Sunday Train: Putting Steel into the Amtrak Long Distance Backbone

Burning the Midnight Oil for Living Energy Independence

Express HSR is sexy. Indeed, its sexy enough that when Big Oil propagandizes against it, they have to paint it as too expensive or something that America is too incompetent to handle, since the idea of sitting in an actually comfortable rail seat, watching a movie on a laptop or snacking on a sandwich while flying along at two to three times highway speeds, "just like in France or Japan or Spain", that's too appealing to convince a big majority of people that it would be anything but nice to have. So they have to con people into thinking of it as an unrealistic pipe dream that the US can do what Spain has been doing for a decade, France for three decades, and Japan for half a century.

Rapid Rail is not as sexy as Express HSR, but at least it is as fast as driving for most drivers on most corridors, and appreciably faster than driving on the corridor with the "best bones", like either Cleveland / Columbus or Davenport / Des Moines / Iowa wold be at 110mph top passenger speed. And it is much cheaper than Express HSR, with lots of potential corridors that local residents will start lobbying for once the first of the Rapid Passenger Rail services come into service.

But conventional long haul rail? Surely plodding along at 50mph to as slow as 30mph on heavy freight rail corridors is an obsolete holdover from an earlier time?

Well, no. Conventional long haul rail has a 21st century role to play, if the United States should declare Economic Independence and start working to regain the economic freedom that we surrendered to the Big Oil and the oil exporting regions in the 70's and 80's.

And so, in this evening's Sunday Train, we look at the "PRIIA Section 210" plans that Amtrak has developed for the five weakest of its fifteen long distance corridors: the California Zephyr, the Capitol Limited, the Cardinal, the Sunset Limited, and the Texas Eagle.

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Sunday Train: Steel Interstates & An America That Can Do Big Things

Burning the Midnight Oil for Living Energy Independence

Steel Interstate (noun): A Network of Electrified Heavy and Rapid Rail corridors that will allow the United States to remain a sovereign national economy.

Integrated into the Steel Interstates are Electricity Superhighways to connect Renewable Energy Resource areas to each other, to substantially increase the stability of the available Renewable Energy Supply, and to Energy Consumers, to ensure that no rich Renewable Electricity Resource goes untapped for lack of access to a electricity markets.

This is something that the United States should do. Depending on the twists and turns of international energy markets in the coming decades, it may be something the United States must do, to remain a coherent national economy.

If the efforts of Big Oil and Big Coal are successful, it is the kind of thing that America will not be able to do.

Yet, I believe it is something that the United States actually can do.

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Sunday Train: Sustainable Steam Train? / SF Muni - HSR Disconnect? / A Geary Aerobus?

Burning the Midnight Oil for Living Energy Independence

This week's Sunday Train is a trio of shorter topics. The first is a research development project to develop a modern steam train to run on biocoal. The target is a sustainable steam train that, as a headline grabber, will attempt to run at 130mph and break the world steam train speed record. There's much to like about this research development project ... but I am going to argue that biocoal to operate trains is not it.

Second, SF's MUNI transport agency is one of the ten agencies slated to split $760m in Prop1a(2008) bond funds improvements to systems interconnecting with the planned High Speed Rail system. The balance of the $950m goes to the three existing Amtrak California intercity rail services, the Capitol Corridor, the San Joaquin, and the Surfliner.

Odd thing is, the proposal that SF MUNI is setting forward doesn't actually connect to the proposed HSR system? What's up with that, after the break.

And third, a speculative look at an alternative technology that SF MUNI might deploy that money on, that actually would connect with the HSR system at the Transbay Terminal, as well as connecting to BART, the MUNI light rail network, the existing (and proposed alternative) Caltrain terminus at 4th and King, and provide express transit service along Geary Blvd.

So instead of the traditional long trip, Sunday Train for Memorial Day Weekend has three short exursions. Join us for one, two, or all three, after the break.

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Sunday Train: The Rock Island Line is a Mighty Fine Iowa Rapid-Rail Road

Burning the Midnight Oil for Living Energy Independence

The Iowa Department of Transport has just completed the Chicago to Omaha Regional Passenger Rail System Planning Study, to select its preferred alignment for a detailed Environmental Impact Report.

There were five alignments in the study, based on the five historical passenger rail services between Chicago and Omaha. From north to south, these are: the Illinois Central; the Chicago & Northwestern; the Milwaukee Road; the Rock Island Line; and the Burlington Line. The study also included one combined alignment, based on where the Burlington Line and the Rock Island Line cross in Wyanet in western Illinois.

The combined alignment is the one selected, taking the Burlington alignment out of Chicago, and then taking the Rock Island line to Moline in the Quad Cities on the Illinois / Iowa border and through Iowa City and Des Moines to Omaha (probably via Council Bluffs, but that has yet to be determined).

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Sunday Train: Leveraging HSR for a Fresno Regional Rail Corridor

Burning the Midnight Oil for Living Energy Independence
 
Kings County officials have been opposed all proposed routes:

Board members said no high-speed rail route through Kings County would be acceptable while denouncing the Authority and its Fresno-to-Bakersfield environmental impact report. “I think we should come out and oppose high-speed rail in Kings County, no matter what alignment they have,” said Supervisor Tony Barba during a discussion of the county’s official response to the EIR, which is due Thursday. He was applauded by a large crowd that nearly filled the Board of Supervisors’ chambers at the Kings County Government Center.

And then they opposed getting started on California HSR:

HANFORD — Kings County supervisors on Tuesday will likely ask three key legislators to delay high-speed rail funding until the project resolves local conflicts. ... The Legislature is expected to vote in June whether to spend $2.7 billion in state bond money on the project, which has created major controversy in the San Joaquin Valley and stoked opposition from several cities and counties who believe it should be scrapped. Denying the funding would stop the Authority from starting construction in Fresno later this year or in early 2013.

And now, County officials seek to preserve Amtrak :

... But Authority officials have recently entered into discussions with Kings County to see if Amtrak service through Hanford and Corcoran can be preserved, said Larry Spikes, Kings County administrative officer. Downtown stations are considered critical to cities’ local economy. Authority Board Chairman Dan Richard couldn’t be reached for comment. “Taking Amtrak right out of the heart of Hanford and Corcoran is just not a good idea,” Spikes said.

So, don't want the HSR Station in town, don't want the HSR to go outside of town, and wants Amtrak to be continued to Hanford and Corcoran at slow speed when the San Joaquin after the high speed route between Merced and Bakersfield becomes available. What I am looking in this week's Sunday Train is a different way to go about this that provides a mix of local and intercity transport benefits to the major county centers: the Fresno Regional Rail Corridor.
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Sunday Train: The Miami/Orlando Passenger Rail Project

Burning the Midnight Oil for Living Energy Independence

I saw this story a couple of weeks ago, but between the happenings in California and some unanswered questions I had, I haven't mentioned it yet. Florida East Coast Industries plans Miami-Orlando passenger service by 2014:

Passenger train service between Miami and Orlando could begin as early as 2014 under a plan announced Thursday by Florida East Coast Industries.

The new "All Aboard Florida" service, which would be privately owned and operated, would offer frequent, regularly scheduled daily trains geared to business travelers and tourists. The Miami-Orlando trip by rail would take three hours, about the same time it takes by car via Florida's Turnpike.

There would be four stops: Miami, Fort Lauderdale, West Palm Beach and Orlando, each with connections to airports, seaports and existing rail systems such as Tri-Rail and Metrorail. The trains would run on existing FEC tracks that stretch along the east coast from Miami to Cocoa. Forty miles of new track would link Cocoa to Orlando.

Well, waddya know ~ a Passenger Train that Scott Walker can't kill. More about the Miami/Orlando Train, below the fold.
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Sunday Train: Did Governor Brown Save California's HSR?

Burning the Midnight Oil for Living Energy Independence

As I mentioned in last week's Sunday Train, the California HSR Authority came out with a revised draft Business Plan.

And why do you revise a draft Business Plan? Because some people suggested some modifications to your previous draft Business Plan might be in order ... for instance, if there's a possibility that you cannot get bonds authorized to start work on the part of the corridor where the Federal Government has already put some funding on the table.

The new, revised, draft Business Plan seems to mark the final passing of the baton from the Judge Kopp absolutist vision of the what an HSR "simply has to be" to the more grounded, realistic vision of Governor Brown ...

... and in the process of dragging the HSR Authority back into touch with reality, it is quite possible that Governor Brown has saved the California HSR project.

There are two qualifiers here. The first is that without an account of someone privy to the details of the Governor's intervention, we won't know what changes were things the California HSR was on track to doing anyway, and what changes were pushed upon them. But even there, what "the HSR Authority wanted to do" was likely heavily influenced by the changing of the guard from Schwarzenegger appointees to Brown appointees at the Authority.

The second is that getting to work is not yet a done deal. Supporters of the project ~ whether ongoing supporters or those won over by the newly revised plan ~ still need to work to help see the project through to construction of the first construction segment.

The devil is in the details, so we go chasing the devil below the fold.
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Agent Orange

Sunday Train: A Streetcar for Broadway (LA)

Nearly a month ago, Yonah Freemark had a post at The Transport Politic entitled, Los Angeles’ Streetcar Plans: Too Duplicative of Existing Services?. He wrote:

Los Angeles has big hopes for its downtown, and, like most of the country’s major cities, it has seen significant population growth in the inner core over the past ten years. Now, to extend this renaissance, the city — also like many others — is planning a [http://www.metro.net/projects/historic-streetcar-service/ streetcar line] that would traverse the district from north to south. Last month, it applied for $37.5 million in U.S. Department of Transportation TIGER grant dollars, which it hopes to supplement with local and private funds to complete an initial route of between 3 and 5 one-way track miles at a cost of between $106 and $138 million.

Despite the fact that planning for the L.A. streetcar goes back for more than a decade thanks to the work of a public-private local advocacy group, the city will have plenty of competition in its effort to win federal funds. Requests for the third round of TIGER funding outnumbered actual funding available by 27 to 1. With so many projects up for consideration, anything funded by Washington ought to be valuable. But L.A.’s project could benefit from significant improvement.

And then ... well, join me at one of the community blogs below:
ProgressiveBlue
The Stars Hollow Gazette
HillbillyReport.org
Daily Kos

Sunday Train: Strengthening the Jobs Bill with a $0.01/gallon Oil Tariff

Burning the Midnight Oil for Living Energy Independence

Yeah, OK, its not Sunday, but I got called on Saturday morning after a Friday night class to substitute for a colleague, and that threw me off completely. Fortunately for the Sunday Train, I am massively underemployed, so there is Monday afternoon available to finish composing what I been thinking about this week.

As I discussed in Whether and How to Sell the Jobs Policy, there is not a whole lot of "pop" in the jobs bill, but there is some. The EPI analysis suggests 1m in jobs "created or saved", but of course "jobs saved" is an increase compared to a counterfactual, and not an actual increase. Over half of those are "job saved", so the "pop" is under half a million jobs.

If spread evenly across a calendar year, "just under half a million new jobs" would be 40,000 new jobs per month. If 150,000 new jobs per month is needed to bring unemployment down, that is relying on our stuttering economy to create 110,000 or more ~ close to what we have often been achieving, but there is substantial concern that we might not keep it up, after a month with about 0 (zero, zilch, nada) new private jobs created.

So the aim here is to look for something that can add some more "pop". And having read the title, you know that a 1 penny Oil Tariff is involved. Hopefully raising the question in our mind: "uhmmm, where's the 'pop' in that?"

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ProgressiveBlue
The Stars Hollow Gazette
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Whether and How to Sell the Jobs Policy

Burning the Midnight Oil for Progressive Populism

First off, the thing to do with the BS about gutting the safety net on the excuse that the Take Everything Away Party wants to kill it is to take the idea of gutting the safety programs behind the farmhouse to the mint bed and apply a sharp ax.

How to do that, I don't know.

But if it can be done, then there's still the question of whether and how to sell the "Jobs Policy"
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Docudharma

Sunday Train: The Texas Wishbone Regional High Speed Rail

Burning the Midnight Oil for Living Energy Independence

Back in the 90's, Texas tried to get an Express HSR system off the ground (that is, a bullet train system somewhere in the 125mph to 220mph range) with the "Texas Triangle" project. It was to be an entirely privately funded project. Not surprisingly, competing against the heavily publicly subsidized interstate highway and air travel systems, it did not get off the ground.

More recently, the Texas T-Bone was proposed, based on the Dallas to San Antonio leg of the Triangle and a route from Houston to Temple, then running north to Dallas with connections south to Austin and San Antonio.

While the Texas T-Bone seems to be the current plan of the Texas High Speed Rail and Transportation Corporation, this is more of an advocacy group than an official HSR Commission or Rail Development Commission.

Given that we are in between periods of substantial federal funding for High Speed Rail, I thought this might be a good time to take a look at the prospects for Regional HSR, in some of the existing rail corridors within the "Texas Triangle" region ... and so arrived at the Texas Wishbone.
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ProgressiveBlue
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Docudharma
The European Tribune
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LQD: The AA+ rating is valid, but the S&P case is intellectually dishonest ~ Mosler

Burning the Midnight Oil for a Brawny Recovery

"LQD" is an abbreviation I first encountered at EuroTrib: it means "Lazy Quote Diary".

[http://moslereconomics.com/2011/08/06/sp-downgrades-us-on-ability-to-pay/ The quote from Warren Mosler]:

Credit ratings are based on ability to pay and willingness to pay.

David Beers of S&P knows this and has discussed this in the past.
...
So why then did David T. Beers decide to downgrade the US on ability to pay, and not explicitly on willingness to pay?

Sure looks like a case of intellectual dishonesty.
And I have no idea why.
So much for his legacy.

Well, its a very short post, so fair use restricts it to an even shorter quote.

But this is the gist of it: no issuer of its own currency is ever forced to default on debt issued in its own currency.

Think about it: if your family's IOU's were accepted by the bank to repay debts ... could you ever run short of the means to pay your debts?

What would an honest downgrade have said? Below the fold.
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The argument for a downgrade is this:

The only credit risk is that the sovereign issuer of currency is unwilling to pay its debts, as Mosler says. An honest downgrade would be, "in voting down a clean extension of the credit ceiling, the majority in the House of Representatives of the United States demonstrated a willingness to consider defaulting on its debts as a bargaining ploy to get what it wants. This implies a risk of default greater than 0, and so US debt doesn't deserve the "absolutely no risk of default" rating of AAA.

The argument against a downgrade is this:

Even in the manufactured debt ceiling crisis, there was never any reason to believe that interest would not be paid on Treasury Debt nor that Treasury Debt that matured would be redeemed at its face value. What the Government would have done ~ for no good reason, since it has the legal authority to mint coinage with face values in the billions, which on deposit in the Fed would have allowed payment to have been cleared without requiring the issue of debt ~ would have been to miss appropriated payments which it was not legally bound to pay.

So as far as what S&P are rating, the actual payments on the actual Treasury bonds, bills and notes that Congress permitted the Treasury to issue ... there was no risk.

However, 10 years is a long time in politics, and 10 years of this bullshit, who can tell. So while its hard to make a case that bills and notes should be rated below AAA, AA+ for 10 year bonds may be a bit more plausible.

Conclusion

Bottom line, though, S&P is still lying to people when it pretends that the rating is about "ability to pay". Its only ever about willingness to pay for a government issuing debt in the currency it issues.


Midnight Oil ~ Read About It



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Sunday Train: Fighting Economic Sabotage

Burning the Midnight Oil for Living Energy Independence

There was shocking news early this June about May economic performance: GDP growth in May was about the same as the average for the first quarter of 2011, and so employment growth was virtually stagnant, and indeed fell behind growth of the labor force.

What was shocking, of course, was that this was news to anybody. For anyone with the basics on how the economy works, it was obvious that economic growth would be sluggish.

Of course, the Republicans in Congress and the White House, both for their own reasons, completely missed the boat ~ the White House arguing if we ease off the accelerate and tap the brakes, but do it intelligently, that will eventually speed up the economy, and the Republicans insisting that, no, we have to slam on the brakes to fix things.

With such a broken political discussion, what can be done?
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.Progressive Blue
..HillbillyReport.org
...Docudharma
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If the College Educated hit 16% unemployment, would it be different?

Burning the Midnight Oil for Progressive Populism

While Matthew Yglesias tends to be susceptible to patently absurd conventional wisdom economics, he does have his moments, as back in February when he observed:

The people in all the key jobs—not just the members of congress and cabinet secretaries and FOMC members and newspaper editors, but the bulk of the people who staff those people—are virtually all college graduates. And the way America works in 2010 those people are overwhelmingly going to have friends, neighbors, and acquaintances who are also college graduates. And while the labor market outlook for college graduates is bad by the standards of recent history, it’s really not catastrophic. Things look very different for people with high school diplomas.

The figures are stark, and starker when plotted as a graph:


The people I teach are mostly on that purple line trying desperately to climb down onto that green line, out of the 10% (headline) rate to the just-under-8% rate. Which may be part of why I am skeptical when Richard Florida reckons that the 'Knowledge Economy' as currently constituted, which mostly constitutes people making intellectual property claims to slice and dice existing income streams, is sufficient as a future for the American economy.

If the US is going to be importing the actual manufactured products, mostly from the Factory of the World across the Pacific, we have to have something to export that people can work on without genuinely requiring a four year college education.

Now, I don't believe in silver bullet, all-in-one miracle solutions, so none of these are intended to be silver bullets, but all of these involve work below the four year college level, in addition to the college-educated work that it generates:

• Pass a Federal Law that long term fixed tariff electricity rates may take as their "avoided cost" the average annual wholesale price of power in the median of the past five years. This will allow states to pass feed-in tariffs, establishing jobs in manufacturing, installing, and maintaining wind turbines in all states that take up the offer
• The same Federal Law allows for stable feed-in rates to buy back power from small scale solar and industrial cogenerated electricity, further expanding the employment that can be generated
• A 10 cent a gallon tariff on imported crude oil to finance Steel Interstates, High Speed Rail, Electric Transport, Public Transport and Active Transport, with the ability to borrow ahead on the tax revenue, can generate millions of new jobs ~ many college educated, and many not requiring a four year college education

This is a point that is perhaps lost in the noise: when the Oil Industry founded and as it funds the Radical Right Wing echo chamber, including the Cato Institute, the Heritage Foundation, the Reason Foundation, among the notable opponents to Energy Independence and supporters of maintaining America's vulnerability to its greatest national security threat ...

... they are opposed to the creation of jobs for ordinary working families.

While the Republican noise machine generates outrage about a non-existent Mosque which will not look onto Ground Zero to distract attention from its own jobs policy of "prosperity is just around the corner".

People know that someone has ripped off their American Dream. Too many Democrats are beholden to the same interests that did the ripping off to stand up and say loud and clear who did the ripping off ... in this election cycle. But what that means is that we have to organize so that starting around December 2010, we are working to getting people on the ballot for State Legislatures and Congress ~ Democrats if they'll let us, independents if need be ~ who are willing to stand up and say loud and clear who is on the getting side of the Great American Rip-Off Economy.

Remember what happened when gasoline hit $4/gallon. Over the decade ahead, we will be starting to slide down from the Peak of Peak Oil, and will be looking back fondly at $4/gallon oil, unless we start doing something now to tap the jobs that are available from Working to Kick Oil.


Midnight Oil ~ Dreamworld

The Breakfast Creek Hotel is up for sale
The last square mile of terra firma gavelled in the mail
So farewell to the Norfolk Island pines
No amount of make believe can help this heart of mine
End - your dreamworld is just about to end
Fall - your dreamworld is just about to fall
Your dreamworld will fall

Sunday Train: Heritage Opposes Freedom to Choose High Speed Rail

Burning the Midnight Oil for Living Energy Independence

Front paged at Docudharma, Hillbilly Report and at ProgressiveBlue, also available in Orange.

I'm shocked, shocked I say, that a belief tank partly funded by Big Oil and Union Busters would issue a piece attacking High Speed Rail. But they did, claiming that there is a "Coming High Speed Rail Financial Disaster".

Less shocking is that the argument in the piece is tissue-thin, relying on shell games and appeal to stereotype in lieu of evidence.

Of course, just because its an empty argument does not mean its a pointless one. When you are trying to prevent solutions to problems, FUD ... Fear, Uncertainty and Doubt ... can sometimes be as effective as genuine argument.

Well, I hope someone out there is able to frame great counter-arguments that are useful in cracking into Dr. Utt's (Economics) target audience of those with short attention spans and limited access to information. What I can offer here is raw material for those counter-arguments.
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Attack what you can, even if its not the policy on offer

The first red flag that the Heritage piece does not intend a serious consideration of current US Department of Transportation High Speed Rail policy is when the author blithely announces:

Although there is no fixed rule as to what constitutes HSR, a common definition is a rail line that operates at an average speed of at least 125 miles per hour (mph).

If talking about bullet trains alone, this number is low - the very first bullet trains half a century ago were going at these speeds, but there have been a lot of improvements since then. If talking about appreciably faster than what is available at present through the United States ... its high.

What "at least 125mph" means is the speed where a rail corridor has to be completely grade separated. That's why the Express HSR corridors are not built to be a little bit above 125mph: there is a substantial capital cost to cross over that hurdle, and once crossed, substantial benefit to operating at 170mph, 190mph, or 220mph.

As regular readers of the Sunday Train may be aware, outside the Northeast Corridor, the common maximum speed on US rail mainlines is 79mph. If it sounds odd that the speed limit is set exactly one mph below a normal US "count by 5's" speed limit ...
... as James McCommons recounts in "Waiting on a Train", over half a century ago, the Federal Railroad Authority mandated that all railway corridors supporting traffic at 80mph or higher must provide Positive Train Control signal systems for safety. These are systems that can automatically stop trains if a train is going into a track that is already occupied, or if the engineer is incapacitated.

And the railways mostly responded by setting speed limits of 79mph in their corridors. So while the US has the biggest and brawniest trains with massive heavy freight loads compared to most nations worldwide ... by international standards, that's big and brawny and slow.

In nations that already had regular Interurban Express services running 90mph~100mph, the improvements in technology that allow these trains to maintain that speed when going around curves were incremental improvements. "High Speed" was going substantially faster than that.

And so the first Japanese bullet trains in the 1960's went 125mph, and the first French TGV's in the 1980's went 168mph, with the second generation at 186mph ... and the most recent generation of bullet trains is reaching 220mph around the world.

Now, I'm sure Dr. Utt (Economics) knows perfectly well that the High Speed Rail policy that he is pretending to critique involves all three classes of speed that are higher than conventional US passenger rail. He is just setting the bar to create the frame for the very weakest part of his argument, when he considers the 110mph and 125mph classes of Higher Speed Rail.

To sustain these speeds over long routes requires a substantial investment in a secure and exclusive roadbed built to precise standards and tolerances, using equipment that meets the same high standards. As a result, an HSR line costs much more to build and operate than an ordinary passenger rail line. It is believed that only two HSR lines in the world earn enough revenue to cover operating and capital costs: Paris-Lyon and Tokyo-Osaka

Of course, as I've discussed before, "enough [passenger] revenue to cover operating and capital costs" really means, "pay all operating and capital costs by a fraction of the economic benefit, with everyone else benefiting getting a free ride."

And if we were to apply that same standard to the status quo, Interstate Highways ... Interstate Highways cannot even cover their maintenance alone out of gas taxes paid by traffic on the highways, but have always required cross-subsidy by gas taxes paid to drive on city streets. And now, even that cross-subsidy is not enough, and the shortfall is now being made up out of the General Fund.

So its (1) an absurd standard and (2) an absurd standard that High Speed Rail comes closer to meeting than the Interstate Highway status quo.

The cost of alternative Interstate Highway spending is no mere theoretical comparison. The only two 150mph+ Express HSR systems funded in February were in California and Florida, both in areas projected to have growing population and demand for intercity transport, and both of which present a choice between spending less money to provide transport capacity with High Speed Rail, and more money to provide transport capacity with long distance highways and investment in airport expansions.

So one freedom the Heritage Foundation is fighting against is the freedom to spend public capital subsidies in a cost-effective way.


Deficit Errorism Strikes at Rail Projects!

In addition to the high costs that the HSR program will impose on taxpayers during a period of economic hardship and slow recovery,

When applications made for funding, those applications include a cost and benefit analysis that does indeed claim that the total economic benefit exceeds the total cost. Yet Dr. Utt (Economics) has not to this point even pretended to dispute these claims. He simply jumps from "not profitable for a private business to pursue" to "a net cost to taxpayers".

That logical leap is lubricated by bullshit. If the projects yield economic benefits that are substantially greater than the costs, there is no net "cost imposed on taxpayers". Construction of those HSR corridors would impose:

• job opportunities on unemployed and underemployed workers, and
• demand for the product of supplier businesses

... but not net costs on future taxpayers. Instead, the investment in more capital efficient transport more easily powered by domestic sustainable energy yields a net benefit for future taxpayers.

And of course, if there is a particular corridor where the cost of an Express HSR corridor is not justified by the full economic benefit, build a less expensive system ... because Express HSR is just one option.


What there's no argument to make, hope for an ignorant audience

Of course, after criticizing Express HSR for being too expensive, without bothering trying to prove the point, the next step is to argue that the much less expensive Regional HSR projects are no good either. But I wonder how you could attack Regional HSR for being so much cheaper per mile than Express HSR, after resting your whole argument on the high cost per mile of Express HSR? I wonder ...

One has to wonder what exactly motivated the FRA review team to endorse the proposed $1.1 billion investment in the Kansas City-St. Louis-Chicago route, which would allow customers to reach their destinations 10 percent faster than they could by driving between Chicago and St. Louis.

Actually, no, nobody has to wonder. After existing improvements in bottlenecks with freight, even according to SubsidyScope's attack on Amtrak, the Chicago/St. Louis corridor recovers 80% of its operating costs from operating revenues at Amtrak speeds.

And that is a service that is slower than driving, which means there are trips that are day trips when driving but overnight trips by train.

It puzzling why a fellow economist would have to "wonder" why more people will make a choice when more people gain the freedom to make that choice. Indeed, on the demand side, its the growing freedom to choose that defines the three tiers of High Speed Rail:

• Become time-competitive with driving, and people who would rather spend their trip doing something other than driving, have the freedom to make that choose.
• Become faster than driving, and some people who wanted something faster than driving, especially for inner urban, outer suburban, and rural destinations without a convenient airport, will start choosing the train for the speed.
• Become time-competitive with flying, and some people will choose the train for the greater comfort and the smaller portion of the trip spent waiting for the trip to start.

Given the willingness that Dr. Utt (Economics) has to engage in misleading framing and deceptive shell game arguments, when he has to resort to simply bluffing by "wondering why" for a question with a perfectly obvious and straightforward answer, he must be on very weak ground indeed.


And then cross-reference to fellow HSR deniers

However extravagant this commitment to jazzed-up 19th century technology may be, the ultimate costs of bringing HSR to the 13 corridors already approved by the FRA will be staggering. California received a $2.3 billion grant toward an HSR rail system with an official cost of $50.2 billion (in 2006 dollars), but independent analysts contend that it will more likely cost $81.4 billion.[6]

There's another shell game here:

• shell one is the actual policy
• shell two is the talking point that 110mph diesel and 125mph electric tilt trains, first successfully put into service in the 1950's and not gaining wide use until after active tilt was mastered in the 1980's is "1800's technology"
• shell three is putting the cost of the California system immediately after the reference to the 110mph and 125mph speed classes ... even though California is a 220mph speed service.

But note the description of a cost quote from what is described as an "independent source". Is it a peer reviewed academic paper? A genuinely independent third party that takes no position on HSR pro or con? No, of course not, its the output of another partly Big Oil funded belief tank, the [http://www.sourcewatch.org/index.php?title=Reason_Foundation "Reason" Foundation]:

[6]Wendell Cox and Joseph Vranich, "The California High Speed Rail Proposal: A Due Diligence Report," Reason Foundation Policy Study No. 370, September 2008, at http://reason.org/files/1b544eba6f1d5f9e8012a8c36676ea7e.pdf (March 11, 2010).

... by Wendell Cox, who makes much of his living as being the "transport expert" who can be relied upon to deliver the pro-road-lobby conclusion.

Dr. Utt is lying about the independence of that source. Its the output of a belief tank that opposes High Speed Rail. That's not an independent source.

Dr. Utt then surveys the "overseas experience" while conveniently avoiding the fact that every system that he talks about, even the over-priced, badly managed UK investment in HSR, dogged by the politically imposed burden of "public private partnerships", generate operating surpluses. The bedrock foundation of this survey is the demand that everyone else who benefits from a transport service must be given a free ride on the back of passenger fares.

After all this time with shell game arguments, misleading frames, and "one wonders" questions where even a misleading argument must not be available, Dr. Utt saves the lie for very near the end. Blink and you would miss it ... especially for those who believe the lie to be true:

Most taxpayers will continue to travel by more cost-effective and largely self-financed modes, such as cars and airplanes.

Of course, the "self-finance" claim for roads is patent nonsense. Interstate Highways have always been cross-subsidized by people driving on city streets that receive no federal gas tax money, by zoning requirements to provide "free parking", and by a host of other explicit and hidden public subsidies. Unlike High Speed Rail, which can cover its own operating costs, intercity transport by road has been provided both capital and operating subsidy ever since the Interstate Highway System was first established.


None of this is surprising

It we cast our eye back across American Economic History, a watershed event that can be used to divide the Fordist period the followed WWII from the Second Gilded Age that started to gain full speed under Ronald Reagan is American Peak Oil ... and even more specifically, March, 1971, when the Texas Railroad Commission removed the quota on oil production.

When oil prices in the US were regulated through production quotas to remain relatively stable in dollar terms, which means falling prices when corrected through inflation, the interests of Big Oil were lined up with strong income growth. The side-effect that this provides a favorable economic setting for organizing workforces was, for capital-intensive corporations such as big oil, a regrettable but tolerable evil.

When the balance of pricing power passed from an elected Commission in the US to the major oil exporting nations, the interests of oil companies and the economic interests of the United States began to diverge. An over-valued US$ provides US-headquartered transnationals with added economic power when pursuing the rights to exploit non-renewable natural resources overseas. Depressed economic conditions in low-income countries are more appealing than rapid economic development.

When any industry has interests that diverge strongly from the national interest, it becomes useful to invest in propaganda mills to help promote argument frames and talking points that are favorable to their interest and help obscure the national interest.

Each of these propaganda mills are, of course, organizations that chase funding from various foundations and corporations ... so when a single right wing propaganda mill adopts a particular position, it would well be a matter of personal conviction by a group of propagandists wihin the mill. But when the Heritage Foundation, Reason Foundation, Cato Institute all take up the case (see Libertarians Against Choice: The Attack on Obama's HSR Policy and the Midwest HSR Association's HSR Fact versus Fiction) ... well, coming up with arguments that serve the interests of those who pay their bills is the common job of all three.

And so this last week, my "HSR" search tag caught mention after mention of the newest Heritage Institute "argument" against the present High Speed Rail policy.


Your Mission, if you Choose to Accept It ...

So, given what is clearly an effort at deceptive propaganda posing as a serious argument, your mission, if you choose to accept it, is to propose simple, clear, fact based responses to this kind of nonsense. While you ponder that, I'll pass the stage on to the headliners.


Midnight Oil: Truganini

Sunday Train: Going to Disneyland, Disneyworld, and Other Adventures

Burning the Midnight Oil for Living Energy Independence

Huh, seems me that whatever the state of my various concerns, the agenda of the Sunday Train has been taken over by the White House ... funny how announcing the recipients of a total of $8b will do that.

The Transport Politic (aka Yonah Freeman and the TTP commentariat) has a very complete rundown. The allotments over $200m are:

• California, $2,344m
• Florida: $1,250m
• Illinois: $1,236m
• Wisconsin: $822m
• Washington: $590m
• North Carolina: $545m
• Ohio: $400m

So, what's the money for?


So, what's the money for?

I'll start with the big ticket items.

California, $2,344m. This includes $1,850m for the California HSR Stage 1 from San Francisco to Anaheim via San Jose, Fresno, Bakersfield, and the LA Basin. This is, in essence, enough to prime the pump for the California project.

California has the advantage of $9b in bonding authority already passed in November 2008, but that bonding authority has strings attached. One of those string is that for any given segment, all funding has to be in place before bonds can be sold, bonds cannot fund more than half the cost of a given segment, and to avoid monkey business in the definition of "segment", it has to have a vetted plan for running services without state operating subsidies.

This ARRA funding will allow the California HSR authority to work through 2010 and its projected start of the segment design and build process in 2011 without having to sell bonds up front. Then if an application for additional Federal funds requires matching funds, it will be possible to bring one or more of the defined segments in line for receiving state bond support, which will provide the matching funds.

Obviously, how fast those funds flow will determine how close the CAHSRA can stay to its project timeline ... but with the ARRA funding to prime the pump, California is well placed to proceed with the project at whatever pace that funding flows permit.

And the flip side of the ARRA announcement is a substantial group of states with a stake in having enough HSR funding so that they are not forced to go toe-to-toe with California's substantial application advantages. Any "transparent process", which are codewords for cost-benefit analysis based decisions, will give heavy weight to California for Express HSR. Just as the Northeast Corridor has a close to ideal population distribution for conventional rail, and the Great Lakes / Eastern Midwest a close to an ideal population distribution for 110mph/125mph Emerging/Regional HSR, California has close to an ideal population distribution for Express HSR.

In addition to the Stage 1 corridor funding, the ARRA funding includes $400m for building the shell of a bus terminal into the foundations of the Transbay Terminal bus station in San Francisco. This is a project that is reputedly "ready to go", although of course the actual design of the TBT train box leaves quite a bit to be desired. Never one to quit working before the whistle, I am hoping that the availability of $400m can be used to persuade the Transbay Joint Power Authority to build a less heavily bottlenecked design for trains entering and leaving this undergound train station.

Finally, while Stage 1 does not go to Vegas (despite what the Replicants were saying this time last year) ... it does go to Disneyland. Which sets the stage for the next allocation.

Florida: $1,250m. This is entirely for Express HSR track from Tampa to Orlando. This is a line that has been criticized for not connecting the two downtowns of the two cities. On the other hand, it does go to Disneyworld, and as an on-again, off-again project that kept getting squashed by lack of local funding, the Florida State Legislature was led to believe that their hopes of HSR funding required a commitment to support complementary local rail service. Support for SunRail passed, and so Florida got their Disneyworld train.

If there is ongoing federal funding available, I expect that sooner or later Florida will bite the bullet and sort out an extension of the service - even if not an extension of the corridor - to allow downtown to downtown service. After all, in France, one of the early pioneers in High Speed Rail, its common for the Express HSR services to only run on Express HSR corridors between major metropolitan areas, and to run into and through major metro areas on express electric urban lines.

Illinois: $1,236m. The main project here is $1,102m to upgrade parts of the Chicago / St. Louis corridor to 110mph service, cutting end-to-end travel time to four hours, and bringing substantial new populations along the corridor within three hours or less of either Chicago or St. Louis or both. Further improvement of this corridor on the same basis can bring the end-to-end time down to three hours.

The second main project is $133m for line and station improvements between Chicago and Michigan, including two suburban and one downtown station for Detroit. This is a line that, like the Chicago / St. Louis, has already has a series of smaller incremental improvements.

Wisconsin: $822m. The bulk of this is $810m to establish a Milwaukee-Madison corridor service. This will extend the already well patronized successful Chicago / Milwaukee corridor, and indeed further build patronage on that corridor, since Madison / Chicago is a substantial transport market in its own right along this corridor.

Washington: $590m. This is mostly for bypass tracks for the Cascade Corridor between Oregon and Washington, with some services continuing to Vancouver. I believe there is also some provision for new rolling stock to support additional Vancouver services.

North Carolina: $545m. The bulk of this is $520m to bring the Raleigh/Charlotte corridor up to 90mph, as a first step to eventually bringing it up to 110mph as part of the Southeast HSR Corridor.

Ohio: $400m. This is all dedicated to establishing the conventional rail starter service for the Triple C route from Cleveland to Columbus and Cincinnati to Columbus. This was a route abandoned in 1971 when Penn Central went bust, and when Columbus was well under half a million in population. However, with the growth of Columbus in the decades since, Columbus is now the second most populous metro area and the corridor the most densely populated corridor in the country without regular rail service.

In terms of HSR, establishing this service is a starter on establishing the 110mph version of the Triple C, which with two hour services to Columbus from either end is when the corridor is projected to be capable of generating a substantial operating surplus. It may take a series of upgrades, to get there, but each upgrade will cut trip speeds and improve patronage on the corridor, trimming the required subsidy until it finally goes away.


Oh, and clever politics too

I've already noted the political intelligence of giving California enough to prime their pump. California Senators and Congressmen will, of course, be pushing for enough further HSR funding to assure that California's HSR system can be constructed more or less on scheduled. And of course, rivals can either try to fight that big House caucus ... or work out a way to ensure there is enough to go around. The politics leans toward the "enough to go around" outcome.

For Florida, people from all over the country go to Disneyworld. In not too long a time from now, many of them will be catching the train from an airport station to Disneyworld, and some of them using the HSR train again for one or another daytrip. This addresses the "if only you had ever been to Europe/Japan and experienced this thing ..." problem.

And of course, Florida is a famous Presidential swing state. Work on the corridor will be progressing before election day in 2012.

Illinois is not a famous Presidential swing state, but after California is one of the prime examples of states that have invested both capital and operating subsidies into improving Amtrak corridor services in its state, and even if the President and Secretary of Transport were not a Democrat and Republican, respectively, from Illinois, it would be wise politics to reward that behavior with the flagship Emerging HSR corridor. Of course, on the SubsidyScope numbers, even at conventional rail speed, its also the leading Great Lakes / Midwestern regional corridor in operating cost ratio, so its also the safest bet in terms of generating a comfortable operating surplus once raised to 110mph.

Washington (and Oregon, but the bulk of the corridor is in Washington, and that's where the highest priority bottlenecks lie) may not lean as strongly Democratic in Presidential politics as Illinois, but is also an example of rewarding those states that have invested into corridor improvements, as in inducement to additional states to follow the same course.

North Carolina is an example of a state that we didn't expect to be a swing state in Presidential politics, but then in 2008, it swung. And North Carolina is right on the boundary line between states that have been making genuine investments in improved rail service, and the states to its immediate south and west that have been paying lip service at most.

And of course, Ohio is a Presidential swing state in the Florida league. Further, the Ohio Triple-C will be in operation before election day, 2012.

In terms of the politics of rewarding states for supporting rail, Ohio is like Florida in the first half of "new friends are silver, old friends are gold" ... after a very tight fight in the Ohio state legislature, the operating subsidies required by the conventional speed Triple-C service were passed by the Republican State Senate. That was when before Strickland's approval rating was battered by the recession, and unless that subsidy offer was taken up by the DoT, there was every chance that it would not be repeated.

On the other hand, once the service is up and running, the call to apply for federal funds to speed segments of the corridor up to 110mph will be much harder to resist than it was to fight against the idea of starting the service up in the first place. So there is every reason to hope for 110mph service to be in place in Ohio sometime before election day, 2016.


And now, the headliners ...
Midnight Oil: The Power and the Passion

Sunday Train: A Train Running A Profit is Charging Too Much

Burning the Midnight Oil for Living Energy Independence

Note that the statement is abbreviated for the title. The full statement is, a common carrier like a train, bus, or plane that running a profit based on passenger revenue while paying its full operating and capital cost is charging too much for its tickets.

The radical abbreviation of the title is in part because of the radical abbreviation of the lie that is commonly used as a frame. The lie is that a common carrier like a train, bus or plane that is paying for its full operating and capital costs out of passenger revenue ought to run a profit, commonly expressed as a charge of, "SERVICE_XYZ is losing money, it needs to be reformed!", which assumes that Service_XYZ is supposed to be making a profit.

And, of course, in the sense described above, if its a common carrier transport service, of course it shouldn't be making a profit. And further, if under the above conditions, if its making a profit, you're doing it wrong. In the sense given above, PROFIT=FAIL.

This is problematic under our economic system, because under our economic system, running a profit on the full cost of production normally means that you are free to continue without substantial outside interference, while not making a profit implies that you have to go cap in hand begging for money to operate. So if the main assertion is correct, we have a situation where you can be doing it wrong, and be free to continue, or be doing it right, and have to constantly beg for permission to continue doing it right.


The Services Provide by a Common Carrier Transport Service

A common carrier transport service provides multiple services.

• The passenger taking the service receives a direct benefit
  
• The passenger choosing an alternate means of transport receives an insurance benefit in the form of an available back-up means of transport in case the preferred alternative fails
  
• In the US and most Western nations, common carrier transport services are more space-efficient than the most common semi-private private vehicle transport, the automobile, so the passenger taking the common carrier service is providing a congestion benefit to semi-private motorists
  
• Common carriers normally operate with designated origin and destination points, which concentrates foot traffic and creates property value
  
• When compared to semi-private automotive transport, common carrier rolling stock is normally far more intensively employed, substantially reducing rolling stock material overheads per passenger mile
  
• These are in addition to the general external benefits of transport in permitting people to congregate, to the benefit of employers, retailers, and a wide range of service providers
  
• These are also in addition to specific advantages or disadvantages of specific technologies, such as the intrinsic energy efficiency and aggregate labor efficiency of coupled vehicles operated in a train over uncoupled vehicles operated individually.
  

The value of the common carrier ticket reflects the direct benefit to the passenger, and some but not all of the insurance value of the existence of the service. It cannot include congestion benefits, intrinsically experienced by those not taking the common carrier, and does not include any property value benefits.

The material efficiencies of use of the rolling stock would be captured in the capital cost of the system - except there are substantial material costs that we simply ignore. Handing a free ride, for example, to those dumping CO2 into the atmosphere despite the fact that they have done nothing to establish that it is safe to do so - is only one of the more egregious examples.

All common carriers offer intrinsic and automatic transport insurance benefits to users of alternative systems, and that benefit can only be partially captured in ticket prices. It is possible, of course, to charge a higher price to a person that bought a ticket closer to the day of departure, ordinarily presented to the passenger as a discount for buying the ticket a certain period in advance. However, it is not possible to distinguish between a specific transport need that arises close to the departure date and a need to switch to a back-up mode that arises close to the departure date.

So demanding that trains, buses, and planes fully their full economic costs out of ticket revenues alone is always expecting passengers to pay for somebody else's benefit.

This should be no surprise: "user pays" is quite often a shorthand for, "the poor sucker who has had the bad luck to be dubbed 'user' subsidizes the other beneficiaries". In reality, those on the public right of way may be using space freed by common carrier passengers, as well as using the self-insurance of a fall-back option, and if the common carrier transport is more energy and emissions efficient, using the fuel and CO2 dumping capacity freed up by the common carrier transport.

What About Beneficiary Pays, Then?

So, what if we had a Beneficiary Pays system?

Those private users of a congested public resource like the public roadway would pay users of common carriers based on the relative space efficiency of that common carrier. So mass transit would get the most subsidy per seat, then various forms of light rail, then (actual) Bus Rapid Transit and Quality Buses, then shuttle buses. This payment would be for seats occupied over the load factor that has the same space consumption as the average private vehicle.

In our Petroleum Import Strategically Dependent nation, those private users of petroleum consuming vehicles would pay users of common carriers based on the relative petroleum consumption - the maximum subsidy to electric vehicles, then to high load factor trains, then to high load factor buses. This payment would be for seats occupied over the load factor that has the same petroleum consumption as the average private vehicle.

All private vehicle operators would, of course, pay for the existence of common carrier transport. This payment would be for the frequency of trips to distinct destinations.

And all property owners served by common carriers would pay a property tax to reflect the portion of their property value supported by the existence of the common carrier. Since it is dedicated transport corridors that have clearly discernable property value benefits, this payment would be distributed by the frequency of trips on dedicated transport corridors to distinct destinations.


Short Term Versus Long Term

Now, this is not a proposal for Congressional Action in 2010. Just as the radical reactionaries who adopt the pretense of labeling as "conservative" the desire to destroy the gains of the Square Deal and the New Deal pushed both short term and long term messaging, we have to be able to push both short term and long term messaging. And this is part of the long term messaging:

• ALL the beneficiaries should pay, not just the users

Heck, its short enough to twitter: "All who benefit should pay, not just riders" ... 44 letters. 20 characters for a bit.ly link and you still have 70+ characters for usernames, retweets, and additional remarks.

But short term, keep it in mind when arguing in favor of whatever funding source is being cobbled together to support feasibly ecologically sustainable transport by electric rail, rail that can later be upgraded to electric rail, and electric trolley buses ... throw it into the argument. "ALL who benefit should pay, not just the riders".

Oh, and don't forget the occasional "of course you want the system to make a profit - you are trying to take a free ride off the fares paid by the riders" if you get the mental inhabitant of one of the libertarian fantasy universe engaged in conversation.

Because if well run train system on a well-chosen corridor is running a profit - then cutting the fares and eliminating the profit would offer more benefit all around.


The Headliners: Midnight Oil
Read About It: Oil on the Water Concert

The rich get richer
The poor get the picture
The bombs never hit you when you're down so low

Some got pollution
Some revolution
There must be some solution but I just don't know

Sunday Train: Freight and Passenger Trains Should Be Friends

Burning the Midnight Oil for Living Energy Independence

Flying home from the Economist's national conference Atlanta (see note1) my brilliant entertainment plan to pass the day lost flying home from Atlanta fell apart.

I could not attend even the 8am session on Tuesday, because the flight left at 11:15, and I was warned about TSA security theater delays. So I got on the MARTA train around 8:30, to stand in line to check-in, to stand in line to get through screening, to get to the gate and wait, to get on the plane which waited in line for a runway. It was, however, only half an hour in the air, so that fact that with a 125mph train to Charlotte I could have gone to the morning conference session and arrived in Charlotte sooner is neither here nor there.

Then I had a 3hr+ layover in Charlotte until the plane back home to NE Ohio. But I had my Netflix and some FullMetal Alchemist DVD's, so no problem. Except my portable DVD player decided to stop working (see note2), so there were no DVD's. Which meant I was forced to fall back on a "pbook" (paper book) I had brought with me - Waiting on a Train, which meant that I finally finished it (and still had several hours to wait after I had done so).

And in particular read the fascinating discussion of the touchy relationship between freight and passenger trains. Regular readers will know that this is a critical point: indeed, the entire Steel-Interstate strategy to getting Higher Speed Rail for Appalachia rests on passenger trains running on infrastructure provided in support of 100mph electric freight trains.


The Bad Old Days Are Not So Many Days Ago

One of the striking passages in the book is the following:

... at breakfast I got an earful from Tom Landolt, an engineer who had retired from UP [Union Pacific] a few months earlier.
...
He said, "Let me tell you a story. I was running a freight train in New Mexico on a real cold night, and the Sunset Limited was coming up behind us. Now, I had a real heavy train, and we had to go up a grade, so I talked with the dispatcher and said I would pull over and let the Amtrak go by. And he said, 'No, sir, we don't pull over for them, they can just slow down.' And I started up that hill and broke down. Now, the Amtrak had to back up more than ten miles, and wasted hours. Now there's no reason for that to happen, but that's the attitude. They just do not give a damn." (pp. 163-5)

That is, however, Union Pacific. By contrast, there is this from the Burlington Northern Santa Fe (the one that Buffet recently bought):

Mitchell looked down at a printout of my submitted questions. "You ask what makes us different. Why do passenger trains on our tracks have such good on-time performance?"

He looked up, "OK, here's the the simple answer: 'We Care.'"

"You care?" I said.

"We do. We really do."

I was remembering Hubbard's "We don't care" anecdote.

"Well, why? What's in it for you guys?"

"Because we believe Amtrak and the commuter services that run on our network are customers. And like all of our customers - coal, grain, or industry - we believe they deserve good treatment. (p. 190)

Of course, caring alone does not guarantee Zero Delays.

In Texas, for example, the ports of Houston and Galveston can get so congested that freight trains back up all the way to Oklahoma City because its a single track railroad. The Temple to Forth Worth section has terrible on-time performance. The ground dries out in the summer and the ballast sinks. In winter, the soil turns to gumbo, the ballast slumps, and the rails become "bumpy". In both instances, slow orders have to be put on until repairs are made. (p. 191)

There is only so far that sincerity can go before reaching the point where capital investment is required for further improvement.


The Bright New Day for Passenger/Freight Rail Cooperation

By the second half of 2008, under the pressure of the capacity constraints that were preventing the Class I railroads from taking full advantage of the windfall of the Oil Price Shock, the major railroads had adopted a new line (though of course, I will believe that Union Pacific is an enthusiastic supporter of the industry line when I hear tell of some direct evidence):

... I went to Washington DC and interviewed Ed Hamberger, President and CEO at the Association of American Railroads ...
...
Hamberger has been President of the AAR since 1998, a time when the organization was suing Amtrak to stop hauling freight cars on its passenger trains. He testified several times in front of congressional committees that Amtrak should pay fully allocated rather than incremental costs. Hamberger is a sharp and articulate guy, comfortable with politics, and the repositioning it sometimes requires. He wasn't unaware of the ironies of what he was about to say, and acknowledged them with some humor.
...
"The industry is taking an aggressive stance to link its message with that of passenger-rail advocates. Perhaps we haven't been as forthcoming in the past as we could have and should have been, but now were are saying: We think the country has to move forward with both freight and passenger-rail service," said Hamberger.

I'd gotten wind of this turnabout in attitude from Don Phillips and Carmicheal, but it was still striking to hear it directly. Its a strategy capsulated in the phrase: "Commuters vote, boxcars don't." Delivering improved passenger service benefits freight railraods.

Although the recession has given railroads some breathing room, the industry is clearly worried about capacity. If just 10 percent of highway freight switched to rails, the railroads would be inundated. As one executive tol me, "Corporate America is ready to move a hell of a lot more goods on trains, but they won't do it if the railroads are incompetent."

Ensuring that Freight and Passenger Rail are Friends on the Steel Interstate

Now, what the railroads are pushing for is an investment tax credit. However, as discussed before, the Steel Interstate strategy opens up the door to something far more dramatic.

It is a compelling national interest, after all, that if we have an opportunity to shift long haul freight from diesel road freight to electric rail freight, we do so. Irrespective of the source of electricity, the electric rail freight offers reduced CO2 emissions, with further reductions if the power comes from a carbon-neutral source. And at the same time, many of our largest untapped domestic energy resources, such as wind power, originate their power as electric power, so using the power in the form of electricity avoids conversion losses.

Suppose that the original capital cost of infrastructure for 100mph freight paths - and, incidentally, 110mph to 125mph passenger rail paths - is paid for out of user fees and access fees, but the interest on the capital cost is subsidized.

For example, a quarter per barrel import tariff is imported on imported petroleum and petroleum products, rising by a quarter per barrel each year for 10 years. This would yield about $3b per year to finance twenty year tax bonds, which at a real interest rate of 5% would be about $60b new capital spending per year. The public authorities building the Steel Interstates would then buy back the tax bonds with access and user fee income.

These tax bonds could even be structured in a way to make Wall Street speculators happy, promising a given share of the tax revenues, which Wall Street investment banks could then slice and dice to their hearts content into various senior, more stable, and junior, more speculative tiers - except rather than feeding a process of debt-financed consumption, they would be feeding a process of real, physical, protection against massive oil price shocks.

What does this mean for relations between freight and passenger rail? Simple: the fast freight trains on 100mph paths would be running on publicly owned infrastructure, built on the freight railroad's right of way. When the Rapid Rail dispatcher says that the freight is making way, then its the freight dispatcher's choice whether the freight goes onto a siding to wait or returns back onto the heavy freight line to continue making headway.

And as BNSF has shown, when the infrastructure owner cares about the passenger trains running on time, then it becomes possible to perform far better than when faced with the antagonistic (see note3) approach of Union Pacific.

You probably still wouldn't want to be a local commuter railroad relying in whole or part on Union Pacific infrastructure - but if it means an opportunity to winning far more market share from road freight for more quickly than they could on their own, it seems likely that even Union Pacific will be willing to at least pretend to be friends with passenger rail.


The Headliners

Midnight Oil - Truganini

There's a road train going nowhere
Roads are cut, lines are down
We'll be staying at the Roma Bar
Till that monsoon passes on

The backbone of this country's broken
The land is cracked and the land is sore
Farmers are hanging on by their fingertips
We cursed and stumbled across that shore
...

Notes

(Note1: At the conference, I mostly went to the Association for Evolutionary Economics sessions, so didn't see a lot of calculus, though bizarrely I did learn a lot about the Economy - which is of course not what one would ordinarily expect from going to the Economist's national conference.)

(Note2: The DVD player is a V-Zon by Coby, with all sorts of nifty media features - it can play MP3's and several video file formats on both USB keys and SD flash ram cards. Its just that it sucks that when a portable DVD player so dislikes being ported that it stops playing DVD's. By contrast, my Samsung player continues to work as a DVD player even after I stepped on it, breaking its LCD screen. So if you were asking me, I'd recommend Samsung as making a more durable portable DVD player than Coby.)

(Note3: Note that the attitude of Union Pacific is not only antagonist, but it likely results in multiple actions by dispatchers that are, in fact, illegal, under the terms of the agreement reached in the 1970's in which the Class I railroads handed off their responsibilities to provide passenger rail service. The action of the dispatcher reported by the retired UP engineer was certainly illegal.)