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1 week ago

University of Alabama report: State’s logistics infrastructure unprepared for new economy

Officials have been saying for decades that Alabama needs to better fund improvements to its infrastructure but a report from the University of Alabama adds new urgency to the issue, saying  the state risks losing ground in economic development if it doesn’t address some key areas.

The report, “Logistics Infrastructure: Transformational Opportunities,” from the university’s Culverhouse College of Business, was co-authored by K.C. Conway, director of research and corporate engagement at the Alabama Center for Real Estate (ACRE) and Stuart Norton, research coordinator at ACRE.

Conway said there is one inescapable conclusion.

“If we invest in our logistics infrastructure, we will really continue to grow this great economy in Alabama,” he said.

If not, the state will lose ground to competing states that are addressing their logistics infrastructure needs.

Alabama’s logistics infrastructure found lacking in new report from Alabama NewsCenter on Vimeo.

The report has nine key takeaways:

  1. The logistics infrastructure (LI) needs are compelling, with 4.1 million miles of public roads requiring maintenance, 1.2 billion hours of annual delays for the trucking industry, a 17-fold increase in annual spending required to maintain railroads, and e-commerce warehouse demand growing from less than 5 percent of industrial leasing a decade ago to 20 percent today.
  2. A horseless-carriage supply chain from the 1950s cannot support a modern e-commerce supply chain that is growing 25-30 percent per year because the age and state of Alabama’s existing infrastructure is inhibiting future economic and real estate development, forcing existing industry to relocate toward destinations that have modern LI.
  3. “Build the Logistics Infrastructure and development will come” is not a cliché − it is transformational logistics in action. Retail, distribution and manufacturing businesses are at risk of leaving cities and states that don’t invest in LI and update aging infrastructure.
  4. LI is driving the “why” and “where” decisions for commercial real estate development, such as the new Amazon fulfillment center being built in Bessemer or the Walmart regional distribution center at the state port in Mobile.
  5. The ongoing shift toward online retail will result in fewer physical stores, with the tradeoff being will be many new fulfillment centers and warehouses aligned with new LI. Statistics show e-commerce fulfillment centers will displace one-third of America’s 1,100 malls in a few years.
  6. The development metrics by the major commercial real estate brokerages suggest a boom is ahead for new industrial warehouse development due to e-commerce. Demand still exceeds supply resulting in another 800,000 to 1 billion square feet of new development across the U.S. over the next three years.
  7. Margins for online-shop-and-deliver do not beat shop-and-take-home, but retailers will not reverse course, instead doubling down on technology and LI to get the margins right.
  8. Reliance on the federal government to fund LI for port projects, rail, intermodal or needed supply chain components is too lottery-like a strategy to fund our economy’s circulation system. Of the billions of dollars available annually to fund our ports and inland waterways via the Harbor Maintenance Trust Fund, only 10 percent of yearly balances are distributed to ports.
  9. The time has come to rank our North American ports based on a more dynamic method than the current single variable of 20-foot equivalent unit (TEU) container count. A model that calibrates factors like port depth, Class I rail connectivity, number of PPMX Gantry Cranes, usage by shipping alliances, and the like should be used.

ACRE is releasing the report as a resource for officials to consider as they will likely take up an infrastructure funding bill in the Legislature in this year’s session, which begins next month.

The report doesn’t go into funding methods or taxation, but only points out the needs that exists. Unlike past reports that focused on road and bridge construction and maintenance, this report looks at overall logistics infrastructure, bringing into account railways, the Alabama State Port Authority and more.

“When we debate this next year about what do we do with logistics infrastructure, there is something in it for everybody,” Conway said. “It’s not just certain locations and certain communities are going to benefit from a new road or a bridge. Everyone has a stake in it.”

Jim Page, president of the West Alabama Chamber of Commerce and chairman of the Alliance for Alabama’s Infrastructure, also sees infrastructure as a key economic development issue for the state.

“This is such a major topic for Alabama for us to maintain our economic competitiveness, but in the future, we’ve got to be competitive with our sister Southeastern states, many of whom have already addressed this issue,” Page told Alabama NewsCenter in August. “We think it’s imperative in the 2019 legislative session that we finally address this issue for the first time since 1992.”

Alabama Commerce Secretary Greg Canfield told the state’s economic developers last month that an infrastructure bill will be a focus in the upcoming legislative session.

“We’ve had great success in bringing great companies into the state,” Canfield told Alabama NewsCenter after addressing the Economic Development Association of Alabama. “That, in turn, means that there’s an awful lot of products and goods and supplies and raw materials that have to flow in and out of our state. We’ve got to be able to accommodate that by having the best roads and bridges we can.”

Jim Searcy, EDAA executive director, took it a step further.

“We’ve been very neglectful in the state for decades and it is starting to impact companies’ consideration of Alabama as a location,” Searcy said. “Until we can show a plan and the resources to execute that plan, then I think we are going to be at a disadvantage in the economic development process.”

(Courtesy of Alabama NewsCenter)

21 mins ago

Obama era environmental regulations strike again, force closure of APCO’s Gorgas Steam Plant

The Obama administration has ended, but job-killing environmental regulations from the 44th president’s time in office are still hurting Alabama.

Alabama Power Company announced Wednesday that the Gorgas Steam Plant in Walker County will be shuttered because of unrealistic and cost-prohibitive mandates put in place by President Barack Obama’s Environmental Protection Agency (EPA). The plant, which has been operational since 1917, will cease operating its three coal-fired generating units and close April 15.

The facility could not meet the stringent mandates related to coal combustion residuals (CCR, better known as coal ash) in time, and the cost to convert to gasification would have been monumentally high. In a press release, the company said it estimated a price tag of approximately $300 million just to comply with one set of mandates and continue operating the plant’s coal-fired units.

Alabama Power has worked to ensure that almost all Plant Gorgas employees will be transferred to new facilities and get to keep their jobs. Bevill State Community College has been working with the company to retrain affected employees. 

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Jim Heilbron, senior vice president and senior production officer for Alabama Power, said, “We recognize that Plant Gorgas and the men and women who have operated it have brought great value to Alabama Power, our customers and the local community.”

Patrick Cagle, president of the Alabama Coal Association, told Yellowhammer News that he commends Alabama Power’s efforts at minimizing the economic impact of the closure.

“President Obama’s administration declared war on the coal industry and unfortunately this is the latest example of that legacy,” he stated.

Cagle continued, “The Alabama Coal Association is keenly aware of the economic impact this closure will have on the local community, and we commend Alabama Power for working to relocate affected employees and minimize this economic impact as much as possible. Alabama Power has been a longtime partner to us and our members, and we appreciate their continued commitment to investing in our great state and local economies through the use of Alabama coal.”

In a statement to Yellowhammer News, Congressman Robert Aderholt (AL-4) commented, “This is just another example of [Obama’s] ‘War on Coal.’”

“While I’m certainly glad to hear that most of the employees of the Gorgas plant will be able to keep their jobs, the loss of tax revenue to Walker County is astronomical,” he advised. “This is just another example of the ‘War on Coal’ that was prevalent during the Obama Administration and how it deeply impacts rural communities with little concern for those who are hurt.”

Aderholt also outlined how elections – and the policies of respective administrations – have consequences that cannot be undone overnight.

“President Trump has made progress in rolling back the Obama Administration executive orders that were trying to kill coal and coal jobs. And in Congress, I voted in 2015 on a bill that would roll back crippling EPA rules, but as has been the case for far too many bills, it went to the Senate where it was allowed to die,” he explained.

Aderholt concluded, “I, along with my conservative colleagues, are fighting alongside President Trump to stop these job choking, economic crushing and community killing regulations. But changing the chronic Washington lack of understanding when it comes to rural America, will take time to reverse.”

Alabama Public Service Commission — ‘The war on coal finally took its toll’

A press release from the Alabama Public Service Commission (PSC) stressed that due to “extreme Obama Era Federal regulations… there is just no choice regarding the future of Plant Gorgas.”

“In 2008, candidate Obama declared war on coal and promised to bankrupt anyone who built a coal fired electricity plant. President Obama immediately went to work signing one after another punitive, burdensome federal mandates on the coal industry. Now his promise has come to fruition at Plant Gorgas,” the release said.

It added, “[T]he responsibility of the Alabama Public Service Commission is to require Alabama Power to provide secure, reliable service at the lowest cost to their customers.  Given this charge, along with the astronomical rising cost to comply with Obama era mandates, there is just no choice regarding the future of Plant Gorgas.”

“The company has taken every possible step to keep the plant up and running, but the war on coal finally took its toll,”  Public Service Commission (PSC) President Twinkle Andress Cavanaugh said.

“Obama said he wanted to make it too expensive to run coal-fired plants, and he did. I commend President Trump for rolling back as many of the Obama mandates as he could. The problem for us here in Alabama was that Obama placed the biggest bullseye on us, and Trump’s valiant effort at finally implementing common sense came along a little too late,” she concluded.

Commissioner Jeremy Oden remarked, “I serve the State of Alabama as the Chairman of the Clean Coal Committee for the National Association of Regulatory Utility Commissioners. One of my duties across the country is to make sure these plants continue to serve their mission in economical ways. With the mandated environmental retrofit required to continue to produce energy at Gorgas with coal, it is no longer feasible. I have spent years nationally trying to save these plants, and it saddens me deeply to see this happen in our state.”

Commissioner Chip Beeker commented, “Obama’s negligence and disregard for Alabama families and their jobs is one of the many destructive outcomes of his presidency. The liberals who helped drive Obama’s agenda continue to put Alabama’s economy at risk. Our task moving forward is to keep the ones affected by this and their families in our hearts and in our prayers. We will continue to fight for our state to achieve the most reliable and affordable energy.”

The PSC emphasized that it supports Alabama’s coal industry and the miners who “have supported their families and our state’s economy with their self-sacrifice, hard work and dedication.”

The commission is urging Alabama Power to continue working “to minimize the impact of this closure on the communities and on the numerous families affected.”

Just the latest example

Unfortunately, Plant Gorgas is just the most recent Alabama casualty of Obama era mandates.

On New Year’s Eve, PowerSouth CEO Gary Smith emailed employees that Lowman Plant on the Tombigbee River in Washington County will be forced to close.

He pointed to the coal ash regulations as prohibitive to keeping the facility in business, saying “we are left few choices other than to close the Lowman Plant and obtain additional generation resources to replace the coal-fired generation.”

Smith also outlined why having coal in a power generation portfolio is so important to this day, lamenting “extremist environmental ideologies.”

“With closure of the Lowman Plant, we lose the diversity of coal-fired generation as a natural hedge against higher natural gas prices, and we are more dependent upon natural gas as a generation fuel (The Lowman Plant has been economically dispatched ahead of our most efficient natural gas units for the past four weeks because of higher-priced natural gas),” he advised.

“It is sad and disheartening that environmental activists, politicians, bureaucrats and others have allowed environmental and climate change movements to close coal-fired units and cost good, hardworking people their jobs and livelihoods,” Smith added. “The real victims are the hopes and dreams of Lowman employees, people with families, lives and needs that were met with their employment at the Lowman Plant, not the abstract climate threats to public health. Maybe one day our leaders will understand the real damage they have done.”

Additionally, Plant Gorgas is far from the only example just when it comes to Alabama Power facilities being affected by Obama administration environmental mandates.

“Federally driven environmental mandates related to coal, and the costs to comply with those mandates, are changing the way Alabama Power provides electricity to customers,” the company’s press release Wednesday noted.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

All roads lead to Alabama jobs

“940,353 full times jobs are completely dependent on Alabama’s transportation network. If we want to recruit new industry and create more jobs, we need a road and bridge system that supports economic growth in Alabama. It’s time to take this issue seriously and invest in Alabama’s future. Let’s take action and rebuild Alabama’s roads!” #FixALroads

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1 hour ago

Save the date: Yellowhammer News Shaper series kicks off with its 2019 legislative edition

Yellowhammer News will host its next “Yellowhammer News Shaper” event in Montgomery on March 19. The gathering will offer a networking opportunity as well as a live interview with Alabama Senate President Pro Tem Del Marsh (R-Anniston) and Speaker of the House Mac McCutcheon (R-Monrovia).

The discussion will be moderated by Yellowhammer News editor and owner Tim Howe and will cover issues surrounding this year’s legislative session.

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The event will take place at the Alabama Association of Realtors, 522 Washington Avenue, and will begin at 5:00 p.m. with a cocktail reception followed by the moderated interview and questions from the audience.

Several more Yellowhammer News Shaper events will take place across the state this year. The series is non-partisan, on-the-record and designed to localize issues and highlight thought leaders.

Continue to visit Yellowhammernews.com for announcements during the 2019 calendar year.

2 hours ago

7 Things: Byrne to announce he will challenge Doug Jones, Alabama politicians race to react to a publication with 3,000 subscribers, gas tax increase could be 12 cents a gallon and more …

7. The Democratic Party has a new front-runner — he’s a 77-year-old white male socialist

— Senator Bernie Sanders (I-VT) is in the primary to be the next Democratic presidential nominee. He polls better than any other candidate currently in the race. The only suspected candidate that out-polls him is former VP Joe Biden. Sanders is the second choice for voters who choose Biden. He was able to raise $228 million in 2016 and brings that fundraising ability with him.

6. Secretary of State John Merrill has been sued by the Libertarian Party of Alabama

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— Libertarians are suing Merrill for charging the party roughly $34,000 for a list of registered voters. Alabama law provides these voters list to Republicans and Democrats at no charge, but that is because they are qualified major parties. Merrill believes he is unable to provide the list for free because the Libertarian Party is not a major party and can’t be without achieving ballot access.

5. President Donald Trump reportedly wanted a friendly district attorney involved in the Michael Cohen investigation in New York

— The New York Times is reporting that the president wanted then-acting Attorney General Matt Whitaker to appoint a Trump ally to oversee the investigation into former Trump attorney Michael Cohen. Whitaker told the president he could not, as the person Trump suggested had recused himself from the case. Trump denies pressuring Whitaker, Whitaker denies being pressured and there isn’t much new here. Cohen would eventually plead guilty and say that Trump ordered him to arrange the payments to the women. He will start serving three years in prison for campaign finance violations soon.

4. The U.S. Census Bureau believes hundreds of thousands of illegals will not fill out a census form if they are asked about citizenship

— The government entity told the White House that 630,000 households may not complete the census because a question asking about citizenship question. This only involves .5 percent of the population and a bureau document found “the Census Bureau has identified no credible quantitative evidence that the addition of a citizenship question would impact the net undercount of the 2020 Census.” There are multiple court cases over the matter, including one involving Alabama Attorney General Steve Marshall and Congressman Mo Brooks (R-Huntsville).

3. We have our first look at what a gas tax increase could look like in the upcoming Alabama legislative session

— State Senator Sam Givhan (R-Huntsville) laid out the current state of play for the gas tax debate and signaled the current plan would have a hard time passing. The plan calls for a 12-cent increase in the current gas tax, with eight cents going to ALDOT, three cents to the counties and one cent to the cities. The division of the cities’ money would be based on population with the counties’ money being divided half by population and half split evenly among the 67 counties.

2. More Alabama politicians call for the editor/publisher/owner of a newspaper to step down from his own paper, which has published multiple offensive editorials

— An irrelevant small town paper is under-fire from all political players in Alabama with calls for an apology and a resignation coming from both parties. The Democrat-Reporter in Linden, Alabama, has run a number of offensive editorials in the past few years and its editorial referencing the KKK to its 3,000 readers drew national condemnation. House Minority Leader Anthony Daniels (D-Huntsville) called for readers to cancel subscriptions and advertisers to pull their advertising, which is the right call for a public official being critical of a media outlet.

1. Senator Doug Jones (D-AL) could draw his first challenger today

— Congressman Bradley Byrne (R-Mobile) is expected to announce his decision to enter the race for U.S. Senate in 2020. Byrne has been criticizing Jones for months and this was widely expected. Byrne will be a formidable foe in a GOP primary, as he finished second in the 2010 GOP gubernatorial race and in the general election where Jones is expected to face an uphill climb for re-election.

5 hours ago

Byrne to make ‘special announcement’ Wednesday

Congressman Bradley Byrne (R-AL) is set to officially announce his candidacy for the United States Senate seat currently held by Sen. Doug Jones (D-AL).

Byrne and his family are welcoming friends, supporters and interested members of the public to attend a “special announcement” 5:00 p.m. Wednesday at the Wintzell’s Oyster House in downtown Mobile.

The primary election will be held just over 12 months from now — March 3, 2020.

State Senate President Pro Tem Del Marsh (R-Anniston) is strongly considering entering the race. He and Byrne would start at the head of the pack of potential Republican contenders.

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Additionally, State Auditor Jim Zeigler (R-AL) has launched an informal exploratory campaign for the Senate seat, and Col. Lee Busby, a former military aide to General John Kelly, is weighing a Republican candidacy.

Busby, who has conducted 2020 primary polling, mounted a 2017 write-in campaign during Jones’ general election fight with Republican nominee Roy Moore.

The Alabama Republican Party will hold its annual winter meeting Saturday. Ongoing preparations to defeat Jones will be the center of focus for the attendees.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn