Green Energy Land Theft

One feature of the ‘Green Energy’ gold rush that has been going on in Ontario under the current government has been a massive deployment of industrial wind plants. The plot is always the same — a community will be targeted as a site for these things, lawyers and sales guys will quietly circulate among the landowners to lease places for these behemouths under strict conditions of silence and anonymity. When enough property has been leased the applications are put in to Hydro and somewhere along the line the community finds out about it and screams bloody murder.

Nobody in government cares or listens. In fact, the government seems to facilitate the process, destroying bird sanctuaries, nature reserves, retirement communities and just to make sure that none of those pesky local residents slow the process, municipalities are barred from having a say. And while the government rants on about all the ‘green’ jobs that are being created, the daily newspapers and experience from abroad show the side effects are really catastrophic job losses of 2:1 or higher for this subsidized employment program. And the stiff new electricity rates we all pay are encouraging employers to move elsewhere — well done, I am sure.

Here on Amherst Island we are seeing another aspect of the process that I am surprised doesn’t get better press. Land allotments, like much of Ontario, tend to be skinny rectangles — a few hundred feet wide along the road allotment but very deep. What is happening is that the wind company leases a spot on one piece of property for a turbine. But the 550 meter exclusion zone that this creates is mostly on the neighboring land. Those folks have just lost the use of their property as no building permits can be issued inside the exclusionary zone. I read this morning of one family that had 150 acres they had bought for a home and farm stolen in this way. But they get nothing out of the deal and apparently no level of government is interested in even listening to them.

An interesting side point is that the wind farm proponents assert that this is all about property rights and that no one should be able to tell them what to do with their land. I agree completely. The problem is that most of the land reserved by the wind project is not owned or controlled by the wind lessees — but in effect stolen from their neighbors. When these folks have control of sufficient acreage to implement the project without restricting their neighbors use of THEIR land the issue is moot. But that is not how this is being done — and to me this is wrong.

I am curious as to just how much of this is going on in Ontario and why the government allows, even encourages, it to happen? This is not NIMBYism but classic theft right out of some 19th century colonial horror story. Whatever the virtues or vices of the technology may be, these companies should be paying for what they use — especially considering the outrageous tax breaks and incentives being paid to facilitate this unwanted and unneeded source of energy. But clearly the landowners of Ontario are being told to take one for the team and DONATE their land to the process. Just one more example of how wrong this whole program is — despite the glowing praise the government heaps on itself for what has been done.

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Musing About Training

In the very old days, skilled tradespeople belongs to craft guilds that controlled entry into the trade, managed apprenticeships and established to some degree the standards of quality. While the concept of apprenticeship is preserved in Europe and in some skilled crafts here within a union organization (my son is an electrical apprentice) it has for the most part gone away.  After the second world war there was a broad interest in having Universities provide low cost advanced education for the masses. One would acquire a basic knowledge of  a field and reasonably expect that the specifics of how it was applied be covered in specific training once one was hired.

But this practice has largely gone away as well. Employers seem to expect that their new hires have been fully trained in the latest technologies by the college or university they attended. Instead of a broad theoretical background, education is expected to be job-specific, with the prospective employee bearing the full costs and the risk of anticipating employment market requirements in advance. Employers provide few hints, and no responsibility for changing their mind abruptly. If the market requirement shifts the job seekers are expected to suck it up, take out yet another crushing loan, and go back to school for even more years of training — with the hope that it won’t happen again.

And as with many other things, the costs of this specialized education are soaring as schools are transformed into profit centers.  Gone is the idea that public financing of education is an investment in the future.  And with this rise in costs there are all sorts of vultures circling to make a profit lending money to desperate students.  After all, the courts have sided with the lenders — bankruptcy affords no protection from crushing student debt.  In effect they have become the new class of indentured servants — bleeding into the financial system for decades.

Another trend has been the tendency of employers to seek new grads for jobs and avoid experienced workers. Ironic at a time when people are told that they must keep working longer due to the impoverishment of  the retirement system.  And the one thing this process is inexorably doing is squeezing out experience from the system — those famous mistakes and bad ideas that we all recognize when we do them again.  So we have a skills shortage and unfillable job openings because the available people just don’t have the right mix of skills or the finances to learn them. And as individuals, job seekers are all pretty much at the mercy of the employers whims.  Something will have to give — I wonder what it will be?

Could this be the time to bring back the old craft guilds — organizations to provide guidance (technical and moral), education and protection for the employees against the would be slave owners — oops, I meant employers.  If one needed an engineer, computer programmer, mathematician or surgeon the employer would go to the guild instead of the open market. Oh, hiring the brother-in-law for that plum senior position would still be possible.  After all, we just want to fix some of the unfairness in the system, and we cannot eliminate the people.  One would enter the guild when there was a sense of a career direction, and be schooled in the fields’ body of knowledge.  Apprentices would be overseen to ensure they picked up the best practices as well as the known ways to fail.  Training would be tied to some degree with employer requirements —   but with a filter to screen out impossible demands (I recall a want ad that sought a minimum of five years with a specific tool that had just been released. Not even the tools’ designers would have had that level of experience. HR departments seem to do this regularly.)

Oh, I know I haven’t thought this one through and I am sure it has a million defects. But I am appalled at the degree of unemployment among new grads, the crushing levels of debt these kids are carrying, and the degree that they have been made to bear the risks of anticipating the fickleness of employers needs. After all, if employers have too tough a time filling those factory positions then there is plenty of support to move the whole thing to some other place. Maybe the skills aren’t there either but the people are much cheaper and the government is probably more ‘cooperative’.  But what really worries me is the hollowing out of the country and the short-shortsightedness of these decisions. After all, if the future citizen is an unemployed, deeply indebted bum, what sort of a country will we become?

Purchasing and Shortages

Many years ago one of my job functions was purchasing for a small manufacturer of coatings and adhesives. The base of our product line was petroleum wax, brought in by tank cars from refineries all over North America. Those contracts were the purview of  senior management. It was my responsibility to manage the rest — custom packaging, plastics, resins and specialty chemicals that went into the final products. There was uncertainty at every level — demand, transportation and supply. But we had a business requirement to be able to deliver to our customers as orders came in. Matching these was my problem.

Learning about purchasing and inventory management introduced me to the concepts of restocking levels, economic order quantities and multiple sources of supply. In the course of learning about inventory management one encountered various re-order models, one of which was the hospital model. And there were special formulations for cases where the product being inventoried was perishable — in shipment or in storage awaiting use. The theory was that the optimum way to manage inventory and the capital it represented was to balance costs against the possibility of being out.  The hospital model was the one model where stock outs were unacceptable. How times have changed.

Over the years, changes have come along it the fashions of inventory management. ‘Just in Time’ was adopted from Japanese and Chinese manufacturers — the idea being that one saved money by not maintaining inventory at all because anything that was wanted could be drop shipped from the plant down the street as needed and delivered just in time to avert an expensive line shutdown. This idea has become very popular — not having capital tied up in inventory is a real savings. But the procurement world of a purchasing manager where the sources of supply were down the street is very different than that where supplies came through an intermittently porous border or the other side of the globe in containers. And we won’t even talk about the problems with quality and contamination — that is a subject for another entire rant.

One thing vendors have always tried to do is encourage their customers to go single source and shutout competition. Sometimes there are interesting financial and other incentives — both above and below board. The danger is always trading short term gain for dependency and vulnerability to changes of intent by the vendor. Once one single sources there is a relinquishing of control — both on price and availability over the long haul. ( There are sometimes cases where there are no other vendors — but for this discussion we will ignore that special case.)  This prospect always scared me so I rotated among my vendors.  But others chose other approaches — the health organizations of the provinces,  with prescription drugs.

One other interesting thing in the field of commercial drug manufacturing is the ongoing turnover of the manufacturers drug portfolio. When a drug is developed and approved for sale, its formulation is protected by patent.  This allows the manufacturer a period  of profit with competition legally excluded. When the patent runs out, a successful drug will be picked up by others as a ‘generic’ or simply rebranded by its vendor. This is generally good for consumers with one proviso — new drugs may be approved for sale without the need to demonstrate that they are better than the products they replace, just different.  Because generics are sold at lower prices there is a lot of emphasis in marketing the new stuff — that is where the big money is. And interestingly, widely used generics may disappear when they are not profitable enough, or experience an extended plant shutdown to investigate and fix vague problems. So the only real choice is the more expensive brand names. And after an extended outage the generic may simply not be available — I think the line will be something like ‘discontinued because there was no demand’.

So now we come to the current day — after squeezing the ‘fat’ out of inventories through ‘smarter’ purchasing and inventory policies, and signing of single source contracts with drug suppliers to get a ‘better’ price, we find hospitals scrambling for supplies and competing with vets for anesthetics and other compounds. Seems in the search for ever lower prices a point has been reached where the one manufacturer in Canada had a problem and shortages are cascading through the system.  And there are few alternatives thanks to relentless pruning of purchasing and product lines on both sides.

One wonders — how much of this is the result of greed, naivete, or just random chance? Recall that the fashion of the day has been to go for the newly educated (therefor cheap) rather than experienced — and the one thing that is learned over the years is an appreciation for what can go wrong.  So when one intentionally weeds out experience as relentlessly as one squeezes out excess costs — should we be surprised that perhaps the process has gone too far? How much of the ‘fat’ was there as a vital protection against uncertainty? And would the same decisions have been made if experience played more of a role in ‘smart’ solutions?