Lawson for Congress

Piedmont Biofuels is a commercial biodiesel production facility in an industrial park on the outskirts of Pittsboro, NC, located alongside several other like-minded eco-industrial enterprises. Judging from its aesthetically pleasing landscape of brightly colored buildings, acres of green grass and blossoming foliage, the site appears more like a botanical garden or an art space than it does an industrial park.

Although this rural setting provides the park with somewhat of a buffer against the suburban bustle beyond its borders, an active and unique community of ecologically aware individuals each contributing to the creation of an environmentally sustainable lifestyle exists within the fences of this industrial site. Against this idyllic backdrop, Piedmont Biofuels brews more than one million gallons of biodiesel every year.

In addition to producing biodiesel and providing it to the community, a related worker and member owned cooperative promotes the use of clean, renewable biofuels and lobbies local, state and national government on their behalf. It runs a market garden for wholesale and the local farmer’s market, performs oilseed crop research and provides both consultation services to those interested in setting up their own biodiesel businesses and educational services in the form of classes and workshops on biodiesel and alternative fuels. They also offer internships that allow people to live on-site and immerse themselves in all aspects of the operation.

Last Friday, I was invited to accompany Dr. B.J. Lawson to the Piedmont Biofuels Industrial Park to tour the facility and observe the interview that he conducted with the coop’s vice president of stuff, Dr. Lyle Estill, for his public access television program, “Taking the Pulse.”

One of the three founding members of the coop, Dr. Estill is an influential and innovative force in the world of biofuels. For one thing, his plant was only the third in the nation to convert to chicken fat for its biodiesel production (at a time when the majority of plants were using soy oil).

Although Lyle credits his penchant for recycling as well as his ingrained environmental inclinations as the primary inspiration for his foray into the world of alternative fuels, his various stints in industries as diverse as computer technology and studio artistry also have guided his thinking and continue to inform the way in which Piedmont Biofuels is operated.

When we met Dr. Estill, he was busy giving a tour of the Industrial site as he does on the first Friday of every month. He invited us to join the group for the last leg of the tour followed by a Question and Answer session before giving us a private tour of the grounds and sitting down for a talk with Dr. Lawson.

Dr. Estill began the tour by showing us the apparatuses that comprise the plant’s infrastructure. As we strolled past tanks, reactors, and processors, he frequently stopped to give fascinating and detailed explanations of how the machinery operate in concert to produce biodiesel. His enthusiasm and passion for the operation were evident in his explanations.

As the tour progressed, we were given the opportunity to observe the operations of several of the other eco-industrial enterprises that the Industrial site houses, including Screech’s Greenhouse and the worm bed.

Within the 60ft. hydroponics greenhouse, we saw rows upon rows of giant lettuce heads that Screech has grown for sale both at the local farmer’s market and to Eco Organics, an on-site farm coop charged with remaking the industrial park’s food shed.

Upon entering the greenhouse, we also immediately noticed a long, covered crib. As we peered inside the crib, we quickly realized that this structure contained the worm bed. Powered entirely by food waste, the bed is home to countless worms that busily decompose the site’s fine paper waste. Using food waste produced by Chatham Marketplace, this vermiculture enterprise is set to expand into its own business.

Our visit to Piedmont Biofuels culminated in a “Local Lunch,” in which Dr. Estill generously invited us to partake. Held every Friday, the Local Lunch brings together the coop’s staff to share a meal prepared using only ingredients grown by local farmers.

On this particular Friday, we had the pleasure of sampling an array of delectable dishes from ginger salad to bean salad to tomato and cucumber salad, all made from some of the freshest food that I had ever tasted. Just as enjoyable as the fare were the conversations that I engaged in with the staff and interns that I sat alongside.

The equipment and methods that Piedmont Biofuels employs to create biofuel proved to be very fascinating. However, the people that I met during our visit made an even greater impression on me. Their passion and dedication both to the coop and to the environmentally sustainable lifestyle that the coop encourages was at once admirable and infectious.

In his latest book, Small is Possible: Life in a Local Economy, Dr. Estill writes, “In my 25 years in business, my people have always been my most important asset.” The same value should be placed on people in communities. Although the importance of financial capital and infrastructure should not be dismissed, Piedmont Biofuels is a great example of what happens when people are nurtured as a community’s most valuable resource.

Too often, discussion of serious issues such as energy are defined by divisive partisan rhetoric that often misses the point, such as this humorous Daily Show segment:

While politicians in both major parties are focused on gas prices, the arguments they use are often little more than a red herring. Consider the current controversy about offshore drilling, for example.

The Republican party line is “Drill here, drill now, pay less”. That’s deceptive. The Democratic party line is “Use what you got, already!” — we shouldn’t risk environmental damage to areas off-limits until existing leases are exploited. That’s also deceptive.

Here’s one problem with these arguments: both parties make the assumption that lifting drilling restrictions for the Outer Continental Shelf (OCS) would result in an immediate rush of oil exploration, with lower prices (Republicans) and environmental devastation (Democrats).

Rational people, however, might question that fundamental assumption. The fact is that oil rigs aren’t just sitting around idle waiting for new places to drill. They’re already close to fully utilized in the places of greatest economic benefit, as shown by utilization data at RigZone.

Furthermore, new rigs aren’t rolling off the assembly line on a daily basis. They’re extremely expensive and take a long time to build. So one reason existing leases aren’t being exploited is that there are easier pickings elsewhere. Opening up additional OCS territory doesn’t mean that new rigs would appear overnight.

But why not? Doesn’t it seem that if global demand and oil prices are strong, then industry investment in exploration and rig production would be also accelerating? Given what we know about growing global demand, why aren’t oil companies investing every spare dollar in exploration, instead of dividends and share buybacks?

Could it be that large oil companies are aggressively buying back stock and not plowing money into locating new reserves because the largest and most accessible reserves have already been found?

Oil is a finite resource, so it is safe to say that once all the oil is extracted, it is gone for good and cannot be replaced. The term “Peak Oil” refers to the time in which the world’s oil production will reach its maximum rate and then begin to decline. Peak Oil is not about the time when we run out of oil; it is about the rate at which oil is being produced. Simply put, it is the point where the amount of oil the world uses everyday exceeds the rate at which oil can be produced.

For an excellent introduction and discussion about Peak Oil, please visit The Oil Drum.

In 1956, scientist M. King Hubbert used a logistic model, now called the Hubbert peak theory, to accurately predict the time which the United States’ lower 48 states would reach peak oil. It is agreed upon that the lower 48 states reached their production peak in 1970 and have been producing less oil, at a slower rate each year, than it had the year before — despite rising prices and continued efforts to increase supply.

The Hubbert Theory has been used successfully to project timetables for the peak of oil and other finite resources in many countries throughout the world. Since the US imports over 60% of its oil, we have not been worrying about the unseen consequences. But what happens when the entire world’s oil supply reaches its peak? Once there is a peak in world oil production, the world will need to learn to decrease the amount of oil consumed and learn how to stop relying so heavily on oil.

From the week of July 4- July 11 2008, the U.S crude oil imports averaged 10.8 million barrels per day. This is a 1.2 million barrel increase from the previous week. In 2007 the U.S consumed over 142 billion gallons of gasoline and in total, consumed over 7.5 billion barrels of crude oil: almost 25% of the total amount of oil consumed in the entire world. Even in the energy sector, dating back to 2005, the U.S accounted for 21.8% of the total energy used in the world. Yet we are only 5% of the world’s population.

Ultimately, high energy prices will help us focus on local, community-based sustainability. However, we will likely need to use nearly every drop and BTU of available energy to make an orderly transition to renewables in the face of global population growth and our current level of fossil fuel dependence.

From that perspective, lifting the federal ban on offshore drilling is necessary, as we must be able to use the most accessible of our few remaining reserves:

But merely lifting the ban won’t accomplish much in itself. It doesn’t mean drilling will begin immediately. It will take some time, during which we will continue to be 300 million Americans increasingly competing with 1.1 billion Indians and 1.3 billion Chinese who love their new cars. So prices are unlikely to collapse, and the impetus to look locally for sustainable solutions will only grow.

For those who study our financial system, the past few weeks have been interesting, and concerning. I don’t know if it’s possible to overstate my concern for our future — both as citizens as the United States of America, and as inhabitants of a world that is increasingly interconnected yet dependent on a fundamentally flawed financial and monetary system.

If asked to pick one word to describe why I’m running for Congress, that word is sustainability. Sustainability doesn’t mean stability, it doesn’t mean safety, and it doesn’t mean protection from life’s inevitable uncertainties. Sustainability does mean recognizing and obeying the natural laws that govern of our world.

Every branch of science has certain laws: Objects in motion tend to stay in motion; force equals mass times acceleration; every action has an equal and opposite reaction; energy in a closed system cannot be created or destroyed but merely changed in form; and closed systems tend towards increased entropy are a few good examples.

These laws of motion and conservation of energy are not limited to high school physics class. Every system in nature must obey these underlying principles — including our financial and monetary systems.

Let’s start with Newton’s laws of motion — it’s a short hop from there to defining leverage as the ability to move a large object a short distance using a small force exerted over a long distance. Leverage is a concept in finance, as well — using borrowed money to increase returns based upon small underlying price movements. Just as the car lifted with a hydraulic jack can hurt you if it falls, a small price movement in an imprudently leveraged investment can wipe out a lifetime of savings.

Next consider conservation of energy and open versus closed systems. Since energy within a closed system cannot be created or destroyed, and since closed systems tend towards increasing entropy, every growing system must be open to an external energy source. In this setting, one can immediately see problems with our debt-based monetary system.

What is debt-based monetary system? It’s where money is debt, and every dollar in circulation exists because a bank created it out of nothing based upon someone’s promise to pay it back, with interest.

Our economy is an open system relative to money, which is created and destroyed by banks. Banks create the money through loans — but they only create the amount you borrow. They don’t create the interest that you also promise to repay. Where do you get the interest? You have to earn it, but first it has to be created — yes, by someone else borrowing more money that they promise to repay with still more interest.

In the end, our monetary system is like a game of musical chairs — the banks create money based upon someone’s willingness to borrow, and the bank’s ability to lend. The constant demand for new money to repay interest on existing money compels growth and new money creation at an accelerating rate.

Refer to the chart of America’s total debt, which raises obvious questions about sustainability. Trees do not grow to the sky — and when banks cannot lend, or people are no longer willing to borrow, the music stops. When the music stops, there are more loans outstanding than money to repay, so everyone left standing loses whatever they pledged in exchange for their loans. Even worse, money that was created out of nothing through borrowing just as easily disappears back into nothing as asset values plummet — so when the music stops, the chairs start disappearing from the room.

Leverage, debt-based money, fractional reserve banking, and interest are fundamental features of our economic system. Our economic history of boom/bust cycles and decisions dominated by short-term gain as opposed to long-term stewardship are fundamental consequences of this underlying system. In short, our system has undesirable consequences and is fundamentally unstable — but it’s working as designed.

What we are experiencing today is a perfect storm of rising demand for natural resources in the setting of  global growth, a declining domestic currency due to decades of unsustainable debt (= money) creation and spending, coupled with an unfolding credit crisis that has crippled the debt (= money) creation system. What happens next?

I don’t know. Economists and analysts are searching for an analogy to our current position. Are we in the 1970s? Are we Japan in the 1990s? Are we entering the 1930s? Each situation is unique, and this one is no exception. There is evidence that we have experienced “peak credit“, and are popping a credit bubble that has been forming for over 20 years. That is reminiscent of Japan in the 1990s, or the 1930s. We’re also suffering from high energy prices, like the 1970s, although in this case we’re facing global tight supplies in the setting of rising demand.

Today’s news capped off several weeks of concerning developments. Illustrating the danger of leverage, our largest mortgage companies, Freddie Mac and Fannie Mae, are fighting rumors of insolvency:

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee — which could be staggering — would be paid by taxpayers.

The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.

These companies funded 80% of the mortgages issued in the first half of 2008, and are thus almost fully responsible for supporting the housing market at its current levels. Ready to talk about leverage? In May, Fannie and Freddie had $83 billion in capital supporting over $5 trillion in debt and other obligations. That’s leverage — every dollar in debt is supported by less than two cents.

Here are some excellent commentaries on the dangers of these quasi-federal companies (read: we’re all going to take the hit) that inflate housing prices and define moral hazard:

Former St. Louis Fed President Poole Calls Freddie, Fannie “Insolvent”

Disaster Planning for Freddie and Fannie

Freddie and Fannie: Conservatorship as Endgame?

Fannie and Freddie Waterfalls Are Too Big to Bail

Fannie and Freddie are just the most recent problem to flare up, however. A contraction in the mortgage market was only the beginning — losses are spilling over throughout the economy. As Nouriel Roubini notes, total loss estimates from the credit crisis across all sectors of the economy are up to $1.6 trillion:

As I argued in writings last February such credit losses would be at least $1 trillion and could be as high as $2 trillion, well above the $300 billion of subprime writedowns that have been recognized so far. At that time the $1 trillion estimate was considered as lunatic but by now the IMF estimates these losses at $945 billion, George Magnus of UBS estimated them at $1 trillion; Goldman Sachs put them at $1.1 trillion, the legendary hedge fund manager John Paulson (who made last year $3.5 billion of income on shorting subprime) put them at $1.3 trillion; and a couple of days ago Bridgewater Associates estimated such losses at $1.6 trillion. Thus, as I argued then $1 trillion would be floor, not a ceiling, to such credit losses.

Of course such losses have been in part transferred from US banks to capital market investors and to foreign investors via securitization. But with the entire capital of the US financial system at $1.3 trillion such staggering losses will lead to a systemic banking crisis and systemic financial crisis. No wonder that Bernanke is now telling non-bank primary brokers that the Fed exceptional liquidity support (TAF, TSLF and especially PDCF) will be extended into 2009. And no wonder that Geithner, Paulson and Bernanke have now all three spoken of the need to find orderly ways to let even large and systemically important institutions go bankrupt if they are insolvent.

The consequences of this credit unwinding and a hard landing in the United States have damaging global consequences, as well. This article, again by Nouriel Roubini, outlines why the current international monetary regime known as Bretton Woods 2 could collapse in the wake of an expanding global credit crisis, and our current trade imbalances:

Will the Bretton Wood 2 Regime of fixed and/or heavily managed exchange rates in many emerging market economies collapse in the same way as the Bretton Woods 1 regime (the “dollar standard” regime that ruled after 1945 in the global economy) collapsed in the early 1970s? What are the similarities and differences between those two regimes? It is interesting to note that the same factors – U.S twin deficit, U.S. loose monetary policies and fixed pegs to the U.S. in the dollar standard regime of Bretton Woods (1945-1971) - that led to the commodity inflation and goods inflation in the early 1970s and thus to the demise of the Bretton Woods 1 regime (in the 1971-73 period) are also partially the same factors that are leading now to the rise in commodity and goods inflation in emerging markets that are pegging to the U.S. dollar and/or heavily managing their exchange rates.

Thus, like the rise of commodity and goods inflation led to the demise of BW1 the current rise in commodity and goods inflation in emerging market economies may be the trigger that will lead – as argued in my 2005 BW2 paper with Brad Setser and a more recent 2007 paper of mine – to the demise of BW2. It is true that BW2 is still alive as the massive ongoing reserve accumulation by BRICs, GCC and other emerging markets suggests. But the rise in inflation that these exchange rate policies are causing may soon lead to its demise: abandoning pegs and/or letting currencies appreciate at a faster rate will be the necessary step to control inflation in such emerging market economies.

Every country is between a rock and a hard place:

By now inflation has become so high in so many emerging market economies that – in some dimensions – it is almost too allow these currencies to appreciate: inflation is so high that only an abandonment of pegs or of heavily managed rates and a very sharp nominal exchange rate appreciation would be able to control inflation Even in that case nominal appreciation would not be enough to control expected inflation: a much tighter monetary and credit policy – that is feasible only if enough exchange rate flexibility is allowed – would be necessary to control actual and expected inflation. But now the global economic outlook has much worsened with the US recession and the sharp economic slowdown in most advanced economies. The need to control inflation with a stronger currency and much tighter monetary policy in emerging markets is happening at a time when downside risks to growth are emerging in these countries because of the US recession and the slowdown in the advanced economies growth rate. Thus, emerging market policy makers face a serious dilemma: controlling inflation requires exchange rate flexibility and much tighter monetary and credit policy. But such policy may exacerbate the growth landing of these economies at the time when global conditions are leading to a sharp slowdown of growth in advanced economies that – in due time – will slow down exports and growth of the emerging market economies.

Thus, it is not obvious that the members of BW2 will decide to phase out this regime and move to greater currency flexibility and tighter monetary and credit conditions. Rising oil, energy and food inflation in these economies is already leading to popular unrest, riots and – in some cases – ruling governments being toppled. Thus, the last thing that these economies need is a sharp growth slowdown on top of socially unpopular rising inflation. That is why – while the rational choice would be phasing out BW2, allow greater exchange rate flexibility, regain monetary autonomy, allow currencies to appreciate and tighten monetary/credit conditions – many of these BW2 may be reluctant to follow this painful policy path.

But again, these problems, consequences, and suboptimal “solutions” are simply the result of a suboptimal and unstable system working as designed.

Finally, we must consider these financial instabilities in a world where the fundamental life-giving resources such as food and energy are becoming increasingly precious:

Every Barrel Now Counts: What Prospects for More Oil Supplies?

IEA Medium-Term Outlook

While we complain about high food prices, other countries — some to whom we owe a great deal of money — are seeing riots and social unrest. The bottom line is that food and energy prices are not separate from this economic crisis. They are intimately related, for two reasons.

First, food and energy are fundamentally equivalent even beyond irrational corn ethanol subsidies. By some estimates, our unsustainable system of industrial agriculture requires 10 calories of fossil fuels for each one food calorie produced. What happens as fossil fuels become more expensive based upon growing global demand against finite supplies?

Second, many countries with food and fuel inflation high enough to spark riots and social unrest, and to whom we owe a lot of money, are keeping their currency artificially low against our dollar to stimulate exports. What happens if the pain of social unrest in China is great enough for them to abruptly let their currency float?

A rapid strengthening of China’s currency would reduce the value of their $1.4 trillion in dollar holdings. On the other hand, such a rapid appreciation would give them an instant discount on their dollar-denominated commodities such as fuel and fertilizer, and is the ultimate solution to their price inflation.  What would be the consequence for us, however, as high prices causing riots and social instability abroad transfer to our shores?

Mutually assured destruction did not end with the Cold War — our position in the global economy can also be described as mutually assured economic destruction.

We need principled leadership that recognizes the root causes behind the threats we face, and we need a government that empowers us to build a sustainable society. Such sustainability has not, and cannot, come from a federal government that consolidates power, exceeds its Constitutional authority, and serves corporate and special interests.

Critically, we must recognize that our economic, energy, environmental, and agricultural policies do not operate in isolation — they are all related, and they all exist on the foundation of an unstable monetary system that bring us to this precarious situation. We live in interesting times.

To follow up on my latest post discussing Former Democratic Senator and Presidential Nominee George McGovern’s newly-discovered love of liberty, I paid a visit to a blog that I frequent a lot and where I sometimes post called Freedom Democrats, a group of Democrats who, like Senator McGovern, are very freedom-minded. The main poster at the site, Freedom Democrats, also contributes to my main blog, Liberty Republicans. A few weeks ago, he made a post endorsing the election of B.J. in this district instead of David Price, the incumbent and a member of his own party. I’d like to share this post with all of you here. Make sure you share the view of this Democrat with all of your Democratic friends in the 4th District! Away we go:

Stand up to George Bush: Elect a Republican to Congress!

What in the world could bring me, a self-identified libertarian Democrat, to the point of advocating electing a Republican to Congress?

Two things.

First, a Republican like North Carolina’s BJ Lawson.

For those who don’t know Lawson already, he is arguably one of the most dynamic and exciting libertarian Republican candidates this year. With Jim Forsythe out of the race in New Hampshire, the list of Republican congressional candidates representing a new generation of libertarian politics is lead by BJ Lawson and Virginia’s Amit Singh.

Second, there needs to be a Democratic incumbent who is failing to stand up for the district he is elected to represent. In North Carolina’s 4th District, we have such a problem.

Ironically, a front page story at the liberal blog Daily Kos helps make the case.

The great minds in Bush’s Homeland Security department came up with a doozie this year: let’s move the facility where we study the most infectious and dangerous disease among livestock from the isolated island it’s now on (accessible only by ferry or helicopter) and put it where there are lots of livestock operations. Brilliant!

The Associated Press has the details on a plan to move the nation’s leading center for research into animal diseases from Plum Island to the heartland of America:

The only U.S. facility allowed to research the highly contagious foot-and-mouth disease experienced several accidents with the feared virus, the Bush administration acknowledged Friday.

A 1978 release of the virus into cattle holding pens on Plum Island, N.Y., triggered new safety procedures. While that incident was previously known, the Homeland Security Department told a House committee there were other accidents inside the government’s laboratory.

The accidents are significant because the administration is likely to move foot-and-mouth research from the remote island to one of five sites on the U.S. mainland near livestock herds. This has raised concerns about the risks of a catastrophic outbreak of the disease, which does not sicken humans but can devastate the livestock industry.

One of the five likely sites of the research facility is the town of Butner in Granville County, just outside of the 4th District and the Durham metropolitan area.

Here is where the incumbent in the race stands:

My current assessment is that the Granville County site would be a good location for the NBAF, and that our region of North Carolina would reap many economic and agricultural benefits from such a facility.

Here is BJ Lawson’s view:

As a citizen, physician, and father, I strongly oppose NBAF in our backyard. Join me in opposing David Price, and opposing NBAF. As your Congressman, I will work for the people of the Fourth District by seeking to make our federal government smaller, not larger. I will work to preserve private property rights, and not encourage unaccountable environmental hazards in our backyards.

The AP article outlines a government simulations of a simulated foot-and-mouth disease outbreak in Kansas:

A simulated outbreak of the disease in 2002 — part of an earlier U.S. government exercise called “Crimson Sky” — ended with fictional riots in the streets after the simulation’s National Guardsmen were ordered to kill tens of millions of farm animals, so many that troops ran out of bullets. In the exercise, the government said it would have been forced to dig a ditch in Kansas 25 miles long to bury carcasses. In the simulation, protests broke out in some cities amid food shortages.

Stand up to George Bush and his Department of Homeland Security, elect Republican BJ Lawson.

I couldn’t have said it better myself.

[Splash and Dash] also illustrates a cautionary tale of how government incentives, no matter how well-intentioned, can sometimes be subverted into windfalls for the few.

We are increasingly faced with evidence that our government exists to serve lobbyists and special interests. From the recent Farm Bill, the veto for which was (maybe) overturned, to irrational government favors showered on ethanol proponents, we have created systems ripe for abuse and exploitation.

Splash and Dash is a perfect example. Thanks to the American Jobs Creation Act of 2004, your taxes and our government’s debt are paying a $1 per gallon subsidy for blended diesel that combines petroleum diesel with diesel from agricultural products such as soybeans. Now, foreign biodiesel manufacturers are exploiting this subsidy for fuel that benefits European drivers, but we’re paying the bill. Here’s how it works:

The maneuver begins with a shipload of biodiesel from, say, Malaysia, which pulls into a US port like Houston, says John Baize, an industry consultant in Falls Church, Va. Unlike domestic diesel-biodiesel blends, which typically contain from 1 to 10 percent of biodiesel, the Malaysian fuel starts off as 100 percent biodiesel, typically made from palm oil.

Then, the vessel receives from a dockside diesel supplier a “splash” of US petroleum diesel. It doesn’t take much to turn it into a diesel-biodiesel blend that is eligible for US subsidies.

If the ship holds roughly 9 million gallons, it takes only about 9,000 gallons of traditional diesel (0.1 percent of the total) to make the entire load eligible for the blenders tax credit.

The US importer of the load applies to the Internal Revenue Service for the credit – a dollar for each of the 9 million biodiesel gallons, Mr. Baize calculates. The next day the tanker can set sail – dash – for Europe. There, the US importer resells the biodiesel, taking advantage of European fuel-tax credits that, in effect, keep biodiesel prices above US prices.

You must be kidding me.

I’m not kidding, but I am realistic and a bit cynical. Government incentives, no matter how well-intentioned, will always be subverted into windfalls for the few.

Our income tax system is irreparably broken. Even though the American Jobs Creation Act was designed as a tax reform bill to reduce the burden of government, tinkering with our tax code always results in unintended consequences through interactions with our maze of special-interest-driven subsidies and favors.

FOR IMMEDIATE RELEASE
APRIL 17, 2008

CONTACT
Linda Williams
919-481-1177

Durham - Congressional candidate William Lawson, M.D. will be holding a press conference at the Durham Earth Day Festival in Durham Central Park at 2pm on Saturday, April 19th to announce his opposition to the Department of Homeland Security’s proposed siting of a Biosafety Level 4 (BSL-4) biodisease laboratory (NBAF) in Butner, North Carolina. The conference will be at the Lawson for Congress table, and the setting has been chosen to emphasize the importance of local control and accountability in environmental protection.

The proposed facility will study a range of diseases affecting humans and animals, including the economically devastating Foot and Mouth Disease (FMD). It is impossible to predict which diseases will be studied, however, as the Department of Homeland Security reserves the ability to study organisms at their discretion based upon perceived risk.

Recent news reports highlight the history of accidents at existing facilities both in the United States and abroad, and the most recent severe outbreaks of Foot and Mouth Disease have paradoxically been caused by research facilities themselves. No facility can be completely safe, and Dr. Lawson believes it is common sense to avoid locating such laboratories in areas that put local human and livestock populations at risk. This position is shared by Dr. Roger Breeze, who previously directed Homeland Security’s existing biodisease laboratory in Plum Island, New York.

The second concern with such a facility is lack of local control. While we already have several BSL-2 and BSL-3 laboratories in our area, these labs are associated with industry, our universities, and our state’s Division of Public Health. As such, there are certain levels of transparency and accountability associated with their activities. The Department of Homeland Security is a completely different animal, and over the course of the past five years has proven itself to be highly politicized, corrupt, wasteful, and secretive. The transparency and accountability that we can demand of our existing facilities would be completely absent at NBAF.

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The fight against the National Bio & Agro-Defense Facility (NBAF) continues to march forward and gather steam. In the last few weeks I have had the pleasure of meeting and getting to know members of the Granville Non-Violent Action Team (G.N.A.T.) and they, along with B.J., have inspired and encouraged me to speak out about NBAF.

So, in the last couple of weeks, I have composed two Letters to the Editor: one for the Durham Herald-Sun, and one to the Raleigh News & Observer.

Below is my letter to the Durham Herald-Sun, which addresses the attempts by the NC Consortium for NBAF to speak about the security and transparency factors of the proposed facility even though they are unqualified to speak about either:

NBAF risks public health
March 6, 2008

Regarding the Feb. 27th article “Official Supports Bio-Agro Defense Facility”, Dr. Warwick Arden, Dean of the NCSU College of Veterinary Medicine, like many members of the N.C. Consortium for the National Bio and Agro-Defense Facility (NBAF), is unqualified to discuss the security and transparency aspects of the facility. He is not a member of Homeland Security and, as such, his assurances of how the Department will behave are meaningless.

Further, there are several facts that Arden cannot deny. For instance, the outbreak of foot-and-mouth disease, which will be stored at NBAF, in England in 2007 is believed to have been caused by an accidental release from a facility there. Accidents, after all, do happen.

In September, New York Congressman Tim Bishop, whose district includes Plum Island, encouraged his constituents to reject locating NBAF on Plum Island. This was despite that the facility on Plum Island has been in place for over 50 years.

At the Creedmoor town hall meeting last week, Dr. William (B.J.) Lawson, a physician who’s running for Congress against NBAF-supporter David Price, argued that we should collaborate with laboratories around the world already studying these diseases instead of building a “Taj Mahal” for these diseases in our backyard.

The reality remains unchanged. NBAF presents undeniable and unnecessary public safety and health risks to our area that any potential benefits from the facility do not outweigh. Unqualified assurances from Arden and other members of the Consortium will not change that.

While my letter to the Herald-Sun tackled a recent article they published, my letter to the News and Observer tackled what hasn’t been in any articles yet: the fact that David Price supports NBAF and has lobbied Homeland Security to bring it here. Here it is, as published (except for the bold part):

What Price supports

I have yet to see a single article that points out that U.S. Rep. David Price supports the National Bio and Agro-Defense Facility and as chairman of the Appropriations Subcommittee on Homeland Security has been lobbying the Department of Homeland Security to bring it to the area.

He has done so while ignoring the dangers of the NBAF, a facility that will store animal-to-animal and animal-to-human diseases that will pose health and safety risks to local livestock and residents.

Thankfully, at least one candidate has stepped up to retire professional politician Price and give the people of the forth district a voice in Washington once again — B.J. Lawson, a Duke Medical School graduate from Cary who filed his candidacy last month.

It seems that after serving in Congress for over 20 years, Price has lost touch with the people he’s supposed to represent. I say “supposed to” because a glance at Price’s campaign donors shows whom he now truly represents: a laundry list of corporate and special interests, including some interests who might benefit from NBAF being located in the area.

It’s time for long-overdue change. Someone in Congress actually looking out for the best interests of the people would be Price-less.

The part in bold was actually removed by the newspaper, but as people wake up to what David Price is doing, they’ll begin to look for alternatives. B.J. Lawson is that alternative.

Watch our local newspapers, as many other local residents are speaking out about the proposed facility and making solid points about its dangers. I encourage everyone to do the same, and don’t stop at NBAF. Letters to the Editor are a great way to speak your mind about whatever issue is important to you. To write the Durham Herald-Sun click here. To write the Raleigh News and Observer click here.

Rep. Tim Bishop is a Democrat who represents New York’s 1st District, including Long Island and Plum Island. Here’s what he had to say about NBAF in September of 2007:

“I encourage Long Islanders to join me in voicing strong opposition to placing a Bio-Safety Level 4 facility on Plum Island,” said Congressman Tim Bishop, who represents the Congressional district which includes Plum Island. “From the moment DHS became involved at the Plum Island Animal Disease Facility, I have received repeated assurances from the highest levels of the Department—including Secretaries Ridge and Chertoff—that it would not be a suitable location for BSL-4 research.”

The article on his Congressional Web site continues further:

Plum Island’s proximity to major metropolitan areas on Long Island and Connecticut make it an unsuitable location for BSL-4 research, which investigates highly infectious diseases that affect both animals and humans, such as the Ebola virus. Placing a prime terrorist target in such a highly populated area could have disastrous consequences.

Why is Rep. Tim Bishop encouraging his constituents to reject NBAF on Plum Island, while Rep. David Price is encouraging NBAF to locate in our backyard?

Unfamiliar with NBAF? Read this post.

Last night’s gathering at South Granville High School in Creedmoor was a poignant illustration of the crisis of confidence between our federal government and its citizens. I had the opportunity to speak with people on both sides of the issue — local citizens opposed to NBAF, as well as representatives from Homeland Security, the USDA, government contractors, and our local consortium desiring to bring the laboratory to the area.

At the end of the evening, what stood out was the profound lack of trust in our federal government. Person after person approached the microphone to ask the panel to essentially predict the future. Almost every question asked for long-term assurance regarding safety, transparency, governance, and accountability. Many questions couldn’t be answered until the Environmental Impact Statement is prepared. When answers were offered, however, they were received with palpable skepticism among the lab’s opponents.

Unfortunately, no members of last night’s panel can predict the future. Despite their best intentions, the lab’s representatives from Homeland Security, USDA, and various government contractors are incapable of delivering on any verbal promises made last night. At the end of the evening, we’re still left with the nagging question of whether our region wants the largest BSL-4 laboratory to study the most dangerous organisms in our backyard, when that laboratory’s use will be dictated by ongoing threat assessments by our Department of Homeland Security and the USDA.

My question to the panel was a slightly different one — why do we need this boondoggle at all? We’re looking to spend $450 million on this laboratory, which is money that we don’t have, to study diseases that are not yet endemic to our country. Does it really make sense to spend money we don’t have to concentrate the risk of studying and housing all these exotic diseases in a single large facility?

Make no mistake, each of these diseases is a cause for alarm. We absolutely should contribute to the global body of knowledge to diagnose, treat, and ultimately prevent these diseases from causing a public health disaster. But let’s consider an alternative: since each of these diseases is endemic somewhere, there is already research being done right now in laboratories around the world.

Why can’t we embrace a collaborative approach, and encourage our scientists to work at the best existing laboratories for these diseases around the world? Such studies are being done where the diseases are already endemic. If we believe we have the best safety and containment protocols, why not share those with other countries where they are already studying the diseases, and reduce the risks inherent in existing laboratories? Why not encourage laboratories that have already specialized in a few of these diseases, and thus reduce the “risk concentration” of a single large repository for dangerous pathogens?

I asked this question, and was told that we need this laboratory since we will not be able to rely on international cooperation in the event of a widespread outbreak. For example, in a global Foot and Mouth Disease outbreak, the UK would meet its own needs before it would share assays or treatments with us.

That answer still falls short for me. In a collaborative environment, as our scientists help create diagnostic assays, treatments, or vaccines for each disease, we can begin commercializing the resulting technology domestically so that we are assured of our own defense.

Is this really the best way to spend $450 million, plus ongoing operating expenses?

Regrettably, our incumbent representative David Price is lobbying our Department of Homeland Security, in conjunction with the U.S. Department of Agriculture, to locate the proposed National Bio- & Agro-Defense Facility (NBAF) in Butner, North Carolina. The proposed facility would bring a Biosafety Level 4 (BSL-4) laboratory to our backyard to study diseases including:

• Foot and Mouth Disease (FMD)
• Classical Swine Fever (CSF)
• African Swine Fever (ASF)
• Rift Valley Fever (RVF)
• Contagious Bovine Pleuropneumonia (CBPP)
• Japanese Encephalitis (JE) virus
• Nipah Virus
• Hendra Virus

This list is not inclusive, and may change based upon Homeland Security’s “continued threat assessments and risk assessment”.

Rep. Price has a twenty-two year history of bringing home the bacon to North Carolina, but this is one federal gravy train that we should avoid at all costs. The proposed facility will replace the current Plum Island Animal Disease Center, located off the northeastern tip of Long Island. Plum Island is on an island for a reason: by current law, Foot and Mouth Disease (FMD) cannot be studied on the mainland United States. While we in the United States have been free of FMD since 1929 (other than an accidental outbreak on Plum Island in 1978), it has devastated the livestock industry overseas, especially in the U.K.

There are a number of special interests who are joining Rep. Price is supporting this effort. This Consortium includes representatives from our local academic communities and industry. While they are clearly well-meaning and interested in economic growth, they have differing opinions concerning what is in the best interest of our region. The Consortium’s Web site has a FAQ page supporting the laboratory, but their support falls short on several counts.

The first concerns are transparency and accountability. While we already have several BSL-2 and BSL-3 laboratories in our District, these labs are associated with industry, our universities, and our state’s Division of Public Health. As such, there are certain levels of transparency and accountability associated with their activities. The Department of Homeland Security is a completely different animal, pardon the pun, and over the course of the past five years has proven itself to be highly politicized, corrupt, wasteful, and secretive. The transparency and accountability that we can demand of our existing facilities would be completely absent at NBAF.

The next concern is simply common sense. Why change the law to allow FMD to be studied on the mainland United States? Why locate such a facility, with no transparency and little accountability, within fifty miles of two million people? Why allow “pretreated and decontaminated” waste from this facility to flow into Falls Lake, Raleigh’s already precious water supply? Are jobs and prestige from this federal gravy train really worth the risk to our citizens and environment?

Fortunately, there is growing grassroots awareness that the answer is no. Not in our backyard, certainly. A growing grassroots organization has been spreading the word through its Web site www.nobio.org and letting citizens know how to push back. There are a number of events this week, but the most important is Thursday evening’s DHS/NBAF Hearing at South Granville High School, Creedmoor, from 7 - 10pm. Concerned citizens should attend — this laboratory’s proposed location is on the border of Granville and Durham counties, and waste disposal or accidents will affect all of us.

Finally, I had the opportunity to meet with local activists from the Granville Nonviolent Action Team (GNAT) this past weekend. I was interviewed by John Monroe, who received this form letter (quoted below) in response to his concerns from David Price:

“NBAF, which will be managed by the Department of Homeland Security (DHS) in cooperation with U.S. Department of Agriculture (USDA), will conduct research focused on zoonotic and foreign animal diseases.”

“Much of the federal research on these kinds of diseases is currently conducted by DHS and USDA at the Plum Island Animal Disease Center in New York.”

“I understand that there are concerns about the security of NBAF, in terms of the potential for dangerous pathogens to spread beyond the facility, and that these concerns are based in part on questions on the security of the Plum Island facility in the past.”

“Through my subcommittee post, I intent to exercise such oversight in order to achieve a safe and sustainable outcome for both our national security interests and the welfare of the community where the facility is eventually sited, hopefully in North Carolina.”

Here is a YouTube video of our discussion:

As a citizen, physician, and father, I strongly oppose NBAF in our backyard. Join me in opposing David Price, and opposing NBAF. As your Congressman, I will work for the people of the Fourth District by seeking to make our federal government smaller, not larger. I will work to preserve private property rights, and not encourage unaccountable environmental hazards in our backyards.