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Category: Economics / Money / Investing (Page 1 of 9)

Economics, Money, and Investing.

Canned Food is Fine


When I was a kid in the 1950s and 60s, my mother had the opinion that canned food was of low-quality and best avoided. I was young and took her word for it. I maintained this opinion myself into adulthood and sometimes shared it with others. But occasionally I wondered because my own observations and experience didn’t agree. In the late 1990s I became sufficiently curious and learned about it. But first some history.

A Real Short History of Modern Canning

The Dutch Navy were the first to seal foods like salmon in metal cans in 1772. For some reason, this process remained unknown outside of the Netherlands.

The rest of the story begins with French military logistics. In 1795, Napoleon offered a large reward to anyone who could develop a way to preserve foods so that armies could have better provisions when deployed, especially in summer temperatures. As you may know, logistics is what wins wars and availability of food was a major limiting factor in what armies could do.

Fifteen years later, Nicolas Appert won Napoleon’s prize after observing that food cooked inside a sealed jar did not spoil. The reason for this was unknown for another 50 years until Pasteur identified the role of microbes in the spoilage of food. The army worked on developing this process but advancement was slow and the wars were over before useful quantities could be produced.

Development of the canning process continued in Europe and the U.S.A. A process was developed for canning foods in hand-made wrought-iron cans, which worked. But the process was labor intensive and expensive. In 1824, Parry took canned beef along on his voyage to the Arctic. In 1829, James Ross took canned food to the Arctic as did John Franklin in 1845. Some of these provisions were found in 1857. One can was opened in 1939 and found to be edible and nutritious but was not tested for lead contamination from the lead solder used to make those cans.

By the mid-1800s, the wealthy began to see canned foods as a status symbol and novelty. By the 1860s, rising urban populations increased demand for canned food. Many inventions and machines were developed to fabricate cans rapidly. Improved processing methods reduced cooking time from six hours to 30 minutes.

Skipping ahead, a big step was the invention of the double-seam can in 1888. These provided a reliable perfect seal and were called Sanitary Cans. This is the type of can we use today. By World War 1, mass production of canned goods was perfected and large quantities of food, coffee, cigarettes, medications, and ammunition were packaged for the soldiers in cans by the British, French, and the U.S.A. At the end of the war, the companies equipped to make such foods like Nestle and Underwood turned to selling to the general public. Canned foods proliferated. It was now possible for European made foods to be sold in the U.S. and vice versa. Canned tomatoes and canned peaches were available year-round, regardless of the season. It was a whole new world.

Expiration Dates and Safety

I’m old so while I now expect expiration dates on foods, it still seems like a new thing for me. I remember when milk started to bear a date, then eggs, then meat. Before that you could write your own date with a grease pencil if you wanted to. And these were manufacturing or packaging dates, not expiration, best by, or use by dates. Food manufacturers soon realized that by putting “use by” dates on everything they could force supermarkets and consumers to donate or discard food that was past the date and sell a lot more product. Very quickly, manufacturers were all-in on putting dates. Customers began to expect dates.

Today, everything has a date. Even bottled water has a date and many consumers think dates are required by law. They are not. The only things in the U.S.A. required to have a date are pharmaceuticals and baby formula.

When use-by dates began to appear on cans, I just laughed. Cans are hermetically sealed and then heated to sterilization temperature or higher, as high as 130C. Most items are cooked in the sealed can itself. There’s no chance for microbial contamination unless the can leaks.

Modern double seam cans like we’ve used for the past 100 years almost never leak. When they do it’s usually visible. If a can isn’t damaged or bulging and passes the appearance and smell tests, it’s safe to eat.

In the 1970s, a trove of cans of freeze-dried food from 1865 was discovered and tested1. There was no trace of microbial contamination and the food was safe to eat. In the 2000s a trove of cans of various foods from the Depression Era (1930s) was discovered which were sent to a food lab for analysis. All of it was safe to eat. The worst case of degradation was the canned corn, which had lost 30 percent of its nutrient value, but was safe to eat.

Do canned foods last 20 years? USDA says “Most shelf-stable foods are safe indefinitely.”

Back to My Mother

In short, my mom’s opinion about canned food was false. But why did she have this opinion? Thinking back on the stories she told me as I was growing up provided the answer. My mom grew up in a big city in Northern Germany in the 1910s and 20s. By the 1920s, a lot of the food on the table was canned because that’s all that was available. Her mother was an early health-food proponent and went to great lengths to seek out fresh fruits and vegetables, gather wild berries and mushrooms. This made an impression on my mother.

When my mom came to the United States in the 1930s, she was astonished at the abundant fresh foods available in markets everywhere, even in big cities. And like most immigrants, she had the idea that everything was better in the U.S.A., which led to her deprecation of canned foods as inferior.

Conclusion

The truth is it’s not a matter of inferior or superior, it’s a matter of cooked versus fresh. If you want raw or lightly steamed broccoli, that’s not going to happen with a can. On the other hand, the can of broccoli will be there waiting for you years into the future without power-consuming refrigeration or freezers. Canned foods tend to be cheaper not because they’re lower quality but because it’s usually prepared near the farm, doesn’t need refrigerated transport, and doesn’t have to be rushed to the market before it spoils. There’s also less waste that has to be refrigerated and rushed to the market. How much of a broccoli head’s mass amd volume do you actually use? A third? The rest goes in the trash but you paid for all of it to come to you fresh.

If you consider the can itself, it’s made of steel, which is cheap, abundant, and non-polluting in a landfill. Unlike plastics, steel is easily recycled but hardly anyone does because steel is so cheap. If you look at the big picture, canned foods make a lot of sense.

The IRS Expansion


IRS Logo

The organizations paying for ads opposing the IRS expansion and the hiring of more IRS agents are telling on themselves. They’re calling it a “shakedown”.

Let’s think about this for a minute. The IRS doesn’t take any more than they are legally allowed to, which in the U.S. these days is very little. This is the amount legally owed. Anyone who would call expansion of the IRS a shakedown is admitting that they are a tax cheat. They’re admitting to breaking the law and not paying their fair share. All such people are in the top ten percent of wealth in this country.

So who is paying for these ads? The ones I’ve seen are paid for by an organization called “Americans for Prosperity”. Great sounding name but who are they? Americans for Prosperity is the Koch Brothers’ propaganda outlet, funded by them. Are you a billionaire? A millionaire? No? Then this expansion doesn’t apply to you.

Americans for Prosperity produces ads that try to get normal middle-class people and the poor angry about issues that have nothing to do with them but do concern the Koch Brothers and their billions. Unless you’re a billionaire or expecting to become one soon, you’re being played. Keep this in mind the next time you see an ad from Americans for Prosperity.

The ads imply that the IRS engages in theft, when it’s the reverse. All the IRS does is enforce the tax code as set forth by Congress, nothing more. Those who cheat are the thieves, robbing the government of funds that would come to the middle-class and poor in the form of roads, highways, education, assistance, medical care, and security.

Ironically, it’s the richest people who can easily afford to pay their taxes that complain. The poor pay little tax, as it should be, but the Koch Brothers still want you to vote for things that benefit them, not you. Don’t be fooled by the name Americans for Prosperity. Whose prosperity? Yours? No.

Will the IRS be targeting the billionaires? Of course they will. Why would they come and audit you if you’re an ordinary wage earner, who pays their taxes with every paycheck? It would be a waste of time. It’s the ones who owe tens of millions of dollars on a hundred million in income that is worth the effort. These cases also require more manpower and smart auditors to untangle complex tax-dodging arrangements. That’s what those agents will be doing — exactly what the Koch Brothers and hundreds of others don’t want.

Tax rates in the U.S.A. are very low when compared to the rest of the developed world. They are very, very low when compared to the 1950s and 1960s when the U.S.A. was at it’s most prosperous. Republicans have been gutting the IRS for 30 years by reducing IRS funding and staff. Why? The intent is to hobble the IRS so their wealthy donors can cheat with impunity.

What’s more, it’s not even an expansion of the IRS if you look back 30 years. It’s the intent of Congress to restore funding and restore the IRS to an appropriate level. Again, unless you’re a billionaire or millionaire, none of this concerns you.

Fossil Fuel Companies Hold Planet Hostage


Sounds sensational, doesn’t it? Click bait. Well, after reading this, you tell me.

It’s not widely known but over the past 100 years, investors have demanded agreements, treaties from the governments of countries they invest in. There are thousands of these treaties, including with the United States. Investors understandably don’t like risk and do everything possible to eliminate risk. Countries, especially poor countries, will jump through hoops, bend over backwards, go to any length to attract foreign investment. They’ll give everything up and sign such agreements in order to attract foreign money.

Petroleum Jack Pump

In the case of fossil fuel companies, such treaties enable them to demand hefty compensation if the government interferes with the business in any way, revokes permits to drill, permits to lay pipelines, restricts extraction, and so forth. We’re talking payouts that can amount to hundreds of billions of dollars if/when these treaties are invoked, far beyond the means of many countries.

And, it’s starting already. The U.S.A. is being sued to the tune of a billion dollars for cancelling the Keystone Pipeline. The governments of Italy, the Netherlands, Poland, and others are being sued for four billion dollars over their phasing out of coal power plants, requiring environmental impact assessments, and blocking of extraction projects. Anything that interferes with the business is grounds to sue for damages.

These treaties enable fossil fuel companies to hold us hostage and prevent the implementation of measures to mitigate climate change. Oil companies can make it too expensive to wean ourselves off of fossil fuels, hamstringing the ability of countries to deal with climate change.

It’s an insane situation where the urgent need to act on climate change will be derailed by old treaties from the middle of the last century. But here we are. They have us over a barrel (of oil).

To Support Coal Buy an EV


What? Yes, it’s true. Read on.

This post is intended for my fellow West Virginians. West Virginia is coal country so a lot of West Virginians support the coal industry.

I look at the big picture as an engineer. Now that the pollution problems associated with coal were mostly solved decades ago, I see coal as just another fossil fuel that we burn to obtain energy. It also happens to be what we have an abundance of in West Virginia.

I’ve watched climate change coming since 1990 and it’s going to bring huge difficulties. You ain’t seen nuthin’ yet. The bottom line is humans have to eventually stop burning things to obtain energy. Achieving this goal is going to take a long time. I’m a realist. It’s going to take far longer than we can afford but that’s how it’s going to be. We’ll be burning coal for a long time to come.

However, that doesn’t mean there’s nothing we can do to reduce our CO2 output. In fact, there’s something we can do to reduce CO2, save our hard-earned money, and support the coal industry, all at the same time. Sound impossible? It’s not. I’ll explain why.

Power Plants and Efficiency

To explain this we need to talk a bit about engineering, but this is something anyone can and should understand. It’s not complicated. Engineers who design machines or electronics are always interested in efficiency. In simple terms, efficiency means how much “input stuff” do you have to put into a device or system to get a certain amount of desired “output stuff” and how much is lost along the way.

In the simple case of an electric motor, if you put in 100 watts of electric power and get 75 watts of mechanical power out, the motor is 75 percent efficient. The other 25 percent is wasted/lost as heat. Nothing is ever 100 percent efficient. There are always losses.

If you have two or more devices one after the other (in series), you multiply together the efficiencies of each device to find out what the total system efficiency is. So, taking some typical figures, if we have a gasoline engine that’s 25 percent efficient, followed by a transmission (geartrain) that’s 80 percent efficient, the total efficiency at the output of the transmission is 0.25 times 0.80 equals 0.20 or 20 percent efficiency. The other 80 percent is lost as heat. This principle will become important below.

Power plant technology has improved continuously since the steam engine was invented. Efficiency is, by far, the most important factor in the design. Power plant efficiency means how much of the chemical / thermal energy in the fuel ends up coming out of the plant in the desired form and how much is lost as heat. Early steam engines were horribly inefficient. Only a few percent. Coal-fired power plants built in the 1970s achieve an efficiency of around 35 percent. So 35 percent of the thermal energy in the fuel leaves the plant as electricity. It may not seem like it, but this is pretty impressive. Modern coal plants built in recent years reach 45 percent efficiency and this is probably close to the maximum possible.

As an aside, natural gas power plants can employ designs that are not possible with coal. The most advanced natural gas plants can reach an unbelievable 60 percent efficiency. But, we’re not talking about natural gas here, we’re talking about coal. But I’ll mention this figure once more at the end of the article.

It probably goes without saying but I’ll point it out anyway. The more efficient a power plant is, the less fuel it consumes, but also the less CO2 it produces to generate a given output. This will become important below.

Internal Combustion Engines (ICE)

Now let’s look at internal combustion engine (ICE) cars. The overall efficiency of modern cars ranges from 12 to 28 percent. That’s the system efficiency measured from the energy in the fuel to moving the car down the road. But the 28 percent figure only applies to certain cars under certain conditions. My little Corolla probably gets close to that 28 percent figure when on a flat highway, at a reasonable speed, no headwind, I’ll get 38 mpg. When city driving, that figure drops way down and I get 24 or 25 mpg. Many cars, SUVs, pickups, do much worse. At no time does any ICE powered vehicle reach the efficiency of the oldest coal-fired power plant. Most of the time the coal plant is 2 to 3 times as efficient at turning fuel into usable power.

Ignoring the frictional losses of all the moving parts in an internal combustion engine, a problem it’s had since it was invented is something called the “power curve”. An IC engine produces maximum power at a certain RPM, maximum torque at a different RPM, and maximum efficiency at yet another RPM. At low RPM it produces little power or torque. At idle, it produces no usable output but still consumes fuel.

Electric Motors and Cars

Modern electric vehicles are powered by 3-phase induction motors. Small electric motors achieve 70 or 80 percent efficiency but the efficiency rises rapidly for larger motors. At the 100 horsepower level, such 3-phase motors are more than 95 percent efficient. Larger ones are even more efficient. And that’s running on fixed mains power at a fixed voltage and frequency.

The 3-phase motors in cars are powered by a sophisticated motor controller that varies the voltage and frequency as the motor’s speed and load changes. That gives these motors a flat power curve and even higher efficiency. At low RPM / low speed they produce lots of torque. At high RPM / high speed they produce the horsepower the car needs. The efficiency stays constant at all speeds.

So what’s the system efficiency of an electric car? The lithium batteries used in electric vehicles have a charge/discharge efficiency around 85 percent. So 85 percent of the electricity you put in comes back out to power the car. Fast charging pushes that number down towards 80 percent. Charging slowly at home pushes it up close to 90 percent.

So the motor gives at least 95 percent efficiency, the motor controller is 98 percent efficient, the battery 85 percent, there is no transmission. Multiplying those together we have around 79 percent efficiency from the charger plug to moving the car down the road. I’m ignoring regenerative braking that harvests the energy from braking to charge the battery. No ICE vehicle can do that, harvest the energy from the brakes and convert it into gasoline.

The electrical grid that transports electric power from the power plant to the home or charging station is very efficient. Over the short distances found in West Virginia, it’s nearly 100 percent efficient and can be ignored.

Conclusion

And so we’ll pull all the numbers together here: coal-fired power plant at 35 percent efficiency and 79 percent efficiency in the vehicle means 27 percent system efficiency from coal to moving the vehicle, any vehicle, down the road. All the time, city, or highway. That’s equal to my Corolla under rare perfect conditions. With a more modern coal-fired plant, it’s 36 percent efficient from coal to moving the vehicle down the road. Well beyond what an ICE vehicle can achieve. “Fueling” an EV from coal generates, on average, one-half to one-third the CO2 of burning gasoline or diesel in an internal combustion engine.

What’s more, the cost of that energy is much lower than buying gasoline or diesel. For example, a high-end Tesla Model S with the big battery pack option, completely discharged, at the electric rates we pay in West Virginia, costs about $12.00 to “fill up”. On top of that, your money isn’t going to a company in Texas, Mexico, Venezuela, The Netherlands, Saudi Arabia, or Russia. It stays right here in West Virginia. West Virginia generates about twice as much electricity as it uses locally. The rest is sold to out-of-state utilities. Availability of locally generated power is not a problem.

For those of you not in West Virginia or coal-country, if your electricity comes from hydro, wind, solar, or nuclear, like in the Pacific Northwest, no fuel is burned and no CO2 generated to power an EV. If your power comes from a modern gas-fired plant like in Florida, efficiency is 2 to 4 times that of an ICE vehicle and about one-third the cost.

As soon as I can solve the charging-at-home problem, I’ll be getting an EV and it will have a bumper sticker that says “This Car is Powered by Coal”.

tl;dr version: It’s more efficient, cheaper, and produces less CO2 to “fuel” an EV with coal-generated electricity than an equivalent ICE vehicle burning gasoline or diesel. Roughly twice as efficient and at one quarter the cost.

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