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How high-speed rail could help the U.S.'s aging infrastructure
An artist's rendering of the high-speed rail project in California.
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TEXT OF INTERVIEW
Jeremy Hobson: The Florida Department of Transportation has released a study showing that the proposed high speed rail line between Tampa and Orlando would have had more than three million riders. And would have made money in its first year. But as you may remember the Governor of Florida turned down federal funds for the project.
Let's bring in our economics correspondent Chris Farrell to dig into the issue of high speed rail and its economic impact. Good morning, Chris.
Chris Farrell: Good morning.
Hobson: So how important is high-speed rail for the economies of various regions in the country?
Farrell: I think that high-speed rail is important in the short run because it will provide a lot of construction jobs. And in the long run, I think it's very important in a region because we have an aging infrastructure, we have increasing congestion, and Jeremy, I don't know if you noticed, but we also have a high price of oil. So high-speed rail will help move people cheaper, faster and easier.
Hobson: But there's a lot of skepticism that remains. What is the cost of just leaving things the way that they are right now?
Farrell: I think there are two major costs. If you look at our infrastructure, it's aging. Recent estimates say it's costing us $200 billion a year. If you look at things like trucks, just sitting in traffic. So that's a long-term cost in terms of our bridges, our water, our energy. But the other part of is it we need to start dealing with creating a new infrastructure that really gets around this whole issue of congestion, and high-speed rail is part of it. Unless you want to be building airports everywhere.
Hobson: Now, there are 50 states in the country -- is there any state that you're looking at that's doing things right?
Farrell: There are a number of states that are doing things right. Denver's doing things right in that city; Twin Cities here, we're building light rail. But let me highlight Virginia. The new governor Bob McDonnell, borrowing $4 million. And what he said is, 'Look, interest rates are low. Our economy is weak. The cost of construction is down. Now is the time to borrow and rebuild our roads.' Bravo, he's doing the right thing.
Contrast that with Governor Christie in New Jersey; he decided he didn't want to spend the $2.7 billion to improve the rail link between New Jersey and New York. And Jeremy, it's the wrong move for New Jersey because the growth of northern New Jersey really depends on the metropolitan area called New York City; it extends into Connecticut, it extends into New Jersey. And so workers can go back and forth with ease, and safely.
Hobson: Two Republican governors doing two very different things when it comes to infrastructure. Marketplace's economics correspondent Chris Farrell, thanks so much.
Farrell: Thanks a lot.
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Tampa and Orlando
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Sounds good for the rental car companies in Orlando and for con-structural-unemployment. What you got looming ahead is Devon's Paradox. As efficiency increases on Tampa Guys going by train to Disney World, efficiency will morph into over-utilization of the efficient process == Devon's Paradox. Not near so happy for the people who depend on funds now being drained out of Tampa but into Disney; out of Temple Terrace but into pockets of Dollar Thirsty Rental Car. Welfare transfer payments now flowing towards Central Florida will simply be diverted towards Tampa. Could that help with beach ecology. Great! Sounds great!
Zounds good
!
I think it is quite pathetic that the U.S. still has no high speed rail network like Europe. We have spoiled ourselves with cheap oil and built sprawling suburban communities that are becoming obsolete while driving large fuel INefficient vehicles.
As Zaffino mentioned, we should prepare for 3rd world status when we begin to bear the true cost of oil and have no alternative put into place.
J Mason of Dallas asked "What are federal subsidies now for airlines/airports versus rail?" Excluding the stimulus funding over 10 years for high speed rail projects, the annual Federal subsidy for rail has hovered around $1.5 billion, which keeps Amtrak in a marginal state of repair. Compare with around $15 billion spent annually on subsidization of the air travel infrastructure. And $60 billion for highways. (Source "Trains Magazine" April 2011 issue, devoted to high-speed rail topics). Note Amtrak Northeast Corridor traditionally a moderate money maker - Amtrak owns their own tracks for the most part, hosts tenant commuter agencies, little freight. European high speed rail in densely-popluated corridors around 4-hours travel time make money, with a public/private partnership financial model based on very long 50-year to 100-year periods, though many have covered their cost of construction within 15 years.
Aging infrastructure and jobs is certainly not a valid reason to spend billions on a transportation method that may not be economically viable. A more in depth analysis could have been presented. What are federal subsidies now for airlines/airports versus rail?
Mr. Farrell I often find we are in disagreement over many economic issues, but you really nailed your high speed rail commentary. Low interest rates, low construction costs, high oil prices, the need for jobs... Now is the time to do infrastructure improvements. If we extrapolate this logic to the federal government, we can easily see that NOW is the time to invest heavily in the new and inevitable Alternative Energy economy and infrastructure. We are at Peak Oil, and if we do not start an emergency program to transition our economy away from rapidly declining fossil fuels, then we should learn to accept the inevitable 3rd world status that America is heading towards.
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