should ncdot add more piedmont trains?

8/7/2019 Should NCDOT Add More Piedmont Trains?

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Should NCDOT Add

More PiedmontTrains?

WENDELL COX

APRI L 2011

P O L I C Y R E P O R T


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Should NCdoT Add MoRE PIEdMoNT TRAINS?

P o l I C y R E P o R T

Should NCDOT Add

More PiedmontTrains?

WendellCox

Table of Contents

2 Introduction

2 Te Context

3 Passenger rain Service Expansion

4 Financial Sustainability

6 Environmental and Energy Sustainability

8 Employment Impacts

9 Value of the North Carolina Railroad

10 Conclusion

10 End Notes12 About the Author

Te views expressed in this report are solely those o the author and do not necessarily reect those o the staf or board othe John Locke Foundation. For more inormation, call 919-828-3876 or visit www.JohnLocke.org.

2011 by the John Locke Foundation.


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J o h N l o C k E f o u N d A TIo N


IntroduCtIon

Tere has been debate in North Carolina aboutthe wisdom o accepting grants under the ederalhigh-speed rail program to add a third and ourthPiedmont train.1 Similar controversy has erupted in

other states, leading three governors to reuse high-speed rail unding (Florida, Wisconsin, and Ohio), while a legislative committee declined to includehigh-speed rail unding in the budget in a ourth state(Missouri).

Tis report outlines issues with respect to the pro-posed expansion o passenger rail service. Overall, itis noted that:

Tere is opposition to additional public expen-ditures on passenger rail, both because o the

potential or capital and operating costs to behigher than projected and the potential that thestate would be required to pay or any cost over-runs and any additional operating subsidies.

Tere is also opposition to additional publicexpenditures on passenger rail, because o theserious nancial difcultly aced by both thenation and the state o North Carolina. Spe-cically, there is an objection to spending ona lower priority, such as high-speed rail, whilehigher priority expenditures are threatened withreduction.

Te new trains would have minimal impact ontrafc volumes between Charlotte and Raleigh.

Te new trains could contribute to 20 yearsubsidy requirements o rom $250 million to$600 million or more. Te subsidy levels maynot be nancially sustainable.

Tere is a substantial risk or taxpayers. NorthCarolina would be required continue to oper-ate the trains or 20 years and complete the im-provements, or it would be necessary to returnpart or all o the grant unding to the ederalgovernment ($550 million).

Te additional passenger trains would, in thelonger run, emit more greenhouse gases thanthe automobiles removed rom reeways and

would increase ossil uel consumption.

An alternative system o intercity buses wouldreduce greenhouse gas emissions and energyconsumption 50 percent to 75 percent relativeto the new passenger trains.

Te projected employment impact o expand-ing passenger train service excludes any analysiso the displacement o private sector jobs thatwould take place as a result o the project. Gov-ernment reports have shown the employmentimpacts o similar inrastructure spending to beminimal.

In the longer run, additional passenger trainservice on the North Carolina Railroad could

diminish its value and earnings, principally be-cause high-speed passenger trains and reighttrains have materially dierent operating char-acteristics (such as speed and weight). Te po-tential or a loss o value is especially great as thestate seeks to implement the 110-mile-per-hourSoutheast High Speed Rail Corridor program.

For the reasons outline above, North Carolinashould return the ederal high-speed rail grant und-ing, withdraw its pending application and seek nomore unding or passenger rail.

the Context

Te policy consideration o passenger rail expan-sion is occurring in the context o pervasive cost es-calation and overly optimistic are revenue projectionand a difcult public unding environment.

Passenger Rail Cost Concerns. Internationalresearch indicates that high-speed rail projects otensurpass their projected capital costs.

Te most comprehensive research was perormed

by Oxord University proessor Bent Flyvbjerg, NilsBruzelius (a Swedish transport consultant), and Wer-ner Rottenberg (University o Karlsruhe proessorand ormer president o the World Conerence onransport Research) examined 258 transportationinrastructure megaprojects covering 70 years inNorth America, Europe, and elsewhere. Tey oundthat capital cost escalation rom the point o project


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approval to completion can be as much as rom 50percent to 100 percent above projections. Te re-searchers ound particular difculties with passengerrail systems, with an average cost overrun o 45 per-cent. Moreover, they ound that capital cost overruns

were pervasive, occurring in 9 out o 10 projects.Just as the international research indicates costsare oten understated, ridership and revenue is otenoverstated. Flyvbjergs team ound that projectionswere, on average, 65 percent higher than the eventualactual ridership. Te result has been lower-than-pro-jected are revenues and higher-than-projected oper-ating subsidies.

Te projections were so consistently erroneousthat the researchers characterized them as consistingo strategic misrepresentation and lying, as project

promoters sought to obtain approval or projects thatmight not otherwise be implemented.

Tere have been cases o even more substantialcost escalation. For example, a project to increasespeeds on the West Coast Main Line in the UnitedKingdom eventually cost ve times the projectedamount andailedto deliver the promised service im-provements.2

Public Finance Concerns. Te ederal govern-ment and many state governments, including NorthCarolina, have serious challenges in eliminating bud-get decits.3 On April 18, Standard and Poors low-ered its outlook or on the debt rating o the UnitedStates rom stable to negative.4 Shortly beorethat, the International Monetary Fund expressed theneed or greater attention to reduction o the US na-tional debt:

The United States needs to accelerate the adoption of

credible measures to reduce debt ratios.5

In this environment, questions have been raised

about the appropriateness o higher general taxspending or passenger rail services. Specically, thereis an objection to spending on a lower priority, suchas high-speed rail, while higher-priority expendituresare threatened with reduction. Te recent 2011 ed-eral budget agreement eliminated all spending au-thority ($2.5 billion) or high-speed rail in the cur-rent budget and reduced unused previous authority

by $400 million.Te nations two principal intercity transportation

programs, airlines and highways are principally sup-ported by user ees rather than general tax revenues.

PassengertraIn servICe exPansIonTe North Carolina Department o ranspor-

tation (NCDO) has been awarded grants totalingapproximately $545 million under the ederal HighSpeed Intercity Passenger Rail Program. Te und-ing would be used to upgrade the state-owned NorthCarolina Railroad (NCRR), in order to increase speedon trains that operate between Raleigh and Char-lotte, and to add a third6 and daily Piedmont trainin 2011 and a ourth7 daily Piedmont train to theschedule in 2016. Currently, three daily trains serve

the route each way, including the Carolinian and twoPiedmonts. Te Carolinian continues rom Raleigh toWashington and the Northeast corridor, terminatingin New York.

Train Schedule. Te improvements will permitPiedmont trains to make the trip rom Raleigh toCharlotte in three hours (3:00),8 compared with thepresent travel time o 3:12 (toward Charlotte) or 3:13(toward Raleigh).9 Te maximum train speed wouldbe 90 miles per hour. Tis speed is well below interna-tional high-speed rail standards. Most high-speed railservices in Europe and Japan operate at 186 miles perhour or higher. Some services operate at 200 miles perhour, nearly double the speed o the proposed South-east High-Speed Rail Corridor.10 North Carolina is apartner in the proposed Southeast High-Speed RailCorridor, which would provide service rom Char-lotte to Washington, with a maximum speed o 110miles per hour.11

NCDO projects that trains on the corridor willreach a maximum speed o 90 mph as a result o the

ederally unded improvements to the North CarolinaRailroad. Average terminal-to-terminal speed wouldbe 58 miles per hour, assuming on-time operation.

On-Time Perormance. However, NCDOprojects on-time perormance or the ourth Piedmonttrain to be only 80 percent, even ater the one-hal-billion-dollar expenditure. Based upon the estimateddelay indicated in the North Carolina Department


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o ransportation application,12 the av-erage train travel time between Raleighand Charlotte would be approximately3:18, which would reduce the averagespeed, terminal to terminal to 53 miles

per hour.Tis delay would amount to approxi-mately 10.5 percent o the scheduledtravel time between Raleigh and Char-lotte. By comparison, the average peakperiod delay in trafc in the large metro-politan areas along the corridor is consid-erably less. According to the 2010 INRIXNational rafc Scorecard, the averagepeak period delay in trafc is 7.4 percentin Charlotte, 5.3 percent in Raleigh and

2.1 percent in Greensboro.13 Tus, whiledelays occur along Interstates 40 and 85between Raleigh and Charlotte, the delayrom normal trafc speeds would seemlikely to be less than the average delay onthe train (Figure 1).

In addition to the already-awardedgrants or $545 million, NCDO hassubmitted a grant application or urtherederal high-speed rail unding in theamount o $620 million. Among otherimprovements, this grant anticipates theestablishment service that operates at amaximum o 110 miles per hour betweenRaleigh and Richmond as a part o theSoutheast High Speed Rail Corridor.14

Impact on Road Trafc. NCDOindicates that the third and ourth Piedmont trainswould reduce trafc volumes on reeways in the corri-dor. Te reality is that the proposed rail service wouldreduce trafc volumes only minimally. Even i both

trains were to carry the optimistic ridership level pro-jected or the ourth Piedmonttrain in 2025 and allridership were to have been attracted rom cars, thereduction in trafc along on the I-85 and I-40 cor-ridor between Charlotte and Raleigh would be under0.5 percent or the two round-trip trains, removingone out o every 200 cars (Figure 2). Tis reductionwould not be perceivable to drivers.15

FInanCIalsustaInabIlIty

Te grant application or the ourth Piedmonttrainindicates that annual ridership will reach 104,500 bythe 10th year o operation. Tis is nearly 50 percent

more than the 69,000 riders who rode the rst Pied-mont train in 2009, ater approximately 15 years ooperation. Te ridership projection could well beoverly optimistic, which could increase uture statesubsidy requirements.

Annual Operating Costs. Based upon estimatesby NCDO or the cost o operating the rst andsecond Piedmont trains in 2015, it is estimated that

Figure 2. Train Passengers: Freeway Impact (2025)Raleigh to Charlotte: 5 Daily Round rip rains

Figure 1. Travel Delays: Train & MetropolitanBy mode: per passenger mile


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the cost or each o the new trains would be approxi-mately $6 million ($12 million total additional cost)per year.16

Te capital and operating cost o adding thetwo trains would be substantial. Te annual capital

and operating costs necessary to establish the thirdPiedmont train service would be approximately $150per round-trip per new passenger. Te cost per newround-trip passenger or the ourth Piedmont trainwould be more than $550.17

Te total cost per new passenger mile o the thirdPiedmont train would be approximately $0.50 perpassenger mile, which is more than double the ullyallocated cost per passenger mile o the US light ve-hicle eet (car and sport utility vehicles) in 2009. Tecost per new passenger mile or the ourth Piedmont

train would be more than $1.75, more than seventimes the cost per passenger mile o the US light ve-hicle eet.18

Subsidies. Each o the Carolinian and Piedmont-trains are supported by passenger ares and paymento the operating defcit by the state o North Carolina.Tere are conicting reports o subsidy levels or thePiedmont trains rom NCDO. NCDO indicatedthat subsidies or the two initial Piedmonttrains (thesecond train was added in 2010) would reach $9.5million by 2015, ater ederal startup unding expires,or less than $5 million annually per train.19

However, the ederal grant application or thethird Piedmont train indicates that annual subsidieswould be $9.3 million in 2011 and $9.8 million in2020. Further, the ederal grant application indicatesthat the annual operating subsidy or the ourth Pied-mont train would be $9.8 million in 2016, but pro-vides no subsidy inormation or later years.

Tere is also a much lower fgure in another NC-DO document, which places the total state subsidy

at $13 million annually in 2013, or the Carolinianand Piedmont trains, including the third and ourthPiedmonttrains.20

In the worst case, these fgures could imply a lon-ger-term annual operating subsidy obligation or thestate o up to $30 million (or even higher i the ear-lier estimates or the frst and second Piedmonttrainswere to rise to that o the third and ourth Piedmont

trains). Tis could lead to a 20-year obligation o over$250 million to $600 million or more to subsidizethe Piedmont trains. Te subsidy may not be fnan-cially sustainable.

North Carolina Grant Repayment Risk. Under

ederal grant procedures, North Carolina is obligatedto complete the capital improvements and to contin-ue operating the third and ourth Piedmont train or20 years. Any additional costs that occur, whether incapital costs or higher operating subsidies, must bepaid by the state.

I the state were to not complete the NCRR im-provements because o rising costs, it would be neces-sary to reund all or part o any ederal unding thathad been spent. Further, i the state were to cancelthe third or ourth Piedmont train because o higher-

than-anticipated operating subsidies, the state wouldbe required to pay back some or all o the ederal capi-tal grants.

North Carolinas fnancial obligations with respectto the pending $620 million ederal grant applicationwould be virtually the same as those that apply to the$545 million in ederal grants already received.

Higher-than-projected costs, such as ederal grantrepayment liabilities and the necessity or operatingsubsidies, led governors in our states to cancel majorinrastructure projects over the last six months. Treeo these projects were to have been supported withederal high-speed rail grants.

In October o 2010, Governor Chris Christieo New Jersey canceled a new rail tunnel underthe Hudson River between New York and New Jersey. Governor Christie took this action be-cause o indications that the cost o the tunnel was escalating signifcantly. Under the ederalgrant application, any cost escalation was to bethe responsibility o New Jersey taxpayers. Aterthe governors initial announcement, there werediscussions between the governor, New Jerseyscongressional delegation, and the US Secre-tary o ransportation in an attempt to fnd acompromise that would permit the project toproceed. In the end, the potential obligationso New Jersey taxpayers could not be avoided,


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and Governor Christie made cancellation o thetunnel nal.

As a candidate or governor o Wisconsin, ScottWalker announced that he would return a high-speed rail grant to the ederal government be-

cause o the ongoing obligations that would berequired o taxpayers. Te grant would havespeeded up trains between Milwaukee andMadison, though not to the genuine high-speedrail standards. Te grant award was cancelledby the US Department o ransportation aterGovernor Walker was elected.

Similarly, as a candidate or governor o Ohio,John Kasich announced that he would not ac-cept already approved unding or a so-called

high-speed rail line between Cincinnati andCleveland. As in Wisconsin, the speed o thetrain would have been well below genuine high-speed rail standards. Te grant award was can-celled by the US Department o ransportationater Governor Kasich was elected.

In February, Governor Rick Scott o Floridacanceled one o the nations two genuinely high-speed rail proposals (the other was in Calior-nia). Te trains would have operated between

ampa and Orlando. Governor Scott citedconcerns that there would be substantial costoverruns and that operating subsidies would berequired, both o which would have been theresponsibility o state taxpayers. Florida hadalready experienced a demand by the ederalgovernment to return one-quarter billion dol-lars in grant unding because a transit grantee(ri-Rail, the Miami area commuter rail opera-tor) had ailed to maintain the required levelo service. ri-Rail was able to avoid reundingthe money to the ederal government only by astate bailout amounting to nearly $15 millionin annual subsidies. Tis permitted ri-Rail torestore service that it could not aord with itsown unding sources.

In a th state, Missouri, the legislature in Aprildeclined to include high-speed rail in its annual bud-

get.21 Again, this action was justied by concern aboutlonger-term, indenite obligations or the taxpayerso the state.

Te cancellation o already-awarded ederal high-speed rail grants to Wisconsin, Ohio, and Florida e-

ectively returned $3.6 billion to the ederal treasury.Despite claims rom proponents that the undingwould simply be given to other states, the eventualreduction o high-speed rail unding in the recentederal budget agreement cut approximately 80 per-cent o that amount ($2.9 billion). All o the current(scal year 2011) budget authority o $2.5 billion wasrescinded as well as $400 million o authority romprevious years.

envIronmentaland energysustaInabIlIty

NCDO cites environmental and energy con-servation justications or expanding passenger railservice.

Greenhouse Gas Emissions. Te NDCO grantapplication indicates that the addition o the ourthPiedmonttrain would result in an annual reduction o2,747 tons o greenhouse gases. Tis appears to be anexaggeration.

NCDO indicates that passenger trains emit0.18 kilograms o greenhouse gases per passengermile. NCDO also indicates that cars emit 0.21 kg ogreenhouse gases per passenger mile. Tis means that,according to the NCDO data, each person switch-ing rom a car to the train would reduce greenhousegas emissions by 0.03 kilograms per passenger mile.

I all o the 12.32 million passenger miles antici-pated in the 10th year o operation were to have beendiverted rom cars (an optimistic assumption),22 thereduction in greenhouse gas emissions would be only370 tons. Te NCDO estimate o greenhouse gasemission reductions is thus exaggerated by more than

seven times (able).Even beyond this apparent error, the emission

actors used by NCDO indicate that passenger rail would be more greenhouse gasriendly than cars.Over the lie o the proposed project, the data showotherwise.

Te greenhouse gas emissions estimate used byNCDO or automobiles uses average data. Such av-


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erage data include the much highergreenhouse gas emissions that oc-cur in heavy city trafc. Accord-ing to the Congressional ResearchService, automobiles use 27 percent

less uel per passenger mile on tripso more than 75 miles (the averagetrip length or a ourth Piedmonttrain rider would be 114 miles,according to the NCDO ederalgrant application).23 Because green-house gas emissions are proportion-al to uel combustion, the emis-sions rom light vehicles would alsobe less or an intercity light vehicletrip. Based upon 2010 data rom

the US Department o EnergyAn-nual Energy Outlook, it is estimatedthat the greenhouse gas emissionsper passenger mile o light vehicleson intercity trips would be the ap-proximately the same as passengertrains, at 0.18 kilograms per pas-senger mile.24

Further, the NCDO analy-sis ails to account or the improved greenhouse gasemissions that are projected or light vehicles by2025, which would be the 10th year o operation othe ourth Piedmonttrain. Light-vehicle greenhousegas emissions are projected to improve substantiallyby 2026.25 Based upon data in the US Department oEnergysAnnual Energy Outlook: 2011, it is estimatedthat light-vehicle greenhouse gas emissions will all to0.14 kilograms per passenger mile by 2025. Tis ismore than 25 percent below the passenger train guresupplied by NCDO.

Tis does not include the greenhouse gas emis-

sions that would be expended in the construction ac-tivities associated with upgrading the North CarolinaRailroad.26 It is thus likely that the passenger trainswill result in a net increase in greenhouse gas emis-sions in later years. Further, it is likely that automo-biles will become more uel efcient ater 2025 andemit an even lower volume o greenhouse gases perpassenger mile.

Energy Consumption. Tere are similar difcul-ties with the NCDO estimates on energy conserva-tion.

NCDO indicates that cars consume 3,696 Brit-ish Termal Units (BUs) per passenger mile, com-pared with the 2,586 BUs per passenger mile orpassenger rail. Te costs, according to NCDO es-timates cars consume nearly 50 percent more energyper passenger mile than passenger rail.

I the more representative intercity automo-bile trip uel efciency or a longer trip is used (seeGreenhouse Gas Emissions, above), the latest data

indicate that the automobile would consume 2,700BUs per passenger mile, only slightly more than pas-senger rail. Adjusting this gure or the improvementprojected or 2025 reduces the energy consumptiongure to 2,160 BUs per mile, which is below theNCDO passenger train gure o 2,568. Tis doesnot include the energy that would be expended inthe construction activities associated with upgrading

Table. Greenhouse Gas Emissions Estimates (NCDOT and Actual)o a Fourth PiedmontTrain

Line Factor Data Source

A Passenger Miles 12,320,000 NCDOT

B Car GHG/Passenger Mile (in KG) 0.21 NCDOT

C Train GHG/Passenger Mile (in KG) 0.18 NCDOT

D Reduction from Car to Train (in KGs) 0.03 NCDOT

E Maximum Reduction in KGs 369,600 D (x) A

F KGs per Ton 1,000 Supplied

G Maximum Reduction in Tons 370 E () F

H NCDOT Figure 2,744 NCDOT

I NCDOT Figure Compared to Actual 7.4 H () G

Based upon Year 10 data rom NCDO grant application. GHG emissions reduction isoverstated because not all travel on the train would be diverted rom cars.


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the North Carolina Railroad. Tus, thetrains are likely to increase ossil uel useor energy consumption or both over thelonger term.

Intercity Buses: A More Environ-

mentally Friendly Alternative. In act,it appears likely that passenger trains arethe least environmentally riendly suracemode o intercity transportation over theproposed route. Intercity buses have byar the smallest environmental and en-ergy ootprint.

NCDO uses a gure o 4,315 BUsper passenger mile or buses. Tis gureis well above that o intercity buses andis, in act, or transit buses.27 ransit bus-

es are inappropriate or comparison tointercity passenger rail services, becausethey operate principally in urban areaswhere congestion is greater and becausethey typically have comparatively lowpassenger load actors.

Recent research indicates that inter-city buses represent the most uel ef-cient and least greenhouse- gasintensiveintercity passenger transport mode. Teaverage energy consumption per pas-senger mile o the intercity bus eet wasestimated at 953 BUs in 2007, morethan 60 percent below the intercity railgure.28 However even this gure canbe reduced. Research on the emergingcurbside bus29 industry estimates en-ergy consumption at 666 BUs per passenger mile,which is approximately 75 percent below that o pas-senger rail.

Te reduction in greenhouse gas emissions would

be similar. A conventional intercity bus system couldreduce greenhouse gas emissions 50 percent relativeto the passenger rail system. A curbside intercity bussystem could reduce greenhouse gas emissions bymore than 70 percent.

Tese lower levels are understated because theydo not include the substantial energy consumptionand greenhouse gas emissions that would occur dur-

ing the construction activities in upgrading the NorthCarolina Railroad.

Tereore an intercity busbased program (whichcould be developed by NCDO under contract),

whether conventional or curbside, would produce arbetter results in energy conservation and greenhousegas emission reductions (Figures 3 and 4). Moreover,either option would require little or no capital expen-diture and ar lower subsidies (i any) or operations.

emPloyment ImPaCts

NCDO grant applications indicate that the new

Figure 3. Estimated 2025 Greenhouse Gas EmissionsBy mode: kilograms per passenger mile

Figure 4. Estimated 2025 Energy ConsumptionBy mode: BUs per passenger mile


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passenger train projects will create jobs. However, the jobs projections ail to take into consideration the jobs that are displaced in the private sector by tak-ing money out o the private economy. CongressionalResearch Service30 and Government Accountability

Ofce31

reports indicate that public inrastructureprojects tend to add little or no new jobs overall andcan result in overall job losses.

valueoFthe north CarolInaraIlroad

Te North Carolina Railroad (NCRR), over whichthe passenger trains travel, is owned by the state. As aresult, the state and its taxpayers have a material inter-est in its uture value and prots (or losses). NCRRis managed under contract by the Norolk SouthernRailroad, which operates reight trains over the route.

Tese reight trains are very likely responsible or theull value o the NCRR. Te passenger trains haveno commercial value, by virtue o their capital andoperating losses.

An agreement has been reached between the state,NCRR, the Norolk Southern Railroad, and Amtrakor the operation o the additional passenger service.It is to be hoped that the parties have made eectivearrangements to ensure the continued, expeditiousoperation o the reight trains that make NCRR avaluable asset.

Te mixing o passenger trains and reight trainson the same right-o-way has always posed difculty,because o the substantially diering speeds, weights,and other requirements o these two very dierenttransport modes. Tis is illustrated by the interna-tional experience in passenger and reight rail.

No high-income nation operates both a high-vol-ume reight rail system and a high-volume passengerrail system.32 Among major higher-income nations,rail reight volumes exceed that o trucks only the

United States (58 percent o the combined total),33Canada (61 percent),34 and Australia (75 percent).35In each o these countries, the reight rail systemsare owned principally by the private sector. Over thepast decade, US reight rail volumes have increased atnearly 1.6 times that o trucks.

Freight rail market shares are very limited in Eu-rope (European Union-27) where passenger train

volumes are substantially higher. Tis is at least inpart because the operational requirements o thepassenger rail services make it difcult or passengerrail to compete eectively with road reight. In Eu-rope, rail reight accounts or only 19 percent o road

and rail reight volumes. Road reight is expandingat 2.4 times that o rail reight.36 Specic programsby the European Union to increase reight rail vol-umes have ailed to reverse the trend. Te Europeanreight market share continues to decline, despite theact that substantial volumes have been moved romconventional passenger rail services in Europe to thenew high-speed rail services that have been built withcompletely separated rights-o-way. In major urbanareas, commuter rail operations restrict the access oreight rail services to and rom manuacturers and

warehouses. Tis increases the share o trucks trafcon Europes urban roads, highways, and reeways.

Te situation is similar in Japan, where passengertrain requencies are much higher than in the Unit-ed States, Canada, and Australia. In Japan, reightrail represents only 6 percent o the combined roadand rail reight volumes.37 Tis increases the share otrucks trafc on Japans urban roads, highways, andreeways.

In the one part o the United States where there isa substantial presence o passenger rail, reight rail vol-umes are very low. In the Northeast corridor, betweenWashington, New York, and Boston, reight rail hasa very small market share, more akin to the smallerreight rail market shares in Europe and Japan.38

In the United States, the substantial reduction inpassenger rail service that occurred with the estab-lishment o Amtrak provided capacity to support anunprecedented increase in reight rail volumes. Tesubsequent deregulation o the industry under theStaggers Act a decade later also contributed to this

increase.39Tus, at the national level, a substantial increase

in intercity rail services could lead to a diversion oreight to trucks, which would intensiy trafc vol-umes within and between urban areas and increasetrafc congestion.

Tese difculties are highlighted by a recent state-ment by the Michael Ward, the Chie Executive O-


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cer o the CSX Railroad, who indicated that the op-eration o trains at above 90 miles per hour, such asproposed in the Southeast High Speed Rail Corridor,is incompatible with reight operations.40

Te new NCDO high-speed rail grant applica-

tion would implement 110-mile-per-hour maximumspeeds in the Raleigh to Richmond corridor as a parto the Southeast High Speed Rail Corridor. Furtherdevelopment o 110-mile-per-hour operations underthe Southeast High Speed Rail Corridor could makethe NCRR less attractive or reight operations, whichcould divert volumes to trucks or to other rail routes.

end notes

Te ederal High Speed Intercity Passenger Rail Program isprincipally an intercity rail program rather than a high-speed railprogram. Most projects under the program anticipate maximumspeeds ar below international high-speed rail standards, includ-ing the North Carolina program.

James Meek, Te 10Bn Crash, Te Guardian, April 1, 2004,www.guardian.co.uk/world/2004/apr/01/transport.politics.

See Elizabeth McNichol, Phil Oli, and Nicolas Johnson, StatesContinue to Feel Recessions Impact, Center on Budget and PolicyPriorities, Center on Budget and Policy Priorities, March 9,2011, www.cbpp.org/cms/?a=view&id=711.

Release: S&P Cuts U.S. Ratings Outlook to Negative, TeWall Street Journal, April 18, 2011, blogs.wsj.com/market-beat/2011/04/18/release-sp-cuts-u-s-ratings-outlook-to-negative.

International Monetary Fund, Fiscal Monitor: Shiting Gearsackling Challenges on the Road to Fiscal Adjustment, April 2011,www.im.org/external/pubs/t/m/2011/01/pd/m1101.pd.

For the NCDO ederal grant application or the third Piedmont

train, see www.bytrain.org/ra/track2/nct2_3_5th_req.pd.

For the NCDO ederal grant application or the ourth Pied-monttrain, see www.bytrain.org/ra/track2/nct2_2_4th_req.pd.

According to Amtrak, the rail distance rom Raleigh to Charlotteis 173 miles, which at an average projected speed o 58 miles perhour (rom the NCDO grant application) results in a trip timeo 3:00.

Te Carolinian is scheduled to make the trip rom Raleigh toCharlotte in 3:32 and toward Raleigh in 3:26. From Charlotte,

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Tis could reduce the value o the NCRR.41

ConClusIon

Because o the substantial risks to taxpayers o ur-ther passenger rail development, the minimal trafc

impacts, the act the passenger rail would reduce nei-ther greenhouse gas emissions nor energy consump-tion, the minimal job impacts and the potential orreducing the value o the North Carolina Railroad,North Carolina should return the ederal high-speedrail grant unding, withdraw its pending application,and seek no more unding or passenger rail.

the Carolinian takes 9.5 hours to Washington and 13.5 hours toNew York.

Chinas high-speed trains operate at up to nearly 220 miles perhour and were planned to travel as much as 235 miles per hour.However, a recent announcement by the Ministry o Railwaysindicates that rom July 1, no trains will operate aster than 186miles per hour, due to saety, energy consumption, and are(cost) considerations. See Brian Spegele, China Puts Brakes onHigh-Speed Rail, Te Wall Street Journal, April 15, 2011, online.wsj.com/article/SB10001424052748703983104576262330447308782.html.

Southeast High Speed Rail Corridor, www.sehsr.org.

Te grant application or the ourth Piedmontindicates that therewould be 1,053 minutes o delay per each 10,000 train miles.Over the 173-mile distance rom Raleigh to Charlotte, this calcu-lates to a delay o approximately 18 minutes per trip.

2010 National rac Scorecard, INRIX, www.inrix.com/scorecard/op100Metros.asp.

Bruce Sicelo, Mixed Signals on Rail Funding, TeNews & Observer, April 6, 2011, www.newsobserver.

com/2011/04/06/1107891/mixed-signals-on-rail-unding.html.Tis assumes that trafc would continue to grow at the rate opopulation increase and uses the high-trafc point and low-trafcpoint in the corridor based upon NCDO trafc counts rom2009. Calculated using data rom NCDO,2009 Interstate &Freeway Report, www.ncdot.org/doh/preconstruct/tpb/trac_survey/download/2009InterstateFreewayReport.pd.

Calculated rom data in attachments to a letter rom Patrick B.Simmons o NCDO to Administrator Joseph. C. Szabo o the

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15.

16.


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Federal Railroad Administration, August 24, 2009, www.bytrain.org/ra/general/nc_fnance_plan.pd.

Capital cost discounted at 4 percent over 35 years.

Based upon gross domestic product data, see Demographia, USCost o Automobiles/SUVs and Public ransport per PassengerMile rom 1960, Urban ransport Fact Book, www.publicpur-

pose.com/ut-drivingcost.pd.From the Congestion Mitigation and Air Quality Improvementprogram o the US Department o ransportation.

NCDO, Financial Plan: High Speed Intercity Passenger Rail Pro-gram, October 2, 2009, www.bytrain.org/ra/track2/fnancial_plan.pd.

Associated Press, Lawmakers deal setback to high-speed railplan, News ribune, April 13, 2011, www.newstribune.com/news/2011/apr/13/lawmakers-deal-setback-high-speed-rail-plan.

Te NCDO grant application does not project the source othe ourth Piedmonts ridership.

Steven J. Tompson,Amtrak and Energy Conservation in Intercity

Passenger ransportation, Congressional Research Service, Septem-ber 3, 1996, ncseonline.org/nle/crsreports/energy/eng-11.cm.

Calculated rom data in US Department o Energy,AnnualEnergy Outlook: 2011, www.eia.doe.gov/orecasts/aeo.

Tis gure assumes that there would be no improvements to beuel efciency o the light vehicle eet ater the CAFE standardso 2016 are reected. More stringent standards (which have beenproposed) or technological advances or both could make thisimprovement even greater.

A University o Caliornia study indicates that the greenhouse gasemissions rom construction o that states proposed high-speedrail system would take 71 years to recover at mid-level ridershipprojections. See Mikhail Chester and Arpad Horvath, Lie-

cycle Assessment o High-Speed Rail: the Case o Caliornia,Environmental Research Letters, January 10, 2010, iopscience.iop.org/1748-9326/5/1/014003.

NCDO indicates that the 4,315 BUs per passenger mile arerom a US Department o Energy source published in 2009.Tat source (not directly noted in the NCDO application)appears to have been the ransportation Energy Data Book, Edi-tion 28, which indicates that the BUs per passenger mile ortransitbuses were 4,315 in 2007, the last year or which data areprovided. Earlier editions o the ransportation Energy Data Bookhad placed intercity bus energy consumption at 932 BUs perpassenger mile in 2000 (the latest year reported).

Joseph P. Schwieterman and Lauren Fischer, Te Intercity Bus:Americas Fastest Growing ransportation Mode, 2010 Update onScheduled Bus Service, Chaddick Institute o Metropolitan De-velopment, DePaul University, December 20, 2010, las.depaul.edu/chaddick/docs/Docs/2010_Intercity_Bus_Study_12-29.pd.

Te curbside bus industry is a relatively new intercity bus mode.Companies (an example is Megabus) pick up and dischargepassengers at bus stops on streets. icketing is virtually all by theInternet and services usually are o a higher quality than tradi-tional intercity bus service, oten including high-speed Internetaccess.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

David J. Cantor, Highway Construction: Its Impact on theEconomy, Congressional Research Service Report or Congress,

January 6, 1993.

Emergency Jobs Act o 1983: Funds Spent Slowly, Few Jobs Created,US General Accounting Ofce, December 1986, archive.gao.

gov/0102/132063.pd.

In emerging-world China, which has developed the worlds larg-est high-speed rail system, a principal justication has been tomove passenger trains o the conventional tracks to allow greaterexpansion o reight operations. Chinas rail system operatesvirtually at capacity in a number o corridors and represents theprincipal mode o intercity transport or its hundreds o millionso households who do not yet have cars. Unlike Europe and

Japan, many o the stations in the largest urban areas (such asWuhan, Nanjing, Guangzhou, Changsha, Xian, and Shanghai)are being constructed outside the urban cores, which eliminatesthe need to share tracks with reight, unlike the general practicein the larger urban areas o Europe and Japan.

Calculated or 2008 rom data in National ransportation Statis-tics, Bureau o ransportation Statistics, United States Depart-

ment o ransportation, www.bts.gov/publications/national_trans-portation_statistics/html/table_01_46b.html.

Calculated or 2008 rom data in Freight ransportation SecondaryEnergy Use by Energy Source and ransportation Mode, Ofce oEnergy Efciency, Natural Resources Canada, Government oCanada, oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tableshand-book2/tran_00_8_e_4.cm.

Calculated or 2008 rom data in Yearbook 2011: AustralianInrastructure Statistics, Department o Inrastructure and rans-port, Government o Australia, 2011, www.bitre.gov.au/publica-tions/92/Files/BIRE_Yearbook_16Mar2011.pd.

Calculated or 2008 rom data in EU Energy and ransport inFigures, European Commission (2010).

Calculated or 2008 rom data in Japan Statistical Yearbook,Ministry o Internal Aairs and Communications, StatisticsBureau, Government o Japan, www.stat.go.jp/data/nenkan/zuhy-ou/y1204000.xls.

US Cost o Automobiles/SUVs and Public ransport per Passen-ger Mile rom 1960, Te Public Purpose, 2010, www.publicpur-

pose.com/hwy-rtrail.pd.

Ibid.

Lisa Caruso, CSX Chie Says He Cant Be Part o ObamaHigh-Speed Rail Plan, Bloomberg, April 6, 2011, www.bloomberg.com/news/2011-04-06/csx-chie-says-he-can-t-be-part-o-obama-high-speed-rail-plan.html.

Te NCDO grant application indicates that revenues on theSoutheast High Speed Rail Corridor would handily exceedcosts. Based upon the pervasive losses evident in both interna-tional and US passenger train systems, an assumption o prot-ability or the Southeast High Speed Rail Corridor is consideredexceedingly optimistic.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.


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1



aboutthe authorWendell Cox is principal o Demographia, a public policy rm located in the St. Louis metropolitan area. Hehas completed projects in the United States, Western Europe, Canada, Australia, New Zealand and Arica.He has authored two reports on high-speed rail in Florida (or the James Madison Institute in 1997 and orthe Reason Foundation in 2011) and was co-author with Joseph Vranich o a high speed rail report in Cali-ornia (or the Reason Foundation in 2008). He was appointed to three terms on the Los Angeles Countyransportation Commission (which oversaw highway and transit policy in the nations largest county) by LosAngeles Mayor om Bradley and was appointed by Speaker o the House o Representatives Newt Gingrich tothe Amtrak Reorm Council, to ll the unexpired term o Governor Christine odd Whitman o New Jersey.He holds a BA in Government rom Caliornia State University, Los Angeles and an MBA rom PepperdineUniversity, in Los Angeles.

aboutthe John loCke FoundatIon

Te John Locke Foundation is a nonprot, nonpartisan policy institute based in Raleigh. It seeks to transorm

state and local government through the principles o competition, innovation, personal reedom, and personal

responsibility in order to strike a better balance between the public sector and private institutions o amily,

aith, community, and enterprise.

o pursue these goals, JLF operates a number o programs and services to provide inormation and analysis

to policymakers, civic and community leaders, activists, and the news media. Tese services and programs

include research reports on policy issues such as taxes, education, health care, regulation, and economic de-

velopment; a media outlet, Carolina Journal, with an audience o 200,000 North Carolinians receiving print,

radio, video, or online editions at CarolinaJournal.com; a quarterly member newsletter, Te Locke Letter, and

a variety o blogs, web sites, and media outreach eorts; and regular luncheons, policy briengs, panel discus-

sions, and other events held throughout the year in Raleigh, Charlotte, the riad, Asheville, Wilmington, and

other North Carolina communities.

Te John Locke Foundation is a 501(c)(3) tax-exempt public charity and is unded solely rom voluntary

contributions rom individuals, corporations, and charitable oundations. It was ounded in 1990. For more

inormation, visit www.JohnLocke.org.


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should ncdot add more piedmont trains?

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