OregonPEN has often published the writings and podcast musings of Chuck Marohn, founder and president of Strong Towns (StrongTowns.org). Marohn is that rare original thinker who is willing to grapple with new ideas and to revise his prior thoughts in the face of evidence. Strong Towns is such an important group on the national scene because it is shaped in Marohn’s image – willing to insist that bad things should be seen and recognized as bad things, even if the right approach to those bad things — the “solution” to them — may not be known or may not even exist. Like any good recovery program, Strong Towns insists that you have to admit you have a problem before you can begin to think about addressing it or learning to manage it.

This issue of Strong Towns presents an “asynchronous interview” with Marohn, a transcript of one of his recent podcast talks, with questions edited in because this important talk – a one-hour monologue – would be much less accessible for an audience less familiar with Marohn and the Strong Towns ideas. So even though OregonPEN’s questions weren’t really asked, and were added to the transcript after the fact, we hope they help orient the reader.

“Hey, I’m here showing you that the way you’re building is bankrupting yourself. The first thing you should do is stop doing that.”

OregonPEN: What’s on your mind, Chuck?

Chuck Marohn: I’ve been thinking about [a] question a lot. And part of it is the dialogue we had with Johnny Sanphillipo on the Strong Towns site a month or so ago, and part of it is this dialog I’ve been having with a group called The Market Urbanists in a private Facebook chat that we’ve been having.

You guys have heard Johnny before on the podcast a couple times. I adore Johnny, I think he’s an incredible person and I’ve just learned so much from him. I just like him a lot and I like spending time with him and I like hearing from him and I like reading his stuff. And it’s almost like my … I was going to curse there but I don’t do that on this podcast. He’s a bit like my BS meter. Like, “Hey Chuck, no. No you’re going too far out there. Come back, stay grounded in reality.”

Johnny has struck out and tried to do a couple things in Cincinnati from a housing development standpoint. Became very frustrated with that, I don’t blame him, I don’t blame him. But he and I have very different backgrounds. My background, since 1995 when I got out of undergraduate school, has been working in the private sector for government. I have not been a government employee but have always … essentially I have gotten paid up until I made this leap of faith over to Strong Towns full time. My career, my salary has always come from companies. Either companies that I worked for or companies that I owned and ran [on government funds or], that derive their revenue almost exclusively from governments.

In a sense, I have been very near like the inner workings of government. So for better or for worse, part of the lens of my thought process and the prism that our conversation goes through has a lot to do with governments, and the working of government. So one of Johnny’s critiques of me was, “Hey, you’re kind of trying to change the system that doesn’t want to change, and isn’t going to change. I think you would be better off doing perhaps something else.” And my gosh, I think that that is a fair critique. There are days when I just bang my head against the wall and say, “What am I doing?”

But I will say, I get the opportunity now to travel around the country to meet with cities, to meet with public officials, to meet with staff members, and I am more and more running into people that I think are great leaders [who] I think are transformational people, I think are great people that are trying to do great things in very difficult circumstances.

I was in the city of Barberton a couple weeks ago, just outside of Akron in Ohio. I got to meet the mayor there. Now I’m going to say something and I’m going to say this and I don’t mean this in like a derogatory way, here’s a guy that was not (pause) he’s not going to blow anybody away. This wasn’t like someone who was overflowing with enthusiasm or you know deeply intellectual, just a good solid small town mid-size town kind of mayor who clearly cared about the place, clearly was thoughtful and had thought about the different options in front of him and in front of the city that he was leading, and felt a real civic responsibility to not just continue to do the stuff that everybody else had done that had gotten him into the messes that he is dealing with. I hope the guy, if he’s listening, doesn’t feel put down by that. Because what I’m really trying to say is that we’re getting to the point where Strong Towns thinking and a different attitude on cities is not something that you have to be an extreme outlier to have.

It’s starting to become something that is seeping into the mainstream conversation about how we run cities. How we manage places, how we make decisions. Now it still is a minority opinion and it still is being overwhelmed by the kind of centralized devices that have all the money, all the regulation, all the standing. We have a long ways to go. But I can go to a place like Barberton –which is off the beaten path so to speak — and you’ve got people that are talking Strong Towns and they’re talking better block, and they’re talking tactical urbanism, and they’re talking how do we make small changes in neighborhoods so that we can get incremental development patterns going again.

We can start to move things in the right direction, and I’m inspired by it. Maybe I’m a little naïve; maybe I’m a little trusting. Maybe I’m a little too optimistic at times, but I’m seeing real progress happen. I really am. And, yes, the problem is overwhelming, but remember Strong Times we’ve not said we’re here to solve this problem. We’re not going to be able to solve these problems. What we’re going to be able to do is come up with ways that we can start to deal with them, and when the time comes, when we’re needed, when things get difficult, we will have a reasonable thoughtful alternative approach. Really so that the country doesn’t go crazy.

OregonPEN: What problem are you talking about?

Marohn: If you’ve been with us a while, you’ve heard me talk about this and it sometimes gets a little dark and scary. But I think — maybe, now there’s a little bit more credibility, after the last twelve months of electioneering and governing — that this country stands a decent chance of going nuts. You start to pile on to the confusion and consternation that we have now. Cities that are failing, pensions that aren’t being paid, firefighters and police officers being laid off. Roads and streets that aren’t being maintained, just a basic general overall acceleration of the decline that we have seen now for really 15-20 years at the local government level. It’s not hard to imagine a certain level of panic and borderline hysteria creeping into our national psyche.

It’s not hard to imagine a certain level of panic and borderline hysteria creeping into our national psyche

We as Strong Towns advocates, we as people who are trying to advocate for a different way of doing things, need to be there. We need to be the level head, the ones who say, “You know what? This may seem bad but here’s how we start to work our way out of this.” This brings me to the thing I really want to discuss.

So the question that I’ve been struggling with for a long time and I’m kind of comfortable with where I’ve arrived, but let me give you the question. The question is what do you do if you don’t know the answer? If you can clearly explain or understand the problem, or at least understand the factors that have driven us to the problem or the dilemma that we face, what do you do if you don’t know the answer?

I’ll go back to the early days of Strong Towns. I mean this was the critique that I faced back in 2011, 2012, 2013 just harsh, almost cruel around here in my hometown. “Okay, Chuck, you’ve identified this problem, we agree with you, we see it. Like right we’re not going to argue that, this isn’t a deal, but what would you do you?”

Basically the kind of line of discussion was you don’t have a right to stand up and say that this is a problem, that essentially we’re doing something wrong, if you can’t tell us what you would do differently.

Then you’re just a naysayer, then you’re just a bomb thrower. Then you’re just a cheap critic, and I don’t think that’s fair and I spent some time kind of arguing that that’s not fair. I don’t think … if the plane is about to crash, you don’t have to know how to fly the plane to stand up and say, “Hey, we need to do something different.” I don’t think having a 10-point plan to turn things around is a prerequisite for being able to stand up and say like, “This isn’t going in the right direction.” So I thought that was completely unjustified, that didn’t stop it from happening.

Really in many ways it became like an intellectual sticking point for me because I knew and I understood that I could — I’m going to say this, and I’m not trying to say this to make myself look good by comparison, but I am going to give you some insight on the way I think about things that is going to make other organizations look inferior, at least in my mind.

I understood way back in 2008 when I started writing this stuff, I understood when I ran my own consulting company doing planning around the state of Minnesota, that if I just came up with a three-point plan that I could make tons of money. If I just went into cities and said, “Look, I know the answer, you just need to do A B C. And if I can make A B C palatable, easy, something that they would be willing to pay for, something that they could do, something that was happy, something that people could embrace, that people would do it and I could make a lot of money. I could get paid to do that.

My problem was, and I’ve said many times, I’m not a very good consultant. I’m not a very good fundraiser and part of what keeps me from being a good consultant and a good fundraiser is that I have this intellectual problem with doing that.

OregonPEN: So you’re saying that, with complex problems, consultants selling one-size-fits-all formula solutions can make a killing, even though they don’t actually help with the problems?

I will specifically pick on the complete streets movement today, [but] not because I don’t like them. I like them and I find that we intellectually see the same on many, many, many things, but I’ve never been a fan of complete streets.

I’ve thought that it was an overly simplistic approach to an incredibly complex problem, and that if the world embraced complete streets, in the way that the complete streets advocates were going to or wanted them to, that we wouldn’t have better outcomes. [And not only that] we wouldn’t have noticeably better outcomes, but we would have more calcified bureaucracy.

We would have engineers building ridiculous things and blowing up budgets. We would have all these other things that I saw as related problems, but not core problems. My struggle has always been that the simple solution to A doesn’t address B C D E F G, and [also] then all the other things that I’m not smart enough or savvy enough to actually have identified as problems. That would show up later when we started to do A.

And understanding this I just struggled. I sometimes was on a hamster wheel and running and not going anywhere, intellectually. When people started to beat me over the head with this, and I had a few local critics that were just mean people, just mean people.

When they started to beat me over the head with this, “What would you do Chuck, [if] you’re so smart?” I struggled because I did not have like a five-point plan. I didn’t have things that I could say. Like, “Here do this.”

It even got to the point where in 2013 I did a tour of Idaho. John Reuter, who is on our board today, at that point was the Executive Director of a group called The League of Conservation Voters of Idaho. He really liked our message, wanted to get it in front of a bunch of the communities that he was working with, and his organization sponsored us to come out and travel around the state. Incidentally it was Andrew Burleson, who is our board chair now. John Reuter, who is on our board, and myself, driving around Idaho for a week.

The kind of recurring critique – [which] came out of giving that presentation 15 times to audiences big and small and everything in between — the ongoing critique that I got from these two gentlemen who saw this presentation over and over and over, and understood it, is “Hey, you got to give people some direction here.” It was a friendlier version of the mean critique I was getting back home here.

I tried, I really tried. If you go back, it almost makes me laugh now when I go back and look at those early days of the Curbside Chat because it was me trying to do something that I knew would make our message [palatable] … having a three-point plan or a four- or a five-point plan, or whatever it was, like here’s what we should do differently. “Here’s five things.”

That would give our movement a lot of legs, a lot of momentum. It would make it easier to do an elevator speech, it would make it easier to present the foundations, it would make it easier to talk to donors and whatever. It would have got a lot easier if I just had something like that.

It’s the analogue to complete streets. I could go and say, “Look, every street should be complete so that people can walk along side of it and bike alongside of it and people can drive and if we just thought of everybody, it would work fine” and I can give that speech in an elevator and I find it completely vacant because it doesn’t deal with the myriad of things that come out of it.

I can give that speech in an elevator and I find it completely vacant because it doesn’t deal with the myriad of things that come out of it.

So if you go back and look at the Curbside Chat presentations — and there’s a couple of them online from 2013 or whatever. I can go back and look at the slides because I saved every one separately, so I can go see what I did four years ago, five years ago. I used to have this set of recommendations.

The first one was stop doing what you’re doing. Which for me was an honest legitimate recommendation. Like, “Hey, I’m here showing you that the way you’re building is bankrupting yourself. The first thing you should do is stop doing that.” And the funny thing is we very rarely got beyond that one. I mean I had other ones, like take an inventory of where you’re at, so you actually understand how deep the problem is. I know that it ended with triage.

And I had this whole speech about how … here’s me, like, tearing up in front of people, [saying] “Hey, out on the battlefields, the Red Cross come across and here’s these soldiers and they’ve sacrificed everything, they’re dying and bleeding to death, and you don’t have enough resources to take care of them all. So what do you do? You triage, and look, when we look at our cities and we have so much we have to do and not enough money to do it, we have to do triage and you know what? It’s actually going to be easier than dealing with soldiers on a battlefield, so let’s go do this.”

For me it was intellectually honest, but it didn’t have any legs. It was really hard and people couldn’t be inspired by it, they couldn’t grasp it. “Yeah, okay Chuck great, stop everything that we’re doing, go and be a bunch of accountants and figure out like how screwed we are and then spend the next few years going around telling everybody like we’re not going to fix your road. We’re not going to fix your road and we’re going to fix your road. And sorry that’s just the way it is. Yeah I know we have money now, I know we have a budget, I know things are bad but we’re looking in the future and this guy told us things are going to get bad, so this is what you’re going to have to do. Suck it up. Sorry your roads aren’t going to be fixed.” That was intellectually honest for me but not going to happen, not a workable way to approach the problem.

OregonPEN: So you’re telling me people prefer hucksters selling quick fixes to real prophets, and that a prophet is without honor in his own land? Who knew?

Marohn: So, the question that I struggled with was what do you do? And you know, I’m going to stand here and tell you tonight that I don’t know what the future is going to bring. I mean I laugh at these people who paint these very vivid pictures of what the autonomous car is going to mean to life in the future, and then other people who get this huge fetish over the Hyperloop or whatever Elon Musk’s latest thing is.

Sure, fine, maybe those realities will come to pass but maybe they won’t. I’m kind of in the Nassim Taleb School in many ways. One of the ways is this notion that, if something has existed for a long time, it is more likely to be in existence a long time from now than something that is brand new. I like to think of this in terms of books. The Harry Potter series my daughters have gone through, and I think those are fantastic books. They’re amazing books. If you’ve never read the Harry Potter books, you don’t really have to be a fantasy person to really enjoy them. They’re very good books. That being said, which has a greater chance of being around and being widely read and widely distributed a hundred years from now? The Harry Potter series or The Lord Of The Rings series? Which one has a greater chance of being around a hundred years from now?

Think of like a book like the Grapes of Wrath or a book like … well let me just go really old school, the Old Testament. Which one has the greater likelihood of being around? You can say the Grapes of Wrath are probably going to outlive or out survive Harry Potter. If you had a bet today, even though Harry Potter is this fantastic book and it’s caught on and it’s wonderful. The Grapes of Wrath will probably outdo it.

Why? Because there’s this long track record. You can look back and see like it’s been around a long time. That’s a pretty good indication of its ability to endure. The Old Testament is … someone’s probably going to be able to get a copy of the Old Testament 500 years from now. And we can say that with some confidence because it’s been around a heck of a long time. It’s not going to go away. You’re going to be able to find it.

OregonPEN: Ok, things that have lasted are the most likely to keep lasting. So?

When we look out into the future and [ask] how different is it going to be from today.

I’m not going to argue that it’s not going to be different. But the idea that we wouldn’t be living in houses on blocks, driving cars, parking on the street, walking on sidewalks to shops and [such] . . . . This has been around thousands and thousands and thousands of years. There’s a possibility that it will be different, but I wouldn’t put big money on that.

But what do you do if you don’t know? What do you do if you don’t know? Nassim Taleb has talked about this, and I think he has it right. This is really in many ways the basis for my obsession with building incrementally. It actually is the reason that I started to understand how people used to build. I would sit and look at development patterns, old places, places that I had gone to. Different levels of maturity before we hit this suburban experiment.

OregonPEN: So development patterns that have lasted are most likely to last further in the future? So?

After reading Nassim Taleb, it started to occur to me how this was done incrementally. Nassim Taleb says the way you probe uncertainty is incrementally. The way you probe an uncertain future is to proceed incrementally, and this is particularly true in systems that what he calls forth quadrant systems. Sometimes, in complexity theory, they’re called complex adaptive systems. Systems that have different parts that each, themselves, are able to receive feedback and act independently on that feedback, and then interact with each other.

Cities, economies, climate, all these things are complex adaptive systems, and Nassim Taleb’s notion is that when you don’t know what the future holds, the way you try to figure that out, the way you try to figure out what the best path is, you proceed incrementally. If you think about that and let me use climate as an analogy, and then I’ll use the economy as an analogy because I actually think that in a way that will appeal to those of you that are left of center, and those of you that are right of center, will both grasp, then, these different analogies.

The big argument with climate change — when you get down to the central core of it and get rid of the certainty that kind of tends to come out when you get into the political realm — if you actually get to the scientific realm, there’s a lot less certainty, but that certainty can’t be expressed politically because of the political positions people have taken. But if you actually get into the science, what you’ll see is that we have dramatically changed the inputs into the climate. We have, through the burning of fossil fuels, released enormous amounts of carbon into the atmosphere. Something that is in a sense unprecedented. There is no precedent for this in the history of the earth.

You can’t go back and really point to times in the record, as best we can reconstitute it, where literally millions and millions of years [worth] of organic material have been brought to the surface, burned and turned into carbon. I’m sorry, turned from carbon into carbon dioxide in the atmosphere. Carbon released from the ground into the atmosphere.

When we look at this, we have to say we don’t know what’s going to happen. We don’t know what this massive impact will be. We can guess, we can model, we can have certain levels of probability with different outcomes, but we don’t really know and the interesting thing about climate science and I’ll probably tick a whole bunch of people off right now, but you can go back not too far and scientists were looking at similar data predicting ice ages.

There’s a lot of variability. The thing about the climate when it comes to putting large amounts of carbon in, is that what you’ve got is a system that is a complex adaptive system at a certain level of equilibrium and you have just jarred that. You’ve just put a massive, massive change into it. You don’t know what’s going to happen; you don’t know what the outcome will be. Now Nassim Taleb would say, the way you explore that uncertainty, the way that we should have proceeded, is more slowly and incrementally.

And, had we done that, essentially, the feedback from the negative impacts would have been felt a lot more quickly.

We can say the same thing about the economy. We had this golden age of economic theory where we said we can counteract recession, we can smooth out the business cycle, we can, through different fiscal and monetary tinkering with the system, we can get rid of those downturns and have the upturns be more prosperous for everyone.

And what we have seen is that, over time, we had this long period of moderation. And then these wild fluctuations, really, since the early 1980s. We’ve seen these wild corrections and wild fluctuations and each one demands and even more robust and more kind of violent and wild response. Someone with Taleb’s mindset, someone with an anti-fragile mindset would say, “We should not have, in a sense, intervened at that level in decades past, because what we did is we created essentially a fragile situation; we built up, we put off volatility. We put off volatility; we robbed ourselves of small volatilities and exchanged that for large unpredictable levels of volatility.

We should have not tinkered with them, we should have left well enough alone. If we had a brand new theory for how things work, [we should] try to test it and tinker with it and do it in small ways to see what worked.

I think both of those examples, the climate and the burning of millions of years of carbon and the economy coming out of the depression of World War II, both of those kind of also point to human weakness, right? We can burn fossil fuel, so we do. We can intervene with the economy, so we do. Burning of fossil fuels has brought about unparalleled levels of prosperity in many places. I mean, the fact that we’re able to talk today like this. If we hadn’t had the industrial economy, if we hadn’t had the burning of fossil fuels, would we be having this conversation today? I think it’s very likely that we wouldn’t, right?

If we hadn’t intervened in the economy in the years after World War II and smoothed out the business cycle, would we have had this period of robust growth? Would we have had this period of prosperity that has done more worldwide to bring people out of poverty than really anything else that’s ever been done? I think you can make a strong case that it has. And so, as humans, we’re kind of predisposed to do great things when we see challenges in front of us, when we have the means at our disposal to go out and do something, it’s hard for us to not do it, right?

OregonPEN: Isn’t this Dunning-Kruger stuff? People who aren’t good at humility about their own ignorance don’t know that they aren’t good at humility about their ignorance?

This is the Lord Of The Rings side. There’s that scene in the first, the Fellowship of the Ring where they realize that Gollum is following them there in the Mines of Moria and Frodo says, “I wish Bilbo had had killed him.” And Gandalf says, “Who are you to decide? Who are you to decide who should live and die? Do you have that power?” I think as humans, as frail people, it’s very hard for us to resist that temptation, that power, right? Like we can mine fossil fuels and change the world. We can intervene the economy and make things better. We can, and I’m going to get to cities now, we can go out and solve the problems that we see in front of us.

We can, for example, build high speed rail all over California to connect all these cities in a way that is going to be . . . . We can make all the excuses: it’s going to be good for the environment, it’s going to reduce congestion, it’s going to connect our cities, make them stronger and healthier and get all this investment. We can go out and build highways through the middle of the neighborhoods and the same exact mindset that thinks billions of dollars of high speed rail today would be great, is the same exact mindset that 60, 70 years ago said running highways through the middle of the cities is a great thing. Look what it’s going to do, it’s going to get rid of all this and environmental problems we have in our cities, it’s going to spread people out, it’s going to reduce all that congestion, all that nasty density, we’re going to have people who are healthier. They’re going to have more green space, more air, more lights. They’re going to be closer in touch with nature. Those are all these things that we told ourselves would make things better. And by the way, this was not a left or right thing, I don’t even think like high speed rail is necessarily a left or right thing today when you get to a state like California.

You have essentially a problem or a series of problems and you have this big kind of silver bullet solution or a set of one or two things that you can do to attack this complex problems you’re going to do it, and then you wind up with all the side effects.

What do you do if you want to attack the problem and you don’t want the side effects, you do it and it seem, let’s suggest you probe uncertainty incrementally.

Here’s the fascinating thing about this, this is what our ancestors did. And when I say ancestors, I mean ancestors in like the largest possible sense of the word. You can go back to the earliest civilizations that we’ve been able to excavate in Fertile Crescent and what you can see is a development pattern that, in layout and design looks eerily like ours, but was developed incrementally, was discovered in a sense incrementally.

OregonPEN: So early societies were natural incrementalists?

You can picture these people, thousands and thousands of years ago trying things and tinkering with this and tinkering with that and, over successive generations, figuring out that if we set things up like this, it worked a little bit better, and if we lay things out in this way, it moved the air a little bit better, or it allowed light in better, or it allowed us to accomplish defense better, or allowed us to interact with each other better. It allowed us the ability to actually work together as a community a little bit better. You start to look at these things and you realize that all of that complexity that is the human experience. Not just what the engineers look at, you know, the pipe, and the street, and the sidewalk; and not what the planners look at, the setbacks and, you know, where the Boulevard is, what your floor area ratio is; the actual complexity of humanity, the lives we live, how we interact with each other, how we decide where to spend our money, our time, our energy. You realize that all these things, people thousands of years ago, figured out slowly over time by iteration, by trial and error, by probing uncertainty incrementally.

Now, they did not have [another] option. This is the thing — they didn’t have an option, they didn’t know that they could dig up a bunch of fossil fuels and burn them. They didn’t have combustion engines, they didn’t know that they could get cranes and build 20-story towers. They didn’t have that capacity. And so, in a sense, they were forced to learn incrementally, because they didn’t have another alternative.

But today, we have the alternative; we can discipline ourselves to work incrementally, or we can kind of lurch from massive silver bullet to massive silver bullet, trying these things in generation after successive generation and then dealing with the really harmful and devastating side effects.

I think to a degree that our cities are in the process of being starved of resources. There’s too much commitments, there’s too many promises. The money’s going other places, the states and the federal government are taking way more of their share than they ever have. Our toleration for taxes, our expectations of local government have never been lower, our tolerance for paying for it has never been lower, our expectations in many ways have never been higher.

We have this mismatch today at the local government level, and I hear in our dialogue a whole lot of people who I think, very naturally for human beings, want to embrace some type of grand solution, [some] grand way of doing things.

And what I’m suggesting is that we have to get back to doing things incrementally, we have to get back to probing uncertainty incrementally. I think our lack of resources will help make that case. But even if, even in the interim, and even if we don’t, I think we can benefit a lot from starting to think this way, starting to move this way, starting to act this way.

OregonPEN: Ok, we need to go back to a more incremental mindset even if the resource constraints haven’t forced it upon us yet. What else?

The debate that I got in with the Market Urbanists this week. And boy, what a bizarre conversation. I won’t go into it too much, because it was in a private group, and I gave it a lot of time, and I gave it a lot of time because it started out very confusing to me and then it became combative and even more confusing actually. And then [it] ended up in a place where I just kind of had to accept that we weren’t going to agree on some things. It was a group that I thought that we agreed on. I thought like the Venn diagram overlap between Strong Towns and Market Urbanism was actually pretty high. [It was actually] not so high, but the thing that was really the dividing line was this notion that we should build incrementally.

And I wrote about California’s housing crisis this week. If you listen to the podcast, The Week Ahead podcast, Rachel asked me about it and I kind of chatted a little bit about it, but I had all these other kind of thoughts coming at me on the screen at the same time and I was rather frustrated with the whole thing at that point. I think I have figured out a little bit more now, what they’re getting at. But the Market Urbanism people tend to, they call themselves more libertarian, which in their case is, truly, like no rules, no limitations when it comes to building.

Their idea is that, if we are forced to build incrementally — which is essentially one of our central suggestions, that every neighborhood by right be allowed to build to the next increment of intensity, but no more — if we’re limited to that, we’re not only stepping on people’s liberty, but we’re actually missing out on the opportunity to build housing that people want. We’re going to make housing artificially more expensive, we’re going to impoverished people, we’re going to lead to gentrification. It’s going to have all these negative impacts, just let us build towers.

I’ve written extensively on why I think this is a bad approach and it really gets back to the idea that I am not certain on what the problem is today, I’m not completely certain that I understand what’s going on.

A lot of people look at the crazy housing prices right now — in places like San Francisco, in LA and San Diego, New York, Vancouver, Seattle, Austin — they look at these crazy housing prices and they’re extremely confident on what the problem is.

And, largely, they’re extremely confident, if you are right-of-center, if you’re one of these Market Urbanist people, you can pin the blame on the Not In My Backyard (NIMBY) type people, government regulation that artificially limits the amount of housing, and all the bureaucracy you have to go to in order to build. If we could just get rid of those things, force the NIMBY’s to allow building in the neighborhood, take away their power to resist it, remove zoning regulations and streamline approval processes, we could build our way out of this problem and the housing prices would come down and we’d have this great flourishing and prosperity.

OregonPEN: So, unleash the market solves all ills?

If you go to the left-of-center — and you know, I think the Market Urbanists actually after having a dialogue with them now for a week, are quite a bit right-of-center — I think the counter reaction to that — the NIMBY groups are quite a bit left-of-center — but the idea that the more housing we build just makes it worse for everybody. We take poor housing and we replace it with luxury housing, and all that does is just kick poor people out and let wealthy people move in. And the idea that the way we solve this is by somehow forcing developers to do things that are at a net loss in the marketplace, that’s somehow charging other people more for housing, is going to make housing cheaper for other people at a scale, that is actually going to matter.

OregonPEN: So it’s “Unleash the Market” vs. “Rent Control”?

I find these arguments to be incoherent and simplistic, because — let me just throw in one thing, and I don’t want to go all Ron Paul on you, but, you know, tell me what the effect of the Federal Reserve is on all these housing prices? That has nothing to do with the local approval process, [and it] has nothing to do with luxury housing being built, [and] it has nothing to do with what your neighbor does across the street. Tell me what the Federal Reserve buying up every mortgage that was originated for eight years, keeping interest rates at near zero for almost a decade now, tell me the effect that all this liquidity has had on housing prices.

I can tell you the policy goal of those things: the policy goal was to re-inflate the housing bubble, because the piercing of the housing bubble was catastrophic and we had to get prices back up. What effect does that have? Is that long term sustainable, is that viable, is that something that will endure?

If it is discovered today that housing prices are artificially too high — and I have to tell you, I don’t understand. And I know people have just brushed this off and said, “Whatever, Chuck, you just don’t get it.” I don’t understand how you can have a city where half the population cannot afford the houses. How does that even work? How does that work? It doesn’t make any sense. Like on paper, it doesn’t make any sense. If people can’t afford it, then how are they paying for it? There’s a lot of people rolling their eyes right now, “Chuck like you don’t get it.” I do. I mean, I get, people live two, three, in an apartment, they’re splitting rent with other people, they make [do].

Okay, [but] you can’t have a long-term stable situation where the median family can afford the median family home. It is not a stable situation; it won’t work. Something is going to have to change; either the family size is going to change, more people are going to live together, they’re going to change the economics of that that housing relationship. Either that or people are getting money from somewhere else. And for a long time in the run up to the housing bubble in the 2000s, people couldn’t afford the homes but it didn’t matter because they were cashing out the equity all the time and using that to make things work. They were using that to cash flow their life. So you look and you just say these anomalies can’t persist, they’re not viable over the long term. They may be a short term anomaly, but they’re not [going to last].

So what happens when those things work themselves out? What happens when those things work themselves out? I don’t know, right? I don’t know, but I’m not confident going in with some one-size-fits-all big massive solution [such as] “we’re going to force developers to do this on a big scale;” “we’re going to remove all these building regulations and just build towers all over the place.”

To me, what we’re doing, is we’re just setting the stage for the next thing that’s going to be really screwed up. The way we probe uncertainty is by building incrementally, by moving forward incrementally.

OregonPEN: So, if you’re so smart . . .

And so our solution, the Strong Towns approach when it comes to housing affordability has been that we need to build everywhere. We need to build incrementally over a broad area over a long period of time. Every neighborhood should be allowed to build to the next increment of intensity by right. There should be no way a NIMBY can stop that, you shouldn’t have a long approval process. In my ideal world, you should be able to walk in the city hall at 9:00 AM with a request to build the next increment and by noon you should walk out with your permit and be able to start building.

To me, that is what the system should look like. But I wouldn’t then go to the next increment beyond that. I wouldn’t jump over two or three or four increments. I wouldn’t go from single-family home to six-story condo units. I think that is a distortion. And I think that is not probing uncertainty incrementally, that’s rushing all in.

Let me just give one narrative here to kind of crystallize what I’m suggesting. When you build a tower or when you go out and build a 400-unit subdivision, take your pick, whichever one you desire the most, take your pick. You go out and build 400 single-family homes all at once, [or] you go out and build the big tower all at once. What do you have? Well you have something that in its initial condition is, in a sense, maximized, the value of the building to the value of the land. You have something that is, essentially, in its peak state.

Over time, it will start to age and you can see this in single-family housing subdivisions, where you have 20 homes, 50 homes, 400 homes, all built at the same time. What happens is you come back 25 years later and what do you see? Everybody’s sidewalk’s gone bad at the same time; everybody’s roof has gone bad at the same time; everybody’s windows start to lose that little bit around the edge and start to look weathered, and the seals start to go bad, and you see things start to get mold and look out of place, look bad. All the stuff goes bad but it goes bad at the same time.

We didn’t build it incrementally, we didn’t build a little bit here and a little bit there and then continue to progress over time. We just built it all at once to a finished state and it all goes bad at the same time.

If you have a tower, the whole thing goes bad all at once. All those gaskets go bad at the same time, they all have the same life span, they all go bad at the same time. All of the 1970s wallpaper that you put on, just a brutal mess to get off. All of that looked bad at the same time. So what you’ve done is, in a sense, I’ll use the old phrase, you put all your eggs in one basket. You essentially attached yourself to one life cycle: one beginning and end, one outcome.

And what you’re relying on is that either you’ll do it so well that it will be maintained and taken care of and loved and endure, or you just are not thinking about it, you just don’t care: It just doesn’t matter to you what happens in the future; those are for people in the future to figure out.

This is where my prism of looking at things from a city standpoint comes in, because, for me, what I see is [this]: on one side you have this Market Urbanism argument. Let’s just go and build towers, and it’s people want to be in the downtown, so let’s put a thousand units down there, and let’s beat down prices by just increasing supply. Let’s meet demand with supply and that will create this market equilibrium.

And I see, on the other side, this idea that “don’t change my neighborhood, I don’t want incremental growth, I’m not willing to accept a granny flat next door, I’m not willing to accept an ADU [accessory dwelling unit], don’t you dare put two families under one household, that is offensive to me. No, no, no I won’t do that.”

What I see are two extreme views, neither of which are really viable over the long term for the city. And, understand, I’m not talking about the city as in the bureaucrats that work at city hall or the mayor or the city council running for reelection. I’m talking about the city as in the municipal corporation of which we are all a member.

If you are the NIMBY who insists that my neighborhood is under glass, it is not allowed to change, what you are doing as you are handcuffing your city and guaranteeing that it will fail.

OregonPEN: You mean we’re all in this together?

In other words, I own a piece of land in a corporation known as the City of Brainerd, [Minnesota]. And in order for my piece of land to do well — and to function and to create wealth for me and to create prosperity for me, something that will endure, that I can hand on to my descendants at some point in the future, if that is my dream for this piece of land that I have purchased, that I have a home on that I live in — what I need is for this corporation known as the City of Brainerd to also prosper and do well. And if you just look at the Strong Towns narrative, to any degree what you see is that our cities are massively fragile. They are falling apart, they are financially bankrupt, they have more promises than they have the ability to keep.

And so if you’re a Market Urbanist wanting to build towers all over the place, and you don’t care if the bottom falls out of that market, you don’t care what happens. You think maybe even like bankruptcy of those places is good because it would just make housing cheaper and more affordable. You’re completely overlooking the fact that the tax revenue and the wealth for building that and for sustaining all that stuff comes from this tax base that you’re just like flippantly disregarding.

But on the other side, if you are the NIMBY, if you are the one who insists that “my neighborhood is under glass, it is not allowed to change. I pay my taxes; this is what I bought in for.” What you are doing as you are handcuffing your city and guaranteeing that it will fail.

I look at our cities and I see them heading into times of deep stress. And even if you’re a city like San Francisco, where, boy, it just seems like despite whatever you might do to screw things up, you just can’t screw things up. There’s so much tech money being thrown at you, there’s so much demand for being there, there’s so much growth, you could be the most incompetent city in the world, you could run, as a Local Government, just the worst place, and it’s [still] going to work out really well. It seems like that today, right? It seems like that today.

But when we look back in time we can see that [in] the lifetime of people that have been around today, it has not always been that way. We can also see many, many examples of cities that were at this [same] generational high only to have, essentially, overbuilt, overpromised, overextended, particularly when they [did] it in one dimension.

Just look at Detroit, one of the greatest cities in the world, 50, 60 years ago. Literally, one of the top cities, one of the top handful of cities in the world. Ornate opera houses, massive public investment, just a gorgeous, gorgeous city. And made all these investments at the top believing that this is what great cities do. And they were the wrong investments. They were the wrong investments.

How do you know? You don’t, and I think, at the end of the day, we have to acknowledge that we don’t [know] and that acknowledgement will get us to a place where we can start to act in a prudent, disciplined way to probe uncertainty incrementally, to take small incremental steps, to intentionally limit our reach. Not because we don’t dream big, but because we are in absolute awe and humbled by the wisdom and the knowledge that was built by our ancestors over thousands of years of them building incrementally.

And if we can just be adequately humbled by that, I think that we can stop this flailing around this almost charlatan approach to ourselves, where we lurch from one massive solution to another massive solution, from one set of charlatans to another set of charlatans, and actually get back to, in our neighborhoods in our communities, building incrementally in a way that we know will build wealth, in a way that we know will lead to prosperity, in a way that we know will make our cities healthy and stable. And do that for a broad area, for a lot of people.

I urge you to stand with humility and be comfortable with that, be comfortable with not knowing, be comfortable with not having the exact answer and be comfortable with and confident really, well saying, “I don’t know. So let’s try some things and see what we can figure out.”


The people of Oregon have a problem. As is evident, sometimes the Executive must be impeached

But, in Oregon, the government we empower to serve us has two serious, structural problems, which are related:

First, our state constitution affords us no way to remove a chief executive (Governor) for maladministration or malfeasance.

Second, we have no deputy chief executive — such as a lieutenant governor — who can fill the position when the governor resigns or dies in office. So, in that case, we make do by moving the secretary of state into the governor’s office. This makes the secretary of state, the office responsible for overseeing elections, a partisan stepping-stone on the way to the governor’s office for ambitious politicians.

As the evidence from the national capital so clearly shows, it is critically important that there be a way for the people in a democratic state to remove, without a coup, or force the resignation of the head of the executive branch of government when that chief executive has demonstrated unfitness or unwillingness to conform to the requirements of the office he or she holds.

This deficit — our inability to remove a governor — is even more serious because of our secession problem, where we could easily have a Secretary of State rise to replace a governor of a different political party, a serious problem in our system where we have fixed terms of office instead of fluid terms such as used in parliamentary systems. In those countries, when the head of the government falls, an election is held, promptly, and the government in power either wins a new majority and resumes its administration with a new head, or a new party assumes power and has a new first or prime minister. If the populace is disgusted only with the individual who had been the head of government, the party remains in power with new leadership; if the people have turned against the party in power, they lose power along with their leader.

But in our system, we can easily imagine that a chance event – a car crash or a crackpot assassin — produces a change in the administration that gives control of the governor’s office to a member of the a different party for a substantial length of time.

This is to say nothing of the problem of having the state elections machinery headed by a strongly partisan politician. To the greatest extent possible, elections should be administered in a strictly nonpartisan way, not by a partisan official whose eye is on higher office.

It is time for Oregon to follow the vast majority of states and provide both for removal of the chief executive in the state and for their assured replacement by a compatible official, at least one compatible enough to belong to the same political party and who was considered by the voters of the whole state.

With luck, impeachment would be used rarely, if ever. But as the nightmare in Washington shows, and the experience of other states presently (the state with the “other” Portland, Maine, being a singularly good example) demonstrates, the strengths of the political parties has plummeted sharply in the last 50 years, for a variety of complex reasons. As a result, the quality of officeholders has plummeted even further.

As a result, we are now seeing the election of people who espouse ideas and take positions that would have caused them to be laughed out of any prospective candidates recruiting meeting not all that long ago. Not that the “smoke filled rooms” never failed – but, on the whole, it is clear that candidate based politics, in the age of weaponized media that can be individually tailored to create a unique, unverifiable reality for each possible voter, and the atrocious Citizens United decision, make the election of totally unfit characters or even outright con artists a much more likely outcome.

We must have the ability to remove the Oregon governor from office constitutionally without elevating a candidate from a different political party. Or, more precisely, we must be able to ensure that we don’t fail to remove a governor because it would result in giving control of the executive to the opposite party.

Like the “National Popular Vote” bill aimed at reforming the slavery-based Electoral College, the Oregon Senate again this year inexplicably killed another necessary reform measure that the House passed, this one a joint resolution that had overwhelming support in the lower chamber (51 – 6, with 3 absent).

The measure proposed (HJR 10) was not perfect, but expecting perfection in a procedure that few expect will be used much, if at all, is expecting the Legislature to spend a lot of time on a fool’s errand. Thus, the Oregon Progressive Party’s criticism is fair, but should have been used to improve the bill, not to justify the Senate’s stealth strangulation of it:

The Oregon Progressive Party (OPP) opposes this resolution, which would send to voters an amendment to the Oregon Constitution to authorize the Legislature to impeach and remove any statewide elected official.

While lodging an impeachment and removal authority in the Oregon Legislature would have value, HJR 10 is written to allow impeachment and removal for merely “neglect of duty” or “malfeasance in office.” Those are very vague offenses. Note that the U.S. Constitution allows impeachment only for “Treason, Bribery, or other high Crimes and Misdemeanors.” The California Constitution requires “misconduct in office,” which is somewhat less vague than the HJR 10 proposal.

So the OPP opposes HJR 10 as written and suggests that the crimes authorizing impeachment and removal be more specifically defined.

The Independent Party of Oregon, for now Oregon’s “third major party,” offered similar faint praise coupled with a call for greater specificity in the House hearing:

I offer this testimony on behalf of the Independent Party of Oregon and its 119,000 member statewide. IPO favors the underlying concept of House Joint Resolution 10, which would amend the Oregon Constitution to allow the Oregon legislature to impeach any statewide elected official.

Our party sees this type of reform as necessary to ensuring greater accountability of statewide officeholders.

Although Oregon was among the first states to adopt provisions allowing for public recall of officeholders in 1908, that process has never been used to recall a statewide official. We believe the recall is essentially unusable today without a massive amount of funding due to the sheer number of signatures needed and the many restrictions that have been placed on the Initiative Referendum and Recall by the legislature in recent years.

However, although the party supports granting the legislature additional authority to hold statewide officeholders accountable, we also note that such powers are often abused by state and federal legislatures. We therefore recommend that any impeachment authority granted to the legislature come with a clear legal framework for what constitutes an impeachable offence that is narrower than what is provided in this bill. Perhaps by enumerating specific categories of offense similar to what we see in other states. For example, we note that Georgia has a relatively high bar to trigger recall that might be worth considering.

‘Act of malfeasance or misconduct while in office; violation of oath of office; failure to perform duties prescribed by law; willfully misused, converted, or misappropriated, without authority, public property or public funds entrusted to or associated with the elective office to which the official has been elected or appointed. Discretionary performance of a lawful act or a prescribed duty shall not constitute a ground for recall of an elected public official. (Ga. Code §21-4-3(7) and 21-4-4(c)) (http://www.ncsl.org/research/elections-and-campaigns/recall-of-state-officials.aspx)

We encourage the carrier to amend the legislation and the committee consider moving the bill to the floor once the scope of the bill is narrowed to minimize the risk of partisan abuse.

The proper course of action would have been for the Senate to pass its own version of the bill, improved to address these criticisms, and send it back to the House and then on to the voters.

79th OREGON LEGISLATIVE ASSEMBLY– 2017 Regular Session

House Joint Resolution 10


The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the measure as introduced.

Proposes amendment to Oregon Constitution to vest power of impeachment of statewide elected Executive Branch officials in House of Representatives and power to try impeachments in Senate. Requires three-fifths majority vote of House of Representatives to deliver impeachment resolution to Senate and two-thirds majority vote of Senate for conviction. Limits judgment to removal from office and disqualification from holding other public office.

Refers proposed amendment to people for approval or rejection at next regular general election held throughout this state.


Be It Resolved by the Legislative Assembly of the State of Oregon:

PARAGRAPH 1. The Constitution of the State of Oregon is amended by creating a new section 34 to be added to and made a part of Article IV, such section to read:

SECTION 34. (1) The House of Representatives shall have the power of impeachment of statewide elected officials of the Executive Branch for malfeasance in office, corruption, neglect of duty or other high crime or misdemeanor. The House of Representatives may deliver a resolution of impeachment to the Senate only upon the concurrence of at least three-fifths of all Representatives.

(2) The Senate shall have the power to try any impeachment received from the House of Representatives. When sitting for the purpose of trying an impeachment, Senators shall swear or affirm to do justice according to law and evidence. A person may not be convicted under this section without the concurrence of at least two-thirds of all Senators.

(3) Judgment shall extend only to removal from office and disqualification from holding any other public office in this state. Any person convicted or acquitted under this section remains subject to any criminal prosecution or civil liability according to law.

PARAGRAPH 2. The amendment proposed by this resolution shall be submitted to the people for their approval or rejection at the next regular general election held throughout this state.

The legislative analysis of this measure shows that it is as clear as can be, without any hidden issues:

79th Oregon Legislative Assembly – 2017 Regular Session


HJR 10      STAFF MEASURE SUMMARY                        Carrier: Rep. Hack

House Committee On Rules

Action Date:      05/18/17

Action:      Be Adopted.

Vote:      8-1-0-0

Yeas:      8 – Barreto, Hack, Holvey, Kennemer, McLane, Nosse, Rayfield, Williamson

Nays:       1 – Smith Warner

Fiscal:      Fiscal impact issued

Revenue:      No revenue impact


Proposes amendment to Oregon Constitution to vest power of impeachment of statewide elected Executive Branch officials in House of Representatives and power to try impeachment in Senate. Requires three-fifths majority vote of House of Representatives to deliver impeachment resolution to Senate and two-thirds majority vote of Senate to convict. Limits judgment to removal from office and disqualification from holding other public office. Refers proposed amendment to people for approval or rejection at next regular general election.


  • Reasons Oregon lacks impeachment provisions
  • Examples of impeachable conduct
  • Infrequency of utilization
  • Requirement for Senate to conduct trial on articles of impeachment
  • Potential for political exploitation of impeachment process
  • Modernization of language including “high crimes” and “malfeasance”


No amendment.


Impeachment is a process that provides legislatures with oversight of official government conduct and the means to remove executive or judicial public officers. The impeachment process has two stages, and the responsibility for each stage is usually separate. The first stage is the development of a formal accusation or statement of charges, typically by the house chamber of a legislature. During this stage, accusations are heard and investigated, and if the body believes misconduct has occurred, the charges—or articles of impeachment—are developed and voted on. If the requisite number of affirmative votes is reached, the articles are forwarded to the other chamber, usually a senate body, responsible for the second stage: formal consideration of the charges. This stage often resembles a trial: both sides may call witnesses and present evidence, and when arguments are complete, the body must vote whether or not the charged individual is guilty. A supermajority is typically required to convict. Impeachment is relatively rare and usually reserved for extreme cases.

Impeachment and removal of governors has happened occasionally throughout the history of the United States, usually for corruption. A total of at least eleven state governors have faced an impeachment trial, but in many cases individuals will resign before the proceedings begin or conclude. Currently, the Oregon Constitution does not provide for impeachment but does provide for recall in Article II, section 18.

House Joint Resolution 10 proposes amendment of the Oregon Constitution to provide a process for impeachment and refers it to the voters for consideration at the next regular general election. It would authorize the Oregon House of Representatives to bring articles of impeachment against statewide elected officials in the executive department and authorize the Oregon Senate to try such persons. A two-thirds majority vote in Senate chamber would be required to conclude the process with conviction. In the event of conviction, judgment would be limited to removal from current office and disqualification from holding other public office.

Given the Oregon Senate’s repeated refusal to pass National Popular Vote and a procedure for impeachment of the governor, it is time to brush up on the rules for initiatives and referenda. The rules demonstrate a real hostility to the Citizen-Legislature. This is evident because the technology exists and is widely and cheaply available so as to make all the signature gathering and verification unnecessary.

Obviously, were citizen lawmaking easier, we would have more of it, which may be a good or bad thing. But the solution used to prevent having more of it only works to keep true citizen, grassroots lawmaking out. Corporations have no problems mustering the funds needed to wade through this thicket of regulatory barriers to the ballot.



Designating the Initiative, Referendum and Recall Manuals and Forms

(1) The Secretary of State designates the State Initiative and Referendum Manual revised 01/2016 and associated forms as the procedures and forms to be used for the state initiative and referendum process.

(2) The Secretary of State designates the Recall Manual revised 01/2016 and associated forms as the procedures and forms to be used for the recall process.

(3) The Secretary of State designates the County, City and District Initiative and Referendum Manual revised 01/2016 and associated forms as the procedures, except where state law permits the procedure to be otherwise under local charter or ordinance, and forms to be used for the local initiative and referendum process.

(4) The Secretary of State designates the County, City and District Referral Manual revised 01/2016 and associated forms as the procedures, except where state law permits the procedure to be otherwise under local charter or ordinance, and forms to be used for the local referral process.

(5) The Secretary of State designates the Circulator Training and Registration Manual revised 01/2016 and associated forms as the curriculum, procedures and forms to be used to register as required under ORS 250.048 by a person who will be paid to gather signatures on a state initiative, referendum or recall petition.

(6) For purposes of subsection (5) of this rule, initiative is meant to include each phase of the petition’s signature gathering effort including the sponsorship phase, the primary signature gathering effort and any supplemental signature gathering efforts.


Review of Proposed Initiative Measures for Procedural Constitutional Compliance

(1) The Secretary of State will review a proposed initiative measure submitted under the authority of Article IV, section 1 of the Oregon Constitution and ORS 250.045 to determine if it complies with the procedural requirements established in the Oregon Constitution for initiative petitions. This review will include, but not necessarily be limited to, whether a proposed initiative measure: “embraces one subject only and matters properly connected therewith,” constitutes an “amendment” to the constitution, or proposes a single amendment to the Constitution or separate amendments that must be submitted separately. The Secretary will not review any prospective petition for substantive constitutional or legal sufficiency.

(2) The Secretary of State will conduct the review of proposed initiative measures for procedural constitutional compliance during the period when the draft ballot title and certified ballot title are prepared.

(3) The Secretary of State will distribute a copy of the text of the proposed initiative measure in the same manner as provided by rule for statewide notice of the opportunity to provide comment on draft ballot titles prepared by the Attorney General. The Secretary will seek comment from interested persons regarding whether the proposed initiative measure complies with procedural constitutional requirements, including those described in section (1) above. Comments must be filed within the same time period as provided for comments on the sufficiency of the draft ballot title.

(4) The Secretary of State will notify in writing the chief petitioners of the results of the Secretary’s review for compliance with the procedural constitutional requirements for proposed initiative measures. The notification will also be sent to any interested persons who submitted timely comments to the Secretary, in the same manner as provided for notification of the certified ballot title provided by the Attorney General.

(5) The Secretary of State will not approve for circulation the form of the cover and signature sheet filed by a chief petitioner(s) if the Secretary determines that the proposed initiative measure fails to comply with the constitutional procedural requirements for a proposed initiative measure.

(6) The Secretary of State’s notice issued pursuant to section (4) is a final order. Review of this order may be sought under ORS 183.484 or 246.910 in the Marion County Circuit Court.

Stat. Auth.: ORS 246.120, ORS 246.150, OR Constitution §1, Art IV & §1, Art XVII
Stats. Implemented: ORS 246.120, ORS 246.150, OR Constitution §1, Art IV & §1, Art XVII
Hist.: SD 26-1986(Temp), f. & ef. 9-15-86; SD 29-1986, f. & ef. 10-10-86; ELECT 11-1998, f. & cert. ef. 11-3-98


Statistical Sampling Procedures for State Petition

(1) This rule is adopted to implement ORS 250.045(1) and ORS 250.105(5).

(2) The pre-processing of petition signature sheets is conducted by the Elections Division.

(3) Verification of sampled signature lines against voter registration records may be conducted by either the Elections Division or county elections officials.

(4) The handwriting characteristics and factors set forth in the Vote by Mail Procedures Manual adopted under OAR 165-007-0030 will be used to evaluate and determine whether the signature on any sampled signature line matches signatures contained in the voter’s registration record.

(a) Only a signature possessing obvious and predominantly matching characteristics with signatures contained in the voter’s registration record may be determined to be a match.

(b) A signature possessing more non-matching than matching characteristics with signatures contained in the voter’s registration record shall be reviewed by at least two different signature verification staff members before it is rejected as a non-matching signature.

(5) A random sample for any prospective initiative, initiative or referendum petition submittal, will only be selected if the Elections Division determines the petition signature sheets accepted for inclusion in the sample contain a number of unverified signatures equal to or greater than the required number of signatures necessary to accept the petition.

(6) After receiving the signature sheets from the chief petitioners, the Elections Division utilizes the process outlined in (7) through (18) of this rule to determine if the prospective initiative petition, which is also referred to as the sponsorship petition or submittal, contains the signatures of at least 1,000 electors.

(7) No more than 2,000 signatures will be accepted for verification at any one time. Signatures submitted in excess of this requirement are void and will not be included for sampling nor returned to the chief petitioner.

(8) Two signature samples may be selected in order to determine if the petition contains the required number of valid signatures. The sample size determination and statistical formula used to determine if a prospective initiative petition contains the required number of valid signatures is contained in Appendix 1, which is incorporated into this rule by reference. [Appendix not included. See ED. NOTE.]

(9) Prior to verification, each cover and signature sheet is reviewed and removed if:

(a) The text of the prospective initiative petition is not incorporated into the cover sheet and copied onto the back or stapled to the prospective initiative petition signature sheet.

(b) The circulator certification is insufficient as defined by OAR 165-014-0270.

(c) All information included in the optional information fields about the petition signers, such as their printed name, address and date signed, does not comply with OAR 165-014-0275.

(d) The cover and signature sheet submitted is produced on colored paper stock when the petition is not using paid circulators.

(e) No sheet number is provided.

(10) The signature lines on each petition signature sheet accepted for inclusion in the sample will be reviewed and not accepted for sampling if:

(a) The signature line is not certified by the circulator’s certification date.

(b) The signature line does not comply with OAR 165-014-0275.

(11) Those individual signature lines accepted for sampling will be entered into the Oregon Centralized Voter Registration System (OCVR) which will be used for the random signature selection process and to verify signatures.

(12) The first random sampling of petition signature lines is verified. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified.

(13) The Elections Division will consolidate and tabulate the verification data, generated from OCVR, for the first sample.

(14) The statistical formula will be applied to the data from the first sample. If the prospective initiative petition is accepted as a result of the first sample the Elections Division will notify the chief petitioners or correspondence recipient and forward the text to the Attorney General for drafting of the ballot title.

(15) If the prospective initiative petition is not accepted as a result of the first sample, the remaining petition signature lines will be verified. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified.

(16) The verification data for the remaining petition signature lines will be added to the first sample data and the statistical formula applied to the combined results. If the prospective initiative petition is accepted after complete verification the Elections Division will notify the chief petitioners or correspondence recipient and forward the text to the Attorney General for drafting of the ballot title.

(17) If after complete verification the Election Division determines the prospective initiative petition does not contain 1,000 valid signatures, chief petitioners may make one additional submittal of no more than 2,000 signatures.

(a) The verification procedures applied to the combined first and second sample will be applied to the second submittal of signatures.

(b) If the results of verification of the second submittal of signatures do not qualify the petition for acceptance, the chief petitioners must begin the prospective initiative petition process again.

(18) Signature verification of the prospective initiative petition must be completed:

(a) Not later than 10 business days after receipt of the prospective petition signatures;

(b) Not later than 20 business days after receipt of prospective petition signatures if two or more prospective petitions are received in a single day; or

(c) Not later than 20 business days after receipt of prospective petition signatures if all signatures contained in the prospective petition are required to be verified.

(19) Once chief petitioners submit the required number of signatures and affirm the petition is complete, the Elections Division utilizes the process outlined in (20) through (31) of this rule to determine if the initiative or referendum petition contains enough valid signatures to qualify for the ballot.

(20) Two signature samples may be selected in order to determine if the initiative or referendum petition contains the required number of valid signatures. The statistical formulas used to determine if an initiative or referendum petition contains the required number of valid signatures are contained in Appendix 2 and Appendix 3, respectively. Both appendices are incorporated into this rule by reference.

(21) Prior to verification, each cover and signature sheet is reviewed and removed if :

(a) The cover and signature sheet submitted is not a version that was approved for circulation.

(b) The circulator certification is insufficient as defined by OAR 165-014-0270.

(c) All information included in the optional information fields about the petition signers, such as their printed name, address and date signed, does not comply with OAR 165-014-0275.

(d) The cover and signature sheet submitted is produced on colored paper stock when the petition is not using paid circulators.

(e) The electronic template submitted is produced on colored paper stock.

(f) No sheet number is provided.

(22) The signature lines on each petition signature sheet accepted for inclusion in the sample will be reviewed and not accepted for sampling if:

(a) The signature line is not certified by the circulator’s certification date.

(b) The signature line does not comply with OAR 165-014-0275.

(23) Those individual signature lines accepted for sampling will be entered into the Oregon Centralized Voter Registration System (OCVR) which will be used for the random signature selection process and to verify signatures.

(24) The size of the first sample of signatures will be fixed at 1,000. The size of the second sample of signatures will be specified such that the total number of signatures for the combined first and second sample will be at least five percent of the total number of signatures accepted for verification.

(25) The petition signature sheets containing signature lines selected in the first and second random samples are separated from the signature sheets that are not selected in the sample.

(26) The first random sampling of petition signature lines is verified. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified.

(27) The Elections Division will consolidate and tabulate the verification data, generated from OCVR, for the first sample.

(28) The statistical formula will be applied to the consolidated data from the first sample. After determining the result of the first sample the Elections Division will notify the chief petitioners or correspondence recipient that the petition has either qualified to the ballot or that the second larger sample will be verified.

(29) The second random sampling of petition signature lines is verified. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified.

(30) The verification data for the second sample will be added to the first sample data and the statistical formula applied to the combined results. If the petition is accepted after verification of the combined sample the Elections Division will notify the chief petitioners or correspondence recipient that the petition has qualified to the ballot.

(31) If after verification of the combined sample the Elections Division determines the petition does not contain the required number of valid signatures, chief petitioners may submit additional signatures as long as the filing deadline has not passed. Each additional submittal will be verified using the following process:

(a) A single sample that is the larger of 250 signatures or a number of signatures that is directly proportional to the first submittal of signatures will be selected from additional signatures accepted for inclusion in the sample.

(b) If fewer than 250 signatures are submitted then all signatures are verified.

(c) The verification procedures applied to the first submittal will be applied to any additional submittal of signatures.

(d) To determine acceptance or rejection of the petition, the verification data from additional submittals will be added to the verification data of the first submittal and the statistical formula applied to the combined results.

[ED. NOTE: Appendices referenced are not included in rule text. Click here for PDF copy of appendices.]

Stat. Auth.: ORS 246.150 & 250.105
Stats. Implemented: ORS 250.105
Hist.: SD 4-1978(Temp), f. & ef. 7-6-78; SD 2-1979, f. & ef. 4-23-79; SD 20-1986, f. & ef. 5-23-86; ELECT 12-1994, f. & cert. ef. 6-23-94; ELECT 8-1999, f. & cert. ef. 9-3-99; ELECT 9-2000, f. & cert. ef. 6-6-00; ELECT 3-2004, f. & cert. ef. 4-15-04; ELECT 3-2005, f. & cert. ef. 3-22-05; ELECT 18-2007, f. & cert. ef. 12-31-07; ELECT 19-2011, f. & cert. ef. 9-26-11; ELECT 7-2014, f. & cert. ef. 1-7-14


Review of Specified Chief Petitioner Accounts

(1) Each chief petitioner of an initiative, referendum or prospective petition who pays any person money or other valuable consideration to obtain signatures on the petition shall keep detailed accounts in accordance with ORS 260.262. The Elections Division will review these accounts in the manner and in accordance with the schedule set out in paragraphs (2) and (3) of this rule.

(2) Chief petitioners shall submit digital copies of the applicable accounts described on the SEL 320 unless they receive prior written approval from the Elections Division to submit paper copies.

(a) Acceptable digital formats include pdf files, Excel files, or Word files submitted on CD-ROM or via electronic mail.

(b) The Elections Division may request original documentation of chief petitioner accounts, in addition to or in lieu of copies.

(c) The Elections Division may choose to conduct on-site reviews of chief petitioner accounts.

(3) Detailed copies of the applicable accounts described on the SEL 320, must be submitted by the 10th business day of each month after any month in which circulators were paid to collect signatures for the primary signature gathering effort. Accounts for the sponsorship phase must be included with the first submittal of accounts for the primary signature gathering effort. The Elections Division may require accounts to be submitted in shortened time frame depending on the circumstances of each petition.

(4) The Elections Division reserves the right to demand all accounts described under ORS 260.262, including all circulated signature sheets.

(5) Chief petitioners, or their authorized agent, must submit a completed SEL 320, each time accounts are provided, detailing the nature of the accounts provided under ORS 260.262.

(6) The Elections Division shall review accounts to determine whether all of the required information appears to have been provided. If after review it is determined that the accounts submitted are incomplete or the chief petitioners fail to submit the requested accounts, the Elections Division may find that a violation of section 1b, Article IV of the Oregon Constitution, has occurred, suspend the petition from obtaining additional signatures, and/or issue a civil penalty under OAR 165-013-0020.

(7) If the Elections Division takes action under ORS 260.262(6) the chief petitioners may file notarized written explanation contesting the suspension and providing evidence that the accounts submitted are complete.

(8) If a petition is suspended under ORS 260.262(6) the chief petitioners are prohibited from obtaining any additional signatures on the petition until it has been determined by the Elections Division that the accounts are complete. Any signatures gathered in violation of the suspension will not be accepted for signature verification.

(9) If the petition has multiple chief petitioners, only one set of copies of the detailed accounts for each petition need to be produced by the deadline.

(10) Accounts must be kept current as of not later than the 7th calendar day after the date a payment is made to a person for obtaining signatures on a petition.

(11) The Elections Division reserves the right to conduct a review of all chief petitioner accounts in accordance with ORS 260.262(4).

Stat. Auth.: ORS 246.150, 260.262
Stats. Implemented: ORS 260.262
Hist.: ELECT 21-2007, f. & cert. ef. 12-31-07; ELECT 3-2008(Temp), f. & cert. ef. 3-14-08 thru 5-2-08; ELECT 6-2008(Temp), f. & cert. ef. 5-2-08 thru 9-10-08; ELECT 8-2008, f. & cert. ef. 8-12-08; ELECT 33-2009, f. & cert. ef. 12-31-09; ELECT 13-2011, f.. & cert. ef. 8-1-11; ELECT 6-2013, f. & cert. ef. 11-8-13; ELECT 16-2015, f. 12-31-15, cert. ef. 1-1-16; ELECT 3-2016, f. & cert. ef. 7-6-16

Statistical Sampling for Local Petitions


Statistical Sampling Procedures for Other than State Initiative or Referendum Petitions

(1) This rule is adopted to implement ORS 248.008, 249.008, 249.875, 250.215, 250.315 and 255.175.

(2) For this rule, the term:

(a) Filing Officer refers to the person with whom the petition is filed for pre-processing. A minor political party formation petition and a recall petition against a State Public Officer are filed with the Elections Division. County petitions are filed with the county elections official, city petitions are filed with the city recorder and district petitions are filed with the county elections official of the county in which the administrative office of the district is located.

(b) Elections Official(s) refers to the person who verifies the sampling of petition signature lines against the voter’s registration record. For a minor political party formation petition or a recall petition against a State Public Officer the Elections Division may choose to verify sampled signatures or distribute to county elections officials for verification. The county elections official verifies signatures for all county, city and district petitions subject to this rule.

(3) The handwriting characteristics and factors set forth in the Vote by Mail Procedures Manual adopted under OAR 165-007-0030 will be used by Elections Officials to evaluate and determine whether the signature on any sampled signature line matches signatures contained in the voter’s registration record.

(a) Only a signature possessing obvious and predominantly matching characteristics with signatures contained in the voter’s registration record may be determined to be a match.

(b) A signature possessing more non-matching than matching characteristics with signatures contained in the voter’s registration record shall be reviewed by at least two different elections officials before it is rejected as a non-matching signature.

(4) A random sample for any petition submittal, will only be selected if the Filing Officer determines the petition signature sheets accepted for inclusion in the sample contain a number of unverified signatures equal to or greater than the required number of signatures necessary to accept the petition.

(5) Once chief petitioners or sponsors submit the required number of signatures and affirm the petition is complete, the process outlined in (6) through (16) is utilized to determine if the petition contains enough valid signatures to qualify for the ballot.

(6) Two signature samples may be selected in order to determine if the petition contains the required number of valid signatures. The statistical formula referred to in this rule is contained in Appendix 4, which is incorporated into this rule by reference.

(7) Prior to verification, each petition cover and signature sheet is reviewed by the Filing Officer, and removed if:

(a) The cover and signature sheet submitted is not a version that was approved for circulation.

(b) The circulator certification is insufficient as defined by OAR 165-014-0270.

(c) All information included in the optional information fields about the petition signers, such as their printed name, address and date signed, does not comply with OAR 165-014-0275.

(d) No sheet number is provided.

(8) The signature lines on each petition signature sheet accepted for inclusion in the sample will be reviewed and not accepted for sampling if:

(a) The signature line is not certified by the circulator’s certification date.

(b) The signature line does not comply with OAR 165-014-0275.

(9) The size of the first sample of signatures will be 10% of the total number of signatures accepted for verification. The size of the second sample of signatures will be the same number used in the first sample, plus at least one additional signature.

(10) The Elections Official separates the petition signature sheets containing signature lines selected in the first and second random samples from the signature sheets that are not selected in the samples.

(11) The first random sampling of petition signature lines is verified. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified. When the Filing Officer and Elections Official are not the same individual these changes must be noted on the signature sheet.

(12) The Elections Official will consolidate and tabulate the verification data generated from OCVR, for the first sample.

(13) The statistical formula will be applied to the consolidated data from the first sample. After determining the result of the first sample the Elections Official will notify the following individuals that the petition has either qualified to the ballot or that the second larger sample will be verified:

(a) The Filing Officer; or

(b) The chief petitioners or sponsors of the petition if the Filing Officer and Elections are the same individual.

(14) The second random sampling of petition signature lines is verified.. If the sampled signature line is a blank or crossed out line, the next available line below will be verified. If there are no lines below, the line above will be verified. When the Filing Officer and Elections Official are not the same individual these changes must be noted on the signature sheet.

(15) The verification data for the second sample will be added to the first sample data and the statistical formula applied to the combined results. If the petition is accepted after verification of the combined sample the Elections Division will notify:

(a) The Filing Officer; or

(b) The chief petitioners or sponsors of the petition if the Filing Officer and Elections are the same person.

(16) If after verification of the combined first and second samples the Filing Officer determines the petition does not contain the required number of valid signatures, chief petitioners may submit additional signature sheets as long as the filing deadline has not passed. Any additional submittals will be verified using the following process:

(a) The verification procedures applied to the first submittal will be applied to any additional submittal of signatures.

(b) The Elections Official has the option to either verify all additional signatures or to continue to use the sampling process described in this rule.

(c) A single sample that is the larger of 100 or a number of signatures that is directly proportional to the first submittal of signatures will be selected from the additional signatures accepted for inclusion in the sample.

(d) If fewer than 100 signatures are submitted then all signatures are verified.

(e) To determine acceptance or rejection of the petition, the verification data from additional submittals will be added to the verification data of the first submittal and the statistical formula applied to the combined results.

[ED. NOTE: Appendices referenced are not included in rule text. Click here for PDF copy of appendices.]

Stat. Auth.: ORS 246.150, 250.105, 250.215, 250.315 & 255.175
Stats. Implemented: ORS 249.875, 250.105, 250.215, 250.315 & 255.175
Hist.: ELECT 19-1991(Temp), f. & cert. ef. 12-20-91; ELECT 13-1993, f. & cert. ef. 4-16-93; ELECT 7-2000, f. & cert. ef. 4-5-00; ELECT 3-2004, f. & cert. ef. 4-15-04; ELECT 3-2005, f. & cert. ef. 3-22-05; ELECT 10-2005, f. & cert. ef. 12-14-05; ELECT 18-2007, f. & cert. ef. 12-31-07; ELECT 19-2011, f. & cert. ef. 9-26-11; ELECT 6-2013, f. & cert. ef. 11-8-13


Prohibition on Paying or Receipt of Payment based on the Number of Signatures Obtained on an Initiative, Referendum, Candidate Nominating Petition or Voter Registration Cards

(1) The purpose of this rule is to interpret Article IV, section 1b of the Oregon Constitution and ORS 260.569. Article IV, section 1b of the Oregon Constitution provides: “It shall be unlawful to pay or receive money or other thing of value based on the number of signatures obtained on an initiative or referendum petition. Nothing herein prohibits payment for signature gathering which is not based, either directly or indirectly, on the number of signatures obtained.” ORS 260.569 provides: “A person may not pay or receive money or another thing of value based on the number of: signatures a person obtains for purposes of nominating a candidate for elective public office or signed voter registration cards a person collects.

(2) Section 1b and ORS 260.569 bans the practice of paying circulators or others involved in an initiative, referendum, candidate nominating petition or voter registration card collection effort if the basis for payment is the number of signatures obtained. This means that payment cannot be made on a per signature basis. Employment relationships that do not base payment on the number of signatures collected are allowed. Allowable practices include: paying an hourly wage or salary, using express minimum signature requirements (quota), terminating those who do not meet the productivity requirements, adjusting salaries prospectively relative to productivity, and paying discretionary bonuses based on reliability, longevity and productivity, provided no payments are made on a per signature basis. The use of express minimum signature requirements (quota) for an initiative or referendum petition is allowable so long as that requirement is disclosed to the Elections Division on the SEL 320 as part of accounts.

(3) If a circulator is carrying a petition subject to Section 1b or ORS 260.569 and another petition not subject to Section 1b or ORS 260.569 (for example, a state initiative petition and a local recall petition), the circulator may be paid by the signature only for signatures collected on the petition not subject to Section 1b or ORS 260.569. Any payment for collecting signatures on the petition subject to Section 1b or ORS 260.569 must comply with Section 1b or ORS 260.569.

(4) The phrase “directly or indirectly” in Section 1b means that the chief petitioners who are responsible for the circulation and submission of the initiative or referendum petition cannot directly pay for signature gathering based on the number of signatures obtained, and cannot contract or delegate to another person or entity to obtain signatures and allow the third party to pay circulators on the basis of the number of signatures obtained. However, chief petitioners may contract with a person or entity to manage the signature gathering, and pay the person or entity for services, including the service of qualifying the petition for the ballot, so long as the individuals who actually circulate the petition are not paid based on the number of signatures obtained. The chief petitioners are responsible for insuring that agents of the chief petitioner (anyone who is delegated the task of obtaining signatures on the initiative or referendum petition) do not violate Section 1b.

(5) Violations of Section 1b or ORS 260.569 will be processed under 260.995 as civil penalties. Penalties may be assessed against chief petitioners or any other persons who either directly or indirectly pay based on the number of signatures or voter registration cards obtained. Liability may be imposed on chief petitioners as provided in 260.561. Violations of Section 1b or 260.569 will be calculated by deeming each individual signature sheet or voter registration card that contains signatures that were collected in violation of Section 1b or 260.569 as a single occurrence.

Stat. Auth.: ORS 246.150
Stats. Implemented: ORS 250.045 & 260.995
Hist.: ELECT 15-2003, f. & cert. ef. 10-15-03; ELECT 22-2007, f. & cert. ef. 12-31-07; ELECT 15-2011, f. & cert. ef. 8-11-11; ELECT 16-2015, f. 12-31-15, cert. ef. 1-1-16; ELECT 3-2016, f. & cert. ef. 7-6-16


Circulator Certification

(1) This rule applies to prospective initiative, initiative, referendum, recall, candidate nominating, minor political party formation and voters’ pamphlet petitions.

(2) Circulators must certify that they witnessed the signing of the signature sheet by each individual whose signature appears on the sheet and that they believe each signer is an elector by completing the certification at the bottom of the signature sheet.

(3) A petition signature sheet will be rejected if the circulator certification is not completed or determined to be insufficient.

(4) The circulator certification is considered complete if it consists of a signature and a date that have been determined to be sufficient under the Circulator Certification Matrix contained in Appendix A which is incorporated into this rule by reference.

(5) If the circulator’s certification signature is required to be verified by exemplar the handwriting characteristics and factors set forth in the Vote by Mail Procedures Manual adopted under OAR 165-007-0030 will be used to evaluate and determine whether the certification signature on a petition sheet matches:

(a) For circulators required to be registered under ORS 250.048, signatures provided as examples on any SEL 308, Circulator Registration, accepted for the petition cycle.

(b) For circulators not required to be registered under ORS 250.048, signatures contained in the circulator’s voter registration record.

(c) If the circulator is not required to be registered under ORS 250.048 and an Oregon voter registration record bearing the circulator’s signature is not available as an exemplar, the elections official will notify the chief petitioners or authorized agent by telephone and email, providing an opportunity to submit an alternative exemplar of the circulator’s signature.

(d) To be considered, the chief petitioners or authorized agent must deliver an alternative exemplar to the elections official no later than 5 pm of the following business day that is at least 24 hours from the time notification was made. Additional time to provide an alternative exemplar may be allowed only if the chief petitioners or authorized agent requests it and if allowing the additional time does not delay the signature verification process.

(e) The alternative exemplar must be a signature on an official government-issued document such as a driver’s license or passport, and must have been executed before the date of the attempted certification of the petition signature sheet.

(6) Only circulator certifications with a signature possessing obvious and predominantly matching characteristics to those signatures contained in the exemplar provided under (5) of this rule may be determined to be complete.

(7) Circulator certifications with a signature possessing more non-matching than matching characteristics to those signatures contained in the exemplar provided under (5) of this rule shall be reviewed by at least two different signature verification staff members before the petition sheet is rejected for insufficient circulator certification.

[ED. NOTE: Tables referenced are not included in rule text. Click here for PDF copy of table(s).]

Stat. Auth.: ORS 246.150, 249.008, 250.105, 250.215, 250.315 & 255.175
Stats. Implemented: ORS 249.008, 249.061, 249.740, 249.865, 249.875, 250.045, 250.105, 250.215, 250.315 & 255.175
Hist.: ELECT 4-2005, f. & cert. ef. 4-8-05; ELECT 23-2007, f. & cert. ef. 12-31-07: ELECT 8-2012, f. & cert. ef. 1-3-12; ELECT 6-2013, f. & cert. ef. 11-8-13


Completion of Optional Information on Petition Sheets

(1) The purpose of this rule is to establish standards governing what an Elections Official will review for in determining if there has been a violation of ORS 260.567. This rule applies to all state and local initiative, referendum, recall and candidate nominating petitions.

(2) A petition signature sheet will be rejected for noncompliance with ORS 260.567 and not included in the sample if:

(a) The same handwriting appears to have completed the optional information on all lines of the petition sheet;

(b) Optional information on all lines has been entered, altered, corrected, clarified or obscured by typewriting or other mechanical means;

(d) [sic] For any other reason the Elections Official determines from the face of the signature sheet that a person or persons other than the petition signers entered, altered, corrected, clarified or obscured any information about the person who signed the signature sheet, including the optional fields of printed name, residence address and date signed.

(3) If the same handwriting appears to have completed the optional information on multiple lines only the first signature line will be included in the sample. All other lines will be rejected for noncompliance with ORS 260.567 and will not be included in the sample.

(4) Notwithstanding paragraphs (2) and (3) of this rule, a signature sheet or an individual signature line will not be rejected for noncompliance with ORS 260.567 if:

(a) Each entry or change of information made by a person other than the signer, was subsequently initialed by the person who signed the signature sheet; or

(b) Each entry or change of information occurred with regard to a signer who is a person with a disability who requested assistance in writing, altering, correcting, clarifying or obscuring on the petition sheet any information about the person.

(5) For purposes of this rule, “optional information” means information in the optional fields of printed name, residence address and date signed.

Stat. Auth.: ORS 246.150
Stas. Implemented: ORS 260.567
Hist.: ELECT 24-2007, f. & cert. ef. 12-31-07; ELECT 14-2011, f. & cert. ef. 8-4-11


Circulating Unpaid Petitions by Paid Petition Circulators

Under ORS 250.048(9), a person may not obtain signatures on a petition or prospective petition for which the person is being paid and, at the same time, obtain signatures on a petition or prospective petition for which the person is not being paid. For purposes of ORS 250.048(9), “at the same time” means during any time period for which the person is being paid to circulate any petition or prospective petition. “At the same time” does not include any lunch or other break period for which a person is not paid to circulate any such petition, as reflected in the person’s payroll records required to be submitted under OAR 165-014-0100.

Stat. Auth.: ORS 246.150
Stats. Implemented: ORS 250.048
Hist.: ELECT-8-2010, f. & cert. ef. 11-5-10

This week, just ahead of the first anniversary of the Commons Law Center, OregonPEN is pleased to present an interview with its founding executive, Amanda Caffall.

OregonPEN: When did the Commons Law Center officially kick off?

Amanda Caffall: Well, we were incorporated in May of 2016. And started serving clients in January of 2017.

OregonPEN: Do you have a virtual space, or do you have a physical office?

Amanda Caffall: We have a physical office down in John’s Landing in Portland. And I do work remotely with a lot of clients, so I work with people remotely, digitally, and I also meet with people in the offices of the pro bono lawyers who volunteer with our program.

OregonPEN: Can you estimate how many clients you’ve seen since January of 2017?

Amanda Caffall: 19.

OregonPEN: What was the mission or the thought of creating the Commons Law Center when you formed it?

Amanda Caffall: So currently, and this number is from the American Bar Association. 80% of people in the United States do not have access to civil legal care. The ABA published a report in August of last year by The Commission on the Future of Legal Services, and that report really dives into what is our access to justice pro bono, and what the heck are we going to do about it.

So 80% of people don’t have access to civil legal care. Meanwhile, the National Association for Law Placement reports that 30% of new lawyers are unemployed or underemployed nine months after graduation. So that’s either two big problems, or an apparent solution to a big problem.

So what the Commons Law Center does is train new lawyers to be competent providers of legal services, and direct their energy to serve clients who live between 125 and 400% of the federal poverty level. So 125% of where legal aid drops off, and 400% of the federal poverty level is, for a family of four this year, it’s about $97,000 dollars a year. So people at 400% not necessarily living in crisis, not necessarily facing potential homelessness, but also having a hard time making it in today’s economy.

And they are part of the access to justice gap. So that report I mentioned from August 2016 found that “yeah, we know that low income people have trouble finding legal help, but also moderate income Americans have trouble finding legal help.”

So we looked around the country at the legal incubator movement, which has proliferated since 2007. There are now about 65 or 70 so-called legal incubators operating. And we looked at what was working with the legal incubators and what wasn’t. And the big idea behind legal incubators is take those five new lawyers, direct them at the access to justice gap. Unfortunately, most legal incubators operate such that new lawyers are solo practitioners participating in a program, rather than new lawyers being full time salaried staff members at a nonprofit organization.

And so, many legal incubators struggle financially. A law firm or a law school or a state buyer association will seed fund an incubator, and then a couple years down the road they’re like, gee whiz, could we keep carrying this or what? Because it’s not making any money on its own.

So we also looked around the country at the sliding scale law firm movement, which has proliferated as well. And we found an organization in Utah called Open Legal Services. They’ve been financially self-sufficient since 2012, and they’re serving the same socio-economic demographic, 125-400% of the federal poverty level. And we said gee, why don’t we combine these two concepts, why don’t we say we want to hire and train new lawyers, and we want to provide sliding scale legal services to people to help them afford legal services. So we’ve developed a business model — we don’t do any pro bono services. Everything we provide for people, every legal service we provide for people they pay for, but we provide it on a sliding scale.

Our hourly rates range outside the family law context from $35 – $150 dollars, and in the family law context they range from $75 – $175 dollars. We believe that our organization can be financially self sufficient, and can expand access to justice. Which is important, because funding for the Legal Services Corporation, which supports Legal Aid, has continued to drop.

And even though in Oregon we’re really good, as a legal community, at giving to the Campaign for Equal Justice, we’re still not giving nearly enough for them to have the resources they need to serve the population that lives below 125%. So one thing that’s really essential is that we do not long term compete for those philanthropic dollars with Legal Aid, but that we create a model that can support itself financially and expand access to justice.

That was a big answer to your question. I’m happy to break any of that down.

OregonPEN: What is the reason for the distinction in the sliding scales, in and out of family law? Family law being an area where people are often in crisis, such as when monetary stress causes family stress. I was surprised that your sliding scale for family law was higher than your normal sliding scale – what’s that about?

Amanda Caffall: Gotta make the boat float financially. For most of the matters we do in the business context, the nonprofit context, and the estate planning context, 90% of the work in those areas if not more is on a flat or fixed rate basis. So we’re never charging people by the hour.

In the family law context and in the probate context, we have to charge people by the hour, because it’s impossible to predict how their matter’s going to go. There’s no such thing as a simple divorce.

Because we’re actually doing a lot of hourly work in the family law context, we have to make sure that the hourly work is generating enough revenue to make the organization viable.

We looked at St. Andrews legal clinic. They’ve been around for 40 years providing sliding scale legal services to largely the same population that we’re providing those services to. And their minimum retainer is a thousand dollars. My minimum retainer is a thousand dollars. So I know I’m on par with other nonprofits in this space already. Now we’re what, eight months into this program? There’s a lot of learning as we go along with … The intent is how can we deliver services in a way that drives the cost down for the low to moderate income consumer.

So in ten years, is it possible that the minimum hourly rate for family law is less than $75 dollars, sure, that’s possible. But there’s a lot of strict attention and discipline around the business model, that, yes, we are operating in the nonprofit context, but we are dependent on fees earned to make the thing go. There’s no foundation backing us up with fifty or a hundred grand. Do I think there should be? Hell yes I do. Have I asked? You bet. Am I going to continue asking? Absolutely. But right now, it is this very careful balance of making sure we have enough matters at rates that clients can afford, that also help pay for the program.

One of the things I’m doing right now is I’m raising a $100,000 seed fund. And that $100,000 seed fund goes to on-board the first cohort fellows, and build the community relationships that we need to really make the phone ring.

What I know today is that I’m getting about 15 calls a month. Every three calls turns into a client. I need to make the phone ring a lot more every month before I can hire the first cohort of fellows. And I need a philanthropic infusion to help. Before the business part of this is really rolling and generating enough revenue to be financially self sufficient, I need that capital infusion to do things like pay the bar dues of the brand new lawyers who come to work for our program. Pay the professional liability insurance for the new fellows that come work for our program.

The other thing I want to make sure I explain is how the training happens for these new lawyers. I like to joke that any brand new lawyer can be your lawyer, they’re just probably not going to be a very good one. And I’ve only had one person push back on that. The other joke that somebody shared with me is that brand new law license is essentially a license to commit malpractice. So we know that there is something really fundamentally broken about how new lawyers are produced — there’s a disconnect between the educational process and the actual providing the public with services process.

So we are intending to hire these brand new lawyers who don’t have any practical training, who maybe had some clerkships or summer jobs but who haven’t actually been a practicing lawyer. So the quality control, the training for those new lawyers, comes in the form of pro bono supervisory input, basically.

As you can imagine, we’ve sort of taken the partner-associate relationship, and the associate is within the Commons Law Center, and the “partner” is a pro bono lawyer who gives a minimum of two hours a month to our program to help mentor, train, and supervise new lawyers.

And it started by building the team of pro bono lawyers. I need to triple it in short order, before it turns into 2018. And those lawyers, instead of giving pro bono services directly to a client, they’re giving services in partnership with our fellows. So they are having the opportunity to mentor and train, in a really practical, hands on way, new lawyers, and also provide pro bono services.

So we’re in the process right now of our application to be an Oregon State Bar certified pro bono agency is winding its way through the right channels. It has passed all the desk it needs to pass at the bar, it’s on the right desk at the Professional Liability Fund right now.

If we are accepted as a pro bono certified agency, then lawyers who, say, are in-house counsel or are retired and not currently carrying their own PLF coverage can get umbrella coverage through the PLF because they’re giving pro bono time to our program. So I think there’s a big opportunity to tap into the wealth of expertise that experienced, retired or semi-retired lawyers in Oregon have to help train new lawyers to expand access to get this.

OregonPEN: Yeah, there’s a lot in that. The issues around PLF are huge. I know that in my first year in practice, my PLF bill was bigger than the billings from clients. I began in the last quarter of the year, and I ended up paying more to the PLF than all my clients combined paid me in that quarter. And it’s quite a serious issue when you have the mandatory PLF. Do you have any sense whether pulling this off is easier in states without the mandatory malpractice insurance for every new lawyer?

Amanda Caffall: No idea. But what I do know is if I’m a brand new lawyer in any state in the country, I want professional liability insurance. I want to be covered. As brand new lawyers, people have almost no idea what they’re doing. They need the insurance. I’m perfectly okay going out to fundraise to say I need this money to pay for PLF for the fellows in my program, because I want them to have that coverage. And there’s no way around me paying for PLF coverage for those lawyers, and so that’s okay. But with our plan to hire three fellows each fall, by the time we get to a place where — and we’re asking the fellows to stay with the program for three years – so that bill to the PLF gets really big really fast.

But so too does the bill for the bar dues. Now the benefit is that these fellows are all going to be new lawyers, so they’ll be in that … I think it’s the first three years your PLF dues are lower than they are later on.

OregonPEN: You have no exposure until you have clients. I’ve often wondered about the huge barrier to entry, even with the 40% discount for the first year and 20% for the second year, you’re still talking thousands of dollars before you’ve seen your first client. And that’s whether it’s a paying client or not a paying client, it’s quite a barrier.

Let’s talk more about the economics that you have alluded to. I run into a number of older lawyers who basically went into practice with no debt. Are there any new lawyers coming around without any debt, into your program?

Amanda Caffall: No way. The average debt load of a new lawyer is $112,000 dollars. That data is a couple years old, I heard someone say recently it was more like $140,000 today. These new lawyers — they have huge debt. There’s so much we could talk about, about just like big national macroeconomic trends, and the enormous debt load that Millennials are carrying that no other generation before us has carried. And it’s huge, it’s criminal. I mean, we have essentially debilitated an entire generation in American history, because of the huge debt load they’re carrying. And I feel really passionately about this. I have an enormous debt load.

There’s one way I imagine that debt load going away, which is part of the reason why I think our program will be really attractive to new fellows. So in our budget we’ve targeted that we’ll pay these new fellows $40,000 a year. Is that a huge salary? Nope. Is it a livable salary? Yes. I think I can hire lawyers at that salary because there aren’t other nonprofit organizations that will hire them. For the class of 2016, when they graduated, in the entire State of Oregon there were 1.5 positions available to practice law in a nonprofit organization in the state. And those 1.5 positions were with Legal Aid, and they will tell you that they don’t hire brand new lawyers because we are way too expensive to train and they don’t have the resources for it.

So the benefit of working for the Commons Law Center as a brand new lawyer with enormous debt load is twofold. One, your student loan payments will be based on your income, your income will be modest, your loan payments will also be modest.

Number two, and this is the important one, because we’re a 501(c)(3) nonprofit organization, the loan payments that our fellows make while they’re working with us qualify for public interest loan forgiveness. This is a program that George W. Bush put together, and if you work for ten years and make 120 qualifying payments — a payment that’s made on time while you work for a 501(c)(3) — then your entire remaining student debt can be forgiven.

Now you may have read about the lawsuit that the ADA and others are in right now, with the U.S. Department of Education, where the Department of Education denied forgiveness for a number of people.

And it’s the ABA and other folks that are suing. And honestly I would know more about it if the thought of the program going away didn’t keep me up at night and give me tremendous anxiety about my future and my life choices. The Justice Department last week filed a motion for summary judgment saying that they didn’t actually really ever promise to forgive all this debt, so we’re not sure that these people reasonably relied on the program. It just drives me crazy.

So provided that [A] we all survive this administration, literally, and [B] that the public interest loan forgiveness program survives this administration, then the fellows will have that other huge benefit to working to working with the Commons Law Center, because they’ll have three years under their belt towards their ten years right out of the gate.

And what I hope — more than hope, what I intend — is that we’re equipping new lawyers with the ability to be competent providers of legal services, but also with the understanding of how to make the business or nonprofit go, how to make the boat float financially.

In my dream world, after fellows get done with our program, they move to a rural part of Oregon that currently doesn’t have a lawyer or doesn’t have enough lawyers, and they start a new nonprofit organization there with all the tools I’ve given them in their time with the Commons Law Center. And boom, now they’re expanding access to justice in a part of the state that’s underserved. So that’s my big dream.

OregonPEN: So if the feds decide to get rid of the public service loan program, does your model still work?

Amanda Caffall: Yeah, because new lawyers – a third of new lawyers are still un- or underemployed. Whether they can get their debt forgiven or not, they’re going to need a job, and they just spent $100 or $200 grand figuring out how to be a lawyer so they need somewhere to work, to actually learn how to be a lawyer. It’s interesting what we’ve seen happen in law firms. The experience that people had who graduated law school a couple years after you through today is very different than the experience people had when they graduated law school in the 90s.

I mean, I remember, I was a 2011 grad, and I could count on one hand the people who had jobs, who I knew before we graduated. And my friend who graduated from U of O three years before I did: everyone had a job, those employers were paying for their bar study, paying for their bar dues. And the rest of us — I graduated in 2011 and was like well, now that I’ve passed the bar and my bar loan is almost gone, I have three weeks to get a job or I don’t know, I move into a van, I move back in with my parents in Washington.

So the economics for new lawyers have just changed dramatically.

The good news is that the market is responding to these changes, and fewer people are applying to go to law school. But no, I don’t think the program depends on public interest loan forgiveness; I think the sanity and the mental health of people graduating from law school, I think that depends on the public interest loan forgiveness surviving.

OregonPEN: So tell me how it is that it’s a good thing if fewer people go to law school? I mean, doesn’t the law of supply and demand say that to bring the cost of legal services down you have to have more supply chasing the market? Otherwise, if you don’t have enough lawyers, don’t prices stay up?

Amanda Caffall: Yeah. I mean that makes sense, but what about the 30% of lawyers who graduate every year who can’t get a job? The supply isn’t the problem, we have the supply. Which is why when I see the Board of Governors proposal for a licensed paraprofessionals I’m like, all right, well that sounds cool. Sure, let’s do that, let’s try that too, but let’s not mistake licensed paraprofessionals as a solution to a problem of having too few professionals. We have plenty of professionals. What we don’t have is a way for those professionals to take the step from getting their license to practice to actually being able to serve the public.

OregonPEN: So I wanted to ask you, you mentioned living with your parents in Washington. Did you mean Washington State?

Amanda Caffall: Yeah. And luckily, I got a job as the political organizer on a political campaign, so for the last six years, I’ve been doing things that have almost nothing to do with practicing law. I mean, I learned how to be a fundraiser and an organizer and a movement builder, and that’s all helpful and I’m glad I know that stuff. But I’ve been practicing law for a year. Because I didn’t have a — there was no entryway into legal service for me.

OregonPEN: The law schools are cranking out new solos all the time. And it is sobering to imagine life for these young people, typically it’s young people, who have to learn to practice law while at the same time trying to learn how to be a small business person.

Amanda Caffall: No kidding.

OregonPEN: It’s not easy to open any small business, much less while trying to learn how to practice law. The reason I mention Washington though was that Washington has something that’s always appealed to me, which is that you can read law and not acquire a huge law school debt. What I hear you saying is that we have plenty of talent and we have plenty of need, but we don’t have an economic model that allows the need to be served at any sort of cost that the market will bear. And what about getting rid of law school, or making law school an alternative rather than the only gateway to practice, by expanding on Washington’s idea that let’s you read law with a qualified mentor?

Amanda Caffall: I don’t really have an opinion about that. I mean that, is an enormous proposal. I think the proposal on my desk, which is to make the Commons Law Center go, is plenty big. I don’t want to also get into a situation where I am now advocating that legal education is fundamentally changed. I have a mentor who graduated from William and Mary, or Washington and Lee, or one of those schools in Virginia that’s a pretty — used to be — a pretty good fancy law school, high ranking in the US News and World Reports. And they changed their legal education program and they said, all right, we’ve got these three years. For the third year, it’s all practical experience, it’s all externship, it’s all working alongside and practice with a lawyer. And what happened to their ranking is that they totally tanked.

So who is going to follow that law school’s lead to fundamentally change what legal education is? I don’t know, if I’m a law school, I would have a lot of hesitation about that. I don’t want to tell law schools how to do it, I don’t want to tell anybody how to do it, but I do want people to understand that. Yes we need new economic models to connect the supply of new lawyers to the need, but we also need new training models. We need new training models, that’s the part we’re missing. We’re missing the part that enables somebody to say with confidence that they are really following the Oregon Rules of Professional Conduct around competence. How do we make brand new lawyers competent providers of legal services? That’s really the question.

And so the Commons Law Center’s answer to that is let’s bring them into the Commons Law Center, let’s partner them with experienced pro bono co-council, and let’s get them a lot of practice with somebody holding their hand through it all, to make sure that the competence is really there. And then once they’ve done that for a couple years and worked with a lot of different pro bono lawyers who all have their own theories and philosophies about practice, then let’s kick them out into the world and say okay new lawyer, you’re good now. But we just don’t have the training. And you know, things that don’t help: Lewis and Clark shutting down, the Lewis and Clark legal clinic in downtown Portland. That’s not that helpful. It’s not that helpful for the public, and it’s not that helpful for new lawyers who had that as one of their few opportunities to get practical experience at Lewis and Clark.

Amanda Caffall: But what I really want to focus on is how do we fill this training gap for lawyers? Once they’re out of law school, they’ve passed the bar, they’re certified, licensed, whatever, they’re ready to go — except they’re not really ready to go yet. How do we make them really ready to go?

And the reason I don’t want to pick on law school is because i need them. I need them to partner with me, I want them to help fund me, I want them to send me the best students they have who would be great for our program. So I don’t want to pick on law school.

OregonPEN: Sure. But let me ask about that again this way: if you have a paralegal working in a law office who’s able to work under supervision, and then at the end of five years sit for the bar exam without having to get that $140,000 of debt, doesn’t that make that person someone who’s much more able to find a $40,000 a year opportunity attractive? Because they do have all that practical experience from working in a law office for five years under supervision, and they don’t have that huge nut to service every month for student loan debt.

Amanda Caffall: Right. I don’t really know the answer to that, because as you were talking some of the things that were flashing through my mind were like, it’s sort of the devil you know is better than the devil you don’t. So I’m thinking about yeah, but what about all that stuff in law school where we dig deep on Con Law and Contracts and Property and Civ Pro, and what about all that sort of underpinnings of our whole system of justice and government? Don’t we want people to have that foundation in them when they’re going out providing legal services to the public? And maybe that is me falling into the trap of lawyers thinking they’re some sort of special snowflakes. Accountants don’t really think of themselves as some sort of special snowflakes. And us being special snowflakes is evidenced by us calling it a paraprofessional program.

OregonPEN: But this isn’t a new idea. I mean, this is in place in Washington State now, and has been for a long time.

Amanda Caffall: I’m not familiar with it in Washington. I know in California you don’t have to go to law school and you can just take the bar, but-

OregonPEN: No, you don’t have to go to an ABA accredited school in California, they’ll let you sit the bar if you go to a state accredited school.

Amanda Caffall: Oh, okay. That’s the difference.

OregonPEN: And so there’s a huge number of law schools, relatively speaking, in California compared to other states, because they can get a state accreditation without having to have ABA. Their grads can sit the bar exam, but that’s part of why the California bar pass rate is typically quite low.

Amanda Caffall: I don’t feel like this question is within the scope of my work, or the Commons Law Center’s work. Do I want people to be thinking about what’s broken about our legal education system? Yes. But what I want to think about is how do I develop a model that is replicable that helps solve the problem today? Part of my huge frustration is there’s conversations about legal incubators and training programs and the bar is having them, and committees are having them, and everyone’s having conversations, conversations, conversations with each other. And you know what that does for low income people who need a lawyer today? Nothing.

So I’m glad people are talking, that’s super. But sitting around talking about ideas is not what I consider what my role is. My role is to execute a new model that is replicable so that it can be transformative, so that we can really start doing something huge to impact who gets access to a lawyer and who doesn’t. So what I want people to do is buy into the idea that hey, we used to train lawyers by sending them to firms to work under the supervision of partners. Once they figured out what the heck they were doing, if they wanted to spin out and have a solo practice, great. But that’s how they got the training, was going to work for a law firm.

For whatever reason about law firm economics, or macroeconomics or social trends or whatever, that pipeline is broken, that is no longer how we train new lawyers to be competent providers of legal services. So how else are we going to train them so that 30% of them aren’t unemployed or underemployed, but that 100% of new lawyers who graduate law school directly start serving the public’s legal needs?

I don’t want to think about how to make life better for lawyers, I want to think about how are we going to get people access to services that they need. And my answer to that is hire them into this fellowship program, pair them with pro bono supervising attorneys, let them offer services on a sliding scale, and make it financially self sufficient so that it’s replicable and scalable and transformative and all that stuff. I want people to buy into we can establish a new model. The options are not legal aid or a private law firm, there are lots of options in between, and let’s start trying them and helping people, and let the cream rise to the top.

OregonPEN: Let’s talk about your clients – to the extent you can describe the clients that you’ve seen. You’ve had 19 cases, I think you said.

Amanda Caffall: Yep.

OregonPEN: And you feel like you’re getting a case every three calls. So there’s been 57 people who have called, and so 19 have ended up being engaged, needing legal services. Who are you serving, and how did they find you?

Amanda Caffall: Good question. So I’ll give you a couple client profiles. So one of my clients is a woman who lives on less than $16,000 a year in Social Security. She wanted to make sure that she had some kind of estate plan in place so that her son could take care of her if she became incapacitated. She called me asking for a will. She said “I need a will.” And I said okay, I learned about her situation, I made sure she was qualified for the program, and I said you know what, you don’t actually need a will. There’s nothing to probate, you’re not going to have a probate, you don’t have enough assets. Make sure you have a Transfer on Death checking account, and let me set you up with a power of attorney and advance directive and HIPPA, so that your family, your son and your sister can take care of you if anything happens. And, you know, your son gets the art supplies, your sister gets the craft supplies, they know, boom you’re taken care of. So that’s one example of a client. She came to me because she went to a senior law project clinic, and one of the attorneys that she spoke with knew about our program and said you know, you should call the Commons Law Center. So she did.

Business clients have come to me through the Oregon Secretary of State, which has a small business ombudsman. And that person is really excited about our program, gets tons of calls from businesses needing help. And their office has referred a number of business clients to the Commons Law Center. Same goes for the Small Business Development Center, which is housed at Portland Community College here in Portland. They’re part of the SBA, is SBA funded. So they’re referring clients to us, people come to them – so, for example, I have a client who’s a filmmaker right now. And he came to me wanting help forming an entity, he is a documentary filmmaker, he’s only made one film. It’s not really a job yet. And he needed help forming an entity, which I helped with.

And then he also had some pretty enormous intellectual property questions, and that is outside the scope of what I can do for him, so I’m working to find, among my stable of pro bono cooperating attorneys, somebody who will give him an hour of their time to help him understand what he needs to do, and how much it might cost him to do that stuff.

My nonprofit clients, there’s a law firm that helped. There’s a private law firm, Catalyst Law, it was their idea to start this nonprofit. They recruited me to make it go. And so they’ve had a number of clients contact them, who needed help forming a nonprofit organization, who couldn’t afford their rates and who qualified for the Commons Law Center. So I’m helping a fair amount of nonprofit organizations right now apply for tax exempt status, and clean up their corporate government stuff. These are largely nonprofits that are entirely volunteer run, and don’t have a lot of resources, either within the nonprofit or within the board of directors of a non profit organization.

The family law clients — I’m signed up for the [Oregon State Bar’s] Lawyer Referral Service and the Modest Means Service. And at least one family law client came in through the Lawyer Referral Service, and the other was a referral from an attorney who knows about our program. So it’s word of mouth at this point.

I have a list of 125 nonprofit organizations that are either community based or they are social service providers that are some sort of governmental entity. And I’m writing them all a letter and sending them a brochure saying this program exists, if we can help people that you’re helping, please let them know about us. And my hope is that I can establish relationships that are partnerships with some number of those nonprofit organizations. For example, the immigrant and refugee community organization, I reached out to them by email two weeks ago. And they said wow, thank you so much for telling us about your services. Will you come out and present about small business law, and forming a small business, to immigrant and refugee, current or prospective small business owners? And I said absolutely.

So we’re doing that in October. Because part of closing the access to justice gap is about getting people legal services they can afford, and part of it is about educating people that they even have a problem that has a legal solution. And so, making sure people have some of that initial education, so that when they are going into business with a partner, that they have a good operating agreement that has exit ramps. So that when something funky happens in their business or with their partnership, people aren’t losing their homes over it. They’re not made to be in a worse economic situation than they were before they started the business, just because they didn’t have their few legal ducks in a row that they needed.

And the thing that’s really important about our program is that for us to achieve financial self sufficiency, I have to make sure that we’re serving people across the income spectrum. So if all my clients are at 125% of the poverty level, I’m not going to be able to make the boat float financially. If they’re all at 400% of the federal poverty level, then I’m not helping — I want to be able to help people — across the spectrum, so that we’re really lifting a lot of boats, and targeting services to communities that need it. So a lot of the organizations that I hope to establish partnerships with work with communities of color or in communities of color. You don’t have to be a rocket scientist to know that communities of color have gotten a rough ride in Oregon and in the rest of America. And if our program can not only be a tool for access to justice but also social justice, great. Better.

OregonPEN: Yeah. So if you assess an individual based on income of 125% to 400% of the poverty level income, how do you access and screen to help prospective nonprofit, or a prospective small business? How do you determine, when an entity is the client or the prospective client, how do you scale your services for them?

Amanda Caffall: Good question. Basically the same way. I require that people submit either a copy of their most recently filed taxes, or a series of recent pay stubs. And so when somebody wants to start a small business, I do the same thing. If it’s two business partners going into business, I say great, let me look at your personal tax returns for the last year to see where you are. So in that regard, the business qualification is that same as the personal qualification, because typically my clients are at that formation stage. Now I do have at least one client who has a business that’s established, and that’s been going for a couple of years. And so for their business, I was able to sit with them. And it’s a husband and wife and they both work for and run the business together, so their personal finances are the business’s finances too, their salary and earning is reflected there.

So for that client, I said let me see a copy of your business tax return, to make sure that the highest income earners don’t make more than $55,000 a year, and that the annual operating budget of the business is less than $1 million. And this is on my website, on the legal services page, there are qualifying sheets for individuals and for businesses and nonprofits, sort of breaks this down. And so if it’s an hourly business client for example, for whatever we’re working on if I have to be hourly, and the highest income earners earn $55,000 a year, then their rate is the highest hourly rate I’ll charge. So that’s how we do it for businesses and nonprofits, it is still really looking at the taxes and the individuals, and who’s making money.

For a nonprofit organization it’s the same thing. If you come to me and want to start a nonprofit organization with your partner — So this is a great example. I have a client who, with her husband and another person, are starting a nonprofit to raise money for cystic fibrosis research. And I said great, I want to see a copy of your personal tax returns, to make sure that you’re personally qualified for the program. Now in that case, the personal situation was really entwined with the nonprofit situation because it was a family starting a thing to raise money for cystic fibrosis research. And, for example, I have a nonprofit client right now that their annual operating budget is 235,000 dollars a year. I require that the budget is less than a million, but really I’m focusing on organizations that are below the $250k mark. Most of the nonprofits I serve haven’t crossed the $50,000 a year threshold and operating budget.

Amanda Caffall: This … When I first put the fee scale together for nonprofits, I said okay, we’ll only serve nonprofits if the highest salary of the highest income earner at the nonprofit organization makes less than $50,000 a year. I sat down with the Nonprofit Association of Oregon and I said all right, here’s how it works, here’s some qualifying nonprofits. And they said “Oh gee, you’re missing a lot of nonprofits who can’t afford legal services by limiting your provision of services to organizations that have the highest income earner earning less than 50k. And they also said it doesn’t seem fair for you to be considering the personal economic circumstances of individuals who work at a nonprofit, rather than the nonprofit itself. So, this one client I have, their executive director makes $80,000 a year, the nonprofit’s budget is $235,000 a year. So in that case, I looked at the budget and the financials and tax filings of the nonprofit, to qualify them.

So it’s a little bit squishy in the nonprofit context, and it moves a little bit more. But if somebody who made $500,000 a year called me and said, hey I want to start a nonprofit for Ferrari fans, and we’re all going to get together and drive our Ferraris around, I’d be like that’s really nice but you can go downtown and hire a market rate lawyer for that. I’m not going to help you do that, not because we don’t like Ferraris, but because if you have enough money to have Ferraris, you can go get a market rate lawyer. My services aren’t designed for you.

Amanda Caffall: The other things that are super important, is that when I’m qualifying individuals, I’m requiring that they give me their tax returns so I can look at their income, but I’m also requiring that they disclose their assets. Because if you make $35,000 a year but you have two million dollars in a trust or a brokerage account or something, our services aren’t for you. You have assets and resources, and you can hire a market rate lawyer to help you, just take some money out of your two million dollar brokerage account.

OregonPEN: Well, sure, Legal Aid screens the same way. I mean, it’s not just current income, it’s also assets. It makes sense to me, anyway.

Amanda Caffall: I talked with a forty year old family law nonprofit based in Los Angeles, and they said nope, we only look at income, we don’t look at assets. And my board president and I were like really? Gee, that doesn’t seem right.

OregonPEN: Yeah. So you basically serve what I call the kitchen table nonprofits, the mom and pop who, it’s them and their friends forming a volunteer board, and there’s not much money there yet it sounds like.

Amanda Caffall: Yeah. Although some of them are growing concerns. Like the nonprofit with the ED who’s making 80 grand, their nonprofit has been around since 2011, they have ten years of stable financial support, but still their budget is small, and legal help isn’t something that’s built into their budget because it’s really tightly designed around delivering their programs.

OregonPEN: Right. So how do you keep from getting buried in landlord-tenant law, or more realistically, tenant law?

Amanda Caffall: I don’t offer that service.

OregonPEN: So even people in crisis who really meet your income, it’s just not there?

Amanda Caffall: Right. The services we offer are for businesses, nonprofits. We offer estate planning and probate. Now those were the first four we started with, because those were the first four areas that I had adequate pro bono supervision for.

When I first started working on this last August, August 15 actually, is when I dove into this project, so we’re coming up on a year. When I first dove into this, I went out, I met with Legal Aid, I met with the Campaign for Equal Justice, I met with St. Andrew. I talked to lawyers, I talked to the Oregon State Bar, I talked to Oregon Law Foundation. And the response I got was “Cool program, but there’s already a small business legal clinic and are you really helping people who need it the most? Can’t you offer family law, because that’s an enormous area of need?” And I heard that again, and again, again and again. And so in March, about a year ahead of schedule, I was able to bring family law into our suite of services.

We have a resource sharing agreement with a local family law firm, that has agreed to offer services on our sliding scale. So for family law matters, typically I serve as a project manager. In some ways, I’m sort of turning the partner associate relationship on its head, and then changing some stuff about it. So in my world, the associate does all the relationship management, all the billing, the initial intake. And the “partner,” who’s the experienced legal beagle in the relationship, they come in and do the legal services. So in the family law context, I’m able to offer a sliding scale services through the Commons Law Center, because I have a partnership with a family law firm that helps me actually provide the services. But the idea is that we build up the internal capacity within the Commons Law Center so that we can just use pro bono family law counsel rather than having to pay for sliding scale counsel.

The other thing I should mention is that our five year pro forma budget does envision an on-staff supervising attorney. And it’s likely that that person will need to have family law experience, because I see that as our biggest opportunity for growth. I see that as an area where we could really have a big impact for people who need help but can’t afford market rates. And so some time, and I don’t know when, but some time we do envision having an on-staff supervising lawyer, maybe in family law. We’ll just have to see.

OregonPEN: Yeah. I used to volunteer at Legal Aid, and the family law and domestic violence response is a huge fraction of their workload. Do you get into that through your family law? Do you get into restraining orders and things like that?

Amanda Caffall: Haven’t yet, but anticipate we will. Especially once I start this outreach to nonprofit organizations. So yeah, the family law stuff we do include custody, parenting time, dissolution. And we can do restraining order work as well. But the challenge there is it can’t be for free. That’s the hard part.

I had a woman call last week, she’s got five kids, she’s never worked, had a mean, controlling husband. They finally broke up, she’s living with her mom and five kids. Controlling husband never let her work, he’s exposing the kids to potential sexual assault by this crappy cousin of theirs. And I had to tell this woman, I would love to help you, I need you to find a $1,000. That sucks. I just kept thinking about that. And I really wish that I had a better answer for her but I don’t because this is the model. I’m not asking her for $4,000 like somebody downtown would, but I am asking her to find $1,000 bucks.

And that’s hard. I would like to say no, shoot, come on in, let me help you, let’s figure it out. But I don’t have those resources, that’s not what this model is.

OregonPEN: Yep. I get it. So are you getting any breaks to help reduce your overhead, to make your system more viable? There’s a lot of cost to running a law office that most people aren’t aware of, PLF just being one of them.

Amanda Caffall: Right.

OregonPEN: But your space and your utilities and your phone, are you getting any breaks, or are you paying market rates for everything you buy?

Amanda Caffall: Huge breaks. So that’s the great benefit of being a 501(c)(3) nonprofit. I mean, one of the many benefits, besides doing charitable work. So I have a bunch of digital applications that I use. For example, I use something called Box.com for all my file storage, for all my files within the cloud. And all my files are electronic only, I have notes and then I scan them and I shred the notes. So everything lives on the cloud, and I pay 50% of what someone in private practice would pay to use that cloud. Same thing for my time tracking system.

The firm that thought this was a good idea is hosting office space. They are hosting my phone system, and they are hosting a couple other things, like my fax system, and my electronic signature system. I need to get those on my own system, but rather than paying ten dollars a month for those services, I hope to pay five dollars a month for those services. Every time I have to buy something, my first question to the person is do you offer a discount for a nonprofit organization? And most places do. And also taking advantage of free stuff. I have a free conflict system, it’s a customer relationship manager called Insightly, and it’s a free program so I don’t have to pay for that.

Now this fall, starting in September I will have to start paying for my own office space. But it will be discounted office space, I won’t be paying market rate because I’ll continue to be hosted partially by Catalyst Law.

OregonPEN: Very good. So I’ve taken an hour of your time, for which I’m very grateful. And I appreciate you’re being willing to talk to me about this. Is there anything that you want to say in summary about what you’re doing and where you’re going?

Amanda Caffall: I want to say that I’m really excited about the potential for collaboration, both between the pro bono lawyers who participate in my program, and the fellows, but also with the law schools, the bar association, the private bar, the law firms. I think it’s really easy, because I’ve seen this happen in conversations I’m having with lawyers, it’s really easy for people to go the problem is so big and huge, and here I am earning a nice salary at private practice. And now I feel really guilty and crappy about myself, and am I part of the problem?

And I don’t want to trigger that in people. I want to trigger people’s optimism that we can do something. Like yeah, we have some pretty huge problems in our industry, and we haven’t even really talked about like sexism and racism.

But let’s just take access to justice and unemployed new lawyers. Huge problem, but there’s really something meaningful and powerful that we can do. And that’s really what I’m excited about, I’m excited to see who collaborates with this program, how collaborating with this program and learning from this program inspires other people to start new programs, and I just think there’s so much potential for programs like the Commons Law Center to really help the people who need it, and I’m really excited to facilitate that collaboration as best I can, to help consumers, people with legal problems, get legal help.

OregonPEN: Very good. There is one question that popped into my head while you were saying that. You know, we had a big national discussion, or shouting match, whatever you want to call it, about whether there is a right to healthcare. Do you think there should be recognized right to legal services? Do people have a right, a civil Gideon right? Do they have a right to an attorney when their lives and their well being is at risk?

Amanda Caffall: I’ll answer that by sharing a fascinating thing I heard on NPR this morning, that Mayor Bill De Blasio in New York City just committed that every person going through landlord-tenant court, all the tenants would have a lawyer. He guaranteed they would all have a lawyer that they didn’t have to pay for. And it’s going to cost the City of New York something like 200 million dollars a year. That’s incredible. The report also said that they think it’ll save the city of New York 300 million dollars a year in support for shelter services, stuff like that. So I thought that was really interesting and awesome. Yay, Bill De Blasio. I’m going to share it on the Commons Law Center Facebook page today, I’m so excited about what he’s done.

Here’s the thing I think is interesting. So … And this isn’t really … I don’t have an answer to your question because I’m not sure, but I do know that the thing that was supposed to make the United States of America different was that our country was founded on the rule of law, and that we’re a nation of laws not a nation of men. And the rule of law on the national stage we are seeing play out how important it is. And you might say we’re in a constitutional crisis of sorts.

So I had coffee with Michael Lavelle, the current president of the Oregon State Bar, and he said, “Amanda, when most people don’t have access to those laws, at some point they stop appreciating them, respecting them.”

And so to my mind, people having access to civil legal care, that’s important for the health of our democracy. That’s important for the rule of law perpetuating. You know what I mean? If four out of five people can’t access the law or enforce their rights under the law, then do four out of five people not give a hoot about the law at all? Do they care if the constitution burns? Not really doing much for them if they can’t access it. So I think that’s an interesting question we can ask ourselves, is do we have a right to civil legal care? Maybe, maybe not.

But what happens really practically in our democracy when most people don’t have access to civil legal care is the question.

OregonPEN: If 80% of the people didn’t have access to healthcare, I think the discussion about whether health care is a right would be much different. Well, Winston Churchill said that Americans can always be counted on to do the right thing after first exhausting all the alternatives.

As Western Oregon bakes in merciless heat, it is an appropriate moment to think about our precarious and fragile electric grid, sometimes known as “The World’s Biggest Machine.” That machine is still mainly powered by fossil fuels, directly or indirectly. And it turns out that the tools we are adding to reduce the carbon-emitting fossil fuel dependency (see “merciless heat” above) prove once again that famous old engineering truth TANSTAAFL — “There Ain’t No Such Thing as a Free Lunch.”

It’s sobering to imagine what happens if (a) Oregon actually does add a million guests to its own resident population during the weekend before the upcoming total solar eclipse on 21 August, and (b) this week’s blistering high temperatures return for the eclipse, causing thousands of air conditioners to run continuously, just as the extraordinary electric demand for cooking and pumping water to all of us causes transmission lines to sing with the heavy energy flows they carry. Add just one bit of instability — a transformer failure, a wind-fueled wildfire — and the West could easily experience a blackout comparable to the Northeast’s catastrophic failure on 14 August 2003.

The only downside to being lucky enough to avoid any such failure this August is that such luck would mean we are likely to remain oblivious to the problem. Were we wise, we would be aiming for a crash program to reduce our grid fragility by reducing demand — especially peak summer demand, but also overall year-round base demand —  sharply, along with sharp changes in building codes to require new structures to be as energy frugal (or net energy positive) as they can be.

Gail Tverberg’s penetrating insights are frequently featured here because she is one of the few analysts who is entirely free of conventional thinking about energy and who dares to insist on checking the math when hucksters tout the latest “revolution” that will solve all our energy problems without requiring anyone to do anything differently. Tverberg, known as “Gail the Actuary” is indeed someone whose profession was identifying long-run risks and figuring out how they could be assessed accurately. We are lucky to have her sharing her insight with us.

by Gail Tverberg, Our Finite World

How should electricity from wind turbines and solar panels be evaluated? Should it be evaluated as if these devices are stand-alone devices? Or do these devices provide electricity that is of such low quality, because of its intermittency and other factors, that we should recognize the need for supporting services associated with actually putting the electricity on the grid? This question comes up in many types of evaluations, including Levelized Cost of Energy (LCOE), Energy Return on Energy Invested (EROI), Life Cycle Analysis (LCA), and Energy Payback Period (EPP).

I recently gave a talk called The Problem of Properly Evaluating Intermittent Renewable Resources (PDF) at a BioPhysical Economics Conference in Montana. As many of you know, this is the group that is concerned about Energy Returned on Energy Invested (EROI). As you might guess, my conclusion is that the current methodology is quite misleading. Wind and solar are not really stand-alone devices when it comes to providing the kind of electricity that is needed by the grid. Grid operators, utilities, and backup electricity providers must provide hidden subsidies to make the system really work.

This problem is currently not being recognized by any of the groups evaluating wind and solar, using techniques such as LCOE, EROI, LCA, and EPP. As a result, published results suggest that wind and solar are much more beneficial than they really are. The distortion affects both pricing and the amount of supposed CO2 savings.

One of the questions that came up at the conference was, “Is this distortion actually important when only a small amount of intermittent electricity is added to the grid?” For that reason, I have included discussion of this issue as well. My conclusion is that the problem of intermittency and the pricing distortions it causes is important, even at low grid penetrations. There may be some cases where intermittent renewables are helpful additions without buffering (especially when the current fuel is oil, and wind or solar can help reduce fuel usage), but there are likely to be many other instances where the costs involved greatly exceed the benefits gained. We need to be doing much more thoughtful analyses of costs and benefits in particular situations to understand exactly where intermittent resources might be helpful.

A big part of our problem is that we are dealing with variables that are “not independent.” If we add subsidized wind and solar, that act, by itself, changes the needed pricing for all of the other types of electricity. The price per kWh of supporting types of electricity needs to rise, because their EROIs fall as they are used in a less efficient manner. This same problem affects all of the other pricing approaches as well, including LCOE. Thus, our current pricing approaches make intermittent wind and solar look much more beneficial than they really are.

A clear workaround for this non-independence problem is to look primarily at the cost (in terms of EROI or LCOE) in which wind and solar are part of overall “packages” that produce grid-quality electricity, at the locations where they are needed. If we can find solutions on this basis, there would seem to be much more of a chance that wind and solar could be ramped up to a significant share of total electricity. The “problem” is that there is a lower bound on an acceptable EROI (probably 10:1, but possibly as low as 3:1 based on the work of Charles Hall). This is somewhat equivalent to an upper bound on the affordable cost of electricity using LCOE.

This means that if we really expect to scale wind and solar, we probably need to be creating packages of grid-quality electricity (wind or solar, supplemented by various devices to create grid quality electricity) at an acceptably high EROI. This is very similar to a requirement that wind or solar energy, including all of the necessary adjustments to bring them to grid quality, be available at a suitably low dollar cost–probably not too different from today’s wholesale cost of electricity. EROI theory would strongly suggest that energy costs for an economy cannot rise dramatically, without a huge problem for the economy. Hiding rising energy costs with government subsidies cannot fix this problem.

Our current pricing approaches make intermittent wind and solar look much more beneficial than they really are.


Distortions Become Material Very Early

If we look at recently published information about how much intermittent electricity is being added to the electric grid, the amounts are surprisingly small. Overall, worldwide, the amount of electricity generated by a combination of wind and solar (nearly all of it intermittent) was 5.2% in 2016. On an area by area basis, the percentages of wind and solar are as shown in Figure 1.

Figure 1. Wind and solar as a share of 2016 electricity generation, based on BP Statistical Review of World Energy 2017. World total is not shown, but is very close to the percentage shown for China.

There are two reasons why these percentages are lower than a person might expect. One reason is that the figures usually quoted are the amounts of “generating capacity” added by wind and solar, and these are nearly always higher than the amount of actual electricity supply added, because wind and solar “capacity” tend to be lightly used.

The other reason that the percentages on Figure 1 are lower than we might expect is because the places that have unusually high concentrations of wind and solar generation (examples: Germany, Denmark, and California) tend to depend on a combination of (a) generous subsidy programs, (b) the availability of inexpensive balancing power from elsewhere and (c) the generosity of neighbors in taking unwanted electricity and adding it to their electric grids at low prices.

As greater amounts of intermittent electricity are added, the availability of inexpensive balancing capacity (for example, from hydroelectric from Norway and Sweden) quickly gets exhausted, and neighbors become more and more unhappy with the amounts of unwanted excess generation being dumped on their grids. Denmark has found that the dollar amount of subsidies needs to rise, year after year, if it is to continue its intermittent renewables program.

One of the major issues with adding intermittent renewables to the electric grid is that doing so distorts wholesale electricity pricing. Solar energy tends to cut mid-day peaks in electricity price, making it less economic for “peaking plants” (natural gas electricity plants that provide electricity only when prices are very high) to stay open. At times, prices may turn negative, if the total amount of wind and solar produced at a given time is greater than the overall amount of electricity required by customers. This happens because intermittent electricity is generally given priority on the grid, whether price signals indicate that it is needed or not. A combination of these problems tends to make backup generation unprofitable unless subsidies are provided. If peaking plants and other backup are still required, but need to operate fewer hours, subsidies must be provided so that the plants can afford to hire year-around staff, and pay their ongoing fixed expenses.

If we think of the new electricity demand as being “normal” demand, adjusted by the actual, fairly random, wind and solar generation, the new demand pattern ends up having many anomalies. One of the anomalies is that required prices become negative at times when wind and solar generation are high, but the grid has no need for them. This tends to happen first on weekends in the spring and fall, when electricity demand is low. As the share of intermittent electricity grows, the problem with negative prices becomes greater and greater.

The other major anomaly is the need for a lot of quick “ramp up” and “ramp down” capacity. One time this typically happens is at sunset, when demand is high (people cooking their dinners) but a large amount of solar electricity disappears because of the setting of the sun. For wind, rapid ramp ups and downs seem to be related to thunderstorms and other storm conditions. California and Australia are both adding big battery systems, built by Tesla, to help deal with rapid ramp-up and ramp-down problems.

There is a lot of work on “smart grids” being done, but this work does not address the particular problems brought on by adding wind and solar. In particular, smart grids do not move demand from summer and winter (when demand is normally high) to spring and fall (when demand is normally low). Smart grids and time of day pricing aren’t very good at fixing the rapid ramping problem, either, especially when these problems are weather related.

The one place where time of day pricing can perhaps be somewhat helpful is in lessening the rapid ramping problem of solar at sunset. One fix that is currently being tried is offering the highest wholesale electricity prices in the evening (6:00 pm to 9:00 pm), rather than earlier in the day. This approach encourages those adding new solar energy generation to add their panels facing west, rather than south, so as to better match demand. Doing this is less efficient from the point of view of the total electricity generated by the panels (and thus lowers EROIs of the solar panels), but helps prevent some of the rapid ramping problem at sunset. It also gets some of the generation moved from the middle of day to the evening, when it better matches “demand.”

In theory, the high prices from 6:00 pm to 9:00 pm might encourage consumers to move some of their electricity usage (cooking dinner, watching television, running air conditioning) until after 9:00 pm. But, as a practical matter, it is difficult to move very much of residential demand to the desired time slots based on price. In theory, demand could also be moved from summer and winter to spring and fall based on electricity price, but it is hard to think of changes that families could easily make that would allow this change to happen.

With the strange demand pattern that occurs when intermittent renewables are added, standard pricing approaches (based on marginal costs) tend to produce wholesale electricity prices that are too low for electricity produced by natural gas, coal, and nuclear providers. In fact, wholesale electricity rates for supporting providers tend to diverge further and further from what is needed, as more and more intermittent electricity is added. The dotted line on Figure 2 illustrates the falling wholesale electricity prices that have been occurring in Europe, even as retail residential electricity prices are rising.

Figure 2. European residential electricity prices have risen, even as wholesale electricity prices (dotted line) have fallen. Chart by Paul-Frederik Bach.

The marginal pricing scheme gives little guidance as to how much backup generation is really needed. It is therefore left up to governments and local electricity oversight groups to figure out how to compensate for the known pricing problem. Some provide subsidies to non-intermittent producers; others do not.

To complicate matters further, electricity consumption has been falling rapidly in countries whose economies are depressed. Adding wind and solar further reduces needed natural gas, coal, and nuclear generation. Some countries may let these producers collapse; others may subsidize them, as a jobs-creation program, whether this backup generation is needed or not.

Of course, if a single payer is responsible for both intermittent and other electricity programs, a combined rate can be set that is high enough for the costs of both intermittent electricity and backup generation, eliminating the pricing problem, from the point of view of electricity providers. The question then becomes, “Will the new higher electricity prices be affordable by consumers?”

The recently published IEA World Energy Investment Report 2017 provides information on a number of developing problems:

“Network investment remains robust for now, but worries have emerged in several regions about the prospect of a ‘utility death spiral’ as the long-term economic viability of grid investments diminishes. The still widespread regulatory practice of remunerating fixed network assets on the basis of a variable per kWh charge is poorly suited for a power system with a large amount of decentralised solar PV and storage capacity.”

The IEA investment report notes that in China, 10% of solar PV and 17% of wind generation were curtailed in 2016, even though previous problems with lack of transmission had been fixed. Figure 1 shows China’s electricity from wind and solar amounts to only 5.0% of its total electricity consumption in 2016.

Regarding India, the IEA report says, “More flexible conventional capacity, including gas-fired plants, better connections with hydro resources and investment in battery storage will be needed to support continued growth in solar power.” India’s intermittent electricity amounted to only 4.1% of total electricity supply in 2016.

In Europe, a spike in electricity prices to a 10-year high took place in January 2017, when both wind and solar output were low, and the temperature was unusually cold. And as previously mentioned, California and South Australia have found it necessary to add Tesla batteries to handle rapid ramp-ups and ramp-downs. Australia is also adding large amounts of transmission that would not have been needed, if coal generating plants had continued to provide services in South Australia.

None of the costs related to intermittency workarounds are currently being included in EROI analyses. They are generally not being included in analyses of other kinds, either, such as LCOE. In my opinion, the time has already arrived when analyses need to be performed on a much broader basis than in the past, so as to better capture the true cost of adding intermittent electricity.

Slide 1

Slide 2

Slide 3

Slide 4

Of course, as we saw in the introduction, worldwide electricity supply is only about 5% wind and solar. The only parts of the world that were much above 5% in 2016 were Europe, which was at 11.3% in 2016 and the United States, which was at 6.6%.

There has been a lot of talk about electrical systems being operated entirely by renewables (such as hydroelectric, wind, solar, and burned biomass), but these do not exist in practice, as far as I know. Trying to replace total energy consumption, including oil and natural gas usage, would be an even bigger problem.

Slide 5

The amount of electricity required by consumers varies considerably over the course of a year. Electricity demand tends to be higher on weekdays than on weekends, when factories and schools are often closed. There is usually a “peak” in demand in winter, when it is unusually cold, and second peak in summer, when it is unusually hot. During the 24-hour day, demand tends to be lowest at night. During the year, the lowest demand typically comes on weekends in the spring and fall.

If intermittent electricity from W&S is given first priority on the electric grid, the resulting “net” demand is far more variable than the original demand pattern based on customer usage. This increasingly variable demand tends to become more and more difficult to handle, as the percentage of intermittent electricity added to the grid rises.

Slide 6

EROI is nearly always calculated at the level of the solar panel or wind turbine, together with a regular inverter and whatever equipment is used to hold the device in place. This calculation does not consider all of the costs in getting electricity to the right location, and up to grid quality. If we move clockwise around the diagram, we see some of the problems as the percentage of W&S increases.

One invention is smart inverters, which are used to bring the quality of the electrical output up closer to grid quality, apart from the intermittency problems. Germany has retrofitted solar PV with these, because of problems it encountered using only “regular” inverters. Upgrading to smart inverters would be a cost not generally included in EROI or LCOE calculations.

The next problem illustrated in Slide 6 is the fact that the pricing system does not work for any fuel, if wind and solar are given priority on the electric grid. The marginal cost approach that is usually used gives too low a wholesale price for every producer subject to this pricing scheme. The result is a pricing system that gives misleadingly low price signals. Regulators are generally aware of this issue, but don’t have a good way of fixing it. Capacity payments are used in some places as an attempted workaround, but it is not clear that such payments really solve the problem.

It is less obvious that in addition to giving too low pricing indications for electricity, the current marginal cost pricing approach indirectly gives artificially low price indications regarding the required prices for natural gas and coal as fuels. As a result of this and other forces acting in the same directions, we end up with a rather bizarre situation:  (a) Natural gas and and coal prices tend to fall below their cost of production. (b) At the same time, nuclear electricity generating plants are being forced to close, because they cannot afford to compete with the artificially low price of electricity produced by the very low-priced natural gas and coal. The whole system tends to be pushed toward collapse by misleadingly low wholesale electricity prices.

Slide 6 also shows some of the problems that seem to start arising as more intermittent electricity is added. Once new long distance transmission lines are added, it changes the nature of the whole “game.” It becomes easier to rely on generation added by a neighbor; any generation that a country might add becomes more attractive to a neighbor. As long as there is plenty of electricity to go around, everything goes well. When there are shortages, then arguments begin to arise. Arguments such as these may destabilize the Eurozone.

One thing I did not mention in this chart is the increasing need to pay intermittent grid providers not to produce electricity when there is an oversupply of electricity. In the UK, the amount of these payments was over 1 million pounds a week in 2015.  I mentioned previously that in China, 17% of wind generation and 10% of solar PV generation were being curtailed in 2016. EROI calculations do not consider this possibility; they assume that 100% of the electricity that is generated can, in fact, be used by the system.

Slide 7

The pricing system no longer works because W&S are added whenever they become available, in preference to other generation. In many ways, the pricing system is like our appetite for food. Usually, we eat when we are hungry, and the food we eat reduces our appetite. W&S are added to the system with total disregard for whether the system needs it or not, leaving the other electricity producers to try to fix up the mess, using the false pricing signals they get. The IEA’s 2017 Investment Report recommends that countries develop new pricing schemes that correct the problems, but it is not clear that this is actually possible without correcting the hidden subsidies.

Slide 8

Why add more electricity supply, if there is a chance that you can use the new supply added by your neighbor?

Slide 9

South Australia had two recent major outages–both partly related to adding large amounts of wind and solar to the electric grid, and the loss of its last two coal-fired electricity generation plants. The first big outage came during a weather event. The second big outage occurred when temperatures were very high during summer, and because of this, electricity demand was very high.

One planned workaround for supply shortages was natural gas. Unfortunately, South Australia doesn’t actually have a very good natural gas supply to operate its units generating electricity from natural gas. Thus, the available natural gas generators could not really respond as hoped, except at very high prices. Some changes are now being made, including a planned Tesla battery system. With the changes being made, there are reports of electricity rate increases of up to 120% for businesses in South Australia.

The irony of the situation is that Australia is a major natural gas exporter. Businesses expected that they could make more money selling the natural gas abroad as LNG than they could by providing natural gas to the citizens of South Australia. These exports are now being curbed, to try to help fix the South Australia natural gas problem.

These issues point out how interconnected all of the different types of electricity generation are, and how quickly a situation can become a local crisis, if regulators simply assume “market forces will provide a solution.”

Slide 10

An expert panel in Australia has recommended an approach similar to this. It simply becomes too difficult to operate a system with built-in subsidies.

Slide 11

Slide 12

Timing makes a difference. The payments that are made for interest need to be made, directly or indirectly, with future goods and services that can only be made using energy products. Thus, they also require the use of energy products.

Slide 13

Slide 14

There is a real difference between (a) looking at the actual operating experiences of an existing oil and gas or coal company, and (b) guessing what the future operating experience of a system operated by wind panels and solar panels might be. The tendency is to guess low, when it comes to envisioning what future problems may arise.

It is not just the wind turbines and solar panels that will need to be replaced over time; it is all of the supporting devices that need to be kept in good repair and replaced over time. Furthermore, the electric grid is dependent on oil for its upkeep. If oil becomes a problem, there is a real danger that the electric grid will become unusable, and with it, electricity that is generally distributed by the grid, including wind and solar.

Slide 15

Slide 16

Economies and humans are both self-organized systems that depend on energy consumption for their existence. They have many other characteristics in common as well.

Slide 17

We know that with humans, we really need to examine how a new medicine or a change in diet works in practice. For one thing, medicines and diets aren’t necessarily used as planned. Unexpected long-term changes occur that we could not anticipate.

Slide 18

The same kinds of problems occur when wind and solar are added to a grid system. We really have to look at what is happening to see the full picture.

Slide 19

Anyone who has followed the news knows about medicine’s long history of announcements followed by retractions.

Slide 20

A fairly similar situation can be expected to happen with proposed energy solutions.

Slide 21

There is a whole package of costs and a whole range of direct and indirect outcomes to consider.

Slide 22

As far as I know, none of the attempts at producing a system that operates on 100% renewable energy have been a success. There has been some reductions in fossil fuel usage, but at a high cost.

Slide 23

2013 Weissabach et al. EROI analysis examines a situation with partial buffering of wind and solar (approximately 10 days worth of buffering). It leaves out several other costs of bringing wind and solar up to grid quality electricity, such as extra long distance transmission costs, and more significant buffering to allow transferring electricity produced in spring and fall to be saved for summer or winter. These authors calculated a partially buffered EROI of 4:1 for wind, and a partially buffered EROI range of 1.5:1 to 2.3:1 for solar PV.

Of course, more investigation, including looking at the full package of needed devices to provide non-intermittent electricity of grid quality, is really needed for particular situations. Improvements in technology would tend to raise EROI indications; adding more supplemental devices to bring electricity to grid quality would tend to reduce EROI indications.

If the cutoff for being able to maintain a modern society is 10:1, as mentioned earlier, then wind and solar PV would both seem to fall far below the required EROI cutoff, if they are to be used in quantity.

If, as Hall believes, an EROI as low as 3:1 might be useful, then there is a possibility that some wind energy would be helpful, especially if a particular wind location has a very high capacity factor (can generate electricity a large share of the time), and if pricing problems can be handled adequately. The EROI of solar PV would probably still be too low in most applications. In any event, we need to be examining situations more closely, instead of simply assuming that hidden subsidies can be counted on indefinitely.

Republished with kind permission of the author, Gail Tverberg. First published as “Researchers have been underestimating the cost of wind and solar” at Our Finite World, where “Gail the Actuary” explores how oil limits affect the economy.

Where the Money Goes

As Oregon struggles with massive unmet needs — such as for an energy transition and for reducing the fragility of the electric grid and for preparing for the inevitable Pacific Subduction Zone earthquake — “The Big One” — it’s important to know that there is a place in America where money is no object, and where the self-anointed “realists” get to play with “gee-whiz” toys to their hearts’ content.

“There are only two phases of a program. The first is ‘It’s too early to tell.’ The second: ‘It’s too late to stop.'”

How Not to Build a Ship:
The USS Gerald R. Ford

President Trump speaks on the USS Gerald Ford

President Trump used the Navy’s next generation aircraft carrier, the CVN-78 USS Gerald R. Ford, as a backdrop to unveil his vision for the next defense budget in March 2017. The moment was meant to symbolize his commitment to rebuilding the military, but it also positioned the President in front of a monument to the Navy’s and defense industry’s ability to justify spending billions in taxypayer dollars on unproven technologies that often deliver worse performance at a higher cost. The Ford program also provides yet another example of the dangers of the Navy’s and industry’s end-running the rigorous combat testing that is essential to ensuring our fighting men and women go to war with equipment that works.

EA-6B Prowler Recovery

“An EA-6B Prowler, assigned to the “Rooks” of Electronic Warfare Squadron One Three Seven (VAQ-137), catches one of four arresting wires on the flight deck of the aircraft carrier USS Enterprise (CVN- 65). (U.S. Navy photo)”

The Navy had expected to have the ship delivered in 2014 at a cost of $10.5 billion. But the inevitable problems resulting from the concurrency the Navy built into developing the Ford’s new and risky technologies, more than a dozen in all, caused the schedule to slip by more than three years and the cost to increase to $12.9 billion—nearly 25 percent over budget.

For all this time and money, “poor or unknown reliability of the newly designed catapults, arresting gear, weapons elevators, and radar, which are all critical for flight operations, could affect CVN-78’s ability to generate sorties, make the ship more vulnerable to attack, or create limitations during routine operations. The poor or unknown reliability of these critical subsystems is the most significant risk to CVN-78.”

EMALS Catapult, Failure to Launch

The problems with the ship’s systems, including the catapult, are well-known. But President Trump still caught virtually every Pentagon watcher off guard when, in the middle of a wide-ranging Time Magazine interview, he said he had directed the Navy to abandon the new “digital” aircraft catapult on future Ford-class carriers. Instead he wants the Navy to revert to the proven steam catapults, which have been in use for decades.

The President is correct when he says there are significant problems with the Ford’s “digital” catapult, but abandoning it in future ships will pose significant problems.

The Ford’s “digital” catapult is, in fact, the Electromagnetic Launch System (EMALS). It was designed to provide the boost necessary for aircraft to reach take-off speed within the short deck length of an aircraft carrier. In the long run, it is intended to be lighter, more reliable, and less expensive than the steam system. Unfortunately, the EMALS is immature technology, and its development is proceeding concurrently with the ship’s design and development. So far, the program has not lived up to the promises made.

Steam-powered catapults, though said to be maintenance-intensive, are proven technology. They have been in service with continuous upgrades and satisfactory reliability for more than half a century. In this system, steam pressure pushes a piston down a track set into the deck of the ship. The ship’s crew prepares the airplane for launch by attaching its nosewheel to a shuttle connected to the piston. When the steam valve opens, the pressure behind the piston accelerates the shuttle and plane down the track, reaching a speed high enough to allow aircraft to take off.

US Navy aircraft catapult shuttle

(U.S. Navy photo by Mass Communication Specialist 3rd Class Lex T. Wenberg/Released)

The steam to power the catapult is generated by the ship’s nuclear reactor main boiler, the same boiler that generates the steam for the propulsion turbines. That steam is piped from the boiler room to the catapults at the bow.

The new EMALS stores an enormous electrical charge (enough to power 12,000 homes three seconds, the time it takes to launch an aircraft) and then quickly releases the current into massive electromagnets that push the shuttle down the track.

The new electromagnetic catapult is intended to launch everything from small unmanned vehicles to heavy fighter planes. The Navy claims EMALS will save money over time because it is said to require less people to operate and is predicted to be easier to maintain. But testing has already revealed the Navy underestimated the workload and the number of people necessary to operate the system. As a result, the Navy has to redesign some berthing areas to accommodate more people. It was also supposed to increase the lifespan of aircraft by putting less stress on their airframes by using a more controlled release of energy during a catapult launch. Unfortunately, recent tests of land-based EMALS prototypes showed that the system actually overstressed F-18 airframes during launch.

Perhaps even more serious is that the design makes it impossible for the crew to repair a catapult while the ship is launching planes with other catapults. This is done as a matter of routine on current carriers as each catapult operates independently of the other. When one of the steam catapults fails, the crew can make the necessary repairs while the adjacent catapults continue launching planes.

Like earlier carriers, The Ford has four launch catapults so that (theoretically), should one fail, the ship could continue operations using the remaining three. But the Navy found there is no way to electrically isolate each EMALS catapult from the others during flight operations, raising questions about the system’s operational suitability. The massive electrical charge needed to power the catapults is stored in three Energy Storage Groups, each using four heavy flywheel-generators. The three groups together power all four catapults and cannot be electrically disconnected from a single failed catapult to allow repairs while the other three catapults launch planes.

Perhaps even more serious is that the design makes it impossible for the crew to repair a catapult while the ship is launching planes with other catapults.

This means that repairing the failed catapult must wait until all flight operations have been completed, or, in the event that multiple launchers fail, all flights may have to be suspended to allow repairs. Thus there is the possibility that the ship might not be able to launch any planes at a critical moment because the EMALS designers failed to provide independent power for each of the four catapults.

This problem is particularly acute because the EMALS has a poor reliability track record. The system thus far fails about once every 400 launches. This might seem like a reasonable record, but it is ten times worse than the 4,166 launches between failures the system is supposed to achieve per the contract specifications. At least four days of surge combat sortie rates are to be expected at the beginning of any major conflict—and delivering those sorties is, after all, the primary reason carriers are built in the first place. At the current failure rate, there is only a 7 percent chance that the USS Ford could complete a four-day flight surge without a launch failure, according to the office in charge of testing the ship, the Director of Operational Test and Evaluation (DOT&E).

The decision to pursue immature EMALS technology has been a boon to contractors, particularly San Diego-based General Atomics. With only a nuclear fusion magnetics background and no previous experience in carrier catapults, the company won the EMALS System Development and Demonstration contract on April 2, 2004. At the time, the contract was valued at $145 million. This figure has predictably ballooned over the years as risky, concurrent technology programs tend to do. The most recent figures released by the Pentagon’s Cost Assessment and Program Evaluation (CAPE) office show the Navy will have spent approximately $958.9 million simply to develop this one component—and more may well be required to correct current deficiencies.

The cost to build and install an EMALS system (four catapults) is another thing entirely. In January, the Navy awarded General Atomics another $532 million contract to install the system on the third-in-class Ford-class carrier, the USS Enterprise.

And although EMALS is problem-ridden and enormously expensive, replacing it with the proven steam catapult substitute would likely be more so. Using the steam catapult instead is impossible without a complete redesign of the nuclear reactor plant’s steam generating system. Because the Navy planned the Ford to be an electric ship, the reactor was not designed to produce service steam for major ship systems. So the reactor now can’t deliver the 4,050 pounds per minute of high pressure steam required by a steam-powered four-catapult installation. Furthermore, installing four new steam-powered catapult tracks would require a complete redesign and rebuilding of the supporting deck structure. The cost of both would be staggering and the delay may be upwards of two to three years.

AAG Arresting System

Of course, launching a fighter jet over the bow of the carrier is only one part of the equation. The jets also need to land, which is another very large challenge on a moving ship. Aircraft don’t really land on a ship; they essentially crash in a highly controlled fashion. Instead of rolling out to a stop on a conventional runway, a plane landing on an aircraft carrier has to catch a cable on the flight deck with a hook attached to the plane to bring it to a stop on the relatively short deck.

As it did with the catapult, the Navy decided to use unproven technology for the Ford’s electrical arresting system to capture aircraft during landings. This system, too, has been more of a challenge than the Navy expected. In an August 2016 memo about the Ford, the Pentagon’s top weapons buyer Frank Kendall said, “With the benefit of hindsight, it was clearly premature to include so many unproven technologies.”

Navies around the world have been using arresting systems for more than a century to land aircraft on ships. The US Navy installed its first system, consisting of sandbags and cables, on the USS Pennsylvania in 1911. The Navy currently uses a hydraulically braked arresting system called the MK 7 on the current Nimitz-class aircraft carriers. When the hook on the landing aircraft catches one of the cables on the deck, the cables are braked by an engine inside the ship. In effect a very large shock absorber, this engine is a plunger inside a cylinder filled with hydraulic fluid. When pulled by the deck cable, the plunger compresses the fluid which then flows through a metered valve calibrated to handle the weight of the type of aircraft being landed. The compressed fluid absorbs the energy of the landing and brings the aircraft to a stop in only 340 feet.

This hydraulic arresting gear system has been in use since 1961 and has been improved several times over the years. But as a high-tech selling point, it’s a non-starter. In order to get increased funding for the Ford program, the Navy chose to replace the proven hydraulics with an entirely new and untested electrical system, called the Advanced Arresting Gear (AAG). The original 2005 estimate for AAG development alone was $172 million. This figure was revised upwards in 2009 to $364 million, and has now ballooned to well over $1.3 billion, an astounding 656 percent increase.

The AAG is also built by General Atomics, and, as with the EMALS, the company doesn’t have any prior arresting gear experience. The AAG is based on a “Water Twister,” a paddlewheel inside a cylinder of water. When spun by the pull of the deck cable, the paddlewheel uses the resistance of the water to absorb 70 percent of the energy of the landing plane and bring it to a stop—with fine-tuning of additional braking forces provided by a very large electric motor. At least that is how it is supposed to work.

The Department of Defense Inspector General concluded in a July 2016 report that the entire program has been mismanaged.

“Ten years after the program entered the engineering and manufacturing development phase, the Navy has not been able to prove the capability or safety of the system to a level that would permit actual testing of the system on an aircraft carrier.”

Test personnel found damage due to insufficient strength of several subcomponents inside the water twister following developmental tests in 2012. The water twister required two years of “significant redesign”; the revised prototype passed land-based dead load tests two years later. The first aircraft tests, also land-based, occurred in 2016.

Separately from the twister failures, earlier failed tests revealed damage to the AAG’s cable shock absorber that the Navy attributed to the design’s complexity. This problem was also reportedly corrected.

Landings between AAG failures chart

Nevertheless, the latest reliability results show only 25 landings between operational mission failures of the AAG, 660 times fewer than the Navy’s requirement of 16,500. This makes it utterly impossible for the Ford to meet its surge sortie rate requirements. And, in an astonishing design oversight exactly like that of the EMALS, General Atomics engineers made it impossible to repair AAG failures without shutting down flight operations: the AAG power supply can’t be disconnected from the high-voltage supply while flights continue.

Even after spending an estimated $1.3 billion, the ability to correct the AAG’s dangerous unreliability remains so uncertain that the Navy cannot yet commit to a schedule for actual at-sea testing of the Ford.

Problems with the AAG are so bad that the Department of Defense asked the Navy to study shelving the idea completely for the follow-on ships in favor of an enhanced version of the proven MK-7 system currently in service. However, recommending to drop the AAG after spending $1.3 billion would have been a major admission of failure. Unsurprisingly, the Navy decided to stick with the AAG and push forward with plans to install it aboard the second Ford-class ship, the USS John F. Kennedy.

That decision may get overturned now that the Navy has had to report the AAG program’s costs exceed its 2009 estimate by at least 50 percent, triggering an automatic review. This is called a “Nunn-McCurdy” breach, named after the 1982 law that requires the Pentagon to review major weapon programs when their costs rise above certain levels. If a program’s cost estimates increase more than 50 percent, the program is supposed to be automatically cancelled unless the Secretary of Defense certifies the program as critical to national defense.

Of course it is extremely rare for any program to actually be cancelled by such means. The AAG will likely provide further proof of Fitzgerald’s First Law of defense acquisition:

“There are only two phases of a program. The first is ‘It’s too early to tell.’ The second: ‘It’s too late to stop.'”

Electrical Problems

Aircraft carriers require a lot of power. Earlier carriers used nuclear reactor-generated steam to drive two of the most power-hungry systems on board: the steam turbines that turn the propellers and the steam catapults that launch the planes. The Ford-class ships retained steam turbines for propulsion, but rather than piping steam from the reactors to power major ship systems directly, it uses steam to turn four main turbine generators (MTG) to generate electricity for the systems like the new electromagnetic catapults. Generating and managing the massive amount of electricity the ship needs has been a significant contributor to its budget and schedule troubles.

To feed these massive electrical demands, as well as the ship’s expanded electronics, the Ford’s four generators were designed to provide triple the total electrical power provided by the eight generators on the Nimitz class—13,800 versus 4,160 volts. These new ultra-high voltages pose substantial risks such as increased safety problems and increased electrical arcing and failure rates, particularly in humid salt atmospheres. They are also much more fragile than legacy systems, which can make the ship far easier to cripple in battle. Repairing damage to these systems often requires them to be powered down, which could impact other systems that didn’t sustain damage. The possibility that these risks could require substantial ship modification or render the Ford unsuitable for combat cannot be assessed until the completion of operational testing in 2020.

The Ford-class ships will be equipped with two newly developed Bechtel-built A1B nuclear reactors that together will generate approximately 25 percent more total thermal power and 300 percent more electrical power than the Nimitz’s A4B reactors. In the hopes of reducing the reactor operating manpower by two-thirds, the new reactors will halve the control valves, pumps, and piping and will be far more dependent on control automation than legacy reactors. The relatively inflexible automation and grossly reduced manning may significantly reduce the Ford’s ability to operate and survive in the face of battle damage. This is a problem inherent in the quest for strict efficiency. Because of the reduced manning, fewer people are available to fix problems in the event of battle damage. But the full implications of the risk cannot be assessed until operational testing is finished.

Underlining the risks of the inability to deal with battle damage associated with automation and ultra-high voltages, the Ford suffered a small electrical explosion on one of the four new MTGs in June 2016. The explosion threw debris into the turbine and sent smoke billowing throughout the ship. This incident was quickly followed in July by another similar event in a second MTG. A Navy investigation showed that both explosions were caused by faulty voltage regulators.

Fixing the damage is expected to cost approximately $37 million. As a temporary fix to prevent yet more delays to commissioning and in order to resume testing, the rotors inside both generators were removed and replaced. But, according to the Navy, MTG No. 2 will have to complete additional “full repairs” when the ship is in the post-shakedown phase, after it is commissioned.

These full repairs may be quite extensive. The Navy says the MTG can be repaired in place by replacing the unit’s rotors, but this will only happen during the post-shakedown overhaul period after the Ford’s commissioning.

This means that the USS Ford will be commissioned and put into active service with only a temporarily repaired electrical system. It will then have to return to the shipyard to undergo major generator repair work before plane launch and recovery tests can even commence.

Shock Trials

All of these systems have yet to be pitted against perhaps the biggest testing challenge any new Navy ship must face: Full Ship Shock Trials. These critical tests discover whether each new ship class is suitable for combat, and occur when the fully kitted-out ship heads out to sea with its crew. Explosives are detonated underwater in relatively close proximity to the ship in order to learn if the ship’s systems are sufficiently hardened to carry out missions in the rigors of combat conditions, and if the crew would be able to rapidly identify and fix any problems that resulted during those conditions.

The Navy first identified the need for such testing in World War II. It was observed that several newly designed ships were rendered useless because of “inadequate shock proofing of the ship systems” when mines or torpedoes merely exploded nearby. Since then, the Navy has required that shock hardness be “designed and engineered into ship platforms, aircraft and shipboard interface systems, ordnance and related equipment.” The official Navy instructions for ship-hardening lists 16 mission-essential systems that must continue functioning after a shock event, including propulsion, navigation, and communications. Thousands of components are put to the test. During shock trials for the Arleigh Burke-class destroyers, for instance, 4,460 unique components were monitored.

Navy rules used to require the first-in-class ship to go through shock trials. Despite the obvious importance of verifying shock-hardening, the Navy changed its rules in 2013. Now the Program Executive Officer for each ship class may select the first-in-class ship “or an early ship of each shock hardened class that shall be subjected to the shock validation process as part of post-delivery test and trials when required.” The timing of the rule change is important within the context of the USS Ford and the subsequent ships in her class: on June 18, 2012, the Navy attempted to abandon its plans to conduct Full Ship Shock Trials on the Ford, claiming that deferring the tests to a later ship was justifiable because components like the EMALS and AAG were shock hardened by design. Instead, the Navy announced its intention to conduct the shock trials on the second-in-class ship, CVN-79 USS John F. Kennedy. The Navy altered the testing plan while its own instructions still mandated the tests be conducted on the lead ship. It wasn’t until eight months later that the Navy issued its new instructions regarding shock trials.

The Navy met with resistance on the change of plans for the Ford from the DOT&E, which disapproved the USS Ford’s Test and Evaluation Master Plan. The plan didn’t sit well with the two senior members of the Senate Armed Services Committee, either. Senators John McCain (R-AZ) and Jack Reed (D-RI) both objected, saying that sending the ship out to sea before the tests “and potentially fighting without this testing gives us pause.” In the end, Deputy Secretary of Defense Robert Work, under pressure from SASC, overruled the Navy and ordered the USS Ford to undergo shock trials, saying the tests “will be conducted to ensure the survivability of the CVN-78 design is understood prior to beginning operational deployments.”

It is particularly important that the Ford go through early shock testing because of its multiple new, high-risk systems, all of them critical to the carrier mission but particularly susceptible to shock and battle damage. These vulnerable, unproven systems include the highly automated A1B nuclear reactor, the EMALS catapults, the AAG arresting gear, the ultra-high 13,800-volt electrical distribution system, the dual-band radar, and the new main turbine generators. Postponing the test to the second ship in class is fraught with risks and potential costs. Had the Navy’s change in plans gone unchallenged, the shock trials to confirm whether the ship’s design could operate successfully in combat conditions likely wouldn’t be completed until 2025. The Navy would run the risk of sending the $13 billion Ford with 4,300 crew members into a situation where a single close-proximity explosion could render it useless and vulnerable to being sunk. Moreover, if the tests reveal fundamental design problems when they are finally completed, the Navy would have to engage in an expensive retrofit of the Kennedy and the Ford. In fact, by the time the deferred tests would take place, construction of the third-in-class ship, CVN-80 USS Enterprise, would be well underway and it, too, would need expensive retrofitting.

The decision to test the Ford as originally required was a clear—though unfortunately reversible—victory for long-time advocates of realistic combat and live-fire testing. The whole saga is a clear example of how and why the services and contractors work to thwart the testing process. The MITRE Corporation, a federally funded research and development center, published a report titled Navy Ship Underwater Shock Prediction and Testing Capability Study that found service officials and contractors with an interest in rushing ships into full scale production—namely, the concurrency advocates—often want to avoid this kind of realistic combat testing:

“Shock trials cost time and money, and [Full Ship Shock Trials] occurs at exactly the time where there is the least incentive to go back to the drawing board to fix any issues that arise.”

Certainly, until the trials are completed, DoD officials and Congress need to maintain vigilant oversight to ensure the ship’s combat suitability is properly tested and evaluated before it enters service.

Actual Utility of Aircraft Carriers

And then there is the overarching matter of the actual relevance of aircraft carriers in the future. Plenty of frank commentators have questioned in recent years whether the day of the supercarrier has passed. The wisdom of investing such a large amount of capital into a single weapon system deserves scrutiny.

There is the basic matter of battlespace economics. The USS Ford costs nearly $13 billion so far. In a few years, she will likely carry a complement of at least 50 F-35Cs. Conservatively, each aircraft will have a real cost of $185 million…for a total of $9.25 billion worth of strike aircraft concentrated on one ship. That means this one ship when underway will be worth at least $22.25 billion, to say nothing of the 4,297 sailors on board. That is putting a great deal of proverbial eggs in a single basket.

Closely related is the economics of fleet size. Even within a reasonably growing budget, it is impossible to expand the fleet while buying four or more carriers at $13 billion a pop, each with $9 billion of fighters onboard. The Congressional Budget Office estimates the Navy would need a budget increase of one-third to achieve its current shipbuilding goals. To persist in buying four Ford-class carriers guarantees that the fleet will continue shrinking for years to come.

Supercarriers and the vessels that accompany them in the Carrier Strike Groups do carry a great deal of destructive power, at least against fixed land targets and ships that are not too heavily defended. But, simultaneously, they are very large and costly targets. The United States currently has ten such carrier groups, but because of the heavy maintenance and crew training required to keep them operating, only a few can be at sea at any one time. This doesn’t provide the United States with a great deal of redundancy.

For this reason alone the president and the theater commanders will be forced to limit their carrier demands in order to husband this precious resource. Today the Navy’s carriers are almost constantly in the news as presidents use them as a symbol of strength anytime there is a potential hotspot around the world. They have become, in effect, a very expensive version of gunboat diplomacy. Only recently, when the North Koreans renewed threats to conduct nuclear missile tests, the Trump Administration ordered a carrier strike group towards the peninsula. This is relatively easy to do, so long as there is little risk that the waters will be contested.

Presidents and theater commanders will likely be far less interested in positioning these same ships where they may be within reach of a potential adversary’s forces. And because other nations see the US Navy’s carriers as a centerpiece of American military power projection, for at least half a century potential adversaries have been developing and deploying weapons to keep US aircraft carriers from getting close enough to their coasts to bomb their territory. Their most important and effective anti-carrier weapons continue to be diesel subs, sea-skimming high-speed anti-ship missiles, and mines, all of which are deployed in sizable numbers by every nation with a threatened coast line, particularly Russia, China, North Korea, and Iran.

Most potential adversaries have impressively large fleets of diesel-electric subs: North Korea has approximately 70; China has approximately 50; Russia has 18 (plus 22 nuclear attack submarines); and even Iran has 20. Clearly, they decided years ago that subs would be their best bet for neutralizing or sinking American carriers. Thirty years of Navy fleet exercise results bear them out:

“To put it simply, if naval exercises in the last two decades involving foreign diesel-electric submarines had been actual combat, most if not all, U.S. aircraft carriers would be at the bottom of the ocean: as many as 10 U.S. aircraft carriers have been reported ‘sunk’ in these exercises.

“The analytically conservative Congressional Budget Office was alarmed enough to officially report that ‘some analysts argue that the Navy is not very good at locating diesel-electric submarines, especially in noisy, shallower waters near coastal areas. Exercises with allied navies that use diesel-electric submarines confirm that problem…[For example,] Israeli diesel-electric submarines, which until recently were relatively old, are said to always ‘sink’ some of the large and powerful warships of the U.S. Sixth Fleet in exercises. And most recently, an Australian Collins-class submarine penetrated a U.S. carrier battlegroup and was in a position to sink an aircraft carrier during exercises off Hawaii in May 2000.’

There have been many such exercise ‘sinkings’ since then, including aircraft carriers Reagan and Lincoln.”

A carrier threat even more proliferated than diesel subs is the sea-skimming anti-ship missile. Essentially every potential US adversary has substantial quantities of these in versions launched from patrol boats, warships, jet fighters, truck launchers, subs, and even merchant ships. Extremely hard to detect because they fly at 15 to 50 feet above the ocean’s highly radar-reflective waves, many carry more punch than the largest battleship cannons. And, because of their multiple launch platforms, they are a threat to carrier task forces from well beyond the carrier’s maximum strike radius of 500 miles.

For nearly half a century Russia and China have been continuously developing and selling all over the world an ever-increasing variety of these anti-ship cruise missiles. Widely deployed in large numbers today by Russia, China, Iran, and possibly North Korea are the Mach 2.3 3M80 Moskit with a range of 90 to 150 miles and the newer, lower flying Mach 2.9 Club 3M54 with a range of 150 to 410 miles.

The Navy’s few and less-than-stressful operational tests of the Aegis defensive systems protecting our carriers provide no assurance that our carriers can survive and operate under anti-ship missile attack:

“Against the most difficult targets—traveling at supersonic speeds at very low, sea-skimming altitudes—the test results were, to put it mildly, depressing.

“In tests using surrogates that were both slower and higher than the Mach 2 Soviet SS-N-22 Sunburn [the NATO name for the Moskit] missile, it was clear that the Aegis system could not be relied on for an effective defense of itself or aircraft carriers it was escorting.”

“…More than one director of the Operational Test and Evaluation (DOT&E) shop in the Pentagon has expressed serious concern that the Navy has not even been able to replicate the Sizzler [the NATO name for the Club] in tests.”

No matter what kind of missile is being used, it makes much more economic sense to defend against an aircraft carrier than to build one. Anti-ship cruise missiles cost from $750,000 to $3 4 million, depending on range and guidance. Anti-ship ballistic missiles may cost from $10 to $20 million each. Hitting what amounts to a relatively small target in a big ocean is a challenge, but the odds of doing so increase with each missile and torpedo fired at the carrier. Since missiles and torpedoes cost significantly less than the carrier and its planes, a determined foe would likely do everything in its power to launch a saturation attack meant to overwhelm the defensive systems of the carrier strike group to increase the chance of getting just one to impact the ship and at least cripple flight operations. Sinking $22.25 billion with $1 million—or even with $20 million—is a good return on investment.

Some in the Navy have advocated for smaller, far less expensive carriers. Another (perhaps better) alternative is to build far less expensive carriers without making them smaller by eliminating nuclear propulsion and returning to austere electronics and weaponry. Either alternative would allow the Navy to increase the size of the fleet. A larger number of less expensive carriers would allow more carriers on station, more diverse stationing, and less of the excessive wear and tear on people and materiel due to overly long deployments.

Others argue that the right approach is to devote more resources to a larger undersea fleet. Submarines are much more capable of surviving the coastal missile defenses an enemy will field. Their cruise missiles can execute deep strikes, at least against fixed targets. The current nuclear submarine fleet is very expensive (the latest Virginia-class nuclear attack submarine, for instance, is $2.4 billion), but advances in Air Independent Propulsion (AIP) systems are rivaling the performance of the nuclear fleet and at $200 million to $900 million, AIP boats cost a fraction of their nuclear counterparts.


The Ford-class carrier program is in much deeper trouble than the Navy and the DoD are willing to admit. As further testing reveals further serious deficiencies, cost overruns will balloon and promised combat capabilities will shrink. There is the very real possibility that, as currently configured, the Ford will prove to be unsuitable for combat because the EMALS catapults or the AAG arresting gear might be unreliable at sea under surge conditions or because the reactor and electrical system might not function in the face of battle damage. Or, worse, because of all of the above.

If the AAG fails operational tests, it can be replaced with the legacy MK 7 hydraulic arresting gear—though the retrofit will be painfully expensive and may delay the program by a year or more. If the EMALS fails operational tests, installing a steam catapult substitute would require an extensive redesign of the entire ship.

To avoid these disastrous consequences, it is inevitable that the Navy’s Ford program management and its contractors will expend maximum effort on weakening and delaying the overall operational tests—and on abrogating the most crucial ones. If the Secretary of Defense and Congress do not act vigorously to protect the current operational test plan and schedule, the taxpayer will have spent at least $44 billion (SAR total program cost) to buy three carriers that are likely to fare worse in combat than existing carriers and that in wartime will jeopardize the lives of the nearly 4,300 sailors aboard each carrier.

There’s a near-certainty that upcoming testing of the Ford will require major redesign and retrofits to it, and corresponding design changes for the Kennedy and Enterprise. To avoid further wasteful retrofits, the schedule for these second and third ships needs to slowed down and the plans for the as-yet unnamed fourth ship, CVN-81, should be put on complete hold until the final IOT&E report is released, currently scheduled for FY 2020. Commensurate with the needed slowdown, the $1.29 billion and $1.37 billion requested in FY 2017 for Kennedy and Enterprise, respectively, should be reduced—perhaps halved—and the savings reapplied to fully funding the most crucial and urgently needed developmental and operational tests as recommended by DOT&E: the shock tests, the live-fire ship vulnerability tests, the sortie generation tests and simulation, the Dual Band Radar multiple target tracking and traffic control tests, and the EMALS and AAG reliability tests.

The appalling mismanagement and avoidable major failures of the Ford program are due to exactly the same three causes as the equivalently disastrous mismanagement and failures of the Littoral Combat Ship program:

  • dearth of in-house technical expertise (badly needed to prevent major contractor design engineering mistakes) due to 20 years of deliberate outsourcing;
  • deliberate incorporation within the design requirements of unproven, high-risk major systems as selling points to justify large new acquisition programs; and
  • deliberate scheduling of maximum concurrency between design and development, prototyping, engineering tests, operational tests, and full-scale production, all in the interest of cancellation-proof program funding.

Unless the Navy moves—or is forced by DoD and Congress—to expunge these three guarantors of program failure, the taxpayer can expect future major Navy system procurements to have outcomes at least as disappointingly delayed, wastefully expensive, and dangerously combat-ineffective as the Ford-class carrier.


By Dan Grazier and Pierre Sprey. Grazier is Jack Shanahan Fellow, Project On Government Oversight. Pierre Sprey consulted for Grumman Aircraft’s research department from 1958 to 1965, then joined Secretary of Defense Robert McNamara’s “Whiz Kids” in the Pentagon.