Tag: "Transportation"

Double the Cap on Private Activity Bonds

Congress’ extension of U.S. surface transportation policy for another two months provides a little more time to improve current policies. With the added time, I want to offer a ninth recommendation for reforming U.S. surface transportation policy. Robert Poole and I recommend that Congress double the lifetime cap on private activity bonds (PABs).

State and local governments are embracing public-private partnerships (P3s) for large-scale transportation infrastructure projects. Because these projects leverage limited state funds with significant private capital, Congress, in SAFETEA-LU allowed state or local entities on behalf of P3 developer/operators to issue up to $15 billion in tax-exempt revenue bonds. The bonds are an obligation of the P3 project, not government. But with the increasing pace of P3 projects, two-thirds of the $15 billion has already been allocated. In a four- to six-year reauthorization, the remaining $5 billion worth of PABs will likely be far less than the demand for using this financing tool.

Increasing the $15 billion cap will likely match the flow of P3 deals suitable for PAB financing. This is consistent with the length of the reauthorization bill, for a six-year bill, the cap should be increased to $30 billion, for a four-year bill the cap should be increased to $25 billion and for a two-year bill the cap should be increased to $20 billion.

There are several reasons why increasing the cap it vital. The combination of tax-exempt PABs and supplemental Transportation Infrastructure Finance and Innovation Act (TIFIA) loans has generated considerable P3 investment in much-needed infrastructure. As of September 2014, these financing tools enabled states and other governments to obtain $23.4 billion worth of highway, transit and intermodal projects for total government outlays of $5.56 billion — more than four times the direct outlay of traditional tax funding. Both PABs and TIFIA are examples of “project finance,” in which dedicated project revenues (such as tolls) are the funding sources to pay off the Private Activity Bonds and repay the TIFIA loans. This kind of leverage is critically important at a time when Congress has difficulty increasing the amount of funding it can provide to the states under traditional highway and transit programs. But without an increase in the cap on PABs, that source of financing will likely dry up within the time frame of the 2015 reauthorization bill.

The principal benefit of an increase in the cap on PABs is the continued robust growth in P3 transportation infrastructure projects, which makes limited state highway and transit funds go much further. Federal taxpayers are not at risk, since the debt service on PABs comes from dedicated project revenues such as tolls. Some federal accountants view the tax exemption on these bonds as costing the Treasury tax revenue that bond-buyers would have paid if the bonds had been taxable. But in many cases, in the absence of tax-exempt bonds, the project might not pencil out as a P3 and would either be built by a tax-exempt government entity or not be constructed.

Jun 17, 2015 | Leave a Comment | by

U.S. 100 Percent Renewable Energy Plan Lacks Price Tag

Engineers from Stanford and U.C. Berkeley have developed a state-by-state plan to convert the United States to 100 percent renewable energy by 2050. The plan aims to:

Eliminate air pollution mortality, create jobs and stabilize energy prices.

The researchers behind the plan, referred to as “The Solutions Project,” examined the amount and source of energy consumed by the residential, commercial, industrial and transportation sectors in each state. Though the plans calls for aggressive changes to infrastructure and energy consumption methods, Jacobson and Delucchi ― the engineers behind the project ― claim the conversion is technically and economically possible with technology that already exists.

Jacobson and Delucchi claim replacing all fuel usage with electricity through their plan would yield significant energy savings, reducing total end-use power demand by 39 percent by 2050.

Though a neat concept, the lack of a visible price tag is worrisome. The engineers admit that the up-front costs of conversion would be steep, but doesn’t seem to offer a comprehensive cost for the project, either by state or as a whole.

 

Jun 10, 2015 | 1 comment | by

More Tax Money for Obama’s Green Dreams

From Merrill Matthews at the Institute for Policy Innovation:

President Obama reportedly will announce on Friday that he will waste another $100 million taxpayer dollars in his never-ending quest to push consumers to embrace his green dreams.

Though he won’t actually put it quite like that, that’s the upshot of his message.

The $100 million is to expand special fuel pumps, called “blender pumps,” that allow drivers to choose how much ethanol they want in their gas tanks. If consumers could choose zero, at least it would represent a real choice, but don’t bet on that.

Consumer Reports says that about 70 percent of gasoline has a 10/90 blend, that is, 90 percent gasoline and 10 percent ethanol, known as E10.

Ethanol advocates — primarily the farmers who grow the corn and the processers that turn it into ethanol, both of whom profit greatly from the product — claim that newer cars can take a blend ratio of E15. And some flex-fuel cars can go significantly higher.

But why would most people do that, since the higher blends of ethanol appear to reduce miles per gallon?

When Consumer Reports compared the gas mileage of E10 to what the ethanol industry is really pushing, E85 (85 percent ethanol), it found a significant reduction in miles per gallon. “When running on E85 there was no significant change in acceleration. Fuel economy, however, dropped across the board. In highway driving, gas mileage decreased from 21 to 15 mpg; in city driving, it dropped from 9 to 7 mpg.”

In addition, many environmentalists who once encouraged ethanol expansion have begun to back off that support.

Obama’s predictions about the adoption and benefits of his environmental policies have been every bit as bad, if not worse, than his predictions about his health care law. He predicted there would be a million electric vehicles on the road by 2015; there’s actually about 286,000. His efforts to push high-blend ethanol are likely to be no better.

There is nothing wrong with a transition to higher-blend vehicles — if that’s what consumers want. But that is not this administration’s approach. What matters is what the president thinks is good for you, whether he would ever use it or not, and to back his vision with your taxes.

 

Jun 08, 2015 | 2 comments | by

Tunnels are a Solution to Relieving Traffic Congestion

Due to the policy of building freeways through communities and the resulting highway revolt, most U.S. metro areas now have unfinished freeway networks. With the economy and traffic congestion growing, it is time to consider filling the missing links in these freeways. Fortunately, with the advent of tunnel boring machines (TBMs), it is now possible to cost-effectively build tunnels under densely populated neighborhoods. These tunnels can help complete unfinished freeways. These tunnels can also encourage transit service by offering free usage of premium lanes at no charge. Most importantly, these tunnels will have no adverse impacts on the neighborhoods above them.

Tunnels have proven an effective alternative to surface freeways across the world. For example, to protect Versailles, the French built a highway tunnel under the historic estate. The tunnel keeps traffic flowing while protecting the national landmark. The Port of Miami built a tunnel, allowing trucks to access the Port of Miami and bypass city streets. This tunnel reduced cut-through traffic and helped rejuvenate city neighborhoods. In Washington State a tunnel is being constructed to replace the seismically deficient SR 99. In addition to providing a better travel alternative, the tunnel will allow better connections between Seattle’s neighborhoods and Puget Sound waterfront. While Seattle TBM broke last year delaying the project, the TBM has been fixed and construction is progressing.

Building tunnels is not cheap. Costs typically range from approximately $100-$500 million per lane mile. However, building surface roads in such areas can often reach $50 million or more per lane mile to build an elevated section if right of way is needed. Further, the lost economic costs of congestion are much higher than $500 million. In Chicago alone, reducing congestion by 10 percent would save business $1.3 billion per year in business-related expenses and $455 million in labor market expenses. This assumes a 10 percent improvement; 20 percent would double the benefits.

Which metro areas in the U.S. could benefit from tunnels? The largest metro areas such as Chicago and Los Angeles could benefit from multiple tunnels, between 2 and 7, depending on the cost-benefit analysis. Other large regions such as Atlanta, Dallas, Houston and Washington D.C. could benefit as well. Tunnels are not appropriate in all situations but they are an important key to reducing urban congestion.

 

Jun 01, 2015 | 2 comments | by

Lawmakers Should not Speed-Up Positive Train Control Deadline

Trains are among the safest form of transportation but on rare occasions when crashes occur, the death toll is often high. The crash earlier this week of a Northeast Regional train en route from Washington D.C. to New York City has brought Positive Train Control (PTC) back into the news.

First mandated in the resultant Railroad Safety Improvement Act of 2008 (RSIA 2008) as a result of a tragic train crash in California in 2008 that killed 25 people, PTC remains an expensive, unnecessary government mandate. Cheaper technology that is just as effective is a better way to increase safety. Legislators cannot let the emotion of the moment sway them into adding unnecessary mandates or spending more taxpayer funds on passenger rail.

Railroads are one of the safest forms of transportation. The National Safety Council compared four modes of transport: airlines, passenger trains, buses, and light duty vehicles (includes passenger cars, light trucks, vans, and sports utility vehicles). In 2009 the passenger death rate in light duty vehicles was 0.53 per 100 million passenger-miles. The bus fatality rate was 0.04; the rate for trains is 0.02. Only airlines were safer at 0.01.

In the California train crash, a Metrolink commuter train collided with a Union Pacific freight locomotive killing 25 people. The crash was the worst U.S. train accident in 15 years. Federal investigators revealed that the train driver was sending and receiving text messages just before his commute train skipped a red light and hit the freight locomotive. Even before the final safety report was released, Sen. Dianne Feinstein (D-Calif.) began pushing to mandate automated safety equipment for all large railway systems. According to Feinstein the accident occurred because of “resistance in the railroad community.” Kitty Higgins of the National Transportation Safety Board (NTSB) also began lobbying for positive train control less than 24 hours after the collision and before the full safety investigation began. Swept up in the emotion, Congress in 2008 failed to seriously consider any solution except PTC. The PTC bill passed October 16, 2008 with limited debate only a month after the crash.

Positive train control is one of several methods to improve railroad safety. While PTC can prevent accidents by using GPS, sensors, and other technology to stop trains remotely, the costs are astronomical. The Federal Railroad Administration (FRA) places the cost at more than $13 billion to install and maintain a nationwide class I PTC system. Consulting firm Oliver Wyden estimated that PTC has a 20 year benefit of $0-$400 million. Even if all $400 million in benefits are realized, the cost/benefit ratio range is $1 in benefits for every $20 spent on the system.

Although Congress failed to consider an alternative, there are several technologies that could prevent the most serious train crashes. The most obvious solution would be to expand Amtrak’s existing automatic train control system that regulates speed. Automatic train control systems can be programmed to send information to a train about the speed limit for a section of track. Equipment inside the locomotive senses when a train is exceeding the limit and sets off an alarm. If the engineer fails to slow the train, the system triggers the train’s emergency brakes. Amtrak installed this technology on the southbound track but not the northbound track, because among other trains it slows trains too much. If the technology was installed on the northbound track, the train likely would have gone around the curve at 80 miles per hour and not come off the track.

Other options include rerouting freight trains, reducing the speeds of trains to minimize the impact of collisions or implementing schedule changes to increase headways between trains. These solutions can be implemented with no direct costs and only the indirect time costs of slower trains and longer commutes.

There are several other PTC complications that leaders have not taken into account. Immediate implementation of PTC could impair safety. PTC is forecast to prevent only 4 percent of railway accidents and the $13 billion spent enacting the technology is money that cannot be spent on infrastructure upgrades and other safety improvements. Further, despite claims to the contrary PTC by itself will not improve track efficiency. Increasing the train frequency requires precision dispatching. While precision dispatching can be implemented, it is a separate technology and different issue than positive train control. Additionally, Current PTC systems will make train tracks less efficient. Today’s systems do not estimate braking times accurately. As a result, these systems slow a train prematurely when compared with human control, reducing the number of trains that can fit on a section of track.

The Federal Railroad Administration (FRA) has studied PTC repeatedly. In 2005 the agency noted that a regulatory mandate for PTC system implementation [can] not be justified based on cost-benefit principals and direct safety benefits.

Why despite FRA’s advice is positive train control mandatory? Advocates who had been pushing for the technology for 20 years saw an opening. At the same time, many members of the House and Senate were swept up in the emotion of the situation and failed to consider the cost/benefit ratio or alternative technologies.

Fortunately, Congress has a chance to learn from its mistake. No action should be taken until a preliminary investigation is completed. FRA should study other technologies including Amtrak’s existing automatic train control to determine if there is a long-term solution that is just as effective at a more reasonable price. Safety policy is too important to be decided in the emotional aftermath of a tragic accident.

May 21, 2015 | Leave a Comment | by

Special Interests Use Amtrak Accident to Push for Unneeded Solutions

After a tragedy, the knee-jerk reaction is to take some action. It does not matter if that action actually fixes the problem, as long as something is done. As a result of the Amtrak train derailment in Philadelphia, Amtrak boosters are screaming for more funding and Positive Train Control (PTC) advocates are beating the drum for mandatory installation of PTC. Yet facts reveal an older, cheaper technology with minimal costs could have prevented this accident.

While the National Transportation Safety Board is investigating the crash, several facts have been confirmed. The train accelerated from 70 miles per hour (its normal operating speed over this section of track) to 106 miles per hour in the last minute before the crash. When the train reached a curve the speed caused the train to derail. The train’s engineer, who suffered a concussion, cannot recall much information about the crash. But records show that that he engaged the train’s emergency braking section before the wreck.

The most likely scenario involves the engineer mistakenly accelerating the train (either because he fell asleep or because of error) and then realizing his mistake and applying the emergency brake too late to stop the derailment. However, there are other possibilities. One theory is that the train experienced some kind of mechanical failure preventing the brakes from working. Another theory is the track was warped, split or otherwise defective. Until we know the cause, we won’t know how to prevent it from happening again. Whatever the cause, the full investigation is likely to take a year.

Yet that lack of information has not stopped interest groups from releasing breathless press releases. According to the Amalgamated Transit Union:

While early reports say excessive speed was a factor in this tragic accident, the lack of positive train control that would have automatically slowed the engine down and the well-documented poor condition of our nation’s rail system is just the latest example of the way in which Congress refuses to adequately fund transportation.

According to the Midwest High Speed Rail Association:

The fact that the crash happened on a 50 mph turn on a high-speed line, shows how outdated our infrastructure is. On high-speed lines across the world, curves like this would have been straightened out to allow for continuous high-speed travel. Hazards like this curve need to be removed to prevent accidents of this nature and allow for much better service on the line.

Some groups are using this accident and the tragic loss of life to advance their agenda. Their statements suggest that if Amtrak had received more government funding, than this problem would not have happened. Yet the bigger problem is how Amtrak spends its revenue. Amtrak makes a profit on this line–the Northeast Regional Service. In contrast, Amtrak’s long-distance routes such as the California Zephyr that has just 376,000 riders, lost $600 million in 2012. If Amtrak had used the money it made on the northeast corridor to improve safety on the corridor, instead of diverting it to all its money-losing routes, this accident likely would not have occurred.

Other groups suggest that if only positive train control was implemented, this and most every accident would be prevented. Yet PTC is only forecast to prevent 4 percent of railway accidents. While the cost to install a nationwide class I PTC system is $13 billion, consulting firm Oliver Wyden estimates PTC has a 20-year benefit of between $0 and $400 million. Even if all $400 million in benefits are realized the cost/benefit ratio range is $1 in benefits for every $20 spent on the system. In 2005 the Federal Railroad Administration (FRA) noted that a regulatory mandate for PTC system implementation [can] not be justified based on cost-benefit principals and direct safety benefits.

Most analysts are ignoring a far simpler cheaper technology that could have prevented this crash, Amtrak’s existing automatic train control system that regulates speed. Automatic train control systems can be programmed to send information to a train about the speed limit for a section of track. Equipment inside the locomotive senses when a train is exceeding the limit and sets off an alarm. If the engineer fails to slow the train, the system triggers the train’s emergency brakes. Amtrak installed this technology on the southbound track but not the northbound track, because among other trains it slows trains too much. If the technology was installed on the northbound track, the train likely would have gone around the curve at 80 miles per hour and not come off the track.

So even though cheaper technologies are available, advocates appear to be taking advantage of an accident to lobby for more money or unnecessary safety systems. Pushing for unnecessary solutions is a disturbing way to commemorate those who lost their lives.

 

May 18, 2015 | 2 comments | by

Take a Train – Buses are too Complicated?

Apparently, when it comes to making a mass transit choice between trains and buses when travelling around town, people should pick the train.

From the Congress for the New Urbanism blog:

Why Buses Are Inferior

Critics of rail often argue that buses are superior; they are cheaper, more flexible and (sometimes) run almost as fast.  But in a recent blog post, Houston planning student Maggie Colson explains why trains are better than buses, even if the train isn’t much faster:

The train system was much easier to maneuver than the bus system. I found the bus system to be more complicated because you had to find the correct bus stop with the bus number labeled on it. In addition, you could easily end up going in the wrong direction – the buses did not have the directions labeled like the trains. On the bus you also had to know where you needed to get off. Unlike the train system, the bus did not stop at every stop and instead you had to push a button to request for the bus to stop. While this is not necessarily an issue once you know the route, trying to navigate for the first time was stressful. Without the use of my smartphone, I would not have found or gotten off at the correct bus stops.

In other words, with buses you really have to know what you are doing.

Ignoring the recent rail disaster in London, are buses inferior to rail?

May 04, 2015 | 5 comments | by

White House Releases Quadrennial Energy Review for Earth Day

Yesterday, the Obama administration released the first installment of the new Quadrennial Energy Review (QER), a four-year cycle of assessments deigned to provide a roadmap for U.S. energy policy. This first installment focuses on the needs and opportunities for modernizing the nationwide infrastructure for transmitting, storing, and distributing energy. Dr. John Holdren and Dan Utech said:

Today, America has the most advanced energy system in the world. A steady supply of reliable, affordable, and increasingly clean power and fuels underpins every facet of our nation’s economy. But the U.S. energy landscape is changing dramatically, with important implications for the vast networks of pipelines, wires, waterways, railroads, storage systems, and other facilities that form the backbone of America’s energy system.

The administration hopes that careful analysis and modernization of energy infrastructure will promote economic competitiveness, energy security, and environmental responsibility.

This first QER installment comes just in time for Earth Day, which has spurred many sectors of the government into action. Over the past two days, the House of Representatives sent an energy efficiency bill to the president’s desk, the Department of Justice and the EPA levied $5 million in penalties against ExxonMobil for a 2013 oil spill, Democratic House members introduced the “strongest anti-fracking” bill yet brought to the House, which would ban fracking on all federal lands. The president is also doing his part, touting his plans to impact climate change at debates in Florida.

Though Earth Day has a tendency to bring out people’s far-fetched energy plans, it does do some good as well. According to the Annual Energy Outlook, improvements in energy efficiency, increases in energy demand, and the stabilization of energy-related carbon dioxide emissions have all benefited since the first Earth Day 45 years ago.

 

Apr 22, 2015 | Leave a Comment | by

Grant User-Friendly Tolling Flexibility for Highways

Today I want to offer the eighth and final recommendation for reforming U.S. surface transportation policy. Robert Poole and I implore Congress to grant user-friendly tolling flexibility for Interstate highway construction.

America’s Interstate highways are reaching the end of their 50-year design life, and will all need to be reconstructed over the next several decades. Many corridors — especially those that are primary truck routes — will need additional lanes. The estimated cost of reconstruction and prudent widening is nearly $1 trillion — and no funding source exists for this purpose. Urban Interstates experience chronic congestion that is not being systematically addressed.

The U.S. has a tolling pilot program, but all the slots are currently used. To allow other states to rebuild their Interstates through tolling, expand the three-state Interstate System Reconstruction and Rehabilitation Pilot Program to all 50 states and allow participating states to use it to reconstruct all Interstate highways in their states, not just one. To ensure the support of highway users, provide stronger protections to ensure that the tolls are pure user fees that can be used only for the capital and operating costs of the rebuilt rural and urban Interstates. These protections should include:

  • statutory limitation on use of the toll revenues to the rural and urban Interstates only
  • beginning tolling only after an Interstate segment has been rebuilt
  • requiring that tolling be all-electronic and interoperable nationwide
  • granting rebates of state fuel taxes to Interstate toll-payers for the miles driven on the newly tolled and rebuilt Interstates

The current three-state pilot program is deficient in that it allows a state to hold onto its slot without using it, precluding other states from going forward. And by limiting toll-financed reconstruction to a single corridor, it creates geographic inequity among highway users and precludes a responsible state DOT from offering a 20-year plan under which all of its Interstates will be reconstructed using toll financing. The highway user protections are critically important, given the well-justified skepticism of highway user groups based on a history of some states using toll road revenues for other transportation purposes and even “economic development.” All highway user groups endorse the users-pay/users-benefit principle, but they will only support toll-financed reconstruction if the tolls are guaranteed to be pure user fees, not a combination of user-fee and general transportation tax.

Since there is no identified source of funding for the $1 trillion cost of Interstate reconstruction, a major benefit of this change is to provide such a funding source, available to states that comply with the user-friendly provisions. Since a per-mile toll is a mileage-based user fee, if all 50 states opted in, that would convert 25% of all vehicle-miles of travel to mileage-based user fees, an important first step toward replacing per-gallon fuel taxes. If the toll rates were limited to covering the capital and operating costs of the rebuilt system, highway users would pay somewhat more than they do now to use the Interstates, but would receive much better services.

Apr 20, 2015 | 1 comment | by

Recognize All HOT Lanes as Fixed Guideways for Transit

Our recommendations for reforming surface transportation policy have been so well received that we want to offer two more ideas. Our latest recommendation focuses on high occupancy toll (HOT) lanes that reduce congestion and provide a virtual guideway for express bus service. My colleague Robert Poole and I recommend that the federal statute be changed so that the Federal Transit Administration (FTA) counts all high occupancy toll (HOT) lanes count as “fixed guideway miles.”

Federal transit policy recognizes that an HOV lane converted to a variably tolled HOT lane provides buses with a “virtually exclusive guideway,” since variable pricing permits buses and cars to travel uncongested even during peak periods. Such HOT lane miles are counted toward a metro area’s total of “fixed guideway miles” for funding purposes, if used by transit buses. But the Federal Transit Administration withholds this designation for HOT lanes added as new capacity, even though such lanes function identically to those converted from HOV lanes. Region-wide BRT/express bus service will be fostered by creating seamless HOT networks. But a large fraction of such networks will be new capacity, since most freeways do not have HOV lanes to convert.

Changing the policy will require two modifications. First, revise the definition of “fixed guideway miles” to include all HOT lanes, whether HOV conversions or new capacity. This would acknowledge the functional identity of priced lanes as virtual fixed guideways, regardless of how they came about. Second, permit transit agencies to use New Starts and Small Starts grant funds to pay for a portion of new-capacity HOT lanes, based on the projected share of passenger miles of travel that will be generated by bus service on the new-capacity HOT lane.

This change would provide travel options and improve express bus service in the U.S. Very few state DOTs or transit agencies can afford to develop bus-only lanes on freeways, since the vast majority of their capacity would be unused even during peak periods. HOV lanes are frequently over-used, providing little or no time-saving advantage for express-bus service. HOT lanes are a proven way to use all the capacity of a specialized lane, with buses and paying vehicles both benefiting from congestion management via variable pricing. Current FTA policy artificially distinguishes between HOT lanes based on how they came about, thereby discouraging creation of seamless networks that require construction of new lanes. Under the second part of this policy, transit agencies could partner with a toll agency or state DOT to jointly develop new HOT/BRT lanes, sharing in any net toll revenues (after covering capital/debt-service and operating costs) in proportion to the agency’s contribution to the capital costs of the project. Thus, in addition to helping create the network of virtually exclusive bus lanes, the transit agency would receive part of any net toll revenue as an additional ongoing source of revenue.

This change would not cost taxpayers a dime, since it would merely create new options to encourage HOT/BRT lanes and networks. It would give transit agencies and highway agencies a new incentive to work together creating HOT/BRT networks, a highly cost-effective way to increase transit infrastructure.

Apr 13, 2015 | Leave a Comment | by
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