Friday, February 18, 2011

HSR from the energy perspective of an energy expert

This article was brought to my attention by Nadia Naik of the CARRD group.  It's interesting, as she points out, because the sponsoring web site for this article is an energy centered organization with considerable support from Siemens which, as we know, is a huge high-speed rail manufacturer based in Germany and eager for US contracts to build our rolling stock. Of course, Siemens is in the energy business as well and may want to be perceived as a "good citizen."  The article in question is not HSR-friendly.

Geoffrey Styles, the author, is quite critical of this HSR program and looks at the environmental impact but, in the end, seeks more data about the environmental cost/benefits compared to other travel modes.  That data is in ample supply and does not favor the pro-rail arguments. Styles is also on the Board of the Energy Collective.

The Energy Collective

Is High-Speed Rail Worth Its Cost?

Posted February 18, 2011 

by Geoffrey Styles

The editors of the Washington Post have expressed serious reservations concerning the administration's plans for investing up to $53 billion in new high-speed rail systems, with the goal of linking 80% of the US population by a new fast rail network. If the facts they cite concerning the ongoing subsidies such systems require in other countries are correct--including countries with more suitable geography for high-speed trains--then attempting to follow their lead here could amount to buying a gigantic money pit. While I certainly see the benefits of high-speed rail as part of an upgraded US transportation infrastructure, I'd like to see the architects of the current proposals provide some hard numbers on how high speed rail compares to our alternatives.

This is a hard subject for me to approach objectively, because I love trains. Access to convenient and reliable rail service was one of the great joys of the two years I spent living in the UK and traveling on the Continent of Europe. I now routinely take Amtrak's Acela service in preference to flying between D.C. and New York, particularly in light of the hassle that air travel has become, especially for short distances. Yet as much as the thought of sleek 200 mile-per-hour trains running on a network of smooth high speed tracks and connecting most major US cities appeals to me as a train fan and futurist, I'm also acutely aware of the cost and risk of such endeavors. For example, despite carrying more than 9 million passengers a year the channel tunnel system connecting London and Paris, which impressed me greatly when I rode it in the late 1990s, declared bankruptcy in 2006. It is now just barely profitable, earning a negligible (negative?) return on its original investment. The UK recently sold off its portion of the line to pay down government debt.

The World Bank report on high-speed rail cited by the Post was generally positive concerning developments in China and elsewhere, though also full of red flags: "The demographic and economic conditions that can support the financial or economic viability of high-speed rail are limited." "The established lines with greatest demand are in East Asia..." "Nevertheless, high-speed rail projects have rarely met the full ridership forecasts asserted by their promoters and in some cases have fallen far short." "Governments contemplating the benefits of a new high-speed railway... should also contemplate the near-certainty of copious and continuing support for the debt." It also explains why high-speed rail is attractive in China, attributing it to, "The combination of supportive features that exist on the eastern plains of China including very high population density, rapidly growing disposable incomes, and the prevalence of many large cities in reasonable proximity to one another..." To that I might add the relative lack of competition from underdeveloped road and air infrastructure. Yet even in China its high cost is drawing criticism.

I'm also not clear on the non-transportation economic benefits for the US, particularly if the core train technology for systems like California's current high-speed rail project is likely to come from Japan, France or Germany. And while the California project cites greenhouse gas savings of 6 million tons per year, that doesn't sound quite so impressive in the context of its $10 billion initial cost. And the total is sure to go much higher, considering that the cost of the first leg, the so-called "train to nowhere" in the Central Valley, is over $4 billion and includes neither rolling stock nor power supply.

So here are some basic questions I'd like to see answered, in lieu of the largely aspirational rhetoric we've heard so far, before I'd be pleased to see my tax dollars spent on this initiative:

•What is the projected return on capital and net present value of the investment?

•What is the effective cost per barrel of achieving the oil and other energy savings projected for the first 20 years of operation?

•What is the implied cost per ton of the resulting emissions reductions, assuming that the system is powered by the average US grid mix, and how does that compare to other ways to reduce emissions?

•How do these results compare to the same metrics for other transportation investments that could be made with these funds, including modernization of US airports and air traffic control systems, key highway segment upgrades, and electric vehicle recharging infrastructure?

About Geoffrey Styles
Geoffrey Styles is Managing Director of GSW Strategy Group, LLC and an award-winning blogger.