Out of Control Policy Blog

High-Speed Rail: Going Nowhere Fast

David Freddeso has an excellent analysis of the pitfalls of high-speed rail at the National Review. As usual, the Obama administration is promoting the rail system with all the flair of high-minded rhetoric and viritually ignoring the costs of building the system. But, as Freddeso points out, any high-speed rail system is going to be very, very expensive while generating very little net social gain.

It sounds lovely, but before you go to sleep with visions of bullet trains dancing in your head, it’s worth examining the numbers more closely. Any real-life high-speed rail system on the scale Obama is promising would be vastly more expensive than the $13 billion he has committed; in fact, it would require close to half of the $787 billion contained in his recently passed stimulus package.

We know this because high-speed rail systems in other nations were not built, and are not operated, anywhere near so cheaply as Obama suggests. In the past decade, Taiwan built a single 215-mile high-speed passenger route for $15 billion. Germany, France, and Italy, often cited as advanced railroad nations, subsidize their rail systems heavily: Between 1995 and 2003, Germany spent $104 billion on subsidies, France spent $75 billion, and Italy spent $64 billion, according to a 2008 study by Amtrak’s inspector general. Rail ridership in Europe far outpaces that in the U.S., but in spite of these huge subsidies, trains have lost a significant portion of their market share to automobiles and planes since 1980.

High-speed rail in the U.S. really won't be high-speed anyway. Top speeds are likely to reach just 110 mph, significantly below standards in Europe and Asia. This means most trains still won't be competitive airlines. It also means we are substituting a highly subsidized form of transportation (rail) for a mode that has very low, if any, public subsidies (air).

Reason Foundation has published some of the most current analysis of high-speed rail, and the study can be found here.

Serious rail analysts should also take a thorough look at Randal O'Toole's study for the Cato Institute. That policy study can be found here.

What makes high-speed rail attractive, at first, is the potential for a truly high-speed rail service to become self-supporting. Yet, it's difficult to see this level of service ever being acheived. An analysis of the Ohio high-speed rail corridor found that a number of assumptions had to be made for the system to cover its just the operating costs, including,

  • All or nothing build out. The success of the system depended critically on interconnectedness among major cities in the Midwest--Chicago, Cleveland, Detroit, Columbus, Buffalo, etc. This interconnectedness accounted for more than a third of projected ridership.
  • Achieving speeds of at least 110 mph. Speeds lower than this would not attract ridership sufficient to make the rail corridor worthwhile.
  • Federal funding of all capital costs. Revenues from the use of the high speed system would not be sufficient to cover the costs under any circumstances.
  • Using public private partnerships to keep costs in check.

Notably, the Ohio study found that the economic impacts were in fact modest. The primary benefits would be felt by the users of the system, not the neighborhoods surrounding the train stations or the statewide economy.

Environmental benefits, particularly in terms of congestin relief and air quality, are barely even worth mentioning. Not enough travelers are diverted from roads and airplanes to make a difference.

Any way this project is sliced, it's risky. You may not get that from the rhetoric, but it doesn't take long to burrow down into the evaluations and analysis of these projects to find it.

Samuel Staley is Research Fellow

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Comments to "High-Speed Rail: Going Nowhere Fast":

james seney | April 21, 2009, 10:37am | #

Dr.Staley's remarks about the Ohio Hub are correct. However, to understand them fully one must read the linked G.E.M. report and all the Ohio Hub Economic Impact Reports. 1)110 MPH is neccessary to be competative or beat the automobile in travel time. 2)All or nothing buildout is required to achieve ridership and Econ Impact because that is what the projections are based on, a partial system gets diminished results. 3)The Ohio Hub is an economic development plan, not a project of social change, enviromental benifits are considered an intended consequence of the project not the reason for building it. It is designed to bring the benifits of the reach, price and frequency of existing international air hubs to Ohio and increase the capacity and efficiency of transportation corridors not replace them. All in all the G.E.M. report concludes that there is significant economic benifit for development and that Ohio should proceed with the Ohio Hub Project, mindful of certain pit falls.
James Seney, Former Director of The Ohio Rail Development Commission and responsible for developing the Ohio Hub concept.

Rail Pass | April 21, 2009, 11:27am | #

Perhaps you don't recall the astronomical gas prices that plagued our nation less than a year ago, but I can tell you from personal experience that I got off the roads and onboard a train to get to work in 2008. And, what's more, I will never go back to the expensive, eco-terrorist highway system again. And it looks like I was not alone......US train ridership on Amtrak saw double-digit growth in 2008 (http://tinyurl.com/c5b5j9). And that was before Obama's high-speed rail initiative was on the table. Americans have already stepped forward to acknowledge that train travel is a viable alternative to car transport. High-speed (even if it is only 90-110 mph) rail travel will only make this mode of transportation more attractive.

As to moving traffic from non-subsidized air to subsidized rail, I think you are omitting the biggest shift that will likely occur - from historically highly-subsidized road to newly-subsidized rail. Trust me; the government has plowed more than its fair share of taxpayer money into our nation's roads and highways over the years. I am all for using government funds to actually improve my travel experience and the Earth's environment.

For more commentary on the high-speed rail debate, please have a look at this posting: http://tinyurl.com/crahrg

john smith | June 22, 2009, 10:24am | #

Why don't you write about how our Nazi inspired highway system wiped out the private railroads in the first place.

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