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The High-Speed-Rail Boondoggle
The president’s new project would hurt freight transportation and waste money.

By Lou Dolinar


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Key Republicans are rightly going after President Obama’s $53 billion pie-on-the-tracks high-speed-rail schemes. House Transportation Committee chair Rep. John Mica (R., Fla. ) calls it a “Soviet-style train system,” while Railroads Subcommittee chair Rep. Bill Shuster (R., Pa. ) says it’s “insanity.” These are strong comments, coming from officials who have in the past expressed support for rail projects.

I don’t pretend to speak for them, but what they appear to be getting at is that high-speed rail is another typical Obama play, long on flash and short on the hard details needed to make a law work. The economic case against high-speed rail is well known. But there’s another problem: As was the case with the health-care bill, even if you accept its aims and the need for some subsidies, the initiative is poorly thought out and self-defeating.

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Problem No. 1 is the havoc high-speed rail could wreak on our freight-rail system, with which many of the proposed routes share trackage. Subsidy-free and profitable since deregulation, as The Economist reported recently, the freight-rail companies own most rail tracks and are one of the country’s economic and environmental crown jewels. Freight rail moves goods cheaply, efficiently, and with a carbon footprint smaller than that of any other form of transportation. European trains, meanwhile, with which high-speed-rail advocates compare the American system invidiously, move almost no freight. They move people, and require subsidies to do so.

Evidently, the administration thought it could build medium-to-high-speed rail on the cheap in most of the U.S. by making Amtrak trains run more frequently, increasing their speed to 110 miles per hour, and sponging off the freight system. Here’s the problem: The more passenger trains on a given rail corridor, the fewer freight trains, and the administration envisions massive numbers of new trains. Since passenger trains have to meet schedules, they take priority. The faster a passenger train travels, the more freight it displaces. According to The Economist, “One Amtrak passenger train at 110 MPH will remove the capacity to run six freight trains (which travel 50 MPH) in any corridor.” And in many areas, freight rail is already at capacity, and will require more investment to keep up with expected growth.

You’ve read a lot about those mean old Republican governors, Ohio’s John Kasich and Wisconsin’s Scott Walker, who turned down free money, Obama money, for high-speed rail because the state would get stuck with a big part of the costs. Iowa, Florida, and Michigan are considering following suit, according to Fred Frailey of Trains magazine.

Frailey also points out that in many cases, freight-rail companies need to build more sidings and even double tracks to accommodate high-speed rail. The costs are enormous. Negotiations between the federal government and freight-rail companies in North Carolina, Virginia, and Washington State are stalled over how much more capacity is needed, and who’s going to pay for it. If the federal government doesn’t pick up the tab, excess costs could be passed along to consumers in the form of higher freight rates, which in turn will impact the price of energy and manufactured goods.

Running high-speed rail on existing tracks also opens the door to re-regulation of the freight-rail business. Already, under President Bush, Congress mandated that freight systems spend an estimated $18 billion on safety systems designed to prevent passenger-freight collisions like the one in California that killed 25 and injured 135 — systems the industry says are largely ineffective and unnecessary. That’s the start of a slippery slope; the federal government will intrude more and more as a mediator between a dull but efficient freight system and a politically popular but deficit-ridden passenger-rail project. We know how that’s going to turn out.

A second problem with high-speed rail is that it is creating new funding requirements for the whole country, including states that have huge financial commitments to mission-critical rail, those mass-transit and commuter lines that serve high-density urban cores.

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COMMENTS   19

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   02/11/11 08:18

Sir:
Telecommuting has a lower carbon footprint than trains fast or trains slow. Granted, the computer is a poor way to move fuel oil or hogs, but it works marvelously well at moving intellectual product. Let us concentrate on the electronic revolution in human interaction and work on reducing the unnecessary shifting of people from point A to B and back. As the WWII question sternly asked, “Is your trip necessary?”

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   02/11/11 09:25

As it gets fleshed out in the press, this project sounds more and more like a commuter project for California and the northeast - with insufficient funds, widespread disruption of existing freight services, displacement of existing commuter services, involuntary commitments to future outlays by the feds and states when funds are desperately needed everywhere else, too many stops to realize speed, too many opportunities for delays, and minimal benefit to a minimum number of people. Trains travelling closer to 200 mph might have been a costly alternative to planes between New York and Washington while these 100 mph trains with apparently many more stops can’t even compete with a plane.

How does this not end up like Amtrak where a reasonably fast train is hamstrung by schedule disruptions? And is there really a niche here between commuter and Amtrak anyway? Isn’t that niche the part that the old passenger system and Amtrak found out disappeared on the interstate?

It is, however, a foot in the door for someone who wants to pour more good money after bad for a showpiece. I just can’t see that this even has good intentions. It’s a political pose with no real chance of success, but with hopes that core constituencies will be grateful for the cronyism even if it ends up costing them much for nothing. If there is 40% support in California and Boston/DC corridors after the full measure of this seeps in, I’ll be surprised. I think this project ultimately cements this administration and its political operatives in Congress as unrealistic and incompetent boondoggle spenders posing under the utopian technology banner. But who knows, maybe there are enough union jobs in it to put them over the top. /s

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SeanMcG
   02/11/11 09:57

@Stuart
That is a good point. With the widespread availability of broadband internet connections, companies that do business in the locations mentioned above would do well to identify what jobs could done via teleworking and implement the processes and technology accordingly, on their own dime.

However, without concrete data at my disposal, it would seem that there would still be a sufficient number of jobs requiring a physical presence to justify the continuation of commuter rail, but it doesn't have to be HSR.
---

I used commuter rail for several years, but was surprised at the bureaucratic maze that was required to operate the system. Other areas may be different, but Maryland's MARC system contracts out to either AMTRAK or CSX depending on the tracks the trains run on.

I will say that during the time I was making that commute, I was forced to ride Acela a few times. Even when bypassing most of the stops, the trip was not appreciably shorter, but the fare was 9X higher. I realize there are a lot of factors in setting fares, but this particular difference seems excessive.

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   02/11/11 12:12

I love taking the train or bus ... but the fundamental problem with rail is that the people who supported the stimulus are trying to implement it - meaning over budget and useless.

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   02/11/11 12:33

Telepresence is only good for people who solely deal in information. Workers in factories, laboratories, stores, restaurants, etc. need to actually BE THERE.

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Paul Sandberg
   02/11/11 13:11

It cost twice as much for a retired person to ride high speed rail from NY to Boston. No discounts because it is business class only.

High speed rail would only be for the better off and people on expense accounts.

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   02/11/11 16:55

OK I'll go along with the 58 billion dollar train system, when someone can tell me how long it will take to pay off construction/pay off operating costs via ridership. If after it's all built and you get 1 million riders in the first year, how much would it cost each rider at 1 million per year for 20 years to pay off the investment? Not counting operating costs or loss of the value of the money had it been used for something else. Roughly $3000.00 dollars per ticket is what I get. Once again that only hits the money used to build it, not the operating costs. (Amtrak has never made money.....ever) So it works out as well a the $178,000.00 we spend per job in the stimulus.
If you still believe that this country can afford this, and it's a good idea, you are completely insane.

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   02/11/11 17:59

I'm in favor of it as long as every Congressman that votes in favor issues a personal guaranty to cover any cost over-runs or operating losses (using GAAP accounting). The guaranty must be nondischargeable in bankruptcy and binding upon spouses, parents, children, grandchildren and great-grandchildren. If it's such a great idea, let's see them take real risk - the same risk they're asking us to take.

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   02/11/11 18:49

AMTRAK at 150mph on existing track! Come on.

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   02/11/11 20:23

HSR is not feasible for most of our country. It is not profitable anywhere in the world except for a few lines (one in France and another in Japan). It requires large subsidies and huge borrowing up front to implement. Most people in the US would prefer to take their cars on mid-range trips because many cities in the US don't have good public transportation. For me, taking a train for a 300-500 mile trip would require renting a car at my destination. I might do it for the novelty a few times but not as a preferred means of travel. More on why it is not a good idea for us here; External Link 

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Train kook
   02/11/11 23:12

I've been reading about the latest high speed maglev trains in China. They ride on a cushion of air several inches thick at 300 mph. I have an awesome idea. We could have 600 mph trains that ride on a cushion of air that is 30,000 feet thick. Maybe private companies could operate these "trains" and people would pack them due to the low ticket prices and convenience.

I guess that such a concept could never work in America!

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   02/12/11 10:01

The real issue with HSR is its astonishingly poor return on investment. We would get far MORE rail service to far more people, and achieve much higher output (revenue passenger miles) per dollar invested from modest investment into "conventional" 79-90 MPH services all across the country. And the initial capital required would be less than 10% of the cost of any HSR scheme.
Mr. Dolinar is dead wrong that the Northeast is the logical place to make these new rail investments. To date, we have sunk nearly $40 billion already into Amtrak's Northeast Corridor, and we have almost nothing to show for it: Amtrak's market share there is about 1%, its trains' load factor in the NEC is under 50% (exclude the 90 miles between Philadelphia and NYC and the load factor drops to about 30%--suggesting rather plainly that we are substantially OVER-invested in the NEC already), and Amtrak's return on investment from its Acela semi-HSR program has actually been negative. The NEC today consumes about three-quarters of a billion dollars annually in free federal subsidy. How much new money should we throw into that pit?

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   02/12/11 10:06

As someone NOT from the northeast or California, who cares about the speed or efficiency or carbon footprint of this “investment”? This is nothing but executive branch, Democratic pork for high density blue states. If it’s such a good idea, why is there no combination of private, municipal and state money available to fund it? We live in a budgetary environment where marginal costs and benefits of each federal expenditure must be evaluated, and this isn’t remotely near the top of the list.

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Paul Wilson
   02/12/11 12:41

The Administration's support for HSR (however broadly construed) is about pandering to a core Democrat constituency, the urbanized coastal professional elite. That explains the crocodile tears about having to pull the plug on projects in Iowa, Wisconsin and Ohio. Look at who buys overpriced Acela tickets. Mica is correct, the HSR program has been hijacked by the monopoly rail carrier of last resort, to wit: Amtrak. With Joe Biden in charge, did we really expect anything different? Biden has spent his entire political career steering pork to Amtrak. Yes, Amtrak and Biden have been around that long.

The one thing that can save passenger rail in the US is competition. Perhaps this is one area where I would like the USA to be *more like* Europe. In Europe they actually have competition among passenger rail carriers (although progress varies from country-to-country) and cross-subsidization of services has been banned by EU diktat.

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   02/12/11 13:07

The Administration's support for HSR (however broadly construed) is about pandering to a core Democrat constituency, the urbanized coastal professional elites. That explains the crocodile tears about having to pull the plug on projects in Iowa, Wisconsin and Ohio. Look at who buys overpriced Acela tickets. Mica is entirely correct, the HSR program has been hijacked by the monopoly rail carrier of last resort, to wit: Amtrak. With Joe Biden in charge, did we really expect anything different? Biden has spent his entire political career steering pork to Amtrak. Yes, Amtrak and Biden have been around that long.

The one thing that can save passenger rail in the US is competition. Perhaps this is one area where I would like the USA to be *more like* Europe. In Europe they actually have competition among passenger rail carriers (although progress varies from country-to-country) and cross-subsidization of services has been banned by EU diktat.

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Citizen
   02/13/11 11:38

1. Shipping by barge is the most energy efficient way to transport freight.
2. When certain airports are capacity maxed out, travelers will demand alternatives.
3. Separate track for commuter rail is an obvious necessity. The interstate system is the obvious choice for the location.
4. All forms of transportation have varying form of government subsidies.

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Juju
   02/14/11 11:44

This whole thing is just "stoopid". We ARE NOT Europe. We fought a war not to be like Europe. If congress even remotely acts like they are going to support this, take down their names now and vote them out.

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Peter Hill
   03/09/11 19:22

Mass transit programs should be rolled out initially where the greater benefits "above the accounting bottom line" and below it can be obtained. What are the main benefits of mass transit over car travel? They are: conservative savings in infrastructure costs avoided by reducing car-based urban sprawl; opportunity to reduce import costs of petroleum (think of Peak Oil); reduced CO2 emission rates; health benefits from increased walking that comes with mass transit ridership.

There's a similar argument in Australia, where a Very Fast Train (VFT) at over 150 mph is once again proposed to link Melbourne, Canberra, Sydney and Brisbane, whose metro and town populations total around 15-17 million. These cities are quite far apart (300 to 600 miles) which precludes car commuting, and favours air travel over trains. The rail infrastructure needed is too costly for the passenger revenue that would be returned.

Europe, Japan, China and North America's northeast provide better opportunities for fast trains (80 - 150 mph) and VFTs (over 150 mph) to service city-to-city markets of very large populations that are not very far apart (say, less than 200 miles). These shorter distances put air travel at a disadvantage, as economical cruise flying is very restricted, and there remain the on-ground transfer links between airports and city downtowns, that can be as time consuming as the flight! Trains typically take riders from city centre to city centre.

If USA rolls out VFTs, then it should be on dedicated track, and NOT at the expense of freight haul. Displacing freight haul from rail onto road trucks would be the worst outcome, increasing traffic congestion, fuel usage and pavement damage.

Perhaps America should plough its dollars into high-capacity urban mass transit and automated road pricing so as to shift the greatest part of the auto travel market (daily metro commuting) from car to transit, rather than in VFTs.

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