Oregon Strategist

Reinventing the Oregon Dream

Floating Solar: Smoothing the Energy Cycle

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Exciting new floating solar installations around the world, a ray of sunshine in the cloudy Pacific Northwest, and reservoir woes in Southern Oregon.

Yes—this is a wide range of topics. One of the most fascinating and challenging aspects of understanding the floating solar market is the technology’s unique positioning at the nexus of energy, water, and land management.

It means that all sorts of factors can drive floating solar adoption, whether that’s a mine or quarry being decommissioned, new restrictions on installing ground-mounted solar on farmland, rollout of new community solar rules in a territory, or even the pursuit of more knowledge about…floating solar.

South Africa

It’s official—commercial floating solar has arrived on the African continent.

South African renewable energy developer New Southern Energy recently completed a 60 kW floating solar system at the Marlenique Estate, a fruit farm and wedding venue near Franschhoek in South Africa. The floats came from Ciel & Terre, a leading global provider of floating solar hardware, and the system complements a much larger 534 kW ground-mounted system on land adjacent to the farm’s irrigation reservoir.

The project is a near-perfect case study for floating solar. Owner Carl van der Merwe originally looked into solar power due to frustrations with unreliable power supply from Eskom, one of Africa’s largest utilities. The farm plans to install a battery system in a second project phase to build a true microgrid, providing them with 100% energy independence. A stable power supply was crucial to the successful operation of the farm’s cold storage, irrigation, and wedding venue facilities.

Outside of securing a stable power supply, Marlenique Estate checked practically every box for potential floating solar benefits, confirming research conducted years prior in the region. They reduced evaporation on their reservoir while South Africa is still reeling from last year’s drought. They achieved higher photovoltaic panel productivity due to the cooling effect of the water. They slowed their growing operational expenses. They even created a space for fish to congregate.

Albania

Norwegian floating solar developer Ocean Sun recently sold a 2 MW floating solar system to Norwegian utility giant Statkraft for installation at the Banja reservoir in Albania, with help from a feed-in tariff authorized by the Albanian government.

The project boasts several of the typical benefits of floating solar systems—ease of installation, scalability, increased panel efficiency, reduced evaporation, algal bloom mitigation—but it’s a new type of floating solar in its own right.

While most floating solar arrays are mounted on hard high-quality plastic floats, connected together to form a semi-rigid unit, Ocean Sun’s technology installs dual-glass modules on a durable, thin, flexible membrane. This is Ocean Sun’s first sale, so the project will amount to somewhat of a pilot, but the added benefits are compelling.

According to Ocean Sun, direct panel contact with the water can boost efficiency by up to 15%, where more traditional floating solar arrays tend to claim 10% or less. The thin polymer membrane minimizes materials on the system, helping to lower cost and reduce the burden of plastic waste 20-30 years from now. Finally, the membrane structure is claimed to flex with ocean swells, making the system more durable, and their models show the system withstanding hurricane-force winds of 170 mph.

Floating solar is still an emerging technology, representing about 1% of installed solar capacity worldwide, and healthy competition among hardware manufacturers can only benefit offtakers.

Thailand

The state-run Electricity Generating Authority of Thailand (EGAT) just upped the ante in a serious way, committing to build a series of floating solar projects across its reservoirs totaling 2.7 GW in capacity. The project is nearly three times larger than total installed floating solar capacity today, globally. The largest project is slated to be a 325 MW array on the 100 square mile reservoir held up by the Sirikit Dam in Uttaradit Province, more than twice the size of the already-gargantuan, current-world’s-largest 150 MW array in Anhui Province, China.

The first project looks to be a 45 MW array at the Sirinhorn Dam, which will notably be comprised of proprietary floating solar hardware developed by Siam Cement Group, one of Southeast Asia’s leading manufacturers of construction materials. The project shows that despite the rapid success of global hardware leaders like Ciel & Terre and Sungrow, floating solar is still anybody’s market.

If the project goes as planned, it will bring Thailand’s energy portfolio from today’s 12% renewable to 37% renewable by 2036.

It Works

Technology moves quickly, and solar power is becoming increasingly viable even in cloudy regions like the Pacific Northwest.

Washington State just announced its first lease of public lands for a solar farm of any size, and they’ve eschewed pilot projects in favor of a full-blown utility-scale project. The farm, led by renewable energy titan Avangrid, will be good for 150 MW in Klickitat County.

It’s a major vote of confidence in the efficiency and cost-effectiveness of today’s photovoltaic technology, and spells opportunity for the region. Klickitat County isn’t as cloudy as coastal areas in the PNW, but it’s still cloudy about half the year, and is already served by ample hydropower and wind power resources. These factors have typically turned solar developers toward more favorable regions. Now, proximity to existing transmission infrastructure, and the proliferation of energy-intensive data centers in the area, helped the project pencil. It’s a new day for solar in the Northwest.

Where Does Floating Solar Come In?

Despite a host of renewable energy incentives sunsetting in the state in 2017, two major forces are converging that—with the viability demonstrated by Avangrid’s project in Washington—make Oregon a promising place to explore floating solar development.

The first was the passage of SB 1547, Oregon’s aggressive move to ditch coal-fired power plants, with its commencement of planning to roll out a statewide community solar program. The program will allow residents within the same utility territory to subscribe to local solar projects that don’t sit on their property, which overcomes a large barrier for residents with limited yard space and lots of tree cover. There are still key questions outstanding in the rules, most importantly the PUC’s determination of the Resource Value of Solar (RVOS) and the associated bill credit for community solar subscribers, but if the numbers land where we hope they will, the program will unleash rapid deployment of 160 MW of solar power across the state.

The other major development is a growing opposition to repurposing heritage vineyards and farmland for ground-mounted solar installations. Already Clackamas, Jackson, Marion, and Yamhill counties have taken decisive action to hinder ground-mounted solar development in their jurisdictions, helped by land use advocacy groups like 1000 Friends of Oregon. Most recently, there appear to be severe limitations to ground-mounted solar on farmland on a statewide basis coming down the pipe.

It’s hard to blame them, as repurposing large swaths of land can have plenty of negative environmental consequences, not to mention economic impacts to neighboring rural residents who aren’t cashing in on these solar projects, but we still hate to see different factions of environmentalism at odds with one another. It’s also a shame to see any hindrance to renewable energy development for any reason, given the UN IPCC’s horrifying recent report on climate change, and the proximity of Oregonian farmlands to power transmission lines.

This is where floating solar can offer a solution. Oregon has ample surface water in its rural areas, close to both potential offtakers and transmission lines, helping ease the costs of any floating solar installations. With a strong community solar program in place, pond owners could deploy systems of <3 MW, roughly enough to power 600 homes each, offering cost savings to people who really need it, and helping the Beaver State transition away from coal power once and for all.

Pumped Hydro in Oregon and Washington

In other parts of the region, tensions are brewing around six separate pumped hydroelectric storage projects in various stages of feasibility analysis and Federal Energy Regulatory Commission (FERC) approval. Pumped hydroelectric storage, or “pumped hydro,” is an innovative approach to solving the “duck curve” problem with renewable energy. The duck curve is a phenomenon wherein solar energy is at maximum production during midday, then drops sharply upon sundown, forcing other power sources to rapidly ramp up to meet demand. Managing against the duck curve is often expensive and challenging for power providers. You can read more in this factsheet from the California Independent System Operation Corporation.

Pumped hydro offers an elegant solution to the problem. Pumped hydro systems involve two reservoirs—one at a significantly higher altitude than the other—connected by a pipe containing one or more reversible pump-turbine/motor-generator assemblies. The system pumps water into the uphill reservoir during low demand periods when energy prices are lower, then allows the water to flow back downhill during peak demand periods when energy is most expensive, playing a form of energy arbitrage. They address the duck curve problem by rapidly ramping up energy production at a significant scale as the sun sets, replacing the power that solar panels provided during the day. The Energy Storage Association offers further reading, including alternate configurations of pumped hydro systems.

Pumped hydro technology is crucially important to American energy infrastructure, with projects built from the 1960s through the 1980s representing over 90% of energy storage capacity in the United States. Their purpose was to boost the profitability of nuclear power plants, that—like solar power—cannot easily adjust production to shifting demand (nuclear plants are most efficient when they run at a steady rate, so unlike solar, the plants use pumped hydro to bank power overnight instead of during the middle of the day). We stopped building pumped hydro systems as our focus on nuclear power development waned a few decades ago, but the rise of solar and wind power has fueled renewed interest in the technology.

Developing massive infrastructure like pumped hydro, however, poses significant challenges. Navigating regulatory frameworks across jurisdictions can take a decade or more, as experienced by the developers of six pumped hydro projects pending in the Pacific Northwest. Perhaps the largest challenge is managing negative impact to local stakeholders, who care less that pumped hydro is a well-established and cost-effective way to store energy, and care more about having their land and water impacted by massive construction projects nearby.

Rye Development, a firm that is front-and-center about “low impact” pumped hydro projects and their commitment to environment and local community interests, is developing one such project in Southern Oregon. At 393.3 MW, the project is an utter behemoth, with capacity to meet the demand of 290,000 to 390,000 homes when the water is flowing downhill. It’s not nearly the largest of the six projects proposed in the Pacific Northwest either, and will likely only represent about 5% of projected energy storage needs in Oregon and Washington by 2035. As critically necessary as these types of projects are, this one has been deeply polarizing to the local community.

On the one hand, the project is likely to bring revenue and jobs to Klamath County, which operates at a $2 million annual deficit and is in sore need of the support. On the other hand, constructing two brand-new 60-acre reservoirs and many miles of transmission lines is deeply disruptive to homeowners and tribal lands in the area. Homeowners will see their bucolic views (and associated tourism revenue) impacted, potentially deal with irritating noise, see bird populations impacted, see a massive draw on local groundwater, and have to reroute crops and irrigation lines to adjust. They’re also worried about wildfires, which is understandable given the unimaginable recent fires that clobbered Malibu and Santa Rosa in California, wiped the town of Paradise, CA off the map, and desecrated the Columbia River Gorge, one of Oregon’s most beloved recreational gems.

Burying the power lines would address many of these issues, but it would drive up the cost of transmission by about 1500%. It’s also not going to happen. The U.S. Federal Energy Regulatory Commission awarded a 50-year license for the project earlier this month, meaning that homeowners who don’t agree to settlement terms will be forced to endure the eminent domain process.

Sustainable development, done right, seeks to make use of existing resources wherever possible. The relative benefits of floating solar power depend heavily on this principle (i.e. not repurposing valuable land). We would be happy to see new pumped hydro projects sited at existing reservoirs, which already have many of the hardest questions answered—abundant water, uphill, connected to the grid via existing high-voltage transmission lines. Constructing a lower-elevation reservoir to complete the picture would be far less impactful than the project underway in Klamath County. The approach would help locals feel much better about their contribution to our collective interests as residents of this planet, and would likely make for a much easier permitting process.

So what does all of this have to do with floating solar? Beyond the obvious benefits of siting solar panels on the massive quantity of surface area found in our reservoirs, there is a powerful synergy between floating solar and pumped hydroelectric. The Lapeenranta University of Technology in Finland published a study last year (free download) analyzing the impact that floating solar could have on pumped hydro systems, which represent 141 GW of pumped hydro capacity globally. That’s good for about a hundred million homes’ worth of power.

The numbers are staggering. Covering 25% of the surface of those pumped hydro reservoirs is likely to result in a 5.22x increase in their power production capacity, which is huge—pumped hydro systems are efficient storage systems but still experience losses, and floating solar would turn them from net energy consumers into net energy producers. Here in the United States, which boasts a relatively small 2.58 GW of pumped hydro capacity, covering 25% of the 312 square miles’ worth of associated surface water would produce 13.4 GW of floating solar production (enough to power the entirety of New York City’s five boroughs) and prevent 183,000 acre-feet of evaporation annually (enough water to serve a third of the City of Los Angeles), which in turn provides more water for traditional hydropower and storage capacity. Taken globally, the impact would be more than 50 times larger.

That’s just for pumped hydro storage reservoirs, and doesn’t even consider other types of man-made reservoirs, of which our country boasts nearly 25,000. The implications are clear—every pumped hydro system should install floating solar power.

Groups are already starting to put this exciting theory into practice. Leading global floating solar developer and hardware manufacturer Ciel et Terre partnered with Portugal-based global energy developer EDP to build a 220 kW floating solar pilot project on Portugal’s Alto Rabagão Dam. The pilot went live in 2016. The floating solar panels represent less than 1% of the dam’s nameplate capacity, but importantly, it demonstrated that these systems can work in practice, even when facing a constant water level variation of nearly 100 feet. Thanks to the massive potential for the synergy between floating solar and pumped hydro, the success of this pilot is likely to catalyze many more projects in Portugal and beyond. It’s not a moment too soon.

Originally Published: https://splash.solar/floating-solar-news-spring-2019/

A Case for the Open Primary

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demopublicanThe Democratic Party has a healthy lead as the majority party in Oregon. Their base, much like the Republican base, unwittingly votes the party line and, as a result, we in Oregon are left being represented by an unrepresentative majority.

Only one elected federal official from Oregon is a non-Democrat. Yet, Oregon is composed of 39% Democratic, 32% Republican and 29% Independent, unaffiliated and alternative party voters. This leaves many Oregonians wondering how to achieve more balanced representation. Open primaries may just be the answer.

For many in the minority, building a coalition based upon the broadest array of viewpoints that do not fundamentally conflict with one another is seen as the only way to broaden the state’s representation. It is also an enormous undertaking. This type of approach will not typically endear religious radicals or rabid environmentalists. However, the approach will treat representation as less about the party line and more about a holistic and substantive treatment of the issues.

An open primary system would enhance representation in Oregon by identifying candidates who most fully represent Oregonian points of view – not Oregon Republican or Oregon Democratic points of view. And is not this what we all desire – having our politicians striving to represent Oregon in the fullest sense?

The idea that parties will become irrelevant may be a pipe dream, but an open primary system is the first step towards eroding party identification as the basis for representation. It will involve the 29 percent of Oregonians who do not identify with one of the two major parties in the primary process, so that the rest of us will not be left with those politicians the parties have “presented” us with in the general election. Open primaries will incentivize us all to think about how our vote will shape our political future, as the range of candidates we see listed on our ballots will prompt greater inquiry.

Certainly, money will still play an inflated role in name recognition, as it has for centuries. But values will play a role of greater importance, as conscientious Oregon-affiliated voters mark their support for candidates they believe stand for Oregonian principles.

For Democrats who feel their leaders are reaching a point of entrenchment and mismanagement, from $300 million spent on CoverOregon to $200 million on a proposed and yet-to-be-built bridge, open primaries offer an opportunity to infuse our political system with a more frugal vision based on good stewardship. For Republicans who seem to embody antiquated social perspectives and, time and again, lose in the general election, open primaries offer an opportunity at increased representation – even if their candidates are not as “complete” a package as they would like.

But perhaps the greatest win an open primary system would bring home is overcoming the conventional form of politics that offer conflict-based representation. Finding leadership that seeks to resolve our differences by marrying seemingly disparate viewpoints is essential for a renewed and rejuvenated Oregon and United States.

There is an opinion that parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty. This within certain limits is probably true; and in governments of monarchical case, patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And there being constant danger of excess, the effort ought to be by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.

George Washington’s Farewell Address.

 

Our Veteran Homeless: A Caretaker’s Perspective

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Homeless VeteranJason Kersten is a former Army Ranger that served in the Gulf War during Operation Desert Storm and Desert Shield. I spoke with him on a park bench in Lownsdale Square about his work with the veteran homeless population in Oregon and Portland in particular. 
There are currently 1400 houseless veterans in Oregon. Jason’s life mission is now to help these veterans deal with their drug, alcohol and health issues. He has a passion for this work and a deep connection to the community-at-large.Jason knows the difficult and unstable life of being without a roof over his head. He was one of four Porlanders who inspired me on the last Sunday in September, to sleep under the Hawthorne Bridge to experience, for just a moment, the restless night of one without shelter.

Imagine for a moment what it is like to have to merely choose where to sleep. Will you choose to sleep near other houseless, or by yourself in isolation? Will you sleep facing a wall with your back exposed or facing outwards where other people know you are sleeping because they can see that your eyes are closed? Either position imbeds an extraordinary lack of security. Now imagine, a train, or car, or passerby waking you up every two hours. You have to walk around the block. Go back to sleep. Imagine trying to hold a steady job under these conditions.

Ibrahim Mubarak, one of the primary founders of Right 2 Dream in downtown Portland, at one point told me that if we focused on eliminating homelessness amongst our veterans we would reduce overall homelessness by 30%. This is an astounding number on its own but given that this particular type of homelessness is a product of our society and the future we have created for many of these individuals who served their county with honor and valour, this is a type of homelessness we are obligated to eliminate.
I saw many others sleeping on the street that last Sunday in September. There were immigrants, the mentally sick, young runaways, and drug addicts. These are the most vulnerable in our society. The way we treat them is a reflection of who we are as a society and the kinds of values we promote.
We have the wealth and the capability in our nation to lift eachother up. Wealth stratification is stretching our society apart at an unhealthy and degrading level. The term “paying our way forward” has picked up new momentum as so many of us are realizing that consuming for ourselves is not the type of world we want to create. We see a better world. A world where we are not so reliant upon the energy the government sells to us to consume. A world where we are not so reliant upon the industrial food complex – where we now may find trees next to sidewalks bearing fruit. A world where we decide that modesty is relevant and alive and experience is shared.
Our soldiers have been exposed to the atrocities of this world. Whether one agrees with the military’s purpose or not, our human empathy begs us to stand by them on their return. We must pay the way forward to bring our soldiers home. We must re-integrate them properly into our civilian communities and think hard, as we have with Syria, about the real cost involved in sending them away to begin with.

Surplus, Transparency and International Trade

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TPPAccording to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis the United States is running a trade deficit of $34.2 billion. This is a decrease from the previous annual period; however, it is still enormously unhealthy for an economy attempting to recover from the blow of 2008.

A country’s trade surplus or deficit speaks mightily about where that country stands in its growth and development. Like a college kid with a credit card, we ran up our deficits at the bar, one of those $300 nights, and expected Mother and Father to foot the bill in the end. Only now, we realize Europe has problems of its own. Yes, we have started to offload some of our debt to Asia. This is why Japan maintains an interest in Montana mines and why our Navy controls their harbors from bases in Yokosuka and Okinawa. This is why China, our much younger sibling, is racing to the top to secure its stake in our debt. And this is why we are attempting to join trade associations like the Trans-Pacific Strategic Economic Partnership (“TPP”) that has been the source of much criticism from Congress and the public in Washington D.C.

Understanding our goals for international trade are equally important as understanding our role and status. As Europe’s glory faded into ours, their economies relied upon specialty market goods that now find tremendous appeal in burgeoning regions like eastern and southeastern Asia. We, as a nation, have protected our resources well by relying upon others’ gases, textiles, metals and wood. But as our reliance has grown, so has our deficit, and so has our expectancy that a variety of choices will be laid at the Prince’s feet. Growth comes from acceptance to atonement to demand for greater responsibility.

Part of this acceptance results from raising public awareness about our proposed trade agreements like the TPP. Mega corporations have veiled the negotiations and are inhibiting our acceptance, growth and democracy. Their power over governmental processes is such that they can now bargain away our most important choice: the choice in how we will live and carry on. Yet the reason they are so large and have ultimately consumed our government itself is because we allowed our federal government run what our local government should have been dealing with. We centralized authority over the minute details of our lives.

Trade is, undoubtedly a federal issue that requires broad base, uniform dealings. However, when those dealings are skewed to the perspective of the highest orders, the interests protected tend to be those of the highest orders. Increasing exports by lowering tariffs through trade agreements, reducing imports through restricting the processing of our natural resources overseas, and ultimately working towards a trade surplus is one route to restore our “war” chest, that, next time around, will hopefully be used to advance our internal economic mechanisms and sustain our prosperity.

Such an effort requires the highest order of checks and balances. These checks and balances must span not merely between the three branches of our government, but between those three branches’ relationship to the fourth branch: the lobbies that have hijacked our government and are now controlling negotiations overseas. We must impose checks and balances between the public sector and the private sector in the form of simple, straightforward laws, that reveal where our politicians have been bought and paid for, in order, thus, to bring them down from their supposed role as stewards of our society.

Josephine County: The Governing Conundrum

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Josephine County Sheriff's officer -- Photo courtesy Josephine County

Josephine County Sheriff’s officer — Photo courtesy Josephine County

Last week residents of Josephine County, Oregon rejected a levy that would increase property taxes in order to provide more funding for an increasingly resource-starved Sheriff’s Department. The voting results sparked conversation nationwide  regarding local, state and federal governing entities and their role in administering the duties of the state. The issue took a particularly emotional turn as news organizations focused in on a sexual assault committed against a woman who had called 911 last August but was unable to reach any authority

for lack of funding. Politicians at all levels offered their responses.

Josephine County, a mountainous and wildly beautiful swathe of land located in Southwestern Oregon is seventy (70) percent owned by the federal government as Oregon and California Revested Grantlands (O&C Lands). Cuts in federal subsidies (such as those provided under the Secure Rural Schools Act) resulting from the sequester is one reason for the County’s under-resourced Sheriff’s Department. United States Senator Jeff Merkley (D-Ore.) has proposed that sequestered funds be payed immediately through an amendment to the Farm Bill. At the state level, Governor John Kitzhaber is considering legislation to declare a public safety emergency in counties similarly affected by these federal cuts.

Should issues such as public safety be left to the local population when their self-determination results in choosing not to fund such services? On a different but connected issue, should the federal government be managing the lands of the county at all or, for that matter, providing subsidies to the local population to support the local bureaucracy? While these questions are difficult to answer, an even tougher issue for those such as Commissioner Simon Hare who advocate solely for local control is voter turnout in the county. Only fifty (50) percent of registered voters took action in the special election on May 21st that included the proposed levy – hardly a showing of democratic support against the tax. The levy itself lost by less than 600 votes.

Oregon residents should not be left to fund Josephine County’s policing practices. Josephine citizens’ voice, however unrepresentative, must be recognized and local politicians like Simon Hare should practice their preaching by rejecting such federal and state funding (something easier said than done but within their prerogative) and, rather, focusing on increasing voter awareness and turnout. Dependence on subsidies and emergency measures hurts everyone.

As for the federal government exercising control over much of the county, Reps. Peter DeFazio (D-Ore.), Kurt Schrader (D-Ore.) and Greg Walden (R-Ore.) are gathering support for a bill that would alleviate some of the gridlock on logging in the area by putting certain previously logged areas in trust to the state for harvesting. The federal government, however, is uniquely situated to help mediate the use and protection of environmental resources given the cross-border effects of logging runoff, erosion, air quality and habitat destruction. We have witnessed how local practices of an industry (i.e. logging) can operate at the expense of other industries (i.e. salmon) where eco-systems are more organically inter-connected than the bright-line boundaries of local, state and federal territories. Managing the resources, businesses, and environmental organizations requires a neutral practitioner. So, while DeFazio, Schrader, and Walden are well-intentioned in their efforts to confer control over land-management to state authorities, they should not relinquish their position of being able to provide appropriate protections for more vulnerable parties.

The Accountability of Banks

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imagesDodd-Frank and the Too-Big-To-Fail regulations of the Great Recession have done nothing to curb the growth and expansiveness of multinational banking institutions here in the United States. Our politicians’ actions in Washington D.C. have failed to address the heart of the issue in the big-banking world: accountability. Corporate behemoths such as JP Morgan Chase have shamelessly lobbied Congress for the kind of downside protection that affords key members in the banking echelons not only the notorious golden parachutes that reward failure of duty, but also the kind of criminal immunity that Attorney General Eric Holder has referred to as “Too Big to Jail.”  Crony capitalism of this form is the result of a lack in accountability.

The facts show that these obese banks game the system. They have found creative ways around the Volker Rule, legislation that banned the high-risk practice of proprietary trading. The reason they can and do game the system is because their size divests them of accountability to the customers they are supposed to be serving. Indeed, one large bank is known to refer to its customers as “muppets”. As drone attacks make fighting a war more impersonal, and thus, easier to rationalize, so do the actions of institutions that, because of their size, have created positions so specialized as to blur employees’ vision of their broader action and the morality behind such action. The right hand knows no longer what the left hand is doing.

The regulations the federal government has responded with have created the façade that our Congress is acting to curb the growth of these banks. Higher capital requirements, seemingly sensible to reduce risk, are a mere short-run band aid for a problem with no end in sight. Long-run, high-stakes betting, not covered by Volcker remains a virus in the banking system. As often happens when government policies lay down a blanket for reform, the little guys are squeezed out by higher costs in operations. Smaller banks find it more difficult to survive.

Should we not be rewarding accountability and deterring its obsolescence? Small banks (as well as businesses) focus on cutting costs and reducing waste as much if not more than their larger counterparts. Their efficiency is a product of a drive in quality. They are held accountable because clients are not “muppets” but rather the lifeblood of the institution. The clients live next door and form an integral and valued part of the system that generates their profits.

In 1904, Amadeo Giannini founded the Bank of Italy in San Francisco where he provided services to the immigrant communities of the city. He is great not because of his resulting progeny now known as Bank of America, but because his actions, at the most local level, served to ease the painful effects of San Francisco’s 1906 earthquake. Giannini was a banker accountable to his society. His motivation did not lie in the obfuscated derivatives of today’s Wall Street, but in the life of his neighbors who needed his help.

Accountability should be the overall aim of a society, not only for a recovering economy but also for one that wants to achieve sustainable growth, smoother business cycles, and higher quality products.