ANALYSIS OF U.S. HIGH-SPEED RAIL POLICY April 28, 2004
U.S. transportation policy has failed to provide substantial long term federal funding for rail infrastructure to create a more balanced, intermodal, and sustainable transportation system that includes high-speed rail (HSR). HSR can be competitive with highway and air transport in regional corridors for medium distance trips within a range of about 100 to 500 miles. Policy in the 1960's and 1970's funded successful high-quality intercity rail development in the Northeast corridor that has consistently been very competitive with airline travel. The flexible funding provisions of more recent legislation has provided increasing opportunities to create a HSR system. This has included funding for rail projects that have provided beneficial foundations for HSR implementation. However, HSR routes have been slow in materializing. Umestrained federal funding continues for highway maintenance and for the construction and expansion of airports. Transportation demand management (TDM) techniques, including the implementation of HSR and other sustainability objectives, would reduce projected increases in highway and air transport demand, provide preferable economic development, and increase environmental protections.
I INTRODUCTION AND STATEMENT OF RESEARCH
Transportation in the U.S. faces a crisis with increasing congestion and demand for automobile and air travel. The railroads face potential gridlock with increasing freight traffic and outdated infrastructure. Metropolitan areas are struggling to find solutions while attempting to meet federal mandates to reduce air pollution. A primary cause of these problems is federal policy that has focused excessively on funding for highway and airport construction. Lack of funding for railroads has resulted in right-of-way abandonments, deferred maintenance, and an inadequate intercity passenger rail system. Research will show that a transportation gap has been created for medium distance passenger trips between about 100 and 500 miles. This gap can be filled more effectively and efficiently by high-speed rail (HSR) as opposed to the automobile or air transport. In addition, the research will outline how implementation of HSR with other Transportation Demand Management (TDM) techniques can significantly reduce projected travel demand. Analysis shows that there has clearly been a continuous gap in U.S. transportation policy to provide long term federal funding for rail infrastructure to create a more balanced, intermodal, and sustainable transportation system that includes HSR.
Section II, Legislative History, will discuss the evolution of federal policy that has addressed passenger rail in the U.S. over about the past 40 years.
Section III, Sustainable Transportation Policy, will evaluate the trends of these policies and the capability of HSR in reducing infrastructure costs, reliance on fossil fhels, and emissions.
Section IV, Transportation Demand Management, will discuss the ability of HSR and TDM to reduce travel demand. The failure of policy and of the decision making process regarding the proposed South Suburban Chicago Airport will also be examined briefly.
Section V, Intermodal Connectivity and Funding, will discuss recommendations for HSR implementation.
Section VI, Conclusions, sumarizes key points documenting the shortcomings of federal transportation policy and the benefits that a multi-regional HSR system can provide.
II LEGISLATIVE HISTORY
HSR can be defmed as steel-wheeled trains that operate on rails at speeds of more than 125 mph. Such service currently exists only in Europe and Japan. Plans for HSR in the U.S. do not necessarily meet this defmition as expectations are, generally, for service above the current maximum speed of 79 mph on most Amtrak routes. The Federal Railroad Administration (FRA) defines high speed ground transportation (HSGT) as intercity passenger transportation that is comparable to typical air and/or auto travel time for medium distance trips or a range of about 100 to 500 miles. A description of significant legislation follows.
The High Speed Ground Transportation Act of 1965 appropriated $90 million for HSR in the Northeast corridor over about a ten-year period. In 1969, Metroliners and Turbo trains began operating in the Northeast corridor where service has consistently been very successful
and competitive with airline travel. After initial funding expired, Congress focused on providing financing for improvements in the Northeast corridor.
Creation of HSR organizations in other patts of the country spawned federal funding for research and development in the 1980's. A portion of this funding went for HSR demonstration projects while the remainder went to the research and development office of the FRA. In 1991, the Intermodal Surface Transportation Efficiency Act (ISTEA) appropriated $800 million for a National High-Speed Ground Transportation Program. The bulk of this was for development of a MAGLEV prototype while $50 million was authorized for the display of the latest HSGT technologies and $25 million was allocated for research and development. Although up to $1 billion was authorized by ISTEA for government-guaranteed loans to fund HSGT projects, none of the amount was used for actual construction. By 1998, about 15 states had passed legislation supporting research and development of HSGT (Stiles, 1998). Pursuant to section 1010 of ISTEA, the FRA identified five HSR corridors in 1992.
The Swift Rail Development Act of 1994 created funding for the Next Generation High Speed Rail Program. This program has been an effective source of funding for HSR planning, preconstruction activities, signaling and equipment upgrades, and right-of-way purchases. Authorizations were extended in 1998 through 2001 by the high-speed rail provisions of the Transportation Equity Act of the 21st Century (TEA-21) (FRA, Corridor Descriptions, 2004). The program is a group of interconnected public/private pattnerships with the ultimate objective of working toward a HSR system. Some of the specific features include: the Advanced Turbine Locomotive (ATL); Advanced Locomotive Propulsion System; and Positive Train Control (Volpe, 2004). Pursuant to Section 1103(c) ofTEA-21, the FRA identified additional HSR corridors in 1998.
The Railroad Rehabilitation and Improvement Financing Program (RRIF) created under TEA-21 authorized the FRA to provide direct loans and loan guarantees up to $3.5 billion to railroads, state and local governments, joint ventures with at least one railroad, and quasi-governmental corporations. Specifically, projects eligible for funding are: construction of new intermodal or railroad facilities; the rehabilitation of existing intermodal or rail equipment; and for refinancing debt in relation to these activities (FRA, Railroad Rehabilitation and Improvement Financing Program, 2004).
Since about 1971, the intercity passenger rail system known as Amtrak has been fhnded through federal appropriations, operating revenues, agreements with freight and commuter railroads, and finances from state and local governments. Federal funding for Amtrak has never exceeded about $1.7 billion per annum (FRA, Corridor Descriptions, 2004, 274). Critics claim that Amtrak is a continual money-loser that taxpayers should not have to subsidize. However, the federal government has subsidized air and highway transportation in the amount of $1.89 trillion over this 30-year period. Only 60 percent of federal highway funding comes from user fees. From 1963 to 1971, none of the $15.8 billion in air transport development costs incurred by the federal government came from user fees. From 1980 to 1989, the majority of air transport funding came from the general revenue fund. (TrainWeb, 2004). In contrast, the European Union agreed to more than $188 billion (U.S. currency) in public and private funding for conventional and HSR enhancements pursuant to the Maastricht Treaty in 1993 (Moore, 2001).
Since about 1997, Amtrak has participated in HSR planning for five regional areas of the U.S. (Amtrak, 2002). One of these corridors is the Midwest Regional Rail Initiative (MWRRI) created by the FRA, Amtrak, and nine Midwestern states. The goal of the MWRRI is to improve the existing passenger rail transportation in these states in accordance with the Midwest Regional Rail System (MWRRS) plan. In turn, the purpose of the MWRRS is to accommodate future regional intercity travel demand by: using existing rights-of-way shared by other rail services; operating trains at up to 110 mph; and by increasing multimodal connections. Forecasts predict annual ridership of 9.6 million passengers by 2010 over the MWRRI. This would be about four times that predicted if present service continued unchanged. On the Chicago-St, Louis corridor, about 65% of the ridership will come from passengers switching from other modes (Wallace Floyd Design Group, 2002). The MWRRI will consist of a hub and spoke system between Chicago and major cities within the Midwest. Total costs for the MWRRI, including infrasti·ucture upgrades and new equipment, are estimated at $4.1 billion over a ten-year period (Amtrak, 2002).
Other recent legislation has attempted to provide funding for rail projects that have impacts on HSR implementation. The Chicago Region Environmental and Transportation Efficiency (CREATE) project is a $1.5 million public/private plan supported by the U.S. Department of Transportation (U.S. DOT) to relieve six major railroad bottlenecks in the Chicago metropolitan area. The program will greatly enhance the Midwest HSR initiative, reduce traffic delays/emissions, improve safety, and provide jobs. Passenger train travel times will be reduced through the creation of six rail-to-rail "flyovers" that will segregate freight trains. The majority of these overpasses/underpasses will be along a passenger express corridor that will include about seven miles of new track and 33 new switches extending south from LaSalle Street Station along current right-of-way (IARP, 2004).
Another example is the July 2003, legislation known as the American Rail Equity Act (AREA) introduced in the Senate which proposed the following for Amtrak over the next six years: "an allocation of $12 billion in operating expenses; establish a national passenger rail system from Amtrak's current routes; create an independent Rail Infrastructure Finance Corporation (RIFCO) to underwrite $48 billion in government-backed tax credit bonds and administer a trust fund to repay the bonds over 20 years; provide a framework for dispute settlement between freights and Amtrak with the condition that freights accepting federal funds for improvements must allow Amtrak to meet its schedule" (Hutchison, 2003). This and comparable legislation proposals have faced difficult funding hurdles given the entrenched Congressional mind set which, while showing gradual openness to flexible transportation options, continues to back policy focusing on roadway construction/maintenance and the expansion of air transport.
III SUSTAINABLE TRANSPORTATION POLICY
"A sustainable transportation system is one that: allows the basic access needs of individuals and societies to be met safely and in a matter consistent with human and ecosystem health, and with equity within and between generations; is affordable, operates efficiently, offers choice of transport mode, and supports a vibrant economy; limits emissions and waste within the planet's ability to absorb them, minimizes consumption of non-renewable resources, reuses and recycles its components, and minimizes the use of land and production of noise" (The Centre for Sustainable Transportation, 1997).
Fossil Fuels Limitations
Analysis by the U.S. Department of Energy has shown that petroleum demand will exceed supply by the year 2037. The International Energy Agency estimates that the oil production peak will occur between2010 and 2020. Most analysts and expetts agree that this peak will occur when about the halfway point is reached in extracting oil from known reserves. More than 40 studies have shown that total world oil production is about 1.8 to 2.4 trillion barrels. Almost I trillion barrels of this amount has been recovered to date with about 28 billion barrels consumed per year. The demand for oil has been increasing by about 3 percent annually while the amount of new oil reserve discoveries has been decreasing consistently over about the past 25 years. The oil peak will result when oil production cannot keep up with demand. Prices will then increase continually until demand decreases (Lowy, 2004). Federal policy has not recognized the potential impact that the limited supply of fossil fuels would have on the transportation system and the entire way of life in the U.S. Transportation policy must recognize these limitations to be sustainable.
High Speed Rail vs. Competing Modes
In part, the flexible funding provisions of ISTEA and TEA-21 reflect a growing realization by U.S. policy that automobile congestion frequently cannot be mitigated by highway expansion. However, due to the extent of the highway system, substantial funds must be appropriated for its maintenance. In addition, unrestrained federal funding continues for the construction and expansion of airports to meet projected air transport demand. Over subsidization of air transport does not fully charge users with the costs such travel imposes on the environment and the quality of life for communities near airports. Beneficial tax, regulatory, and industrial policies for aviation related development is contradictory to market principles and can often be economically harmful due to the limitations on transportation choice (Victoria Transport Policy Institute, 2003, 2-5).
HSR in Europe has clearly shown that, in terms of travel time, it is as fast or faster than air transport for trips up to three hours or distances under about 500 miles. While competing with the airlines, the intermodal connections of European HSR also uses medium distance trips to complement air travel for connections to long distance flights at airports. HSR right-of-way takes up far less than one-half the land necessary for expressways. HSR consumes about three to four times less fossil fuels than the automobile and up to five times less than air transpmt per passenger mile. C02 is the primary contributor to the greenhouse effect. C02 emissions by HSR are more than seven times less than air transport and more than five times less than the automobile per passenger mile. The safety records of HSR in both France and Japan have been exemplary. Projections have shown that, potentially, HSR service between central and southem California could eliminate almost 300 flights per day in this conidor (Moore, 2001). U.S. government statistics show that Amtrak trains use almost 40% less fossil fuels per passenger mile than air transport and about 33% less than the automobile (Sierra Club, 2004). The impact of air transport on global warming is projected to increase from 3.5% to 5-15% of all human impacts (Victoria, 2004). The Saint-Lazare passenger train station in France accommodates 2.5 times the number of passengers as Chicago O'Hare Airport using a fraction of the land acreage
(Midwestern Legislative Conference, 2004).
Construction costs of HSR are estimated to be $1 million per mile or ten times less than highway construction. Midwest HSR would offer the following additional benefits: create 15,000 construction jobs and 2,000 permanent jobs; create more than $9 billion in new economic activity; and increase tourism (Midwestern Legislative Conference, 2004). A substantial portion of the development would be at inner city areas, many of which are economically depressed.
Findings from a study by Cambridge Systematics, Inc., show that construction of HSR in Califomia offers the best solution in managing the state's projected population growth of 54% by the year 2035. As compared to constructing or expanding highways and airports, building the 700-mile HSR system would use less land, promote more business development, and create twice as many jobs (California HSR Authority, 2003).
IV TRANSPORTATION DEMAND MANAGEMENT
Aviation and Highway TDM
There has not been any recognition by U.S. policy of the benefits aviation TDM can provide to promote efficiency of the air transport system and limit excessive air travel. These include: congestion pricing; price reforms; increased tax rates on airports and fuels; development of HSR for medium distance trips; implementation of sustainability objectives; and evaluation of least cost planning alternatives, among others. A sustainable U.S. transportation policy would discourage domestic air travel for mid-length or regional trips where HSR can be competitive or advantageous. Such policy should also promote rail connections from international airports to regional airports to eliminate the need for air feeder flights. An air dominated transport policy also has equity impacts on low-income travelers who often cannot afford to fly (Victoria Transport Policy Institute, 2004). Similarly, federal policy has also not adequately recognized the benefits ofTDM for auto transport to promote efficiency of the road system and limit excessive car travel. TDM techniques including: fuel tax increases; vehicle miles traveled (VMT) taxes; emissions taxes; and a more extensive toll system can effectively reduce the demand for auto transport.
Air transport analysis by the British government has shown that there would not be a need for new airports if demand management policy included the implementation of fuel tax and value-added tax (VAT) on the airlines. Further, this could be done without imposing significant additional costs to passengers. Air transport in Great Britain receives more than £7 billion in subsidies and tax breaks. The airline industry does not pay for the enviromnental impacts it imposes. Such overall policy creates artificial demand that further encourages the construction of more airports (Friends of the Earth, 2003).
An example of the mind set against transportation alternatives including TDM is evident in presidential re-election posturing and advertising. Senator Johm Kerry has reportedly voted for gas tax increases numerous times. However, in an attempt to appeal to voters now that he is running for president, Senator Kerry advocates a plan to reduce gas prices. A Bush advertisement states, "Some people have wacky ideas...like taxing gasoline more so people drive less. That's John Kerry" (CBS News, 2004). Many transpotiation experts agree that a gas tax increase of up to 5 cents a gallon is needed to properly fund maintenance and construction of transpotiation infrastructure relating to reauthorization ofTEA-21 (Peirce, 2003).
High-Speed Rail v. South Suburban Chicago Third Airport in Peotone
An example of transportation policy that does not give full consideration to the potential benefits of HSR is the proposed South Suburban Airport in Peotone, Illinois. O'Hare Airport enplaned 31.0 million passengers in 2002 according to the FAA. About 5 million or 16 percent of these passengers are traveling to cities that could be transported in comparable times by a Midwestern HSR system (L.A. Scott & Company, 1995). In accessing the feasibility of and alternatives to the Peotone Airport, the FAA Tier 1 Enviromnental Impact Statement (EIS) dismissed HSR as a viable alternative. The FAA would only recognize that 8.2 percent of O'Hare passengers travel to the top three cities of a Midwest HSR network. The FAA concluded that HSR would not affect air transport demand significantly in the Chicago area (FAA, T I EIS, 2002, 3-4 to 3-7). However, the FAA did not consider the other destinations that HSR would serve directly and through connections that could potentially divert many other air travelers. In addition, the FAA incorrectly assumes that air transport demand will continue to increase. The FAA did not consider other aviation TDM techniques. The FAA also did not consider the projected oil supply peak which will markedly raise fuel costs and reduce air transport demand further.
The FAA has projected that demand for air transport will be I.7 million operations in 2025. However, the expansion of existing airports could provide capacity for 1.8 to 2.2 million operations annually in the Chicago metropolitan area (Openlands Project, 2003). Implementation of a Midwest HSR system and other aviation TDM policies would reduce this projection and could also alleviate the need to expand existing airports. The FAA failed to comply with the National Environmental Protection Act (NEPA) which mandates that an EIS should "..rigorously explore and objectively evaluate all reasonable alternatives" (40C.F.R.§1502.14(a)).
The alternative is the Gary-Chicago Airport. It has the potential to handle up to 500,000 flights a year. It is much closer to the urban core of Chicago and is adjacent to the South Shore Suburban commuter rail line. In addition, intermodal connections are proposed with three major Amtrak routes between Chicago and Detroit, Cleveland, and Indianapolis. Gary, Indiana, has long been economically depressed and is in need of revitalization. Some of the adverse impacts of a third airport in Peotone are as follows: the destruction of I ,200 acres of floodplain; the envelopment of more than 15,600 acres in the footprint in addition to hundreds of acres of prime farmland; and the paving over of more than 180 acres of wetlands and seven miles of streams (STAND, 2004). The Center for Neighborhood Teclmology offers a preferable alternative to the economic development a third airport would create by expanding the southern Chicago region's industrial base tluough redevelopment of numerous brownfields (Heuer, 2002).
V HIGH-SPEED RAIL INTERMODAL CONNECTIVITY AND FUNDING
Overall, most of Amtrak's routes operate on track owned by the freight railroads. The rail industry has traditionally been responsible for maintaining right of way and infrastructure. Numerous rail routes have been abandoned throughout the 20'h century. The railroads do not have the finances for the capital expenditures necessary to maintain the current infrastructure, let alone make required upgrades to accommodate increased freight traffic and HSR.
Analysis shows that higher ratios of costs to benefits can be achieved with regional HSGT projects that use upgraded rail lines, have cooperation with freight railroads, and use less costly Accelerail technologies as opposed to new right-of-way for HSR and Maglev. Projections show that HSGT will not require subsidies after sufficient investments have been made. Apart from continuing maintenance and future investment needs, revenues could cover some of the initial capital costs (FRA, High Speed Ground Transportation for America, 1997, 9-2 to 9-3).
Primary transportation funding methods have been through debt financing, public-private partnerships, and "pay-as-you-go." The continued use of debt financing, such as in ISTEA and TEA-21, threatens the very stability of the transportation industry and its assets. Amtrak has leveraged the majority of their assets, and more than one-quarter of its operating budget is allocated for debt. Public policy in relation to transportation has traditionally been based upon the "user fee=user benefit" approach. This has caused fragmented infrastructure, noncohesion and unnecessary competition. The government encourages modal competition through policies that promote economic development linked with air travel at the expense of the underutilized passenger rail market. Reconnecting America has proposed a "Last-Mile Intermodal Connections Fund" that would join all modes of transpmtation including passenger rail with highways, airports and bus terminals.
The traditional creative funding options include: VAT on cargo; national VMT fees; national vehicle registration taxes; and tax credit bonds. Incremental funding options include: gas tax increases; increased tolls; increased use of passenger facility charges for airport intermodal connections; redirection of air freight waybill; and the use of railroad fuel taxes for intermodal transportation. These funding techniques provide alternatives, however, the reality is
that revenues need to be increased at both the federal and state levels. The ideal solution to relieve the economic burden of traffic congestion is by improving connectivity of the airports, freight and passenger rail, highways, and parking facilities. "For example, since there is no inherent speed advantage in traveling under 400 miles by airline as opposed to passenger train, building air-rail and air-bus connections within airports makes transportation and economic sense, as we see from investments in such connections all over Europe" (Ankner, 2003, iv-v).
Within the next ten years it will become more readily apparent that the present level of the motor fuel tax is insufficient for the transpmtation investments that are necessary. Funding for transit projects can be appropriated comparable to that of highway projects if criteria is used to insure that the best transportation construction project choices are made. The Highway Trust Fund must continue to be used for all types of transportation (Ankner, 2003, 32). HSR will be an integral part of the intermodal connectivity that is essential to make our transportation system more efficient.
The lack of a Rail Trust Fund comparable to the Highway Trust Fund and Aviation Trust Fund has resulted in increasing train congestion due to the inability to maintain and expand railroad infrastructure and capacity (Lipinski, 2002). Such a federal capital-funding program is one of four principals agreed upon by a meeting of 37 passenger rail advocates. The other principals are: creation of a new agency within the U.S. DOT devoted solely to policymaking, financing, and management of a national inter-city rail passenger system; preservation of the entire current inter-city passenger rail system; and adequate funding for Amtrak to preserve and upgrade service while streamlining management and operations (UTU, 2002).
Great Britain has most recently funded its rail system with a $15 million enhancement program including an optional total funding provision of $45 billion. Considering that Great Britain has one-fifth the population, this would be a per capita funding rate of $225 billion in the U.S. Studies show that the cost for HSR in California would be $37 billion as opposed to $87 billion to build new highways and airports (The Travel Insider, 2004).
There has been a continual gap in federal transportation policy to provide long term funding for HSR infrastructure to create a more balanced, intermodal and sustainable transportation system in the U.S. HSR can effectively meet market demand for medium distance trips of 100 to 500 miles.
Despite the success ofHSGT in the Northeast corridor, subsequent funding for HSR system research, development and demonstration projects from the mid·1970's into the 1990's has been nominal. The flexible funding provisions of ISTEA, TEA-21, and related legislation have helped lay the groundwork for implementation of HSR.
This legislation recognized the benefits of an intermodal transportation system and rail enhancements, but did not provide substantial funding for such projects. The creation of actual HSR operations has been hampered by unrestrained federal funding for highway construction and maintenance. Such policies have created latent demand resulting in increasing traffic congestion and gridlock on our roadways.
Excessive federal spending has continued unchecked for the construction and expansion of airports to meet projected air transport demand. Policymakers incorrectly assume that this demand must be met by increasing air transport capacity. TDM techniques together with HSR service can effectively reduce the demand for both auto and air transport.
Highway and airport-induced sprawl is typically in the form of inefficient and congested automobile-dependent land uses that increase air pollution unecessarily. HSR emissions and fuel efficiency are substantially superior per passenger mile compared to other modes. Global warming will increase significantly if we continue to meet travel demand by building more highways and airpotis.
The looming oil supply peak requires closer evaluation of the transportation system in terms of sustainability. An energy crisis could severely restrict the automobile and air transport in which society has become accustomed. Increased transportation costs would encourage smaller market and commuting areas. The result would be higher population densities near central business districts (CBDs) and other nodes. Rational investments made in HSR, intermodal connections, and transit oriented development (TOD) address this reality by creating more efficient land use patterns.
We need to stop referring to subsidies for HSR and Amtrak, and must emphasize investments. All transportation in the U.S. is subsidized by the taxpayers. To make HSR a viable option, substantial investments in infrastructure and equipment comparable to the funding levels of highways and air transport are necessary. Gasoline taxes must be increased substantially to provide the initial capital funding needed for HSR. Implementation of HSR must be complemented with frequent scheduling to offer travelers more viable alternatives and flexibility. HSR will be self-supporting after the proper investments are made. Revenues may even cover some of the capital costs.
HSR projects create jobs and would revitalize inner city areas around stations. Improvements in the freight railroad industry go hand-in-hand with benefits for commuter and HSR service. Without these contributions to freight transportation, the higher costs of trucking would be reflected in prices paid by consumers. HSR projects that include rehabilitation of existing rail lines and cooperation with the freight railroads fare better in cost and benefit analyses as opposed to construction of new right of way
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