How Much Per Driver Did US Freeways Lose?

Oct 27th, 2009 | Posted by

A study that is getting a fair amount of coverage online today is that from the Pew Economic Policy Group, which shows Amtrak “lost $32 per passenger in 2008″. The full report breaks it down route by route, showing that only a few routes generated surpluses in 2008, including the only high speed rail route in the Amtrak system, the Acela.

One might see that as a positive sign for high speed rail, proving that it won’t experience the same kind of operating losses the other Amtrak lines tend to produce. Already some are arguing the report should produce further support for HSR at the expense of other Amtrak routes.

Unfortunately, the report these analyses are based on is deeply misleading and should not be used by anyone to set passenger rail policy or transportation policy.

The number one flaw of the Pew report, by far, is it does not compare 2008 numbers to previous years. The report merely examines Amtrak route performance in 2008 alone. As you all remember, 2008 was a rather interesting year for American transportation. Most passenger trains – from Amtrak to the local subways and streetcars – experienced significant spikes in ridership as a result of the spike in gas prices.

Any study of 2008 passenger rail that does not take into account these effects is not credible. At all. And a study that doesn’t even compare to past years is a joke.

Let’s look at a California Amtrak route that DOES publish such credible studies – the Capitol Corridor. Below are excerpts from their 2008 Annual Performance Report, available at the link in the previous sentence.

These charts show a steady increase in both ridership and revenue on the Capitol Corridor, even before the 2008 spike. When presented in context, you see a successful service. Compare that to the Pew report, which took a snapshot of a single year, out of context, pointed out “loss per passenger” that makes Amtrak look like a failure.

This chart is even more impressive and significant. It shows that state subsidy levels (Capitol Corridor is funded by the state of California) have remained pretty much static for the last eight years, yet the Capitol Corridor has had dramatic success at growing ridership and bringing its costs under control.

Eugene Skoropowski, managing director of the Capitol Corridor Joint Powers Authority, presented these charts to the NARP/RailPAC meeting in San Carlos last Saturday. He noted that the 2009 numbers to date show about a 10% decline in ridership from the 2008 highs, but that they’re still above FY 2006-07 in terms of revenue and riders.

These numbers paint a very different picture than the flawed and ridiculous Pew study. Amtrak routes have experienced steadily growing ridership since about 2002, and have witnessed improving farebox recovery rates. Further, since we know that the price of oil is merely in a temporary respite and will rise again once economic recovery returns, we can expect Amtrak to continue on a positive upward trend of increasing ridership and increasing financial returns on investment.

And yet that doesn’t get at the other enormous problem with the Pew study, which is conceptual. Has Pew done a study of the loss per driver of US freeways?

As anyone who has driven in the Bay Area recently will attest, traffic is much lighter on freeways as a result of the recession. This phenomenon can be found nationwide. So how much money have American freeways lost per driver in 2008? In 2009? What is the trendline?

The Pew study is reinforcing a deeply biased and illogical concept, that passenger rail has to be held to standards of “profitability” that we simply do not demand of our freeway network. As Skoropowski noted at the Saturday meeting, federal highway funds were given to states with a requirement that states pay the ongoing maintenance costs. That money is supposedly paid out of gas taxes, but neither the state nor the federal gas tax has been increased in nearly 20 years. As we expand freeways and as Californians in particular conserve fuel through driving less and buying more efficient cars, the gas tax is less effective in paying these costs, requiring, yes, government subsidies. And of course, nobody has ever once proposed paying back the $425 billion (in 2006 dollars) it cost to build the system.

In short, Pew’s study is intended to make Amtrak and passenger rail in general look like a bad investment, when in fact it is anything but that. Sure, the numbers from the Acela prove that HSR will generate revenue, but that’s not why we support high speed rail. HSR advocates should condemn this flawed study and resist the temptation to use it to bolster our already strong case for HSR.

  1. Matthew
    Oct 27th, 2009 at 17:33
    #1

    If you consider fuel taxes to be the "fares" paid by drivers, you can use that to figure out how much the highway system lost (or possibly earned?) per passenger mile.

  2. YESonHSR
    Oct 27th, 2009 at 17:58
    #2

    I guess a service millions of Americans use is not worth 32 bucks
    a person yet we can spend 1 trillion on a war and none of usual types crying about Amtrak will blink an eye at that figure

  3. flowmotion
    Oct 27th, 2009 at 18:08
    #3

    @Matthew – the federal highway trust fund (funded by gas taxes) is currently running in the red. Plus you have earmarks, stimulus, and so on paid out of general revenues.

    (This is fairly recent, the fund maintained a surplus for many years.)

    On top of that you have state funding, which varies widely state-to-state (some run in the red, some in the black), and even local funding such as sales tax measures in parts of California.

    Its a complicated question, but the answer is that drivers are not likely paying their own way. (And that's even before you consider local streets paid for by property taxes, development fees and so on).

  4. Evan Goldin
    Oct 27th, 2009 at 18:17
    #4

    So…what's the answer to the headline? "How Much Per Driver Did US Freeways Lose?"

    I'd love to actually know the answer. You don't seem to give a stat or anything.

  5. Brandon in San Diego
    Oct 27th, 2009 at 18:24
    #5

    Don't get lost in the freeway versus rail comparison!

    Some things will not change… there's insufficient space to continuously add freeway lanes AND, more capacity only increases auto use and more reliance on foreign oil.

  6. Rafael
    Oct 27th, 2009 at 18:31
    #6

    @ Matthew -

    fair enough, let's look at just the federal picture to keep things simple. The federal government levies $0.184/gallon of gasoline and $0.244/gallon of on-road diesel (ULSD). By definition, a barrel of petroleum products equals 42 US gallons.

    ===
    Total vehicle miles traveled 2008 (source):

    2921.9 billion miles (est.)

    ===
    Revenue:

    Total gasoline supplied by US refineries in 2008 (source):

    3,290,057 * 1000 * 42 * $0.184 = $25.426 billion

    Total on-road diesel (ULSD) supplied in 2008 (source):

    1,174,004 * 1000 * 42 * $0.224 = $11,045 billion

    Total motor vehicle fuel tax revenue: $36.471 billion

    There are also a few other types of revenue that go toward the highway trust fund, e.g. a tax on tires, a special sales tax on commercial vehicles and tolls. Historically, those amount to about 10% of fuel tax revenue, though the ratio varies by year.

    I wasn't able to find a hard number, but my minimally educated guess is that roughly $40b went into the HTF in CY2008.

    ===
    Spending:

    In addition to the Highway Trust Fund, there are surface transportation bills, earmarks for specific projects, stimulus bills etc. Add to that the relationship with state and local government funding of both capital projects and maintenance, for both road and transit.

    I'll refrain from giving a number because I don't fully understand the complexity.

  7. BruceMcF
    Oct 27th, 2009 at 18:50
    #7

    Bear in mind that even when the Highway Trust Fund is not in the red, its not "Highways Paying Their Own Way" – its "Highways As Well As Those Streets That Do Not Qualify for Highway Trust Fund Support, Paying Highway's Way".

    Every single Highway Trust Fund Funded road is cross-subsidized by non-qualifying streets, primarily urban streets funded by property taxes, state and local sales taxes and state and local income taxes.

    And the car system cannot work as it does without the appropriation of property in the form of zoning requirements for parking provision.

    And another operating subsidy in support of the car system is the substantial portion of the police budgets of towns and cities for regulating driver misbehavior as well as policing motor vehicle theft.

    However, there is a serious danger in chasing down the dollars and cents involved that in framing the question too narrowly, the largest costs are overlooked. After all, the most efficient trip is the one that does not need to be taken, since you are already there. Single-use zoning in support of auto-dependent development creates trips by eliminating opportunities for combining trips and opportunities to reside close to multiple common destination.

    As I argued in the argument that metastasized in the comments to the Sunday Train, all transport policy is social engineering, including transport policy designed to perpetuate the status quo. However, since the status quo is not tenable, the "easy answer" of social engineering "the same way we were social engineering before" is not an option.

  8. Robert Cruickshank
    Oct 27th, 2009 at 18:53
    #8

    Evan, the question was mostly rhetorical. I don't really think it needs an answer. The point is that the Pew study is stupid because it is based on stupid concepts.

  9. Joey
    Oct 27th, 2009 at 19:19
    #9

    Remind me – is gasoline subsidized in the USA?

  10. Anonymous
    Oct 27th, 2009 at 19:34
    #10
  11. Brandon in San Diego
    Oct 27th, 2009 at 19:45
    #11

    Yes… gas is subdized. You do not see it in the US transportation budget, but many government activites go toward supporting gas to Americans… The US military is a good example.

  12. Anonymous
    Oct 27th, 2009 at 19:45
    #12

    Hey Utopians, looks like you get a car-free day tomorrow. Enjoy that BART ride under the bay…

    …and how many Caltrans idiots signed off on "Made in China" quality for critical infrastructure parts?

    Pay the price, build HSR using US suppliers, or at least from countries with strict quality controls and legal recourse. That would exclude a country so lax that their own children's milk is poisoned.

  13. Alon Levy
    Oct 27th, 2009 at 19:59
    #13

    Matthew, in Texas the DOT did a related calculation, looking at how much money in revenue each highway produced per dollar spent on construction and maintenance. The answer was, at best 50 cents, and at worst 16 cents.

    http://www.txdot.gov/KeepTexasMovingNewsletter/11202006.html#Cost

  14. Anonymous
    Oct 27th, 2009 at 20:03
    #14

    Wow. Pew even hates HSR, and they're usually for big government investment. Who did Kopp piss off?

  15. lyqwyd
    Oct 27th, 2009 at 20:03
    #15

    Hey Anon, the piece that broke was made in the US:

    "The parts needed to make the fix were manufactured overnight by Stinger Welding Inc. in Coolidge, Arizona"

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/07/BAQU19JGKE.DTL

  16. Peter
    Oct 27th, 2009 at 20:27
    #16

    @ lyqwyd

    Was the part that was replaced one of the parts that just broke?

  17. Anonymous
    Oct 27th, 2009 at 20:30
    #17

    Interestingly all the Reaganites who loathe rail transit overlook the most telling criticism.

    That would be that political corruption invariably taints every major project. You vote for a seemingly good idea and then watch while some LA crooks totally **** it up. Yeah, I mean Palmdale.

    I can't wait to vote against the water project. Maybe a little payback.

  18. Evan
    Oct 27th, 2009 at 20:48
    #18

    @Robert: I hear you. But I talk to a lot of people who complain about the cost of high-speed rail and public transit in general, both capital and operating. I've been hoping to add some data to my "highways-cost-money-too" rhetoric.

  19. Peter
    Oct 27th, 2009 at 20:53
    #19

    Today is another example of why we need to have a second rail route crossing the Bay. Be it a second Transbay Tube or Dumbarton Rail, we need options in case disaster strikes.

    BART may have been up and running the day after the Loma Prieta earthquake, but there's no guarantee the Transbay Tube wouldn't get wiped out in a second earthquake. If the Bay Bridge or some other bridge was knocked out at the same time, we'd have absolute havoc.

  20. dave
    Oct 27th, 2009 at 21:48
    #20

    OMG, Amtrak is losing money with unprofitable routes. Hey, lets upgrade these routes to make them profitable.

    I think these anti-passenger rail editorials are shooting themselves in the foot by helping show that we are not investing enough in passenger rail. The ridership is there, it's just that we need to harness/access it.

  21. mike
    Oct 27th, 2009 at 22:36
    #21

    The main point of the Pew report is that you need to account for depreciation costs when doing these profit/loss calculations. Amtrak uses a depreciation rate of around 4%. To do an honest comparison, you would need to do the same thing for highways.

    According to the 1992 copy of "Highway Statistics" that I have handy, the US roadway system contains 1.8 million lane-miles of paved urban roads, 2.2 million lane-miles of paved rural roads, and 6.4 million lane-miles of gravel/unimproved rural roads.

    One lane-mile of paved urban road costs $2.5 million and one lane-mile of paved rural road costs $1.2 million (Source: Florida DOT). I don't have estimates for one lane-mile of gravel roadway, so let's lowball it and say $0.3 million per lane-mile.

    Total value (not including real estate) of the US highway system is thus $2.5m*1.8m + $1.2m*2.2m + $0.3m*6.4m = $9.1 trillion.

    At a depreciation rate of 4%, you are talking $364 billion per year. This translates to 12.5 cents/vehicle-mile using the figures Rafael gives.

    Coincidentally (or perhaps not), that is quite close to the 11 cents/passenger-mile that Pew estimates Amtrak loses above and beyond the simple cash flow loss of 4 cents/passenger-mile.

    Of course, there are many other subsidies that go to the roadway system as well (the biggest being free real estate, direct cash subsidies, and subsidized/free parking). The numbers above tell only part of the story, but they're pretty big even by themselves.

  22. jim
    Oct 27th, 2009 at 23:56
    #22

    don't forget to figure out the value of the lives of each soldier who dies for oil times the number of total dead soldiers and then send the bill to the americans who want to fill their tanks at any cost. yeh, remember to inlcude that figure. what was it again?

  23. Anonymous
    Oct 27th, 2009 at 23:58
    #23

    Evan, the question was mostly rhetorical. I don't really think it needs an answer.

    Typical Cruickshank bloviation. He can't even answer his own rhetorical questions.

  24. BruceMcF
    Oct 28th, 2009 at 03:34
    #24

    Anonymous/9:03 said…
    "Wow. Pew even hates HSR, and they're usually for big government investment. Who did Kopp piss off?"

    That's Amtrak in the Pew study, in't?

    "Anonymous/12:58 said…

    "Evan, the question was mostly rhetorical. I don't really think it needs an answer."

    Typical Cruickshank bloviation. He can't even answer his own rhetorical questions."

    (1) You do know what "rhetorical question" means, don't you? You realize that its a question posed as a rhetorical device, as opposed to an effort to elicit an answer? Hmmm?

    (2) The assertion was whether it needs an answer, not whether an answer could be provided. Evans has a start – if we wanted to focus it in on the Interstate Highway, VMT on highways as a proportion of total VMT would give us a rough guide of the Interstate Highway "farebox" share of gas taxes (under 50%). Add 50% for externalities and we'd be getting close to a rough ballpark estimate – and, of course, the biggest costs imposed on society in terms of a settlement system that requires egregious material and energy waste completely ignored in the process.

  25. TomW
    Oct 28th, 2009 at 05:35
    #25

    I did some quick analysis on the Amtrak Route Performance table, and noticed two things:
    1) Their farebox recovery ratio is 90%, which by North American public transit standards is simply excellent.
    2) If passenegers increased 15% (and costs stayed the same), Amtrak would break even. Alternatively, if passenger-miles increased 10% (and costs stayed the same), Amtrak would break even.

    Now, I know full well that if passenegers increase, costs increase, unless there is some a lot of unused capacity. Nevertheless, it shows that Amtrak does run things reasonably well financially.

  26. Andre Peretti
    Oct 28th, 2009 at 05:58
    #26

    Should a public service be financially profitable?
    Last week, on the French parliamentary TV channel, an opposition leader explained how the government's obliging the SNCF to be profitable had caused a total degeneration of the public service.

    He took the example of the Paris-Lyon TGV line, considered the most successful in Europe with its 25% profit margin.
    On most of its length (the trunk line) it is saturated with 12 trains per hour at peak times.
    The solution exists: installing the ERTMS level 2 signalling system which would allow 19 tph, at a cost of €1 million/km. Any self-respecting national railway would make this investment.
    Not the SNCF. With their eyes focused on the yearly balance they have chosen to make scarcity profitable by adopting an aggressive yield management policy. The result is that, unless seats are booked long in advance, the tickets get so expensive that many people prefer to drive or fly. So much for the government's war on CO2 and oil dependence.
    Thus, according to him, the TGV's success as a business hides a total failure as a public service.

    Of course, he is in the opposition and that must be taken into account. Yet, it shows that you can't evaluate Amtrak or the SNCF as if they were ordinary businesses. You have to consider the benefits they bring, or don't bring, to the community as a whole, and this is far more complex to assess.
    In that respect, fragmentary compilations like the Pew report are worthless.

  27. Anonymous
    Oct 28th, 2009 at 08:30
    #27

    Robert… Wait, are you suggesting that at a lower (pre-2008 spike) ridership, that Amtrak would have been more profitable on a per rider basis?

    (Because you argue – 2008 is such a bad year to use for profitability analysis because their ridership is so spiked in that year?)

    I thought that high gas prices are exactly what will drive wild success of the rail alternatives.

    Are you saying high gas prices indeed spiked ridership but drove lower profitability?

    How does that work?

  28. Peter
    Oct 28th, 2009 at 09:22
    #28

    I think that after yesterday, we should seriously start lobbying MTA and Caltrans for either a new Transbay Tube or for implementation of Dumbarton Rail.

    BART to San Jose or the OAC won't help us the next time a bridge goes out.

  29. BruceMcF
    Oct 28th, 2009 at 09:57
    #29

    Anonymous said…
    "Robert… Wait, are you suggesting that at a lower (pre-2008 spike) ridership, that Amtrak would have been more profitable on a per rider basis?

    (Because you argue – 2008 is such a bad year to use for profitability analysis because their ridership is so spiked in that year?)"

    Except that is not his argument. His argument is that the numbers are presented without context, as if no other intercity transport receives capital or operating subsidies, and neglecting to look at the trends.

    Completely swapping out the argument made for another, and then attacking the argument you made up is called "attacking a straw man". So since you are having trouble deciding on a pseudonym, "mule" might be good – they'll attack a straw man with gusto.

  30. jim
    Oct 28th, 2009 at 10:53
    #30

    I know at in terms of increasing ridership, we are not not alarmed by the drio this year compared to last year because the spike last year was an anomaly, steady gains continue even with this years drop compared to 08.

    As for increased costs with increased ridership. We are doing more with less when it comes to labor aside from basic increases for costs living. we do not have t hire a huge new work force as tech is being used to make up the difference.

    The biggest costs will be the long over due capital investments. One reason I think amtrak should operate ca hsr is that we can kep costs lower than anyone for the simple fact that we already have existing staff, stations, res, in place in most locations. any other company would have to start from scratch building up systems and employee base.

    I agree wit andre that public benefit of things such as rail should be considered to be like highways, which also don't make a profit but act as a public benefit to commerce and security..

  31. Anonymous
    Oct 28th, 2009 at 11:02
    #31

    No BruceF – his first and primary point is precisely that 2008 figures are taken alone without the prior year compares. "The number one flaw of the Pew report, by far, is it does not compare 2008numbers to previous years."

    So I'd still like to know why a year with spiked ridership is a 'bad' year for profitability, according to Robert.

    His second argument is basically the classic kindergarten argument, 'look over there' trick. Because roads do not make a profit, why should rail. Well, first of all CHSRA promised the tax payers that CHSR would make a profit. That's the main reason. And if it can't then why did they promist it would? Then CHSRA should close up shop and stop lying to the public.

    And Robert by the way makes no attempt to quantify the economic utility of roads versus rail (Roads being infinitely more economically productive). Robert's doing the childish rhetorical equivalent of trying to distract from getting pummeled himself, by pointing at some imaginary horrifying flying object in the distance to throw up a desparate distraction, then sucker punching and running.

  32. Peter
    Oct 28th, 2009 at 11:07
    #32

    @ Anon

    Once again, you miss Robert's point. He is complaining that a) the study did not take any sort of trends into account, and b) that the study was done completely out of context. Finally, he made the point that rail can function quite effectively with the most minimal in operational subsidies.

  33. Rafael
    Oct 28th, 2009 at 12:03
    #33

    @ Peter -

    "new Transbay Tube or for implementation of Dumbarton Rail."

    Just to play devil's advocate: how about moving jobs from SF to the East Bay, preferably well east of the Hayward fault?

    The Bay Bridge and BART tube both have capacity in both directions. Before you call for building even more super-expensive regional transit infrastructure, you should figure out how to make better use of what's already in place.

    The city of SF may not like it, but forcing hundreds of thousands to trek across the Bay every day is bad economic policy for the region and the state.

  34. lyqwyd
    Oct 28th, 2009 at 12:07
    #34

    @Anon

    regarding your statement:

    "Well, first of all CHSRA promised the tax payers that CHSR would make a profit"

    The Pew report actually supports CHSR being profitable, as the NEC HSR is profitable, and that doesn't provide anywhere near the speeds that CHSR will.

    I believe Robert's point regarding 2008 is that subsidies have been going down, and the gas spike strengthened that trend. Given that gas prices are likely to go up again once the economy improves, and continue to rise over the forseable future, the trend towards profitability will only increase. I don't speak for Robert, but that was my understanding of what he wrote.

  35. lyqwyd
    Oct 28th, 2009 at 12:08
    #35

    @Peter

    Regarding your question earlier as to whether the part that broke was the part that was earlier fixed, yes, that piece that they installed to fix the crack they found on labor day was the part that broke yesterday.

  36. Anonymous
    Oct 28th, 2009 at 12:11
    #36

    "Before you call for building even more super-expensive regional transit infrastructure, you should figure out how to make better use of what's already in place"

    Yes, but improving Caltrain for the SF-SJ connection to HSR – heaven forbid we should focus on improving Caltrain before duplicating all the way through the Peninsula!

    SF-SJ via Caltrain
    SJ-Stockton via Altamont
    Stockton to LA HSR via I5 or 99

    (Instead of Altamont from SJ To Stockton PLUS Pacheco which constitutes gross duplication.)

    Stockton intersects both 99 and 5 -so HSR can go down either from Stockton to LA.

    So, Why DON'T we make the most of what we already have and avoid duplicating infrastructure that's already in place before building more super-expensive infrastructure????

  37. jim
    Oct 28th, 2009 at 12:12
    #37

    @anon And Robert by the way makes no attempt to quantify the economic utility of roads versus rail (Roads being infinitely more economically productive).

    you know this or you're just making stuff up?

    A system such as ca hsr will bring unlimited possibilities and benefits now and indefinitely into the future for california.

    First HSR has a much smaller land footprint, than a highway.

    Second, it a much higher speed and faster travel time than driving.

    Third, it has nearly unlimited capacity without slowing down compared to roads.

    Fourth, it can be expanded and adapted to wrk as both regional, long distance and commuter rail.

    Fifth, it can be adapted to high high speed freight, mail, package express, etc.

    Fifth it creates a reliable transportation core to which other transit planning can be coordinated including airlines.

    What can a freeway do/ It lets you drive, sometimes at the speed limit, usually below, along at a pokey 65 mph, stopping and going, while dragging around 3000 pounds of noxious spewing metal.
    How much of your life do you spend pumping gas?
    You know those fumes you breathe while youre at the pump, what do you think those fumes are doing to your health over the course of 30 years, twice a week?
    How many american boys are dying so you can keep pumping?

  38. jim
    Oct 28th, 2009 at 12:17
    #38

    Lets call your opposition what it really is:

    " I don't give a shit about the consequences because Im not an old school american who knows what it means to adapt and sacrifice to make my country better, Im a new american who only believes in it being all about my needs wants and convenience consequences be damned and I don't have to take nay responsibility for my county's future because I'm able to live in anonymity and not be held responsible, I can be just another asshole in the road trying to get what I want before the other guy"

    Isn't the the new american way.

  39. Rafael
    Oct 28th, 2009 at 12:31
    #39

    @ jim -

    will you ever make it through a whole day without swearing in at least one comment? Knock it off.

  40. BruceMcF
    Oct 28th, 2009 at 12:35
    #40

    Anonymous/Mule said…

    "No BruceF"

    … Actually I went to the minor trouble of bothering to pick a pseudonym. Its BruceMcF to you, a lazy Anony-Mouse …"

    "his first and primary point is precisely that 2008 figures are taken alone without the prior year compares. "The number one flaw of the Pew report, by far, is it does not compare 2008numbers to previous years."

    So I'd still like to know why"

    The following is where you lie about the argument that Robert made:

    "a year with spiked ridership is a 'bad' year for profitability,"

    … the claim that you said someone made and …

    "according to Robert."

    The person you said made the claim.

    And of course it is a blatant straw man – Robert's conclusion of his first point is:
    "These numbers paint a very different picture than the flawed and ridiculous Pew study. Amtrak routes have experienced steadily growing ridership since about 2002, and have witnessed improving farebox recovery rates. Further, since we know that the price of oil is merely in a temporary respite and will rise again once economic recovery returns, we can expect Amtrak to continue on a positive upward trend of increasing ridership and increasing financial returns on investment."

    Robert points out the empirical fact that before the spike in ridership following the first of this century's oil price spikes, Amtrak was already experiencing increasing ridership and rising operating ratios.

    And defines increased ridership and improving ratios as improving financial performance – an improvement that someone simply reading the study under discussion would continue to be unaware of.

  41. BruceMcF
    Oct 28th, 2009 at 12:43
    #41

    Anonymous said…
    "His second argument is basically the classic kindergarten argument, 'look over there' trick. Because roads do not make a profit, why should rail.

    "Well, first of all CHSRA promised the tax payers that CHSR would make a profit. That's the main reason. And if it can't then why did they promist it would? Then CHSRA should close up shop and stop lying to the public."

    If closing up shop on lying is your proposal, then you are the one who has to close up shop, because you are lying.

    What the CHSRA promised was that the system would generate an operating surplus, which would help provide capital funding for Stage 2.

    Since the Pew study indicates that even the barely-faster-than-driving Acela generated an operating surplus, there is nothing in the study to cast doubt on the CHSRA system generating an operating surplus.

  42. jim
    Oct 28th, 2009 at 12:54
    #42

    @rafael.

    okay tomorrow for sure.

  43. Anonymous
    Oct 28th, 2009 at 14:10
    #43

    There's nothing in the study, and yet the posters here continue to throw out this ridiculous lament that its not fair that trains should be required to run subsidy free, because freeway system isn't held to the same standard. The issue is whether train system is making profit, and even in the best of years (spiked 2008) its STILL not, and Robert STILL doesn't like the year they chose, and STILL has to run over to his go-to complaint "but the freeways are subsidized". Yes, because freeways are worth it. CHSRA is the one that made the committment to operate without any form of subsidy. So let them if they're so smart. Its an impossible hurdle they set for themselves – its OBVIOUS why Robert keeps thowing the cost/subsidy of freeways out there – because he's setting the stage (excuse) for CHSRA inevitable failure to deliver on its financial promises.

  44. Anonymous
    Oct 28th, 2009 at 14:11
    #44

    Bruce F, Brucemcf, Brucemcmuffin. Its all anonymous. who cares, really what form the anonymous takes? What difference does it make? Its really just an opportunity for me to stick in your craw, and you to resort to childish name calling – isn't it.

  45. lyqwyd
    Oct 28th, 2009 at 16:04
    #45

    As mentioned several times, the report reinforces the idea that CAHSR will be profitable. As does every other HSR system out there.

    Freeways aren't profitable, even when completely maxed out, while HSR systems are profitable long before they reach maximum capacity.

  46. Alon Levy
    Oct 28th, 2009 at 16:41
    #46

    Now that I'm thinking about it, the Pew study isn't very useful, because it doesn't allocate depreciation costs based on where there is a lot of actual depreciation going on. Depreciation isn't constant either per passenger or per passenger mile, which is why Pew got the nonsensical result that the Regional is profitable per passenger but not per passenger-mile.

    The correct way of allocating depreciation would be to send Amtrak a freedom of information request about where its capital investments go and what its capital stock is, and then apply depreciation formulas. Not all routes are equally capital-intensive.

  47. Anonymous
    Oct 28th, 2009 at 16:46
    #47

    CHSRA party line is that the Tehachapis are not mountainous, only the Grapevine.

    See: http://www.railpictures.net/viewphoto.php?id=301943&nseq=1

  48. BruceMcF
    Oct 28th, 2009 at 19:10
    #48

    Anonymous said…
    "Bruce F, Brucemcf, Brucemcmuffin. Its all anonymous. who cares, really what form the anonymous takes? What difference does it make?"

    If you pick a pseudonym and stick to it, it indicates you are willing to either back your arguments or admit it when you change your mind. If you decide to post as one of a sea of "Anonymous", it indicates that you are not willing to stand by your arguments.

    "Its really just an opportunity for me to stick in your craw, and you to resort to childish name calling – isn't it."

    You elected to leave it open to others what to call you – that was your choice. However, I was wrong to call you Mule. Mules may be stubborn beasts, but they are honest.

    Oh, and did I mention that when you stated that the CHSRA promised that the system would turn a profit, you were lying? That as anyone who wishes to can easily confirm for themselves, that the CHSRA before the vote, and now, projects an operating surplus to partially fund capital costs.

    And that anyone can easily confirm that that the Pew report under discussion shows the Acela system, which is at present no faster than proposed Emerging HSR systems in effective trip speeds, generates an operating surplus, despite the large number of more heavily subsidized transport options available between various origin/destination pairs along the Northeast Corridor.

    Given the fact that the transport opportunities they offer generate third-party benefits, intercity road, air, and HSRail systems all require capital subsidies, if we are going to have the economically efficient amount of intercity transport.

    The difference with road and air is that air and roads run operating deficits, while the California HSR system will generate operating surpluses.

  49. BruceMcF
    Oct 28th, 2009 at 19:27
    #49

    Anonymous said…
    "this ridiculous lament that its not fair that trains should be required to run subsidy free, because freeway system isn't held to the same standard. The issue is whether train system is making profit,"

    That would be an idiotic thing to make the issue, wouldn't it? Anybody that said, "It does not matter that the road system as a whole runs at a loss, and the air system as a whole runs at a loss, the question is why the train system as a whole does not run at a profit" …

    … is not credible as a rail opponent – it seems more like somebody presenting a satire of rail opponents.

    Only doctrinaire libertarian ideologues would insist that any any common carrier intercity transport system ought to be run on a for profit basis.

    In a state in a perennial state of crisis, because of the anti-democratic provisions of the "tax revolt", it certainly is convenient that HSR will generate an operating surplus.

    However, the fact that HSR is a more capital efficient way to provide the intercity transport capacity that is in its scope is sufficient reason to choose HSR, given that we already know it will not require operating subsidies.

    The fact that the the Energy sector is a gaping wound in the US current accounts and that HSR can be operated with sustainable renewable domestic energy rather than imported fossil fuel energy is sufficient reason to choose HSR.

    The fact that transport is 30% of the CO2 emissions problem, and HSR can be powered by available sustainable, renewable, zero-emission energy technology is, once the commitment is made to power the HSR system in that way, sufficient reason to choose HSR.

    The fact that HSR can allow more households to become car-independent and expand the opportunity to reverse the massive ongoing property takings in the form of zoning regulations for parking provision – well, on its own probably not sufficient reason, but a nice bonus.

  50. Anonymous
    Oct 29th, 2009 at 07:15
    #50

    The CHSRA said to the voters they would run without ANY subsidy. That's what THEY claimed to voters, and we all knew then and know now its an impossible promist and will never come to pass, and therefore that HSR in California won't ever in a million years happen under that parameter.

    Don't cry now to opponents who are simply pointing out the CHSRA's stupidity and lies. Why didn't they tell the truth? – that HSR would need forever after public subsidy – just like the rest of our major infrastructure, that it would cost 100's of billions of build and that they'd barrel through whatever and wherever they damnned well pleased? Because they knew the voters wouldn't agree to it, not any of it.

    HSR can run on renewable energy? Well it could if pigs were flying and if California had that incremental renewable power generating and distribution capacity. But neither are true, and the state can't afford to build it either. CHSRA seems to think renewable energy is going to be absorbed by the trains through osmosis from the sunshine because they certainly aren't going to PAY to have it generated.

    So again, CHSRA lying to the public – because HSR 'can' but it won't.

    And exactly how does HSR allow families to become car independent. Specify exactly how a family uses HSR to get off car dependency. Start with school in the morning, walk us through the day and explain exactly how a family uses HSR to get through life without a car. Don't be afraid to be specific.

    And mules are honest? Really? I guess that's because you've never had one lie to you? McMuffin, are you smarter than a 5th grader? I could care less what you call me. You're wrong and you continue to be wrong, and all the name calling in the world doesn't make you any righter.

  51. Anonymous
    Oct 29th, 2009 at 07:41
    #51

    Bitter that your old man macain world is dying ???HAHA HSR WILL BE BUILT like it or not!!!

  52. lyqwyd
    Oct 29th, 2009 at 07:56
    #52

    @Anon

    CAHSR will operate at a profit. Nothing anywhere has credibly said otherwise.

  53. BruceMcF
    Oct 29th, 2009 at 08:22
    #53

    Anonymous said…
    "The CHSRA said to the voters they would run without ANY subsidy."

    Ah, I see the problem – you (just like lygwyd, btw) do not understand what a profit is, so you cannot understand why "operating without a subsidy" and "operating at a profit" are two different things.

    The California Express HSR system will generate an operating surplus. It requires a partial capital subsidy, so it will not operate at a profit, but yes, while road transport and air transport require annual operating subsidies, the HSR system will not require operating subsidies – it will have an operating surplus.

    lywqyd: "CAHSR will operate at a profit. Nothing anywhere has credibly said otherwise.:

    CAHSR has said so for one: their budget is predicated on capital subsidy for the construction of Stage 1. Operating surpluses will only cover capital costs for construction of later stages.

    Don't oversell. The CAHSR has promised an operating surplus. Actually, the Amtrak figures that are being discussed add additional evidence in support of that and offer no evidence to contradict that.

    Of course, the only intercity transport systems that run "at a profit" are
    (1) those that run on subsidized infrastructure that they do not own and
    (2) freight railroads.

    Everything else is subsidized, the only question is whose sets of books the subsidies are entered into.

    Further, it would be a mistake to not subsidize intercity transport, because of the third-party benefits it generates. The problem with current policy is that intercity rail is discriminated against – there is no level play where all projects that serve intercity transport needs compete against the same criteria for funding.

    And a substantial problem of the Pew study is that policy questions are how to distribute capital subsidies and which operations are the highest priority candidates for operating subsidies.

    Unless the criteria are blatantly rigged against rail, the past eight decades of bias against capital subsidies to rail transport ensures that there will be highly effective rail projects competing for the capital funding, and given technological advances in the past eighty years, many of those will be higher speed rail than we presently have.

  54. Anonymous
    Oct 29th, 2009 at 09:19
    #54

    The CHSRA will need an ongoing public subsidy because it has been sabotaged with a major gratuitous detour.

    Thirty years from now embarrassed CHSRA flak-catchers will be apologizing for the Tehachapis detour much as BART spokesmen do now for their broad gauge botch.

  55. BruceMcF
    Oct 29th, 2009 at 11:04
    #55

    Anonymous said…
    "The CHSRA will need an ongoing public subsidy because it has been sabotaged with a major gratuitous detour."

    This would seem to be the argument that HSRail should avoid network economies and run point to point like airplanes?

    Since its just an assertion without supporting argument, its difficult to discern – and the argument is made weaker by the fact that operating surpluses could well result from CV to Bay and CV to LA Basin patronage alone. Its the capital costs that rely on the addition of LA Basin / Bay travel for justification.

  56. jim
    Oct 29th, 2009 at 11:39
    #56

    Thirty years from now embarrassed CHSRA flak-catchers will be apologizing for the Tehachapis detour much as BART spokesmen do now for their broad gauge botch.

    No they won't. The Antelope Valley is part of Los Angeles County. Probably the most populous county in the nation and that's why they are getting the addtion service and stations. LA county has no intention of hindering continued growth and the economy that comes with that growth and this routing will ensure that the vast majority of LA County residents both current and future, will have ample access to the network. In fact more access than any other county which is as it should be considering their size, population and political clout in the state.

  57. Anonymous
    Oct 29th, 2009 at 11:47
    #57

    The I-5-Grapevine racetrack will generate traffic not disappoint it.

    The single biggest danger to the future of hsr is not cost overruns but buyers remorse. It is much more likely that promises will not meet expectations rather than costs. Environmental problems such as noise, vibration, and visual blight will be worse than touted. BART provides a real world example of this. Speeds along 99 will have to be dampened due to public outcry. Performance, maintenance and labor problems will almost certainly emerge.

    The best defense against these inevitable snags is a high-speed backbone route. Just consider the possibility of technical innovations allowing a ramp up of top operating speeds. This would much easier to implement on the I-5 alignment. Urban areas will want lower rather than higher speeds. In general the I-5 is the most expeditious way to deal with residual environmental and agricultural complaints.

  58. jim
    Oct 29th, 2009 at 12:17
    #58

    In general the I-5 is the most expeditious way to deal with residual environmental and agricultural complaint

    and leave the vast majority of the riding population without service….

  59. Anonymous
    Oct 29th, 2009 at 12:33
    #59

    During the Prop 1A, Quentin Kopp was crowing that the project would pay for itself. Of course, CHSRA could never pay back its huge capital costs, so it has been lying. It's now trying to change the story after the bond passed.

    Don't question Bruce McMuffin's knowledge of mules. They are his best friends, and he knows them intimately.

  60. jim
    Oct 29th, 2009 at 12:57
    #60

    anon, sometimes when you lose you just have to accept it.

  61. BruceMcF
    Oct 29th, 2009 at 14:09
    #61

    Anonymous/BrerFox said…
    "During the Prop 1A, Quentin Kopp was crowing that the project would pay for itself. Of course, CHSRA could never pay back its huge capital costs, so it has been lying. It's now trying to change the story after the bond passed."

    Link? If he was saying that around the state, it should be easy to find multiple newspaper article that quote Quentin Kopp saying that the CHSR would run a profit, overall.

    And it does not count if it is a newspaper article saying that California HSR would run operating surpluses. It will do that, and nothing that you have said disputes that, even if you are hazy on the difference between the two.

  62. Anonymous
    Oct 29th, 2009 at 14:36
    #62

    Kopp has claimed several times that the project will completely pay for itself. As a self-identifying "fiscal conservative", Kopp believes this is why HSR is better than other transit projects, but Kopp is also a fool.

    http://www.sfbg.com/blogs/politics/2008/10/high_speed_rail_debated_1.html

    Kopp countered that he has received 37 letters of interest from investors last year, drawn to a project that is expected to completely pay for itself within 20 years of operation.

  63. Alon Levy
    Oct 29th, 2009 at 19:24
    #63

    Bruce, the Acela is probably the Western world's slowest profitable train. Connecting New York and Washington makes it easier to run a profit than connecting Frankfurt and Berlin, let alone Cleveland and Cincinnati, which means a railroad can break even at lower speed.

  64. BruceMcF
    Oct 30th, 2009 at 06:40
    #64

    @ Alon, as usual you include the factors that confirm your existing conclusion and ignore those that do not.

    DC/NYC (pdf) is ~2:47, Cleveland/Columbus and Columbus/Cincinnati <2:00, and with the market/time more closely aligned between the northern and southern legs than the Boston/NYC/DC corridor, the passenger load factor will be higher.

    There are a wide range of existing common carrier alternatives for the 21 origin/destination pairs along the DC/NYC corridor, many of them subsidized.

    The capital cost per route mile is far higher when trying to upgrade in a corridor already so crowded that, for example, for the Connecticut portion of the corridor, straightening the alignment is considered easier than widening it a few feet to permit the Acela to tilt. By contrast, the Ohio Hub is building in corridors where the private owners requested 25 foot centerline separation between the existing freight lines and the dedicated high speed rail track, and the ORDC widened that to 28 feet to permit later addition of passing track in between.

    Its a smaller total market than the Acela, but larger than many already provided with rail service – the triple-C corridor is the most densely populated corridor without rail service and Columbus the second largest city without rail service – and the SlashSubsidy study under discussion found that the Acela runs at a profit, while the target for the Ohio Hub is to run at a comfortable operating surplus.

    Anyone interested in following this particular argument in more detail can go to the long running argument at transportpolitic – I finally tired of the "invent a new supporting assumption" debating style.

  65. Lupus Solus
    Oct 30th, 2009 at 06:54
    #65

    YESonHSR said… "I guess a service millions of Americans use is not worth 32 bucks a person …"

    If the service is worth the extra $32/person … then let's raise the ticket prices! What a concept!

  66. lyqwyd
    Oct 30th, 2009 at 10:51
    #66

    @BruceMcF

    perhaps I should have said CAHSR will be operationally profitable. Meaning, it will operate at a profit, not including capital costs.

    It may wind up being able to pay off capital costs, who knows, but I'm 100% certain it will have operational surpluses. Every bit of evidence out there supports that.

  67. neroden@gmail
    Oct 30th, 2009 at 18:13
    #67

    I am impressed at the ignorance (or possibly dishonesty) of the anti-rail anonymice.

    The Grapevine route was rejected because, in order to provide suitable grades (that's "slopes") for trains, it would have required a tunnel which crossed three faults *underground* near the intersections of all three. This is both quite dangerous in an earthquake, and poses vast unknown hazards in tunneling (meaning, immense cost overruns).

    In contrast, the Antelope Valley route crosses all the faults at grade (on the surface); the tunnels are *between faults*. This makes construction cost much more predictable — you know what you'll run into when tunnelling, to a much greater degree — and makes them a lot safer (an earthquake causing a slip a section where the line is on the surface is relatively easily dealt with).

    The minor advantages of approaching Bakersfield from the "correct" direction and serving the Antelope Valley, and the disadvantages of longer trip times, were secondary to this rational decision based on construction risk and safety issues. I read the report.

Comments are closed.