Could Coal Trains Be A Black Swan In Our Future?

The Black Swan is a concept of the destructive unexpected event that was popularized by Nassim Nicholas Taleb, a Lebanese-born short seller who became an acclaimed book author after becoming very wealthy shorting the bubbles of the last decade. Typically, these bubbles are perceived at the outset as great opportunities. So was greeted the news that SSA Marine, the giant, worldwide port operator had gained an opportunity to build the Gateway Pacific Terminal at Cherry Point to load trains of coal from Montana on to ships for China.

SSA Marine, having sought this opportunity for years, came on with a blitzkrieg PR campaign to gain the support of most office holders in the state from the governor to the mayors of Lynden and Ferndale, who posed for ads supporting the terminal. Why not? This means jobs and increased tax revenue. For Birch Bay it could mean well-paid buyers of houses and lots that have been hard to sell and new houses, perhaps more new developments like Bay Crest.

Andy McCauley, president of the Bellingham Port Commission, told a group of Birch Bay residents at a recent information breakfast that, having grown up where coal is burned, he hates it, yet he is supporting the terminal because it means “economic opportunity.”

But, unlike most Black Swans that are “unexplainable and unpredictable until after the fact,” this bird is being met head on. The arguments fall into three categories:

Global Environmental Ethics – Are we increasing global warming by sending coal to China? On the other hand China will get coal from elsewhere and, if they buy it from us, the U.S. will reduce our imbalance of payments. A third hand would be that the Chinese may invest the money and engineering skills to make “clean coal” a reality.

Noise and Congestion – If projections are met, there may be as many as 14 trains, as long as a mile and a half, running through Bellingham and Ferndale daily.

Health Degradation – In a letter published by the Northern Light on March 10, Don Pitcairn, president of Surrey's United Naturalists reported on the experience of residents of the Tsawwassen First Nation's reserve, located next to the Delta Superport that is British Columbia's “gateway.” He included airborne coal dust pollution, and black tide caused by particulate from trains, ships and trucks plus a stagnant seashore due to currents impeded by causeways.

In a letter to community members Bob Ferris, executive director of ReSources, quotes a warning from Cherie Eichholz, executive director of Washington Physicians for Social Responsibility that, “Coal dust has been linked to respiratory diseases.”

Bob Ferris – the full title of his organization is ReSources for Sustainable Communities – is the captain of the folks who are standing up to the advocates who include Peabody Coal, Goldman Sachs, that owns 49 percent of SSA Marine and Warren Buffett, a principal owner of BNSF, the railroad that will haul the coal from Montana and Wyoming. Information about “No Coal at Cherry Point” can be found at www.re-sources.org.

A comprehensive article on the subject was published in the April issue of Whatcom Watch (www.whatcomwatch.org). It was written by Dr. Preston Schiller who teaches courses on transportation planning and environmental issues at Huxley College of the Environment at Western. He studied the coal industry in West Virginia and worked on U.S. Clean Air Acts.

The permitting process will involve many agencies from the Whatcom County Council to NOAA and is expected to take four years. There will be ample opportunity for Birch Bay community members input including the election of county council members and the county executive.

In addition to the above sources, Jeremy Schwartz has been providing balanced reporting in the Northern Light. And you can expect the Cascadia Weekly to provide reporting and offer opinion.

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As always, comments are eagerly sought.

Vote YES on School Bond

Ballots are arriving this week. Although the election date is not until April 26, there is no reason to wait. In advertising, presentations to civic groups and campus tours Superintendent Ron Spanjer has made the case that the school buildings, particularly in the high school, need to be restructured. Others who have inspected the facilities have confirmed the need in letters to the Northern Light.

In 2008 the vote for a $40 million bond failed. (At the same time a 4-year maintenance and operations levy was approved.) This year's reduced request, $32 million, represents a re-evaluation of priorities and includes $2 million to buy property for an eventual Birch Bay elementary school.

With the economy down and voters increasingly cautious, you might ask why is the school board asking for the vote now. The answer is that, with interest rates at historic lows, the cost of the 12-year bond is lower now than later; construction bids can be expected to be lower.

Hearing and reading so much in the news about the failure of the nation's schools, I was pleased to hear Mr. Spanjer's comments on the quality of the Blaine High School in his talk at the Birch Bay Chamber of Commerce in February:

• Advanced Placement – that is students completing college-level courses – is up for the 4^th consecutive year;
• BHS is recognized as an “exemplary level school” on the State's Accountability Index;
• Last year the high school completion rate passed 90 percent for the first time.

My high school class started in 1944 with 100 students and graduated 34 in 1948. You understand why I am impressed with that 90 percent.

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Hope for the Future

Buddy Moen remembers always wanting to run a restaurant. When he was eight his mother him cook for the family. His first meal was liver, onions and pasta shells preceded by a green salad. But he was not a “mother's boy” and never called a “sissy.” In high school he was two years the captain of the football team on defense, honorable mention on the all state team at strong safety.

But at Everett Community College he didn't go out for football; he wanted to cook in the college restaurant that was open to the public on Friday nights and for Saturday and Sunday brunch. Buddy studied marketing as well as food service. In the evenings he tended bar at Romano's Macaroni Tavern in the Alderwood Mall. (He said he wanted to learn there after reading in Hospitality Magazine that Macaroni was the best organized of the upscale national franchises. He also figured he could make better tips there, serving food as well as drinks.)

Betsy Payton worked around the corner at the Apple Store and often came to Macaroni at the end of her shift for a small plate – usually shrimp – and a glass of wine. Payton flirted with Moen and Moen flirted with Payton. One evening when she worked late Buddy came into the Apple Store and asked Betsy if she would have dinner with him at the nearby Red Lobster. While that was not Betsy's dream date, she agreed when Buddy explained he was studying that chain for a term paper.

Betsy was a favorite of her grandfather, Ben Vanderlugt. She had spent summers at his farm in Lynden and played with the calves. Now retired with a young wife – he sold the farm to Betsy's uncle – and living part time in California – he asked Betsy to set him up with an Apple system to trade commodity futures. Betsy, who worked on the “genius desk” in the Apple store, had a number of followers who traded futures. Ben was so delighted with his system that he invited Betsy to spend a weekend at his new house in Birch Bay. Betsy asked Buddy to go along.

To escape the talkative young wife, Gwen, – much younger than Betsy's mother – Betsy took Buddy for a walk on thebeach. Not far from Ben's house, they came upon a vacant restaurant building with a for-sale sign, called the Blue Fish yet painted brown – “Bad marketing there joked Buddy.”

Back at the house Buddy peppered Ben with questions about the “brown fish.” How long had it been closed? Was it ever profitable? How much does the owner want? Ben explained that the owner's price was way out of line and that community people wanted to get hold of the building for a visitors' center, a bath house and what all that could not be profitable – “They're socialists,” said Ben.Finally Betsy, who had been trying to coax Buddy away from talking about the restaurant with fingers on his knee, clapped her hands and said: “Grandpa, I'm afraid we're gonna stay up tonight. Can we use your computer to make a business plan?”When they came down to breakfast, Ben and Gwen were not surprised to see the table covered with paper, rather than dishes.The first page was a summary. The owner wants a million but he will accept a lease-to-buy with a hundred thou up front with no rent until Labor Day. After that, 15 percent of profits, defined as revenues less expenses. including reasonable salaries for management.

“But that place is a shack,” said Ben. “

“It's not what's inside the building; it's what people will see looking out. Beautiful water, flocks of sea birds, marvelous sunsets. The deck on top will be full of people,” Buddy responded.

When he had finished reading all 12 pages of the plan, Ben said, “OK, you've got your hundred thou,” and Gwen said, “50 thou more for working capital.”

Buddy kept it simple. He got five gallon pails of white paint cheap. (When Betsy pointed out it was glossy, Buddy said, So much the better.) Three guys who wanted to be waiters did the painting for minimum wage – “we'll make good tips”, they said after reading the business plan. Big pots, large plates, salad plates, unmatched knives, forks and spoons, and wine glasses were a steal at a salvage place. He ordered Dreamfields low-carb mac in bulk – “Good nutrition is our offer,” said Betsy, talking “branding.”

The restaurant opened the Friday before Memorial Day:

Mac&Cheese+Crab

Just one dish with a green salad and a glass of pinot grigio (non alcoholic for kids) and Birch Bay black berries with whipped cream for desert. All for $13.50. Additional wine for $3.50 per glass or $9.50 for big, 1½ liter bottle.

As marketing manager, Betsy put her Mac Mini to work, starting with a list of all the Libertarians in Whatcom County for a special evening the first Tuesday night. Ben got his friend, Ron Paul to come. Congressman Paul passed his own hat, “To get these young people started – they are Free Enterprise personified!”

Fridays, Saturdays and Sundays were fine – the average wait was 25 minutes and the average check for two, $37. “We're making money on $14,” howled Buddy. Betsy became the Twofor Queen of Weeknights. With computer lists from the County she sent out coupons for birthdays, marriage anniversaries, etc. – “Come celebrate paying your taxes!” was the most popular. (The average check was $43.)

Nobody remembered the brown fish.

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Postcript to Post of March 20

New sign. A really nice sign. A sample of what could make Birch Bay a more interesting place to visit and a more enjoyable place to live.

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First, Fix the Signs

When the consultants' report is completed, the Birch Bay Chamber of Commerce will need to determine priorities. In our view the most important task is to revamp the signage that does not include all the businesses presently available to visitors. A revamped program can achieve two important objectives:

1. Enable visitors to find what they are looking for and direct them to business they might not know exist.

2. Involve all businesses in collaboration to make the community more cohesive and, in the process, strengthen the chamber.

Yes, there are some businesses that initially won't want to participate. They may if “encouraged.” Recently I heard a fitting motto: “Pressure, but don't destroy.”

There are some signs that might make visitors wonder what kind of place Birch Bay is. One couple with two businesses recently, on their own, hand lettered their locations on the existing sign. They might be labeled scofflaws, but put yourself in their situation. With an existing system allowing additions, their businesses could have been included efficiently. (A factor is that these people have made significant contributions to the chamber and the community.)

This is going to be a challenge for the Chamber that in previous years has been hard pressed to maintain existing events. The new officers and board inspire hope. They are a cohesive team that has attracted more volunteers and they are changing the previous view that a “non-profit” should not make any money. Fortunately, that attitude is gone and incentives to increase revenue are being added, such as sponsorships of events.

Nonetheless, for an organization that is “on budget” with a balance of four thousand dollars, funding new signs will not be easy. Perhaps the solution would be an assessment on businesses in a way that will make participation desirable. (Pressure, not destruction.)

Another need may be a special listing of lodgings. One comment reported by the consultants was about too many condos. In my view, time shares, rentable condos and cottages are an asset, RV parks less so. But RV parks in Birch Bay are a fact of life. However, they could be dressed up with better signs and entrances.

A related thought is that, along with multi-business listing signs, attractive individual signs should be rewarded. Here is my nominee for this year's ribbon.

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