Friday, February 11, 2011

The freight problem for HSR and for us

The US has no high-speed rail while many European and Asian countries have them.  However, the US does have the best freight rail service in the world.  But, before we get to that topic, here is an interesting article.

First of all I take exception to some of Lou Dolnar's ideological darts and political hot-buttons such as the health care plan and law, and, further on, at Liberals.  It's not necessary to do that in order to make the basic point that HSR is grossly ill-conceived and should be terminated.

The most important point that Dolnar makes has also been made by Fred Frailey from Trains Magazine.  We presented an article from Mr. Frailey not that long ago.  The issue is freights. 

Passenger rail in the US has declined in typical fashion. It was never profitable for the private carriers. So, they reduced service.  By reducing service, they made rail travel less convenient.  So they lost passengers and cut the service even further.  Finally, they gave away their passenger operations to Congress which created Amtrak to manage passenger rail in the US.  

Amtrak has become what all the urban transit operators have become, deficit operations requiring permanent public subsidies to stay in business.  You can see the same pattern at the local, regional and national levels. 

What survived privately was the highly profitable freight business, which today still owns most of the rail corridors around the US.  Union Pacific, which runs a handful of daily freights on the Caltrain corridor (which it once owned) is a familiar sight to Peninsula residents.  Union Pacific is the largest freight carrier in the US.  And, they dislike high-speed passenger rail.

Why?  Because the "return" of passenger rail, slow or fast, requires use of either existing freight owned rail corridors and tracks, such as Amtrak uses, or new, dedicated corridors and tracks for high-speed rail.  And the latter is what's so expensive.  The freight operators are not keen on sharing their tracks or corridors for many reasons, including interference with their schedules, as well as liability and safety.

Let me paint a concrete picture of that.  Say, that like Warren Buffett, we own a freight service and the tracks.  Now the government demands that we have to share them, even with new additional tracks, with high-speed rail.  Our insurance provider is going to hit us with mind-boggling premiums for the increased risk of derailment and collision. Of course PTC will be required, but that doesn't provide a zero-defect system.  Stuff happens!  

There are many more problems, like schedule delays if the faster passenger trains have priority track use.  Our freights run thousands of refrigerator cars with fragile produce.  Now we have to delay them and we get no benefits from that. The bottom line here is that in economic terms, freight and passenger rail don't mix very well.  And we certainly need our freight rail service and capacity. Indeed, we need to upgrade it.  But, it's highly debatable whether we need increased inter-city passenger rail service.

Anyhow, these are problems no one ever talked about, like Obama, when they waved their hands in the air eloquently describing sitting in fast luxury as the countryside passes in a blur, working on our laptops, being served drinks and otherwise living the good life on this super-fast luxury train.  

Then the question becomes -- or should become -- what business does the government have, using our tax dollars to build a hugely expensive luxury train for the rich on our dime?


FEBRUARY 11, 2011 4:00 A.M.
The High-Speed-Rail Boondoggle 

The president’s new project would hurt freight transportation and waste money.

Key Republicans are rightly going after President Obama’s $53 billion pie-on-the-tracks high-speed-rail schemes. House Transportation Committee chair Rep. John Mica (R., Fla. ) calls it a “Soviet-style train system,” while Railroads Subcommittee chair Rep. Bill Shuster (R., Pa. ) says it’s “insanity.” These are strong comments, coming from officials who have in the past expressed support for rail projects.

I don’t pretend to speak for them, but what they appear to be getting at is that high-speed rail is another typical Obama play, long on flash and short on the hard details needed to make a law work. The economic case against high-speed rail is well known. But there’s another problem: As was the case with the health-care bill, even if you accept its aims and the need for some subsidies, the initiative is poorly thought out and self-defeating.

Problem No. 1 is the havoc high-speed rail could wreak on our freight-rail system, with which many of the proposed routes share trackage. Subsidy-free and profitable since deregulation, as The Economist reported recently, the freight-rail companies own most rail tracks and are one of the country’s economic and environmental crown jewels. Freight rail moves goods cheaply, efficiently, and with a carbon footprint smaller than that of any other form of transportation. European trains, meanwhile, with which high-speed-rail advocates compare the American system invidiously, move almost no freight. They move people, and require subsidies to do so.

Evidently, the administration thought it could build medium-to-high-speed rail on the cheap in most of the U.S. by making Amtrak trains run more frequently, increasing their speed to 110 miles per hour, and sponging off the freight system. Here’s the problem: The more passenger trains on a given rail corridor, the fewer freight trains, and the administration envisions massive numbers of new trains. Since passenger trains have to meet schedules, they take priority. The faster a passenger train travels, the more freight it displaces. According to The Economist, “One Amtrak passenger train at 110 MPH will remove the capacity to run six freight trains (which travel 50 MPH) in any corridor.” And in many areas, freight rail is already at capacity, and will require more investment to keep up with expected growth.

You’ve read a lot about those mean old Republican governors, Ohio’s John Kasich and Wisconsin’s Scott Walker, who turned down free money, Obama money, for high-speed rail because the state would get stuck with a big part of the costs. Iowa, Florida, and Michigan are considering following suit, according to Fred Frailey of Trains magazine.

Frailey also points out that in many cases, freight-rail companies need to build more sidings and even double tracks to accommodate high-speed rail. The costs are enormous. Negotiations between the federal government and freight-rail companies in North Carolina, Virginia, and Washington State are stalled over how much more capacity is needed, and who’s going to pay for it. If the federal government doesn’t pick up the tab, excess costs could be passed along to consumers in the form of higher freight rates, which in turn will impact the price of energy and manufactured goods.

Running high-speed rail on existing tracks also opens the door to re-regulation of the freight-rail business. 

Already, under President Bush, Congress mandated that freight systems spend an estimated $18 billion on safety systems designed to prevent passenger-freight collisions like the one in California that killed 25 and injured 135 — systems the industry says are largely ineffective and unnecessary. That’s the start of a slippery slope; the federal government will intrude more and more as a mediator between a dull but efficient freight system and a politically popular but deficit-ridden passenger-rail project. We know how that’s going to turn out.

A second problem with high-speed rail is that it is creating new funding requirements for the whole country, including states that have huge financial commitments to mission-critical rail, those mass-transit and commuter lines that serve high-density urban cores.

One may quibble about who belongs on the list here, but certainly New York City would cease to function without its Metropolitan Transit Authority (MTA). For good measure, throw in Chicago, Boston, Philadelphia, San Francisco, and Washington, D. C. High-speed Amtrak is an unaffordable luxury compared with such systems.

Transit authorities typically cut across city, county, and even state boundaries, and thus are organized as, in effect, their own units of local government, with revenue streams, the ability to issue bonds, and their own workforces — and also, to varying degrees, crushing debt loads, unfunded pension liabilities, subsidy dependencies, and structural deficits that are papered over by such strategies as skimping on maintenance and cutting back on service until their customers scream uncle. Take the Greece-like financial state of the MTA, one of the biggest governmental borrowers in the U.S. Speaking to the Long Island Press, Rep. Peter King (R., N.Y.) pointed out that “right now, almost 40 percent of every dollar spent on [an MTA fare card] is used to pay for debt.” Recent rate hikes have been draconian, yet service, veteran commuters say, is at an all-time low.

It’s questionable whether, in an era of scarce resources, local transit authorities should get new federal subsidies. But the idea of letting these systems fester while the administration wrecks freight rail and gives California $40 billion–plus for a shiny new high-speed-rail line is insanity.

So is there any hope for high-speed rail? Yes. Republicans recognize that the Northeast is where the action is for high-speed rail transit, if any action exists at all. The region has density; money; dedicated, publicly owned passenger trackage; and lots of liberals who like trains. Unlike the administration’s dream projects, high-speed rail on the East Coast could potentially make money and attract private investors. Mica and Schuster have come out in favor of “public-private” partnerships in rail for the Northeast. Conservatives need to run RINO patrol to make sure the emphasis is more on private than public. Also, assuming the Tea Party congressmen succeed in defunding Amtrak, its assets should devolve to the states and new regional authorities to see if they can figure out how to profitably unscramble the egg.

Congress, after all, is optimized for interstate legislative horse trading, not commerce, and as we’ve seen with Amtrak and high-speed rail, that’s a helluva way to run a railroad.
— Lou Dolinar is a retired reporter for Newsday who was born on the Right side of the tracks in a Pennsylvania coal-mining town.