Saturday, June 21, 2008

You're Not Credible If You're Not Talking High Gas Prices

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

I've been traveling around California a lot in the last few weeks - mostly by train - and everywhere I go the most common topic of conversation is gas prices. The relentless march to $5 continues - we blew right past $4 a few weeks ago - but more important than the volatile day-to-day price is the underlying fact that gas prices have risen by nearly 400% in the last nine years. This is due to the phenomenon of peak oil - the shrinking supply and rising global demand for oil. Since the production of oil is at or near its all-time peak, we will have to either reduce our demand or pay ever-rising prices. Simple supply and demand law.

So you would naturally think that any effort to assess the high speed rail project - whose primary selling point is that it allows people to travel between metro areas within our state without being beholden to the ever-rising price of oil - would consider this point. Of course you would be mistaken - the State Senate didn't mention it at all in their report. Most newspaper editorials on HSR neglect the issue as well.

Not surprisingly the issue is completely ignored by the group that passes for HSR opposition in California. DerailHSR.com is founded by a group of Menlo Park property owners who don't want high speed trains running near their homes, even though the trains were there LONG before they were (the SP Peninsula route opened to passenger train service in 1863). If these folks wanted to have a discussion about the impact of the train on their property, that's a fair discussion to have out in the open. But they realize most Californians won't be moved by their "plight" - the median household income is $84,000 and most homes are valued near or above $1 million. So instead they try to "derail" the HSR project by making spurious claims about its ridership projections, its leaders, even its basic concept.

Recently these opponents published a paper that supposedly debunks the ridership projections on which the HSR project depends. But nowhere in this paper are fuel prices discussed. Nowhere at all. This despite the fact that passenger rail in America is setting ridership records due to high fuel prices.

It is simply not credible to discuss ridership and not include fuel prices in that analysis. On that basis alone the HSR deniers' paper is worthless.

But the paper is so full of half-truths and misstatements that I would be remiss if I didn't call those out. After all, if this is what passes for HSR opposition in California, it's best we nip these ridiculous claims in the bud, before they spread any further. The article states:

Construction costs could be 2 to 3 times projections or $80 to $120 billion instead of $40 billion. Ridership and revenue will probably be one-half to one-third of forecasts.


Nowhere is any basis for these figures given. The author, Arthur J. Ringham, appears to have made up these figures entirely. He goes on to cite a Danish study that purports to examine an "inherent forecast bias" in transit ridership projections - in other words that transit systems overestimate their projected riderships. But we can look to California to see this is not so. The Metro Orange Line saw 20,000 daily boardings in 2007 - a level they were not expected to reach until 2020! The pro-transit group Light Rail Now! offers a list of light rail lines that exceed their projected riderships - and that study was done in 2001. New lines in Minneapolis and Charlotte, opened in the last few years, have also met projections.

Demand on intercity rail lines in California is also soaring, stretching available capacity to the breaking point as ridership skyrockets. Finally, the airline crisis suggests that high fuel prices will mean fewer flights and higher fares on the LA-SF route, yet another indication that HSR ridership will have little trouble meeting expectations. Taiwan's new HSR system exceeded ridership projections and turned a profit earlier than was anticipated, and there is every reason to believe the same will occur here in California.

The DerailHSR folks admit that "most claimed benefits depend on ridership" - and so if their criticism of the ridership numbers has little merit, does any of the rest of their argument have merit? Of course not:

California and Japan are quite different. Japan has far higher population density and shorter distances between major cities, conducive to train travel. Their Bullet train system was well established before freeways, and gasoline has been about twice as expensive in Japan as here. Air fares between major cities within Japan are much higher than rail and a lot more than California air fares for the same distance. Californians have been wedded to cars and freeways for over two generations. It is absurd that California high speed rail travel can even approach its popularity in Japan.


What isn't said here is that in Spain - where population densities and distances between major cities are very much like California's - HSR is a stunning success, having little trouble attracting riders.

The only basis for their ridership claims is a belief that "Californians are wedded to cars and freeways." As a cursory glance at reality shows, this just isn't so. Californians were wedded to cheap oil, which made commuting and driving between cities a reasonable proposition. But with the end of cheap oil, Californians are showing themselves to be quite flexible and adaptable. The demand for passenger rail alone, whether in cities or between them, should remove all doubt.

The rest of the HSR deniers' essay mentions rising costs (yes, the costs will rise, but that is due to global inflation in construction materials - an argument for beginning construction ASAP), and even the threat of derailments along - you guessed it - the Peninsula corridor (no HSR trains have ever caused damage to surrounding homes via derailment). But since their claims on ridership were shown to have no merit, even those easily debunked points don't matter. If you don't assess the impact of high gas prices on transit, you are just not credible.

19 comments:

無名 - wu ming said...

so californians were wedded to cheap oil, but then cheap oil up and dumped them, and now californians are looking around frantically for a new stable relationship.

rail's sitting there at the front door, flower in lapel, but a whole bunch of people seem to be intent on barring the door, in vain hopes that cheap oil will reconsider and come back.

ok, i think i've played this metaphor out.

Rafael said...

Perhaps it's worth re-iterating that HSR will be all-electric. If CHSRA decides to run the network on renewable electricity alone, it will more-or-less decouple its future operating cost from the price of oil.

Note that from a climate change perspective, it will be sufficient to demand that the California grid operator purchase as many additional MWhs of renewable electricity as the HSR system consumes in a suitable averaging period, e.g. a year.

This gives the grid operator the flexibility to purchase the required electricity from a coal-fired power plant one day and an excess of e.g. solar thermal power on another. That in turn should lead to higher grid stability and, to more moderate prices.

Much the same will be true for Caltrain after electrification. As for Metrolink, it could switch to all-electric propulsion if SCAG decides to shell out $8 billion in public money on the electrification of the existing freight tracks in he LA basin. Cost might be sharply reduced if HSR tracks are adjacent, allowing masts and utility hookups to be shared. Upgrading UPRR & BNSF to Tier 4 clean diesel engines instead would cost an estimated $2 billion.

That's because freight electrification would have to include generous subsidies to UPRR and BNSF for purchasing electric locomotives. The primary motivation for such a policy would be air quality, though the future cost of oil is also a concern.

davisgrad said...

Excellent post Robert. One of your best.

arcady said...

Electric locomotives cost 1.5 times less, last 2 times longer, are 2 times more powerful than diesel locomotives, and cost much less to maintain. I don't think the freight railroads need any subsidies for them at all: let them just buy some electrics instead of diesels in the course of normal fleet replacement. They could even use an existing design: the ALP-46A, made by Bombardier, which is over 8000hp.
The real cost of electrification is in the infrastructure, and that's all the government subsidy they should need.

Rafael said...

@ arcady -

I was simply restating what was in the SCAG presentation. They've concluded that the freight rail operators don't want to chip in for anything but clean diesel.

That's partly because EPA has not yet applied the thumbscrews to criteria emissions from diesel locomotives in areas with poor air quality. Another issue is that trains would have to switch to diesel in San Bernardino or else (preferably) on the east side of Cajon Pass, which means switching locomotives. Doable but a pain in the keister.

Rafael said...

via Trans4America:

Sen. Obama has re-iterated his support for high speed rail, albeit from a labor rather than a transportation capacity, energy security or global warming perspective.

However, the cost of the trains is ultimately small compared to that of building the line and operating the service - I'm surprised the Senator decided to focus on the manufacturing aspect.

If Sen. Obama is serious about public investment in rail infrastructure - even at the risk of alienating some voters employed in the oil, road construction, airline and auto industries - then he may have a clear and generally popular differentiator in hand. That 400% increase in gas prices in less than a decade plus the Iraq war have had a significant psychological and economic impact on the American consumer.

So far, Sen. McCain hasn't said anything at all on the subject of high speed rail, but his opposition to public funds for Amtrak suggests he probably wouldn't want to invest taxpayer money in high-speed rail projects, either. His ideological fixation on the invisible hand of the market in favor of public works could cost him a lot of votes in a recession.

arcady said...

@ rafael

I think the SCAG's (and other people's) ideas about electrification are still kind of assuming that diesel is still relatively cheap. I think at this point, the cost savings from electrification make all the trouble worth it. Anyway, it's very encouraging to hear that SCAG is even thinking about electrification. For a long time, the thinking in this country has been that freight rail implies diesel, and there was no thought at all that electrification is even a possibility.

Luis D. said...

I doubt the road construction builders will run out of work, were not going to trash and disassemble our roads and freeways after building HSR!

The auto industry would have to cut jobs but cars aren't dissapearing anytime soon, their won't be the same demand as before though since cars today are produced like chocolate bars out of a factory nonstop.

The airline companies would loose some flights but HSR can't compete with long distance flights. That's what the airlines should stick to and nothing else!

The only real losers will be Oil companies and workers! The only thing we need oil for is lubrication of metal parts and the supplies we use in our houses and lives like plastics, tires, household items, etc! We don't need to burn it unecessarily! They (Oil industry) shouldn't have gone into the business leading it's workers that they would have a steady job for generations to come!

Jobs lost in Oil are going to be raplaced in another form, HSR. Some win some loose!

Pantograph Trolleypole said...

Charlotte and Minneapolis along with Houston, Denver, Salt Lake City and others have all beaten their ridership projections. Some of them like Minneapolis have destroyed them. They expected 24,000 riders in 2020. They are getting 29-32,000 riders currently.

Greg said...

I lived in Japan from 2004 until April of this year, and the DerailHSR folks made a number of errors when talking about the transit situation there.

First, the shinkansen network was not established before Japan's network of motorways. They were built simultaneously in the run-up to the 1964 World's Fair.

Second, although gas has traditionally been more expensive than it is here in the States, it's now only marginally so. When I left in April I was paying about 130 yen/liter. That's only about 20% above what I'm paying in Oregon these days.

Finally, there actually isn't much of a price differential between shinkansen (bullet train) and air travel in Japan. The Tokyo-Osaka route costs about the same either way. Over some longer routes, like Tokyo-Sapporo, air travel is actually a little cheaper.

Rafael said...

@ arcady -

my reference was SCAG's RTP update of 2008. I don't think they're oblivious to the recent run-up in the price of diesel.

Rather, the problem is that freight electrification is only going to happen wherever air quality problems are so bad that someone is willing to spend some serious money. Freight operators will not do so voluntarily, because they consume so little fuel per ton of freight hauled that they could never recoup the investment.

Also note that only 30% of all freight landed at LA and Long Beach harbors is bound for customers in Southern California. By contrast, 52% is transported to destinations east of the Rockies. There is zero chance of getting the entire US rail network electrified anytime soon. Partial electrification - and a legal requirement to use it where offered - implies buying bimodal locomotives that can switch to overhead electric supply on-the-fly or else, frequently changing locomotives. Right now, US freight operators would still much rather just stick with diesel-only locomotives.

Anonymous said...

RR freight operators being private are going to look at the true cost of electrification. Rafael has pointed out electrification is perhaps nearly as expensive as laying down tracks.

Now being private, they are going to look at how much they will save in fuel costs, vs. how much it will cost them in construction to get away from diesel. This is in contrast to an operator like CalTrains, which dearly wants to electrify the main reason being that the cost savings by purchasing electricity is not offset by the capital costs of electrification. Capital cost don't seem to count against their operating profit / deficit. CalTrain is in constant deficit and it has caught the public eye. So if they can save a few millions in fuel costs, while not having to account for 10 times those savings in costs in debt service, they want to electrify.

That's not to say, they shouldn't electrify because of other factors, less pollution, more efficient operation. But overall the major reason why they want to convert is to make their bottom line look better.

Morris Brown said...

In a rebuttal today to an editorial in the Sacramento Bee, Judge Kopp again re-iterated a statement he has made many times. It simply is not true. Kopp writes "And, the system will be as safe as other worldwide high-speed rail systems, which haven't incurred a single operational fatality."

Most notably are fatal accidents in Germany (over 100 killed) in and a new fatal accident very recently in China.

Judge Kopp must know better than this. High speed rail is indeed safe, but fatal accidents have indeed taken place.

Rafael said...

@ anonymous @ 2:13 -

there appears to be this strange notion that commuter rail is supposed to generate enough revenue to service the debt on its capital investments. That's not the case anywhere in the world.

Commuter rail is subsidized by taxpayers because population mobility is a public good, not just a private one. Gasoline taxes cover road maintenance - more or less - but the construction of major new roads, bridges is almost always funded by state or federal taxpayers, at least to a significant degree.

Why are you holding rail to a different standard? People aren't livestock, they aren't freight.

@ morris brown -

not all high speed rail systems ar created equal. Germany's Deutsche Bahn in particular relies heavily on legacy mixed traffic network rather than dedicated high speed track. The 1998 Eschede disaster, in which 101 people died, involved a first-generation ICE train traveling at 125mph. It had been retrofitted with new wheels that were supposed to improve passenger comfort. The problem had been caused by the interaction of the high speed and relatively old track. However, the design of the retrofit wheels was fatally flawed, causing one to experience to disintegrate due to metal fatigue. That in turn led to a catastrophic chain of events.

This particular incident has no bearing on the California system, which calls for all-new track dedicated to bullet trains. The flawed retrofit wheel design has been banned world-wide.

There will, of course, always be risk in traveling at 220mph at ground level. Quentin Kopp's remarks should not be construed as a promise that no accident will ever occur. However, the excellent safety ratings of JR and SNCF are not just a matter of luck.

Grade separation against road and other rail traffic greatly reduces accident risk. Fences that keep people and animals of the tracks are a second line of defense. Track surveillance by video, in-cab signaling, remote positive train control and other technical measures such as aggressive maintenance are a third.

And finally, if all else fails, articulated frame construction makes it far less likely that the cars of a high speed train with topple over or jack-knife in an accident. This design feature was credited with preventing a catastrophe when a TGV derailed just before Christmas of 1993 at 182mph - virtually top speed. The cause of the accident had been a freak sinkhole that opened up underneath a section of track after heavy rains.

pat moore said...

@anonymous --

The reason why Caltrain wants to electrify -

1. Faster acceleration/deacceleration - Compare BART acceleration to Caltrain. This means that for the same run time the Baby Bullet could stop at 4 more stops.

2. Lower maintenance/costs - Electric locomotives/EMUs have lower operating costs. Operating costs are paid for out of local (scarce) tax dollars. Capital costs are easier to get state and federal dollars.

3. Noise - EMUs are quieter. Reduce the noise and you reduce resistance to things like Dumbarton Extension.

4. Downtown extension -- This is the big one. Caltrain is going under ground for over a mile to a rebuilt Transbay Terminal. This is also the reason why Caltrain wants EMUs. EMUs can handle a steeper grade.

See good business reasons!

Anonymous said...

@Pat Moore

But they need an FRA waiver to be able to run EMUs so long as they run freight on the same tracks.

In spite of what has been written here, that does not seem like a foregone conclusion.

Also maybe you have some other information, but we were told (by a third party) that CalTrain wants at least at some spots along the line to have one set of tracks to use for by-passing, non-express trains. If HSR is going to run on the same corridor, and they are going to use their own tracks, that would indicate to me at some points a minimum of 5 tracks will be needed.

Robert Cruickshank said...

Morris, it's no surprise you have to try and claim HSR has anything other than a stellar safety record - your claims on ridership, on comparisons to Japan, and virtually every other aspect of your HSR criticism has been torn to shreds here.

Morris Brown said...

@robert

My comment on Judge Kopp's rebuttal is to the point. I clearly state we believe HSR to be safe. We also make that same statement in the FAQ section of our website.

But that is not what Judge Kopp wrote and has on numerous occasions stated namely "And, the system will be as safe as other worldwide high-speed rail systems, which haven't incurred a single operational fatality."

Now Robert maybe you don't find any difference between the system being safe and the statement that no fatalities have ever occurred, but I certainly do.

As for your shredding of ridership projections made in the paper by Jack Ringham, believe me, many others have reached the opposite conclusion.

Rafael said...

@ morris brown -

Quentin Kopp is a former judge, he knows how to choose his words wisely. In this case, he did not claim that every high speed rail system had delivered a zero-fatality record, just that there are some that have. Marketing is the art of deciding which truths you talk about - and which you don't.

As I explained before, the only really serious high speed train accident that has ever occurred anywhere in the world was in Germany. It was the result of a set of circumstances that do not apply to the California project, so please stop beating this dead horse of an issue.

Instead, you might want to focus your energy on how asking CHSRA how it intends to keep people, livestock and wild game off its tracks. Human trespassers onto railroad tracks range from unsupervised children to suicidal maniacs to teenage vandals, saboteurs, extortionists and even homegrown terrorists.

As a follow-up, you may want to ask how CHSRA will provide early warning to train drivers if the first line of defense fails. SNCF and others have solved these problems with technology, but CHSRA hasn't been very clear on whether and where its plans call for applying it in California.