With 2010 under our belts it’s time to look ahead to 2011. What can we expect to be the major HSR stories and events this year? Here’s my stab at it. Offer yours in the comments!

Jerry Brown, HSR Governor. Arnold Schwarzenegger’s support of HSR was episodic and frustrating. Yes, he did help get it to the ballot (after 4 years of delays) and has been supportive of the concept. But his actions were not always helpful, from his uneven funding levels to the California High Speed Rail Authority, which undermined its ability to do effective public outreach, to picking fights with the state legislature over budget oversight language for the Authority that have only alienated and angered legislators unnecessarily. And Arnold seemed most interested in HSR as a vehicle to promote his ideology of turning government operations over to the private sector, whether or not it was a good or financially sensible thing to do.

By contrast, we can expect Jerry Brown to be a very strong supporter of the high speed rail project, as he has been since the early 1980s when he helped promote a “California Shinkansen” plan for bullet trains from LA to SD. He is motivated to overcome 30 lost years and ensure that the HSR project gets built as planned, as part of his effort at using green jobs to help produce economic recovery.

HSR opponents will find no support from Brown in their efforts to kill the project. Similarly, any hopes that anti-HSR legislators like Sen. Alan Lowenthal will derail the project will be dashed – Brown won’t let that happen, and a Democratic legislature is not going to cross Brown on this. Besides, that legislature backs HSR too.

However, we should not expect Brown to be an uncritical supporter of the project. As Attorney General he was familiar with some of the legal issues the Authority has faced, including the “incompatible offices” question, where his office ruled that CHSRA board members Curt Pringle and Richard Katz did indeed hold incompatible offices in violation of state law by also having seats on their local transit agency boards. As I’ll discuss below, one thing we can expect in 2011 is some kind of reform of the Authority, and Brown will be the lead figure in determining what this looks like.

Brown is also a notably frugal man who generally opposes unnecessary costs for infrastructure. There have been some exceptions to this, such as his advocacy in the late 1990s for a “signature span” for the new East Span of the Bay Bridge. But as governor of a whole state, one that faces an annual $20 billion deficit until at least 2016, there’s no reason to expect Brown will support the desires of some folks, particularly those on the Peninsula, for the state to pay for gold-plated infrastructure. If there’s a cheaper way to achieve the same operational requirements, I expect Brown to support those options alone. If Palo Alto wants a tunnel, they’ll have to come up with the money for it themselves.

Perhaps the most important contribution Governor Brown will make to the project is his leadership. Brown wants the HSR project to get done, but he doesn’t come at it with an ideological agenda. He isn’t going to care whether the project is planned by state employees on staff at the CHSRA or by contractors, so long as the planning is done well and at a reasonable cost. He isn’t going to remove effective board members out of an ideological desire to add people with a “business background.” He will instead care that project milestones are reached, that laws are followed, and that funding is found, delivered, and properly and efficiently spent. And he won’t be afraid to knock heads together to make that happen. That’s exactly the kind of leadership we need from the governor’s office.

Authority Reform. As noted above, I expect some kind of reform to the CHSRA to happen in 2011, driven largely by the legislature. Key legislators, including Senators Lowenthal and Joe Simitian, are fed up with the Authority, concerned about their operations and their problems with public outreach. New CEO Roelof van Ark has begun to address these issues, but I doubt it will be enough to stop the momentum for reform. The question remains, what does the reform look like?

The key issue here is fitting a reform to a business model. The Peer Review Report from November 2010 indicated that a business model was the missing ingredient, and that everything from a business plan to a construction timeline depended upon it. There are various business models out there, from the BART model (where the public agency owns and operates everything) to a privatized model where the government owns and oversees the operations of the system, but where the operations – and perhaps construction too – are handled by a private contractor. Each model necessitates different structures for the CHSRA – they’d need to be a robust public agency if the BART model were picked, but could be reduced to just the board of directors if a more overt contracting model were chosen.

There are also governmental questions to consider. For a few years now some legislators have proposed setting up a separate Department of Rail, bringing Amtrak California, the CHSRA, and perhaps other rail agencies under a single executive department. Others have proposed keeping the CHSRA essentially intact but moving it under the authority of Caltrans – or abolishing the CHSRA entirely and giving the project over to Caltrans to manage.

Whatever option is chosen, its primary purpose will have to be ensuring the project is built on time and at cost. We’ll have a lot more to say about this as the year goes on.

Finding Federal Funding. Let’s face it, 2011 is going to suck when it comes to federal funding. We will be lucky if the existing $2.5 billion annual appropriation for HSR stays in the federal budget. While I do not expect the efforts of some California Republicans like Jerry Lewis to take back federal HSR stimulus funds to succeed, neither should we expect any more significant amounts of federal HSR funding until at least 2013, when hopefully Democrats retake the House. (While this blog tries to stay nonpartisan, the fact is that Congressional Republicans are not friends of high speed rail, and that Democratic control of Congress is generally better for HSR projects – although the 111th Congress notably failed to pass a new Transportation Bill despite having Democratic majorities.)

Still, all is not yet lost in Congress. Incoming House Transportation Committee Chair John Mica, a Florida Republican, supports true HSR – 220mph projects like ours in California and like the one to be built in Florida. Mica has also been supportive of California’s HSR project. We will have to hope that he will be able to convince House Republican leaders to not totally eliminate HSR funding, and to help fund the California and Florida projects. Still, as House Republicans talk about massive federal spending cuts, we will have to be prepared to fight to stop another destructive and reckless cut to HSR funds.

California Republicans will be key to this battle. Some of them, like Devin Nunes, are ideologically opposed to HSR despite the fact that their constituents support it, including local businesses, and despite the fact that it would bring plenty of jobs. Of course, these Republicans probably do not realize how much of a limb they’ve climbed out on with this opposition. Because redistricting will be done by an independent commission, people like Nunes can no longer expect to hold a safe seat. Constituents in more purple districts in the Valley will be much less likely to tolerate a Republican Congressman’s attack on jobs, and Nunes may quickly come to regret his opposition to the project. Republicans like Nunes, Jeff Denham, Kevin McCarthy, and others with districts that include portions of the HSR route are especially vulnerable, and they and their staffs need to hear from constituents about the need for HSR in 2011.

One possible area of hope for federal funding is a National Infrastructure Bank. President Obama is likely to pursue it as a method of funding infrastructure that is outside the earmark process. Still, Congressional Republicans are primarily driven by the desire to deny Obama a second term, so they are unlikely to support any initiative proposed by the president, even good ones like an infrastructure bank.

Overseas Funding. With the federal funding situation essentially on hold for two years, the role of private funding becomes more important – and realistically, that means funding from other countries. We’ll have more in a couple of days on Tim Sheehan’s excellent Fresno Bee article about China’s possible role in HSR funding, but it is indicative of the interest from abroad in helping build the California HSR system. Countries like China, Japan, Germany and France aren’t likely to be worried about whether they’ll make money on HSR in California – they are all quite familiar with HSR’s profitability and success. Instead it is the structure of a loan and the related business arrangements, like choice of operator or trainset supplier, that will play the deciding role. As federal funding is scarce for the time being, expect the matter of overseas funding to become very important in 2011.

Rising Oil Prices. The brief lull in the long-term rise in oil prices appears to be over, with oil hitting $90/bbl just before Christmas and with analysts predicting $5 gas by 2012 – and some predicting $4 gas in 2011. If there is any semblance of economic recovery in the US, we can expect those benchmarks to be easily reached, as any increase in global demand will stress peaking supplies and force a rise in prices.

In turn, rising fuel prices will remind the public of their desire for affordable alternatives. In 2008, the last time the price of oil rose dramatically, Californians responded by passing not only the Prop 1A HSR bond, but approving tax increases for passenger rail projects in the state’s most populous counties.

With the fall in prices in 2009, public concern about oil prices ebbed, and NIMBYs took the opportunity to whine about the visual impact of the HSR project. As oil prices rise, public tolerance for NIMBY opposition to affordable alternatives will evaporate, and public demand for completion of the HSR system as planned will rise. Now would be a good time for Peninsula NIMBYs to seek a deal on HSR and to adopt a more constructive tone with regard to project planning, because once Californians see $5 prices at the pump, they’re not going to look very kindly on a homeowner in a wealthy suburb blocking a project that could save them money and liberate them from dependence on the oil companies.

Similarly, rising oil prices will help ensure that NIMBY complaints get less sympathy in Sacramento. As the economic costs of our dependence on oil becomes clear, and as legislators see the possibility of HSR-related jobs just around the corner, in time for the 2012 elections, they’re not going to let a few entitled people with home values that most other Californians would kill for delay the project.

Design Decisions Will Be Made. 2011 will see some final decisions made about HSR design. Despite not winning federal stimulus funding, the SF-SJ segment will still see some decisions made about how the HSR project should be built on the Peninsula. This is sensible, because uncertainty doesn’t help anyone – property values will decline if nobody knows what the HSR project will look like, but once a design is selected, the market can price in that knowledge and home values can appreciate from there.

We will also see decisions made in other parts of the project, including the Central Valley construction segment, where the tracks can be brought to the edge of Bakersfield depending on what is chosen at Corcoran and other locations along the route. Getting these decisions right matters a lot, and HSR supporters will be actively working to ensure that happens.

Contract Bids and Construction. Once final designs are selected, especially along the Central Valley construction segment, the project will be ready to be put out for construction bids. This will happen late in 2011, but it will be a major milestone for the project. Once Californians see high speed tracks laid, their enthusiasm for the project will rise, as will their expectations of seeing the project completed as planned.

In many ways, 2010 was a difficult year for HSR, but it ended on a very strong note for the project with the selection of the Fresno to Bakersfield construction segment. That, combined with ongoing public support, a reminder of the need for the project in the form of rising gas prices, and strong backing from Sacramento, will make 2011 a very good year for high speed rail in California.