Category — Transportation
In 2006, Nashville began operating the Music City Star, a commuter train between Lebanon and Nashville. Transit officials brag that this is “the most cost-effective commuter train in the country” because they spent only $41 million to begin service.
To be cost-effective, however, you need more than just a train: that train needs to produce something. The Music City Star carries only about 250 commuters on round trips each day, riders who could easily have been accommodated in a few buses costing less than $3 million. In fact, it would have been less expensive to give each of those commuters a new Toyota Prius every year for the next 30 years than to operate the train.
Since 1970, American cities have spent about $100 billion building new rail transit lines, and virtually all of it has been wasted. Rail transit was rendered obsolete in the 1920s by the development of reliable buses that could go on any streets open to automobile traffic. Since the cost of the streets was shared with autos and trucks, the capital and maintenance requirements for buses are far lower than for rails.
After 1920, some 700 American cities with streetcar or other rail transit systems converted those mostly private systems to buses. By 1970, only eight urban areas still had some form of rail transit. Today, rail transit can be found in more than 30 urban areas, and the number is growing. This turnaround is largely due to perverse incentives in federal transportation funding that rewards transit agencies for selecting high-cost transit solutions when low-cost solutions–usually buses–would work better.
Predictably, the rail construction boom has generated a huge lobby for more federal funding for rail transit. The American Public Transportation Association, whose members include numerous construction and engineering firms, has a $20 million annual budget, which is several times greater than the annual budgets of all of the various highway groups in Washington combined. Most contractors that can build highways can make even more profits building rail lines, so they have no interest in opposing rail.
One of the big arguments for building rail transit is that it will save energy. But, as I found two years ago in a Cato report, the energy saved by using steel wheels instead of rubber tires is offset by three energy costs. [Read more →]
April 21, 2010 5 Comments
Word on the political street is that a 15 cent increase in the federal gasoline tax may well be included in the final draft of a bill being prepared by Senators Lindsey Graham (R-SC), Joe Lieberman (I-CT), and John Kerry (D-MA) to address global warming. Shell, British Petroleum, and ConocoPhillips – are said to support the tax because it’s a less costly intervention in the transportation fuel market (for them anyway) than alternative interventions that might otherwise find their way into this prospective legislation. Shell et al. may be right about that, but be that as it may, this would still constitute lousy public policy. A gasoline tax hike ought to be resisted.
Higher Taxes Will Not Alter Climate Under Anyone’s Math
The proposed gasoline tax increase will have no significant impact on greenhouse gas emissions. That’s because the demand curve for gasoline is rather inelastic. Hence, a 15 cent increase in gasoline prices – presuming that the entirety of the tax is passed on to consumers, which may not prove to be the case – would not discourage very much fuel consumption at all.
While I don’t have any calculations at hand to translate the likely amount of reduced oil consumption into a percentage reduction in global greenhouse gas emissions (although that would be a fine project to undertake if this idea ever finds its way into the bill), the figure is certainly below 1 percent. How much cooler would the planet be given that emissions decline over the next 50, 100, and 150 years? That figure would certainly be too small to even measure.
Regardless, the uninternalized “negative externality” associated with the impact of gasoline consumption on the climate is likely to be rather small in monetary terms. After a review of the pertinent economic literature by economist Ian Parrry, Mr. Parry concluded that a gallon of gasoline likely does about 5 cents worth of damage to the environment via its impact on the global climate, assuming that the conventional narrative about anthropogenic climate change is correct. Accordingly, a 15 cent increase in the gasoline tax to address climate impacts would likely do more economic harm than good even if you believe the scientific arguments forwarded by the IPCC. [Read more →]
April 20, 2010 6 Comments
Horsepower Sure Beats Horses! (Part I: remembering what came before cars–and the failure of the electric vehicle)
The energy policy debate is well informed by history. So many ‘silver bullets’ being proffered by the Obama Brain Trust (‘smartest guys in the room’?) energy interventionists/transformationists are yesterday’s failures. As F. A. Hayek would put it, the Holdren-Chu approach to energy suffers from the ‘fatal conceit’ and cannot expect to be cost-effective in addressing the alleged problem.
Whither the Electric Vehicle
Take the electric vehicle versus the internal combustion engine. The market verdict of a century ago still holds–and for the same reasons. Thomas Edison was correct to pronounce the verdict to Henry Ford in 1896.
Edison himself labored to make batteries more economical for the transportation market, but the problem of weight and poor energy density could not be overcome. A news splash in 1914 by Ford Motor Company of an “experimental” car, the “Ford Electric” that would sell for $900 and have a range of 100 miles, based on Edison’s work, described as “Mr. Ford’s personal project” and “experimental” by Ford Motor Company—never got off the ground. Edison’s alkaline battery that penetrated the truck market was rejected by car makers because of its size and an incremental cost of between $200 and $600 per vehicle (1)
So it was back to 1896 for Ford and Edison despite the latter’s $1.5 million effort to commercialize batteries for the car. (2)
Consider horse transportation and what supplanted it.
The quotations below should remind the reader of how big a step it was for transportation to become energized by affordable, plentiful, transportable, dense, reliable energy–and that was petroleum.
“In New York City alone at the turn of the century, horses deposited on the streets every day an estimated 2.5 million pounds of manure and 60,000 gallons of urine, accounting for about two-thirds of the filth that littered the city’s streets. Excreta from horses in the form of dried dust irritated nasal passages and lungs, then became a syrupy mass to wade through and track into the home whenever it rained. New York insurance actuaries had established by the turn of the century that infections diseases, including typhoid fever, we much more frequently contracted by livery stable keepers and employees than by other occupational groups, and an appeal to the Brooklyn Board of Health to investigate resulted in the institution of new municipal regulations on stables, compelling more frequent removal excreta and disinfecting of premises. [Read more →]
September 29, 2009 10 Comments
Such a life-cycle analysis was the focus of a study by researchers at UC (Berkeley), which I mentioned in the previous post (but incorrectly identified as UC Davis).
Their answer is that neither form of transportation is clearly superior to the other; it depends on such things as load factors. Japan’s bullet train from Tokyo to Osaka, which serves more than 60 million people in a 300-mile corridor, is probably more efficient than driving. But the same train from (say) Eugene, Oregon, to Seattle would probably be a huge waste of resources because it would not likely fill enough seats to justify the energy costs of construction.
The UC Berkeley study also demonstrates one of the perils of trying to do a life-cycle analysis. Such an analysis is extremely complicated, relies on an enormous number of assumptions, and one small error can completely cripple the results. [Read more →]
July 9, 2009 7 Comments
My op-ed in today’s USA Today is about President Obama’s proposed new fuel economy standards. Don’t like ‘em. Unfortunately, an editing snafu over at the newspaper inadvertently left out the fact that there are four models at present that meet the proposed new standard – the 2010 Honda Insight (41 mpg) and 2010 Ford Fusion Hybrid (39 mpg) were left off the list.
Space prohibited me from making an additional point. Even if there is no rebound effect, my colleague Pat Michaels finds that global temperatures will only be reduced by 0.005 degrees Celsius by 2050 and 0.0078 degrees Celsius by 2100 once you plug those emissions reductions into the computer models used by the IPCC. (These are thousandths of a degree, mind you.) Of course, proponents contend that U.S. action on fuel efficiency will lead to like action abroad. Well, good luck with that. But even if all of the signatories to the Kyoto Protocol adopted Obama’s proposed fuel economy standards, global temperatures would be reduced by only 0.038 degrees Celsius by 2050 and 0.071 degrees Celsius by 2100. If you tried to monetarize those benefits, you would be hard pressed to come up with an defensible number of consequence.
So what should be done instead? Nothing! [Read more →]
May 20, 2009 6 Comments
Mel Brooks, in his classic comedy The Producers, schemed to make money by over-subscribing shares in a sure-to-fail play. Unfortunately for his character, the play became a smash hit, and all the investors wanted their payouts. Since he had sold well over 100% of the interest in the play, he was in a bit of a pickle.
And so it is with natural gas. Clean, easy to use, abundant—natural gas is everyone’s choice for our energy transition away from oil and coal for power generation, industry, homes, and now transportation. Enter oilman-turned-wind-promoter T. Boone Pickens, with a proposal to move U.S. heavy trucks strongly toward natural gas fuel (as compressed natural gas, or CNG). And to enable the offset, the electricity that is currently generated by such gas (about a 21% market share of power generation, according to the Energy Information Administration’s Annuel Energy Outlook 2009, Table 8) would be supplied by new wind farms, built mostly in the Plains States.
The argument is based on simple physical resource reallocation. [Read more →]
March 9, 2009 11 Comments
An endangered species – a market-friendly idea – was spotted recently in an interview with Transportation Secretary Ray LaHood: The Obama appointee is considering replacing gasoline taxes with a tax on vehicle-miles-traveled (VMT) as a means to fund highway and transportation infrastructure maintenance. He asserts that this kind of “outside the box” thinking will typify the Obama administration’s initiatives (Something to be devoutly hoped for).
If they actually replace the gas tax with a VMT tax, rather than piling on, it would be a great improvement in terms of infrastructure maintenance, as a person’s impact on highway infrastructure is proportional to miles-driven, rather than gasoline consumed. A gas-guzzler driving 1,000 miles does the same damage to the highway as a fuel-sipper that drives 1,000 miles, unless they are radically different in weight class. Heavy trucks, those used to transport most of the nation’s goods, are even harder on the surface of roadways. [Read more →]
February 20, 2009 11 Comments
EPA administrator Lisa Jackson is currently weighing whether to reverse the Bush Administration’s policy and grant a waiver for the California Air Resources Board’s (CARB’s) stringent greenhouse gas (GHG) emission standards. Thirteen other states are poised to adopt the CARB program if Jackson reverses. But what will ensue is less a victory for “clean air” than the creation of a chaotic and likely intractable set of regulations with very modest emission reductions. In the current economic climate, in fact, the waiver will likely result in increased GHG emissions. [Read more →]
February 16, 2009 7 Comments
Richard Larrick and Jack Soll have started a nifty website to promote their message that the conventional “miles per gallon (mpg)” metric is actually misleading and counterproductive for climate change and energy policy objectives. In their words:
MPG tricks people’s perceptions. Replacing a car that gets 14 MPG with a car that gets 17 MPG saves as much gas for a given distance as replacing a car that gets 33 MPG with a car that gets 50 MPG (about 100 gallons per 10,000 miles). MPG obscures the value of removing the most inefficient cars. A 14 to 20 MPG improvement saves twice as much gas as a 33 to 50 MPG improvement.
What to do instead? Rather than measuring distance per volume of fuel, Larrick and Soll recommend measuring volume of fuel per unit of length: [Read more →]
February 13, 2009 6 Comments
One of the major problems in policy-making is wishful thinking, in particular a tendency to assume that people will act the way the policy-maker wants. (Military and even corporate planners also suffer from this weakness, and it is arguably the principle weakness in socialist economics.) This presumption is particularly evident when issues of morality—real or perceived—are involved, as in the case of many environmental policies. [Read more →]
February 13, 2009 1 Comment