In this issue:
- Problems with all-electric transportation
- Freight rail innovation in jeopardy
- Virginia embracing per-mile charging
- What is a “business case ROI” for passenger rail?
- “Green Jim Crow” in California
- MBUFs and rural drivers
- News Notes
- Quotable Quotes
Over the past few years, I’ve become convinced of the superiority of electric vehicles. Part of this was an exhilarating ride in a friend’s Tesla and more enthusiasm has come via keeping up with technology advances. As electric vehicles (EVs) mature, with next-generation battery systems having much greater range and/or much shorter recharging times, I’ll be happy to trade in my current vehicle for the cleaner, quicker, and less maintenance-intensive EV that is coming.
That said, there are some major problems preventing the emergence of an all-electric personal vehicle fleet. (I’ll discuss all-electric trucks on another occasion). As a starting point, I recommend renowned energy analyst Daniel Yergin’s recent piece in Politico Magazine, “The Major Problems Blocking America’s Electric Car Future.” His article discusses supply chain transformation, modernization and expansion of the electricity grid, and public acceptance of very different vehicles. Another good introduction is former U.S. Department of Transportation (DOT) research and technology advisor Steven Polzin’s Q&A session at Arizona State University.
Here is my brief overview of the problems the industry and government must address to get beyond idealistic projections of no more fossil-fuel vehicles sold beyond 2030 and a completely carbon-free electricity sector by 2035.
Enough electric generating capacity
Most attempts to quantify a complete phase-out of fossil fuel electricity generation by 2035 take the objective to be replacing the current 4.13 terawatt-hours generated in 2019. Reason science editor Ron Bailey earlier this year wrote a good summary of the Energy Information Administration’s estimates of what this would take. For example, it would take 290 new nuclear power plants to replace the 62% of current electricity generated by coal and natural gas, at an estimated cost of $3.6 trillion—and in just 15 years. Alternatively, aiming to get 90% there via wind and solar (with some natural gas backup) was estimated by a University of California—Berkeley Center for Environmental Public Policy study to cost $1.7 trillion.
But that is just to replace current electricity uses. If even 60% of all US cars were electric vehicles by 2050, the nation’s electricity capacity would need to double by that date, according to the January 2021 electrification futures study by the National Renewable Energy Laboratory. Reuters’ Nichola Groom and Tina Bellon provided a good summary of this challenge in “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids.” I will venture to say that neither replacement of all existing electricity capacity by 2035 nor doubling its current capacity by 2050 will happen.
News articles regularly appear about the limitations of current electric vehicle batteries. They don’t provide enough range for trips beyond urban travel. They take far longer to charge than refilling a conventional car’s gas tank (which is why nearly all of today’s gas stations lack the room to serve more than a handful of EV charging customers per hour). The current lithium batteries cost way too much (which is why EVs cost far more than a conventional car of the same size), they can catch fire and explode, and they require a number of rare and expensive metals, whose sources are mostly in either China or underdeveloped countries. The good news is there’s a fortune being invested in new kinds of vehicle batteries, but no one can predict how soon and how much better the next generation of EV batteries will be.
Far more (and much faster) EV charging
The “more” problem is one focus of the Biden administration’s environmental agenda, focusing mostly on subsidies for electric vehicle charging stations. If successful, this risks putting lots of new capacity in place before there is enough demand for it, but leave that aside. The administration and the Senate have shown no interest in changing federal law to allow EV charging facilities on rural Interstate highway rest areas, unlike the House, whose Fixing America’s Surface Transportation (FAST) Act reauthorization bill includes such a provision. An informal business/environmental coalition is trying to build support for including this provision in one of the pending infrastructure bills, but the White House and DOT have remained silent on this.
Faster EV charging is being developed by researchers and battery companies (established and startups), but even cutting it from 45 minutes to 15 still means much longer waits for customers and far more acreage needed due to durations several times longer than at gas pumps. This will be a much bigger problem for long-distance car and truck trips than for urban travel, where much EV charging can take place overnight at home, or at workplaces.
Experts know that the kind of electrical transformation desired by the Biden administration and (in theory) by nearly all environmental groups will require a huge investment in new long-distance electricity transmission lines, huge areas to locate a vast expansion of solar panels and windmills, and a very large expansion of mining rare-earth minerals, such as lithium and others. Yet as these efforts are starting to get underway, we see various environmental groups, often allied with local NIMBYs, seeking to block new transmission lines, large-scale solar arrays even in deserts, a major expansion of wind power installations, and domestic attempts to start mining lithium and other rare earths. Since this is a surface transportation newsletter, let me just say that there are numerous examples and they are taking place with increasing frequency. The major environmental groups need to start speaking out against this kind of opposition if we are to take their commitment to widespread electrification seriously. And the Biden administration needs to reform the National Environmental Policy Act (NEPA) to reduce endless opportunities for litigation that seeks to block just about every kind of new infrastructure project.
For all these reasons, I have to be skeptical about grandiose electrification goals for 2030, 2035, or even 2050. And if achieving those goals will actually take a lot longer, we need to think through what is actually possible, let alone cost-effective. A completely EV America will require a much larger electricity sector.
In the relatively recent past, the U.S. railroad industry was facing collapse due to generations of counterproductive economic regulation. Fortunately, a bipartisan consensus recognizing the harm of over-regulation formed in the 1970s. Shortly thereafter, the federal government began deregulating the industry, which culminated in the Staggers Rail Act of 1980. This liberalization restored the vibrancy of America’s freight rail network, but rail’s future success likely depends on technological innovation to keep up with its truck competitors. Both existing policy and new counterproductive proposals threaten this innovation agenda, as discussed in a new policy brief published by Reason Foundation. The full brief (.pdf) is available here.
Since partial deregulation in 1980, average inflation-adjusted freight rates have fallen by 44%, train accident rates are down 75%, employee injuries and occupational illnesses have fallen by 83%, all while freight railroads have invested more than $740 billion of their own funds to revitalize their networks to support a 75% increase in freight volume. The fastest growing traffic segment has been intermodal—the shipping containers and trailers that can be moved between rail, truck, and waterborne carriers—and intermodal rail traffic increased by nearly 350% between 1980 and 2019. Intermodal rail traffic in 2019 accounted for more than 15% of industry gross revenue, making up the largest single traffic segment. Much of the future growth of intermodal traffic on rail is likely to depend on how adequately rail can compete with and complement trucking.
The 21st-century competitive landscape of freight transportation is likely to be largely determined by future advances in transportation technology, especially automation. Two rail automation applications are worth considering.
First, infrastructure inspection automation uses unmanned track geometry cars that can augment and replace manual visual inspections. BNSF Railway found during its automated track inspection pilot program that automated geometry cars not only identified many defects that went undetected by visual inspections but also allowed for the redeployment of track inspectors to segments with greater known needs. As a result, its track inspectors on the pilot territory were “recording nearly three times the number of geometry defects per 100 miles than were identified by track inspectors systemwide,” according to a company filing with federal regulators.
BNSF also found safety benefits arising from reduced track occupancy—the number of inspectors and the amount of time required to perform their duties—which reduces track inspectors’ exposure to hazards in the field. Its pilot program saw 20% reductions in both the number of requests to occupy track and the number of hours the track was occupied.
The second, and more ambitious, innovation is train automation. After a Los Angeles passenger train driven by a distracted engineer crashed head-on into a freight train in 2008 and killed 25 people, Congress passed a law that required railroads to spend billions of dollars to develop and install positive train control (PTC) systems. PTC refers to a range of communication and automation technologies designed to prevent train-to-train collisions, over-speed derailments, incursions into work zones, and improper switching.
This unfunded mandate spurred further interest in automation. Train automation is likely to be incremental as functions are gradually automated and personnel are relieved from certain tasks as safety is assured. An automation phase-in could allow for reducing train crew sizes from two to one over time, already common in Europe and which consultancy Oliver Wyman estimated could save U.S. railroads up to $2.5 billion per year by 2030. Certain lower-risk operations, such as those in railyards, are likely to see train automation technology deployed sooner. But international experience suggests that fully automating at least some long-distance freight trains in the U.S. may be on the horizon.
In 2019, mining giant Rio Tinto Group successfully launched its AutoHaul fully automated train operations in Western Australia. AutoHaul involves simultaneous operation of up to 50 unmanned trains, each 1.5 miles long and carrying 240 cars of iron ore from mines to ports on an average 500-mile, 40-hour journey. Loading and unloading is completely automated, although crews still get on board and manually operate the trains as they approach ports. Rio Tinto’s nearly $1 billion effort took over a decade of planning, development, and testing, but reductions in travel time, fuel consumption, and track and locomotive wear-and-tear have already been realized.
But policy barriers to this future loom large. Deploying track inspection automation requires time-consuming and narrow waivers under current rules. Labor unions are promoting inflexible crew-size mandates that undermine the business case for train automation. And some shippers are lobbying for economic re-regulation that would disincentivize investment in new technologies. All these changes would reduce the appeal of freight rail relative to its competitors, leading to a shift in traffic from rail to truck. This would have private as well as social costs, including environmental consequences. Those concerned about transportation sector emissions should take note: when compared to freight rail on a ton-miles basis, the Environmental Protection Agency estimates that trucks emit approximately 10 times as much carbon dioxide (CO2), two-and-a-half times as much nitrogen oxides (NOX), and more than three times as much fine particulate matter (PM2.5).
Automation in freight rail could produce large benefits in the 21st century, both private and social. Going forward, there will be much more policymaking to better match the technological, economic, and social challenges that may arise from automation technology deployment. But at this stage of early development, policymakers today should safeguard modernization by identifying and removing barriers, rather than imposing new burdens that will undermine railroads’ incentive to innovate.
For more on these issues, see the new Reason Foundation policy brief, “Pathways and Policy for 21st Century Freight Rail.”
Back in 2009 when the National Surface Transportation Infrastructure Financing Commission, of which Reason’s Adrian Moore was a member, recommended replacing fuel taxes with mileage-based user fees (MBUFs), the report was met with some skepticism. Some denied that the fuel tax was losing its purchasing power. Others thought mileage-based user fees were far too complicated to ever be implementable. Several experts thought the transition from fuel taxes would take too long.
Fast forward 12 years and mileage-based user fees are being tested and starting to replace gas taxes in a number of states. Some 14 states (California, Colorado, Delaware, Hawaii, Minnesota, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Utah, Virginia, and Washington) and two multi-state coalitions (the Eastern Transportation Coalition and RUC West) have run pilot mileage-based user fees programs.
Even better, two states (Oregon and Utah) now have permanent (albeit limited) MBUF programs, with a third state, Virginia, ready to begin its own program in July of 2022. So it’s time to take a closer look at Virginia’s program.
As spelled out in legislation, the Virginia Department of Motor Vehicles has created a task force to hash out the exact details. While the program rules won’t be finalized until Dec. 15, I’ve gleaned some details from the interim report released earlier this year. The overall approach is solid but I have some suggestions based on the successes and failures of pilots and permanent programs in other states.
The Virginia program will be open to owners of electric vehicles, hybrid vehicles, and vehicles with an average city/highway combined fuel efficiency of 25 miles per gallon or higher. Drivers would have to opt into the program; nobody is required to participate. Drivers with combustion engines who choose not to enroll in the program would continue to pay the gasoline tax. Electric vehicle owners who choose not to enroll would continue to pay the state’s overly complicated highway use fee (equal to 85% of the amount of fuel tax that would be used by a vehicle with a fuel economy of 23.7 miles per gallon driven an average number of miles per year for a light-duty vehicle).
But why limit the MBUF program to a subset of drivers? From an administrative perspective, the state can handle charging all types of vehicles. All drivers of light-duty vehicles should be eligible. I realize that the state is most concerned with revenue lost from vehicles that consume little or no gasoline but electric vehicles already pay the highway use fee. And Virginia won’t get a true sense of mileage-based user fees unless the program is open to a variety of vehicles, from Toyota Priuses and Ford F-150’s. Oregon’s 2013 pilot, which was open to all vehicles, should be the model.
We don’t know how the state will recruit and select drivers, but given the focus on vehicles that pay little in fuel taxes, participation figures to be highest in Northern Virginia, moderate in Richmond and Hampton Roads, and nearly non-existent almost everywhere else. Virginia’s program managers need to seek out drivers from all geographic regions. The Oregon program has bipartisan support today, in part because the state made sure to include multiple interest groups. The Washington State Transportation Commission offered the best participation model. The commission created a steering committee with members from all geographic areas and intentionally selected committee members from groups initially opposed to MBUFs including the American Civil Liberties Union and farmers.
This approach allowed pilot leaders to address some common but false concerns such as that rural drivers would pay more in mileage-based user fees than they would with the gas tax. In reality, rural drivers generally pay less in MBUFs than in gas taxes because they mostly drive less fuel-efficient vehicles than urban residents, but most folks were never going to believe that until they experienced it for themselves.
Wisely, Virginia seems legitimately concerned about privacy. It plans to use private account managers—not the government—to collect data. I hope those account managers communicate that the data is encrypted and anonymized as well as the one-way flow of information. However, the state’s two GPS choices fail to provide a simple technology option such as an odometer reading. While it might not offer all the bells and whistles of a GPS system, an odometer reading is still more mileage-based than the gas tax. Most programs have offered high-tech and low-tech options as a way to build support for the transition to MBUFs.
Finally, the state needs a strategy for interstate travel, particularly for those who live in Virginia and work in Washington, DC, or Maryland. There are two promising options. One is for Virginia to strengthen its partnership with the Eastern States Transportation Coalition and have Maryland and DC residents who want to participate join the program. (Legislation in Maryland and DC would probably be required). The other option is to partner with EZPass, which would work with private account providers to collect necessary information, and Virginia would learn how to administer mileage-based user fees in a multi-state metro area.
The MBUF critics are gradually being proven wrong. The fuel tax has lost more than 50% of its purchasing power. MBUFs have been successfully implemented in two states. The transition from fuel taxes has not been fast, but it has been gaining steam. And the privacy challenges are solvable.
The American Public Transportation Association (APTA) and the American Association of State Highway and Transportation Officials (AASHTO) jointly released a report called “Assessing the Business Case ROI for Intercity Passenger Rail Corridor Investment” in June. This article discusses Volume 1, referred to as a guide for decision-makers.
The basic idea appears to be that since normal benefit/cost analysis fails to justify investment in either Amtrak improvements or high-speed rail (HSR) projects those wanting such projects to gain acceptance need to come up with an additional way of demonstrating and quantifying benefits, such as public policy goals and benefits that accrue to various governments and businesses affected by passenger rail service. I see a number of problems with this approach, so I apologize in advance to several of the people named as advisors on the project whom I know and respect.
A major problem is that the business case return on investment, as described in this report, seems to ignore costs to various stakeholders. It counts as benefits people shifted from driving, flying, and traveling via intercity bus services while ignoring the costs of lost income to toll roads, state DOTs, airlines, and bus companies. Maybe the authors don’t think of these modes as stakeholders, but any quantification of mode-shift benefits must be net of negative impacts on the alternative modes.
The discussion of value capture, such as increased property values around newly built rail stations, is rather superficial. First, it depends on the willingness of local governments to actually tax such increased-value properties. Second, it ignores the negative benefits to all those along the new rail line who will be impacted by noise, vibration, and grade-crossing safety hazards (unless the corridor is elevated to avoid grade crossings). Here in Florida, for example, there has been fierce ongoing opposition to the Brightline passenger rail service (now under construction between West Palm Beach and Orlando) from communities in counties where there would be no stations. These residents got only costs, not benefits. The vast majority of a new passenger rail right-of-way (ROW) will be without stations, and hence with adjoining properties being negatively affected.
Another item put forth as a benefit to be quantified is increased resilience. The idea is that in the event of a disaster, a passenger rail line provides an alternative to driving, bus travel, or air travel. It’s hard to take this very seriously, considering that the loss of a single bridge on a rail line puts it out of service. By contrast, the highway network is an interconnected grid of streets, roads, and highways, offering considerable redundancy if one or several links become inoperative.
I cannot resist noting that “induced travel” due to the new rail line is considered a benefit (Exhibit 4). This assumes that induced highway travel is bad while induced rail travel is good. That assumes that, for example, the carbon footprint of passenger rail trips 30 years from now will be less than that of families driving in their electric cars. Carbon footprint modal comparisons must be based on projected emissions over the expected life of the highway and rail modes being compared, not assumed away by assuming that the future will be the same as the past.
Left out of the discussion is the plight of federal, state, and possibly local taxpayers who, in one form or another, will end up paying most of the costs of any new intercity passenger rail services. Are they not stakeholders also?
I am especially troubled by the report’s emphasis on localized benefits, such as increased jobs and businesses moving to where there are stations for passenger rail. Especially if federal taxpayers are expected to bear the majority of the costs, such projects must be looked at from the standpoint of the impact on the national economy. Most, or all of these localized benefits would not be net gains; rather, they would be shifts of businesses from one county to another or from one state to another. Shifts of this kind are unlikely to increase U.S. gross domestic product. They are, at best, zero-sum changes in the national economy.
In the wake of the collapse of the Soviet Union, economists gained access to detailed records of the USSR’s state-owned enterprises. When they analyzed the costs of all the inputs to these enterprises and compared them to the value of their outputs, they concluded that most of them were “value-subtracting enterprises.” Passenger rail projects that will consume large amounts of taxpayer money without benefiting more than a handful of them could well amount to value-subtracting enterprises, from a national economy perspective.
Some years ago this newsletter critiqued then-new California policies that aimed to reduce greenhouse gas emissions by reducing vehicle miles of travel (VMT). A later Reason Foundation policy study compared VMT-reduction with technology policies (increased vehicle efficiency, electric cars, and congestion pricing) as far more cost-effective ways to reduce greenhouse gas emissions.
But since then, California has gone from bad to worse in its environmental, transportation, and housing policies. How bad is described in detail in Jennifer Hernandez’s powerful article “Green Jim Crow: How California’s Climate Policies Undermine Civil Rights and Racial Equity.” A long-time environmental lawyer in San Francisco, Hernandez lays bare the impact of VMT reduction policies in the state’s major metro areas—Los Angeles, San Diego, and the San Francisco Bay Area—on low-income and minority residents.
She includes maps drawn up by the metropolitan planning organizations in each of these regions aimed at using housing policy to restrict VMT. In essence, the plan is to refuse to permit new housing in (mostly white) single-family neighborhoods and put massive high-density housing into low-income areas served by transit. She shows how these VMT red-lining plans mirror the blatantly discriminatory red-lining policies implemented prior to World War II in much of the United States. The idea is to put lots more people into what are now areas of below-average VMT on the presumption that those people will continue to be transit-dependent.
Yet as her article also explains, solid research has shown that the most effective way to enable lower-income people to get better jobs is car ownership, since many times more jobs are accessible in 30 minutes or 60 minutes by car than by transit. Moreover, with the ridiculously high housing costs in California, the high-density units that get put into low-income neighborhoods cost far more than lower-income minorities can afford, which leads to gentrification of those neighborhoods.
This article is a powerful indictment of misconceived energy, transportation, and land-use policies that are making California more segregated and far less of a land of opportunity than it was when I moved there as a young engineer in 1970.
One of the most commonly heard objections to replacing fuel taxes with mileage-based user fees (MBUFs) is that this would be unfair to rural residents who supposedly drive more than urban residents and are hence assumed to be made worse off. I’ve read a number of Transportation Research Board papers that analyze data on which kinds of motorists drive what kinds of vehicles how many miles per year, and they generally refute this contention. But there is now a far more accessible overview of this subject, released by RUC West, a consortium of state DOTs in western states that have been taking part in MBUF pilot projects. (Note: Out west, they refer to a per-mile charge as a road user charge, or RUC, rather than as an MBUF.)
RUC West analyzed the costs of a road user charge for urban and rural drivers in eight western states. They obtained data on vehicle miles of travel (VMT) by geographic area, vehicle registration data, and gas-tax revenue data, in order to develop a per-mile rate that would produce the same revenue as each state’s gas tax. One of the findings was that although the average trip length for rural drivers was longer than the average for urban drivers, annual VMT was higher for urban drivers. Consultant EDR analyzed vehicle data and found that, on average, rural drivers tend to drive older and less fuel-efficient vehicles than urban drivers.
Assuming the rate per mile is the same for all roads (as is the assumption in most of the pilot projects), the average rural driver would pay less under the RUC system than under the current gas tax system. A table in the four-page document summarizes the impact on urban and rural drivers in each of the eight western states taking part in the study. Depending on the state, rural drivers would save between 1.9% and 6.1% if their state shifted to per-mile charges, while urban drivers (who are far more numerous) would pay slightly more (from 0.3% to 1.4%).
The above results are averages, so, of course, some rural drivers would pay more or less than average, and so would urban drivers. This depends on what vehicle each owns. The four-page summary compares 2008 models of three popular vehicles: a Honda Accord, a Ford F150 pickup with 4-wheel drive, and a Toyota Prius. For these specific examples, the Accord and Prius would pay somewhat more per month with the road user charge than with the current gas tax, while the Ford would pay slightly less.
These are important findings, which should help to alleviate often-heard concerns about rural drivers being hurt economically by a shift to per-mile charging. They would likely do even better if the per-mile charge were higher for highways that cost the most to build and maintain (freeways and Interstates) and lower for all other streets and roads. That would fix a long-standing problem with the gas tax system under which vehicles pay the same amount per mile whether they use premium highways, neighborhood streets, or two-lane rural roads. Charging at least two different rates would not be very difficult to implement.
DOTs Fixing Gaps in Express Toll Lanes
Both the Minnesota (MnDOT) and Washington State (WSDOT) Department of Transportations are addressing bottlenecks on their emerging express toll lanes networks. In the former, MnDOT in August closed a three-mile gap in the northbound toll lane on I-35E (where the toll lane was replaced by a short general-purpose lane), which had led to extensive weaving of traffic into and out of the general-purpose lane by cars leaving or entering the toll lanes (now called E-ZPass lanes in Minnesota). Thanks to the recent conversion of those three miles, they now operate as E-ZPass lanes, like the rest of the northbound corridor and all of the corresponding southbound E-ZPass lane. In the Seattle metro area, WSDOT received federal environmental clearance on a project to fix the bottleneck on the I-405 express toll lanes, where the configuration changes from two to one tolled lane northbound and vice-versa southbound. The project will add one lane each way for five route miles, i.e., 10 lane miles at an estimated cost of $600 million. The environmental study stressed the air quality benefits of reduced congestion plus the extended uncongested route for Sound Transit’s express bus service in the corridor.
Miami Beach Monorail Moving Forward
Miami-Dade County is nearing the completion of pre-development work by MBM Partners on a project to add a 3.5-mile monorail adjacent to MacArthur Causeway linking downtown Miami and Miami Beach. The project is expected to be procured as a design/build/finance/operate/maintain concession, presumably financed based on availability payments. The plan calls for the monorail to offer 12 trips per hour with a 300-person capacity. There will be connections to other transit on either end of the monorail. No cost estimate is currently available, but the planned completion date is 2026. Renderings show the monorail running alongside the causeway, which means no traffic lanes will be taken away from this important artery.
Pennsylvania Toll-Financed Bridge Replacements Moving Forward
Despite a hostile bill in the state senate, PennDOT’s toll-financed Major Bridge P3 Program is moving forward. In August four potential bidders responded to the agency’s Request for Qualifications. The agency plans to release the request for proposals for the program in December, contemplating a “progressive public-private partnership (P3)” under which each initial contract would be a pre-development agreement (PDA) for one or more of the planned nine Interstate highway bridge replacements/rehabilitations. The latest version of the Drive Smart Act in the legislature would allow tolling only for the replacement of the I-95 Gerard Point Bridge while prohibiting it for the other eight bridges in PennDOT’s program.
Maryland Board Approves PDA for Express Toll Lanes Project
The state Board of Public Works last month approved, 2 to 1, the Maryland Department of Transportation’s (MDOT) plans to finalize a pre-development agreement with Macquarie and Transurban for phase 1 of the Beltway/I-270 express toll lanes project. The project will replace the aging and undersized American Legion Bridge on the Beltway (I-495) and extend the express lanes northward to I-270 and then up that Interstate to I-70 in Frederick. Under the PDA, the selected companies will design the project and work on pre-construction activities such as needed utility relocations. Threatening the project moving forward as MDOT plans is a bid protest by Cintra, one of the losing competitors for the project.
“Unimaginable” Rail Project Costs in Honolulu
A retired official of the Federal Transit Administration last month called the relentless cost escalation of the Honolulu rail transit project “unimaginable” and “far beyond” anything he has seen nationwide during his 30 years at the agency. Ron Fisher was director of the Federal Transit Administration’s Office of Project Planning, where he and his team reviewed every rail transit project seeking FTA funding. When FTA entered into its Full Funding Grant Agreement with Honolulu, the cost was put at $5.12 billion, but the current estimate is $12.449 billion. Fisher told the Honolulu Star-Advertiser that the cost escalation was “way beyond and unmatched by anything that I have observed. Of the projects we’ve done in the last few decades, there’s nothing that even approaches that cost overrun.”
EV Truck Firm Rivian Plans Share Offering
Rivian Automotive announced last month that it is planning a conventional stock market debut, after having privately raised $10.5 billion from investors since 2019. The company plans to make electric-powered pickup trucks and delivery vans, which are compatible with the relatively short daily mileage an electric light truck can deliver without recharging. It has a purchase agreement with Amazon for 100,000 delivery vans by the end of this decade. Amazon and Ford Motor Company are among Rivian’s largest investors thus far.
Houston’s Controversial I-45 Project Included in State Transportation Plan
The Texas Transportation Commission voted unanimously on September 2 to include the huge project to redesign and expand a stretch of I-45 near downtown Houston. The plan is opposed by many Houston officials and neighborhood groups due in part to very large planned property takes. The Federal Highway Administration earlier this year asked the Texas Department of Transportation to halt work on the project pending a new federal review of impacts on disadvantaged communities. The Transportation Commission said it would await federal inputs and reserved the option of removing the project from the plan at its December 9 meeting.
Private Toll Bridge Proposed in Northwest Louisiana
An executive formerly with the privately-developed Foley Beach Expressway in Alabama has proposed building a toll bridge across the Red River. It would connect two fast-growing parishes in the part of the state north of Shreveport. It would be the fourth bridge across that river in that region. The company, named Tim James, Inc., would finance, build, and operate the new bridge, charging tolls to recoup its costs.
Georgia Board Rejects Express Toll Lanes Winning Bidder
The State Transportation Planning Board last month rejected the sole “responsive” proposal for the SR 400 Express Lanes project, as recommended by the P3 Steering Committee. The team was headed by Meridiam and Walsh Group, both very credible companies. But analysis by the Georgia Department of Transportation’s (GDOT) chief engineer found that the price proposal “far exceeds the programmed funding for the project.” The project itself will proceed, but GDOT may have to make some changes to its requirements in order to get proposals that can be done within the available budget.
Should Santa Clara County’s Valley Transit Authority End Light Rail Service?
That’s the provocative question asked by analyst Marc Joffe in a recent Reason Foundation commentary. The VTA light rail project already had the lowest ridership in the country prior to the COVID-19 pandemic, with farebox recovery of as little as 12% of operating expenses. The light rail line suspended operations in May following a tragic shooting at a VTA maintenance facility. Joffe suggests that the system’s right of way could be served by electric buses at lower cost and with greater flexibility, since they could leave the right of way when appropriate.
Bill Would Repeal but Not Replace Truck Excise Tax
Trucking interests have won bipartisan sponsors for S.2435, which would repeal the 12% federal excise tax on the sale of heavy-duty trucks and trailers. Supporters note that cutting the effective price of trucks and trailers would make it less costly for trucking businesses to replace older trucks with new ones. But what about the trucking industry continuing to pay its “fair share” of the cost of federal highways? The heavy-truck tax raised $5.1 billion for the Highway Trust Fund in 2019, half as much as the $10 billion raised from the diesel tax, according to the Tax Foundation. Unless the bill increased the diesel tax to make up for the loss, trucking’s “fair share” would be reduced by one-third.
Indiana Toll Road Opens Broadband Project
The Indiana Toll Road Concession Corporation and eX2 Technology announced on August 3 the completion of a fiber optic communication system along the full length of the 157-mile toll road. The system supports an array of ITS devices along the toll road. It also was built with additional capacity that could serve as a backbone for community broadband expansion in northern Indiana. Revenues from the system are used by ITRCC to assist with the toll road’s ongoing improvements.
Florida DOT Planning for Extended Orlando I-4 Expansion
With its $2.9 billion “I-4 Ultimate” 21-mile express toll lanes project on I-4 through Orlando nearing completion, the Florida Department of Transportation (FDOT) is considering what comes next. Its “Beyond the Ultimate” project is reviewing future I-4 travel growth both north and south of Orlando. (I’ve been stuck in seemingly endless congestion on I-4 south of Orlando, which is apparently chronic). The potential southern extension would extend 20 miles past Disney World and connect to US 27, while the northern extension would also be 20 miles, through Sanford as far as SR 472. FDOT has funding for two of the five planned segments, which “could” include toll lanes.
Response to Reason Commentary on Express Toll Lanes Equity
An analyst at WSP took issue with one statement in my Reason commentary on the University of Washington study of the equity implications of the I-405 express toll lanes in the eastern suburbs of metro Seattle. He noted my statement that the largest net benefit (per trip) accrued to the lowest-income quintile of users, he noted the following additional finding in this excellent study: “Because higher-income households take more trips, they accrue significantly more net benefits in aggregate than lower-income users.” That’s certainly true, but it does not negate the point that it is large net benefits for the trips they take that leads lower-income people to choose the express toll lanes for time-critical trips.
Green Industrial Policy in Bipartisan Infrastructure Bill
Policy analyst Scott Lincicome writes an excellent newsletter on economics and public policy. I commend to you a recent one called “Green Industrial Policy Is Back (Again).” In the piece, Lincicome identifies a number of well-intended environmental initiatives in the bipartisan Infrastructure Investment and Jobs Act. They significantly resemble many previous federal energy and environmental projects that sought to pick winners and ended up (for various reasons) all too often producing losers. He doesn’t just opine on this; rather, he cites Inspector General and Government Accountability Office reports documenting the extent of dud projects that cost taxpayers billions of dollars with very little to show for them.
High Density, High Rises, and GHG Emissions
A journal article in Urban Sustainability questions the idea that the best urban form for minimal greenhouse gas emissions is high density in high-rise buildings (such as in Manhattan and many other downtowns). Francesco Pomponi and four co-researchers devised a method of analyzing the life cycle GHG emissions from four types of urban models: high-density high-rise, low-density high rise, high-density low-rise, and low-density low-rise. They found that high-density low-rise yielded the lowest life-cycle carbon emissions. As they note, “These results counter the claim that building taller is the most efficient way to meet the demand for urban space.”
“Ezra Klein mentions Aron Levy on transportation projects and environmental review in ‘How Blue Cities Became So Outrageously Unaffordable.’ …[European countries] don’t enforce their environmental legislation through litigation. The enforcement mechanism is not that individual people sue the government. The transportation researcher points out that in many countries, like Italy, planning authorities perform these kinds of things in-house. It’s not done through lawsuit enforcement.”
—New York University Marron Institute Newsletter, Aug. 4, 2021
“Individually owned cars will remain a big part of the new ecosystem. They are still the world’s preferred means of transport. For every ten miles travelled, Americans use the car for eight, Europeans for seven, and Chinese for six. Even in Europe, which is friendlier to public transport than America or China, only one in six miles was traveled on buses, trains, and coaches in 2017. Uber accounts for just 1.5% of total miles driven in its home market, the U.S. The pandemic has in some ways cemented the car’s pole position. Many people have shunned shared vehicles, be they cabs or buses, for fear of infection. A survey of American travel habits by LEK, a consultancy, showed that car journeys declined by just 9% last year (2020), compared with 55-65% for public transport and ride-hailing.”
—Michael L. Sena, “The Future of Mobility Is Slowly Coming into Focus,” The Dispatcher, June 2021
“What has been missed are the fundamental reasons for adopting a mileage-based [MBUF] system, namely the user-pays principle, which historically has been the bedrock principle of road financing in the United states, and equity: drivers should be fairly assessed for the cost of building and maintaining the roads they use. . . . Yet our user-pays-based financing system is no longer viable in its current form. . . . Road use is still high, but fuel consumption is poised to shrink dramatically due to highly efficient and electric vehicles. . . . The equity question is whether it is fair to require that only gasoline and diesel-fueled vehicles pay for the road while electric vehicles travel free. The goal of a mileage-based fee system is not to punish vehicle classes but to put in place the framework for a user-pays financing system which is equitable and sustainable.”
—Peter J. Basso, “Lessons Learned from the Surface Transportation System Funding Alternatives Program,” testimony before the Senate Committee on Environment and Public Works, April 14, 2021