Surface Transportation Innovations #95

In this issue:

• Interstate tolling debate heats up
• Large tunnels moving forward
• Last gasp for National Infrastructure Bank?
• I-90 truck tollway feasible?
• Texas “pass-through” tolling fiasco
• Transportation Enhancements under fire
• Upcoming Conferences
• News Notes
• Quotable Quotes

Debate on Interstate Tolling Heats Up

With any increase in federal fuel taxes off the table for the foreseeable future, and the Interstate system starting to wear out, interest in using toll finance to rebuild and modernize the Interstates is picking up sharply.

Virginia has been in the news this month, having received approval from the Federal Highway Administration (FHWA) to transfer the tolling authority it received in 2003 for I-81 to I-95 instead. The I-81 project, which had intended to add truck-only toll lanes to that important goods-movement route, died under significant opposition from the trucking industry and NIMBYism. Under the revised agreement with FHWA, the Virginia DOT (VDOT) is to develop a detailed plan for tolling part or all of I-95’s 1,100 lane-miles.

Virginia holds one of three slots in the Interstate System Reconstruction and Rehabilitation Pilot Program, created by Congress as part of the 1998 TEA-21 reauthorization. Another slot is held by Missouri, whose ambitious proposal to reconstruct I-70 with truck-only lanes I reported on last month. The third slot has recently been applied for by Rhode Island, to toll its portion of I-95 and I-295 to fund a number of reconstruction and modernization projects. Other states whose DOTs have expressed interest in making use of the pilot program include North Carolina and Connecticut, both for I-95. Connecticut received two grants this summer from FHWA’s Value Pricing program, one to study pricing strategies for I-95 between New Haven and New York and the other to do likewise for I-84 in the Hartford area.

The Virginia proposal was blasted by the American Trucking Associations in a Sept. 19th news release. “Study after study shows that tolls carry astronomically higher capital and overhead expenditures compared to the fuel tax,” the release said. While not providing any details, that presumably refers to (a) financing costs and (b) collection costs. On the former, toll financing provides a well-proven way to bring about large-scale upgrades in the near term, by paying for them over time. This is how most people buy their homes, and it is how most new facilities are paid for by businesses. It makes good sense for users to pay for these improvements over many years, as they enjoy the benefits of better highways. As for collection costs, it’s true that the cost of collecting highway funds via fuel taxes (done at the wholesale level) is only a few percent of each dollar collected. But the ATA and other tolling opponents cite “astronomically” high costs of toll collection by using mostly 20th-century data based on largely cash toll collection. A forthcoming Reason Foundation study will document the much lower cost of 21st-century all-electronic toll collection, which is what states like Connecticut and Virginia are planning to use.

Federal policy has yet to come to grips with what may be a $2-3 trillion cost to reconstruct and modernize the Interstate system as most of it exceeds its original 50-year design life over the next two decades. Without a major increase in the federal fuel tax, the choice is between using toll finance or allowing this hugely valuable infrastructure to decay. Hence, I’m intrigued by a study released by the Association of Equipment Manufacturers in July. “Modernizing the U.S. Surface Transportation System” by Jack Schenendorf and Elizabeth Bell calls for all-electronic federal tolling of the entire Interstate system. (www.aem.org/PDF/2011-07-27_SchenendorfModernizingSystem.pdf)

The authors propose this as an add-on to the existing federal fuel taxes. With tolling dedicated exclusively to the Interstates, existing federal fuel tax monies would be reserved for the remainder of the federal-aid highway system (which totals 985,000 miles out of a total of 4 million roadway miles). The proposal thereby seeks to close at least a large portion of the funding gap identified by the U.S. DOT’s Conditions and Performance report and the two federal surface transportation infrastructure commissions. In addition to the Interstate toll, their report also proposes a universal truck toll (also collected electronically), the proceeds of which would be dedicated to freight-related improvements. Thus, the proposal would create two new accounts in the federal Highway Trust Fund, one for the capital and operating costs of the Interstates and the other for targeted goods-movement capital projects.

As someone who thinks the federal role in surface transportation is far too expansive, I am concerned about putting significantly more money into the existing program, which is what this proposal would do. I’m also concerned that Schenendorf and Bell apparently reject toll financing, proposing instead that all the Interstate and goods-movement capital investments be made from toll revenue cash flow rather than by issuing long-term toll revenue bonds. And although they do allow that toll rates could be higher than elsewhere on urban Interstates, they explicitly reject congestion pricing.

A better approach, in my view, would be for Congress to remove the numerical limits on FHWA’s four innovative tolling/pricing programs:
Value Pricing Pilot Program

• Express Lanes Demonstration Program
• Interstate System Reconstruction and Rehabilitation Pilot Program
• Interstate System Construction Toll Pilot Program.

This would allow as many such projects as states can gain political support for; it would essentially “mainstream” these kinds of projects, as Congress did with HOV-to-HOT lane conversions in 2005’s SAFETEA-LU legislation. Just such a proposal has been made in legislation introduced earlier this year by Sen. Mark Kirk (R, IL) and reiterated by him in a letter to Sens. Boxer and Inhofe on September 12th.

Large Tunnels Moving Forward

Three major congestion-relief highway tunnels are moving forward in the United States today-in Miami, Seattle, and Los Angeles. Though tunnels are several times more costly than surface routes, sometimes going under is the only feasible way to close gaps in urban expressway systems, given the high political and economic costs of condemning very expensive land. State-of-the-art tunnel boring machines (TBMs) are one key to cost-effective tunneling.

The TBM for the Port of Miami Tunnel arrived from Germany in June, and as of September is more than 50% assembled for its job of boring twin tubes beneath Biscayne Bay to link the Port with MacArthur Causeway and thence to I-95. The nearly $1 billion project is aimed largely at getting container-hauling trucks off the streets of downtown Miami. It’s being done as a long-term concession, but in this case the concession company will receive availability payments rather than toll revenues. Florida DOT correctly judged that charging tolls would conflict with its goal of getting trucks to use the tunnel.

The $1.9 billion Seattle project will provide a single 56-foot diameter, double-deck tunnel 1.7 miles long to replace the seismically damaged Alaskan Way Viaduct along the city’s waterfront. Long opposed by anti-auto people and Mayor Mike McGinn, the project received a resounding 60% vote of confidence in a referendum held in August. A week later, FHWA issued its record of decision, completing a lengthy environmental review. Although WSDOT does not plan to use a concession, the tunnel will be partly toll-financed, with tolls estimated to support $400 million of the project cost and the Port of Seattle putting in $300 million. The balance will come from federal and state fuel-tax monies. WSDOT has given the go-ahead for Seattle Tunnel Partners to proceed with final design and construction, with a target date of 2015 for the tunnel to open to traffic.

At 56 feet in diameter, the Seattle tunnel will initially be the world’s largest diameter bored tunnel. But if plans in Russia pan out, that record will soon be eclipsed. Russia has ordered a TBM to create a tunnel 63’2″ wide under the Neva River in St. Petersburg. Groundbreaking is set for 2013 with the opening planned for 2016.

Currently in environmental review is the $3.25 billion, 4.5 mile tunnel to provide the long-missing link in the I-710 freeway in Los Angeles. The original Caltrans plan, for which right of way was acquired, was to build this freeway on the surface, bisecting the pleasant and reasonably affluent community of South Pasadena. Political and legal opposition from city officials have kept that project stalled for the past 50 years. I was one of the first to propose solving the problem, in the mid-1990s, by means of a deep-bore tunnel. That approach has gradually won strong support from both Caltrans and LA Metro. The latter envisions doing this project via a long-term toll concession, discussed in both an article and a Viewpoint column in Engineering News-Record‘s July 25th issue. Civil engineering professor James Moore of USC had an excellent op-ed on the subject in the Los Angeles Times on July 29th, entitled “Finish the 710 Freeway.” Surveys cited by Moore show that LA voters favor completion of the 710 via the tunnel by 5.6 to one. (www.latimes.com/news/opinion/commentary/la-oe-moore-170-20110729,0,1177301.story)

A bizarre footnote to the 710 tunnel story was its inclusion in a list of supposed boondoggles that should be eliminated from the federal budget. The latest “Green Scissors” report-a joint product of Friends of the Earth, Taxpayers for Common Sense, Public Citizen, and the Heartland Institute-lists the 710 tunnel as one of 13 federal transportation programs or projects that should be eliminated. The alleged federal budget cost saving from cancelling the tunnel was put at $11.8 billion-this for a tunnel whose cost is estimated at between $2.7 and $3.5 billion, a significant fraction of which will be paid for out of toll revenues. Nat Read, who chairs the 710 Freeway Coalition, tells me that the current funding plan is based on state, local, and private (toll-based) sources, not federal. So the project shouldn’t even be on the Green Scissors list.

Last Gasp for National Infrastructure Bank?

Just when many of us thought the idea of a national infrastructure bank was dead, President Obama has made it a key element of his proposed American Jobs Act. Unlike his previous transportation-only bank/fund proposal, this one is modeled after the Kerry-Hutchison proposal. Gone is talk of grants, in favor of loans-only. And the list of eligible project types is quite long: highways, bridges, transit, waterways, ports, airports, air traffic control, passenger and freight rail, wastewater treatment, storm-water management, dams, solid-waste disposal, levees, electricity transmission and distribution, energy storage…even “energy-efficiency enhancements of buildings.”

Given this breadth of coverage, it’s understandable that much of the transportation community seems to be saying “Thanks, but no thanks.” That appears to include the American Road & Transportation Builders Association, the American Trucking Associations, and possibly the U.S. Chamber of Commerce (whose transportation and infrastructure director told The Bond Buyer that the proposed “American Infrastructure Financing Authority” would not have any impact on jobs for a number of years. It’s also telling that neither of the two draft reauthorization proposals, from the Senate EPW Committee and the House T&I Committee, includes such a bank.

Even though I had previously judged the Kerry-Hutchison (K-H) bill as the least bad of the I-bank proposals then on offer, I was startled to learn that the Administration has made some fundamental changes. As Transportation Weekly (Sept. 13, 2011) has pointed out, the Administration draft “completely changes the meaning” of what was Sec. 302 of K-H. Where the Senators’ bill had called for the I-bank to be “a self-sustaining entity, with administrative costs and federal credit subsidy costs fully funded by fees and risk premiums on loans and loan guarantees,” the corresponding section of the AIFA draft merely says that it should “minimize the risk and cost to the taxpayer.” That suggests something less than a market-based assessment of which projects to fund.

And that, in particular, is my biggest concern about the proposal. With an extremely broad charter, AIFA looks to me like an institutionalization of the TIGER program, but with soft loans rather than grants. As I pointed out in the May issue of this newsletter, the TIGER and High-Speed Rail programs have selected projects to fund in a non-transparent way, with GAO finding that both programs gave only vague reasons-not clear benefit-cost assessments-for their selection decisions. We also have the Administration’s track record of attempting to pick winners in “green energy” start-up companies (such as the notorious Solyndra solar panel company that recently went bankrupt).

For a chilling example of what institutionalizing such politicized funding can lead to, consider the Japanese Postal Bank. As economist Paul Roderick Gregory pointed out in a recent piece for Forbes, JPB is the world’s largest holder of household savings deposits, totaling $3.3 trillion. It is also the nation’s equivalent of a national infrastructure bank. Gregory concludes, from observing its record of funding pork-barrel projects all over Japan, that JPB “is also the world’s largest political slush fund. Politicians at all levels direct its funds to voters, constituents, friends, and relatives for infrastructure, construction, and business loans.” The result, says Gregory, is that “Japan’s economy has one of the world’s highest investment rates and one of the world’s slowest growth rates,” with rates of return on invested capital only a small fraction of U.S. rates of return.
(www.forbes.com/sites/paulroderickgregory/2011/08/21/why-we-dont-need-an-infrastructure-bank-japan-is-why.)

Fortunately, there is a very good alternative to creating something as risky as AIFA. It’s called TIFIA, and unlike TIGER, HSR, and green jobs, it has a solid track record of selecting projects that meet a market test (investment-grade bond rating) and need only gap financing (up to 33% of project cost). Both the House and Senate reauthorization drafts would expand TIFIA rather than creating a more broadly based and potentially politicized I-bank. That looks to me like a sound choice.

I-90 Truck Tollway More Feasible than Estimated

Back in 2004, Peter Samuel and I did a Reason Foundation policy study looking for promising corridors for truck tollways that would permit longer combination vehicles (LCVs) to operate in states where they are not currently allowed. (https://reason.org/news/show/corridors-for-toll-truckways) So I was pleased to learn several years ago that FHWA had commissioned a sketch-level study of one of those corridors.

One of our most obvious candidates is the one FHWA chose for study: the 128-mile gap between the Indiana Toll Road and Ohio Turnpike (which permit long-double and short-triple LCVs) and the New York Thruway and Massachusetts Turnpike (which permit long doubles). The gap in northeastern Ohio and Pennsylvania’s Lake Erie panhandle means that LCVs going from one set of turnpikes to the other must be broken down into shorter rigs to go those 128 miles. That almost certainly reduces long-haul LCV use on the four turnpikes, and means there are less of the productivity benefits that would arise from greater LCV use.

An uncritical reading of the FHWA study (dated September 2009 but only released in July 2011, after much internal review and revision) reveals a surprising conclusion: that the costs of building the four truck-only lanes would far exceed the estimated toll revenues. (www.fhwa.dot.gov/policy/otps/110721/) As a reviewer of the first draft of this study, I was dismayed that it still reached such a negative conclusion. So was my former co-author, who took a far more detailed look at its assumptions than I had time for. His conclusion was that the costs were significantly more than necessary and that the revenues were seriously under-estimated. Making what I consider to be realistic assumptions, Samuel produced revised cost and revenue estimates, which you will find on his always-valuable website. (www.tollroadsnews.com/node/5433)

Here is my very brief summary. On the cost side, Samuel finds the cost of the electronic tolling system should be one-third to one-half what the study assumed, based on recent projects. And he has carefully examined the assumptions made about how much widening would be necessary, given some major stretches with wide medians. For the north-south section along I-271 east of Cleveland, he suggests re-purposing the two existing “express” lanes in each direction as truck tollway lanes, with perhaps one additional general purpose lane added in each direction for this expressway that already has either 10 or 12 lanes, depending on the section. This and his other cost-reduction suggestions are the kinds of value engineering a toll concession company would likely suggest.

On the revenue side, a careful reading of the study finds that the headline conclusion was based on charging tolls only to the LCVs attracted to the facility. It would be a difficult policy decision to require all trucks to use the new toll lanes, but they would gain safety and time-saving advantages from not using the GP lanes (and although Samuel doesn’t mention it, I would propose also giving them rebates on their diesel taxes for the miles driven on the truck tollway lanes).

The main sketch-level findings of the FHWA study estimated annualized costs of $412 million versus annual LCV toll revenues of between $6.5 and $30.5 million. But Samuel’s value-engineered cost estimate works out to an annualized $276 million. That compares with an estimated $357 million/year in revenue if all trucks were tolled. If that scenario could be brought about, the truck tollway link could well be self-supporting. And that, in turn, means the project would not need diesel tax revenue, which would mean giving truckers full rebates on their diesel taxes would be more feasible.

“Pass-Through Tolling” in Texas

Other countries call it shadow tolling, but when the Texas legislature authorized it several years ago, they called it Pass-Through Tolling. Under this kind of arrangement, a private sector developer is expected to finance, build, and maintain a highway project based on an agreement with the state to provide a payment to the company for each vehicle mile traveled on the new facility, for the term of the agreement. Thus, just as in a toll concession, the developer/operator supposedly takes on not only construction cost overrun risk but also traffic and revenue risk. Funding to support these pass-through toll payments comes from the Texas Mobility Fund. In 2002, Proposition 14 gave TxDOT authority to issue $3 billion in bonds to establish the Fund; the bonds are backed by the state’s general obligation pledge plus revenue from traffic fines and fees. (Note: this means that most of the costs of these projects are not being paid for by users, but rather by the general taxpayers of Texas.)

A paper in the TRB’s Transportation Research Record No. 2187 (2010) analyzes the initial set of projects funded in this manner. It makes sobering reading. Although TxDOT published a list of 11 selection criteria for Pass-through Tolling Agreement (PTA) projects, researchers Khali Persad, Patricia Franco, and Michael Walton comment dryly that “Potentially, any project can qualify if it is on the [TxDOT] Unified Transportation Program and public support can be demonstrated. The flexibility of the criteria has allowed a variety of projects to qualify for PTA funding.” I’ll say! The table of 13 projects seems like a grab-bag, “reflect[ing] a consistent lack of clear decision-making with regard to the partnership selection process,” and “the PTA criteria failed to incorporate essential characteristics of shadow tolling, such as the consideration of technical characteristics of the project, revenue potential, or risks. The most common criteria identified in the 13 PTAs studied relied on benefits that were not quantifiable . . . Moreover, the principal investor, the state of Texas, was not required to quantify or provide the financial benefits anticipated in the review of the projects.”

To put it bluntly, as the authors do, “[I]n the majority of cases the decision to use PTA financing was prompted not by project suitability for PTA financing, but rather by the mere availability of PTA financing. It appears that in each case, whatever support that was available or could be gathered was used to secure the PTA. In general, the choice of PTA had no relationship to the objectives or benefits of the project.” Even worse, “the financing arrangements for most of the PTAs are such that the financiers are essentially guaranteed to recover from the state most of the money they spend, plus any local revenue generated. As a result of this essentially risk-free arrangement, the demand for PTA funding outstripped its availability.”

This is in sharp contrast with the British shadow tolling practice, “which requires in-depth analyses and has many safeguards to reduce government exposure.” Thus, if more money gets appropriated for this program in Texas, TxDOT should go back to the drawing board, drawing on lessons learned from shadow tolling overseas.

“Transportation Enhancements” Under Fire

First authorized by the ISTEA reauthorization back in 1991, the Transportation Enhancements (TE) program has built a strong base of political support. By law, 10% of the federal Surface Transportation Program (the largest component of the overall federal highway program) must be devoted to TE projects. According to the latest annual report from the National Transportation Enhancements Clearinghouse, TE projects must fit into any of the following 12 categories:

1. Pedestrian and bicycle facilities
2. Pedestrian/bicycle safety and educational activities
3. Acquisition of scenic easements, including historic battlefields
4. Scenic or historic programs, including visitor and welcome centers
5. Landscaping and other scenic beautification
6. Historic preservation of buildings and facades
7. Rehabilitation of historic transportation structures
8. Preservation/conversion of abandoned railway corridors into trails
9. Inventory, control and removal of billboards
10. Archeological planning and research
11. Environmental mitigation for water runoff
12. ransportation museums.

Mind you, these are federal highway user tax dollars, here being used for anything but highways. And it’s also telling that the TE clearinghouse is operated, under contract with FHWA, by the Rails-to-Trails Conservancy.

This is the kind of nice-but-not-necessary program that has contributed to widespread distrust in the Highway Trust Fund, making it difficult for highway groups to maintain, with a straight face, that federal fuel taxes are a “user fee” and the Highway Trust Fund a secure conduit for improving America’s most important highways. This disaffection also contributes to the political impossibility of increasing federal fuel tax rates.

Those calling for fundamental reform of the federal program should be aiming to eliminate programs like TE and “Safe Routes to School” (federally subsidized sidewalks) as not being the proper province of the federal (as opposed to possibly state or local) government. With funding in desperately short supply, the federal program should focus on high-priority federal corridors vital to travel and goods-movement. Reason Foundation and several other think tanks have been making these points for several years, but the defenders of these programs are in full battle mode to preserve them.

And both FHWA and the Administration seem determined to go on funding non-federal stuff. Last month FHWA announced $415 million worth of FY11 discretionary grants. Included were $40 million for National Scenic Byways and $8 million for National Historic Covered Bridges. And in the just-proposed American Jobs Act, the Administration is insisting that no less than $783 million of the $27 billion devoted to transportation go for Transportation Enhancements.

Against this backdrop, the outline of the House reauthorization bill calls for removing the requirement that states devote 10% of STP funds to enhancements, though they would still be allowed to divert up to that amount of highway user revenues to those purposes. And prior to the release of the American Jobs Act, House Majority Leader Eric Cantor (R, VA) had offered this to the White House as a possible negotiation point, being more willing to find common ground on transportation investment if the Administration would agree to removing the TE requirement. In the other house, Sen. Tom Coburn (R, OK) sought to block the extension of SAFETEA-LU if the TE requirement was not removed from the bill. His amendment lost, but Politico reports that “under an eleventh-hour agreement, he’ll be allowed to insert language into the longer-term highways bill that would allow states to opt out.”

Retaining or removing the TE mandate will give us an indication of whether Congress and the Administration are serious about setting federal transportation priorities in this new era of fiscal limitations.

Upcoming Conferences

Note: I don’t have space to list all the transportation conferences going on; below are those that I or a Reason colleague am participating in.

ARTBA 2011 National Convention, Oct. 2-5, 2011, Monterey, CA, Monterey Plaza Hotel. Details at www.artbanationalconvention.org (Robert Poole speaking)

Council of Supply Chain Management Professionals Annual Global Conference, Oct. 2-5, 2011, Philadelphia, PA, Pennsylvania Convention Center. Details at www.cscmp.org. (Robert Poole speaking)

Infrastructure Investor America’s Forum, Dec. 7-8, New York, NY, McGraw-Hill Conference Center. Details at www.peimedia.com/iiamericas11. (Shirley Ybarra speaking)

News Notes

“Free Parking or Free Markets”
That’s the title of an excellent article by UCLA’s Donald Shoup on the failures of most U.S. cities’ parking policies. Shoup explains the idea of “performance parking,” recently introduced in San Francisco’s new SFpark program, using market pricing to increase the availability of street parking spaces and reduce wasteful cruising by people searching for an available space. “Parking wants to be paid for,” writes the good professor.
(“Free Parking or Free Markets,” Donald Shoup, Access, No. 38, Spring 2011.

Rebutting a Critique of Florida HSR Study
The generally impressive site PolitiFact Florida last month posted an assessment of the Reason Foundation study of the now-cancelled Florida high-speed rail proposal (Orlando to Tampa), on which Gov. Rick Scott relied in deciding not to accept federal funds for the project. Alas, the critique was seriously off-base, so I wrote a response which you can find on the Reason Foundation website: https://reason.org/blog/show/setting-the-facts-straight-on-tampa. Read them both and see what you think.

Follow-up on Critique of Inspector General PPP Report
Last month I criticized a surprisingly flawed and misleading report from the U.S. DOT Office of the Inspector General on long-term public-private partnerships for highway infrastructure. In part of my critique, I noted that back in 1990, when California’s pioneering PPP pilot program was being implemented, no projects being planned anywhere in the state would have used toll finance. MIT’s Prof. Christopher Zegras reminded me that at that point in time, the Transportation Corridor Agencies in Orange County were planning their three new public-sector toll roads. My only defense is that I was thinking of Caltrans projects (for which the statement is true), not ones being undertaken by a brand-new local agency.

Mileage-Based User Fees: the Numbers
If the federal gasoline tax were replaced by a federal mileage-based user fee, what would the rate need to be for revenue-neutrality? And if that MBUF varied by vehicle type and time of day, how much would be paid by drivers of cars, vans, SUVs, and pick-up trucks? And what would the equity implications of those payments be? An attempt to answer those questions was carried out by Bhargava Sana, Karthik Konduri, and Ram Pendyala of Arizona State University. You will find their paper, “Quantitative Analysis of Impacts of Moving Toward a Vehicle Mileage-Based User Fee,” in TRB’s Transportation Research Record No. 2187, available on the TRB website.

Follow-up on New CAFÉ Standards
Dan Sperling of UC Davis sent me some comments on my piece last month about the impact of new federal Corporate Average Fuel Economy regulations and their impact on federal and state highway user tax revenue. He suggests that the $8,000 per car average cost estimate I cited (from the Center for Automotive Research) is way too high, because it is based on optimistic market penetration of expensive hybrids and electric vehicles, as opposed to evolutionary improvements to internal combustion engines, lighter-weight materials, etc. The government estimate is $2,000 to $2,500. He also noted that the truck fuel economy standards are quite mild and the costs of improvements are modest, which he expects will lead to benefits well exceeding costs for truck operators.

Toll Enforcement Interoperability Agreed in New England
The states of Massachusetts, Maine, and New Hampshire have agreed to cooperate on enforcing toll payment among the three states. Under the agreement reached on August 4th, each state will be able to pursue out-of-state toll violators using the violator’s home-state sanctions (such as suspending or not renewing vehicle registration). The agreement is a pilot program of one year’s duration. Details at: www.tollroadsnews.com/node/5424.

Infrastructure Myths
John Merline of Investor’s Business Daily has written an article seeking to debunk what he terms five infrastructure myths. They are as follows: (1) infrastructure spending is declining, (2) our infrastructure is falling apart, (3) we are falling behind China, (4) more federal money means more jobs, and (5) federal stimulus money can be spent quickly. Even if you don’t agree with all of them, I think Merline makes some good points. (www.investors.com/NewsAndAnalysis/Article/584886/201109151338/Obamas-5-Infrastructure-Myths.aspx)

New Book on Energy Policy
Daniel Yergin, of Cambridge Energy Research Associates (and Pulitzer Prize winner for his earlier book about the global petroleum industry, The Prize) has recently published The Quest, subtitled “Energy, Security, and the Remaking of the Modern World.” Based on the review by my friend Steve Hayward of American enterprise Institute in the Wall Street Journal (Sept. 20, 2011), the book appears to be well worth reading.

Correction re Presidio Parkway
In my News Note last month on California’s Presidio Parkway/Doyle Drive project, I incorrectly referred to it as one of the federal Urban Partnership Agreement projects. FHWA reminded me that when the congestion pricing/variable tolling aspect of the project was rejected by local politics, Doyle Drive was removed from San Francisco’s UPA project. Parking pricing remains part of the UPA.

Quotable Quotes

“The President is certainly right that we can create hundreds of thousands of jobs and build desperately needed infrastructure with a federally supported bank. What he seems to miss is that we already have a national infrastructure bank-it’s called TIFIA. And it has a backlog of applications for more than $10 billion in nationally significant projects that will produce almost a million jobs. Instead of going to the cost, delay, and bureaucratic struggle of creating a new institution, why not just add capacity to TIFIA and clear out the backlog now?”
–Geoffrey S. Yarema, former member of the National Surface Transportation Infrastructure Financing Commission, Sept. 9, 2011 (TFI News)

“Traffic jams and idiot drivers notwithstanding, the freeways connect us at least as much as they separate us. . . . We can drive the freeways on our own schedules, precisely to where we need to go. By helping the city to spread far and wide, freeways give us greater choice in where we can live. And then there’s that primal feeling of liberation you get when you roll down the window, pump up the radio volume, and feel the wind in your hair. . . . You can romanticize bicycles, subways, or light rail all you want, but freeways are what makes us who we are.”
–Gregory Rodriguez, “LA’s Way Is the Freeway,” Los Angeles Times, July 9, 2011

“[S]ome high speed rail advocates have done themselves no favors either. They’ve resolutely backed pretty much any and every rail projects regardless of whether it is potentially useful or an outright boondoggle. They’ve engaged in false advertising by labeling 110 mph peak speeds as ‘high speed rail’ instead of what it really is: Amtrak on steroids. . . . Nevertheless, Illinois is pocketing well over $1 billion of the HSR stimulus funds for [its 110 mph] ‘high speed’ system that will offer end-to-end journey times that are at best only slightly better than what’s already being provided today by Megabus-and that for only a handful of trains a day on a line still subject to freight interference.”
–Aaron M. Renn, “Let’s Face It: High Speed Rail Is Dead,” New Geography.com, July 14, 2011.

“An Infra Fannie Mae is what it would be, underwriting loans to non-viable transportation projects. Viable projects can raise money in the real financial marketplace by earning fees from users that support capital and operating costs. An infrabank is a perfect formula for greatly enlarged federal debt, future federal subsidy and bailout liabilities, misplaced investments, a new venue for political favor trading, and future financial crises.”
–Peter Samuel, Editor, Tollroadsnews.com, Aug. 30, 2011

“Taking rail capacity from freight to provide rail capacity for passengers is not the answer to America’s urban congestion problems, as it will only shift thousands of trucks onto the highways,”
–James Young, CEO, Union Pacific Railroad, quoted in Mark Szakonyi, “Freight Carriers Seek to Derail Amtrak Fines,” Journal of Commerce, Sept. 5, 2011.