Wednesday, December 31, 2008

Adios 2008, Welcome 2009

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

And so we come to the end of 2008, one of the more eventful and tumultuous years I can recall (although my memory doesn't really go further back than 1985, so perhaps my perspective isn't that long). In the midst of economic crisis and political upheaval, Californians ought to look back on 2008 as the year we made a long overdue commitment to sustainable transportation. It's not going to be easy to implement, but if I may paraphrase JFK, we choose to build high speed rail and do the other things, not because they are easy, but because they are hard.

California voters approved Proposition 1A which, combined with federal funding and private contributions (which will materialize; the credit crunch won't last forever) will build a high speed train connecting San Francisco to Los Angeles via the Central Valley that will transform transportation and land use in California, along with providing short-term economic stimulus and long-term economic growth.

Californians also voted to massively expand passenger rail in Los Angeles County, including the Subway to the Sea; to build a passenger train along the NWP corridor in Sonoma and Marin Counties (although the collapse of Colorado Railcar is an obstacle for SMART to overcome); and to commit more money to the BART to San José project.

Those votes are but the first step in a long process of building the kind of sustainable transportation that California must have to maintain prosperity in the 21st century. The HSR deniers haven't fully gone away, and the New Hoovers are gathering to fight government spending on infrastructure, including rail. Our work is still cut out for us.

But 2008 showed us what we can accomplish when we give Californians a choice - the failed status quo, or a high speed rail future. The end of 2008 gives us one last chance to reflect on those victories and accomplishments - because once 2009 starts, seven hours from now, we're going to have to get to work on the state and federal level to ensure that the HSR project is funded and supported.

Happy new year, everyone.


Rafael said...

Happy New Year!

This will be a year of significant change across the board, thanks to the combination of a new administration - backed by a strong majority in both houses - and a pile-up of national and international crises. More of the same just isn't an option any longer.

The same is true of the state of California and its totally broken budget process. With a deficit of $42 billion looming, the constitution has to be changed as soon as possible so budgets can pass with simple majorities.

Caught up in this maelstroms is CHSRA. It will survive, but opponents of the HSR projects will surely try to delay or cancel the whole project under the false pretext somehow it was the straw that broke the camel's back. It wasn't, the budget crisis is a result of ideologues on both sides - mostly the Republican one - standing their ground just because they can. Now, the tax base is crumbling because the foreclosure crisis is forcing former taxpayers to draw unemployment benefits or, to leave the state entirely.

This crisis has multiple causes, but cheap gasoline - and the expectation that it would stay cheap - was a key enabler. It allowed social climbers to buy large houses far from their place of employment. When external factors and rampant speculation combined to drive up the price of oil and products derived from it, McMansion owners all over the nation found themselves faced with a double whammy of unexpectedly high commute costs and real estate they could no longer flip before the teaser rate on their mortgage expired.

This painful experience ought to drive home the folly of insisting on low fuel taxes that merely perpetuate a culture of gas guzzlers delivering high annual mileage. California should bite the bullet and decide to hike taxes on fuels derived from fossil sources (incl. nuclear power) while reducing general sales tax to keep the total tax burden constant. In practice, that would translate to e.g. an additional $0.02 per gallon of gasoline each and every month for the next 10 years.

Without such drastic measures, don't count on electric cars making much of a dent in the situation, either: assuming GM doesn't end up in chapter 7, its much-ballyhooed Chevy Volt will be a mid-sized sedan priced at around $40,000. Even with generous tax credits to help create a market, the ROI horizon on the incremental cost of the drivetrain is far greater than the life expectancy of the vehicle as long as gasoline remains cheaper than bottled water. Unit volume would be insignificant for a very long time.

Besides, (partially) electric cars do little or nothing to relieve congestion. What is needed is a shift back to an old transportation paradigm: less car + plane, more (electric) transit + (electric) bicycles + short walks.

High speed rail will run on renewable electricity and sustain fast travel at intermediate distances. However, it should be seen as only one element of a wider strategy whose primary focus is urban densification around transit hubs, e.g. HSR stations. Living close to your place of work must become affordable again, though "close" may mean commuting via electric HSR, as many do in France and Japan. The introduction of reliable broadband internet access on Thalys and TGV Est means time spent commuting can be productive, at least for some professions.

The collapse of Colorado Railcar should also be seen in this context. FRA-compliant DMUs would have helped a broken transportation model that starves passenger rail at the expense of roads and airports limp along. Caltrain has already proved that off-the-shelf lightweight non-compliant multiple unit rolling stock performs as well as FRA-compliant equipment in grade crossing accidents.

What is needed now to enable mixed traffic is public investment in robust signaling and positive train control to avoid train-on-train collisions. Once that logjam is broken, the operating subsidies for regional passenger service go down. Counties and states will be able to offer more of it, which will increase ridership. That in turn will enable investment in bypass track sections to improve on-time performance, further increasing ridership. At some point, it will become politically and financially feasible to enter into PPPs with the freight rail companies to enable higher speeds in rapid rail corridors. Depending on location, these may or may not act as feeders for true HSR lines.

California is leading the way in the US, but it is absolutely vital that FRA map out an affordable regulatory path toward mixed traffic and rapid rail. The "Office of High Speed Rail" proposed in the Kerry-Specter bill is a step in the right direction, but an more general "Office of Passenger Rail" might arguably do more good.

Spokker said...

Here, here. I just hope this whole rail transportation thing doesn't fizzle out. The only thing I can do is keep riding trains, for business and pleasure.

Anonymous said...

I wonder if the government will come to there senses and make all the banks pay us back. (I WISH!) Perhpas we could push for 110 mph rail for 36k miles of rail, electrified at a cost of 450 billion dollars. Add in an additional 250 billion dollars, you could have the Northeast, Florida, Texas, and California running true HSR (maybe Nevada, Arizona) and the Midwest and Ohio regions with midspeed rail of 150 mph. That is what I call a massive bailout, instead of sending the money nowhere, how about actually showing some results!

We want rail, we want HSR, and even Russia has HSR! We need to repent that cars weren't the way to go and most of us will have to adapt to the fact that car travel might be on the final leg. Sprawl needs to come to an end and densification needs to occur. Connect rails inbetween, many will want the area for easy access. Best of luck for high speed rail!

Alon Levy said...

Where does Russia have HSR?

Rafael said...

@ Alon Levy -

Moscow - St. Petersburg will be operational at 250km/h at the end of 2009. Moscow - Nizhny Novgorod will follow in 2010.

Rolling stock is Siemens Velaro RUS, downrated and adapted for the 1524mm gauge used in Russia.

Details here./wiki/Siemens_Velaro

Rubber Toe said...

Don't recall if anyone here caught this in the Governors proposed 2009-10 budget. This may be the first case I have seen of where the actual bond money will start getting spent...

High-speed rail: Proposes $123 million in 2009-10 from the $9.95 billion bond approved in November to begin detailed engineering, design and environmental work on the 200 mph train that would run through the San Joaquin Valley, connecting Northern and Southern California. Dependent on the state being able to return to the bond market.

They don't specify if this comes out of the larger $9 billion part or the smaller $950 million part. I'm assuming it would be the larger as it is for work on the HSR portion not for regional improvements.


Rubber Toe said...

"...the credit crunch won't last forever..."

I tend to worry about this even more so than the idea of having both the Feds and the private sector having to pony up funds. If the state doesn't get it's act together, and soon, the Prop 1A bond money will be nothing more than a passed proposition without the ability of the state to sell the bonds to acquire the money needed to do any of the work.

We run out of money next month, unless the PTB agree to something. If the Republicans or the Howard Jarvis foundation try scuttling any "fee" increases passed by 50% of the legislature then the state could end up going over the cliff while the courts sorted out what the difference is between a "tax" and a "fee".

If the budget process, or lack thereof, ends up with California defaulting or deferring interest payments on it's current bonds, you can pretty much kiss any future bond selling goodbye, as well as HSR. I know there are those who say "that can't happen", I would counter that it already "is happening" and action will be required to avert the worst case scenario. Actions leading up to this point do not make me feel warm and fuzzy concerning the PTB taking any meaningful action. Even the Governors latest plan:,0,7234337.column

includes borrowing from future lottery revenue to the tune of $5 billion plus issuing another $4.7 billion in IOU's. This shows that the structural problems with the budget still haven't been addressed, and again that all assumes that the economy doesn't contract any further in 2009, which it almost certainly will. So, the current $42 billion gap will continue to increase over time as the economy contracts. As it has been increasing ever since they finally passed last years budget.

I think things are going to get worse before they get any better. We might well find ourselves spending more time trying to figure out how to be able to sell the bonds to finance the work than doing any of the actual work. Thats my prediction for 2009...


Anonymous said...

Colorado Railcar went broke!?

That's a shame. There were a good number of transit systems that were lining up to order trains from them for start up commuter rail service (including a start-up commuter rail service in my hometown of Orlando).

I know this might provide more leverage for anti-FRA compliant equipment proponents since there is no longer a provider of FRA compliant DMUs, but that also might backfire causing certain transit projects to be canceled or delayed. Its going to be a very iffy situation.

My father is currently taking over a bus-rebuilding works in southeastern Colorado to try to turn it around and apparently a few CORC employees have come to him asking for work. Now I know why.

Brandon in California said...

It does not seem that Colorado Railcar going bankrupt and closing would mean with certainty that planned use of their product is not a possibility.


Coloroado Railcar still has assets. Those will/could be sold to another party that can provide that same product.

Rafael said...

@ Brandon -

yes, another manufacturer could acquire patents, train designs and other IP during CoRC's bankruptcy proceedings. However, CoRC presumably went bust because there simply weren't enough hard orders for its niche technology.

I suppose it's conceivable that Siemens or some other rail manufacturer with a plant in California would be prepared to spend some money on the blueprints and design team if Amtrak California, Metrolink and others indicate they would use their share of the $950 million in prop 1A funds to purchase FRA-compliant DMU rolling stock.

If need be, the state legislature could twist their arm - after they've sorted out the much bigger problem of the cratering state budget.

Anonymous said...

The company and its assets were liquidated. I'm going to bet that nobody is going to takeover the CORC business. More likely the investors will just sell off the equipment.

Rafael said...

A federal panel is recommending a $0.10 hike in fuel taxes to shore up the highway fund in light of recent reductions in fuel consumption.

While I'm all for shifting the burden of taxation away from wealth generation and toward asset consumption, this proposal is too simplistic.

First, the proceeds would still be earmarked specifically for road construction. They need to go into the general fund. It should be up to lawmakers to decide which mix of transportation modes best meets capacity, safety, flexibility, environmental and national energy security objectives.

Second, since wear and tear on road surfaces is proportional to the fourth power of axle loads, commercial vehicles do far more damage than individual cars. It would make sense to base vehicle license fees on axle loads and count. Truckers would have to pass the cost on to their customers, which means slightly more expensive goods for all consumers. On the other hand, more expensive trucking would give rail freight operators financial room to implement (partial) electrification or at least, retrofits for (some) of their diesel locomotives to Tier 4 emissions standards. Alternatively, it could also make some rapid rail commercially viable.

Third, $0.10 a gallon isn't nearly enough to bring about a permanent shift in the nation's transportation culture away from oil and toward electricity. For that, fuel taxes would have to slowly, predictable and de facto irreversibly ramp up avoid a shock to the system. I'd prefer ratcheting fuel taxes up by $0.02/gallon each and every month for at 8-10 years. Knowledge of where prices are heading will generate demand for fuel-efficient cars, transit and rail transportation.

Ideally, jet fuel should also be taxed, at least for short-haul domestic flights. There are legal impediments to taxing fuel for international flights, but raising airport taxes would have much the same effect.

Note that any additional burden should be imposed by states rather than at the federal level, so it can be offset by reductions in general sales tax. States that do not levy one would have to find some other means of keeping the measure revenue-neutral, especially for low income families.

To provide the requisite political cover, federal lawmakers can impose a national fuel tax hike but exempt those states that impose one of equal or greater magnitude of their own accord.

Anonymous said...

Did anyone notice in the MSNBC article who is on that Highway commision?? WELL its none other the HSRs dear friend from the Reason Foundation..Mr Moore the "transportation expert" at that so called free thinking!!

crzwdjk said...

"However, CoRC presumably went bust because there simply weren't enough hard orders for its niche technology."

I don't think that's the case. There were definitely orders, and a good deal more interest from potential buyers, including Amtrak. However, there were a few problems too, especially with quality and imeliness for the TriMet cars, which have delayed the opening of the line by half a year. Their production facilities really just weren't up to the (quite complex) task of building several brand new DMUs from scratch. Also, as a smaller company, CRC couldn't provide financing or the ability, for example, to trial a car for some time and return it.

I think in the end, the end of Colorado Railcar is no huge loss though. It was always more a dream than an actual product. Eventually, someone else will create an FRA-compliant DMU, perhaps on the base of all the various new FRA-compliant EMUs (M-7, M-8, Silverliner V, and a potential future NJT EMU).