In this issue:
- Two states consider toll-finance Interstate reconstruction
- A level financial playing field for P3 projects
- Highway Trust Fund debate sparks new proposals
- Millennials, like the rest of us, prefer suburbs
- Congestion is back, and needs attention
- Upcoming Conferences
- News Notes
- Quotable Quotes
Toll-Financed Interstate Reconstruction Starts to Gain Traction
In both Connecticut and Missouri, support is growing for using toll revenue to finance reconstruction and widening of major Interstate highways. Missouri already holds one of three slots in a federal pilot program that allows such financing; doing so in Connecticut would require a broadening or mainstreaming of that pilot program. Both governors seem to be favorable to the idea, but gaining political consensus will be a challenge in either state.
Missouri already has a detailed plan for reconstructing I-70-a major trucking corridor-with truck-only lanes added. That was the preferred solution of a several-year, four-state study of I-70 as a “corridor of the future,” funded by the Federal Highway Administration under DOT Secretary Mary Peters. Last fall Gov. Jay Nixon asked the state’s transportation commission to report back by the end of the year on the feasibility of going forward with that plan. Its December 2014 report points out that I-70 in Missouri is one of the oldest Interstates in America, with the first sections 58 years into their nominal 50-year design life (and the original pavement and base date back to sections of old US 40, built in the 1920s). Traffic projections show that by 2030 much of the 200-mile route between Kansas City and St. Louis will operate much of the day in stop-and-go conditions. The report sets forth a range of alternatives, from a simple $2 billion reconstruction to the $4 billion plan that would also add dedicated truck lanes. It also lays out the advantages of procuring the project via a long-term toll concession or some other form of public-private partnership.
While I think the fundamental case for the $4 billion project is sound, and Missouri already has the required federal permission, the state lacks two key ingredients, which will be up to the legislature to decide: tolling authority and P3 enabling legislation. To bring those about, Gov. Nixon, the Transportation Commission, and MoDOT will need to carry out a serious effort to explain to legislators, media, and the public why I-70 needs to be reconstructed and widened, why toll financing is the only realistic way to pay for this mega-project, and why a long-term P3 would shift significant risks from taxpayers to investors.
Connecticut has been having discussions about tolling I-95 for quite a few years now. Some of it has been fanciful-e.g., charging tolls only at the borders. Some has focused on reducing congestion on the stretch between the New York border and New Haven, either via adding express toll lanes or by congestion-pricing the whole thing. Only recently has the poor condition of the pavement and bridges on I-95 entered the discussion, as Gov. Daniel Malloy stressed in his State of the State address January 7th. He also discussed widening the entire length of I-95. Malloy has increasingly talked about tolls as a way to help pay for his promised 30-year plan for improving the state’s transportation infrastructure.
In the 2013 Reason Foundation Interstate 2.0 study, I estimated the costs of reconstructing and widening each state’s rural and urban Interstates. For Connecticut, reconstructing just the urban Interstates (including I-95 between Greenwich and New Haven) would cost $5.8 billion (net present value), and widening another $3.7 billion, for a total cost of $9.5 billion. But my estimate of toll revenue, from a moderate congestion pricing scheme, totaled $9.2 billion (NPV), so in ballpark-number terms, this set of mega-projects looks toll-feasible. But what such calculations also make clear is that pipedreams about using toll revenue to fund upgrades to the Metro North commuter rail system and many other transportation needs go well beyond what highway users are likely to be willing to pay for-again, assuming that Gov. Malloy and CDOT can present a compelling case for toll-financed reconstruction to legislators and the public.
And in making that case, both governors really need to stress the value added for highway users. Better pavement and guaranteed maintenance, reduced congestion, dedicated truck lanes (at least for major truck routes like I-70)-basically making the Interstates operate like a well-managed network utility, with the tolls as true user fees (like electric bills), paying for the capital and operating costs of the rebuilt highways. And that means not charging sky-high toll rates to bail out the rest of the state’s transportation budget. The higher the toll rates, the more traffic diversion there will be onto local roadways. So limiting tolls to only what is needed to rebuild and modernize the Interstates will serve both the users of those highways and those who live nearby.
A Level Financial Playing Field for P3 Projects
One of the perennial arguments raised against long-term public-private partnerships (P3s) for transportation infrastructure is that the financing cost will be higher, because revenue bonds issued by the private sector carry higher interest rates, since the interest on those bonds is taxable. If the same project were carried out by a government toll agency, the bonds would be tax-exempt and therefore have lower interest rates.
For many years, along with industry colleagues, I argued that this was a foolish distinction for federal policy to make, and that tax-exempt bond status should depend not on who the project developer/operator is but rather on whether or not it is available for use by the public. Congress finally accepted this logic, and in the 2005 SAFETEA-LU legislation, authorized federal tax-exempt status for up to $15 billion in bonds for P3 surface transportation infrastructure projects.
These Private Activity Bonds (PABs) have been very popular. As of June 2014, according to DOT figures in the House Transportation & Infrastructure Committee’s report by its bipartisan panel on P3s, some $4.59 billion of PABs have been issued for projects that are either under construction or now in operation: nine highway/bridge projects, two intermodal center projects, and one transit project. Another $6.46 billion of PABs have been allocated to eight more projects, bringing the total to $11.05 billion. That leaves only $4 billion remaining out of the $15 billion authorized, with dozens more eligible P3 projects in the pipeline.
The need to increase-or ideally, to remove-that cap has been a subject of considerable discussion during the past year. Last September the U.S. Treasury’s Office of Economic Policy issued a 17-page report, “Expanding our Nation’s Infrastructure through Innovative Financing.” Among its recommendations was to increase the cap to $19 billion, as part of the President’s FY 2015 budget. That’s significant, because historically Treasury has resisted just about any increases in the use of tax-exempt debt, on the assumption that any projects that would use something like PABs would otherwise be financed via taxable debt. Hence, such expansions would reduce federal revenue. That has also been the long-standing position of Congress’s Joint Committee on Taxation. That claim ignores the fact that some projects simply do not pencil out as feasible with the higher debt-service cost of taxable debt, so they either would not be done at all or would be done by a government toll agency . . . using tax-exempt bonds.
But the big news now is that last week the White House announced a multi-pronged effort on “Increasing Investment in Roads, Ports, and Drinking Water Systems through Innovative Financing.” One key provision is “leveling the playing field for public-private partnerships.” Specifically, the proposal calls for creating tax-exempt Qualified Public Infrastructure Bonds (QPIBs) intended specifically for P3s in airports, seaports, highways and bridges, transit, solid waste disposal, water, and sewer projects. As the fact sheet notes, “Unlike PABs, the QPIB program will have no expiration date, no issuance caps, and interest on these bonds will not be subject to the Alternative Minimum Tax.”
As I told a reporter from Bloomberg, “Eliminating the [PAB] cap-mainstreaming level playing-field financing for P3 projects-is huge.” It’s not immediately clear whether this change can be done by Treasury alone, or whether it will require legislation (as was the case for the current PABs program). If the latter is the case, at the very least the Administration’s support for the concept should make it easy for Congress to eliminate the current PAB cap, even if it’s not ready to expand the idea to all other types of infrastructure. The White House has promised details on QPIBs in its upcoming budget proposal.
Highway Trust Fund Debate Sparks New Proposals
Although there is talk among some Republican Senators about taking advantage of lower fuel prices by increasing federal gasoline and diesel taxes, that idea has no support among House GOP leadership. Transportation & Infrastructure Committee chairman Bill Shuster (R, PA) has rejected either an increase in the gas tax or a new federal mileage-based user fee as sources of additional highway user tax revenue. That seems to leave Congress with two (to them) unpalatable choices: do another short-term fix with general fund money or scale back the size of the federal program to match existing user-tax revenues.
Even if there were support for the widely touted 11 cents/gallon gas tax increase, plus indexing the new total for inflation, the solvency of the Trust Fund would not be ensured. The Congressional Budget Office has pointed out (as Transportation Weekly reported on Dec. 28th) that while the Highway Account in the Trust Fund has spending commitments equal to 1.3 times its user-tax revenue, the Mass Transit Account has been living even further beyond its means, at 1.5 times its highway user tax revenue. So if the now-traditional 80/20 split of new Trust Fund revenue were applied to the 11 cents/gallon increase, it would ensure the Highway Account’s solvency for the next 10 years but fall far short of fixing the Mass Transit Account’s spending problem. To accomplish that, the overall increase would have to be 16 cents/gallon-which is even less politically likely.
So one reform idea would be to ditch the 80/20 split. Another would be to shift transit to the general fund, along with the two safety regulatory agencies that are currently supported by the Trust Fund-the National Highway Traffic Safety Administration (NHTSA) and Federal Motor Carrier Safety Administration (FMCSA). There’s a serious case for shifting these two safety regulators to the general fund, which supports nearly all the other federal safety regulators-e.g., the Consumer Product Safety Commission, the Food & Drug Administration, OSHA, and the safety regulatory part of FAA.
There is actually a bill in Congress, sponsored by Sen. Mike Lee (R, UT) and Rep. Tom Graves (R, GA), that would shift transit, NHTSA, and FMCSA to the general fund and then phase out nearly all of the highway program over five years. Doing the latter is actually far more complicated, because-as Eno Transportation Weekly editor Jeff Davis pointed out (Jan. 14, 2015)-“Highway Trust Fund programs are reimbursable spending, not direct spending.” In other words, FHWA agrees to reimburse states for various eligible projects that can take as long as five years to implement. So even if Congress legislated something like the Lee/Graves bill, phasing out new “contract authority” over five years, there would still be a $41.2 billion shortfall for the years 2015-2019 for making good on previous contractual commitments. This doesn’t mean such a phase-out couldn’t be done-it would just cost more than Lee and Graves have estimated.
A more realistic near-term approach is what my Reason colleague Adrian Moore and I suggested back in 2010 in our policy study “Restoring Trust in the Highway Trust Fund.” Its idea was to rethink what functions are truly federal in nature, and what are more properly the responsibility of state and local levels of government. Doing that would allow a more tightly focused federal program to focus on the infrastructure for interstate commerce. That was considered radical in 2010, and then-T&I chairman John Mica (R, FL) could not garner even a majority of House Republicans to vote for a watered-down version. But to my surprise, the moderate liberal group Transportation for America seems to be coming around to this view. As Ken Orski reported in Innovation NewsBriefs (January 14th), T4America director James Corless recently said that “States that want to continue investing will have to explore new ways of raising funding for transportation on their own.” His comment introduced a new T4America initiative to support efforts to raise transportation funding via state legislation. Orski also notes that at least 20 states plan to deal with transportation funding measures this year, according to the Council of State Governments.
And there is more potential in many states, if their legislators could figure out ways of getting a plethora of non-highway programs off the gas tax. Randall O’Toole recently compiled figures from Table SDF of FHWA’s 2012 Highway Statistics database. You probably know that 25% of the state gas tax in Texas is constitutionally dedicated to public schools. But you may be surprised at how many states spend less than half their gas tax on highways, such as:
Most Western and Sunbelt states spend 70 to 100% of their gas taxes on highways, but I was surprised to see Florida at only 59%.
It’s hard to disagree with columnist Michael Barone who pointed out last month that, “In effect, the feds are abdicating and the states are taking up the burden,” as slow and painful as that transition sometimes appears to be. He pointed out that another federal redistribution program was actually phased out during the Reagan years-general revenue sharing, which began under President Nixon. “Now we’re seeing the slow-motion demise of the Highway Trust Fund. Washington is always trying to accumulate power. But some of it is flowing away.”
Millennials and Others Prefer the Suburbs
Transportation planners need real data-not media anecdotes-to understand trends in where people live and work, and hence what future travel patterns they should plan for. That’s why I periodically report on demographic trends based on real data, as in this article.
First off, the mainstream media persist in telling us that Generation Y-the Millennials-are fundamentally different, not buying cars and rejecting suburbia. A huge survey last year for John Burns Real Estate Consulting sought the housing preference views of a million Americans, sorted by generations. Survey researchers found that only 16% of Millennials preferred to live in an urban core, while 55% preferred an inner suburb, 38% an outer suburb, and 5% an exurban location. The researchers gave all respondents a list of housing design preferences (with photos), and Millennials overwhelmingly chose the “modern traditional” style of single-family house.
Of course, a survey can only tell us what people say. To find out what they do, you need to go to Census data. At Demograpia.com, Wendell Cox reported (July 9, 2014) on housing trends for Millennials age 20-29 between 2000 and 2010. The number living in urban cores increased from 4.3 million to 4.6 million during that decade. But because of their rising total numbers, the fraction of Millennials living in urban cores decreased from 20.2% to 19.3%. Where do the rest of them live? In 2010 42% lived in early, closer-in suburbs (down from 46.1% in 2000). The big growth was in later suburbs, which went from 20.6% of Millennials in 2000 to 24.4% in 2010. And another 14.3% of them live in exurban areas.
Housing trends over the decade (for all population groups) show a continued increase in suburban, detached houses. In metro areas of a million or more people, the number of single-family, detached houses increased six times as much as multi-family housing units between 2000 and 2010. There was hardly any change in urban cores or inner suburbs, but large increases in outer suburbs and exurbs. In addition, houses became bigger during the decade, with the average number of rooms increasing in all areas, with the average going from 5.3 rooms in 2000 to 5.6 in 2010. And average lot sizes increased, as well.
These trends are the opposite of what many urban planners had predicted. Arthur C. Nelson of the University of Utah made projections for urban California, suggesting that the demand for housing on lots larger than one-eighth of an acre would increase only 16% by 2010. The actual result was that 64% of new homes in those urban areas were on lots of that size or larger-four times the prediction.
It looks to me that a lot of what’s going on in urban planning, and transportation planning based on such planning, is wishful thinking, not careful analysis of what people actually do. The task facing transportation planners is not to force people into new ways of living and working, but to provide the transportation infrastructure required by the way people choose to live and work.
Congestion in Metro Areas: It’s Baaack!
Despite reams of media anecdotes about people adopting an urban, smart-growth lifestyle and abandoning their cars for walking, biking, and transit, traffic congestion is increasing again, as recovery from the Great Recession continues. Recent California headlines tell the story:
- “As economy improves, L.A. and O.C. rise in traffic congestion rankings,” Los Angeles Times, Oct. 28, 2014
- “California highways seeing record traffic, bucking years of decline,” Sacramento Bee, Dec. 27, 2014
- “It’s official: Bay Area gridlock is worse,” San Jose Mercury News, Jan. 9, 2015.
The Federal Highway Administration’s most recent Traffic Volume Trends found that traffic (vehicle miles of travel-VMT) in October 2014 was 2.6% higher than a year ago. Broken down geographically, the increase was greatest in the Gulf coast area, including Texas (3.4%), next-highest (3.2%) in the West and the South Atlantic, less in the North Central states (1.6%), and just 1.1% in the Northeast (which may explain why the major national media seem not to have noticed).
The FHWA report also provides annual figures for total national VMT dating back to 1989. That number peaked in 2007 at 3.04 trillion, bottomed out at 2.96 trillion in 2009, and is projected to finish 2014 at 2.99 trillion once November and December numbers are available. However on a year-to-date basis (first 10 months of each year), the 2007 peak was 2.54 trillion and the 10-month figure for 2014 is 2.51 trillion, so the final 2014 figure may exceed the 2007 peak.
I cite these VMT and congestion trends to remind you that metro areas’ long-range transportation plans ought to be focused on reducing traffic congestion to a far greater extent than most of them are. That was the lesson of comprehensive studies my colleagues and I carried out in recent years for Atlanta (2006), Lee County, FL (2009), Miami (2012), and Chicago (2012)-and now Denver. These studies are all posted on the reason.org website.
The Denver study was released earlier this month at a news conference in the city, with participation from Colorado DOT’s High Performance Transportation Enterprise. Lead researcher Baruch Feigenbaum noted two major problems with the official 2035 Metro Vision Regional Transportation Plan produced by the Denver Regional Council of Governments (DRCOG): its $133 billion price tag is not fully funded, and if the plan is implemented, congestion in 2035 will be far worse than today.
The Reason proposal is an alternative plan aimed at addressing both of those problems. It calls for a more comprehensive network of express toll lanes than CDOT currently plans, as well as improving 40 major arterials, many of them converted to Managed Arterials by adding electronically tolled underpasses or overpasses to significantly increase their traffic-flow capacity. This network of uncongested toll facilities would also enable a far more expansive express bus and bus rapid transit (BRT) system serving the entire metro area.
By refocusing major capital expenditures on projects that would cost-effectively reduce congestion, the price tag of the Reason plan is estimated at $52 billion-less than half that of the DRCOG plan. Moreover, the portion funded by the toll revenue would be paid for only by those who choose to use the tolled additions. The plan received good media coverage, and Feigenbaum has been invited back to Denver to speak at a number of events. You can download the full study from https://reason.org/files?reducing_congestion_denver.pdf.
Upcoming Transportation Events
Accountability of Big Infrastructure Projects, Feb. 6, 2015, Pacific Club, Honolulu, HI (Robert Poole speaking). Details at: http://fixoahu.blogspot.com/2015/01/accountability-of-big-infrastructure.html
New Realities for U.S. Transportation Infrastructure, Feb. 9, 2015, Fairmont Kea Lani, Wailea, HI (Robert Poole speaking), annual meeting of Illinois Road & Transportation Builders Association (members only).
Mileage Based User Fee Alliance’s Second Annual National Conference, Feb. 24, 2015, Pew Conference Center, Washington, DC (Adrian Moore speaking). Details at: www.regonline.com/mbufaconference
27th Annual ARTBA PPPs in Transportation Conference, July 15-17, 2015, Hyatt Regency Washington, Washington, DC (Robert Poole speaking). Details at: www.artbap3.org
PATH a Candidate for Privatization-Port Authority. In a 99-page report that calls for returning the Port Authority of New York & New Jersey to its core transportation functions, a special panel that includes the agency’s chairman and vice chairman calls for divesting its real estate assets and looking into privatization of the operation of its heavy-rail system PATH that takes commuters between New Jersey and New York. Although it is one of the nation’s busiest transit lines, PATH is also one of the most expensive-and one of only four that operate 24 hours a day.
Illiana Toll Road Gets Federal OK-But Not the New Governor’s. The $1.5 billion Illiana toll road project linking Indiana and Illinois received its federal Record of Decision on December 11th, but a month later, one of the first actions of new Gov. Bruce Rauner was to put a freeze on all discretionary spending, including Illiana. All such spending will be reviewed, due to the state’s financial crisis, Rauner said. Illiana is intended to be procured as an availability-payment concession, with the states of Indiana and Illinois taking on the traffic and revenue risk.
Pete Rahn Is Maryland’s New DOT Secretary. In selecting Pete Rahn, the former DOT secretary of New Mexico and later Missouri, Maryland Gov. Larry Hogan lauded him as the “best highway builder in America.” Rahn was known as a champion of innovative finance and procurement techniques. He also served as an advisor to the Reason Foundation’s Galvin Mobility Project.
Golden Gate Bridge Installs Movable Barrier. Because commuter traffic across the Golden Gate Bridge to and from San Francisco is highly directional, since 1962 the bridge has provided more lanes in the peak direction, via movable plastic pylons. But on January 12th, 2015, the pylons were gone and a new movable barrier-installed over the preceding weekend-went into operation. The $30 million, 11,500 ft. concrete barrier will prevent head-on collisions.
A Tale of Two Toll Roads. One of America’s largest toll road systems-the New Jersey Turnpike and Garden State Parkway–has rejected outsourcing its cash toll collection, having negotiated a new contract with the toll collectors that reduces their pay to more-competitive levels. At the other end of the spectrum, reports ITS International‘s November/December 2014 issue, the Fort Bend County Toll Road Authority, outside Houston, has among the lowest toll collection costs in the nation-thanks to outsourcing essentially all its functions. Its administrative costs are just 7.85% of revenue, versus the average reported by IBTTA of 12 to 20%, and its total operating costs are just 26% of revenue, compared with the IBTTA average of 53.9%.
Seattle Tunnel Completion Date Now Put at August 2017. With its giant tunnel boring machine still stuck underground due to an unknown obstacle, the $3.1 billion toll tunnel to replace the aging, elevated Alaskan Way Viaduct, is far behind schedule. Seattle Tunnel Partners, still digging its way down to the damaged cutting head, last month gave Washington State DOT a new estimated date of tunnel opening of August 2017, almost two years later than the original schedule.
Private Activity Bonds for Florida Rail Project Approved. The U.S. Department of Transportation late last month gave their OK for All Aboard Florida to issue $1.75 billion worth of tax-exempt private activity bonds for their privately funded passenger rail line to link Miami with Orlando, via Fort Lauderdale and West Palm Beach. Construction of the stations in south Florida is under way, with commuter service between West Palm and Miami projected to start by late 2016. Phase 2, between West Palm and Orlando, cannot begin until federal approval of the environmental impact study for that portion of the project.
Final Leg of ICC Opens-and a Further Extension is Proposed. The last section of Maryland’s Inter County Connector opened last month, extending it further east 1.5 miles from I-95 to U.S. 1. The ICC is the first all-new toll road in the Northeast in several decades, and has variable pricing and all-electronic tolling. Several weeks later, transportation experts Alan Pisarski and Peter Samuel published an op-ed piece in the Washington Post (Jan. 2, 2015), making a case for extending the ICC westward to a new Potomac River crossing. With that extension, Marylanders would have a less-congested route to Dulles Airport and Reston, and residents of Loudoun County, VA would have an alternative to the congested Beltway to reach BWI Airport near Baltimore. It would also facilitate regional express bus service.
Implications of Autonomous Vehicles. Always-interesting transportation analyst Randal O’Toole has produced a provocative study of the “Policy Implications of Autonomous Vehicles.” In his policy study for the Cato Institute, O’Toole suggests that much of conventional transit will become obsolete once autonomous vehicles gain wide acceptance. He also suggests that because the pace and extent of market penetration of AVs is so uncertain, MPOs should de-emphasize long-range transportation plans (e.g., because growth in vehicle miles of travel and housing locations will be far more difficult to predict) and focus more on making existing transportation infrastructure work better. The report is Policy Analysis 758, dated Sept. 18, 2014, and can be downloaded from www.cato.org.
German Highway Tolling Approved by Cabinet. Starting in 2016, drivers on the autobahns will be required to pay an average annual toll of 88 euro, with the proceeds dedicated to transportation infrastructure. Foreigners-who currently pay nothing to use the autobahns-will feel the greatest impact, since Germans will be able to deduct the toll from their current vehicle registration fees. The plan still faces a vote in the German parliament. Although most of Germany’s neighbors have highway tolls that Germans must pay when driving there, many of their governments are objecting, claiming that Germans will pay less than foreigners.
Pennsylvania to Consider P3s for Locks on Rivers. The Pittsburgh Post-Gazette last August published a table of possible P3 projects that might be implemented under the state’s relatively new transportation P3 enabling law. One such project is for improvements to the locks on the Allegheny and Monongahela Rivers. The respective agencies are considering “funds from non-federal sources” to keep the locks open to recreational and commercial traffic during the summer season.
New Brookings Report on Infrastructure P3s. Patrick Sabol and Robert Puentes have produced a well-done 30-page report, “Private Capital, Public Good: Drivers of Successful Infrastructure Public-Private Partnerships.” In addition to being a primer on the whys and whats of P3s, it offers nine guidelines for analyzing and implementing such projects successfully. Released in December 2014, the report may be downloaded from the Brookings Institution website: www.brookings.edu.
Florida Tolling Now Interoperable with Georgia and North Carolina. Late last year Florida Turnpike officials announced that its SunPass electronic tolling system has achieved interoperability with Georgia’s Peach Pass; this follows the 2013 interoperability SunPass achieved with North Carolina’s Quick Pass. The next goal is making these systems interoperable with the 14 states in the Northeast and Midwest where E-ZPass is the interoperable tolling system.
Guide to Contract Highway Maintenance Released. The National Cooperative Highway Research Program has released a scan team report titled “Leading Practices in Large-Scale Outsourcing and Privatization of Maintenance Functions.” The work was carried out as part of NCHRP Project 20-68A, and is Scan 11-01. It can be downloaded from the TRB website.
Correction to November Issue. The article on the results of transportation-related ballot measures incorrectly stated that the Alachua County, FL measure that was voted down included light rail. The measure included funding for road maintenance, bus transit, and bikeways, but not rail transit.
“The Interstate system was conceived and largely financed by the federal government, but they own virtually none of it. The entire 47,000-mile system is owned by the states, and they have ultimate responsibility for maintenance, expansion, and reconstruction. As much of the system is now more than 50 years old, the states are left holding the bag for rebuilding the system.”
-Ed Regan, CDM Smith, “Interstate Tolling Poses New Challenges,” Public Works Financing, May 2014
“Since 2008-when fear of ‘peak oil,’ after which global output would supposedly decline, was the dominant motif-U.S. oil production has risen 80%, to nine million barrels daily. The U.S. increase alone is greater than the output of every OPEC country except Saudi Arabia. . . . It is now clear that new U.S. production is more resilient than anticipated. There has been a widespread view that at around $85 or $90 a barrel, extracting ‘tight’ oil from shale would no longer be economical. However, a new IHS analysis based on individual well data finds that 80% of new tight-oil production in 2015 would be economic between $50 and $69 a barrel. And companies will continue to improve technology and drive down costs.”
-Daniel Yergin, “The Global Shakeout from Plunging Oil,” The Wall Street Journal, Dec. 1, 2014
“In an era of increasingly constrained public financing capacity, public-private partnerships or P3s have become an indispensable tool for delivering essential transportation infrastructure projects. P3s have allowed public infrastructure owners and operators, both domestic and international, to initiate capital-intensive, desperately needed projects including highways, bridges, air terminals, and tunnels that could not have been advanced using traditional procurement and financing approaches.”
-Special Panel on the Future of the Port Authority, Keeping the Region Moving, Port Authority of New York & New Jersey, Dec. 26, 2014
“The provision of highway service is a socialized industry removed from the test of the market. The result is that the total expenditures on highways have been too small, that these expenditures have been improperly distributed among different kinds of roads, and that we have too little highway services per dollar spent.”
-Milton Friedman and Daniel J. Boorstin, “How to Pay for the Safe and Adequate Highways We Need,” 1952, reprinted in Gabriel Roth, Roads in a Market Economy, Avebury Technical, 1996