DENVER | Main Development Thread #7

[TakeFive]

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[mojiferous]

Originally Posted by laniroj

Friend, I have been all around the world and I have seen with my own two eyes most countries doing things of far greater scale than a simple water pipeline that's 600 miles long. China could literally build and complete something like that in 30 days. It's not an exaggeration. If you think it is an exaggeration, go travel to some of these places and see with your own eyes what industrializing countries are accomplishing, it's absolutely astonishing, overwhelming, and inspiring. What took us 150 years, they're doing now in less than 20. They have the will, we don't, that's the only difference. Civilizations have been re-routing water since the dawn of....civilizations.

PS: congress could very easily vote to disregard an EIS for a special project. That could be a part of the package. Better yet, FEMA could declare a disaster under existing rules exempting them from EPA interference...there's many ways to get this done but if there's no will, you're right there's no way.

Again, 30 days of construction comes after years of design and land acquisition. And it also usually comes at an enormous safety standards cost. Projects may take significantly longer in the west, but they also don't collapse or run dry as often, or need replacement as quickly. And all those pesky EIS' are also confirm that construction wasn't negatively impacting the people and places in between point A and B.

So yes, we used to build like this in the US - and we had dams break because of a little too much water, bridges collapse because of wind, accidental seas formed because of flooded canals, ecosystems collapse because of new roads or lack of water... There is always a huge unwritten cost to "move fast and break things" and a lot of engineers bristle at these limitations, but a good engineer will tell you that better outcomes come out of process and following lessons learned.

[bunt_q]

Originally Posted by SirLucasTheGreat

BusinessDen was reporting earlier that the lender may take the keys to the Wells Fargo Center. Is there any chance that these office towers get demolished or are they just going to be resold at a massive loss to the lender?

Can’t recall if I shared this, but good article on this exact question in the NYC context. Long, but interesting.

https://www.curbed.com/article/nyc-office-real-estate-rechler-rxr-project-kodak.html

[TakeFive]

Originally Posted by bunt_q

Can’t recall if I shared this, but good article on this exact question in the NYC context. Long, but interesting.

https://www.curbed.com/article/nyc-office-real-estate-rechler-rxr-project-kodak.html

You hadn't shared this one; it doesn't have a paywall so I thoroughly enjoyed it. I don't follow NYC specifically and wasn't familiar with Scott Rechler.

Few observations:

Basically the same conversations as with San Francisco.

Big Tech will suffer lots of abuse to maintain a Bay Area address. But as they needed to grow they went to business-friendly places like Austin and the RTP in North Carolina.

With already high taxes in California/New York and San Francisco/NYC this could make it more difficult to 'afford' a city do-over. The new term of "doom-loop" can complicate a lot things. Neither city will blow away but there's conservative politics in the background that couldn't care less about either city.

Both cities will certainly survive but their status could change.

[laniroj]

Originally Posted by bunt_q

Not disagreeing with you at all in terms of the impacts of process. But we did it that way for decades. And the general consensus now is that the result was a lot of marginalized communities getting absolutely f'ed. Pretty sure what we see China doing is exactly the same as what we did in the 50s and 60s. No matter the cost (real project cost, time cost, or human cost), I do not see a lot of appetite to go back to that way of doing business.

That said, the EIS is not what holds up water pipelines across the Great Plains. Pumping cost does that. I get pitched/asked to help with somebody wanting to do that (some more credible than others) every few years, and the outcome is always the same - municipal water consumption will have to be a hell of a lot more expensive than it is today for that to make sense. Drying up fields makes more financial sense. (Other things that make more financial sense: buying more bombs for Ukraine so we can get back to growing grain there, where grain wants to grow.)

I'll ask you a question. Would it have made economical sense for private groups (I'm assuming the folks reaching out to you are private but chime in if that's incorrect) to build the Hoover Dam, Glen Canyon Dam, Colorado River Aqueduct? Of course not. The Country sought growth in the west and to do that, the west needed water so they built a storage and distribution system then serving 15 million people which now serves 45+ million. The West's water issue is not solvable through typical profit based models (yet). Through a gubment lens, it is very solvable and VERY profitable from a long term perspective. A typical oil/gas pipeline is roughly $8 million/mile. Gas pipeline not even $2 million/mile. Water is MUCH easier and all of the safety controls that go into oil/gas are not required with water. Say it's $5 million/mile, that's $3 billion to solve an enormous direct issue for 45 million people. Congress allocated more than that to "study" the issue in the Build Back Better Plan. $67/person to build a pipeline to the west and maybe $50 million/year in the worst case scenario to operate it - roughly $1/ person. It's not a matter of possibility, we just can't get our elected leaders to come together and solve important issues anymore.

[laniroj]

Originally Posted by wong21fr

Hey, what's the estimate that's used for electrical costs for such an endeavor? I assume that it's new generation and I'm curious just how grossly optimistic these folks are.

$10 million/mile for electric transmission lines. Electric cars or water for people, housing, and agriculture. Priorities.

[laniroj]

Originally Posted by mojiferous

Again, 30 days of construction comes after years of design and land acquisition. And it also usually comes at an enormous safety standards cost. Projects may take significantly longer in the west, but they also don't collapse or run dry as often, or need replacement as quickly. And all those pesky EIS' are also confirm that construction wasn't negatively impacting the people and places in between point A and B.

So yes, we used to build like this in the US - and we had dams break because of a little too much water, bridges collapse because of wind, accidental seas formed because of flooded canals, ecosystems collapse because of new roads or lack of water... There is always a huge unwritten cost to "move fast and break things" and a lot of engineers bristle at these limitations, but a good engineer will tell you that better outcomes come out of process and following lessons learned.

^No arguments here, but all of the above have also contributed to us not being able to get anything big done anymore. Those canals in New Orleans are problematic, but before they existed it was MUCH worse. On the flip side we follow all the process and check all the boxes and these things still happen - a la I35. There's definitely a middle ground we can aspire to AND still achieve big things, but it's simply not possible under the current model. Progress and consideration are not mutually exclusive. All that said, progress is never pain free and there are always problems, issues, etc. Americans want things to be perfect, they never are.

[laniroj]

Originally Posted by bunt_q

Can’t recall if I shared this, but good article on this exact question in the NYC context. Long, but interesting.

https://www.curbed.com/article/nyc-office-real-estate-rechler-rxr-project-kodak.html

Good read. I was recently in NYC and SF. It's very stark in areas of both Cities. Office heavy areas are essentially devoid of most human activity. A sidewalk in NYC that saw crowds of people walking sidewalks 5-10 deep pre-pandemic will literally be completely empty now - You can look down an entire block and not see another person. Huge street level retail vacancies in those areas. In SF those areas are also packed with the unhoused. NYC doesn't have close to the same unhoused issue and so it feels better. Most of this seems like it could be solved by simply changing zoning and allowing for significant residential in the office heavy areas to create some critical human occupancy mass. Once you get out of the office core and into the residential areas, there is a ton of life and activity in NYC now - they seem 90% recovered from the covid bust. San Francisco has some activity in residential areas but it is still nothing like pre-pandemic SF and nowhere close to what NYC now enjoys and there's still significant unhoused folks pretty much all through San Francisco's neighborhoods.

[bunt_q]

Originally Posted by laniroj

I'll ask you a question. Would it have made economical sense for private groups (I'm assuming the folks reaching out to you are private but chime in if that's incorrect) to build the Hoover Dam, Glen Canyon Dam, Colorado River Aqueduct? Of course not. The Country sought growth in the west and to do that, the west needed water so they built a storage and distribution system then serving 15 million people which now serves 45+ million. The West's water issue is not solvable through typical profit based models (yet). Through a gubment lens, it is very solvable and VERY profitable from a long term perspective. A typical oil/gas pipeline is roughly $8 million/mile. Gas pipeline not even $2 million/mile. Water is MUCH easier and all of the safety controls that go into oil/gas are not required with water. Say it's $5 million/mile, that's $3 billion to solve an enormous direct issue for 45 million people. Congress allocated more than that to "study" the issue in the Build Back Better Plan. $67/person to build a pipeline to the west and maybe $50 million/year in the worst case scenario to operate it - roughly $1/ person. It's not a matter of possibility, we just can't get our elected leaders to come together and solve important issues anymore.

The profit is not what breaks the calculation, nor the capital costs; the cost of pumping alone does that. Sure, if you think your average water ratepayer should pay per gallon the equivalent of what we pay per gallon for gasoline, then your oil analogies make sense. But otherwise your comparisons are no more relevant than comparing it to the moon landing. Our water is very cheap. Water cannot be pumped up 6,000 feet cheaply; that is an ongoing cost, and the best policy in the world doesn't change the physics.

Your average Denver water household uses 105,000 gallons per year. Average daily systemwide consumption is 180 million gallons per day (average; peak is more than double that).

Obviously we could do it, and could pay for it. It just makes no economic sense. The economics are why it's a dumb idea.

[wong21fr]

Originally Posted by laniroj

$10 million/mile for electric transmission lines. Electric cars or water for people, housing, and agriculture. Priorities.

$10M/mile for transmission is high- unless you're talking underground than it's way too low. You can use a LCOE figure coupled will respective ELCC factors and load curves to estimate what generation costs would be for pumping. Could you do variable pumping to make use of lower-cost power? Probably wouldn't be the most efficient, I'm assuming it's similar to gas pipeline operations and looks more like baseload. Colorado isn't in an organized market where an entity can buy power outside of the T&D entity so you're stuck with C&I rates or, more likely a special rate given the type of load the entity would be offering.

Xcel would suck a golf ball through a garden house to get a large load offering that's so flat. Tri-State would be similarly eager given it's about to go into a death spiral.

Just curious if it's been modeled out in detail given the changes on the grid wrought by decarbonization and electrification or if Bunt is just dusting off estimates from the Columbia River diversion, Great Straw, etc. throwing on an escalator and then declaring it economically nonfeasible. Either way it doesn't make sense at this time- the frog hasn't heated up enough.

[laniroj]

Originally Posted by bunt_q

Obviously we could do it, and could pay for it. It just makes no economic sense. The economics are why it's a dumb idea.

Hogwash. If we added 20% increased water to the general 82 gallons/day/person, to operate a water pipeline it would cost approximately $50/month per household within the 45 million folks (20 million households) out west who could use this water AND that would include capital recovery costs. We don't need anywhere near a 20% increase in total water usage to serve the West's growing needs. Is that a good chunk of money that folks will say no to? Yep. Can government find a way to fund that? Also Yep. State governments in the West alone could find a way to fund this. This assumes residential use pays for it all! If agriculture and industry chipped in to subsidize residential (I'm not suggesting they should) that $50/month residential bill starts to come down VERY quickly. This isn't a money problem it's a leadership problem and an entrenched federal process that doesn't allow for big things to happen anymore.

This is well within the realm of financial sanity it's just uncomfortable. You likely know better than most all the silly stuff we spend money on.

[PHX31]

Originally Posted by twister244

That doesn't equate to Phoenix getting any more prioritization on water than they do now. Colorado has rights.......

It sounds like you think the only source of water for the Phoenix area is the Colorado River/CAP (?)... and that minimal water resource planning has been undertaken by the City of Phoenix and State of Arizona.

Quick search shows 52% of our water comes from within Arizona (SRP), 38% from the Colorado River (CAP), and the rest ground/reclaimed, etc. those numbers may not be 100% accurate, but it's pretty close.

Arizona has it's own mountains and high-elevation and snow and reservoirs, etc. The City and State has done serious concerted water planning for decades.

The TSMC and Intel and all of these chips plants do bring up certain questions, and this "strategic" discussion is kind of interesting. It goes further and deeper than just water supply. I've wondered about some ridiculous circumstances with the TSMC... for example, if a full on war between US and China breaks out, would they just send cruise missles or whatever to blow up the TSMC? Has a strategic defense plan for it already been implemented? Again, that is kind of silly, but I'd imagine plenty of planning for many different things (incl water supply) have been undertaken in relation to such mega projects and investments as TSMC, etc.

[TakeFive]

Eh, I'm a Big Picture guy

This conversation is mostly over my head, especially all the math stuff.

Originally Posted by laniroj

This isn't a money problem it's a leadership problem and an entrenched federal process that doesn't allow for big things to happen anymore.

This is well within the realm of financial sanity it's just uncomfortable. You likely know better than most all the silly stuff we spend money on.

Here's what I do know.

https://www.nps.gov/miss/riverfacts.htm

The Mississippi River is one of the world’s major river systems in size, habitat diversity and biological productivity. It is also one of the world's most important commercial waterways and one of North America's great migration routes for both birds and fishes.

https://www.americanrivers.org/river/mis...2Dlongest,and%20food%20for%20the%20world.

As the nation’s second-longest river, behind only the conjoining Missouri, the Mississippi provides drinking water for millions and supports a $12.6 billion shipping industry, with 35,300 related jobs. It’s one of the greatest water highways on earth, carrying commerce and food for the world. Half the nation’s corn and soybeans are barged on the section above the Ohio River confluence, known as the Little Mississippi.

A shrinking river is hurting people and the economy in a variety of ways. Barges can’t operate on the river to get goods to market. Drinking water may also be at risk – for example, salt water moving upriver from the Gulf of Mexico could impact drinking water supplies in parts of Louisiana.

Not unlike the Rockies there may be an excess of water from spring runoff but they've also experienced the opposite of not having enough water through the summer/fall.

It's the pragmatic geo-politics that makes steeling water from the Midwest a Non-starter.

[TakeFive]

We are doing Big Things

One year old, US climate law is already turbocharging clean energy technology
July 23, 2023 BY ISABELLA O’MALLEY AND MICHAEL PHILLIS - AP

AP writers provide us with an impressive read and update.

FWIW:

The Associated Press receives support from the Walton Family Foundation for coverage of water and environmental policy.
The AP is solely responsible for all content.

[bunt_q]

Originally Posted by laniroj

Hogwash. If we added 20% increased water to the general 82 gallons/day/person, to operate a water pipeline it would cost approximately $50/month per household within the 45 million folks (20 million households) out west who could use this water AND that would include capital recovery costs. We don't need anywhere near a 20% increase in total water usage to serve the West's growing needs. Is that a good chunk of money that folks will say no to? Yep. Can government find a way to fund that? Also Yep. State governments in the West alone could find a way to fund this. This assumes residential use pays for it all! If agriculture and industry chipped in to subsidize residential (I'm not suggesting they should) that $50/month residential bill starts to come down VERY quickly. This isn't a money problem it's a leadership problem and an entrenched federal process that doesn't allow for big things to happen anymore.

This is well within the realm of financial sanity it's just uncomfortable. You likely know better than most all the silly stuff we spend money on.

45 million folks? Because all of us "folks out west" are so conveniently clustered and are going to be able to tap into that very cheap and convenient cross-plains line at a very reasonable cost. That's exactly how this works, sure...

This is clearly not what you do. You read something online once and it stuck with you. Cool. Not worth debating. Keanu Reeves made nuclear fusion look easy in the 90s too. That's the level of discourse we are having here.

[trubador]

I always assumed the plan was to divert (via pipes) water from the Mississippi to enter the Colorado river at some point. Then utilize the existing storage and distribution infrastructure to deliver water to the Western states.

[laniroj]

Originally Posted by twister244

That doesn't equate to Phoenix getting any more prioritization on water than they do now. Colorado has rights.......

If the plants become important, fine, but we are already seeing areas in AZ limiting development because they just can't sustain the current trajectory. There are several cities that are going to have to realize sooner that they can't grow indefinitely with looming water/flood issues. And if the municipalities don't deal with it, then the private market will. We are already seeing this in the insurance market (I.E., Florida / California).

Phoenix will have massive national strategic importance once those chip plants are done. Water laws will mean nothing if something international like COVID happens again. Gov will move heaven and earth to ensure those facilities keep operating and local single family moratoriums on account of water resources will mean nothing, nor will the Colorado River Compact.

[laniroj]

Originally Posted by bunt_q

45 million folks? Because all of us "folks out west" are so conveniently clustered and are going to be able to tap into that very cheap and convenient cross-plains line at a very reasonable cost. That's exactly how this works, sure...

This is clearly not what you do. You read something online once and it stuck with you. Cool. Not worth debating. Keanu Reeves made nuclear fusion look easy in the 90s too. That's the level of discourse we are having here.

The distribution network for the 45 million folks who ALREADY use Colorado River water already exists friend. All we have to do is get it to Dillon Reservoir - turns out water flows downhill. The water need is in 5 primary areas - Front Range, SLC, Las Vegas, Phoenix, Southern California. I'm not asserting this is simple and easy, but rather that it is possible and should get the attention of national resources.

[bunt_q]

Originally Posted by laniroj

The distribution network for the 45 million folks who ALREADY use Colorado River water already exists friend. All we have to do is get it to Dillon Reservoir - turns out water flows downhill. The water need is in 5 primary areas - Front Range, SLC, Las Vegas, Phoenix, Southern California. I'm not asserting this is simple and easy, but rather that it is possible and should get the attention of national resources.

Oh good, so you want to pump it up 9,000 feet. Brilliant.

EDIT: Did a rough for-fun calc, assuming something like 1,000 MGD pumped up 9,000 feet. I guess that’s only $3.5 billion/year in electricity costs. It’s certainly expensive - $78 per capita/per year ongoing spread across all 45 million people. That would probably be a 50-100% increase in water costs for your average Denver Water customer. But it is possible.

[trubador]

Originally Posted by bunt_q

Oh good, so you want to pump it up 9,000 feet. Brilliant.

EDIT: Did a rough for-fun calc, assuming something like 1,000 MGD pumped up 9,000 feet. I guess that’s only $3.5 billion/year in electricity costs. It’s certainly expensive - $78 per capita/per year ongoing spread across all 45 million people. That would probably be a 50-100% increase in water costs for your average Denver Water customer. But it is possible.

Do you mind sharing the math on this one?