Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 9, 2023

AI Summary. American firms retain substantial pricing power, which one analysis argues means profit margins are unlikely to compress soon.

Tracy Alloway and Joe Weisenthal Odd Lots Blog
Date Posted:

Using the example of Coke and Pepsi, Samuel Rines argues that American firms still have a large degree of pricing power suggesting profit margins aren’t going to compress anytime soon. @tracyalloway @TheStalwart

AI Summary. The wage return to cognitive skills has declined, from about 10% higher hourly wages per standard deviation of test score in the 1980s and early 1990s to 4.5% in the 2000s and early 2010s, while returns to a bachelor's degree rose. Social skill-intensive occupations grew as a share of US jobs, with faster real wage growth.

David Deming National Bureau of Economic Research
Date Posted:

The return to cognitive skills has declined since 2000 and there has been rising demand for “social skills.” “Jobs with the most employment and earnings growth are those where both types of skill are required.” @ProfDavidDeming

The return to cognitive skills has declined since 2000 and there has been rising demand for “social skills.” “Jobs with the...

Have returns to cognitive skills fallen while social skills pay more?

Core argument: A one standard deviation increase in Armed Forces Qualifying Test score was associated with roughly 10 percent higher hourly wages in the 1980s and early 1990s but only 4.5 percent in the 2000s and early 2010s.

The return to cognitive skills has declined since 2000. A one standard deviation increase in the Armed Forces Qualifying Test (AFQT) score – a widely-used measure of cognitive skill – was associated with about 10 percent higher hourly wages in the 1980s and early 1990s but only 4.5 percent in the 2000s and early 2010s. In contrast, the economic return to a bachelor’s degree increased by 6 percentage points unconditionally and by nearly 15 percentage points after controlling directly for cognitive skills in both waves. What are the implications of the growing importance of social skills for the wage structure? Social skill-intensive occupations grew by nearly 12 percentage points as a share of all jobs in the U.S. economy between 1980 and 2012, and real hourly wages for these jobs grew around 25 percent compared to less than 10 percent for other occupations. This suggests growing relative demand for social skill, and flat or declining demand for cognitive skill. However, because these skills are complements, the jobs with the most employment and earnings growth are those where both types of skill are required. Evidence suggests that cognitive skills and social skills are conceptually distinct and that they work together in non-obvious ways to explain an important recent trend in the wage structure – rising returns to education and social skills, but declining returns to cognitive skills.

Takeaways by Macro Roundup® AI

  1. A one standard deviation increase in Armed Forces Qualifying Test score was associated with roughly 10 percent higher hourly wages in the 1980s and early 1990s but only 4.5 percent in the 2000s and early 2010s.
  2. The economic return to a bachelor's degree rose by 6 percentage points unconditionally and by nearly 15 percentage points after controlling for cognitive skills in both waves.
  3. Social skill-intensive occupations grew by nearly 12 percentage points as a share of U.S. jobs between 1980 and 2012, and their real hourly wages grew around 25 percent, compared with less than 10 percent for other occupations.

AI Summary. The US working-age population aged 15 to 64 shrank in 2018 for the first time since at least 1960 and contracted in the two following years, edging up since only on a rebound in international immigration. Experts say the resulting worker deficit could tax growth and trigger a new wave of offshoring.

Shawn Donnan Bloomberg
Date Posted:

Between 2017-2022 the American working age population grew by just 1.7mm people, an 86% decline from growth of 11.9mm between 2000-05. @markets

Does a shrinking working-age population threaten growth and spur offshoring?

Core argument: The US working-age population, those aged 15–64, shrank in 2018 for the first time since at least 1960 and contracted in the two following years as baby boomer retirements picked up and fewer young people entered the labor force.

The ultratight labor market is often treated as a pandemic-driven aberration. But there’s a strong case to be made that it’s really the product of demographic trends that predated, and accelerated with, Covid-19. Experts say that without meaningful government intervention, America’s worker deficit could become a tax on growth and trigger a new wave of offshoring, like the one the Chips and Science Act of 2022 is trying to reverse. The US working-age population shrank in 2018 for the first time since at least 1960, as baby boomer retirements picked up and fewer young people entered the labor force. The cohort, which covers those aged 15 to 64, also contracted in the two years that followed and has edged up since only because of a bounce back in international immigration.

Takeaways by Macro Roundup® AI

  1. The US working-age population, those aged 15–64, shrank in 2018 for the first time since at least 1960 and contracted in the two following years as baby boomer retirements picked up and fewer young people entered the labor force.
  2. The US working-age cohort has edged up since its contraction only because of a bounce back in international immigration.
  3. Experts say that absent meaningful government intervention, America's worker deficit could become a tax on growth and trigger a new wave of offshoring of the kind the Chips and Science Act of 2022 aims to reverse.

AI Summary. An analysis of US companies grouped by whether they repurchased shares finds that firms doing buybacks carry lower debt loads on both debt-to-capital and debt-to-earnings measures than firms that do not. The author argues this cross-sectional evidence offers little support for the claim that buybacks are debt-funded.

Aswath Damodaran Musings on Markets
Date Posted:

.@AswathDamodaran notes that firms that buy back stock have lower debt levels than firms that don’t, as measured by both the debt to capital ratio and the debt to EBITDA multiple.

Do companies that buy back stock carry more debt?

Core argument: US companies that repurchased stock in 2022 carried lower debt loads than companies that did not, measured by both debt-to-capital ratios and debt-to-EBITDA multiples, at odds with the claim that debt funds buybacks.

I looked at companies in the US (because this critique seems to be directed primarily at them), broken down by whether they did buybacks in 2022, and then examined debt loads within each group. You can be the judge, using both the debt to capital ratio and the debt to EBITDA multiple, that companies that buy back stock have lower debt loads than companies that don't buy back stock, at odds with the "debts fund buybacks" story. Are there firms that are using debt to buy back stock and putting their survival at risk? Of course, just as there are companies that choose other dysfunctional corporate finance choices. In the cross section, though, there is little evidence that you can point to that buybacks have precipitated a borrowing binge at US companies.

Takeaways by Macro Roundup® AI

  1. US companies that repurchased stock in 2022 carried lower debt loads than companies that did not, measured by both debt-to-capital ratios and debt-to-EBITDA multiples, at odds with the claim that debt funds buybacks.
  2. Little cross-sectional evidence indicates that buybacks precipitated a borrowing binge at US companies, though individual firms do use debt to repurchase stock and put their survival at risk.

AI Summary. US share buyback announcements are running at a record pace, but JPMorgan Chase strategists report that more than two-thirds of the $261bn in commitments come from just five companies. Chevron leads with $75bn, followed by Meta Platforms at $40bn, Goldman Sachs at $30bn, and Booking Holdings and Salesforce at $20bn each.

Michael Msika Bloomberg
Date Posted:

Announced buybacks are running at a record pace this year with 2/3 of them driven by five firms. @markets

Are record US buyback announcements concentrated in just a few companies?

Core argument: US buyback announcements are running at a record pace, with more than two-thirds of the $261 billion in commitments concentrated in five companies, according to JPMorgan Chase strategists led by Dubravko Lakos-Bujas.

US buyback announcements are running at a record pace this year, though more than two-thirds of the $261 billion in commitments are spread across only five companies, according to JPMorgan Chase & Co. strategists. Chevron Corp.’s $75 billion leads the way, followed by Meta Platforms Inc. with $40 billion, Goldman Sachs Group Inc. with $30 billion, and Booking Holdings Inc. and Salesforce Inc. with $20 billion each, a team led by Dubravko Lakos-Bujas wrote in a note.

Takeaways by Macro Roundup® AI

  1. US buyback announcements are running at a record pace, with more than two-thirds of the $261 billion in commitments concentrated in five companies, according to JPMorgan Chase strategists led by Dubravko Lakos-Bujas.
  2. Chevron leads US buyback announcements with $75 billion, followed by Meta Platforms at $40 billion and Goldman Sachs at $30 billion, according to the JPMorgan note.
  3. Booking Holdings and Salesforce each announced $20 billion in buybacks, completing the five firms that account for more than two-thirds of the $261 billion in US repurchase commitments.

AI Summary. Researchers at the University of Rochester report creating a superconductor that operates at 69 degrees Fahrenheit and 145,000 pounds per square inch of pressure, roughly 1/360th of the pressure at Earth's core. The authors say this is about 10 degrees warmer and about 1/1000th the pressure of their earlier material.

Aylin Woodward Wall Street Journal
Date Posted:

Researchers at the University of Rochester report in @Nature that they have created a superconductor that can operate at room temperature, which would have significant implications for batteries and electrical transportation. @WSJ

Researchers at the University of Rochester report in @Nature that they have created a superconductor that can operate at...

Can a superconductor work at room temperature and much lower pressure?

Core argument: University of Rochester researchers report in Nature that their superconductor, dubbed "reddmatter," operates at 69°F and 145,000 psi, roughly 1/360th of the pressure at Earth's core.

A group of researchers at the University of Rochester report that they have created a new superconductor that can operate at room temperature and a much lower pressure than previously discovered superconducting materials. Superconductors demonstrate what physicists call the Meissner effect, when a material expels its magnetic field. If you put a superconductor near a magnet, it will levitate. For the new study, which was published Wednesday in the journal Nature, the researchers tweaked their superconductor recipe—adding nitrogen and a rare-earth metal known as lutetium to the hydrogen instead of sulfur and carbon—and once again heated and squeezed it in the diamond anvil cell. They named the resulting material “,” after observing how the material’s hue changed from blue to pink to red as it got compressed. The Rochester lab found that “reddmatter” could exist at 69 degrees Fahrenheit and 145,000 pounds per square inch, or psi, of pressure—about 1/360th of the pressure in Earth’s core. That is about a 10-degree Fahrenheit increase in temperature and a drop to about 1/1000th of pressure compared with its predecessor from 2020.

Takeaways by Macro Roundup® AI

  1. University of Rochester researchers report in Nature that their superconductor, dubbed "reddmatter," operates at 69°F and 145,000 psi, roughly 1/360th of the pressure at Earth's core.
  2. The reported conditions represent about a 10°F increase in temperature and roughly 1/1000th of the pressure required by the lab's 2020 predecessor material.
  3. The Rochester researchers changed their recipe by adding nitrogen and the rare-earth metal lutetium to hydrogen instead of sulfur and carbon, then heating and compressing it in a diamond anvil cell.

AI Summary. A claim of superconductivity at everyday temperatures and comparatively low pressures in a lutetium-based material has met resistance within the high-pressure physics community, and the researcher behind it denies all allegations of wrongdoing. He states the paper underwent multiple rounds of peer review over the better part of a year, with raw data shared and published alongside the result.

Charlie Wood and Zack Savitsky Quanta Magazine
Date Posted:

Some researchers are suspect of the new University of Rochester “reddmatter” given previous retractions by the authors; however, others argue @Nature has a rigorous review process. @QuantaMagazine

Some researchers are suspect of the new University of Rochester “reddmatter” given previous retractions by the...

Is a claim of room-temperature superconductivity meeting resistance from physicists?

Core argument: Ranga Dias denies all allegations of wrongdoing and continues working to establish his claim of superconductivity at everyday temperatures and what counts as almost-everyday pressures within the high-pressure physics community.

Dias strongly denies all allegations of wrongdoing and continues to make efforts to rigorously establish his claims of finding superconductivity at everyday temperatures and what counts as almost-everyday pressures in the high-pressure physics community. He stresses that today’s paper describing low-pressure superconductivity in the lutetium material underwent an unusually rigorous peer review process involving multiple rounds of review over the better part of a year. Dias also said that he shared all of his raw data with Nature, and that it will be published alongside the new result. Multiple independent experts voiced confidence in Nature’s ability to make sure that the result was as rigorous as possible.

Takeaways by Macro Roundup® AI

  1. Ranga Dias denies all allegations of wrongdoing and continues working to establish his claim of superconductivity at everyday temperatures and what counts as almost-everyday pressures within the high-pressure physics community.
  2. Dias says the paper describing low-pressure superconductivity in the lutetium material underwent an unusually rigorous peer review involving multiple rounds of review over the better part of a year.
  3. Dias says he shared all of his raw data with Nature and that it will be published alongside the new result, and multiple independent experts voiced confidence in Nature's ability to ensure the result was as rigorous as possible.

AI Summary. The Netherlands said it plans to restrict exports of some semiconductor manufacturing technology on national security grounds, joining US efforts to limit China's access to advanced chipmaking equipment, and China has formally protested. Dutch equipment maker ASML said the rules would require export licenses for its most advanced immersion DUV lithography systems.

Kawala Xie South China Morning Post
Date Posted:

China has logged a formal complaint with Dutch authorities as the Netherlands, home to ASML, introduces new export restrictions on semiconductor production equipment. @SCMPNews

China has logged a formal complaint with Dutch authorities as the Netherlands, home to ASML, introduces new export...

Will the Netherlands restrict chipmaking equipment exports to China?

Core argument: The Netherlands said it planned to restrict exports of some semiconductor technology on national security grounds, and is set to be the first country to join the US drive to hobble Chinese hi-tech development.

The Netherlands, a key player in chipmaking technology, said it planned to introduce restrictions on exports of some semiconductor technology over national security concerns. Beijing has formally protested against Dutch plans to restrict semiconductor exports, with the Netherlands set to be the first country to join the US drive to hobble Chinese hi-tech development. In a statement, ASML said the new restrictions would require the company to apply for export licenses in order to ship its “most advanced” immersion DUV systems. Plans are also in the works to target other key sectors, such as 5G and artificial intelligence. Washington stopped issuing export licenses for US companies to sell to Huawei in January, moving towards a total ban on doing business with the Chinese tech giant.

Takeaways by Macro Roundup® AI

  1. The Netherlands said it planned to restrict exports of some semiconductor technology on national security grounds, and is set to be the first country to join the US drive to hobble Chinese hi-tech development.
  2. ASML said the Dutch restrictions would require the company to apply for export licenses to ship its "most advanced" immersion DUV systems, with plans also in the works to target sectors such as 5G and artificial intelligence.
  3. Beijing formally protested the Dutch plans, while Washington stopped issuing export licenses for US companies to sell to Huawei in January, moving toward a total ban on doing business with the Chinese tech giant.

Friday, March 10, 2023

AI Summary. US payroll growth remains strong, with a monthly gain of 311,000 jobs and a three-month average of 351,000, while average hourly earnings growth has slowed to a 3.6% three-month annualized rate from 4.6%. Job gains far above a steady-state pace of 75,000 are hard to reconcile with inflation falling to 2–3%.

Jason Furman @jasonfurman
Date Posted:

.@jasonfurman argues that it’s “hard to believe that jobs 275K above steady state of 75K is compatible with inflation falling to 2% or even 3%.”

Is strong payroll growth compatible with inflation falling to 2–3%?

Core argument: U.S. nonfarm payrolls rose 311,000 in February and averaged 351,000 over the last three months, a pace Jason Furman calls extraordinary and says does not look like anomalous data.

The American economy continues to create an extraordinary number of jobs--311,000 in February, an average of 351,000 over the last three months. This does not look like anomalous data. Average hourly earnings growth slowed a lot. Last month the three-month annualized average was 4.6%. Largely because of slow growth in February (but also small revisions) the 3-month growth rate is now 3.6%. The unemployment rate went up, but the participation rate also went up, so employment was unchanged. What does this mean? Hard to believe that jobs 275K above steady state of 75K is compatible with inflation falling to 2% or even 3%. My view was the default should be hiked by 50bp and the totality of this release should not change that. But the market disagrees with me with rates down on the news.

Takeaways by Macro Roundup® AI

  1. U.S. nonfarm payrolls rose 311,000 in February and averaged 351,000 over the last three months, a pace Jason Furman calls extraordinary and says does not look like anomalous data.
  2. Average hourly earnings growth slowed, with the three-month annualized rate falling to 3.6% from 4.6% a month earlier, largely because of slow February growth plus small revisions.
  3. Furman finds job gains 275,000 above a steady state of 75,000 hard to reconcile with inflation falling to 2% or even 3%, and maintains his default of a 50bp hike, while the market sent rates down on the news.

AI Summary. Among surveyed women, remote workers are more likely to be pregnant or trying to conceive, though the difference is not statistically significant overall. The association is larger and statistically significant among workers in relatively good circumstances, suggesting remote work helps them convert improving finances into family formation.

Lyman Stone and Adam Ozimek Economic Innovation Group
Date Posted:

.@lymanstoneky @ModeledBehavior find that remote work has had a positive impact on the likelihood of near-term pregnancy for women, particularly for those >35 whose financials are improving.

Does remote work make women more likely to pursue pregnancy?

Core argument: Remote workers are more likely to be pregnant or trying to conceive, but the authors find the difference is not statistically significant with their controls.

We assess whether women are pregnant or trying to become pregnant. This question is a good indicator of very near-term fertility outlooks, since respondents generally have a pretty clear and stable idea whether they are pregnant or trying to conceive, or not. When looking directly at the impact of remote work on this variable with the same controls, we find that remote workers are indeed more likely to be pregnant or trying; however, the difference is not statistically significant. When we focus on the subset of workers who are doing relatively well, we see a larger and more statistically significant impact of remote work on fertility. Remote work seems to help women in improving circumstances to capitalize on those improvements and convert financial success into family life.

Takeaways by Macro Roundup® AI

  1. Remote workers are more likely to be pregnant or trying to conceive, but the authors find the difference is not statistically significant with their controls.
  2. Among workers who are doing relatively well, the authors find a larger and more statistically significant effect of remote work on being pregnant or trying to conceive.
  3. The authors argue remote work helps women in improving circumstances convert financial success into family life, treating whether women are pregnant or trying as an indicator of very near-term fertility outlooks.

AI Summary. The share of British teens who do not consider themselves likable, think of themselves as a failure, or are dissatisfied with their lives has risen since 2010, with similar deterioration in US and French youth mental health. More time on social media is associated with worse mental health, with the steepest gradient for girls.

John Burn-Murdoch Financial Times
Date Posted:

An increase in time spent on social media is associated with a decline in mental health, with the gradient steepest for girls. @jburnmurdoch.

Is teen mental health deteriorating along with social media use?

Core argument: The share of British teens who do not consider themselves likable fell from 6% to 4% between 1994 and 2010, then more than doubled, alongside sharp rises in those feeling like a failure, worrying a lot, and being dissatisfied with life.

Something is going very wrong for teenagers. Between 1994 and 2010, the share of British teens who do not consider themselves likable fell slightly from 6% to 4%; since 2010 it has more than doubled. The share who think of themselves as a failure, who worry a lot, and who are dissatisfied with their lives also kicked up sharply. The same trends are visible across the Atlantic. The number of US high school students who say their life often feels meaningless has rocketed in the past 12 years. And it’s not just the anglosphere. In France, rates of depression among 15- to 24-year-olds have quadrupled in the past decade. The more time teens spend on social media, the worse their mental health is. The gradient is steepest for girls, who also spend much more time on social media than boys, explaining the sharper deterioration among girls’ mental health than boys’.

Takeaways by Macro Roundup® AI

  1. The share of British teens who do not consider themselves likable fell from 6% to 4% between 1994 and 2010, then more than doubled, alongside sharp rises in those feeling like a failure, worrying a lot, and being dissatisfied with life.
  2. Depression rates among French 15- to 24-year-olds quadrupled over the past decade, and the number of US high school students saying their life often feels meaningless rose sharply over the past 12 years.
  3. Teen mental health is worse the more time teens spend on social media, with the steepest gradient for girls, who also spend much more time on social media than boys.

AI Summary. Prolonged below-replacement fertility in China is projected to produce a "kin crash" in which rising generations have fewer living relatives than ever before in Chinese history. The authors argue this shrinking of extended family networks will erode the Chinese family's role in protecting people from adversity and helping them seize opportunity.

Nicholas Eberstadt and Ashton Verdery Wall Street Journal
Date Posted:

Nicholas Eberstadt and Ashton Verdery @AEIecon make the case that a “crisis of the Chinese family” is underway. They project by 2050 living parents and in-laws will outnumber children for middle aged Chinese.

Will falling birth rates shrink Chinese families' protective role?

Core argument: China faces a "kin famine" unfolding over the next 30 years, in which prolonged sub-replacement fertility leaves rising generations with fewer living relatives than ever before in Chinese history, by the authors' reckoning.

China is now on the cusp of a severe and unavoidable “kin crash,” driven by prolonged sub-replacement fertility. The implosion of consanguineous family networks, by our reckoning, means that China’s rising generations will likely have fewer living relatives than ever before in Chinese history. A “kin famine” will thus unfold unforgivingly over the next 30 years—starting now. As it intensifies, the Chinese family—the most important institution protecting Chinese people against adversity in bad times and helping them seize opportunity in good times—will increasingly falter in both these crucial functions.

Takeaways by Macro Roundup® AI

  1. China faces a "kin famine" unfolding over the next 30 years, in which prolonged sub-replacement fertility leaves rising generations with fewer living relatives than ever before in Chinese history, by the authors' reckoning.
  2. The authors argue the implosion of consanguineous family networks will erode the Chinese family's two crucial functions: protecting people against adversity in bad times and helping them seize opportunity in good times.
  3. The authors describe China's "kin crash" as severe and unavoidable, with the implosion of family networks starting now rather than a distant prospect.

AI Summary. California landowners and water managers are rushing to capture storm runoff before it flows into the Pacific Ocean, after the state's three driest years on record drained reservoirs. Los Angeles officials say they diverted 25bn gallons in one winter, aided by deepened catch basins and streets redesigned to let water seep underground.

Jim Carlton Wall Street Journal
Date Posted:

California snowpack is nearly double average levels for this time of year and the state is racing to try to capture the precipitation to offset the record drought. @wsj

California snowpack is nearly double average levels for this time of year and the state is racing to try to capture the...

Can redesigned basins and streets capture storm runoff before it escapes?

Core argument: Los Angeles city officials say they have diverted 25 billion gallons of storm runoff this winter, enough to meet the annual needs of 308,000 households, aided partly by deepening pool-like basins in the San Fernando Valley.

California is nearing record precipitation this winter after the three driest years on record left reservoirs drained all over the state. Landowners along with state and local water managers are rushing to harvest as much runoff as they can before it escapes into the Pacific Ocean. Gov. Gavin Newsom in February ordered the state to accelerate its efforts to corral storm runoff, such as by facilitating projects to inject more water in underground aquifers. Los Angeles city officials say they have diverted 25 billion gallons so far this winter, or enough to meet the annual needs of 308,000 households. That was made possible partly by improvements such as deepening a group of pool-like basins in the San Fernando Valley so they could hold more rainwater. Runoff was also collected in streets that have been redesigned to include swales of open ground alongside to give water a place to seep underground.

Takeaways by Macro Roundup® AI

  1. Los Angeles city officials say they have diverted 25 billion gallons of storm runoff this winter, enough to meet the annual needs of 308,000 households, aided partly by deepening pool-like basins in the San Fernando Valley.
  2. California is nearing record precipitation this winter after its three driest years on record drained reservoirs statewide, with landowners and water managers racing to capture runoff before it escapes into the Pacific Ocean.
  3. Gov. Gavin Newsom in February ordered California to accelerate efforts to corral storm runoff, including facilitating projects that inject more water into underground aquifers.

AI Summary. Experiments at a geothermal startup's twin wells in Nevada found that pumping water underground and holding it builds pressure that flexes the rock, then produces higher-than-normal water output for hours once released. The results suggest geothermal plants could ramp electricity up or down and store energy for hours or days, acting like a large underground battery.

James Temple MIT Tech Review
Date Posted:

Texas-based @fervoenergy has conducted an experiment suggesting that geothermal power plants could provide long-term energy storage and play a critical role in a carbon-free electrical grid. @techreview

Texas-based @fervoenergy has conducted an experiment suggesting that geothermal power plants could provide long-term energy...

Can geothermal wells store energy like an underground battery?

Core argument: Fervo Energy pumped water thousands of feet underground in northern Nevada and held it there, with gauges in its twin wells showing pressure build as the trapped water flexed the surrounding rock.

Fervo Energy, a geothermal power startup, began conducting an experiment deep below the desert floor of northern Nevada. It pumped water thousands of feet underground and then held it there, watching for what would happen. The readings from gauges planted throughout the company’s twin wells showed that pressure quickly began to build, as water that had nowhere else to go actually flexed the rock itself. When they finally released the valve, the output of water surged, and it continued pumping out at higher-than-normal levels for hours. The results from the initial experiments suggest Fervo can create flexible geothermal power plants, capable of ramping electricity output up or down as needed. Potentially more important, the system can store up energy for hours or even days and deliver it back over similar periods, effectively acting as a giant and very long-lasting battery.

Takeaways by Macro Roundup® AI

  1. Fervo Energy pumped water thousands of feet underground in northern Nevada and held it there, with gauges in its twin wells showing pressure build as the trapped water flexed the surrounding rock.
  2. When Fervo released the valve, water output surged and continued at higher-than-normal levels for hours, results that suggest geothermal plants able to ramp electricity output up or down as needed.
  3. Fervo's initial experiments suggest the system could store energy for hours or even days and deliver it back over similar periods, effectively acting as a long-lasting battery.