The Bottom Line on Top-Speed Trains

DESCRIPTIONPhoto: irargerich

Edward Glaeser (over at the Economix blog) and I have been writing about high-speed rail (HSR) over the past couple of weeks; he just finished his cost-benefit analysis of a hypothetical Dallas-Houston line with a look at land-use impacts. His overall conclusion, even making some very generous assumptions in favor of rail, is that the line would be a net cost to society of at least $375 million per year. This includes HSR’s potential environmental benefits as well as the direct gains to riders.

A couple of caveats are in order. First, transportation investments are highly context-sensitive; Dallas-Houston may not pencil out, but other lines may have more potential. Glaeser and I will return to this in a couple of weeks.

Second, we have been considering a true electric high-speed rail system with average speeds of 150 m.p.h. or more. Florida has flirted with such a system, but currently only California is in the advanced stages of planning one. This is where much if not most of the stimulus money will eventually go. The proposals on the table for the rest of the nation are currently much more modest; while electric HSR is the endgame, for now plans focus on maintaining what we have or on raising the top speeds of existing Amtrak trains (outside the Boston-Washington and Los Angeles-San Diego corridors) from 79 m.p.h. to 110 m.p.h. This sounds quite fast, but average speeds would be well below the top speeds; we’d be looking at an effective increase from about 40 to 50 m.p.h. to about 70 to 75 m.p.h. This would be done through many small-scale improvements to existing freight routes, including upgrading track, signaling systems, and crossings.

But even this more modest strategy is not inexpensive. Current estimates are vague, but one puts the cost of upgrades to three comparatively modest Midwest segments (Chicago-St. Louis, Chicago-Detroit, and Chicago-Milwaukee-Madison) at $4 billion. This totals out to $200 per resident of those cities, a considerable amount given that most of those people will use the service rarely, if at all.

Moreover, this path will not have the transformative environmental benefits that HSR backers tout, since the services in question will use diesel trains and will not travel at game-changing speeds.

Certainly neither Glaeser nor I pretend to have the last word on this topic. We are looking to start some debate, not finish it. So if you want to learn more on the pros of true HSR, check out the California High-Speed Rail Authority’s site, or this report for the views of an articulate critic, the Cato Institute’s Randal O’Toole.

I personally am a skeptic, but it’s not because I don’t think HSR is cool. In fact, a love of high-speed rail was one of the things that got me into the transportation field. I have extensive experience planning, designing, constructing, financing, and operating HSR networks; these have spanned the nation and have been terrifically elegant, with state-of-the-art locomotive technology and thousands of miles of flat, straight track to keep speeds high.

However, those HSR systems were built from electricity, not steel. And while the HSR currently being proposed will cost tens of billions, the cost of my HSR network was comparatively modest: perhaps $30 in fixed costs for the purchase of the computer game Sid Meier‘s Railroad Tycoon, plus negligible variable costs for the power to run my computer and depreciation on my mouse button. The sum total of the utility I experienced from this kind of HSR paid for those costs many times over.

Costs in the real world are quite different. HSR is an exciting idea, and if we could make it appear by magic wand it’d be a terrific addition to our transportation network. But everything has a price, and the way things currently stand, the projected costs look like they outweigh the benefits. If the thought of some ominous budget numbers lurking on a piece of paper in far-off Washington doesn’t move you, consider the opportunity costs of this spending, in terms of health care, education, the economy, defense, or a (more effective) method of slowing global warming. Or if you want to keep the money in the realm of transportation, it could go to address what I consider to be the more serious problem we are facing: moving people around within our cities, not between them.


Robot Mistake

I would be interested if the Space Program of the 1960's or the Interstate Highway system of the 1950's would with stand this analysis?

Or the Roman Aqueducts.

The whole series has the feel of a straw man. Why is there no discussion of the lest cost alternative to the HSR. Such as road maintaince and expansion projects. thank you.

deb

This man seems to be doing a hatchet job on behalf of the automobile lobby. I am no economist, nor pretend to be one but with my 15 years of advising companies on transportation and infrastructure, I can assure you that the comparisions being made are biased at the very least and tainted in all likelihood. Railway travel is not about the cost of the infrastructure alone. Add to that the mandays saved in productivity terms as rail travel saves mandays in comparision to roads and often even against air (for shorter distances).
Add to that the multiplier economics of additional ancillary industry and retail work associated with railways. Add to that enhanced safety and hence lower insurance. Add to that vastly improved comfort. Add to that constantly increasing demand from passengers who continue making the switchover. I mean the list of adds is almost infinite.

The negatives : Capex can be large. However in a recessionary environment, that is the easiest thing for a govt. to rustle up.
Gestation periods can be high.
Demand will build up progressively and hence impact shorter term revenue.
There will be armchair sceptics like the blogger above.

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BenK

Wonderful! The key to the transportation mess is the 10 miles each way many people go twice a day, not the 200 mile trips only a few people make, relatively speaking.

Dan Johnson-Weinberger

In the context of economic development of our regions, we suffer from a lack of good transportation connections between our cities. Read Richard Longworth's book Caught in the Middle for an intelligent view of the Midwestern economy, blaming the relative isolation of our intellectual capitals in universities from our business capitals in cities for some of our economic problems (and calling for high speed rail to integrate the region for stronger economic development).

There are essentially three ways to connect the people and businesses of regions together for greater economic growth: roads, rail or air. We're now connected by roads, but for trips of greater than 200 miles, few like to drive for three hours. Our air network is shrinking, not expanding, particularly as the price of oil continues to rise.

We are largely not connected by rail. Thus, all investments in rail will have a disproportionate benefit relative to roads and air, since we're so under-invested in rail. There is a lot of low-hanging fruit in rail investments.

And especially if we electrify our tracks (as we should) so we shift from oil to coal, nuclear or renewables to power transportation, our economy grows even more (since we won't be exporting wealth to oil-producing nations).

Investing in better rail infrastructure for intercity trains benefits intracity trains as well. The Chicago-St. Louis track is a great example: because of the investment in double- or triple-tracking the rail ilne out of Chicago past Midway airport to Joliet, we'll be able to significantly improve commuter rail service on that line as well. There are lots of investments that benefit both inter- and intra-city rail.

Finally, my client, the Midwest High Speed Rail Association, conducting an engineering report on 220 mph, electrified service between St. Louis and Chicago. I think your readers would be interested in it. www.MidwestHSR.org.

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Donald

Having used and loved a number of HS trains in Europe, I must wonder how useful they would be outside of the NE Corridor for business travel Even in California, the places you're going are seldom anywhere near the train station, and the things you're doing there almost always require a car anyway.

For example, do the math on a trip from San Diego to visit clients in Silicon valley. Even in the unlikely event that they put a stop in San Jose, the time and trouble of renting a car would make this trip comparable to flying.

HS travel might make sense if you're planning to stay where you're going. But these are not the business travelers who value saving time in the first place.

paulwesterberg

It would be much better if we spent the public tax dollars on a stadium so a privately owned team of super rich athletes could play in air conditioned comfort.... Oh wait.

Cackalacka

Considering my travel time associated with a flight last week took 12.5 hours (with 2x the amount of BS from Continental Air) for reasons varying from 'weather' (it was partly cloudy in both places) to 'mechanical' (whatever that may mean) for a trip that would have taken 7 hours by car, you may count me in as someone who wouldn't mind some of his tax resources diverted from propping up the airline industry to shoring up our rail networks.

Please note this travel time does not include the 1 1/2 spent parking the car and being an avid participant of the security theater at my terminal.

Understand that, with each successive delay (structural or otherwise) folks tend to view the decision to fly vs drive (currently our only real options outside of Bos-NY) through a different prism. My radius for maximum amount I would drive for a short trip moved from 6 hrs road time to 10.

I am now compelled to hop in a car and clog up 395 for those DC drivers; the lack of a dependable mass transit option has pushed me into a situation where my journey now must impact local commuters (see your last sentence.)

The eastern seaboard in particular needs a reliable transportation network that can get someone from Atlanta to NY or Richmond to Boston in under 8 hours, one that doesn't depend on weather patterns over O'Hare or Denver.

Air travel makes sense when going to SFO to JFK or from JFK to Gatwick. Driving makes sense when moving from Dallas to Houston. It doesn't make sense to drive/fly past/over the 150 million people that live on either side of I-95.

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JBM

Good point #6, because bringing 60,000 fans into the city 8 days a year to spend money does nothing to help the local economy... Oh wait.

GreenSmart

How about this - the cash for clunkers program has been a big success on many levels.

Next, the nation could start a program that gives companies vouchers/rebates for allowing employees to work from home. The vouchers could be used to purchase a home computer system for the employee, upgrade company HVAC systems to be more efficient, etc.

For every employee who moves to a telecommuting arrangement for 6 months, the company gets a $2,500 voucher. There would have to be rules to reduce gaming the program, but we can figure this out.

Chris

Good point #8, because all 60,000 of those people come from out of town and wouldn't have spent a dime of that money on other things if not for the football game... Oh wait.

DrS

As soon as someone tries to logically argue against HSR, there is always someone to say they are working for the automotive or oil lobby. Never fails.

I like the article because the last line takes away that argument. Rails need to solve the daily commute, not the occasional trip between major city centers.

Jim Brewer

Glaeser and Morris simply assume that competing modes of transportation are subsidy-free. Of course its not true. Highways have been subsidized at the local level for decades. More recently, they are subsidized at the federal level. This takes into account the portion of the gas tax diverted to mass transit.

Morris also assumes a zero sum analysis of either local transit or intercity rail. The fact is that we spend 3% of the federal budget on transportation of any kind. That is why we have bridges falling into the river and why Turkey has HSR and we do not. We need both mass transit and intercity rail and for that matter, more investment in our highways.

The cost is trivial. The money recovered from the tax evaders at UBS alone would pay for the entire Dallas to Houston HSR line very nicely.

GreenSmart

Another telecommuting incentive option...

Companies hold a dutch auction to qualifying employees for the right to work from home. Say a company has 2,000 employees and 1,000 have positions that are qualify to bid.

They designate the top 10% of bids as the winners. The lowest qualifying bid applies to all the winners. So if the last winning bid was $2,400, all 100 winners would pay $2,400. The money could come out of the employee's income pre-tax, so it is not actually $2,400 out of pocket.

Many employees would gladly pay $200 a month if they could save on gas, train tickets, business attire, meals, etc. The savings and the ecological effects would be outstanding.

Eric M. Jones

No great things get started by a team of analysts. Studies of cost-benefit cannot determine whether the thing will look like a good idea a few years down the road. Great ideas that excite the imagination rarely can be justified by cost.

There are cities all over the place that started because the trains had to stop for water and fuel and the railroads could sell land along the right of way. There are not cities in the wilderness waiting for rails and roads. But if you build it they will come.

The best bosses (leaders!) I have knownseen were people who saw a great idea and juggled the figures and found the cash to support it. Bureaucracy kill great ideas.

I can see where this study of HSR is going. It saddens me.

GreenSmart

#8

This is a macroeconomic issue.

You cannot create more money just by attracting people to specific events. If I choose not to go to an NFL game this year I will spend the money on something else. No net loss to the world.

And for the people who come to the games from out of town, aren't you just taking the money they spend away from the visitor's local economy? How does that benefit the world? The net gain is zero.

HSR Lover

Few reason's why i will tilt towards HSR:

1. It's safer than car, very few or no accidents compare to highway accidents - so you can't put value to human life.

2. Compare to air and car drive, weather conditions doesn't impact HSR.

3. Peace of mind: Compare to driving car, its a peace of mind as you may relax rather than stressing out due to driving itself or weather or traffic jams etc.

4. Compare to air travel, there is no hijack like situation possible. i.e. peace of mind to government.

5. No matter how fast you drive a car or bus, you just can't beat HSR's speed. Plus no speeding ticket :)

Thomas Thuene

HSR is a must for modern country, but then sometimes I wonder whether the USA is really modern.
Yes, we have the Acela Express in the North East, but don't forget that the express train in 1932 from Boston to NYC was faster than the Acela Express is today.

Joe

Why is it that in the analysis of cost of the high speed rail there
is no mention that we are close to grid lock on the highways and the airports and to surviwe as a productive and effective
country we need another way to move people around. That is
a big cost of inaction.
Joe

Johnny E

Build it they will come.

Just like with the lighrail system in Houston. Downtown Houston was a ghost town after working hours until the lighrail system was built.

Abby Tucson, AZ

I've heard these things aren't cost effective and that a specialized road for truck and mass transit traffic might prove more sustainable. I'm glad someone said something about the railroads. They took one half of our public domain by 1900 as subsidy for their monopolies. Let's not let them take what's left, less than 5%. Aren't Goldman, Duke and others all hot for the carbon cap to start? They already have their dice loaded.