynamic elements for easier change

Coal

Oil

NG

Water

Waste

Power Control

Base Load

T&D Losses

PowerIndustrial

Storage

Nuclear

Integrated Infrastructure InitiativeThe Landscape of Assets and Issues

PowerTransport

Simplifying Complexity


The premise of the Integrated Infrastructure Initiative (III)is based on a few basic facts.

1. There are certain areas of current infrastructure that are failing or will soon because of age or unforeseen usage demands and must be replaced as their loss produces substantial socio-economic disruption.

2. Some of these infrastructure are buried below cities, businesses or landspace making replacement costly and maintenance more costly than if surface installed. The original premise for design can be overcome with modern engineering and controls.

3. Some infrastructure must be replaced because their GHG profile is unfavorable and others may require major revision where the obvious choice may be wrong and the best choice overlooked.

4. Some infrastructure should be examined for replacement or revision in order to be significantly more efficient, more sustainable or in cases of critical infrastructure, more resilient.

5. The current owners/operators of several key infrastructure types are having unprecedented financial problems with no clear path out in the next decade. A new model and likely new ownership is required and must be part of the integrated view to overall infrastructure renewal. We must be able to leverage all investor options and take advantage of the fact that most other investment vehicles are at an all-time low allowing attractive options to be cost effective in the long term.

6. Any major national infrastructure rebuilding effort will create jobs and provide immediate socio-economic benefit at a time when normal processes cannot build the necessary momentum.


Wide Thinking Proactive Complexity


The premise of the Integrated Infrastructure Initiative (III) is based on a few basic facts.

A Theory To Be Tested – If there are certain elements of infrastructure that must be replaced to prevent social, economic or environmental disruption or damage, can these be managed in such a way that once completed, some of their revenue/profits can seed other infrastructure projects of similar or different type in an investment cascade.

Path - Given all the incentives, enviro/eco credits from carbon to forest, money saved by alternative implementation in installation, operation and maintenance and the opportunity to make ready for the next decades, such a complex path must be fully explored and the silos that currently prevent this type of integrated thinking must be eliminated to ensure maximum benefit to society at minimum cost.




Example of Integrated Infrastructure

City 2.0 - Issues

In major cities, we have several infrastructures in a highly aged state and alreadyCollapsing at a very disruptive rate. The water, sanitary and storm sewers, gas, embedded communications and in some cases district heating. Digging up past infrastructure is costly at a minimum, nearly impossible in some areas and dooms any replacement to the high maintenance costs and disruption that are inherent in urban underground infrastructure.

These same cities experience massive gridlock and transportation problems with few options, a need to reformulate areas of the inner city for living, no money to do anything new, no bond market to fund long term in conventional manner, tax revenues that are down and will stay down for years and most importantly, most cannot meet their pension fund obligations. Unlike roads, their ability to engage Congress on these issues is very limited and in some cases non-existent regardless of the lip service. (Ex: $400 billion to rebuild water infrastructure went to roads).





City 2.0 – Integrated Image

1. Business and ownership models rewritten to allow multiple investment paths, recovery options, customer sale back, etc. New infrastructure can have a completely different ownership, use charge and cash flow perspective.2. Deep urban area becomes multi-infrastructure layers. In transportation, the only option is up. Up means trucks on bottom layer, cars on second layer and people, bicycles and lower power electric people movers on third and utilities including new water, sewer, power, communications on layer one through four as needed. This allows new to be installed without disrupting existing, allows separation of modes with easy connection if needed and protection where needed. 3. Incrementally abandon underground water, sewer and gas infrastructure. Run on surface using transport right of way and elevation of layer structure. In order to change entire cost and change flexibility, consider running trapezoid chamber beside or in median of roads. This will allow easy installation, minimum maintenance disruption, visual confirmation of sensing control and easy expansion or change. New materials, near zero friction nano-coatings and renewable pumping energy technology make this possible.





City 2.0 – Integrated Image (cont’d)

4. The elevation of the layer scheme also allows use of Kinetic Energy Recovery Systems (KERS) for all inertial and potential energy capture in all movement to offset people and goods energy use.5. All infrastructure ownership would be private but with provisos for city government and civil service pension participation as investors, not controllers.6. All interconnection for any service would have a five year use permit attached after which it would expire and not be renewed. This would ensure that tangential and collateral costs for cities and its residents in embracing new technologies where companies benefit but others impacted have no recovery processes. In the last six telecom upgrades, the collateral impacts of placement and implementation have cost cities and citizens millions in each city just by clumsy use of directional drilling. Recovery methods need to be smart and change with technology, not solely when PSC’s wake up.






Rethinking Power and LNG

In some areas of the world, there are massive moves planned to convert coal plants to other options but the options are impractical. One option is incremental conversion that achieves massive reductions in emissions while leveraging existing infrastructure in new ways.

III would take a different view. In areas where LNG can be brought to the coast, install a receiver terminal with a down conversion to CNG. CNG is 60% as compressed as LNG but requires no refrigeration. Then use coal trains already in use by inserting a CNG tank in each car. Finally, add secondary burners in coal boilers to allow mixed fuel firing for now until economics allow full conversion.

We avoid the pipeline cost and ROW issues of NG delivery to plants not on networks, we leverage existing assets at every level and we begin to show a positive, proactive movement to help with climate change to ease pressure and enhance some categories of investor communities.




We cannot do this alone and engineering companies together cannot move this ahead without a comprehensive plan involving government, industry, academia, investment groups, regulators and overseas markets with needs, interests and money to invest.

The silos of infrastructure, of government, of markets and of politics have prevented any of these examples and two dozen others from being possible, but the Obama Administration has many motivations for making this work if someone can express it to them in an authoritative manner. This means alliances with the NSF, DOE, EPA, DOC and the right Congressional committees.

In order to do this, we need to create an alliance based on a 501(c)-3 with an executive committee made up of CEO/President/Government leaders and an operational committee made up of working groups focused on integrated examples like the ones discussed here.




What’s Next?

What’s Next Proactive Complexity


Assured 2022 Futurisms

N-state Computing Non-Linear is New MathMutels – Shape Shifting Metals Chaos is New CalculusMaterials Gardens Decision-centric ThinkingOrganic Machining Material RehabilitationMatrix Gels Molecular AerogelsIntelli-bending and shaping Direct Buyer GuidanceSelf-Organizing Omni-Networks Self-recycling MaterialsDNA-based Sensor Family Self Policing RegulationsGenetic Materials Self Routing GoodsGenetic Accounting Self SensingMulti-Phasic Materials Self RepairingSynthe-Syms Self ImprovingDynamic Intellectual Capital Self EliminatingInterDevice, InterSystem Self-Optimization

What’s Next This Is Only The Beginning


THE USCR – The consumption of any material or commodity equalTo That Of the United States In The Same Timeframe (default a year)

This is not the amount consumed on US soil, but the amount necessaryTo supply all needs, direct or indirect for that material.

Real Question Is – Can The World Stand 2 or more USCR not only inFood or Fuels but also in water, drugs, rare metals or even

Something as simple as molybdenum for lubricants

Only Integrated Innovation Can Hope To SolveThe Issues This Will Create

One Element of That Future

What’s Next Something To Keep In Mind


The New ComplexityThe New ComplexityIts Nature and ProximityIts Nature and Proximity

John Voeller, CKO, CTO, Senior VPJohn Voeller, CKO, CTO, Senior VPBlack & Veatch Black & Veatch [email protected]

816-853-7839, Skype – john.voeller49816-853-7839, Skype – john.voeller49

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The New ComplexityIts Nature and Proximity Risk Situational Complexity

The New ComplexityIts Nature and Proximity Broad Thinking Decision Complexity

The New ComplexityIts Nature and Proximity Broad Thinking Future Complexity

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