Saturday, April 23, 2011

The cost-efficiencies, and lack thereof, of high-speed rail

This article is not the trigger for getting into a discussion of competing modalities. Whether highways are better than runways or railways is a separate issue to analyze.  The point here is one of cost-benefit analysis.  It has not been made in the US for its high-speed rail program.  It has not been made in California for its high-speed rail project.

Why not, do you suppose? Possibly, people don't want to know just how inefficient high-speed rail is, cost-wise. And, how few actual benefits there really are.

Let's look at this as from another planet.  We have freight rail and we have passenger rail.  Freight rail is enormously cost-efficient.  The benefits are immense.  Just ask Warren Buffett.  The freight operators brag about it in their commercials. 435.88 ton-miles from one gallon of Diesel.  (A ton-mile is one ton moved one mile)

What about passenger rail?  Passenger rail is extremely inefficient freight rail.  Most of the weight is 'tare' weight.  That's the weight of the rail car with its furnishings, decorations, racks, carpeting, rest room, etc.  

In passenger rail cars and unlike freight rail, the tare weight is far greater than the net weight; that is, the weight of all the passengers combined. The gross weight is the combination of the weight of the car (tare) plus the weight of the freight (net), or in this case, the passengers.  

Passenger rail is never calculated this way since it would reveal just how inefficient such transit is. (Hey, I'm not freight! Yes you are as calculated for the cost-benefit of operating the train.) Furthermore, passenger rail is far more labor-intensive than freight, which adds greatly to the mile costs.

But, there is still more to calculate.  Another variable is speed.  Speed costs algorithmically.  That is to say, a 100 mph train's operating fuel cost is more than twice the cost of running a train at 50 mph. That's the case whether Diesel or electricity. As you know, it's also true of your own car.

Pulling one thousand passengers in fully occupied passenger cars is more efficient (it costs less per passenger) than pulling five hundred passengers.  The point here is that when one starts doing cost-efficiency calculations, passenger rail, especially high-speed trains, come off very badly. 

High-speed trains require far more maintenance and parts replacement; i.e., more costs. The support structure is more complex with more electronics, more support personnel,etc.  Yet more costs. Cost-benefit? No one will tell you the unpleasant truth about that.

And none of these data take development and construction into account.  Upgrading current rail lines in the US is necessary since they have been neglected for a very long time.  And, it's far less expensive to repair, restore and upgrade the current rail corridors used by Amtrak than it is to build brand-new ones for high-speed rail, such as proposed in California. 

Furthermore, building high-speed rail dedicated tracks is far more expensive to construct than regular rail used by Amtrak and freights. Indeed, high speed rail is the most expensive way to build rail transit.  The Chinese are now learning that lesson the hard way, having poured many billions into a system that is barely being used.

Let's sum it up this way.  A Chevrolet Van is far, far more cost-efficient than a Formula 1 race car.  The job of both is to carry passengers.  The Formula car can only carry one passenger, the driver, has an enormous fuel-intensive engine in order to go extremely fast, and is stunningly costly to build and maintain.  The Chevy, while not as sexy, is the very opposite of the Formula car.  Highly fuel efficient per passenger, far lower capital development and manufacturing costs, and in every way, far more practical.  

Yes, I understand they have different purposes. And there are very high cost-benefits in the auto racing industry.  But as passenger transport, the cost-benefit ratio is day and night.  So it is with high-speed rail and regular rail.  Remember, the point is not the ride; it's getting from point A to point B in the most cost-beneficial way. And, yes, speed is one of the variables. 

The 'Concorde' carried a small number of people at mach 2.4, from NY to Paris in three hours.  Ticket costs = $10,000. Cost-benefits? Promotional marketing for BA and Air France.  Each passenger lost the companies money and was subsidized by the carriers. They are no longer flying. 

With passenger rail, the intention to provide transit services for the largest number of potential riders.  High-Speed Rail is at the bottom of the cost-efficiency list. 

Of all the things that the US ought to be investing in, in order to achieve the intended ends claimed for high-speed rail, repairing, restoring and upgrading existing passenger rail service, especially for urban and regional transit ought to be far ahead of even a consideration of high-speed rail.

This article makes that point.

No cost-benefit studies done for Obama's $53 billion high-speed rail boondoggle

By: Diana Furchtgott-Roth
04/21/11 8:05 Pm

There's no better example of excessive government spending than the $53 billion President Obama allocated for high-speed rail in his 2012 budget.

Shockingly, in a response to a Freedom of Information Act request by Crossroads GPS, a nonprofit advocacy group, the U.S. Department of Transportation admitted this week that it has performed no cost-benefit analysis -- routine comparisons of costs of infrastructure projects versus their benefits -- of constructing a high-speed rail system.

Federal Railroad Administration chief counsel William Fashouer wrote here, "the agency's files do not contain any records related to cost-benefit analyses created by or on behalf of the Federal Railroad Administration related to the construction of a national high-speed and intercity passenger rail network."

Cost-benefit analyses are vital to make sure federal government dollars are wisely spent.

Obama wants to spend $53 billion on a mode of transportation few Americans use, yet his administration has performed no studies on the feasibility either of the entire system or of individual components, such as California's Corcoran-Borden or Florida's Orlando-Tampa high-speed rail lines.

Obama's goal is to give 80 percent of Americans access to high-speed rail by 2037.

High-speed rail is not faster, cheaper or easier than building more freeways or expanding the overburdened air traffic control system, services that users are generally prepared to pay for. Few transportation experts believe that passengers will be prepared to pay for high-speed rail.

Even on the heavily traveled Washington-Boston corridor, rail receives government subsidies and loses nonbusiness customers to buses. A ticket on a regional Amtrak train from Washington to New York this morning costs $147 (price of the faster Acela: $186), compared with $25 for Bolt Bus -- and the bus comes with free wireless.

Ticket prices for high-speed rail would be even more expensive, further limiting its customer base.

High-speed rail proponents have overstated its benefits. Transportation jobs can be created through expansion of highways, using private funding from tolls rather than taxpayer dollars. And high-speed rail is unlikely to relieve traffic jams, because they occur within cities, rather than outside them. 

High-speed rail is expensive, it reaches only small segments of the country, and it cannot substitute for most highways.

Building high-speed lines -- capable of speeds of 150 to 200 miles per hour -- on newly laid track, as well as incremental improvements in existing rail infrastructure, would cost between $250 billion and $500 billion, perhaps more. Obama's $53 billion would be just the start.

The New York Times editors wrote on Wednesday, "France, China, Brazil, even Russia, understand that high-speed rail is central to future development. Not Washington."

The Times must be desperate if it is looking to France and Russia as models for America. All these railroads benefit from substantial government subsidies, paid for by higher taxes that discourage economic activity.

Then, the Times cites New Jersey Gov. Chris Christie's request for $570 million to replace the 100-year Portal Bridge across the Hackensack River as evidence that he is in favor of high-speed rail.

But rail maintenance and building high-speed rail are very different. The deterioration of America's regular rail network is an argument against putting in a whole new high-speed rail system. Even regular rail is expensive to maintain.

Because trains cannot be quickly stopped, they need miles of empty space in front of them, but highways can carry more than 2,000 cars, or 1,000 buses, per lane per hour.

The lack of cost-benefit analysis shows that the federal government cannot be trusted to spend general revenues effectively on transportation. Republicans reduced 2011 high-speed rail funding by $2.9 billion from 2010 levels -- they should finish the job, and strike high-speed rail completely from the 2012 budget.

Examiner Columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

Read more at the Washington Examiner: