Ringside: Choosing the Right Infrastructure Projects Can Deliver Affordable Abundance

The reason to socialize a portion of the cost of major infrastructure is so the ratepayer doesn’t have to bear an unaffordable share of the construction financing payments. The broader benefit to society is to achieve greater affordability for what constitutes raw materials for prosperity; transportation, water, and energy.

Whether or not they are ever completed, there are three megaprojects that California’s taxpayers are being asked to subsidize that will never deliver prosperity or affordability. They are High Speed Rail, the Delta Conveyance, and floating offshore wind. In each case, tens, if not hundreds of billions will be spent on their construction. The financing charges, stretched over decades, will far outweigh any operating benefits.

Maybe there are reasons we should build these projects anyway. That is a separate and worthy discussion. But before we go any further down the half-trillion dollar (or more) path of building them, it’s worth thinking about alternative uses for all that money. Here are some ideas.

With the advent of autonomous vehicles, smart cars, and, soon, long-range, fast-charging EVs, the common road becomes the future of transportation, not just a relic of the past. Let’s repair and upgrade our roads and freeways. Let’s develop smart lanes where next-generation cars can travel at much higher speeds. At the same time, let’s upgrade existing rail, especially our freight corridors. And while we’re at it, let’s triage our failing urban light rail systems. They’re broke, ridership never recovered after COVID, and in most cases advanced vehicles can now deliver far more cost-effective point-to-point services than trains on tracks. And let’s make sure California is at the forefront of mass adoption of quiet, insanely convenient passenger drones. Buckle up. They’re almost here.

Investing in the Sacramento-San Joaquin Delta holds the potential to deliver millions of acre feet of additional water per year to California’s farms and cities. On average, our state and federal aqueducts together transported 4.2 million acre feet per year over the past 3.5 years. Over that same period of time, on average, 19.2 million acre feet per year flowed into San Francisco Bay. What if during these recent wet winters we could have safely diverted an additional 4 million acre feet per year from the delta? Wouldn’t the remaining 15 million acre feet that still would have poured into the ocean have been enough to protect the ecosystem? Yet we would have doubled our water diversions.

There are ways to safely move more water out of the delta. A combination of dredging the silted up interior channels and constructing fish friendly water diversion basins could potentially deliver millions of additional acre feet to the delta pumps. At the same time we should invest in dredging our major reservoirs to restore their storage capacity. We should fast-track permitting for downstream percolation basins on privately owned farmland. We should build more gates in the delta to better manage salinity. And we should demand the cities surrounding the San Francisco Bay upgrade their water treatment plants so we don’t have to send millions of acre feet into the bay every year just to flush out the excess nitrogen discharge.

Finally, acknowledging an ongoing role for oil and gas is not a troglodytic rejection of modernity. It is recognition that fossil fuel still contributes over 80 percent of all energy consumption, both worldwide and in California. And even if consumption of crude oil were to be phased out completely by 2045, which is probably impossibly fast, we are still going to consume at least another 5 billion barrels of oil. In a great irony, drilling for oil in California would improve air quality, because the only way to stop natural seeps of methane in our seismically active state is to deplete the underlying reservoirs.

As for natural gas, it still delivered 40 percent of the state’s electricity in 2024. Shutting down another one of these plants every time another PV/battery farm goes up is why we’re paying $.30 per kilowatt-hour for electricity. If we must, let’s just pump underground the CO2 emissions from these power plants. That is far, far less expensive than building floating offshore wind farms 20 miles off the California coast in 4,000 feet of water. When it comes to oil and gas, we should be setting an example of clean use for the world.

Two variables determine whether spending government funds on infrastructure is going to yield long-term economic dividends to society. The first is to choose good projects. The second is to do so in a regulatory environment that doesn’t elevate costs way beyond that of the actual construction. In both cases, California urgently needs a reset.

If the state deregulated its building environment, lowering costs, more private investment would be attracted to infrastructure investments, and the publicly funded share would go a lot further. With the right choice of projects to develop, overall economic benefits are enormous. People who today collect state-funded benefits could instead be offered high-paying jobs in construction. Californians would not only make more money, but everything they purchased would cost less.