Friday, March 11, 2011

The Chinese race ahead, but we don't. We are losing the high-speed rail race. And the point is?

I'm posting this article from Tech Daily because the argument is so flawed.  It helps to understand the high-speed rail situation better by 'de-constructing' what this author says.  

In talking about the miraculous advances of high-speed rail in China, Jason Mick says:  "Trains will zip along at 200+ miles per hour, opening inter-city opportunities for businessmen and engineers that were formerly only available to the wealthy elite who own private jets."  

Does Mr. Mick not realize the irony of that statement?  High-speed rail, in other words, is for that class of people who own private jets; the wealthy elite.  And that is a point we have been laboring to explain for a long time. Unlike most transit modalities, HSR is not for everyone; only for those who can afford "The Ticket to Ride."

High-speed rail is, to put it simply and bluntly, for rich people. Mick says people like businessmen and engineers.  I assume that he's thinking of at least the ones at the executive level that have generous expense accounts for travel.  Their choices consist of flying first-class or taking a train first-class; i.e., high-speed rail. 

The next insight offered in the article states that the President is promising "as much as $53 billion in matching federal grants for high-speed rail projects."  That raises two problems.  One is that $53 billion, spread around the eleven HSR corridors, is merely scratching the surface of the real costs. The second problem is the matching part.  Where are the states supposed to get their "matching" share of these billions?  Isn't Mr. Mick, or President Obama for that matter, reading the papers?

Then we move on to a study that shows how the Florida project would have been enormously profitable, if only the Governor hadn't turned down the federal funds for it.  The study was not done by or for the US Department of Energy, as Mr. Mick says, but was done for the Florida Department of Transportation which has eagerly been lobbying for the train. "The $1.3 million study, conducted by the forecasting firms Wilbur Smith Associates and Steer Davies Gleave, shows the line would have had 3.3 million riders in its first year. The previous analysis predicted the line would have had 2.4 million riders in 2015."

Does this sound familiar? It should. It's the "ridership" problem. This is the same nonsense that has produced the ridiculous ridership numbers for California's HSR project. Only in our case the Rail Authority hired Cambridge Systematics for their phony ridership numbers.  By now we should all have learned that "forecasting" consulting companies are in business to tell their clients what they want to hear.

Finally, Mr. Mick waxes eloquent about America's "economic golden age." He argues that the US leaps ahead transportation-wise, every fifty years.  And now that the Interstate Highway System is fifty years old, time for another such grand leap, and this time it's, you guessed it, high-speed rail.  He begins with railroading and steam engines.  Clearly he chooses his examples very selectively.  

I might remind him that steam engines and those early trains were the business/private effort that preceeded the evolution of flight as well as personal vehicles; motorcars. There are reasons for the decline of railroading in the US.   Each modality displaced the prior one, just as passenger rail diminished the use of horse-and-buggy. What has survived due to its enormous cost/effectiveness is freight rail.  

I might also remind him that transportation technologies evolve on a continuous basis, and that making  a modality go faster may or may not be an improvement.  ("Just because something is possible in engineering doesn't mean that it is necessary or even desirable.") No, Mr. Mick, it is not a matter of, now it's time for high-speed rail to have its turn. As we keep saying, context is everything.  

And, Mr. Mick does not overlook the Chinese high-speed rail miracle and their intended 16,000 miles of high-speed rail track.

Their vast HSR system will impose great harm on the United States economy, he says, and therefore we  also must have a high-speed rail system to compete with China.  

Actually, a lot of people make that non-sequitur argument.  To that I would reply that we also must re-structure our government to be more like China's, and for the same reasons, since they are so successful economically.  We could be just as autocratic and brutal as they are, and pay all our workers and average of $5,000 per year.  Right Mr. Mick?
U.S. States Abandon High-Speed Rail as China Races Ahead
Jason Mick (Blog) - March 11, 2011 10:40 AM

U.S. transportation has leapt forward every 50 years, but this time many states are choosing to stay behind

By 2020, China will be blanketed by high-speed rail.  The Asian giant is investing $1T USD to create 16,000 miles of high-speed rail track -- roughly a third of the total length of the U.S. interstate highway system.  Trains will zip along at 200+ miles per hour, opening inter-city opportunities for businessmen and engineers that were formerly only available to the wealthy elite who own private jets.  Meanwhile, much of the U.S. is stuck in the slow lane, something that may have a dire impact on the nation's competitiveness.

In response to a difficult recovery and growing conservative movement many states have abandoned plans to deploy high-speed rail, despite President Obama promising as much as $53B USD in matching federal grants for state rail projects over the next six years.

I. U.S. States Opt Out of Advancing U.S. Transportation

Some states like Michigan have effectively rejected projects by simply falling silent.  Michigan governor Rick Snyder has simply stopped talking about the state's former project and has refused calls or discussions on the topic.

Other states like Florida are taking a more active stance.  Last month Florida Governor Rick Scott -- also a Republican -- killed his state's high-speed rail project.  The proposed line would have connected Tampa to Orlando -- two of Florida's top metropolitan areas.  Governor Scott cites a 2009 study that stated that the line's first operation year -- 2015 -- would only have 2.4 million riders and would be operating at a deficit, as a factor in his decision.  He also cites advice from the libertarian Reason Foundation and the Heritage Foundation, a conservative think tank.

This week the U.S. Department of Energy released a new study, saying that the initial estimates were incorrect and the line would likely generate a $10.2M USD surplus on its very first year of operation and have 3.3 million riders.  The new study cost $2.4M USD in federal funding and was conducted by Wilbur Smith Associates and Steer Davies Gleave.

The governor responded to this study, saying that "burdening" taxpayers with the $2.4B USD project was unacceptable.  He states, "I had been briefed on their ridership study and I looked at other ridership studies and I’m still very comfortable with the decision I made that I don’t want the taxpayers of the state on the hook for the cost overruns of building it, the operating costs or giving the money back if it’s shut down."

A spokesperson for the governor said he questioned the study's accuracy, stating, "The governor has said all along he believes ridership projections for this and other rail projects are overestimated. Numerous studies support this conclusion."

The governor's opinions may not be backed by many of his constituents, though.  A recent poll showed that 59 percent of residents of Florida's Hillsborough County supported the project.

But it may be too late for Governor Scott to change his mind -- on Friday U.S. Transportation Department Secretary Ray LaHood announced that the $2.4B USD in matching funds that Florida would have received were going to be redirected to California.

II. Federal-backed Semicenturial Transportation Refresh has Historically Been Vital

The issue of high-speed rail projects is sharply dividing the U.S.  Traditionally liberal west coast states like California, Oregon, and Washington have embraced the initiative and have planned a vast interconnect rail network.  Meanwhile conservative and moderate Southeast and Midwest states such as Florida, Michigan, Wisconsin, and Ohio appear on the verge of rejecting rail plans.

Ultimately, history tells us that much of the U.S.'s modern economic golden age is thanks to transportation pushes that mixed federal funding (land, grants, etc.) with private sector investment.  Examples include the push for steam rail in the late 1800s and the push for an interstate highway system in the aftermath of World War II.  These dramatic transportations pushes typically come ever 50 years or so.

Approximately 50 years have passed since the expansion of the interstate highway system, but this time around not everyone is supporting the latest push.  History shows that the economy is intimately linked to transportation.  Thus, whatever the upfront costs of intercity rail, states rejecting it may face a much higher cost as businesses and professionals flee to more technologically advanced states.

But while the states may be among the losers economically, ultimately it's the nation as a whole that will likely be the biggest loser.  If the U.S. can't keep up with China in terms of transportation it will be at a tremendous handicap economically.  And financial trends tell world observers that the U.S. has little margin for error in its bid to stay ahead of a surging China.