American Firms Invest in the Infrastructure Emergency

America’s glory days are long since over. Streets, bridges and pipelines are crumbling, as are their schools. In the face of such an urgent need for modernization, some companies have decided on a DIY approach.

Do you want to do a tour of the United States? Perhaps a journey through the Wild West in an SUV? Then come to New York and drive along 14th Street. When you go past my office on Union Square, you’ll get a real thrill: Bucket-sized potholes and massive steel plates in the roadway. One of Mayor Michael Bloomberg’s first acts after taking office was to set up a “pothole hotline” that he used almost everyday himself.

New York is out of money; the city is basically bankrupt. It lives on credit just like everyone else in America. Meanwhile, its infrastructure is crumbling all around it. A study done by the Society of American Engineers in 2009 concluded that bridges, rail lines and schools would need about $2.2 trillion over the next five years. The study reads like a horror tale: In just two years, about 3,000 dams could fail and 30 percent of all school students already sit in overcrowded classrooms.

Now, some U.S. firms are taking the bull by the horns. Delta Airlines recently acquired its own refinery in Philadelphia. The $150 million investment is highly irregular; no airline had ever purchased its own fuel supplier before. The acquisition is quite risky because the refinery business is very volatile and the profit margins are razor-thin.

Delta hopes to reduce their high outlays for kerosene. But equally as important, the airline is concerned about the continuity of supply. Refineries on America’s eastern seaboard are closing in rapid succession. Like most other factories in America, they are totally obsolete. It wouldn’t pay to build new facilities, not least because of the difficulty of obtaining permits to build new pipelines to Canada through America’s Midwest. Canada sits on massive oil reserves in the form of oil shale and oil-bearing sands. That explains why gasoline is considerably cheaper in Colorado or North Dakota than it is in New York or Massachusetts. Those on the east coast have to pay $10 to $15 per barrel more for oil that is imported from the Middle East or North Sea wells.

Obsolete refineries and the lack of pipelines — the list of crumbling American infrastructure is lengthy. But worst of all is the school system. AT&T CEO Randall Stephenson recently complained of a shortage of qualified technicians in America. “We are interviewing 11 people to find one qualified candidate,” Randall said. [http://politic365.com/2012/04/16/att-invest-350-million-to-help-close-talent-gap/] That’s why AT&T will invest $350 million in educational aid and other programs designed to ensure a growing number of academically qualified personnel will be available. Siemens also has a similar initiative called Apprenticeship 2000, a sort of expanded apprenticeship program. In cooperation with companies like Pfaff and Ameritech, they are educating the workforce, a task that schools and universities are failing to do.

And finally, one more stop on your SUV adventure: Drive New York’s Houston Street from the Williamsburg Bridge to Broadway. It’s a magnificent slalom course through endless construction sites, deep chasms and potholes. It will make you appreciate your four-wheel drive off-road vehicle all the more.