Friday, November 14, 2008

Federal Stimulus for HSR?

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

The economic crisis that has been slowly unfolding over the last year or so is growing worse by the day, and the incoming Obama Administration and its allies in Congress are already discussing plans for a new economic stimulus package, one that will likely include infrastructure spending. The figures being tossed around so far have been between $50 and $150 billion.

Paul Krugman today argues we need to think bigger - MUCH bigger:

All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.

If we are talking about stimulus of that size, then $12-$16 billion for California high speed rail should be no problem. Some might argue that since construction won't begin until 2010 that it's not a good use of stimulus money. But as Krugman has argued before, this downturn is going to be long:

The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.

That makes Congress and the White House the next stop for our own high speed rail project, even as we continue to keep a close eye on the state legislature to ensure there's no backsliding. Quentin Kopp is optimistic about our prospects in Congress, according to an article in today's issue of Bond Buyer:

"I am satisfied from my readings that enthusiasm has increased in Congress for high-speed rail," said Quentin L. Kopp, chairman of the rail authority's board...

Kopp, a veteran of 12 years in the California Senate and a decade and a half on the San Francisco Board of Supervisors, laid out the challenge in political terms.

"Now we have to fend off other states," he said.

Of course a $600 billion package would make the competition among states for HSR dollars less intense. Even if there is much competition, California is in a very strong position to lay claim to federal HSR dollars. Nancy Pelosi and Dianne Feinstein have already shown their support for HSR, and having two of the most powerful members of Congress in your corner is a pretty damn good place to start.

Over email rafael pointed out that the renewable energy aspects of HSR would also appeal to President Obama's own desire to put energy independence at the forefront of his own policy efforts:

California HSR plus local/regional HSR feeders may become much more attractive to an Obama administration looking for worthwhile public works projects if proponents stress that these will run on renewable electricity. Transportation planners may care more about system capacity, but politicians are keen on energy independence right now.

What exactly is federal funding going to look like? It's highly unlikely that it's going to be a check for $12 billion. From the Bond Buyer article again:

the Authority expects to pursue funding sources that include straightforward federal grants, tax-credit bonds, and funding derived from carbon credits.

One thing we will need to ensure, along with the delivery of federal funding period, is that such funding is stable. Some mixture of the above seems quite workable assuming it adds up to the requisite amount.

It's clear that the global economic crisis is worsening, and all eyes are going to be on Washington DC for answers. We're going to have to make sure Congress and President Obama do the right thing for California and the nation by passing a large economic stimulus bill early in 2009 - a bill that must include funding for California high speed rail.

17 comments:

Rubber Toe said...

"...funding derived from carbon credits..."

This coincides nicely with the following news...

In a landmark action, the Environmental Protection Agency’s final decision-making board has ruled that all new and proposed coal-fired power plants must have their carbon dioxide emissions regulated.

http://wonkroom.thinkprogress.org/2008/11/13/no-new-coal/

Starting up a CO2 tax on coal plants and funneling that money to cleaner power sources and/or using it to power the CAHSR system sounds like it might be in the cards.

Maybe part of the federal funding could consist of a guaranteed stream of money from a carbon tax that would be used by the authority to implement a 100% renewable energy system to run the trains?

Once the renewable power system is built, all the authority has to do is pay the small ongoing cost of maintenance on the windmills and making sure the solar panels get cleaned regularly. If the renewable system is in place before the power is needed, the authority could sell the power and use the profits to help offset the construction cost.

RT

Anonymous said...

Not only can rail be run from renewable electricity, in whatever form that takes in California, but it also will do a lot to reduce the use of gasoline in California, lowering the need for exports, stabilizing fuel prices somewhat, and it should improve our air quality to boot.

We have terrific congresspeople on board, and we can also argue that it's only right that we have a strong rail system just like the northeast has, with our similar population density.

Finally, Californians today get 75 cents for every dollar we send to Washington DC - so it's not only fair to give us the money, but wise to stimulate our economy.

Rafael said...

IMHO, CHSRA should spend a small amount of money on a feasibility study for designing the catenary masts such that they can safely support a new high tension distribution line in addition to the 25kV AC lines used by the trains. Alternatively, any new high tension line could be buried near the new tracks as they are constructed.

Renewable power produced in remote locations is useless unless it can be transported to where it is needed. The HSR system itself will represent less than 1% of the state's total electricity demand.

The biggest headache would probably be electrical safety. Pantographs can easily generate the occasional spark, which could be problematic since the distribution line would be at 110kV or higher tension. A buried line would have to be sufficiently insulated against the rails, which connect the train to electrical "ground".

Other issues include electromagnetic interference, since the lines would be parallel antennas and the pantograph interface is a spark-gap generator.

If it is technically feasible, combining rail and power infrastructure could attract private investment in the HSR project by California utilities.

---

Additional power backbone capacity could even help pay for an additional spur from Mojave to Las Vegas. Las Vegas casinos would probably prefer to invest in that rather than forge ahead with their own Desert Xpress.

Senate Majority leader Harry Reid is from Nevada and still interested in a high speed maglev link to Anaheim. It would be much better for all concerned if he joined forces with the California delegation in securing generous federal funds for HSR in the West.

A spur could eliminate the need for the planned $4+ billion IVP relief airport project near Jean. It wouldn't be operational before 2018, anyhow and the land could be used for a solar thermal power plant.

Fully 1/3 of all traffic at McCurran is with California and, Palmdale airport would be just 1h10min away by HSR train.

The fly in the ointment is that Indian gaming has a powerful lobby in Sacramento and, a stout ally in John McCain.

Rubber Toe said...

Rafael,
On your map you show the train branching off all the way up at Mohave. Why not go from Palmdale directly to Barstow? It seems shorter, unless there is already a ROW present...

Agree with you about how much sense it makes to forget about both the Maglev and Desert Express and have the Vegas line feed into the CAHSR system.

Any idea what a spur from the current system, whether Mohave or Palmdale, to Vegas would cost?

RT

RT

Cas said...

There is no need for the states to compete over federal dollars as Kopp suggests. Krugman is right--we need fiscal stimulus on the order of $600 billion, focusing on infrastructure investment.

With that much money floating around, you don't have to be that picky. Just direct that money to local government projects at a rate proportional to population and/or economic activity. California's HSR is at the top of any such list, and I say that as a resident of Washington state.

$600 billion is enough to do a lot.

Start by directing a couple billion to each state to offset short-term deficits without raising taxes or cutting services. That's $100 billion. That leaves you with half a trillion in stimulus, much of which can go to rail projects (including HSR but also mass transit, non-HSR passenger rail, commuter rail, and urban mass transit), improvements in the electrical network to allow for all-electric trains and cars, investments in high-speed broadband, and fixing our broken roads and bridges.

California's got 13% of the nation's economy, so $78 billion of the national stimulus pot could fairly go to the Golden State. $12 billion of that for HSR is more than reasonable. That also works out to $90-100 billion nationwide for HSR, which is enough to start a lot of other regional HSR networks.

Rafael said...

@ rubber toe -

there is an existing road and freight rail transportation corridor between Mojave and Barstow. Also, you can't just run tracks through Edwards AFB. Connecting at Mojave also happens to be the shortest route to the CV and Bay Area.

The alternative would be to connect to the California system via Cajon Pass. That would permit stations in San Bernadino and Victorville. It would also sharply reduce travel time from San Diego to Las Vegas, at the expense of far longer travel times to the CV and Bay Area - which are home to a lot more people.

Note that the San Diego spur is currently not slated for phase 1. Also, Cajon Pass crosses the San Andreas fault. Depending on the local gradients, there might well be a need for extensive earthworks or tunneling. Plus, that path out of the LA basin ought to be reserved for future freight rail expansion.

Educated guess for what the spur might cost: $10 billion plus $1 billion for the Las Vegas station.

@ cas -

if the stimulus package is really big and lots of states all decide to fire up major public works all at once, I foresee several problems:

a) a bottleneck in EIR/EIS processing, which is unlikely to be waived. People skilled in CEQA and similar regulatory frameworks are scarce. It takes a while to train more.

b) rapid construction cost escalation in terms of both union labor and materials due to supply and demand. There's only so much steel and cement on the world market and, China is still buying most of it.

c) expensive mistakes due to poor preparation and integration of projects that are accelerated in order to qualify for inclusion in the stimulus package.

d) it could be quite difficult to sell $600 billion in US Treasury bonds all at once.

For these reasons, I expect any proposal to invest that much taxpayer money would be distributed over the course of the President's entire first term. There will also be significant pressure to fund things other than physical infrastructure, e.g. universal health care.

Finally, everyone should keep in mind that none of this is free money. Your children and grandchildren will still be paying for these stimulus packages, so they had better be spent on projects with lasting benefits.

Ergo, states should be forced to compete for this money on the basis of quality prep work rather than population size.

The auto industry is a case in point: do managers at the Big Three and UAW understand why they were caught flat-footed by the sudden rise in oil prices? Do they have a strategy for competing effectively against Asian and European transplants that aren't burdened by generous legacy commitments to hundreds of thousands of retirees?

If not, then throwing the industry a $25-50 billion lifeline will do no more than kick the can down the road. What they need is a path to a level playing field plus higher - yes, higher - fuel taxes and lower general sales taxes. CAFE targets do not create demand for fuel efficiency, they just squeeze profit margins.

Permanently higher fuel prices would also permanently increase ridership on mass transit, including HSR. High density residential districts would become much more attractive, as well.

Rafael said...

Quick update: measure B in Santa Clara county is now at 66.61% in favor. The number has been creeping up for a few days now as the last ballots are being counted.

When all the votes are in, it might just pass after all. Unless someone forces a recount, of course. Stay tuned.

Alon Levy said...

Rafael, I think it's unlikely the Vegas spur will be completed before phase 2 of CAHSR.

Another good reason to support service through Victorville is that it connects points in the Inland Empire to LA better, too. San Bernardino won't have any CAHSR station, even though it has stronger commute ties to LA than Riverside.

Tony D. said...

Often during the Bush years I would say to myself "could you imagine if all the billions of dollars spent (wasted) on Iraq were instead spent right here on roads, bridges, and transit." It looks like we'll finally start spending hard earned American dollars right here at home. I just read a SJ/SV Biz Journal article stating that San Jose wants $14 billion in federal bailout funds (it will be a collective request with other California cities). SJ wants the money "primarily to help pay for rapid transit extension (BART) and expand clean tech in the city." Federal stimulus/bailout funds for HSR and infrastructure...if China can do it, so can we!

Rafael said...

@ alon levy -

a) just in case we got our wires crossed: there is currently NO official plan to build an HSR spur to Vegas at all. It's just a suggestion of mine.

b) if such a spur were considered, it would have to be a parallel but related effort run by the state of Nevada. It would have to corral the funds, the state of California would NOT contribute a single dime. It's at the federal level that joint action to secure earmarks would be mutually beneficial.

c) there is no time to lose as Nevada is close to breaking ground on the $4+ billion Ivanpah relief airport and planning a $2 billion maglev line to link it to Las Vegas. Neither would be operational before 2018. Thanks to the EIR/EIS prep work already done for Desert Xpress, an HSR spur could be ready at the same time as phase 1 of the California system.

d) now that prop 1A has passed, any new rail connection to Las Vegas should be accessible from anywhere on the California HSR system. Driving to Victorville to catch a diesel train was always a suboptimal solution.

e) the inland Empire is currently served by four Metrolink lines:

LA - San Bernardino
LA - Riverside via downtown Pomona
LA - Riverside via Fullerton (91 line)
San Bernardino - Oceanside

HSR phase 2 will run right past the terminals at Ontario airport. Unfortunately, the Rancho Cucamonga and East Ontario Metrolink stations are both well beyond walking distance from the airport, so the three stations and the terminals will have to be linked by a shuttle bus.

HSR will also not serve the existing Metrolink station in Riverside, because it needs to hop onto the I-215 median near March ARB. A sensible compromise would be a new intermodal station in the Highgrove area, served by HSR, Metrolink and local buses to the UC campus etc. The two lines that currently terminate in Riverside could easily be extended to San Bernardino to improve HSR feeder service frequency and avoid an additional transfer.

If an HSR spur from Mojave to Las Vegas is ever built, it might make sense to go one further and run selected trains all the way to a new intermodal station at Barstow. There would also be stops in Devore, Hesperia and Victorville.

BruceMcF said...

Note that any rail corridor could be used for an HVDC long haul electricity trunk ... the main advantages of the rail corridor are being able to reach an agreement with one property owner, and the fact that they tend to terminate in places where there are people.

If the supports for the HVDC line are also serving as part of the support structure for electric rail cantenary, that is a secondary capital saving that is also attractive.

Rafael said...

@ brucemcf -

I'm not an electrical engineer, but it seems to me that this combo would have been implemented before if it was as straightforward as you appear to imply.

Stephanie Stout said...

Why should I as a Texan support federal money for California HSR or more Northeast Corridor improvements unless they are part of a major NATIONAL plan to bring rail transit and major intercity passenger rail improvemets to all parts of the US? I applaud what California has done for LRT in 5 cities, the beginnings of regional commuter rail in a few places, and Amtrak California on several routes, but that is a long way off for me with my limited vacation time and budget.

What would I support for federal funding?

Immediate FTA approval and funding for all existing LRT projects throughout the country.

Regional commuter rail in 40 to 50 cities throughout the US.

100 to 200 medium distance (200-300 miles) Amtrak intercity passenger rail corridors with every other hour service at average speeds of 60-70mph to connect cities with medium and small towns.

Two to three dozen long distance Amtrak routes with 3 or 4 trains a day each way.

All this could be done in less than ten years because existing rail lines would be used (except for the urban LRT lines). HST is more expensive and takes more time because it must start from scratch. HSR only connects the major cities and is useless unless there is lots of urban transit, regional rail, and regular intercity passenger service.

With these improvements in place, I could easily travel to California and make use of your HSR as part of an integrated rail system as I have done in Europe.

I should also add that I strongly support mainline railroad electrification starting with West Coast regional commuter rail lines. Why West Coast? The production base will be very slow at first, so wiring the coastal commuter lines (like San Francisco to San Jose) will give the biggest payoff. As production ramps up, West Coast Amtrak lines could be electrified and then the major mountain passes. A half dozen electrification crews working eastward would head toward the Rockies by which time additional crews on the East Coast, Midwest, Texas, and the Southeast would work toward the heartland. This would take about ten to twenty years to electrify all the major railroads and would help reduce foreign oil dependency, air pollution, urban noise, and would stimulate the economy as well.

yeson1a said...

The federal goverment needs to step up its support of all rail projects everwhere.We live in a nation, if we can pick and chose what we support then do you think anything would get done? Why should
California support freeways in the middle of rural states when 2 lane roads should do? Because its a nation.We have said yes to support
our end of the funds..just like any road project in Texas..and we want the same support from WashingtonDC

Anonymous said...

Texas had its chance in the 90s. You're just jealous.

Rafael said...

@ stephanie stout -

and why should Californians pay for a freeway in Texas or Montana? It's called being a nation. California receives 75 cents in federal spending for every dollar it contributes in taxes.

Californians have decided to put their money where their mouth is and actually given the go-ahead for a large high speed rail project. Earlier attempts in Florida and Texas were stillborn, but could now get a second wind. Californians would contribute to those via their federal taxes. It's time to wean the nation of oil from the Middle East. That includes the transportation sector.

In the context of its recently updated Regional Transportation Plan, SCAG is already looking at how to improve air quality in Southern California by improving freight rail capacity through the LA basin. The section from the ports to downtown LA has already been addressed with the Alameda Corridor. Even an additional inland transshipment container terminal is now being considered to reduce highway congestion by diesel trucks.

Electrification of the freight rail lines is one option being considered for improving air quality. The other is retrofitting legacy locomotives with particulate traps and urea injection systems, which would require the use of ultra-low sulfur diesel. Another point to keep in mind is that electrification will be partial at best for many years to come. That means locomotives will have to feature both a diesel-powered generator and a pantograph, a configuration called two-mode.

Freight rail operators want public subsidies to make these investments, since they cannot pass the cost of cleaning up the air on to their customers as long as truckers don't have to, either.

Intercity passenger rail is a separate story. To be useful in the 21st century, it needs to be competitive with air travel, which in California implies cruising speeds of up to 220mph through the Central Valley. That just isn't possible on old freight tracks in terms of safe operations or capacity. Right now, the only passenger rail service linking northern and southern California is Amtrak's Coast Starlight, which takes anywhere from 10 to 15 hours and doesn't serve the Central Valley at all.

That's why hundreds of miles of new, dedicated tracks need to be laid before it makes sense to implement electrification, which is the only way to sustain the proposed speeds.

Btw: prop 1A, 10% of which is earmarked for existing transit services that will connect to HSR, wasn't the only thing California voters approved on Nov. 4.

In LA county, they approved measure R by 2/3 majority - a 1/2 percent sales tax hike to fund rail and road improvements for the next 30 years.

In Marin and Sonoma, voters passed measure Q to fund the SMART train + bike path from Larkspur to Cloverdale (~70 miles).

In Santa Clara county, the vote on measure B is still too close to call. It would increase sales tax by 1/8th of a percent for 30 years to supplement measure A(2000) funding for a very expensive 16-mile extension of the BART system down to and through downtown San Jose.

Bottom line: if you want federal dollars for your transit projects, you first have to commit to tax hikes or bond measures to put skin in the game, even in a recession. California has now done that - how about Texas?

Alon Levy said...

Why should I as a Texan support federal money for California HSR or more Northeast Corridor improvements unless they are part of a major NATIONAL plan to bring rail transit and major intercity passenger rail improvemets to all parts of the US?

Because the more successful HSR is in California and the Northeast, the likelier it is that the T-Bone corridor will get built.