High-Speed Rail will do what Planes can do, only for a lot, lot more Money

Posted by PITHOCRATES - October 3rd, 2011

There may be only two High-Speed Lines in the World that Actually Pay for Themselves

There won’t be high-speed rail any time soon.  Chalk up another one in the ‘lose’ column for Obama (see Senate: ‘No confidence’ in Obamarail by Barbara Hollingsworth posted 10/3/2011 on The Washington Examiner).

… the $100 million the Senate left as a “placeholder” is likely to be zeroed out by the House, Orski notes, effectively killing President Obama’s dream of a high-speed rail network throughout the U.S.

In February, the president asked Congress to appropriate $53 billion through 2018 to provide high-speed rail service. The $100 million is the Democrat-controlled Senate appropriations committee agreed to keep in the budget (by a voice vote) is a drop in the bucket.

“Senate appropriators have done more than merely declare a temporary slowdown in the high-speed rail program. They have effectively given a vote of ‘no confidence’ to President Obama’s signature infrastructure initiative,” Orski says.

You know, $53 billion was a little light to begin with to provide access to high-speed rail to 80% of all Americans.  So that $100 million placeholder obviously wasn’t going to pay for much of anything.  Not even the environmental impact studies.  At best it could maybe pay off a campaign donor or two.

“Their posture is understandable,” he added. “After committing $8 billion in stimulus money and an additional $2.5 billion in regular appropriations, the Administration has little to show for in terms of concrete results or accomplishments. Aside from an ongoing project to upgrade track between Chicago and St. Louis (a $1.1 billion venture that promises to offer a mere 48 minute reduction in travel time between those two cities), no significant construction has begun on any of the authorized rail projects.”

And the only really high-speed rail project in the works – a 220 mph, 160-mile, $67 billion bullet train between Los Angeles and San Francisco – is in trouble because of public opposition (a new poll found that two-thirds of likely voters in California are against it) and the fact that the cost estimates have doubled since 2008.

Orski reports that analysts now believe that the California high-speed rail project cannot and will not be built without a substantial federal subsidy – which is not likely to materialize.

Gee, I wonder where that $8 billion of stimulus funds went to.  Campaign donors?

Can NOT be built without federal subsidies?  You know why?  There may be only two high-speed lines in the world that actually pay for themselves.  One in France.  And one in Japan.  High-speed rail loses money.  Just like Amtrak.  Only more.  They’re just so incredibly costly to build.  And to operate.  To get them to pay for themselves you need numerous trains per hour.  Packed with paying customers.  And, preferably, few automobiles.

Private Railroads aren’t Building High-Speed because Passenger Rail is not Profitable.  High-Speed or Otherwise.

Japan is the home of the Bullet Train.  They ushered in high-speed rail.  To move the people of one of the most populous nations on the planet.  They are so crowded that they use 747s for commuter jets.  Now that’s population density.  Which is what you need to make high-speed passenger rail work.  Which is why the Tokaido route works (see The Difference Engine: Fast track to nowhere posted 5/20/2011 on The Economist).

OF ALL the high-speed train services around the world, only one really makes economic sense—the 550km (340-mile) Shinkansen route that connects the 35m people in greater Tokyo to the 20m residents of the Kansai cluster of cities comprising Osaka, Kobe, Kyoto and Nara. At peak times, up to 16 bullet trains an hour travel each way along the densely populated coastal plain that is home to over half of Japan’s 128m people…

The sole reason why Shinkansen plying the Tokaido route make money is the sheer density—and affluence—of the customers they serve. All the other Shinkansen routes in Japan lose cart-loads of cash, as high-speed trains do elsewhere in the world. Only indirect subsidies, creative accounting, political patronage and national chest-thumping keep them rolling.

This one Japanese high-speed rail line makes money because they pack them in like sardines.  Affluent sardines.  Who don’t need subsidized tickets.  So these trains can charge enough to cover their costs.  And with 16 packed trains an hour each way during peak time keeps these expansive rails nice and shiny.  And shiny rails produce enough revenue to cover costs.

California wants a share of that bullet-train hubris. Where Florida, Ohio and Wisconsin have turned down billions of federal dollars for high-speed rail, the Golden State has been pressing on with its $43-billion scheme to build a high-speed rail service from Los Angeles to the San Francisco Bay Area, with spurs eventually to San Diego, Sacramento and San Luis Obispo.

The irony is that California has the highest rate of car-ownership in the country, if not the world. It also, despite years of neglect, has one of the best road networks anywhere—certainly leagues ahead of Japan’s. On top of that, it enjoys a highly competitive network of budget airlines serving its main cities. The Los Angeles Times got it about right when it editorialised on May 16th that “California’s much-vaunted high-speed rail project is, to put it bluntly, a train wreck”.

Lots of cars, good roads and cheaper gas than in Japan.  That’s three strikes already against high-speed rail in California.  Will people leave their cars at home to pay more to be packed in like sardines and travel according to a train schedule instead of their own whim.  Which you can do with a car.  You want to go somewhere.  Just hop in the car and go.  That’s nice.  And convenient.  And you have no one coughing in your face.  Or groping you in the crowd.  Pretty nice benefits.  Especially if you’re a young lady.

And an expensive one at that. Between them, the federal government, municipals along the proposed route and an assortment of private investors are being asked to chip in some $30 billion. A further $10 billion is to be raised by a bond issue that Californian voters approved in 2008. Anything left unfunded will have to be met by taxpayers. They could be dunned for a lot. A study carried out in 2008 by the Reason Foundation, the Howard Jarvis Taxpayers Association and Citizens Against Government Waste put the final cost of the complete 800-mile network at $81 billion…

The problem in making the case for high-speed rail in California is that, though it is the most populous state in the union, there are simply not enough people packed into the 50-mile wide coastal strip that wends its way 350 miles from Los Angeles to San Francisco. Put it this way: the Shinkansen plying the Tokaido route have access to some 180,000 potential passengers per mile of high-speed track. Even by 2025, when California’s population is likely to have grown from today’s 38m to 46m or so, the number of people within the coastal strip is unlikely to exceed 85,000 per mile of track.

No wonder the Los Angeles Times called it a train wreck.  Lots of cars, good roads, cheaper gas and lower potential passenger density along the line.  No wonder they need federal subsidies.  It’s a black hole for money.  That’s why private railroads aren’t building these things.  They can’t make money with passenger rail.  High-speed or otherwise.

We should not Invest in Rail because Track is Expensive whereas Airspace is Free

Passenger rail is not a working business model.  They bleed money.  Which makes them very attractive to politicians.  That’s why they love them.  Because they know they will require more and more taxpayer money.  And they are always happy to raise taxes to pay for this public good that the public prefers not to have.

As can be seen, rail projects don’t happen fast.  So including high-speed rail projects in a stimulus bill wasn’t going to stimulate anything.  So why do it?  I don’t know.  Pay off a campaign donor or two?

Japan is built for high-speed rail.  When your cities are so crowded that they have capsule hotels you are a candidate for high-speed rail.  You have the population density that will pack trains like cans of sardines.  When you have vast tracks of open country you’re not a good candidate for high-speed rail.  The U.S. has vast tracks of open country.  And is therefore not a good candidate for high-speed rail.

We should not, then, invest in rail.  Americans will drive their cars for most trips.  And fly when it’s too long to drive.  For planes cost less per passenger mile to operate.  Because all of their infrastructure is at airports.  Unlike trains.  This is why air travel is cheaper than train travel.  Because track is expensive.  Whereas airspace is free.

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