The Biggest Obstacle to HSR in California

For most people looking at California's high speed rail project, the biggest obstacle to its completion would seem to be financial. Prop 1A has put $9 billion on the table to get the project started. We can expect $3 to $4 billion from the federal HSR stimulus. The cost of the first route, SF to LA and Anaheim, is likely to be around $30 billion, leaving about $17 billion left to secure. Most of that is expected to come from ongoing federal contributions, some from local governments, and some from private investors.

And yet, as Robert Goodspeed points out, that may not actually be the main problem facing HSR in California. Instead, he argues, it is a land use planning process that is unable to deliver these kinds of projects quickly and affordably:

Ironically, the California system is demonstrating the biggest problems for high speed rail in the U.S. may not be our lack of technical knowledge but our troubled infrastructure planning and delivery system. Disputes about alignments in California have already spawned lawsuits. Maybe beyond ogling their trains, we should study how our foreign counterparts resolve conflicts about system design. In one case study I read about planning a TGV line in France, the government convened a "debate" bringing together the stakeholders before choosing an alignment or other technical details. In the U.S. on the other hand, government agencies act both as project designers and boosters, relegating other stakeholders to reactionary roles as outsiders who rely on lawsuits to pursue their interests. In addition, our government agencies are also lacking in competent planners and administrators who specialize in rail. In the end, dysfunctional planning processes and weak planning capacity may result in avoidable cost overruns. Overcoming these obstacles may prove even more challenging than finding the historically elusive political will.

Goodspeed's analysis of how other stakeholders wind up being placed in "reactionary roles as outsiders" is quite insightful. Then again, that is precisely how planning in California is intended to be. CEQA is set up on the theory that government construction projects are bad, are threatening, and that stakeholders are already in a reactionary, even adversarial position. CEQA was written with a 1970s logic, reacting to a 1960s California Department of Highways that really did behave as a giant bulldozer not giving a crap about what anyone else in the state thought of its route choices, neighborhood impacts, or environmental consequences.

CEQA wasn't designed to promote smart, sustainable growth. It was written to enable people like Gary Patton to have legal recourse to stop projects they don't like, no matter the reason. The mentality is one that assumes the status quo is just fine, that the cost of doing nothing is actually zero - if a project isn't built, no problem, we didn't really need it anyway.

California's planning process should not be a tool for NIMBYs to stop projects they dislike. It should be a vehicle for public involvement in a project development, and to ensure that a project does not cause damage to the environment. CEQA currently fails to meet these objectives.

I'm not the only one making this point. SPUR, the San Francisco Planning and Urban Research Association, came to the same conclusion. In a 2006 report titled Fixing the California Environmental Quality Act they argued that CEQA has failed to meet its objectives, has actually made environmental problems worse, and that it should be replaced in urban and suburban settings with a statewide planning process along the successful path blazed by states like Oregon and Washington:

In the absence of strong statewide planning and in the presence of weak local planning, stopping projects is what California does best. CEQA has become the tool of choice for stopping bad ones and good ones. SPUR has reviewed CEQA from the standpoint of sound planning and environmental quality. We contend that after the law’s 30-plus years of operation, the type and pattern of developments, viewed at citywide, regional, and state scales, are environmentally worse than before. Not all of this can be blamed on CEQA; it has improved individual project design in some cases. Yet viewed broadly, CEQA has contributed to sprawl and worsened the housing shortage by inhibiting dense infill development far more than local planning and zoning would have done alone. To re-form California, we must first reform CEQA....

Our neighbors to the north provide a dramatic model for change. At almost the same moment that California turned to environmental impact reports to protect its environment, Oregon turned to a strengthened planning program, requiring effective local plans and zoning by all jurisdictions. Oregon has protected and greatly improved its natural environment without review of individual projects, but with sound intergovernmental planning. The recent property-rights crusade that passed compensatory zoning at the Oregon ballot box does not lessen the fact that the Oregon environment remains one of the most pristine in the country.

High speed rail should be assessed and planned in a statewide context. Instead, it is assessed in a town-by-town setting, totally divorced from statewide concerns, and even from local urban plans. As a result, sprawl has accelerated over the 40 years since CEQA's adoption, and it has become progressively more difficult to build sustainable infill projects, whether it is housing or mass transit, as the CEQA process empowers people to stop something they dislike, even when doing so causes significant environmental damage.

The alternative to CEQA reform is that more and more projects will simply be exempted by the state legislature from CEQA review. In fact, back in 1982, once and future governor Jerry Brown signed into a law a high speed train bill exempting the project from CEQA review. (The project eventually fell apart in 1983 for various reasons.) More recently, the landmark state planning law SB 375 signed by Arnold Schwarzenegger last year provides CEQA exemptions for certain kinds of infill urban housing projects that meet the AB 32 global warming guidelines.

Using the legislature to provide the occasional CEQA exemption isn't good planning. But it's what happens when the CEQA process is no longer functional. Rather than exempting HSR from CEQA - which, to be very clear, I am not advocating at this time, we should adopt the successful urban planning models used in states like Washington and Oregon that provide for regional and statewide planning processes that still give the public a chance to weigh in, still protect the environment, but don't come at the cost of prolonging a reckless dependence on sprawl and oil. Already the CHSRA is exploring a statewide planning effort, although it is not intended to supplant CEQA.

Of course, even if we did this, not everyone would buy into it. Those who still adhere to the 1970s "government is bad! there's no downside to killing projects!" attitudes will try and undermine a more sensible planning process in service of their own parochial ends. In fact, they're already doing it, as shown by this John Horgan column:

Belatedly, some citizens are raising alarms. It may be too late. The High-Speed Rail Authority has its own agenda, its own priorities, its own budgetary issues — and a great deal of power.

Input from county residents is being collected at countless public gatherings by the vast public relations armada on the authority's payroll. The panel's latest tactic is something called "context sensitive solutions."

Unsurprisingly, this actually reveals the depth of Horgan's ignorance. CSS wasn't something the CHSRA decided all on its own to use. It was pushed onto CHSRA by the very citizens Horgan claims to be speaking for, who demanded CSS be used on the Peninsula.

I'm still not convinced that the broken planning process is the "biggest obstacle" to HSR in California. I still believe the biggest obstacle is actually the unwillingness of the remaining beneficiaries of the 20th century model of economic prosperity and land use to accept any change in that model, regardless of the consequences. The opposition to properly funding HSR, and the breaking of the CEQA process, are both symptoms of that deeper problem.

CHSRA Initiates Statewide Land Use Planning Effort

San Francisco Chronicle architecture columnist John King writes today of an ambitious state planning project known as Vision California. The project is intended to provide a holistic, statewide model of growth scenarios, with an emphasis on how high speed rail will change the state's growth and land use patterns. It is co-funded by the California High Speed Rail Authority. As King explains:

The official action is modest, a $2.5 million contract to devise a set of detailed growth scenarios for California, from classic suburban sprawl to compact development focused on older cities. The goal is to produce a single "preferred scenario" - one that conceivably could be used to prod local governments to accept or reject new construction.

This sort of top-down planning would alter politics in California, where cities and counties for decades have deflected any initiatives that might crimp their autonomy. The difference now: legislative efforts to reduce the state's carbon emission levels, and voter support of a high-speed rail system that could put now-distant portions of the Central Valley within commuting distance of Los Angeles and San Francisco.

Proponents say there's no way to make wise long-term decisions without data to gauge the impact of different patterns of growth when it comes to matters such as energy or water use.

This is a long-overdue and much-needed effort. High speed rail in particular is going to reshape California's urban geography, and will produce significant shifts in population movement and growth sites. It makes perfect sense to evaluate this on a statewide basis - how would high speed trains produce growth in Fresno? What kind of growth might happen? And how would that affect land use in the older coastal metropolitan areas? How would that impact water and energy usage?

It is very good to hear that this effort is being undertake and that the CHSRA is playing a role. Given California's numerous and converging crises, from water to environment to economy to energy usage, we need to start considering statewide planning to solve those crises without one region's solutions undermining those of another region.

As King explains, this isn't the first time such an effort has been tried. Governor Jerry Brown initiated such a study in the late 1970s, around the time he promoted a high speed train for California:

For instance: If townhouses and bungalows are built instead of large single-family homes, how much agricultural land will be saved? If new housing is placed near existing jobs and shopping, rather than in distant subdivisions, what will be the effect on a household's transportation expenses?

"By showing people the results of different futures, you create a different political climate," Peter Calthorpe said. A founder of the influential Congress for the New Urbanism, Calthorpe was working for the Office of Planning and Research in 1978 when then-Gov. Jerry Brown released "Urban Strategies for California," the last serious statewide planning push...

Despite Calthorpe's optimism that things will be different this time, there's another scenario: Things stay pretty much the same.

After all, the sense of looming crisis is nothing new; "Urban Strategies" decried how sprawl chews up "air, water and other natural resources," but the proposals never translated into a formal plan.

It's worth noting that Governor Brown's late '70s efforts didn't just die. They were killed. As I've argued before, the 1978 tax revolt was driven in part by a desire to preserve 20th century suburban sprawl from a perceived attack by Governor Brown. Although Brown recognized the need for a denser California, he ran into a massive amount of opposition from the beneficiaries of the 1950s and 1960s model of land use, opposition that in 1978 wrote itself into the state constitution. Ever since, what I have described as a homeowner aristocracy - a specific group of people who were able to buy homes in the last few decades of the 20th century and who seek to preserve their property values and obsolete concepts of the urban landscape at the expense of everyone else - have fought every effort to produce a smarter, more sustainable strategy for economic growth and land use. Their successful determination to preserve the late 20th century model has left California economically weak, dependent on overuse of water, and vulnerable to soaring oil prices. Their refusal to embrace new solutions, which won't actually cause them much if any personal or economic harm, is a major impediment to proper planning for California's future.

Vision California is not just a useful exercise to help build a more prosperous and sustainable 21st century state. It's a way to ensure that high speed rail does not get used to promote sprawl. Many anti-HSR conspiracy theorists claim, against the evidence, that the CHSRA is nothing more than a vehicle for developers to pave over the Central Valley. They should then be the biggest champions of the Vision California project:

The project has three phases and will continue for about 18 months.

The first phase includes the formation of a working group to set parameters and decide how far into the future the projections should go. Data would be compiled and measurement standards defined.

Phase two would develop a base-case scenario that extends past trends forward - and alternative scenarios that give greater emphasis to mass transit and higher-density development patterns. The scenarios would be tested on "targeted groups of key stakeholders."

The final phase would follow the release of the alternative scenarios with a "preferred vision" - coupled with an outreach campaign to show how the chosen path "can most effectively impact the development of state, regional, and local policies aimed at meeting state climate change and other key goals."

In other words, limiting sprawl and promoting urban density, transit-oriented development, and mass transit connectivity are explicit goals of this planning process, something CHSRA is signaling it is willing to abide by once it is in place.

This is a welcome development, and I wish the Vision California project well. Let's hope it is matched with further statewide legislation in the vein of AB 32 and SB 375 to complement local efforts to change the longstanding local government preference for sprawl. HSR is a major tool in the effort to limit sprawl, but as we've always said, that has to be matched with regulatory changes in land use policy. Vision California is a necessary step in that direction.

HSR and TOD

The middle of a severe recession led by collapsing real estate values may not seem like the best time to start talking about developing property around planned HSR stations. But the economy will eventually recover (even on the slow timescale forecast by many economists there will probably be real recovery between now and 2018) and that in turn will mean developers will bring the capital and the will to use HSR stations as anchors of new projects.

The CHSRA has always emphasized their stations as bringers of urban density; you can see it in the NC3D animations produced last year for the Authority. Transit Oriented Development (TOD) is one of the strongest selling points for high speed rail, as it will help provide needed new housing in city centers, spur the development of other housing, commercial, and retail properties, and help act as magnets for bringing growth back into the cities and away from the exurban sprawl that characterized California's last period of economic growth (a sprawl which was directly responsible for the current economic collapse).

The question, as the San Diego Business Journal points out, is timing:

“I think not only is it something that is a good thing, it’s certainly going to be a phenomenal planning tool for the next generation of growth,” said Perry Dealy, president of Dealy Development. “The opportunity to take the high-speed stop hubs and convert them to maximize their mixed-use, high-density potential is great. You’d have what I’d call a TOD, transit-oriented design, starting with residential, work-live, retail, entertainment and other kinds of venues that are part of the mixed-use characteristics.”...

Dealy said that the type of project he has in mind would ultimately cost $1 billion to $2 billion. It would entail acquiring land to build on, adding or refurbishing infrastructure, and preparing a master plan.

“There is demand for the region to grow, we’re definitely going to add a million people, maybe not in 10, but in 12, 14 years it’s going to happen,” said Dealy. “Now’s the time to actually get these concepts defined.”

Of course, Dealy will have even more time than that to plan for San Diego, where revenue service may not begin until as late as 2030. But for some of the other stops, such as Anaheim, Fresno, Gilroy and San Jose, now may well be the right time to get TOD concepts under way, especially as cities start evaluating land use rules surrounding the proposed HSR stations.

Some developers aren't convinced there's any rush to get plans started:

Shawn Tobias, project manager at Houston-based Hines, a real estate firm and commercial developer, stated that he doesn’t see that much of a push from the development side to start planning for a project like this immediately.

“I think (development) firms in general right now tend to be shortsighted in terms of their business, just to make sure that they’re weathering the current conditions well enough, but planners are certainly into the future,” said Tobias. “Whether that becomes a reality is a different situation because the real challenge is integrating the plan within the existing municipalities, but it certainly is on Hines’ long-term radar.”

Tobias cited economic factors for the reasons that some developers have chosen to focus on more short-term projects.

“I don’t see a planning rush right now because most people are in survival modes,” Tobias said. “Once the economy starts to heat up and there’s more demand for development, I think you’ll see more firms clamoring for this.”

Of course, Hines isn't really saying anything that different from Dealy - both agree that HSR TOD will make a compelling financial opportunity for developers, investors, and buyers, but they aren't sure whether there is the resources out there right now to get this started given the economic climate.

As HSR TOD plans begin to take shape we'll start covering them in more detail here on the blog. One issue that the HSR stations raise related to development is whether there will be overnight and long-term parking allowed at these stations, a question Rafael brought up in the comments to yesterday's post. If such parking is allowed, Rafael rightly argues, it could mitigate against TOD, especially in lower density locations like the Central Valley.

Parking is a big issue when it comes to development in existing urban centers. TOD and density advocates have increasingly pushed to limit or eliminate city planning codes requiring new developments to provide a fixed number of parking spaces, and more attention is being drawn to the drawbacks of urban parking lots.

On the other hand, overnight and long-term parking would represent a potentially significant revenue stream for the CHSRA. There are many years of studies ahead that will examine this question, which will have an impact not only on how Californians interact with the HSR trains, but how the HSR system interacts with its surrounding urban environment.

California's Low Carbon Fuel Standard

The LA Times reports that the California Air Resources Board has just released a complex new environmental regulation called the "Low Carbon Fuel Standard" (LCFS). This is relevant for High Speed Rail in that it will inevitably raise both vehicle and fuel prices for cars and trucks in the medium and long term. That in turn should boost ridership on all types of mass transit and the popularity of transit-oriented real estate development statewide.

Objectives

One objective is to diversify the fuel sources for the millions of internal combustion engines powering motorbikes, cars and trucks in California, away from (mostly) imported fossil crude oil and toward substitutes derived from locally grown energy crops and agricultural waste streams or, from other local, renewable sources of primary energy. Considering that California requires so-called "boutique" gasoline with special additives to curb summer smog, it could not import finished product from out of state or abroad if one of its refineries went offline. Therefore, the diversification of fuel sources is a priority both for energy security and for the state's balance of trade.

A second objective is to reduce net carbon emissions of each gallon of fuel pumped at California gas stations to help meet climate policy goals. Vehicles fueled partially or wholly by substitutes must of course not emit more toxic compounds than those running on conventional oil distillates, but their net CO2 emissions will be lower. The savings accrue not at the tailpipe when the vegetable matter that is used as a feedstock for the alternative fuel production grows back a year later. This is why ARB selected the GREET model for the entire carbon life cycle of each type of fuel. For biofuel compounds, it also takes land use and food web impacts into account.

Note that California's new low carbon fuel standard does not aim to directly reduce total vehicle miles driven, nor to increase vehicle occupancy rates, nor to reduce aggregate net CO2 emissions from ground transportation in the state. Some or all of these outcomes may materialize indirectly as a result of higher vehicle and/or fuel prices.

Exempt Industries

The aviation industry was apparently exempted from the new state regulations. Part of the reason may be that jet fuel is subject to very stringent quality standards for safety reasons. In addition, federal laws and international treaties restrict individual states' ability to tax aviation fuels and/or enforce the use of fuel substitutes in blends or neat form.

In general aviation, there is a desire to phase out 100 octane low lead (100LL) AVGAS, but all substitutes - 91 octane gasoline, methanol, ethanol - require significant modifications to airframes, fuel system components and engines. In the US, any retrofit kits would have to be certified by the FAA, so the industry is moving toward new designs featuring turbocharged diesel engines that can run on either diesel or jet fuel. Some US airports have already stopped selling AVGAS, perhaps in a thinly disguised effort to free up more slots for commercial flights.

Off-road, marine and locomotive fuels are also not covered by the new regulation, nor is the US military.

Natural Gas, Hydrogen and Electricity

Returning to trucks and cars: natural gas, hydrogen and electricity are all included in the list of alternative transportation fuels in the new regulations, which do not consider the details of the alternative drivetrain technologies required to take advantage of them. The GREET models for these fuels do account for how these substitutes are produced and distributed.

Regular natural gas is less carbon-intensive than gasoline but it requires some engine modifications. In addition, achieving an acceptable operating range of ~200 miles between fill-ups requires heavy, bulky and expensive fuel tanks that can withstand 250-300 bar (3630-4350 psi) of pressure plus a network of gas stations equipped with the requisite compressors. On the other hand, biomethane blended with a small amount of propane is the only cellulosic biofuel that could easily be produced in bulk today. EU regulations already permit producers to feed it into the existing European network of natural gas pipelines.

The cheapest way to produce hydrogen is steam reforming of fossil natural gas, but this releases copious amounts of CO2. There may still be a niche application for it in the context of blends of natural gas and a small amount of hydrogen, e.g. Hythane. Relative to CNG, the hydrogen additive accelerates flame propagation and ensures near-complete combustion while improving thermodynamic cycle efficiency. It is best used in efficient homogenous lean-burn spark ignition engines equipped with oxidation catalysts and NOx traps or SCR systems originally developed for diesel engines. To avoid hydrogen embrittlement, special alloys or composite materials must be used to contain fuels containing hydrogen.

This also applies to the entire distribution chain of neat hydrogen and the 700 bar (10150 psi) pressure tanks deployed in fuel cell vehicles (FCVs). However, thanks to the GREET model, hydrogen will now have to be produced using electrolysis of fresh water using electricity from controversial nuclear or expensive renewable sources. Thus, the LCFS virtually guarantees that FCVs will remain a niche phenomenon.

That in turn could create more of a market for vehicles that can store such zero-carbon electricity directly in on-board battery banks. High-volume manufacturers prefer the more expensive and less energy-dense chemistries based on nickel metal hydrides (NiMH), lithium-manganese spinel or lithium nanophospate to banks of commodity lithium-cobalt ion cells found in cell phones and laptops (cp. Tesla Motors). To understand why, watch these videos of nail penetration tests of commodity vs. automotive-grade Li-ion cells, simulating a severe crash scenario.

Regardless of chemistry, all automotive applications of advanced traction batteries have to be maintained at intermediate states of charge (30-90%) and forcibly cooled to near room temperature to ensure they will last for the lifetime of the vehicle. The battery packs used in electric bicycles and scooters are much smaller and cheaper, but owners typically have to replace them after a few years.

Implications for Oil and Utility Companies

Santa Barbara County recently reversed itself on a controversial decision to lift a ban on new offshore drilling in the area. From the oil industry's perspective, the new LCFS adds insult to injury as the carbon life cycle analysis also exposes oil produced from tar sands (cp. Athabasca, Canada) as incredibly carbon-intensive. Developing the US Navy's vast oil shale deposits in Colorado would be even worse.

The new rules point in exactly the other direction: they require refineries to cut the net carbon emissions from their products by 10% in the next decade by blending in renewable compounds or, by selling neat substitutes alongside traditional oil distillates. The latter option would permit oil companies to set up networks of rapid recharge stations for battery electric vehicles, though fire safety considerations will require these to be located sufficiently far from gasoline pumps. Note that oil companies could presumably also comply by taking equity stakes in utilities or else, in specialized start-ups such as Better Place.

However, it's far more likely that oil companies will invest in emerging, relatively benign liquid hydrocarbon technologies such as cellulosic ethanol that are more compatible with their existing distribution infrastructure and the existing vehicle fleet. The fuel systems and engines of all cars and trucks sold in the US since the 1970s can tolerate E10 (10% ethanol) blends. In addition, a loophole in CAFE rules allows auto manufacturers could avoid gas guzzler taxes for popular SUV and pick-up models equipped - at modest expense - with seals and gaskets made from materials that can tolerate blends as high as E85. Millions of car and truck owners are not even aware that their vehicle is already flex-fuel capable.

Unfortunately, one of the biggest headaches presented by cellulosic feedstocks is that they are usually solid and therefore expensive to transport to a large central biorefinery. Moreover, the end product ethanol is highly hygroscopic i.e. it attracts moisture from the ambient air. To avoid corrosion risks, it must be distributed via truck or freight rail instead of existing gasoline pipelines. In addition, storage tanks at gas stations must contain stirrers for fuels containing ethanol. California refineries currently purchase most of their ethanol from the Mid-West, where it is produced from glucose contained in corn kernels - competing directly with applications in the food web. Cellulosic ethanol avoids this problem, but large amounts of energy are needed to increase the surface area of readily available feedstocks like corn stover, switch grass etc. Only then can bacteria begin to break the cellulose down into simple sugars and then ferment those into ethanol. Fermentation into the more desirable biobutanol is in a much earlier stage of microbiology R&D.

An alternate, more easily scalable route is the conversion of cellulosic waste streams, including lignocellulosic biomass, into synthesis gas, a mix of hydrogen and carbon monoxide. This can be converted in Fischer-Tropsch reactors into a variety of useful fuels including synthetic natural gas (SNG) and, alkanes suitable as bulk substitutes for diesel, even gasoline. Unfortunately, F-T is highly exothermic (i.e. inefficient) and also not very selective (i.e. you get lots of worthless by-products) and the results become worse as you scale plants down to reduce the overheads associated with feedstock logistics. This makes F-T unattractive in the context of the carbon life-cycle analysis at the heart of California's new LCFS, unless both the waste heat and the waste CO2 can be leveraged for secondary processes such as steam generation and algal oil production.

Implications for Car and Truck Manufacturers

Gasoline and diesel are the dominant fuels for internal combustion engines used in ground transportation for two very simple reasons: low cost and high energy density. They are also very well suited to precisely controlled combustion in spark and compression ignition engines, respectively. All of the technologies involved have been the subject of continuous refinement for over a century. In addition, there are well-established networks for fuel production and distribution plus vehicle maintenance and repair.

Auto manufacturers therefore also prefer incremental changes, e.g. new and retrofit fuel systems for ethanol and biodiesel (FAME). Only modest changes to fuel pumps, combustion control and/or exhaust gas aftertreatment are required for these. Keep in mind that fuels with lower energy density (e.g. E85) are consumed at higher rates, so MPG goes down, as does range on a full tank.

The problem is that lawmakers and regulators see a need to go much further much faster, in terms of both toxic emissions and energy security/climate change. To that end, they are pushing concepts such as hydrogen fuel cell vehicles and various types of electric hybrids using both mandates (Zero Emissions Vehicle Program) and incentives (Tax Credit Programs) to overcome substantial technical hurdles and encourage the construction of new distribution infrastructure.

Battery electric vehicles can be charged off the existing grid, if you happen to have a garage or reserved parking space. Unfortunately, using a standard 110V/15amp household circuit require a charge times of 4-8 hours for an operating radius of just 40-100 miles, depending on vehicle mass, aerodynamics and how aggressively they are operated. High acceleration/deceleration rates and high speeds are very detrimental to range, as are hotel loads such as cabin heaters and A/C. Fortunately, research has shown that privately owned motor vehicles are typically operated less than 2 hours out of every 24 and, cover less than 30 miles on most days.

General Motors is betting the farm on a technology that combines a full battery electric drivetrain with a small gasoline engine attached to a generator to extend vehicle range. This concept was first presented in the Lohner-Porsche Mixte Hybrid in 1901. It remains to be seen if consumers will be willing to pay a premium of $15k for a Chevy Volt over a comparable conventional Malibu, even if the federal government provides a super-generous $7500 tax credit for early adopters. Even if your daily commute distance (15-20 miles each way) allows you to very nearly deplete the grid electricity charge without firing up the gasoline engine, it will take many years to recoup the additional initial investment as long as gasoline remains comparatively cheap.

Supply regulations like LCFS that indirectly force consumers to shell out for motor vehicle features that they would not purchase voluntarily tend to reduce both profit margins and annual unit volume. Approaches that deliver fiscally sustainable changes in consumer demand would ultimately deliver a greater aggregate impact on climate policy while also making a smaller auto industry more profitable.

Implications for Transit and High Speed Rail

As indicated at the beginning of the post, the new Low Carbon Fuel Standard will above all make buying and operating a motor car more expensive, because essentially all alternative fuel and propulsion technologies cost more than the status quo. This means California families will likely own fewer and on average, older cars and trucks than is the case today.

In the long run, high school and university students may not be able to afford owning a car. Instead, they make do with a scooter or electric (folding) bicycle instead. In addition, simple economics may force them to use local and regional transit more frequently. From there, it is a just a small step to riding high speed rail instead of catching a short-hop flight. Later, this new generation may well prefer living in an apartment in a walkable transit village to their parents' dreams of a large free-standing house in the suburbs where cars are the only way to go anywhere, at least in the winter months.

Electric passenger rail is today and will likely remain the only transportation technology capable of moving millions of people across hundreds of miles quickly, safely and in comfort while making time spent in transit productive via reliable broadband Internet access. The much-ballyhooed zero tailpipe emissions vehicle is actually a very old hat, the hard part is getting urban planners and real estate tycoons to revert to thinking in terms of linear rather than area development patterns, i.e. dense transit villages instead of low-rise sprawl across a grid.

Coda: The Future of the LCFS

If history is any guide, it is very likely that a variety of business interests will lobby California politicians as well as ARB bureaucrats to make incremental changes to the complex new regulation. The cumulative effect will likely be a gradual watering-down, even if crass excesses like the aforementioned E85 loophole are avoided. If the state is serious about reducing its net carbon emissions, by far the most effective approach would be to raise fuel taxes as Japan and European countries did long ago.

Unfortunately, very few politicians are prepared to be honest with voters, so they favor new regulations such as this one. Moreover, forcing industry to lobby them fills their campaign coffers.

It is not yet clear if other states will adopt California's Low Carbon Fuel Standard in addition to its strict limits on toxic tailpipe emissions. Note also that the Obama administration has recently given EPA jurisdiction over CO2 emissions, which may well translate to fleet average limits per mile that will render CAFE (administered by USDOT) and the gas guzzler tax (administered by the US Treasury) essentially irrelevant. That sets the stage for a new arena of jurisdictional conflict between EPA and California ARB.