In Dec. 2022, Florida Gov. Ron DeSantis signed a one-year “toll-relief bill” that applies to every toll road, toll bridge, and express toll lane in the state. Those who drive 35 or more trips per month on Florida’s tolled roadways will be given a 50% discount on the tolls they were charged. The state will compensate toll operators via $500 million in general fund money.

Not to be outdone, New Jersey legislators are considering a similar measure for that state’s toll roads. Oregon’s Department of Transportation (DOT) is working on low-income discounts for drivers who might use soon-to-be-tolled Interstates and bridges in the Portland area.

In Michigan, what shocked me most, was one section of an otherwise very well-done January 2023 study of potential toll-financed Interstate highway modernization in the state. It was researched and written for Michigan DOT by HNTB and CDM Smith, two firms with great expertise in toll financing. The most promising near-term corridors would be rebuilt and modernized, corridor-by-corridor, financed by toll revenue bonds over the next 10 years, at a cost of $18.5 billion. The toll financing plan is estimated to fully cover the capital and operating costs and attain an investment-grade bond rating.

The financial projections in Michigan took 5% of revenue off the top to account for an array of possible discounts, mitigations, and rebates the state could offer to toll lane users. One component, which I think is defensible, is called “local community transportation mitigation.” Because some traffic that now uses Interstates would divert to other roads when the Interstates are tolled, spending a bit of the toll revenue to assist impacted communities in funding things like signal timing improvements, park-and-ride lots, and commuter buses is defensible. In addition, quite a few toll roads offer discounts for frequent commuters, which is also suggested.

But I draw the line at what the Michigan study calls “local community non-transportation mitigation.” It suggests using toll revenue to buy community support by funding “arts and cultural abundance,” “public health and well-being,” “learning,” and “sustainable environment and natural resources,” among other nice-sounding things.

Also proposed is 100% discounts (i.e., no tolls at all) for “environmental justice communities.” Remember, this is for people who own and drive cars, not those who commute via subsidized transit.

Part of the rationale for these mitigations is the projected extent of traffic diversion. The report includes diversion rate estimates for each corridor, ranging from 6% to 18%, based on the most-viable car/SUV toll of 6 cents per mile. An alternative way to reduce diversion—mentioned in the report but not included in the plan—is to provide rebates of state fuel taxes for all miles driven on newly tolled corridors. The state gas tax is about one cent per mile, so if motorists received a rebate of that amount, the net cost per mile to use the tolled Interstate would drop from 6 cents to 5 cents (17% less). And since diversion rates are proportional to the cost of using a toll road, diversion would likely be 17% less than the study estimated.

In a research paper of mine, published last month in Transportation Research Record, I estimated that the net present value of a fuel-tax rebate for newly tolled Interstates in a mid-size state would be less than 7% of gross toll revenue. That is within the ballpark of the 5% that HNTB would set aside for its set of mitigations and discounts in Michigan.

Let’s now consider some of the downsides to this growing trend of discounts and exemptions from tolling. In a report on the new Florida legislation, Moody’s Investors Service points out how unsustainable a one-year discount program will be. State budgets go up and down, and in the immediate term, in 2023, many states still have unspent windfalls from trillions of dollars in COVID-19 pandemic-era federal programs. That is not going to be the case in many future years.

But once motorists are used to paying far less to use toll lanes than before, that will likely seem like an entitlement, and there will be political pressures to continue the discounts—either at the expense of other state obligations (Medicaid, public schools, etc.) or at the expense of the toll roads. Ultimately, that could reduce toll road bond ratings, increasing their debt service costs.

Toll discount programs likely also lead drivers to think highways cost less to build, maintain and expand than they actually do. In this case, that would lead to political pressure for more federal and state funding of what had previously been self-supporting major highways and bridges. That is bad news for the long-term sustainability of highway funding. The true costs of building and maintaining highways and bridges should be paid for by those who use them.

And that brings me to one last point. The United States is facing a once-in-a-century need to replace what will soon be an obsolete method of highway funding—per-gallon fuel taxes—with a funding source that is independent of vehicle propulsion source. The general consensus is that the fairest and best replacement is to charge per mile driven, with higher charges for the heaviest vehicles that produce the most wear and tear on roadways. 

The easiest way to begin this transition to mileage-based user fees is with per-mile tolls on limited-access highways, such as Interstates and freeways. With all-electronic tolling and prepaid accounts, the cost of toll collection can be a very small fraction of the gross revenue collected. The transponder technology—E-ZPass and equivalents—is in widespread use in much of the country and widely accepted with little concerns about privacy.

If states adopt this path toward shifting from charging per gallon of gas to per mile driven, it’s vital that they do it right. The gas tax was designed as a users-pay/users-benefit road-use charge. There are no gas tax discounts for social justice communities, nor are there such discounts for electric bills, water bills, cable bills, or smartphone bills. Some utilities offer reduced lifeline rates to low-income customers. Something similar could be considered for per-mile highway charges. But as I wrote in a recent PW FInancing column on transportation equity:

Politicizing urban highways and undermining tolling, which should be used to finance and maintain highways, is not a good or effective solution to the nation’s infrastructure problems and won’t produce more equity.

We need solidly funded highways going forward, and those who use them should pay for them.

A version of this column first appeared in Public Works Financing.

The post Sustainable highway funding requires charging the drivers who use them appeared first on Reason Foundation.

In this issue:

• Experts spar over induced demand and freeway expansion
• Analysis, not knee-jerk reactions for Ohio train derailment
• Which state DOTs plan to fix major truck bottlenecks?
• TRB report on Black Americans and transportation
• Hyperloop startups losing ground
• How is Denver doing on Vision Zero?
• News Notes
• Quotable Quotes

Experts Spar Over Induced Demand and Urban Freeway Expansion  

I-35 through downtown Austin is massively congested much of the day. That’s hardly surprising since both Austin and Texas have been growing by leaps and bounds for several decades (with no end in sight), while I-35 through central Austin still has not had a significant expansion since 1974. Trying to accommodate today’s traffic flow with the capacity of 50 years ago is like trying to put 10 pounds of potatoes into a 5-pound sack.

Yet opponents of expanding I-35 in Austin raise the concept of “induced demand,” which some refer to as the “iron law of freeway congestion.” The idea is that it’s pointless to add capacity because the improved traffic flow will (only) lead to more vehicles choosing to use the freeway, yielding renewed congestion.

One of those who raised this argument is professor and engineer Kara Kockelman, who teaches transportation engineering at the University of Texas at Austin. In a recent piece by Kelsey Thompson of KXAN, Kockelman said that roadway improvements can lead to people changing their behavior, such as living further out in the suburbs or making trips during peak periods that they used to make at off-peak times. “By opening up I-35,” she told KXAN, “what we do is increase the attractiveness of that corridor for longer distance travel.” Also, after a long construction period, “There’ll be a lot of pent-up demand just waiting to get onto that road when it fully opens,” Kockelman added. That’s all true, but it’s not the end of the story.

At about the same time, another transportation expert, Steven Polzin of Arizona State University, published an article on Planetizen, “Induced Travel Demand Induces Media Attention.” He points out that in fast-growing states, most new highway demand comes from population growth and new jobs, not from “induced” travel. Second, he notes that vehicle miles traveled (VMT) per capita have leveled off in the past decade, so traffic congestion will likely not grow as fast in coming decades, other things equal. Third, Polzin points out that trips accommodated by an expanded highway can provide a number of benefits, such as:

• Residents getting access to better jobs and businesses with better selections and lower prices;
• Businesses having access to a larger labor pool, and larger customer and supplier bases;
• Enabling emergency vehicles getting where they are needed faster;
• Pulling cut-through traffic out of neighborhoods; and,
• Enabling parents to get home in time for family meals and activities.

Some of those benefits might not be long-lasting, especially as places like Austin continue to grow. But neither expert mentioned a way to make the expansion benefits last longer: add market-priced lanes instead of free lanes, so the pricing will enable high-value trips to take place even during peaks when the free lanes are getting jammed. Those can be personal trips (to the airport to catch a plane, getting to day-care in time to avoid late fees), enabling express buses to run consistently faster and more reliably, and letting emergency vehicles get where they’re needed quickly, for example. Kockelman mentions toll roads but not express toll lanes. In Houston and especially Dallas/Ft. Worth, the express toll lanes are popular and much-used. But even there, where they have proven their usefulness and popularity, regional plans for a whole network of express toll lanes have been thwarted by the Texas state legislature, which has banned any new Texas Department of Transportation (TxDOT) support for tolled projects, and any new long-term public-private partnerships (P3s) financed by toll revenues.

TxDOT’s earlier concepts for I-35 in Austin called for adding express toll lanes (also known as priced managed lanes). But as I noted in the August 2022 issue of this newsletter, due to the legislative ban, TxDOT’s current plan is to spend $4.9 billion of taxpayers money to add “non-priced managed lanes” to I-35 in Austin. In plain language, that means old-fashioned, ineffective high-occupancy vehicle (HOV) lanes. Based on past history, if built, those lanes will likely be either too empty (wasting costly pavement) or too full (fam-pools, cheaters). Without pricing, there is no “management” of HOV lanes.

In a recent presentation in Ft. Worth, I pointed out that TxDOT’s current plans to add HOV lanes to I-35 in Austin, I-35 in San Antonio, and I-635E in Dallas total $8.1 billion. On average, revenue-financed highway projects like express toll lanes need only 20% from the state DOT with all the rest financed based on toll revenues. Were those three projects carried out via revenue-financed P3s, TxDOT would save 80% of that $8.1 billion to spend on other projects statewide. That ought to appeal to legislators from smaller cities and rural areas. And it would produce a much more effective and long-term solution for the antiquated I-35 through Austin.

» return to top

Analysis, Not Knee-Jerk Regulation, for the Ohio Train Derailment
By Marc Scribner

On Feb. 3, a 149-car freight train operated by Norfolk Southern derailed in East Palestine, Ohio. Legitimate concerns regarding its hazardous material cargo and the potential impact on the local community soon morphed into a highly politicized and incoherent public debate on rail safety. Without knowing the causes of the derailment, it is premature to suggest any policies to prevent similar accidents from taking place in the future.

Of the 38 cars that left the track in East Palestine, 11 were tank cars carrying hazardous materials. These cars then caught fire and ignited an additional 12 cars that had not derailed. The train crew was able to decouple the lead locomotives from the train and flee a mile east while emergency responders began fighting the fires and instituted a one-mile radius evacuation zone surrounding the site.

By Feb. 5, emergency response personnel had extinguished the fires but noticed the temperature was still rising in a tank car carrying more than 115,000 gallons of toxic vinyl chloride, indicating a chemical reaction was taking place that could cause an explosion. This led to an expansion of the evacuation zone to a two-mile radius, after which emergency responders manually emptied five tank cars carrying vinyl chloride into containment ditches, where it was then burned. There have been no reported injuries or fatalities, although regulators are still investigating environmental and health hazards that may be present.

In the weeks following the accident, mainstream media outlets took an unusually heightened interest. This was accompanied by an outpouring of demagoguery and conspiracy theories from numerous politicians, pundits, and activists. The National Transportation Safety Board (NTSB) is still investigating the causes of this accident, but its preliminary report published on Feb. 23 suggests an overheated wheel bearing failed immediately prior to the derailment.

The NTSB’s clear early reporting on the known facts has helped quell some of the misinformation firestorm, but false and misleading claims about the accident are still being circulated and continue to drive the debate on potential policy responses. Policymakers should proceed with caution and develop an understanding of the particular facts of this accident and the relevance of various regulatory proposals before acting.

The suggestion that the Trump administration’s rescission of Obama-era requirements on electronically controlled pneumatic (ECP) brakes is a potential cause of the derailment is false on its face. That 2015 rule was criticized by rail carriers for having costs that exceeded the benefits. In the FAST Act, the 2015 multiyear surface transportation reauthorization, Congress included provisions at Section 7311 that ordered studies on ECP brakes from the Government Accountability Office and the National Academy of Sciences. Congress also required the secretary of transportation to reanalyze the benefits and costs of the rule based on this revised expert input and to repeal the ECP brake requirements if it was determined that the costs exceeded the benefits. Consistent with the law, the Department of Transportation (DOT) rescinded the ECP brake requirements in 2018 following the updated benefit-cost analysis.

But most important to the East Palestine derailment is that even if the ECP brake rule had withstood congressionally ordered scrutiny, it would not have applied to this train. That is because the Norfolk Southern train did not consist of enough hazardous materials railcars to trigger those repealed requirements. The false claims about the ECP brake rule led NTSB Chair Jennifer Homendy to take to social media to correct the record a week before the release of NTSB’s preliminary report.

In another social media spectacle, Transportation Secretary Pete Buttigieg and Sen. Marco Rubio (R-FL) got into a heated argument about automated track inspection (ATI) technologies that also are irrelevant to the East Palestine accident. Sec. Buttigieg implied that Sen. Rubio’s past support for ATI ran counter to rail safety. This is untrue. As I’ve written at length, regulators themselves have found that ATI provides safety benefits over traditional human visual inspections. The issue is that the Federal Railroad Administration during the Biden administration has been shutting down successful ATI pilot programs and denying waivers requested to expand the use of ATI, apparently at the request of unions representing track inspectors. In this case, Sen. Rubio was right to criticize the Biden Department of Transportation for adopting less-safe rail policy.

But Sen. Rubio has also offered up red herrings following this accident. He most recently joined a bipartisan group of populist senators to introduce the Railway Safety Act of 2023, which closely mirrors the regulatory demands made by Sec. Buttigieg prior to the release of the NTSB’s preliminary report. President Biden quickly endorsed the bill. Among the bill’s provisions is a requirement that trains have at least two crewmembers on board, a longstanding priority of organized labor that fears emerging automation technologies. The Department of Transportation is currently pursuing this rule on its own and has admitted that it does not possess “any meaningful data” to support the conclusion that two-person train crews are safer or that one-person crews are less safe (see Reason Foundation’s response to this proposed rule). What’s more, the Norfolk Southern train had three crewmembers in the locomotive cab at the time of derailment and there is no indication that the crew played any part in the accident.

There may be an appropriate role for policymakers once the causes of the East Palestine accident are determined. However, it is important to recognize that rail accident rates are at or near historic lows across all incident types, according to Federal Railroad Administration data. Further, statistics from the Pipeline and Hazardous Materials Safety Administration show that rail is far safer than trucks in transporting hazardous materials, meaning that rail-specific hazardous materials regulations should be balanced against the safety implications of a potential modal shift to trucks likely to occur if rail transportation costs rise. While especially challenging in a polarized and hot-tempered political environment, responsible policymaking will require careful analysis, not reflexive regulation.

» return to top

Which State DOTs Plan to Fix Major Truck Bottlenecks?

Ever since 2002, trucking research organization the American Transportation Research Institute (ATRI) has been using truck GPS data to identify the top hundred truck bottlenecks across the 48 contiguous states. Its latest annual report was released last month and is available here.

In most prior years, when I have written about this annual survey, I’ve reported little change from year to year: the same bottlenecks keep appearing, in pretty much the same order of awfulness (e.g., Fort Lee, NJ, where I-95 intersects with SR 4 is nearly always #1). But this year, there is actually some good news. Transportation departments in several states have included fixing a number of these chronic bottlenecks in their current plans.

I had time to review only the top 20 bottlenecks, those with the worst chronic traffic congestion. And the winning DOT is Georgia’s. Its current plans are to reconstruct and modernize all of nine of its ATRI  bottlenecks, all in the Atlanta metro area and most of them involving I-285, the Atlanta ring road known locally as “the Perimeter.”  Georgia’s six major bottlenecks in the top 20 to be rebuilt are as follows:

Texas has four bottlenecks in the top 20:

TxDOT tells me that all four are in its 10-year Unified Transportation Program.

Fast-growing Nashville has one of the top 10 bottlenecks: I-24/I-40 at I-440 East. It will likely be addressed in the state’s forthcoming public-private partnership and choice-lanes legislation, but that legislation has not yet cleared the Tennessee legislature.

Cincinnati has the #15 bottleneck, where I-71 and I-75 come together to cross the Ohio River. That bottleneck will be addressed by the $3.2 billion Brent Spence Bridge project, which will improve the existing bridge and reserve it for local travel and build a new double-deck bridge parallel to the existing one to accommodate both I-71 and I-75. That project has won $1.6 billion in federal grants, to be supplemented by Ohio and Kentucky state transportation funding.

Louisiana made #20 on the list, with the notorious bottleneck where I-10 and I-110 intersect in Baton Rouge, near the I-10 bridge across the Mississippi River. Louisiana Department of Transportation and Development (DOTD) has an ongoing contract for the reconstruction and widening of this segment of I-10. In addition, DOTD is in the planning stage for an additional bridge across the Mississippi, which should also improve traffic flow in the Baton Rouge area. Last fall, a planning study narrowed the locations for the Mississippi River Bridge South project to just three.

California has three of the top 20 bottlenecks, all in the greater Los Angeles area. My three Caltrans contacts confirmed that one of the three—SR 60 at SR 57—will begin reconstruction this spring. But there are no plans within the next 10 years to deal with the other two.

The Chicago area has three bottleneck interchanges in the top 20, but thus far, I have not identified any projects that would directly address any of them.

This is the most positive assessment I’ve made of the annual ATRI report, with serious plans to address more than half of the top 20 bottlenecks. Kudos to the DOTs of Georgia, Louisiana, Ohio, Tennessee, and Texas for taking these bottlenecks seriously.

» return to top

TRB Report on Black Americans and Transportation
By Baruch Feigenbaum

In order to better understand transportation’s effects on black Americans, the Transportation Research Board (TRB) Transit Cooperative Research Program (TCRP) is in the process of producing a five-volume study on racial equity. The full title is Racial Equity, Black America, and Public Transportation. The first volume was released in early January.

What is TCRP, and how does the process work? TRB committee members write problem statements for further research and submit them to TCRP staff. The staff meets to select which problem statements should get funded for research, with a focus on statements that are timely and innovative. Once a statement is selected, TRB staff forms an oversight committee of TRB committee members. The oversight committee fine-tunes the topic parameters, issues a request for proposals from contractors, and then selects the winning contractor team based on qualifications.

The first chapter of volume one explains the report’s purpose of understanding how transportation impacts affect black people by linking transportation and the civil rights movement. The second chapter describes the research approach, which sorts government policies into different categories, such as land use. The third chapter discusses economic policies, including housing and transportation, white flight, and spatial mismatch. The fourth chapter discusses health impacts, including air pollution impacts and pandemic policies. The fifth chapter examines social causes, including gentrification and policing. And the sixth chapter includes potential solutions, including changing metropolitan planning organizations’ (MPO) policies.

The report details some clearly racist policies. In chapter 3, section 3, the authors note that often urban Interstates were routed through black communities even when it was not the shortest route. These routings were designed to place a barrier between the central business district and the community. For example, in Atlanta, I-75/I-85 was built in a semi-circle instead of a straight line to separate downtown from the Old Fourth Ward. This occurred even though a straight line would have been cheaper and safer.

In chapter 3, section 4, the authors note how cities such as Denver have prioritized rail construction for a limited number of white constituents while providing insufficient bus service to a larger number of bus riders. The authors also note how most post-World War II heavy rail systems served to move upper-middle-class white residents from the suburbs to downtown, demolishing parts of places like West Oakland, CA, in the process. The authors also note the role of the Bus Riders Union, which successfully sued the Los Angeles County transit provider to force the agency to increase bus service instead of building rail lines. (Unfortunately, once the court-ordered consent decree expired, the transit provider returned to its past ways). In chapter 5, the authors note how bike lanes and light rail can raise property values, forcing out black residents. This occurred in Seattle due to new light rail stations and in Fresno due to a new mixed-use infrastructure project.

But sometimes the report strays from transportation. While some of this research is useful, I question what it is doing in a transportation publication. For example, the report has an entire section on housing discrimination. It details how both the former Home Owners Loan Corporation and the Federal Housing Administration had loan programs that discriminated against black homeowners. Only $120 billion, or two percent of program funds, were disbursed to African Americans. The report also includes an entire chapter on health. The report details the siting of hazardous landfills in North Carolina and Texas, neither of which are related to transportation.

In its conclusions, the report highlights how MPOs need to do a better job of representing all interest groups, not just white business interests, as well as how some transportation ballot measures which did not include projects important to black residents failed. But it does not offer a solution for either. Some of the report’s implied solutions could make the outcomes worse. For example, demolishing Interstate highway segments would likely lead to gentrification displacing black residents. It is far from ideal to live adjacent to a highway and have to deal with increased noise and tailpipe emissions. But it is better than losing your house because you cannot afford to pay the property taxes.

There are also some statements that seem to counter the report’s goals. In one section, the authors note that whites have much shorter travel times to work despite commuting longer distances. The study asserts that the reason is automobile ownership, and if blacks had owned automobiles at higher rates, then travel times would have been the same. If that’s true, maybe the policy should be to subsidize vehicle purchases instead of transit systems, as some transportation economists have recommended.

Finally, I’ll be curious to see the full policy recommendations in volume 3. The report details a 500-year-plus history of racist policies and suggests that government actors are still racist. If the government is so bad, why not look to the private sector or non-profit actors to solve the problem?

Comedian Dave Barry told a joke about how driver #1 got a flat tire because driver #2 intentionally threw a bunch of nails on the road in front of driver #1’s vehicle. Yet driver #1 went to driver #2 to repair his tires. If the government caused these problems, the authors need to make sure their recommendations don’t rely on the people who created the problems to solve them.

» return to top

Hyperloop Startups Losing Ground

Ten years ago, Elon Musk introduced a ‘new’ concept that I’d studied in a mechanical engineering course at Massachusetts Institute of Technology in the 1960s: Build evacuated tubes with capsules powered by linear induction motors for truly high-speed surface transportation. We fledgling engineers were excited by the concept, but we had no real idea of how to estimate its cost or solve a number of technical problems. Musk ‘gave away’ the idea, rather than committing to develop it, but that did not dismay half a dozen start-up companies. A recent Bloomberg article recounts that “Hyperloop Dreams Endangered After SPAC Deal Fails” tells part of the story.

Reporter Sarah McBride recounts the 2022 decision by Richard Branson’s Hyperloop One to slash its staff and shift its focus to freight rather than passengers. Not much has been heard from it since then. Her main focus is on Hyperloop Transportation Technologies (known as Hyperloop TT). It had planned to go public on the New York Stock Exchange this month, via a special purpose acquisition company (SPAC), but the SPAC recently backed out, and the offering was scrapped. Recent startup failures include Swissmetro SA (liquidated in 2009) and Arrivo (shut down in 2018).

Hyperloop TT claims to be the leader in this field, touting its full-scale test track in Toulouse, France, pictured in the Bloomberg article. Actually, it’s only 1,000 feet long, far too short to demonstrate accelerating a capsule to 600 miles per hour and then decelerating to a safe stop—which nobody has ever accomplished. In my most recent newsletter article on hyperloop (May 2022), I cited a number of problems about which no solutions have been put forth by advocates or any of the startup companies:

• Maintaining a vacuum in tubes of a thousand miles or more;
• The energy cost of both propulsion and vacuum maintenance;
• Airlocks in stations, to permit the transition from vacuum in the tubes to passenger ingress and egress in normal air pressure;
• Turnouts (switches) in the tubes and how they would work; and,
• Emergency evacuation of passengers.

In a previous article (July 2020), I wrote about two hyperloop studies, one by Lux Research on technical barriers and the other on Hyperloop TT’s proposed Chicago to Pittsburgh route, whose economics are highly questionable. Several years ago, I attended a session on that project at the Transportation Research Board’s annual meeting, which was mostly analysis-free hype that was so egregious that I sent a protest to the TRB’s executive director. That project is still being touted by various public agencies in Ohio and elsewhere in the Midwest. As of now, that appears to be the company’s only live prospect. Bloomberg’s McBride recounts previous company efforts in South Korea (2017), China (2018), and Abu Dhabi (2018), all now defunct.

My skepticism remains, since no solutions have been offered for hyperloop’s technical questions, nor have there been objective benefit/cost analyses following normal best practices. It appears that potential investors are taking note of these shortcomings.

» return to top

How is Vision Zero Doing in Denver?
By Baruch Feigenbaum

As cities across the United States grapple with traffic fatalities, many have adopted the Vision Zero concept. Vision Zero was started in Sweden more than 25 years ago. It is an effort to reduce traffic fatalities to zero by some future date. Unfortunately, most of the U.S. cities that adopted the policy don’t have good before-and-after data, so it is difficult to determine whether Vision Zero works.

Denver, in contrast, has robust data. The city adopted Vision Zero in 2017 and set a goal of zero traffic fatalities by the year 2030. Yet a new report by Randal O’Toole for the Thoreau Institute examining the impacts of Vision Zero policies on traffic fatalities in Denver found that the city’s plan has so far failed to meet most of its goals.

The report begins with an analysis of Denver’s 48-page Vision Zero Action Plan. The plan seems to be full of platitudes instead of policy solutions. In the third section, titled, “What We’re Doing,” two of the three pages discuss what steps the city is taking, such as:

• Adding flashing lights to alert motorists of a pedestrian crossing;
• Reducing speed limits on a street that had seen several accidents; and
• Changing a traffic signal to include a protected left turn to minimize conflict between pedestrians and automobiles.

The report’s biggest criticism of the action plan is that while it does list the changes the city is pursuing, the plan does very little to show that these changes will reduce traffic fatalities, especially by enough for the city to meet its 2030 target of zero fatalities. In addition, the vision does little to address motorcyclist safety, despite motorcyclists being the most at-risk group on Denver streets.

The report delves into traffic fatality trends in Denver. While there were zero bicycle fatalities in 2020, the report stresses that that’s not necessarily thanks to Vision Zero changes. Denver also had zero bicycle fatalities in 2006, 2009, and 2013. O’Toole found that a five-year average is a far better indicator of actual trends. Likewise, the report notes that the 33% increase in fatalities during the five years ending in 2020, has not been caused by Vision Zero. The real problem is that Vision Zero is not addressing the factors that lead to fatalities.

Next, O’Toole breaks down fatalities by mode of transportation. The report found that pedestrian fatality rates were 50 per billion pedestrian-miles, bicycle fatality rates were 25 per billion bicycle-miles, motorcycle fatality rates were 130 per billion passenger-miles, and automobile fatality rates were 1.3 per billion passenger-miles. Motorcyclists are 100 times more likely to die in traffic accidents than auto users, pedestrians are 40 times more likely, and bicycle riders are 20 times more likely. O’Toole stresses that these are “rough approximations.”

To provide a fuller picture, the report reminds readers of the benefits of the automobile. From the automobile “democratizing mobility” thanks to the affordability of Henry Ford’s Model T, to the increased number of jobs accessible to workers, automobiles brought a host of benefits to the country and the world. The development of highways and streets also has benefits that aren’t just for automobile users. Roads are essential for emergency services and freight, but the former is most relevant to Vision Zero’s goal of saving lives. O’Toole cites a University of Colorado-Boulder study, which found that “for every pedestrian whose life is saved by slowing of auto traffic, 85 people would die due to delays in emergency services.”

In order to reduce pedestrian fatalities, we need to understand that most such fatalities happen at night because pedestrians are intoxicated, cross away from crosswalks, or are among the homeless suffering from mental illness.

O’Toole offers specific suggestions for policies that Denver’s Vision Zero Action Plan fails to include. Each of the suggestions is based on Denver data, and most rely on separating different modes from one another, via methods such as pedestrian barriers to discourage crossing away from crosswalks, separate bicycle boulevards, and a law mandating that motorcyclists wear helmets.

Most critically, the city should start to use a data-driven approach based on the National Highway Traffic Safety Administration’s Fatality and Injury Reporting System Tool, which would prove invaluable as a means of finding where Denver’s problems lie.

Automobile users have become something of a scapegoat for traffic fatalities. Both the report and Vision Zero advocates are right that roadway design is an important aspect of any move to protect non-automobile users; but O’Toole is also right when he says that Denver’s attempt at Vision Zero seems like little more than an attempt to get fewer people driving. Cities that try to encourage a modal shift for citizens often accomplish little more than creating an automobile-hostile environment.

The city of Denver has a lot of work to do to come anywhere near its goal by 2030 since its current Vision Zero approach is not going to reduce traffic fatalities to anywhere near zero.

» return to top

News Notes

Charlotte Express Toll Lanes Green-lighted
On Feb. 15, the Charlotte, North Carolina, Regional Transportation Planning Organization gave the North Carolina Department of Transportation the green light to proceed with plans to procure a project to add two express toll lanes each way to I-77 between the city and the South Carolina border, less than 10 miles away. NCDOT is expected to request proposals for a revenue-financed long-term public-private partnership (P3), similar to the procurement of the express lanes on I-77 north of the city. NCDOT last year received an unsolicited proposal from Cintra, the developer/operator of the existing express lanes, proposing an express toll lane project on the southern corridor. The project is expected to cost in the vicinity of $2 billion.

Toyota Opts for Electric Vehicle Future
The last hold-out among major auto producers last month announced a change of direction. Toyota will now increase its focus on electric vehicles (EVs), following the shift to new CEO Koji Sato, who will take office in April. Sato has called for an “EV-first mindset” that will include a new EV-specialized manufacturing platform. The first of the new EVs will be introduced as Lexus models, while production will continue on its current hybrids and EVs on conventional assembly lines.

Congressman Calls for State Tolling Flexibility
Politico (March 2) reports House Highways and Transit Subcommittee Chairman Rep. Rick Crawford (R-AR) told attendees at the AASHTO legislative conference that he would like Congress to give states the flexibility to toll their own roads. “It’s an important revenue stream, potentially, for states that currently don’t have it… It sounds like I’m cheerleading for tolling — I’m not. I’m cheerleading for giving the states the flexibility to be creative.” And on the same day, Wisconsin House Speaker Robin Voss announced he will try again to get tolling legislation enacted in that state.

Park Over Pittsburgh Interstate Wins Awards
A 2022 project built a park over below-grade I-579 in Pittsburgh’s historic Hill District. The park includes green space, story walls, outdoor classroom space, an amphitheater, and bike and pedestrian paths. The park helps re-unite a community that was divided by the Interstate more than 60 years ago. The project won an Outstanding Civil Engineering Award from ASCE and also a 2023 PCI Design Award from the Precast/Prestressed Concrete Institute.

New Express Toll Lanes Coming to Ft. Worth Area
Under a pre-existing long-term DBFOM P3 concession, Cintra will add one general purpose lane and one express toll lane each way to the congested Loop 820/SH-121/183 Airport Freeway corridor in northeastern Tarrant County. The project is estimated at $300-350 million. Cintra expects the financing, based on projected toll revenue, to be finalized by the end of the year. This expansion is part of the company’s 2009 long-term concession for the North Tarrant Express project, which required the lane additions to be added by 2030. This project appears to be the only express toll lane addition in Texas, due to the legislature’s decade-old moratorium on approving new P3 projects.

Top U.S. City Offices Only Half Full
National data on office occupancy tracked by Kastle Systems shows that as of January 2023, the average office occupancy was only 50.4% of pre-pandemic levels. Stanford University economist Nicholas Bloom told the Washington Post that “Office numbers have flatlined,” due to the increase of flexible work practices between office and home. “Longer run, work from home will clearly rise, as the technology supporting this is improving rapidly.” Also shaping the future of cities is out-migration and in-migration. Data on home searchers from Redfin.com finds 20-30% of local house-hunters in 10 major metro areas are searching elsewhere. For example, the top destination New Yorkers are researching is Miami, and the top destination for Seattle searchers is Phoenix.

First Express Toll Lanes Project in Kansas Breaks Ground
US 69, reportedly the busiest highway in Kansas, will have the state’s first express toll lanes in operation within two years from last month’s ground-breaking, according to the Kansas DOT. The project will add one express toll lane each way in the median of US 69, from 103rd St. to 151st St., the most congested segment. Variable tolls will be used to keep the new lanes from getting overcrowded (and hence, congested). Kansas Gov. Laura Kelly reminded reporters that the new lanes are a choice, available for those with time-sensitive trips and willing to pay for faster and more reliable travel. “This highway is a huge innovation for the state of Kansas,” Kelly added.

Rhode Island DOT Appeals Bridge Toll Decision
Last year a federal court ruled that Rhode Island’s program to charge tolls only to heavy trucks was discriminatory and violated the Commerce Clause of the Constitution. Last month, the Rhode Island DOT asked the U.S. Court of Appeals to review the lower court’s decision, saying that the case raises “important questions related to federalism.” As I wrote at the time, I agree, and I hope the Court of Appeals sustains the lower court’s ruling. The Commerce Clause was included in the Constitution in part to prohibit states from charging tariffs on movements across state borders, which the discriminatory Rhode Island truck tolls were shown to be.

FHWA Replaces “Fix It First” Guidance Memo
Under new Administrator Shailen Bhatt, the Federal Highway Administration (FHWA) has replaced the controversial “guidance” memo issued in Dec. 2021, which implied that state DOTs should prefer projects to fix deferred maintenance to those that expand capacity. After protests from state DOTs in fast-growing states, Republican members of Congress, and a number of business groups, the new policy memo defers to state decision-makers on how to prioritize highway spending and also clarifies that the document “does not have the force of law.”

Three More States Taking Action on Mileage-Based User Fees
In December, the Washington State Transportation Commission voted in favor of replacing per-gallon fuel taxes with per-mile charges. It urged legislators to replace state fuel taxes with per-mile road user charges beginning in 2027. Louisiana’s Department of Transportation & Development announced in February that it plans a state-funded mileage-based user fees pilot project covering up to 4,000 vehicles. Also in February, Oklahoma DOT briefed the state’s transportation commission on its road user charge pilot project, called Fair Miles Oklahoma, to begin in July. Oklahoma’s legislature in 2021 authorized ODOT to create and manage such a pilot project.

Xoox Autonomous Vehicles Operating on Public Road
Xoox, Inc., a self-driving startup owned by Amazon, has developed a passenger shuttle without a steering wheel or other driver controls. Last month it began shuttling employees between its two main buildings in Foster City, CA, on a mile-long stretch of public roadway, at a top speed of 35 miles per hour. Xoox has a state permit to operate driverless on this roadway. Bloomberg reported that Xoox believes this is the first time a vehicle with no onboard controls has operated on a public road.

BP Acquires Major Truck Stop Company
Last month, oil company BP announced the $1.3 billion acquisition of Travel Centers of America, the operator of 281 truck stops near major highways. In a presentation on the deal, BP illustrated a potential future travel center offering EV charging for trucks, a convenience store, biofuels, and eventually hydrogen refueling. Given the national shortage of safe overnight truck parking spaces, and also of EV charging, perhaps BP has the clout to get Congress to repeal the 1960 federal ban on commercial services at Interstate highway rest areas. Even the American Trucking Association’s research arm acknowledges that the ban is an impediment to expanded truck parking and electric vehicle charging.

FDOT Planning to Extend I-4 Express Toll Lanes
One year after their opening on 20 miles of I-4 in Orlando, the express lanes’ success is leading Florida DOT to start researching extensions. Over 10 million trips were taken in the lanes’ first year, with an average of 28,000 drivers per day using them. Studies are under way on extensions of the lanes both north and southwest of Orlando, since major congestion occurs on both of those I-4 segments.

“Modal Shift to Cleaner Transport Fails to Materialize”
That is the headline on a release from OECD’s International Transport Forum in Dec. 2022. The study collected transportation data from the years 2010 through early 2020 from OECD member countries. Some of the findings were that “the share of passenger transport by car increased for all reporting countries between 2010 and 2021,” that “inland freight transport does not show a shift to more-sustainable modes,” and that “rail passenger transport in Europe . . . dropped 51% between 2019 and 2021.”

Ford Dumps EV Startup Rivian
Electric vehicle maker Rivian, which is producing and selling its EV SUVs and pickup trucks, had a terrible 2022. Its share price dropped 82%, wiping out over $75 billion in value. That was bad news for early investors Amazon and Ford Motor Co. Luc Olinga of The Street reported last month that Ford, which had invested $1.2 billion in Rivian, sold 91 million shares early last year before the price plunged, making a gain of $1.8 billion. It sold another 25.2 million shares in May for $700 million, and another 51.9 million shares in the third quarter for $1.8 billion. Overall, at year-end, Ford reported a net loss of $7.4 billion on Rivian and another $2.7 billion loss on Argo. Amazon has not sold its Rivian shares.

Some Good Reading

“Driverless Work Vehicles: On This Side of the Horizon” is a well-researched global overview of commercial applications of autonomous vehicles.

“Off the Rails: Minnesota Transportation After COVID-19” is Randal O’Toole’s across-the-board assessment of what Minnesota transportation planners might do to adjust to our post-COVID world, published by the Center of the American Experiment.

» return to top

Quotable Quotes

“The relationship between land use and traffic generation has been known for many decades. There’s nothing particularly new here, although I’m sure the [Baltimore] article will be circulated by the ‘highways are evil’ crowd. The supposed solution in this article is that Americans should live like Europeans, that is, densely packed 900 square-foot apartments in metropolitan areas. My common answer to persons telling me how we should have public transportation like Paris (or fill in the blank) when they return from their vacation is, ‘We can have a European transportation system if we want to live like Europeans.’ Americans have chosen the quality of life they want to enjoy for their families, and it is not the one envisioned in this article.”
—Pete Rahn, private online commentary, Feb.5, 2023 (used with permission)

“The notion of access vs. mobility is a common thread in all our work. Just about everything in America focuses toward mobility for multiple sound reasons. If you want standard store white bread, the nearest 7-11 will do. But if you want really great Russian black bread with raisins, I know this really great baker in Baltimore! . . .  Favorite restaurants, family, and friends all live at distances. They don’t optimize access to you, mostly. . . . If I work at 7-11, I can likely walk to work. If I teach in a university, and shift to another, it is likely 10-15 miles away. Do I move every time I change jobs? The decline of the “center” for shopping, for entertainment, for jobs is a major factor. Small metros are the last bastion of a heavy focus on the center; as that metro grows, satellite centers become alternatives.”
—Alan Pisarski, private online commentary, Feb. 6, 2023 (used with permission)

“Across the rich world, the commercial property industry is in a grim state. Tenants have come to terms with the fact that working from home is here to stay, and are downsizing appropriately. In cities such as Hong Kong, London, and Paris, vacancy rates have hit record highs. Another indicator of the darkening mood is that global investment in offices last year fell by 42%, compared with a 28% drop for property as a whole. A recent paper by Arpit Gupta of New York University and Vrinda Mittal and Stijn Van Nieuwerburgh of Columbia University forecasts that offices in New York could lose almost 40% of their value between 2019 and 2029, equivalent to $453 billion.”
—”Property: The View from the Top,” The Economist, Jan. 21, 2023

“Automated container handling is essential to quicken the pace of cargo movement through port facilities. The technology is costly, and longshore labor unions are fiercely opposed. The International Longshore and Warehouse Union has held up contract negotiations for months over the issue. Lack of automation is one reason U.S. ports rank low in global productivity relative to ports in China and the Middle East. Ensuring quick container flow through ports must be an economic priority, regardless of union concerns.”
—Peter Tirschwell, “How to Prevent the Next Supply Chain Crisis,” The Wall Street Journal, Feb. 6, 2023

» return to top

The post Surface Transportation News: Ohio train derailment, induced demand and urban freeway expansion, and more appeared first on Reason Foundation.

https://doi.org/10.1177/03611981221147048

Abstract

The Interstate Highway System is critically important to the trucking industry. In a 2019 report to Congress, the Transportation Research Board found that much of the system is wearing out. It recommended a 20-year, US$1 trillion program of reconstruction and modernization. However, in its 2021 Infrastructure Investment & Jobs Act, Congress took no action on interstate reconstruction. Several states are considering toll financing for this purpose, but the trucking industry has long opposed any expansion of tolling, despite its need for a modernized interstate system. This paper considers four concerns of the trucking industry—toll roads used as cash cows, the high cost of collection compared with fuel taxes, little value-added for users, and double taxation (tolls and fuel taxes on the same roadway). The paper describes a sketch-level spreadsheet model of a customer-friendly approach to toll-financed reconstruction, using realistic data and assumptions, applied to a generic mid-size state seeking to rebuild four long-distance interstates. The assumptions built into the model respond to the four trucking industry concerns. The model also addresses concerns of state departments of transportation over giving up some of their declining fuel tax revenues. It estimates the net present value (NPV) of fuel tax rebates over 30 years to be less than 7% of the NPV of toll revenues. Toll financing of interstate reconstruction also relieves state fuel tax revenues of the large costs of rebuilding aging interstates. This paper is intended to offer transportation policymakers a set of policy changes that respond to the legitimate aspects of the trucking industry’s expressed concerns.

The Interstate Highway System is generally considered the U.S.A.’s most important multimodal infrastructure, serving personal vehicles, intercity buses, and long-distance truck freight. At the request of Congress, a Transportation Research Board (TRB) special committee carried out a detailed study of the system’s future. Its 596-page 2019 report concluded that much of the system is aging and needs to be reconstructed; it includes many urban interchanges that are bottlenecks; and some long-distance corridors (especially those that are key truck routes) need additional lanes (1). The report estimated the cost at US$57 billion per year over 20 years and proposed a repeat of the original 1956 90% federally funded program, which would require very large increases in federal fuel tax rates.

In its 2021 Infrastructure Investment & Jobs Act (IIJA), Congress did not address interstate modernization or authorize any increase in federal fuel taxes. Despite the system’s name, its corridors are owned and operated by state departments of transportation (DOTs). In the absence of congressional action, state legislatures and DOTs may have to take responsibility for interstate modernization, which raises the question of how best to pay for a project that could cost upwards of US$1 trillion and take several decades.

The TRB report discussed toll financing of interstate reconstruction, noting that up-front financing could get needed projects under way sooner, for corridors that are toll-feasible. In a paper presented at the 2014 TRB Annual Meeting, the current author carried out sketch-level tolling feasibility assessments for each of the 50 states, finding that in all but five of them, the net present value (NPV) of inflation-adjusted toll revenues exceeded the NPV of capital and operating costs (2). In recent years, four states have commissioned their own interstate tolling feasibility studies: Connecticut, Indiana, Michigan, and Wisconsin. In addition, toll-financed replacement of major interstate bridges is under consideration in Alabama and Louisiana, while toll-financed reconstruction of specific corridors has been proposed for I-40 (Arkansas), I-70 (Ohio, Indiana, Illinois, and Missouri), I-80 (Illinois, Iowa, and Wyoming), and I-95 (North Carolina, South Carolina, and Virginia).

The trucking industry is economically the most important user of the interstate system. Those portions that are tolled (e.g., Pennsylvania Turnpike, Indiana Toll Road) derive the largest part of their toll revenue from long-distance trucking. That industry’s two national organizations—the American Trucking Associations (ATA) and the Owner-Operator Independent Drivers Association (OOIDA)—are the most vocal opponents of the increased use of tolling. Yet the trucking industry would could gain important advantages from a modernized system, potentially including dedicated truck lanes in key corridors, more durable pavements requiring less frequent repairs and resurfacing, and the replacement of obsolete and undersized “bottleneck” interchanges.

The question addressed in this paper is whether toll-financed interstate modernization could overcome the long-standing objections of the trucking industry, as well as concerns of state DOTs about the coming decline in fuel tax revenues.

https://journals.sagepub.com/doi/10.1177/03611981221147048

The post Tolling value proposition for trucking and state departments of transportation appeared first on Reason Foundation.

According to The Washington Post, the New Jersey Department of Transportation irritated FHWA Division Administrator Robert J. Clark with traffic board messages such as, “We’ll be blunt/Don’t drive high” and “Hold on to your Butts/Help prevent Forest Fires.”

Clark sent a cease and desist letter to New Jersey DOT claiming that using highway signs for such messages does not “promote the safe and efficient use of the roadway, does not serve a highway purpose, is inconsistent with both law and regulations, and increases the liability risk to the owner of the roadway facility.” 

In dropping the hammer, Clark relied on a revised section of the 2009 Manual on Uniform Traffic Control Devices that reads, “Messages with obscure or secondary meanings, such as those with popular culture references, unconventional sign legend syntax, or that are intended to be humorous, should not be used.”

Federal bureaucrats are not exactly known for their sense of humor, but it is worth noting that highway safety is one area in which New Jersey DOT excels. In Reason Foundation’s Annual Highway Report, New Jersey routinely ranks in the best 10 states for having the lowest fatality rates. The state most recently ranked 4^th in overall highway fatality rate, 9^th in rural highway fatality rate, and 18^th in urban highway fatality rate. New Jersey ranks much worse in categories such as the efficiency of highway spending, quality of pavement conditions, and traffic congestion delays. Perhaps Mr. Clark should worry more about the conditions of highways. 

And New Jersey is not the only state to be threatened. According to the Post and Governor’s Highway Safety Association, some states were warned they could lose federal funding if they continued including humorous messages. 

Yet the federal rule on ‘appropriate’ signs seems to be enforced haphazardly. Tennessee used, “Ain’t nobody got time for a wreck, slow it down.”

Pennsylvania’s recent holiday message was, “Only Rudolph should drive lit/Plan a sober ride.”

Virginia has used, “This isn’t NASCAR, slow down.”

And Mississippi displayed, “Texting and driving? I’m the problem it’s me.”

None of the state highway administrators complained about these messages. Apparently, being lit, NASCAR racing and Taylor Swift lyrics are fine to reference on digital highway signs, but holding on to your butts is not.

The most critical question for drivers and highway officials is straightforward: Do highway safety messages on digital highway signs improve safety?

With relatively limited data, the answer is not clear. Trip Shealy, a Virginia Tech transportation engineering professor, studied how the public responded to such messages and concluded that drivers believed they were effective and were not concerned with their appropriateness.

Shealy’s researchers hooked 300 participants to brain monitors and found that messages using humor or wordplay triggered more brain activity. Put another way, humorous messages are more likely to reach the intended audience. The study found:

The results indicate people perceive all types of non-traditional safety messages as effective. Messages about distracted driving and driving without a seat belt, messages meant to provoke a negative emotion, and messages using statistics are perceived to most likely change driver behavior.

However, a Transportation Research Record study, “Does Displaying Safety Messages on Dynamic Message Signs have Measurable Impacts on Crash Risk?” found that while there were marginal decreases in nighttime crash activity and speeding in places with the messages, neither finding was statistically significant.

A Science magazine study found that when Texas motorists were shown the number of fatalities in the area, the number of crashes actually increased slightly:

Contrary to policymakers’ expectations, we found that displaying fatality messages increases the number of traffic crashes. Campaign weeks realize a 1.52% increase in crashes within 5 km of DMSs [dynamic message signs], slightly diminishing to a 1.35% increase over the 10 km after DMSs.

An Old Dominion University study found:

Results indicate that multi-page messages increased crashes by 1.5% in 2019, and reduced vehicle speed around DMS by 2-4%, relative to single-page messages. Although DMS can provide valuable, actionable information to drivers, DOTs should be more selective in the timing and formatting of messages as to not impose additional externalities on drivers.

A separate panel by the Transportation Research Board indicated that message signs should be simple and not humorous. But the study’s 120-person sample size was much smaller, and it did not find any evidence that humorous signs were bad, but rather “appropriate signs” fit more with transportation departments’ missions.

“Appropriate” can probably be replaced with “boring.” Yet, boring messages do not seem to reduce fatalities, considering the U.S. traffic fatality rate has been on an uphill climb for most of the past decade. 

The best example of the importance of capturing the audience’s attention may be in aviation, which is dramatically different than highway safety but offers some lessons. Southwest Airlines has always used humor in its safety videos. Delta Air Lines did as well during the 2010s. On one flight I was on, the flight attendant directed passengers to place the mask on their child with the greatest earnings potential first, and then help others. I looked around, and almost every passenger was paying attention to the flight attendant. In contrast, Delta’s current sanitized safety videos are ignored by 75% of passengers. A 2015 article in the journal Safety Science found that recall of safety messages improved with humorous briefings. Safety incidents on planes are extremely rare, and airline passengers are different than drivers, but I would much rather be on a plane with passengers who know what to do in an emergency, even if they are making calculations about their child’s future earnings.

On roads, we cannot conclusively say that dynamic message signs improve safety. But we also cannot say that they make safety worse. Highways are owned by the states, not the federal government, and there needs to be overwhelming evidence for FHWA to threaten to pull, let alone justify pulling, a state’s highway funding.

State transportation departments should be able to experiment to find what works best for their highways and drivers.

The post FHWA administrators want to stop humorous traffic safety messages appeared first on Reason Foundation.

The simplest way to address privacy concerns is to offer mileage-based user fee options that do not collect any location information, such as odometer readings. However, these options come with downsides to the customer experience, such as the inability to fully automate odometer readings, the inability to automatically deduct mileage driven out of state or off public roads from customer bills, the lack of seamless integration with separate toll facilities, and the reduced ability to audit mileage counts to support customer billing disputes.

In addition to offering customers a superior billing experience, location-based MBUF technologies can also give customers access to optional features they may desire, such as quickly locating their parking spot or receiving alerts if their teen children have driven too far from home.

So, how can location information be protected to prevent government surveillance?

First, it is important to understand how the location information is generated in the first place. These systems rely on the Global Positioning System (GPS) constellation of navigation satellites. GPS satellites in orbit around the Earth broadcast radio signals that transmit their locations and the precise time from onboard atomic clocks. A GPS receiver, such as one incorporated into a location-based MBUF device, detects these signals and uses the time of arrival to calculate its distance from a GPS satellite. Using the distance calculations from at least four GPS satellites allows a GPS receiver to determine its longitude, latitude, and altitude at a given point in time.

The upshot is that because GPS signals are sent one-way from the satellites and location is calculated by the GPS receiver using multiple satellites, GPS alone cannot be used to track the location of a GPS receiver. Privacy concerns only become an issue when a GPS receiver is paired with a secondary wired or wireless communications system, such as cellular, that can transmit the location information that is computed and stored locally on a GPS receiver. As such, addressing location-based MBUF privacy must focus on how that location information is transmitted, processed, and stored.

From here, location-based MBUF technologies can be designed so that location information used to calculate distances driven on roads subject to MBUFs is separated from the mileage counts that are transmitted for state revenue collection purposes. Location information should be held securely for a short period of time to facilitate audits and customer billing disputes, after which it is destroyed. During the specified period of time that location information is retained, strict warrant requirements can be used to prevent abusive surveillance. 

Oregon, which led the country in developing both fuel taxes and their MBUF replacement, also developed strong privacy protections for location-based mileage-based user fees in consultation with civil liberties organizations. Here are key privacy protections codified in Oregon statute: 

• Oregon relies on private “certified service providers” to administer the customer-facing elements of its location-based MBUF option, which then report metered road use stripped of location information for revenue-collection purposes. (ORS § 319.915(1)(a))
• All location data must be destroyed within 30 days upon the completion of payment processing, billing disputes, or noncompliance audits. (ORS § 319.915(4)(a))
• Location information and other personally identifiable information held to complete a monthly billing cycle are considered confidential and exempt from public records requests. (ORS § 319.915(2))
• Law enforcement officers are required to obtain a court order based on probable cause in an authorized criminal investigation in order to access any personally identifiable information of a person subject to that criminal investigation. (ORS § 319.915(3)(a)(G))

As other states contemplate replacing their gas taxes with mileage-based user fees, they must ensure that customer privacy is protected. Failure to do so will understandably undermine public acceptance of MBUFs and reduce the viability of user-based revenue collection in the long-run.

The post Protecting customer privacy in mileage-based user fee systems appeared first on Reason Foundation.

Under current hours-of-service rules, truckers can drive 14 hours a day before going off-duty. Sometimes drivers spend almost an hour looking for parking, resulting in “about $5,500 in direct lost compensation—or a 12% cut in annual pay.” Approximately 96% of truckers have to park in areas not designated for trucks because of a lack of safe truck parking capacity across the country, according to Trucker Path. Per the latest Bureau of Transportation Statistics data, there are 39,803 parking spots at rest areas on the Interstate Highway Network and some 273,000 parking spaces in private lots. Yet there are 4.06 million Class 8 trucks (trucks with a gross vehicle weight rating of over 33,000 pounds) spread out across the country. The need for more safe parking in and around rest areas for truckers is clear, especially if we want to keep supply chains around the nation safe and stable.

The 2021 Infrastructure Investment and Jobs Act (IIJA) helped push truck parking capacity to the forefront of conversations at the state level. Section 21104 of the IIJA focused on guidelines for states updating or developing freight plans, which had the most relevant sections for addressing truck parking capacity. The bill mandates that states must assess the following:

• The capabilities of both the state and the private sector to provide adequate parking facilities for vehicles engaged in interstate transportation;
• The volume of commercial motor vehicle traffic in the state; and
• Whether there are areas in the state with a shortage of adequate commercial motor vehicle parking facilities and provide an analysis of what factors could be contributing to that shortage.

However, the law does not require states to take any actions, it merely mandates further analysis of the problem.

In contrast to the IIJA, two bills emerged during the 117^th Congress, which ended in January, unsuccessfully attempted to address this critical parking capacity shortage more directly: H.R. 2187, introduced by Rep. Mike Bost (R-IL), and the Senate’s companion bill, S. 5169, by Sens. Cynthia Lummis (R-WY) and Mark Kelly (D-AZ). Neither passed its respective chamber. While H.R. 2187 did make it through committee, it did not receive a vote on the House floor. S. 5169, titled the Truck Parking Safety Improvement Act (TPSIA), was referred to the Committee on Environment and Public Works, where it died.

TPSIA would have allocated $175 million for truck parking for the 2023 fiscal year and $580 million for fiscal years 2024-2026 in grants issued by the secretary of transportation if they met strict project requirements. These requirements would’ve included having projects that are on a federal-aid highway, on a facility with reasonable access to a federal-aid highway, or at a freight facility. To be eligible for grant funding under TPSIA, projects would have needed to provide new parking or maintain existing parking in rest areas. The bill’s provisions would have also provided strict spending criteria. For example, only up to 25% of any grant given could be used for the pre-construction phase, be it on cost/benefit analyses, feasibility analyses, environmental reviews, or preliminary engineering and design work.

However, TPSIA was far from flawless. TPSIA placed a ceiling on the amount of each fiscal year’s annual appropriation for existing facilities, limiting maintenance of existing capacity to 10% of the overall grant budget. It might have helped provide the resources to build new parking capacity, but it also punished states that had the forethought to build parking. 

While an updated TPSIA could serve as a good framework for a federal grant program, any increased federal spending should be a last resort for any sort of capacity expansion, especially when there are better options on the table for policymakers.

The best congressional option would be a repeal of the ban on commercial services at Interstate rest areas. In 1960, Congress banned all commercial services from being provided at rest areas on Interstates. If this ban were repealed, state departments of transportation could engage in revenue-financed commercial parking facilities at rest areas across the country.

This isn’t a new idea either, at least when considering toll roads. As Robert Poole, director of transportation policy at the Reason Foundation, wrote, “many toll roads have rebuilt and modernized their service plazas, often using long-term public-private partnership (P3) procurements.”

Public-private partnerships offer many advantages over federal grants for funding new parking capacity and rest areas. Most notably, the financial risk of failure is borne by the private sector entity that wins the bid for the contract, not the taxpaying public. Providing parking at these rest areas would help to provide a consumer base for the commercial services they’d be offering at renovated locations.

The commercial interest in participating in these service plaza P3s should also be encouraging news for policymakers trying to address these issues on a dime. There’s plenty of private interest, as evidenced by the success of the service plazas along toll roads, so federal policymakers ought to work to remove barriers, like the commercial rest areas ban, preventing the private sector from acting on it.

Some states’ toll roads have already started using long-term P3 agreements for service plaza financing, rebuilding, and operating, including Indiana, Maryland, and New York, to name a few. All types of businesses, including truck stop operators, might be interested in bidding for rest areas.

By repealing, or at least loosening, the ban on commercial services at rest areas on Interstates, policymakers can effectively open the door to expanding truck parking across the country and reduce taxpayers’ costs by shifting the financial responsibility to the private sector.

The post The urgent need for more truck parking spaces appeared first on Reason Foundation.

• Michigan Interstate tolling study released
• Traffic congestion roars back, despite work from home
• Tennessee moving forward on P3s, express toll lanes, and MBUFs
• Unions oppose automated trucking legislation in California
• Seven new MBUF pilot projects announced
• Time to change the basis of truck user fees?
• News Notes
• Quotable Quotes

Michigan Interstate Tolling Study Released  

Last month the Michigan Department of Transportation (MDOT) released the results of its two-year study on the potential of using toll finance to upgrade and modernize the state’s aging Interstate highways and other limited-access highways. After several rounds of screening, its strategic implementation plan focuses on eight initial corridors (called Tier 1) totaling 545 route miles, all but one of them Interstates. This is the fourth such statewide study, following earlier ones in Connecticut, Indiana, and Wisconsin. It was carried out by respected firms HNTB and CDM Smith. Having read the previous ones, I think this study is the best one to date. Some previous studies have focused mostly on the potential revenue that could be generated, rather than on the benefits of toll-financed modernization. The Strategic Implementation Plan, which is one of several outputs of the Michigan study, documents the investments needed for the eight Tier 1 corridors: $18.5 billion in road and bridge improvements. Moreover, contrary to fears of the trucking industry that states would start tolling immediately without guarantees of using the new revenue for modernizing their highways, the plan shows tolls being phased in as various Tier 1 segments are modernized (which I have referred to as value-added tolling).

I was surprised at first that investments for Tier 1’s 545 route miles included only 164 lane miles of new capacity. But Michigan is a low-growth state. A table of estimated state vehicles miles travelled growth rates that I obtained several years ago from an FHWA analyst showed Michigan’s light-vehicle growth rate at just 0.4% per year (though the heavy-vehicle growth rate was three times that at 1.2% per year). So the $18.5 billion capital spending for Tier 1 makes sense as being mostly for replacing or upgrading existing lanes and bridges.

The implementation plan estimates the costs of electronic tolling infrastructure and recommends going with the 6C protocol, which seems to be the emerging electronic tolling consensus. It presents a pro-forma financing plan, based on projected gross and net toll revenue, which the plan estimates would lead to the toll revenue bonds achieving a BBB (investment-grade) rating. The plan concludes that the modernized Tier 1 corridors would be fully self-supporting (capital and operating/maintenance costs) via the toll financing.

The study also reviews the available federal programs under which toll-financed Interstate modernization can take place. It rejects the never-used Interstate System Reconstruction and Rehabilitation Pilot Program since that allows a participating state to toll-finance only a single Interstate corridor. For most of the Tier 1 corridors, it recommends using the Section 129 Bridge & Tunnel program, with the Value Pricing Program recommended for two urban corridors where variable pricing would be used to reduce congestion.

Of course, this is only a study. Michigan DOT, I hope, will want to pursue implementation of it, but that will be up to elected officials—the governor and the legislature. If they decide to implement something along the lines of what these reports have identified as feasible, I can suggest several possible revisions.

While the plan to implement tolling as corridors are modernized addresses one of the highway user community’s concerns about tolling, the study ignores legitimate concerns about “double taxation”—paying both tolls and fuel taxes for the same corridor. The study acknowledges the coming need to replace fuel taxes with mileage-based user fees (MBUFs), but it ignores a key tenet of the ongoing state pilot programs: that the mileage-based user fee is intended to replace the fuel tax, not be charged in addition to it. What would fix this problem is to make the new Interstate tolls Michigan’s first MBUFs. That would mean providing refunds/rebates for fuel taxes incurred for miles driven on the newly tolled Interstates, demonstrating that MBUFs really will be replacing fuel taxes when implemented.

Michigan DOT and legislators might be concerned about the cost of providing fuel-tax rebates, but the study itself recommends devoting 5% of gross toll revenue to various kinds of toll discounts and rebates, some of them highly questionable. In a peer-reviewed study just published in Transportation Research Record (the journal of the Transportation Research Board), I used a detailed spreadsheet model to estimate the net present value (NPV) of fuel tax rebates to motorists and truckers driving on rebuilt, tolled Interstate corridors. The NPV of state fuel tax rebates over 30 years was less than 7% of the gross toll revenue.

And there would be another benefit of making the tolled lanes Michigan’s first large-scale conversion from per-gallon taxes to per-mile charges: less traffic diversion. The strategic plan estimates, by corridor, that diversion rates would range from 6% to 18%, based on light vehicle tolls of six cents per mile and heavy truck tolls of 24 cents per mile. For light vehicles, the state gas tax works out to 1 cent per mile. Since diversion rates are proportional to the amount charged, with fuel tax rebates, the “net” toll rate for cars would be five cents a mile, not six cents. Thus, diversion rates should be about 17% less than estimated on page 57 of the strategic plan, so they would range from 5% to 15% of the traffic. That would lead to increased gross revenue, as well as less diversion.

Another concern of mine is the projected cost of toll collection, at 13% of gross revenue, which strikes me as very high for a system designed from scratch to be all-electronic. The killer is the assumption that license-plate billing will be needed for about 20% of all transactions. That, in turn, requires a traditional back office to analyze video images, generate and send bills, and accept losses due to bills that end up being uncollectible. If the model for toll-financed Interstate modernization included making it Michigan’s first large-scale MBUF conversion, it would be worth considering designing it for 100% use of transponders with pre-paid accounts—or at least including video-tolling surcharges high enough to fully cover the costs of billing and collection. I note in passing that many express toll lanes do not offer video tolling, and, thereby, have much lower costs of collection, as low as 3.9% of toll revenue.

Finally, one other point. Although the study mentions long-term public-private partnerships (P3s), it does not recommend this approach for financing, developing, operating, and maintaining tolled Interstates. Instead, it calls for creating a traditional toll agency, something the state of Michigan has no experience with. While this could provide an opportunity to draw on newer toll agency models such as Florida’s Turnpike Enterprise, it would be worth considering the experience of a growing number of state transportation departments with long-term design-build-finance-operate-maintain P3s, which have an excellent track record with revenue-financed express toll lane facilities across the country, nearly all of which have investment-grade ratings.

» return to top

Traffic Congestion Roars Back, Despite Work from Home

The 2022 INRIX Global Traffic Scorecard was released last month, and it shows a strong resumption of metro area traffic congestion, despite the continued high level of telecommuting. The same pattern appears in major metro areas in Europe, Latin America, and South Africa.

The INRIX global top 25 most-congested metro areas table resembles the 2021 ranking, with London still in first place, Paris in third place, and Toronto moving up from 22^nd to 7^th place. The 10 most-congested metro areas worldwide had delays ranging from 121 hours per driver to 156 hours per driver in 2022.

For U.S. cities, Chicago moved up to 2^nd  from 6^th place, Boston zoomed from 18th to 4th, and Miami rose to 9^th from the previous year’s 32^nd place. Other areas rising a lot included Los Angeles, up to 14^th from 33^rd, San Francisco, from 15^th from 34^th, and Washington, D.C., which went from 99th to now 20^th.

The changes in congestion rank for U.S. metro areas were nowhere near as dramatic as the worldwide changes. Here are the key 2022 INRIX figures for the top 10 metros.

Many factors are responsible for these traffic congestion results, but let me suggest a few that might be relevant. First, despite much rhetoric arguing that traffic congestion is a byproduct of low-density sprawl land-use patterns and that higher density and mass transit are the answer, the top four U.S. metro areas are all characterized by high-density and high-transit mode-share, in comparison with lower-density, low-transit Miami, Los Angeles, San Francisco, and Atlanta.

Second, which of these areas have added express toll lanes to portions of their freeway systems? Miami, Los Angeles, San Francisco, the Virginia suburbs of Washington, DC, Houston, and Atlanta.

One other point about density and transit as the long-term solution: urban agglomeration benefits. Extensive research shows that large metro areas are generally more economically productive than smaller ones because a lot more positive-sum transactions can take place in the former—assuming there is fast and reliable transportation from any origin to any destination (since both residences and jobs are spread out all over the landscape). (See Alain Bartaud’s excellent book, Order Without Design, MIT Press, 2018)

Less-congested freeways, due to variably-priced express lanes, contribute to employers having a wider choice of qualified prospective hires and workers having many more good employment options. The same is true, in theory, of a large transit network. Yet, a series of “access to destinations” studies by University of Minnesota researchers have shown that in most large metro areas one can get to nearly all the potential jobs in 30-45 minutes by car, but to very few via transit.

» return to top

Tennessee Moving Forward on P3s, Express Toll Lanes, and MBUFs
By Baruch Feigenbaum

Some of the early pioneering states that used managed lanes and public-private partnerships (P3s), including Florida and Texas, have quit building projects in recent years due to political pushback. Politicians in these states have also pushed back on mileage-based user fee pilot programs due to concerns about how the technology would be implemented. At this time, only two states—Georgia and Virginia—are using public-private partnerships to build multiple express toll lanes and implementing an MBUF pilot and/or permanent program.

Fortunately, a new state, Tennessee, looks poised to join Georgia and Virginia in making major improvements to its highway system and funding stream. In his Feb. 6 State of the State address, Tennessee Gov. Bill Lee highlighted an aggressive plan to build a network of choice lanes (managed toll lanes with better branding) in five of the state’s metro areas. All of the lanes would be built using toll concession P3s. And in a Feb. 1 hearing, Senate Transportation Committee Chair Becky Massey explored how an MBUF program would work in Tennessee. 

This new attention to funding and financing highways is badly needed. Despite having one of the nation’s highest growth rates, Tennessee ranks last in the country in per capita transportation investment. Few of its rural Interstates have been widened to more than two lanes in each direction. And despite reaching the end of their 50-year lifecycles, almost none of the Interstates in Tennessee have been reconstructed. 

The current plan is to add choice lanes to urban Interstates in Nashville, Memphis, Knoxville, and Chattanooga, as well as the Tri-Cities of Bristol, Johnson City, and Kingsport. Memphis and Nashville have poorly performing high-occupancy vehicle lanes that can be converted to choice lanes. For example, almost 80% of the vehicles in the Nashville I-24 high-occupancy vehicle lanes are cheaters; they don’t have the required two people. Finding a carpool companion in low-density metro areas built after World War II, in which people are traveling from many origins to many destinations, can be very challenging. Some of these drivers would gladly pay a small per-mile toll to have a more reliable commute. But today, they don’t have that option. 

Many of the corridors in Memphis and Nashville are good candidates for new express toll lanes, but the most intriguing options may be in Chattanooga and Knoxville. I-24 in Chattanooga, between I-59 and I-75, is a critical bottleneck between Nashville and Atlanta. Bounded by the Tennessee River and mountains, I-24 could benefit from the innovative approach a P3 concessionaire brings to the table. The section of I-40 and I-75 that runs concurrently near Knoxville has the highest traffic volumes, and truck volumes in the state. Already with eight lanes, it is congested much of the day, seven days a week, with traffic volumes growing each year.

Tennessee is planning to build the lanes as toll concession P3s. Toll concession P3s have several advantages. The first is that the tolls provide a new revenue source. Tennessee has about $500 million annually for new capacity for the entire state. Clearly, that is not enough for a growing state of seven million people. Importantly, a toll concession model, in which the private sector takes the revenue risk, has a big advantage over a hybrid model, in which the state takes the revenue risk. Nobody could have predicted the COVID-19 pandemic, and hopefully, we won’t see another pandemic in the near future. However, states that used toll concession P3s that transferred the revenue risk to the private partner were in much better financial shape than states that kept the risk. States in the latter category had to delay or cancel other projects. In speaking with Tennessee officials, I learned that risk transfer was a big factor in choosing toll concessions.

Tennessee Department of Transportation leaders plan to make some other innovative delivery changes. Currently, Tennessee has a cap on the number of projects for which design-build can be used. The cap is in place because small construction companies were worried that they could not compete for DBs, and thus preferred traditional design-bid-build (DBBs). But transportation leaders spoke with these stakeholders and explained how in both P3s and DBs they could be subcontractors on large, previously unaffordable projects. This helped broaden support for both reforms.

Meanwhile, in the Tennessee General Assembly, Transportation Chair Becky Massey led a hearing on MBUFs. Trish Hendren of the Eastern Transportation Coalition and I testified on the advantages of MBUFs and conducting an MBUF pilot. I focused on the problems with the fuel tax, the advantages of MBUFs, potential pilot ideas, and funding sources for the pilot. I also detailed existing MBUF programs and pilots in the bordering states of Georgia, North Carolina, and Virginia. Trish touched on the importance of communicating the transportation funding problem, how MBUFs can benefit rural residents, and that the public does not understand how transportation funding works.

Senators asked questions and received answers about environmental challenges (there are not any more than with the gasoline tax), double taxation (MBUFs would replace fuel taxes), rural residents (rural residents would pay less in an MBUF than with a fuel tax), payment options (there are multiple types including GPS-based transponder, odometer reading, etc.), and payment timeframes (once per month, once per quarter, etc.). I’ve never seen a committee as legitimately engaged at a hearing. House Transportation Chair Dan Howell was also at the hearing and was very intrigued by the MBUF option.

The next step for the choice lanes and innovative delivery is for a bill to be introduced in the Senate. Analysts expect it to pass the Senate and House transportation committees and, given it is one of the top priorities of the year, pass the full bodies and be signed into law this year. While MBUFs are another key priority, there is more education needed before a bill for a pilot can pass the General Assembly. MBUF action is more likely in early 2024.

» return to top

Unions Oppose Automated Trucking Legalization in California
By Marc Scribner

California was once at the forefront of automated vehicle (AV) policy. Driven by Silicon Valley developers outside the traditional automotive industry, the AV industry in the U.S. remains concentrated in the Golden State. California has authorized AV testing and limited deployments on public roads, but these have excluded heavy-duty vehicles. Regulators recently began considering authorizing heavy-duty AVs in the state, but union-allied politicians quickly introduced legislation that would ban the testing and deployment of heavy-duty AVs without human drivers present in the vehicle. This would effectively kill the business case for AV trucking, as well as the safety and consumer benefits that AV trucks could offer.

Despite California’s ever-tightening regulatory environment, automated vehicle developers in the early days were optimistic about making progress in the state. California’s first AV law, Senate Bill 1298, was even signed into law by then-Gov. Jerry Brown at Google’s Mountain View headquarters in 2012. Fast forward a decade, and California’s AV policy has fallen behind states such as Arizona, Arkansas, Florida, and Texas, which lack California’s intensive permitting approach to AV testing and deployment.

While the California Department of Motor Vehicles (DMV) has allowed AV testing and deployments to take place on public roads, these operations have been strictly limited by DMV regulations to vehicles weighing less than 10,001 pounds. In January, the California DMV began considering updates to its AV testing and deployment rules that would end this arbitrary prohibition. It held a public workshop on Jan. 27 (video).

The International Brotherhood of Teamsters, which represents a small fraction of California truck drivers, had already begun whipping up opposition before the public workshop. On Jan. 26, California Assemblymember Cecilia Aguiar-Curry, with principal coauthors, assemblymembers Ash Kalra and Tom Lackey, introduced Assembly Bill 316, which would prohibit AVs weighing 10,000 pounds or more from being “operated on public roads for testing purposes, transporting goods, or transporting passengers without a human safety operator physically present in the autonomous vehicle at the time of operation.”

On Jan. 31, the Teamsters and California Labor Federation held a rally outside the state capitol in Sacramento with Aguiar-Curry, Kalra, and Lackey in support of their bill. While framed as supporting safety, despite poor human decision-making being a factor in nearly all vehicle crashes, attendees made clear they were really concerned about the potential for reductions in driver jobs—and dues-paying union drivers—that would arise from safer AVs. “Tech companies don’t talk about people. They don’t talk about families that depend on the jobs that you all rely on,” said Assemblymember Kalra.

AV opposition organizers also made clear that they believed that if California, under single-party control, couldn’t stop AV trucking, there would be no way to withstand the tide of transportation technology progress in the rest of the U.S. “So goes California, so goes the rest of the nation. If we lose this, we’re never getting them back,” Teamsters Vice President Lindsay Dougherty told the crowd, according to a Los Angeles Times report on the rally.

California does have an outsized influence on the national AV policy stage. Not only is it the largest state by population, but California is also home to the ports of Los Angeles and Long Beach, two of the largest container ports in the U.S. This makes Southern California an ideal near-term deployment candidate for short-haul automated drayage operations as well as a hub for long-haul operations into the wider Sun Belt. A recent study from Carnegie Mellon University engineers that was highlighted in the April 2022 issue of this newsletter found that AV trucking in the Sun Belt could impact 10% of nationwide truck operator hours.

But a lack of driver labor is a constant complaint from the trucking industry, with the American Trucking Association claiming that the U.S. was short nearly 78,000 drivers in 2022. A shallow pool of drivers exacerbated problems in supply chains that had already been strained by economic shocks caused by the COVID-19 pandemic, leading to unprecedented congestion at the ports of Los Angeles and Long Beach. President Joe Biden launched a Supply Chain Disruptions Task Force in June 2021 in response to this international logistics crisis. Importantly, the increased efficiency and flexibility made possible by automation could help prevent similar supply chain chaos in the future.

A.B. 316 already has the support of some in California State Assembly leadership, with Speaker pro Tempore Christopher M. Ward and Assistant Majority Whip Pilar Schiavo signing on as co-authors. A State Senate companion bill likely isn’t far behind. So far, Gov. Gavin Newsom hasn’t weighed in publicly, but he may soon face a difficult choice between doing the right thing for his state and doing the wrong thing demanded by a small but powerful political constituency.

» return to top

Seven New MBUF Pilot Projects Announced

In the bipartisan infrastructure law, the Infrastructure Investment and Jobs Act (IIJA), Congress continued a modest federal program that offers states or groups of states the opportunity to get partial federal funding support to carry out pilot projects on how to implement a transition from per-gallon fuel taxes to per-mile user fees (MBUFs, referred to as road user charges—RUCs—in western states). Last month, the Federal Highway Administration (FHWA) announced the seven 2023 winners in the Surface Transportation System Funding Alternatives Program (STSFA).

Some of the projects are first-time statewide projects (Michigan and Oklahoma), while others are continuations of prior statewide projects (California, Hawaii, Minnesota, and Virginia). And one project is a continuation of multi-state efforts coordinated by The Eastern Transportation Coalition (TETCo). Both Michigan and Oklahoma will be designing and carrying out their first pilot project, recruiting volunteers to try out simulated per-mile charges as an alternative to the state fuel tax. Michigan will begin with a statewide survey of citizen perceptions of MBUF/RUC, which will help to inform the design and operation of the pilot test. Oklahoma’s voluntary pilot program will consider working with the state’s turnpike authority (due to its revenue-collecting expertise) and will partner with tribal nations (which may be a first for a state MBUF pilot).

The California Department of Transportation continues to build on what it has learned from previous pilot projects, with the new pilot focusing on methods of revenue collection and the behavioral changes that might result from two different rate structures. Hawaii DOT will build on its initial pilot that linked an annual RUC to annual vehicle inspections and vehicle registration renewal. The focus of Minnesota DOT will be on the potential of using built-in vehicle telematics as a way to collect mileage-fee revenue. And Virginia DOT will transition its initial voluntary MBUF program from a fixed fee to a per-mile charge.

In the largest of the seven projects, the TET Coalition will work with seven of its 17 member states (Delaware, Georgia, Maine, Maryland, North Carolina, New Jersey, and Pennsylvania) to build on its several previous pilots involving both passenger vehicles and trucks, in a multi-state environment. This organization has worked extensively with trucking companies and organizations, for which inter-state travel is critically important. Among other things, the new pilot will work on equity concerns, compliance and enforcement questions, privacy issues, and harmonization among states.

Multi-state efforts such as those of the TET Coalition have brought in quite a few states that have not done their own state-specific MBUF/RUC pilots, thereby raising awareness of this subject in a growing fraction of all states.

» return to top

Time to Change the Basis of Truck User Fees?
By Aarne Frobom

“The Turner Proposal” sounds like a second-rate spy novel, but it’s the name of an alternative approach to the design of heavy trucks, and it could guide the design of future truck user fees.

Heavy trucks impose costs on the road system in three ways: in pavement wear due to weight; in capital cost for lane width, bridge and pavement strength, and intersection geometrics; and in congestion by using up capacity. States charge for these costs in fuel taxes and registration fees.  The fuel tax is a proxy for a toll for capacity used. Registration fees based on gross vehicle weight (GVW) are a way of charging for roads strong enough to carry trucks.

But is gross weight the best measure? 

The federal government long ago settled on the 80,000-lb. five-axle semitrailer as its principal unit of freight transport. Following the elaborate AASHO Ottawa Road Test of 1956‑60, the Bureau of Public Roads (predecessor of FHWA) adopted pavement designs anticipating an 80,000‑lb. truck. But truck traffic on the Interstates grew faster than anyone imagined. By the time the first Interstate pavements reached their 20-year design lifespans, pavement wear was becoming evident. One of the architects of the Interstates, Frank Turner, asked, Did we get it wrong? Are single-axle loads of 16,000 to 18,000 lbs. too heavy?

In 1984, Turner proposed a class of trucks with significantly reduced axle loadings, to reduce some classes of pavement wear and preserve the investment in the Interstates. Such trucks would be closer to Canadian and European designs, where 3-axle trailers are standard.

Since then, U.S. trailers have gotten longer, but there has been no movement toward alternative axle loadings. But the trends of worsening pavement condition, declining purchasing power, increasing truck volume, and replacement of diesel power with electric trucks mean it’s time to re-think truck user fees and truck design from the axles up.

More trailer axles could be mandated, but truck operators should share in the savings from pavement-friendly designs. States could keep their elected-GVW-based registration fee for standard trucks, but a fairer approach would be to reduce the usual fee if a truck operator uses a multi-axle trailer with less than the standard 16,000-lb. axle loadings—say, 13,000 lbs. or thereabouts. The reduced fee might be adopted simultaneously with an increase in other fees generally, as a means of mitigating the impact on highway revenues.

The new axle-weight registration fee could be administered under the existing International Registration Plan (IRP) with minor changes.  (Under IRP, trucks in interstate commerce elect a maximum gross combination weight for every state and province they operate in, and pay each state’s weight-based registration fee, apportioned by miles traveled in each state, on a single tax return.)  Jurisdictions would keep their schedules of weight-based fees, but trucks electing lower axle loadings would pay a reduced or “commuted” fee as if they were operating at a lower GVW. An 80,000-lb. combination with a multi-axle trailer might pay as if it weighed 54,000 lbs., or some other number. A color-coded plate and cab card would tell weight enforcers that the truck must be held to maximum axle loadings, in jurisdictions adopting this idea. 

If a jurisdiction’s bridge designs allow it, legal gross weight might be increased while axle loadings fall, for greater productivity. A few states allow trucks over the 80,000-lb. standard.  One state, Michigan, allows 11-axle combinations, often carrying 154,000 lbs. on eight 13,000-lb. trailer axles.

A shift to axle-weight-based fees could be part of changes to road-user charges generally. A growing number of officials expect the fuel tax to be replaced by a mileage-based user fee (MBUF) impelled by a shift to electric vehicles. If we change from charging by gallons to charging by miles, we could combine it with the registration fee, and eliminate one whole tax structure. For trucks, a single fee could be based on elected axle loading in each jurisdiction.  Combining mileage and weight charges into a single fee would allow more headroom for a discount incentivizing light axle loadings. Current unique single-state taxes (in Oregon, Kentucky, and New York) are inefficient and objectionable to truckers, and could be rolled into the fee as well.

Work is needed to quantify the savings in pavement wear and determine appropriate fees. Truck cost allocation is a tricky problem that will not be made simpler by a range of axle loadings. It’s unclear how big a fee reduction would be needed to incentivize purchase of multi-axle trailers. But the exponential increase in some kinds of pavement wear with axle loadings is real, and it should be reflected in road charges.

Aarne Frobom is a policy analyst for the Michigan Department of Transportation.  This article reflects his personal views and is not a statement by the department.

» return to top

News Notes

Colorado Rejects I-25 North Express Lanes Project
In November, the Colorado Transportation Investment Office rejected an unsolicited proposal from Roadis USA to finance, build, and operate long-planned express toll lanes on 21 miles of I-25 north of Denver. While few details were released, CTIO said that the proposal failed to be approved by the CDOT review panel. Public Works Financing (Nov. 2022) noted that the Colorado Transportation Commission in Dec. 2021 issued a rule capping GHG emissions in metro area long-range transportation plans, which has led to a number of highway projects being rejected. The rule also allows the state to reallocate federal IIJA highway funding to transit, bike, and walk infrastructure.

Charlotte Moving Toward I-77 P3 Decision
The Charlotte (NC) Regional Transportation Planning Organization (CRTPO), after having been briefed on the unsolicited proposal from Cintra to add express toll lanes to I-77 between the city and the South Carolina border, will vote on Feb. 15 on whether to ask NCDOT to proceed with a competitive procurement for the project. If it is approved, the project would add two express toll lanes each way on the 9.4-mile stretch of I-77, under a proposed 50-year P3 concession. Going forward with a P3 would lead to the ETLs being developed years sooner than if the state built them conventionally.

Louisiana P3 Toll Bridge May Break Ground Next Year
With the award of a $150 million Mega Grant announced in late December, Louisiana’s $1.5 billion I-10 Calcasieu River Bridge replacement is now expected to have its ground-breaking early next year. The state’s DOT shortlisted four P3 teams in mid-2021, but funding uncertainties have led to delays. The project is planned as a revenue-risk design-build-finance-operate-maintain (DBFOM), but toll revenues are unlikely to fully support the $1.5 billion cost. The $150 million federal grant plus $100 million in state money have put the project back on track toward issuing an request for proposals this spring and negotiating a long-term concession agreement with the winner.

Kansas Turnpike Rejecting Federal Funds
After considering federal infrastructure funds for two planned interchanges near Topeka, the board of the Kansas Turnpike Authority (KTA) has rejected federal funds. FHWA told the agency that accepting federal funds would likely “federalize” the Turnpike, requiring KTA to adhere to various federal regulations and guidelines, might force the closure of its service plazas, and would impact Kansas DOT’s toll credits. KDOT and KTA are now working on plans to pay for the new interchanges.

Georgia Legislators Endorse MBUF Pilot Project
The legislature’s Joint Study Committee on Electrification of Transportation has endorsed Georgia DOT’s plan to conduct a pilot project to test mileage-based user fees in the Peach State. The report urged that the per-mile charge should produce revenue comparable to that of fuel taxes, were fuel tax revenue remaining at levels prior to the advent of electric and hybrid vehicles.

Washington Transportation Commission Endorses RUC Transition
The Washington Transportation Commission submitted a report to Gov. Jay Inslee and the legislature last month proposing a road user charge (RUC) to replace declining fuel tax revenue in coming years. The report recommended that WSDOT continue its current pilot-project efforts, providing information for many decisions that will have to be made, including how to measure and report miles in a manner that both protects privacy and is reasonably cost-effective to collect.

Kansas to Begin Construction of Its First Express Toll Lanes
U.S. 69 near Overland Park will be the first Kansas highway to be equipped with express toll lanes. The $572 million project will add two express lanes to the median of this congested suburban highway. The project, called 69Express, will begin construction this spring. Customers will be asked to use the KTAG electronic toll system already widely in use on the Kansas Turnpike, but the project will also allow license-plate tolling & billing, at a significantly higher cost.

Wyoming I-80 Toll Bill On Legislature’s Agenda
Wyoming State Sen. Cale Case introduced a bill to implement tolling on I-80, with the revenues used for needed improvements. SF 160 would create a state tolling program and a tolling commission. Cole introduced a similar bill in 2021, which passed the Senate but died in the lower house.

Nikola Announces Hydrogen Progress
Although also offering battery-electric versions of its trucks, Nikola is adding infrastructure and services to support its Tre hydrogen fuel cell trucks. Last month it unveiled its first 10,000 psi mobile fueler that will bring compressed hydrogen to locations where truckers can refill their trucks’ fuel cells. The mobile refuelers will supplement Nikola’s permanent hydrogen fueling stations, currently under development. On Jan. 31, Nikola announced its new brand, Hyla, encompassing all elements of its hydrogen fueling system. The company aims to have 60 hydrogen stations in operation by 2026, with  some of the earliest ones planned for Colton, Long Beach, and Ontario, CA.

Fitch Reports Toll Road Traffic Fully Recovered
In a new report released in mid-January, Fitch Ratings found that average toll road traffic for third-quarter 2022 had reached 99% of third-quarter 2019 levels. The data are available from the company’s Traffic Monitor.

Syracuse I-81 Removal Still in Litigation
Although New York state awarded a $296 million construction contract related to the planned removal of elevated I-81 from Syracuse, NY, no work can be done because of an injunction imposed in December due to one of two lawsuits filed against the project. The other suit was filed in federal court, which is also likely to prevent deconstruction as long as it is being litigated. The state court suit argues that the environmental study ignored adverse traffic impacts on neighborhoods from current I-81 traffic that could not be handled by the replacement boulevard.

Four-Acre Park Opens Above Rebuilt I-70 in Denver
The $1.2 billion project that removed an aging elevated section of I-70 east of downtown Denver came with a bonus for the lower-income community that had been cut in two by the construction of the elevated eyesore 57 years ago. Thanks to the P3 project, the viaduct is gone, and that portion of I-70 has been rebuilt below grade. Above the new I-70, at ground level, is a four-acre park. In mid-December, Gov. Jared Polis and Colorado DOT celebrated the new park’s grand opening. Since I-70 is a major auto and truck route, there was no question of “replacing the viaduct with a boulevard.” Instead, traffic throughput has been improved, in part by the addition of an express toll lane each way, and the communities have been reunited.

Travel Centers Adding EV Chargers, Emulating Turnpikes
Travel Centers of America, which announced 30 new truck stop franchises last month, has also announced a joint venture with Electrify America to add 1,000 electric vehicle fast chargers to selected truck stop locations. Meanwhile, the Ohio Turnpike announced plans to add to its existing EV chargers at its service plazas, as other toll roads have also been doing. Toll roads that are also Interstate highways are exempt from the 1960 federal ban on commercial services at “rest areas,” so they can provide easier access to EV chargers, gas stations, and numerous food and other retail operations.

Recommended Reading on the “15-Minute City” Idea
Reason journalist Christian Britschgi does an excellent job of reviewing an idea beloved by some urban planners, the “15-Minute City.” Britschgi’s critique draws on an analysis of the concept by urban transportation expert Alain Bertaud of New York University’s Marron Institute of Urban Management.

» return to top

Quotable Quotes

People travel to improve their place-time personal utility (i.e., their quality of life). Unfortunately, conventional transit hasn’t found a way to provide a low-enough cost of service to substantially induce much demand for its services, whereas widening roads seems to be very effective at delivering additional improved quality of life since, as we are told, they fill up as soon as they are built.”
—Alain Kornhauser, Princeton University,  email to transportation colleagues, Jan. 22, 2023 (used by permission)

“[Street] grids also allow for what Laurence Aurbach, a historian of urban planning, says is the most consistent rule of city design throughout history: functional traffic separation. That is, separation of pedestrians from vehicles; fast vehicles from slow ones; and through traffic from local traffic. Grids have networks of wide main roads and narrow side streets, with pavements and crossings for pedestrians. Faster traffic can be constrained to wider through-streets, where it has to stop less often, leaving narrower residential streets quieter and less polluted.”
—“Going Off Grid: The Sad Decline of the Oldest Form of City Planning,” The Economist, Dec. 24, 2022

“Apple has scaled back ambitious self-driving plans for its future electric vehicle and postponed the car’s target launch date by about a year to 2026, according to people with knowledge of the matter. The car project, called Titan inside the company, has been in limbo for the past several months as Apple executives grappled with the reality that its vision for a fully autonomous vehicle—without a steering wheel or pedals—isn’t feasible with current technology. In a significant shift for the project, the company is now planning a less-ambitious design that will include a steering wheel and pedals and only support full autonomous capabilities on highways, said the people, who asked not to be identified because the information is private.”
—Automotive News Daily Europe, Dec. 7, 2022 (thanks to Michael L. Sena of The Dispatcher)

» return to top

The post Surface Transportation News: Michigan tolling study, traffic congestion returns, and more appeared first on Reason Foundation.

Let me begin with the early-January 2023 announcement that the long-delayed Brent Spence Bridge project between Cincinnati, Ohio, and Covington, Kentucky, will receive $1.6 billion in federal grant funding. This long-needed project had been held up for a decade or more due to opposition to tolling on the Kentucky side of the border. Now there will be no tolls, and federal taxpayers are picking up half of the project’s likely $3.2 billion cost.

By contrast, many other major bridge replacement megaprojects are going forward with some combination of toll-based financing and regular state funding and federal fuel tax money—such as the Calcasieu River I-10 bridge in Louisiana, the I-10 Mobile Bay bridge in Alabama, and the new Houston Ship Channel bridge. All three of these projects feature toll financing, along with some regular state and federal fuel-tax funding. 

The difference between these bridges and Brent Spence is that the customers of these bridges will understand that major bridges are very costly and that under our users-pay/users-benefit highway funding system, highway and bridge users are generally expected to pay for what they use.

So who is actually paying for the Brent Spence Bridge project? The $1.6 billion comes from two new federal grant programs: the Bridge Program and the MEGA Program. Both were created by the infrastructure law. The funding for both of these projects is essentially new general fund money that is borrowed, adding that amount to the national debt. So the bridge will eventually be paid for by the grandchildren of today’s taxpayers. In practical terms, funding the project this way gives the bridge’s users the impression that the new bridge is free.

Slightly less bad is the legislatively-revamped Major Bridges Program in Pennsylvania. Until local courts and then the state legislature intervened, those replacement bridges were to have been financed based on toll revenues, so those who benefitted from the replacements would have been paying most of the costs. But with the Pennsylvania Department of Transportation having to shift to availability payments for this megaproject, those actually paying for the new bridges will be highway users across the state, who will be deprived of other needed highway improvements that could’ve been made in the amounts now to be diverted to the Interstate bridge replacements.

Avoiding users-pay/users-benefit when it comes to new bridges is only the latest chapter in the shift away from the sound principle (basic to other utilities like electricity and water systems) that users/customers should pay the capital and operating costs of the infrastructure needed to provide the amounts of service they demand. 

In my 2018 book, Rethinking America’s Highways, written mostly in 2016, I pulled together average monthly household utility bills and compared them with the average household’s monthly total for gas taxes (both federal and state). Those 2013-era utility bills typically ranged from $71 for water to $107 for electricity. When I showed a table with those costs to audiences during my book tour, I asked them to guess the monthly highway use bill they pay in gas taxes. Nobody guessed the then-correct answer: $46, not including any tolls. My point was that hardly any drivers understand how little they pay for roads and bridges. Surveys find that many people think gas taxes are based on a percentage of the price of gas (i.e., a sales tax), but neither the federal fuel tax nor any state gas taxes bear any relation to the underlying cost of the fuel.

Congress has contributed to people’s lack of appreciation for the full cost of highways. Up until 2008, the annual spending of the federal highway program was met solely by the amount raised in federal highway user taxes. That is why at the federal level, highways were not subsidized. But in the 2015 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users law, or SAFETEA-LU, reauthorization, Congress built in very optimistic projections of revenue and spending.

When the revenue fell below projections in 2008, did Congress cut back the planned spending? Nope, Congress found a grab-bag of pay-fors to maintain planned spending levels. Basically, Congress allocated general-fund money to top-up the Highway Trust Fund each year and has been doing so ever since. Because the federal budget has been in deficit every year since the Clinton administration, all the non-user-tax money being spent by the Federal Highway Administration—so far totaling $275.5 billion, according to Jeff Davis of the Eno Center for Transportation—has been borrowed from our grandchildren.

And that means highways, rather than being paid for by their users, are increasingly subsidized by federal taxpayers or their grandchildren. The average voter thinks a new bridge costing $3 billion is outrageous, largely because she has no idea how little of the capital and operating cost she is actually paying for.

The modest trend of the last 20 years toward greater use of tolls and toll financing is a small step in the right direction—toward being honest with drivers and truckers about what roads and bridges actually cost. Federal programs like Bridge and MEGA represent reversals of this virtuous trend toward getting people to see the full costs of building and maintaining transportation infrastructure. Revenue-financed public-private partnerships move us in the right direction by ensuring that the tolls cover not only the initial construction but also guaranteed ongoing maintenance. 

As long as drivers believe highways and bridges cost far less than they actually do, new toll and public-private partnership projects will likely continue to be few and far between in the United States. Transportation officials and the P3 community need to work harder on explaining the true costs of building and maintaining highways and bridges to opinion leaders and policymakers.

A version of this column first appeared in Public Works Financing.

The post Stop disguising the real costs of building and maintaining highways and bridges appeared first on Reason Foundation.

• Should priced managed lanes maximize revenue or throughput?
• This is one way to ruin a railroad
• More evidence of electric grid inadequacy for EVs
• Louisiana gas tax needs replacing, says think tank
• Questions about Tesla Semi’s 500-mile trip
• News Notes
• Quotable Quotes

Should Priced Managed Lanes Maximize Revenue or Throughput?  

Several years ago, I read a critique of priced managed lanes, also known as express toll lanes, developed and operated under long-term public-private partnership (P3) agreements. The commentary accused the P3 companies of using a technique to maximize revenue it called “jam-and-harvest.” This refers to an alleged policy of deliberately increasing the variable toll rate above the amount needed to ensure free flow in the express toll lanes (ETLs) prior to the peak, so as to deter marginal customers from entering the express toll lanes and thereby increasing congestion in the non-tolled lanes. That’s the “jam” part. The “harvest” part is to then continue these higher tolls for those willing to pay them to avoid the super-congested regular lanes.

Just a week ago, a transportation friend sent me the paper that may have originated this concept. It’s a 2015 working paper from the Columbia University Center for Pricing and Revenue Management titled “Revenue Maximizing Dynamic Tolls for Managed Lanes” by Caner Gocmen, Robert Phillips, and Garrett van Ryan. The authors built a simulation model to study various approaches to tolling, using data from the first such express toll lane on State Route 91 in Orange County, California. While some useful early data are available for this facility, as the authors note, it uses a pre-set toll schedule (different toll rates for different times of day) but not actual dynamic tolls, which are adjusted in real-time every few minutes based on actual traffic flow. The report refers to “jam and harvest” but did not identify or obtain data from any operational ETL that actually uses dynamic tolling to see if it adjusts its rates to do something like “jam and harvest” to maximize toll revenue.

As a matter of fact, the report from Fitch Ratings that I wrote about in this newsletter’s Oct. 2022 issue, includes a table (Appendix D) listing specifics for all 14 ETLs that it currently rates. All nine of those that were developed and operated as revenue-financed P3s set toll rates based on revenue maximization. Of the five managed by state agencies, one uses revenue maximization, one uses throughput maximization, and the other three use a blend of revenue maximization and throughput maximization. But we have no idea if any of the revenue maximizers employ something like “jam and harvest.”

So I was disturbed to read a Sept. 2022 report from the Center for Advanced Transportation Mobility of North Carolina State Agricultural & Technical University titled “Equitable Dynamic Pricing of Express Lanes.” This paper cites a 2018 paper and simply asserts that it has been shown that “policies that optimize for revenue create more jam on the regular lanes in earlier time periods to harvest more revenue for the latter part, a phenomenon termed jam-and-harvest.” This still appears to be an assertion, rather than a statement based on empirical data.

A 2019 paper offers another perspective on the ongoing trade-off between throughput maximization and revenue maximization in dynamically tolled lanes: “Tolling Roads to Improve Reliability,” by Jonathan D. Hall and Ian Savage, was published in the Journal of Urban Economics. Unlike many managed lanes researchers, Hall and Savage take into account not only time savings but the reliability of trip times, which were first studied in detail by Kenneth Small and several colleagues, using data from the original SR 91 express lanes. In those studies, trip-time reliability was equally important as actual time savings. Hall and Savage focus attention on traffic volumes that make flow breakdowns likely on limited-access highways, leading to large decreases in throughput. They also build and exercise models, aiming to find a variable tolling policy that takes into account both time savings and the reliability of trip times. Their overall conclusion is that tolls should be high enough to restrict flow into the priced lanes below flow rates that would maximize throughput. In other words, revenue maximization is better for express lanes customers than throughput maximization.

Whether this paper legitimizes what is being called “jam and harvest,” I’m unable to say. Being educated as an engineer, rather than an economist, I cannot advise you on the caliber of the modeling in any of these three papers. But at least state transportation departments that are overseeing revenue maximization policies on P3 managed lanes may not feel they have to apologize for them, if Hall and Savage are correct. Besides revenue maximizing being good for bondholders and ratings, it also appears to be better for managed lane customers.

» return to top

This Is One Way to Ruin a Railroad
By Marc Scribner

The supply and demand shocks that resulted from the COVID-19 pandemic continue to be felt nearly three years after much of the world abruptly shut down. Freight railroads, like most of the businesses that make up supply chains, continue to struggle with workforce challenges, equipment shortages, and shifting customer expectations. While the situation has improved, the pandemic’s fallout is likely to linger through at least this year. This environment has spurred market innovation and this sometimes-painful evolution requires patience from policymakers. Unfortunately, it has also generated misguided and counterproductive proposals from unusual sources.

One example of this latter trend is Bobby Miller writing last month in conservative magazine National Review in favor of nationalizing the infrastructure of America’s private freight railroads (“This Is No Way to Run a Railroad,” Dec. 20). The article gets much wrong about the history, economics, and regulation of railroading while charting a future for America’s railroads that is neither realistic nor desirable. To be sure, the U.S. freight rail industry must adapt to new market conditions emerging in the 21st century, as I detail in a December report published by Reason Foundation (“Freight Rail Deregulation: Past Experience and Future Reforms,” Dec. 13, 2022). But this requires careful consideration of the economic and policy facts of American rail and freight transportation.

Miller’s central argument is that the U.S. rail network would be improved if the government “adopt[ed] a franchise model for freight and passenger rail.” This is a type of vertical separation, whereby rail infrastructure would be held by a government monopolist and train-operating companies would bid to access the government monopolist’s common network. Vertical separation was explicitly encouraged in 1991 by the European Union’s Directive 1991/440.

In the Americas, railroads have generally remained vertically integrated and horizontally separated, with product and geographic competition occurring between vertically integrated railroads rather than exclusively “above the rail” between train-operating companies over a single infrastructure monopoly. The Achilles’ heel of European-style vertically separated railroads has proven to be unreliable funding and mismanagement of the government infrastructure monopolies, which has resulted in bottlenecks and poor service, particularly in freight, where Europe lags far behind North America. In contrast, horizontally separated railroads generally have no difficulty in attracting private investment because network performance incentives are clearly aligned within vertically integrated railroads.

More recent theoretical work has challenged the assumptions underlying the European Union’s longstanding vertical separation favoritism, with economists David Besanko and Shana Cui demonstrating in a 2016 paper published in the Journal of Regulatory Economics that horizontally separated railroads will tend to outperform vertically separated railroads on network quality, consumer welfare, and social welfare metrics. As an aside, during a session at the 2022 Transportation Research Board Annual Meeting, a European rail official said that he believed that the European Union’s past support for vertical separation had less to do with economics and more to do with the political difficulties of constructing a viable multinational, vertically integrated rail network model from European Union member states’ legacy of balkanized, state-owned rail monopolies.

To his credit, Miller does appear to recognize the potential problems with vertical separation by cautioning against the model adopted by the United Kingdom’s privatization of British Rail in 1994, where the U.K. spun off franchised train-operating companies and pooled infrastructure assets into a nominally private monopoly called Railtrack, which was re-nationalized eight years later after serious shortcomings became evident. The pandemic’s fallout more recently led to the collapse of Britain’s train-operating companies, with the rail franchising model anticipated to be replaced in 2024 by a nationalized monopoly called Great British Railways that would set prices and schedules and then contract out operations to private firms. However, Miller then cites Japan’s privatization of Japanese National Railways (JNR) in 1987 as something closer to his ideal.

Unlike western Europe, Japan did not adopt the vertical separation model. Instead, it broke up divisions of the JNR government monopoly into six independent, vertically integrated companies that now make up the Japan Railways (JR) Group. JR Group passenger railroads own the infrastructure in their respective geographic service regions. JR Freight operates nationally over the JR network, securing what are known in the U.S. as trackage rights to operate over the infrastructure owned by JR Group’s passenger railroads. Rather than rail franchising (i.e., vertical separation), JR Group is essentially the inversion of the U.S. system, in which government-owned passenger carrier Amtrak secures trackage rights to operate intercity service on lines owned by vertically integrated private freight railroads.

The network designs of Japanese and U.S. rail systems also serve fundamentally different purposes. The distinct operating characteristics of freight and passenger trains (e.g., speed, length) generally call for prioritizing one type of rail service at the expense of the other. Japan, like Western Europe, has chosen to optimize its railroads to serve passengers over freight. Being a small island country also means Japan can move much more domestic freight efficiently along its coasts by ship (more than 40%), although Japan also moves a greater share of freight by truck than the U.S. does.

In 2018, the last year wholly unaffected by the COVID-19 pandemic, just 8.4% of inland freight ton-miles were moved by rail in Japan, similar to a number of Western European countries. In contrast, rail’s 2018 freight modal share in the U.S. stood at 31.4%—nearly four times Japan’s rail freight mode share. While Japan enjoys a 32.6% rail mode share of combined rail and road passenger miles of travel, rail’s passenger mode share in the U.S. is just 0.5% of surface transportation passenger miles—less than 1/60th of Japan’s.

As with his international rail misunderstandings, Miller gets basic facts wrong about the U.S. rail network. He accuses U.S. freight railroads of “charg[ing] prices well above the rate of inflation” even though inflation-adjusted freight rates are down by more than 40% since the partial deregulation of the industry in 1980. He claims “[t]he one Amtrak route that the government makes a profit on” is with its Northeast Corridor operations between Boston and Washington, the only territory where Amtrak operates as a vertically integrated carrier, even though Amtrak has never turned a profit on any corridor when depreciation is properly accounted for. Amtrak’s failure to adopt generally accepted accounting principles not only tricks people like Miller into accepting Amtrak’s “operating profits” without proper context, but it also diverts attention from the state of good repair backlog in the Northeast Corridor that Amtrak currently estimates to be $43.7 billion and growing.

The inconvenient truth facing passenger rail aficionados like Miller is that passenger rail is usually an unprofitable endeavor. Before Amtrak relieved U.S. private railroads of their passenger service mandates enforced by the Interstate Commerce Commission, railroads had been cross-subsidizing passenger service with freight revenue for generations. Amtrak was only created because freight revenue had evaporated by 1970 under heavy regulation and new trucking competition following World War II. Regulators had refused to grant requested “train off” passenger service discontinuances even after those railroads had gone bankrupt.

While passenger rail hobbyists were enthusiastic about the prospect of Amtrak, the rail industry was simply happy to be free of costly passenger service obligations it could no longer afford. Summarizing the railroads’ perception of Amtrak, one railroad executive remarked at the time that Amtrak primarily served as “a sentimental excursion into the past for legislators over 50.”

Adopting vertical separation in the U.S. would almost certainly cause rail infrastructure investment to crater and networks to deteriorate, with the only beneficiaries being rail’s truck competitors who could capture some of the highest-value traffic from shippers fleeing foundering rail carriers just like they did in the 1960s and ‘70s. History might not exactly repeat itself under Miller’s misguided agenda, but it would likely rhyme, and no one in the U.S. rail industry wants to relive the era of standing derailments with a slightly different soundtrack.

Rather than Miller’s confused rail-franchising proposal, policymakers should instead recognize that the future of rail in America is in freight and look to build on the unambiguous success of partial deregulation carried out under the Staggers Rail Act of 1980. Since then, inflation-adjusted average rail freight rates have declined by 44% while freight volume grew by 57%. Even though the law only concerned economic deregulation, the Staggers Act enabled large safety gains, with a 76% decline in train accident rates and an 85% decline in employee injuries and occupational illnesses.

Despite the clear success of partial rail deregulation, some politicians and special interests seek to reverse these reforms and prevent freight railroads from adapting to new competitive market pressures. A coalition of large industrial shippers is seeking new regulations that would limit railroads’ return on investment and, thus, capacity to invest in system improvements. Tellingly, these shippers have opposed the Interstate Commerce Commission’s successor agency, the Surface Transportation Board, adopting robust benefit/cost analysis for major new regulations similar to what has been required of all federal departmental agencies since the Clinton administration.

With rail’s truck competition anticipated to increasingly automate in the coming decades and with labor accounting for nearly half of truck operating costs, rail must also adopt new productivity-enhancing automation technologies to remain viable through the 21st century. Unfortunately, even small movements in this direction—such as by harnessing existing mandated automation and communications technologies to enable single-person crews on some trains, long the default in Western Europe—have been strongly resisted by rail unions. The unions currently have the support of the Federal Railroad Administration (FRA), the rail industry’s safety regulator, which has proposed a rigid crew-size regulation despite conceding it does not possess “any meaningful data” to support the conclusion that two-person train crews are safer than one-person crews.

Organized labor has also opposed automated track inspection that FRA’s own data finds is more accurate than traditional visual inspections. Automated track inspection would not only improve safety for the trains operating over the rails, it would also keep track inspectors out of harm’s way and reduce rail equipment accidents in the field. While FRA was an early supporter of these improved track inspection technologies, it has recently reversed course at the request of rail unions.

The good news is Congress can protect the gains realized from the Staggers Act and help usher in 21st-century freight rail. It should require that new major rules from the Surface Transportation Board be supported by robust benefit/cost analysis and limit the agency’s discretionary powers. Congress should also explicitly prohibit FRA from regulating train crew size and establish a permanent automated track inspection program not subject to the whims of political appointees.

» return to top

More Evidence of Electric Grid Inadequacy for EVs

The Dec. 2022 issue of this newsletter included an article on the much-cited National Grid study that highlighted major challenges involved in building enough charging stations for a complete transition to electric propulsion, for both personal and commercial vehicles. In December, the trucking industry think tank American Transportation Research Institute (ATRI) addressed this issue, with a focus, of course, on how this would affect the trucking industry. The study’s three main findings are:

1. An all-electric vehicle fleet would require more than 40% of all electricity currently generated in this country, with an especially large fraction of that being needed for heavy long-distance combination trucks.
2. There would be major problems obtaining enough rare earth materials for the amount of battery capacity needed for an all-electric vehicle fleet.
3. For long-haul trucking, a major challenge will be finding enough locations for heavy-truck chargers since there are so few existing places where those trucks can park.

Those are all valid points, but some are more problematic than others. The study estimates that personal vehicles would require 1,040 billion kilowatt-hours (kWh) per year, while trucks of all sizes would require 553.5 billion kWh per year. But that’s a bit misleading because the lion’s share, 75%, of truck electricity demand is from long-distance heavy-duty combination trucks (Classes 7 and 8). If those trucks were excluded, the electric vehicle (EV) demand would be 1,176 kWh/year—35% less. I mention this because a May 2022 ATRI study, “Understanding the CO2 Emissions of Zero-Emission Trucks” did a detailed comparison of the carbon footprint and other aspects of Class 8 diesel, battery-electric, and hydrogen fuel cell trucks. It found that fuel-cell electric was far superior to battery-electric for this category of truck—lower lifetime CO2 emissions and significantly higher payload capacity by avoiding the very heavy battery pack needed for battery electric vehicles, or BEVs.

The current ATRI study covers a lot of the same ground about the costly and scarce minerals needed for BEV combination trucks as the May 2022 study, so I won’t go through that again. Instead, let’s go to the third topic of the new report: the shortfall of truck parking spaces. It cites a 2019 FHWA inventory of such spaces, including 273,000 spaces at private truck stops and 40,000 at highway rest areas. As a barrier to expansion, let me quote a short paragraph on page 43 of the new report:

“At the nation’s approximately 40,000 public rest stop truck parking spaces, commercial charging is not allowable under federal law. This limitation stems from a 1956 regulation that restricts any commercial activity at public rest areas, including fueling or restaurants (though some grandfather clauses exist). This regulation presents myriad challenges to public rest area charging. The likely consequences and implications are that truck charging fees either could not be assessed at public rest areas, could not exceed direct electricity costs, and/or that private sector entities could not provide the charging services.”

The text goes on to cite 2021 lobbying by trucking ally National Association of Truck Stop Operators and others to maintain the ban. And it notes unresolved problems in getting electric vehicle charging installed at private truck stop parking spaces. And in the recap of findings at the end of the report, under the heading “Truck Charging Availability Will Be the Truck Parking Crisis 2.0,” the fourth of six bullet points is the following:

“Other barriers include laws preventing commercial charging at public rest areas and the remoteness of many truck parking locations.”

Kudos to ATRI for identifying this as a significant barrier to truck electrification. My only disappointment is that this report does not cite the Reason Foundation March 2021 study, “Rethinking Interstate Rest Areas,” which makes the same point, and discusses the successful use of private capital to develop/redevelop service plazas on tolled Interstates which are exempt from the federal commercial-services ban. These service plazas are adding EV charging.

» return to top

Louisiana Gas Tax Needs Replacing, Says Local Think Tank

Researchers and transportation analysts in Louisiana are increasingly aware that per-gallon fuel taxes are a problematic long-term revenue source for the state’s highway system. In a Dec. 28 commentary, Jamie Tairov of the free-market-oriented Pelican Institute reviews this problem and suggests possible solutions.

Historically, the state’s gas tax was a pure user tax, with the proceeds dedicated to building, maintaining, and modernizing the state highway and bridge system. Over the past 50 years, most states converted their highway departments to departments of transportation. Louisiana’s became the Department of Transportation & Development (DOTD), and the highway fund became the Transportation Trust Fund, which is responsible for highways, bridges, ports, flood control, etc. And funds going into the Trust Fund include not only state and federal fuel tax proceeds but also auto registration fees, airport fuel taxes, and, beginning this year, a $100 annual tax for electric vehicles (EVs). Needless to say, who pays for what has become somewhat blurred.

Louisiana’s fuel tax revenue is barely increasing and is likely to start declining as new cars must go farther and farther per gallon of gas (thanks to tougher federal fuel-economy mandates), more people replace conventional cars with hybrids that use less gas, and as electric vehicles become a larger and larger part of the vehicle population. Complicating the highway construction and maintenance problem is a huge recent increase in Louisiana construction costs, which Ms. Tairov’s piece puts at 88% over the past two years.

Her commentary also suggests that some of the roads and highways that are part of the state highway system could be devolved to local governments, which may well make sense but would likely not be easy, politically. She also suggests possibly deferring new construction projects for several years in case costs “come back down,” but that risks not paying for projects now only to face paying even higher costs three years from now. (Note, the long-term trend in highway construction costs as tracked by the Federal Highway Administration is annual increases averaging 5.72% per year from 2002 to 2019, with very few annual decreases.)

The most troubling suggestion in the piece is “un-dedicating the gas tax, placing those funds in the state’s general fund, and then funding DOTD like any other state priority.” In my 2018 book, Rethinking America’s Highways, I make the case for restoring the users-pay/users-benefit principle—i.e., strengthening the link between paying for and using roads and highways. The gas tax, of course, needs to be replaced with a user fee that applies to all vehicles regardless of how they are propelled. A congressionally-appointed national commission in 2009 studied an array of possible user fee mechanisms and concluded that by far the best way was to charge per mile driven.

When my Reason colleague Marc Scribner read the Pelican piece, he pointed out that, “Eliminating the users-pay principle and funding roads like any other general government obligation out of general appropriations has long been a goal of progressive smart-growth groups who believe they can more easily get their pet projects funded when road-user revenues aren’t dedicated to roads.”

I agree, and in my book I discussed a longer-term goal of making highways function more like other infrastructure such as water supply and electricity. Customers get a monthly bill showing how much they used, the rate per unit of use, and the amount due. The revenues go exclusively to the capital and operating costs of the utility in question.

A growing number of state DOTs have been carrying out pilot projects to simulate, with volunteer drivers and trucking companies, how a per-mile user fee system might work. There is no consensus yet on the best model, but Louisiana policymakers should be thinking about carrying out a similar pilot project.

» return to top

Questions About Tesla Semi’s 500-Mile Trip

The highly touted 500-mile run of a fully loaded Tesla Semi from Fremont to San Diego has raised a number of questions. As far as I can tell, only two minutes of a claimed eight-hour trip video have been posted on YouTube. The video shows only one pause for a bathroom break during that time period, which is suspicious, and not counting that break, if it really went 500 miles in eight hours, that’s an average speed of 62.5 miles per hour. Could there be zero congestion on I-5 (or any other freeways) for any eight-hour period in California?

Other questions include whether the Semi had a full load, weighed the claimed 81,000 pounds, and actually operated on a single battery charge for the whole trip. Autoevolution last month offered a critical assessment. There was no weighing of the truck, and the pallets carried in the trailer to simulate commercial freight loads were estimated at 34, each weighing 600 kilograms (or 1,323 pounds). Yet the video shows only a brief glimpse inside what appears to be a partially loaded trailer. Autoevolution’s estimate of the total gross weight is well below the claimed 81,000 pounds.

The May 2022 ATRI study “Understanding the CO2 Impacts of Zero-Emission Trucks” estimated that the total empty weight of a Class 8 Semi powered by batteries would be 32,016 lbs. Of that, the battery pack alone accounted for a bit over 17,000 pounds. The empty weight of a comparable diesel Class 8 was put at 18,216 pounds. Subtracting the empty weight from the targeted 81,000 gross weight yields a payload capacity of 62,784 pounds for the diesel but only 48,984 pounds for the battery-electric. Tesla has released no figures on either the Semi’s empty weight or the weight of its battery pack. Of course, it may be lighter than ATRI’s estimates, but it would be nice of Tesla to disclose such figures.

Further questions were raised in an article on Electrek on Dec. 16. Reporter Fred Lambert cited a Reuters interview with Pepsico VP Mike O’Connell about the company’s initial 36 Semis for its Frito-Lay division, 15 of them in Modesto and 21 in Sacramento. The Frito-Lay trips will average 425 miles, while trips hauling Pepsi soft drinks will average 100 miles. This suggests that potato chip loads will “cube out” (fill the cubic feet) long before they “gross out” (using all the available payload weight). So at best, it seems likely that the 500-mile run was simulating potato chip loads, not soft-drink loads.

Trucking companies will not make many serious fleet commitments without verifiable performance data. Flashy videos will not be enough.

» return to top

News Notes

PennDOT Finances Major Bridges P3 Project
Just before Christmas, the Pennsylvania Department of Transportation and a Macquarie-led consortium reached financial close on the $2.3 billion Major Bridges Program’s first phase. It will replace six major bridges: one on I-78, four on I-80, and one on I-81. Three other aging Interstate bridges will be addressed in a subsequent project. Because the state legislature last year changed the public-private partnership law to prohibit putting tolls on “existing” Interstate lanes (even though these projects will replace all those lanes), PennDOT is financing the project based on availability payments. The consortium put in $202 million in equity, and the financing includes $1.8 billion in tax-exempt private activity bonds (PABs), the demand for which was six times the amount sought.

Brent Spence Bridge Project Finally Moves Ahead
After more than a decade of local opposition to toll financing to replace the aging Brent Spence Bridge between Kentucky and Ohio, a plan to refurbish the existing bridge for local traffic and build a new (non-tolled) bridge for long-distance (through) traffic reached an agreement—thanks to in large part “free” money from taxpayers via Congress: $1.6 billion in grants from two new federal programs. The new 10-lane bridge will carry I-71 and I-75 across the Ohio River.

Louisiana Moving Forward on Major Bridge P3
After securing modest pledges of state and federal grant support, the Louisiana Department of Transportation & Development is expected to issue its long-awaited request for proposals for a long-term design/build/finance/operate/maintain P3 project this spring. The project will replace the aging I-10 bridge across the Calcasieu River. The estimated cost is $1.5 billion, with the feds committing $150 million and a state grant of $100 million. Tolls are expected to be a significant portion of the financing package, and the concession term is expected to be 40 to 50 years.

Gordie Howe Bridge Delayed Eight Months
The $5.7 billion Gordie Howe Bridge between Detroit and Windsor, Ontario, will not likely open to traffic until Aug. 2025, an eight-month delay. The main factor is delays on the Detroit side of the river, where a new interchange with I-75 is a significant part of the project, along with the bridge and ports of entry on both sides. The 1.5-mile, six-lane bridge will provide much-needed additional capacity for America’s single busiest commercial border crossing. The P3 consortium consists of ACS Infrastructure Canada, Fluor Canada, and Aecon Concessions. The public-sector partner is the Windsor-Detroit Bridge Authority.

Arizona Planning EV Charging “Along” Its Interstates
Arizona DOT plans to use $76.5 million in Infrastructure Investment and Jobs Act funding to add electric vehicle charging facilities along I-8, I-10, I-17, I-19, and I-40. The plan will upgrade eight existing charging stations and add 13 more, according to ADOT. They will be located at 50-mile intervals and no more than one mile from an Interstate offramp. It would have been more convenient for EV operators if the charging stations were located right on the Interstates, but federal law still prohibits any commercial services at Interstate highway rest areas.

Connecticut Truck Mileage Fee Began on Jan. 1
In addition to its diesel tax, commercial truckers using Connecticut’s highways as of Jan. 1 are being charged a per-mile fee, based on vehicle weight. The rates go from 2.5 cents/mile for trucks between 26,000 and 28,000 lbs. to 17.5 cents/mi. for trucks of 80,000 lbs. or more. While it is called a fee, because the proceeds are supposed to support the state’s Special Transportation Fund (to improve roads and bridges), it’s more accurately a user tax, analogous to the original state fuel taxes that were dedicated to highway purposes. And truck weight does correlate with the extent of pavement wear and tear.

Reports Question U.S. Electricity Net Zero by 2050
The Electric Power Research Institute released a report in September titled “Net-Zero 2050: U.S. Economy-Wide Decarbonization Scenario Analysis.” As summarized by Steve Milloy of the Energy & Environment Legal Institute, the report found that conversion to clean electricity plus direct electrification (of uses such as electric vehicles) is incapable of leading to U.S. net zero by 2050. Supporting this finding is a report from the North American Electric Reliability Corp. (NERC), “2022 Long-Term Reliability Assessment,” which found that fossil fuel plants are being removed from the grid too quickly to meet ongoing demand.

Jones Act Repeal Suggested by JEC’s GOP Members
In a 29-page report called “Policy Solutions to Reduce Inflation,” the nine Republican members of Congress’s Joint Economic Committee singled out both the Jones Act, which prohibits foreign-owned ships from transporting cargo between two U.S. ports, and the Foreign Dredge Act, which prohibits foreign dredge operators in U.S. harbors and waterways. Both serve to protect high-cost U.S. companies and prevent efficient delivery of shipping and dredging in this country. These were among a number of sensible suggestions for reducing inflation that should elicit bipartisan support.

Barone Spotlights State Population Winners and Losers
In a Dec. 28 column, the Washington Examiner’s Michael Barone drew on 2022 Census domestic migration data to identify the states gaining and losing the most population due to domestic migration. The three biggest population losers, according to Barone, were New York (3.3% out-migration), Illinois (2.2%), and California (2.2%) plus Washington, DC (down 3.8%). By contrast, the biggest population gainers were Florida (3.3%), South Carolina (3.2%), Texas (3.05%), and North Carolina (2.5%). Obviously, the pandemic and economy significantly impacted the trends, and it is too early to know if they are permanent, but policy analysis and media coverage of migration, housing, and infrastructure in these areas will be vital in the coming years.

EVs and Winter Weather
“Cold weather is zapping electric pickup truck range.” That headline appeared in Equipment World on Dec. 21. It added that range loss in cold weather is stirring up serious concerns among some electric vehicle users. Just sitting out in the cold overnight can deplete range by 20%. The North American Council for Freight Efficiency has found in cold-weather testing that “you lose 10% of range for every 10 degrees under 30 degrees Fahrenheit.” Even worse, the AAA Automotive Research Center in Southern California reports that electric vehicle range “dropped 57 percent…when the temperature was held steady at 20 degrees.” Both Ford and Rivian have advised users of their EVs to park them overnight in a garage, plugged in, out of freezing weather. I have seen no comparable data on hydrogen fuel cells in cold weather, probably because there are so few such vehicles in production or operation.

Miami-Dade County Scraps Monorail in Favor of People Mover
For a long-planned transit connection between Miami and Miami Beach, Miami-Dade County, which previously rejected the idea of extending its heavy-rail transit system across Biscayne Bay in November, also rejected the previously favored idea of a monorail to be developed under some kind of P3 agreement. Instead, the county is sticking with something they know: the slow-moving Metromover—a 1970s-era elevated people mover that circulates in downtown Miami. That will likely cost a lot less and will be compatible in operations and maintenance with the existing Metromover.

Hawaii DOT Favors Road Usage Charge for EVs
After having conducted a pilot project to test aspects of a per-mile charge for all vehicles, the Hawaii DOT now favors beginning the transition from per-gallon taxes to per-mile charges with a per-mile charge for electric vehicles (as is already the initial approach in Utah DOT’s ongoing program). Electric vehicles would pay 0.8 cents per mile initially, based on miles driven read from their odometers at annual vehicle inspections. The pilot project involved 2,000 volunteers, funded largely by a federal grant in 2018.

New Jersey Motorists Will Be Taxed for Amtrak’s Gateway Tunnel
Directors of the New Jersey Turnpike Authority approved the diversion of enough toll revenue to pay for the state’s 25% share of the cost of the $16 billion Gateway Tunnel project. New Jersey officials plan to apply for a federal railroad loan to cover the state’s cost, and diverted turnpike funds will be used to make monthly payments on the loan. This amounts to a $4 billion tax on Turnpike customers, not including interest costs. Where are the trucking associations and AAA on this?

Tesla Puts Video Game in Front of Drivers
Kelly Blue Book reported, without comment, the news that Steam Gaming will be added to Tesla’s Model S sedans and Model X SUVs from model years 2022 and 2023. The illustration shows “Cyberpunk 2077” on a huge Tesla screen, just to the right of the steering wheel. One hopes there is some kind of lockout to prevent a driver from playing such games while driving in “self-driving” modes that require hands on the wheel and eyes on the road. But even if there is, hackers will likely find ways to bypass the lockout.

Recommended Reading

• “By Abolishing Fares, Big Cities Embrace Transit’s Death Cycle,” Christian Britschgi
• “Automotive AI Is Making Both Cars and Drivers, Better,” Michael L. Sena

» return to top

Quotable Quotes

“Eliminating fares without otherwise improving service is unlikely to push very many drivers to take more trips via bus. Instead, evidence suggests that increased ridership will mostly come from people who already take the bus choosing to do so over biking or walking. That’s fine, but it doesn’t do anything to reduce congestion or emissions. In Talinn, the capital of Estonia, fare-free buses led to a 40 percent reduction in trips made on foot and reduced the number of car trips by just 5 percent. In Trenton, NJ and Denver, CO experiments with free fares likewise showed no change in car traffic, despite significant increases in ridership.”
—Jerusalem Demsas, “Buses Shouldn’t Be Free,” The Atlantic, Dec. 9, 2022
 
“The fact that Cruise’s test cars get stuck or Tesla cars crash when their Full Self-Driving systems are engaged indicates that we are still in the pre-commercial phase of automotive AI. But technical issues are only one, albeit important, part of the entire transformation of the automotive driving experience, especially when moving to automotive AI-based systems that have no interaction with humans for the driving task. Like a present which has many layers of wrapping, from the tissue paper around the present to the ribbon and bow on the box, automotive AI requires various layers to complete the basic technology.”
—Michael L. Sena, “Automotive AI Is Making Both Cars and Drivers Better,” The Dispatcher, Jan. 2023

“Do policymakers today have the stomach for the fight? Coming so soon after the fiscally austere 2010s, many are reluctant to tighten the tax-and-spending screws once again. Indeed, many politicians have gone the other way, and now seem uncomfortable with the notion that anyone should lose out from anything, ever. They are offering hundreds of billions’ dollars-worth of deficit-financed fiscal support that will fuel inflation, whether by subsidizing energy bills (in Europe), offering ‘cost-of-living payments’ (in Australia and New Zealand), or forgiving student debt (in America). Policymakers are thus ignoring the fundamental lesson of the 1980s. Fighting inflation is hard. It requires all hands on deck and immense courage over a long period of time. It is also, unfortunately, almost inevitable that some groups lose out, if only in the short term. As politicians run scared, the 2020s risk earning a special place in the history books, too—for failing to tame inflation.”
—Free Exchange columnist, “I’ll Do Things for You,” The Economist, Dec. 3, 2022

» return to top

The post Surface Transportation News: Priced managed lanes, a way to ruin a railroad, and more appeared first on Reason Foundation.

But as transportation researcher Steven Polzin pointed out in testimony before the transportation subcommittee of the U.S. Senate Committee on Environment and Public Works in May 2021, there are many aspects of equity, and they are sometimes in conflict. Polzin noted, “there are tradeoffs and opportunity costs involved with the undisciplined pursuit of mitigating impacts inherent in transportation infrastructure.”

Within the constraints of this column, I’m going to focus on recent attempts to apply new equity concepts to tolled projects, such as highways, bridges, and express toll lanes.

One growing trend is transportation planners proposing to fix alleged inequities in express toll lanes by offering discounted rates to lower-income commuters, offering a certain number of free monthly trips, or similar measures. I first learned of these efforts while taking part in a Transportation Research Board Managed Lanes Committee panel in January 2021. In suggesting that the proposed equity measures were unwarranted, I cited a detailed 2019 University of Washington study of equity among user groups of the Seattle region’s I-405 express lanes, which found that the lowest-income quintile of express toll lane (ETL) users derived greater benefits per trip—defined as the value of time savings minus the cost of the toll paid—than any other income quintile. And I pointed out that these toll lanes are a voluntary choice for drivers, who could also choose to use the non-tolled lanes.

But today, more and more metropolitan planning organizations and state transportation departments are looking into offering discounts or free trips in the toll lanes for economically disadvantaged drivers.

It’s worth noting that most ETL providers already work closely with local transit agencies to ensure there is express bus service using the faster, more-reliable bus service in express toll lanes. These buses offer subsidized rides, just as all transit services do.

As I’ve written before, giving free trips will crowd more cars into the express toll lanes during peak travel periods, leading to the variable toll rates going up higher than would otherwise be the case, which may deter some other drivers from selecting the ETLs, overcrowding the regular highway lanes. The studies of ETL discounts or freebies barely mention the impact these policies have on the road’s performance or revenue (which, in many cases, is essential for meeting the project’s debt-service obligations).

Let’s now consider an even more bizarre proposal. The Metropolitan Transportation Commission (MTC) for the San Francisco Bay Area is studying the possibility of adding tolls to all lanes on the Bay Area’s existing freeways. In the equity portion of the commission’s study, they have identified seven “equity priority communities” that would need special consideration in the planned toll rates. These communities, according to MTC, include:

• Workers with low incomes
• Middle-income workers
• Super commuters
• Working parents with school-age children
• Students
• Small business owners
• Rural residents

With all those groups receiving consideration, the region’s urban professionals would presumably be the only ones to pay the full, regular toll rates. In effect, MTC is considering converting the Bay Area’s highway system into a complex, tiered social welfare system. For a hundred years, U.S. highways have been funded by per-gallon fuel taxes, with everyone paying the same per-gallon gas tax rate. While the argument can be made that the gas tax system should be replaced and now overcharges rural drivers who primarily use inexpensive roads and undercharges urban drivers in major cities, it is not set up as a social welfare operation.

The federal government already charges different rates for different services, including different ticket classes on Amtrak and varying delivery options via the U.S. Postal Service. The higher rates are supposed to be in exchange for the possibility of better or faster services.

Worldwide, toll road rates apply the same de facto rate per mile to all vehicles in a given classification, independent of the vehicle operator’s household income or economic position. Operating toll roads and bridges based on drivers’ job titles or income brackets would wreak havoc on long-term toll financing of the infrastructure, making it even harder to build and maintain roads and bridges. It would also likely lead to a consistently expanding set of politically granted discounts and freebies as more and more groups make the case that they should be subsidized and exempt from paying the full costs of using the infrastructure.

Advocates of implementing discounts on express toll lanes might point to lifeline rates offered to low-income families and seniors to cover modest use of electricity or water. But those lower rates do not lead to the over-use of electricity or water in the damaging way that the subsidies would affect traffic flow in express toll lanes.

For the most part, federal and state transportation policies have explicitly subsidized services, such as urban transit, for those known to be low-income. Some would argue that even those subsidies have gone too far since transit agencies typically do not charge fares that cover operating and maintenance costs. Instead, transit agencies tend to charge the same very low fares, which do not cover the costs of the ride, to all passengers. It would be more equitable to charge cost recovery fares but offer transit vouchers to low-income riders.

The opposite has occurred in the airline industry, where federal cost-plus regulation for decades kept airfares so high and competition so limited that only people relatively well-off financially could afford to fly. Since federal airline deregulation signed by then-President Jimmy Carter in 1978, robust airline competition has helped make flying affordable for most Americans. The only federal subsidies left in commercial aviation tend to be for small, mostly rural communities that don’t have enough passenger demand to support airline service.

Freer markets and more competition help expand consumers’ choices. Deregulation and markets would help produce equity more effectively than government actions.

Turning highways into something that might look like selective social welfare programs to drivers and businesses is unnecessary and unwise.

The transportation community should undoubtedly highlight the many places existing government policies are failing drivers and transit riders and making it harder to build and maintain the infrastructure that workers and businesses rely upon. The transportation community should also actively explain the shortcomings and likely unintended negative impacts that many proposed equity programs would have on the users they’re supposed to help.

Politicizing urban highways and undermining tolling, which should be used to finance and maintain highways, is not a good or effective solution to the nation’s infrastructure problems and won’t produce more equity.

A version of this column first appeared in Public Works Financing.

The post Examining recent attempts to apply equity policies to toll lanes appeared first on Reason Foundation.

Policymakers and the public have expressed concerns about road user privacy in mileage fee systems, especially those that involve a location-based component. Fortunately, protecting the privacy of location-based mileage fee customers is a solvable problem with practical technology and policy solutions. 

How the Global Positioning System (GPS) Works

• GPS satellites broadcast radio signals that transmit their locations and the precise time from onboard atomic clocks.
• A GPS receiver detects these signals and uses the time of arrival to calculate its distance from a GPS satellite.
• Using the distance calculations from at least four GPS satellites, a GPS receiver can determine its position (longitude, latitude, altitude) and time.
• Because GPS signals are sent one-way from the satellites and location is calculated by the GPS receiver using multiple satellites, GPS by itself cannot be used to track the location of a GPS receiver.
• Privacy concerns only arise when a GPS receiver is paired with a secondary wired or wireless communications system that can transmit location information computed and stored locally on a GPS receiver.
• Privacy and data security considerations should thus be focused on those secondary communications systems.

Addressing Location-Based Mileage Fee Privacy Concerns

• In location-based mileage fee systems, policies should be implemented that ensure customers’ personally identifiable location data are protected. These include:
• Storing all location data onboard vehicle computers, transmitting only mileage-count information for revenue-collection purposes. 
• Strict data retention policies that destroy stored onboard location data after a set interval, upon completion of any customer billing disputes or audits.
• The use of trusted third-party payment processors that operate as intermediaries between customers and government revenue agencies.
• Requiring a court order based on probable cause in an authorized criminal investigation before granting law enforcement access to onboard location data.

Recommendation: Customer privacy protection and data security should be thoroughly investigated during mileage-based user fee pilot programs.

Protecting customer privacy in mileage-based user fee collection

The post Protecting customer privacy in mileage-based user fee collection appeared first on Reason Foundation.

The Major Bridges P3 deal is the state’s latest use of public-private partnerships to modernize and rebuild bridges. Pennsylvania’s Rapid Bridge Replacement Project used public-private partnerships to rebuild over 550 bridges on collectors and local roads in the northeastern and southwestern parts of the state over the last decade.

Initially, the Major Bridges project was conceived as an availability payment public-private partnership (P3) with tolling. However, the courts ruled that Pennsylvania’s public-private partnership law did not allow existing capacity to be tolled. As a result, the state decided to use a pure availability payment P3 model (with fuel taxes, general funds, or sales taxes as the revenue sources).

This project was split into two phases for environmental permitting reasons. The $2.3 billion first phase includes $1.8 billion in private activity bonds (PABs), the highest dollar value of PABs for any U.S. P3 project. It also includes $200 million in equity from the private partner–Macquarie, a $140 million mobilization and milestone payment, and $150 million in interest.

Unlike many public-private partnership projects, the first phase of the Major Bridges P3 project does not include a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan because the project financing schedule was too compressed. However, the state and concessionaire are examining a TIFIA loan for the second phase. PennDOT wanted to complete the project by the end of Gov. Tom Wolfe’s administration. While incoming Gov.-elect Josh Shapiro’s administration supports the project—Shapiro approved the project as Pennsylvania attorney general—delays lead to additional costs, which must be priced into the project. It took only three weeks for phase one to move from commercial close at the end of November to financial close in December.

This Major Bridges project helps Pennsylvania and provides four essential takeaways for other states considering public-private partnerships.

First, PennDOT included a major provision to build support among the local contractor community in the state. The P3 requires 70% of project construction to be subcontracted to local firms. Most P3s are able to subcontract a majority of the construction. While a local work requirement can increase costs by barring cheaper external contractors, it typically increases support from smaller construction firms that might otherwise be political obstacles to P3s. Given that much of the work will be completed locally, the trade-offs involved in this provision can be politically savvy overall.

Second, bundling works. The state combined nine projects into two by bundling multiple projects (either multiple bridges or roadways). That minimizes the number of project managers and the administrative support required for each project, and it also reduces the per-project costs to taxpayers. Bundling is not advantageous just for transportation projects. For example, Prince George’s County, Maryland, has bundled school renovation projects. Many jurisdictions could bundle services like fire stations and libraries.

Yet, few state transportation departments have chosen to bundle bridges. Besides Pennsylvania’s bundling, Georgia, Massachusetts, Missouri, Nebraska, New York, Ohio, Oregon, and Rhode Island are the only states with bundled bridge contracts for maintenance. And none of those states has used a public-private partnership in those bundles, even though several have strong P3 laws.

Third, state transportation departments can complete projects quickly if they prioritize and use best practices for public-private partnerships. Pennsylvania reached financial close on the Major Bridges P3 less than five months after the pre-development contract was restarted (a court struck down the original P3 tolling law in early July, requiring changes to the project). The expeditious closing was aided by a detailed pre-development agreement (PDA) that spelled out different contingencies.

Contrast that with the slow-moving I-270/I-495 managed lanes P3 project in Maryland, which was first unveiled in 2017. That project adopted a progressive design-build model (somewhat like a PDA) in early 2022. In fairness, Maryland had to be more deliberate with that project due to the challenges with its much-delayed and costly Purple Line light-rail P3 project. However, Maryland’s initial approach to the I-270/I-495 public-private partnership also led to many of the project’s delays.

Finally, while this availability payment P3 reached financial close, Pennsylvania still has a long-term highway and bridge funding challenge. Since Pennsylvania cannot toll the bridges, it will need to take revenue from other projects, likely other highways that need to be widened and/or maintained. The gas tax, the primary revenue source for PennDOT and other state transportation departments, is losing its purchasing power and mileage-based user fees, the likely successor to fuel taxes, are still in the testing phase in the state.

Pennsylvania could use tolling to help rebuild and expand its Interstate highways today, but tolling is not allowed under the state’s P3 statute, so the state legislature should revise the P3 law to allow tolls. PennDOT clearly understands how to enter a P3 and finance long-term infrastructure. But until the state has a reliable revenue source, its capacity will be limited.

The post Pennsylvania finalizes public-private partnership deal to rebuild nine highway bridges appeared first on Reason Foundation.

• Global study documents benefits of highway P3 concessions
• D.C. area express lanes network’s celebrations and concerns
• Transit’s post-pandemic ridership decline and fiscal cliff
• Electricity grid not prepared for electric big rigs
• Major benefits of advanced driver assistance systems
• The automated vehicle implosion
• Feedback on gas stations and EV charging stations
• News notes
• Quotable quotes

Global Study Documents Benefits of Highway P3 Concessions  

A global assessment of the benefits and costs of 21 toll-financed highway public-private partnership (P3) projects in nine developed countries finds benefits exceeding costs for the 16 projects that have been completed and are in operation. The benefits thus far total $29 billion, while the costs, including costs for projects still under construction, total $23.5 billion. This suggests that over the full life of these 21 concessions, benefits will likely far exceed costs.

The study was carried out by transportation economics firm Steer, based on project data provided by Cintra, the surface transportation arm of Spanish infrastructure company Ferrovial. The report, dated Oct. 2022, is “Economic Impact of Cintra Assets” and is available online.

This is the first global study I know of that uses a standard methodology to assess benefits so that it permits fair comparisons of projects in the nine countries. The benefits are assessed in the following categories:

• Expenditure impacts, assessed via standard input/output models;
• User benefits: travel time savings, reliability increase, reduced vehicle operating costs;
• External benefits: increased safety, reduced emissions; and,
• Wider economic benefits: urban agglomeration benefits (increased economic productivity).

I’m not a fan of input/output models in general because they often reflect local impacts from a project being done in one part of a country rather than in another. But since they are widely used, and the Steer study followed mainstream U.S. and Organisation for Economic Co-operation and Development (OECD) procedures, I report the results here for completeness. The economic impact from the $23.5 billion in project construction and operations to date totaled $60.8 billion and 334,500 full-time-equivalent job years.

Far more interesting to me are user benefits, external benefits, and agglomeration benefits. The projects analyzed include four managed lanes projects in the United States, three U.S. urban toll roads, three phases of a new Canadian urban toll road, eight new interurban toll roads in Europe and Australia, and one new toll network in the Azores. In each of these cases, user benefits were assessed by comparing travel time, reliability of travel time, and reduced vehicle operating cost for those using the new toll facilities compared with existing routes they would have used had the new capacity not been built. Induced demand was estimated and assessed separately. All assessments included both light and heavy vehicles.

External benefits were estimated for both road safety and emissions changes. For the safety calculations, project and no-project accident rates were estimated, reflecting that more of the trips in the no-project alternatives would have been undertaken in more-congested conditions and with a larger fraction on non-limited-access roadways. Emissions estimates followed the U.S. Department of Transportation (DOT) 2021 emissions benefit/cost guidance and assessed CO2, nitrogen oxides, and PM 2.5. Emission rates were based on Motor Vehicle Emission Simulator (MOVES) 3 model for the U.S. cases and comparable government models for Australia, Canada, and Europe.

Wider economic benefits reflect growing research by economists on urban agglomeration impacts. In brief, shorter travel times between homes and jobs enable more positive-sum transactions to take place between employers and prospective employees, and many urban economic studies have quantified the impact of this on the economic productivity of large urban areas. The United Kingdom’s Department for Transport routinely does this kind of analysis; alas, to the best of my knowledge U.S. DOT and state transportation departments do not.

Table 4.3 in the report summarizes the socioeconomic impacts of the 16 projects that had been in operation for at least a year by the end of 2021. The results were as follows:

Would all those benefits have occurred if these projects had been funded conventionally by state legislators and implemented via traditional design-bid-build or design-build contracts?

Perhaps, but let’s consider some key differences. These public-private partnership (P3) projects employed long-term financing via toll revenue bonds and investor equity. This means they had to meet a market test of generating enough traffic over the 35-to-99-year terms of the P3 agreements to pay off the bonds, provide a return to the equity investors, and cover operating and maintenance costs for the entire duration of the agreement. With conventional procurement, there would be no market test to guard against boondoggles and no guarantee against deferred maintenance, which is quite common across the United States.

Moreover, in today’s world, when federal and state fuel tax receipts don’t come close to covering the capital and operating costs of large-scale highway projects, an increasing share of the federal support is borrowed, adding trillions to the national debt (e.g., the entire cost of the Infrastructure Investment and Jobs Act legislation). That is not a sustainable way to fund highways.

I see the new Steer report as a strong validation of the toll-financed long-term P3 model. It is working well in Australia, Europe, and, thus far, to a limited extent in the United States. The long-term P3 could do far more in the U.S. if legislators and state transportation departments fully researched and utilized it.

» return to top

D.C. Area Express Lanes Network: Celebrations and Concern

The emerging network of priced managed lanes in the Washington, D.C., metro area celebrated two milestones last month. The first link in the network—the I-495 express lanes project financed in 2007—celebrated its 10th anniversary of operations. And the newest major link in the network—I-66 Outside the Beltway—had its official ribbon-cutting ceremony on Nov. 29. Altogether, this Virginia-based network now extends over 84 route miles.

All but one small piece of the network (I-66 inside the Beltway) has been financed, developed, and operated under long-term design-build-finance-operate-maintain (DBFOM) public-private partnership (P3) concessions. The original I-495, I-95, and I-395 projects were developed and continue to be operated and managed by Transurban. The new I-66 Outside the Beltway lanes are the latest U.S. express toll lanes from Cintra, teamed with Meridiam, who also worked together on major P3 managed lanes projects in operation in Dallas and Fort Worth.

The original I-495 project began as an unsolicited proposal to Virginia DOT (VDOT) from Fluor, under Virginia’s Public-Private Transportation Act. As I recounted in my book Rethinking America’s Highways, the company, later joined by Transurban, proposed a largely self-funded project to add two express toll lanes each way to the western half of the I-495 Beltway instead of the Virginia Department of Transportation’s long-unfunded plan to spend $3 billion to add high-occupancy vehicle (HOV) lanes to that portion of the Beltway. The project was financed at $2.3 billion, of which the state contributed only 21%. The new lanes opened 10 years ago. They enabled faster and more reliable trips for paying customers, enabled three-person carpools to use these faster lanes at no charge, and facilitated express bus service and new park-and-ride lots. The success of these initial projects cleared the way for subsequent managed lanes on I-95 and I-395, which Transurban also won. As of the tenth anniversary of the original project, 75% of greater Washington, D.C., area drivers have used the express lanes, up from 62% in 2021.

The $3.5 billion Cintra/Meridiam “Transform 66” project was the first Virginia express lanes project to be entirely privately funded, with zero state investment. It was financed in 2017 with a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, private activity bonds, and an unprecedented 44% equity investment. It has substantially rebuilt 22.5 miles of I-66, added three new park and ride lots, and includes new communications infrastructure to facilitate emerging connected-vehicle capabilities. As with the other links in the express lanes network, 3-person HOVs will use the new lanes at no charge, as will buses. To be consistent with the HOV-3 policy on the emerging network, on Dec. 5, the occupancy requirement on I-66 inside the Beltway (operated by VDOT) will change from HOV-2 to HOV-3.

There remains one missing link in VDOT’s D.C. metro area express lanes network: I-495 between I-95 and the Woodrow Wilson Bridge. VDOT hopes to add express lanes on that corridor, as well, potentially crossing the bridge and extending to the MD 210 interchange. Details about the ongoing I-495 Southside Express Lanes study are on the VDOT website.

The one discordant note amidst the Virginia celebrations is the possible cancellation of the first express toll lanes on the Maryland side of the Potomac—the Op Lanes Maryland project that would rebuild the American Legion Bridge, adding express lanes to the new bridge and to I-495 as far as I-270 and on I-270 as far north as I-370. The concession agreement with the Macquarie/Transurban team has not been finalized due to nearly a year-long delay in issuance of the federal record of decision (ROD) giving the project federal environmental clearance. The draft concession agreement must then survive a vote of the state’s Board of Public Works (BPW), which has new members thanks to the November election. Maryland Gov.-elect Wes Moore has expressed reservations about the project, as has the incoming controller. Moore and the controller are two of the BPW’s three members. It would be tragic if the Maryland half of the greater Washington, D.C., metro area turned its back on the demonstrated success of express lanes on the Virginia side of the Potomac.

» return to top

Facing Transit’s Fiscal Cliff
By Baruch Feigenbaum

The drop in transit ridership resulting from COVID-19 pandemic-induced commuting changes has decimated transit agencies’ financial situations. In late 2020, as many cities continued to ban or restrict various in-person activities, transit ridership was down to 5% of its pre-COVID total. While transit ridership has now recovered to 60% or more of pre-COVID levels, it is still causing financial problems for most transit agencies. Two recent articles sounded the alarm on concerts about the financial situations and long-term ridership hopes.

In a Center Square article by Elyse Apel, Tom Gantert, and Brett Rowland, whose title is the main thesis, “As Transit Fares Plummet, Federal Money Increases 95%,” the writers detail how transit’s farebox recovery rate has declined from a paltry 32.3% in 2019 (before the pandemic) to 18.4% in 2020 and 12.8% in 2021. The 2022 numbers are not yet available but are forecast to fall far short of 2019’s numbers. To offset transit’s ridership losses, the federal government has provided transit agencies with $72 billion in four separate bailouts. In 2021, for example, transit agencies used this spending for $13.1 billion on operational expenses. Yet, for a variety of reasons, this cash windfall has failed to restore transit ridership to pre-COVID levels.

The farebox recovery ratio for operational expenses, which excludes capital spending, is a big problem. In 2019, farebox revenue covered almost half of all transit operating expenses. In 2021, the number was only 19%.

With Democrats retaining the U.S. Senate but Republicans taking control of the House of Representatives in 2023, the transit bailouts will likely end. Yet most transit agencies do not seem to know what their ridership will be in the coming years or have plans to fully fund their systems.

In the second of a multi-part article titled “Looking to the Horizon: How Agencies are Anticipating the Mass Transit Fiscal Cliff,” Eno Center for Transportation’s Garett Shrode, a former Reason Foundation intern, found that transit agencies budgeting multiple years in the future are coming to widely different conclusions. For example, Bay Area Rapid Transit (BART) uses three ridership models: a base scenario that assumes 70% of pre-pandemic ridership, a downside scenario that assumes 60% of pre-pandemic ridership, and an upside scenario that assumes 80% of pre-pandemic ridership. For the 2026 fiscal year (FY), the upside scenario predicts no budget deficit, the middle scenario forecasts a $118 million deficit, and the downside predicts a $200 million deficit. And the deficits for the middle and downside scenarios grow by more than 50% between 2026 and 2032.

Other transit agencies provided just one forecast figure. And they were all negative. Southeastern Pennsylvania Transportation Authority (SEPTA) predicts a $63 million budget deficit in 2026, growing to $283 million for FY 2028. Washington Metropolitan Area Transit Authority (WMATA) predicts a $527 million deficit for 2025. New York’s Metropolitan Transit Authority (MTA) predicts a $2.26 billion deficit for 2025. MTA still has a massive deficit even with toll revenue (from MTA bridges and tunnels), and future fare increases included. 

For funding, many transit agencies’ strategies seem to rely on some combination of increasing fares, reducing service levels, increasing sales taxes and/or general fund revenue.

This lack of a comprehensive strategy makes agencies susceptible to plans that exacerbate budget challenges. For example, the Washington, D.C. City Council recently voted to make all bus transit free in the city, using general fund revenue to pay for this service for all D.C. residents regardless of their income levels. Free transit is a growing movement despite the fact that none of the dozens of reports on it has ever found free transit to be a good idea. Most importantly, when an economic recession occurs, tax revenues go down, budgets are hit and general fund revenue to WMATA gets cut, who is going to make up the revenue? What politician is then going to propose charging for something that has been free?

Given the information and data in the Center Square and Eno pieces, what do transit agencies need to do? First, they must take steps to reduce their need for subsidies. Even before the pandemic, farebox revenue made up less than one-third of transit agency operating and capital expenses. Most transit agencies need to charge more for rail service, which tends to be used more by affluent riders and provide vouchers to customers who cannot afford the higher fares. Agencies need to advertise more on transit vehicles, in stations, and in transit-oriented developments. 

Second, agencies should focus on the customers they have, not the customers they want. In the Washington, D.C., metro area, the decision to build the Silver Line and cut bus service was made in hopes of luring choice riders—those with access to an automobile—out of their cars. The decision has increased costs because the added expense of repaying the capital costs for the Silver Line will take decades. But it hasn’t significantly increased choice ridership since trains are slower than driving and have long headways, the intervals between trains. Further, it is typically more justifiable for transit agencies to subsidize transit rides for working-class commuters than for a rider who drives a BMW.

Finally, in the long term, the entire transit industry needs to be rethought. More transit services should be contracted to improve efficiency and reduce costs. Metro regions should have mobility management agencies. Transit agencies also need to conduct a rigorous evaluation of their service quality. Many transit agencies are failing their customers today, and they were failing them before the COVID-19 pandemic. If transit agencies don’t start making big changes to adapt to changing work-from-home and travel patterns by the year 2030, no level of subsidies will be enough for some of them. 

» return to top

Electricity Grid Not Prepared for Electric Big Rigs

Electric utility company National Grid released a study on requirements for electric vehicle (EV) charging stations along long-distance highways, with a focus on heavy trucks. The finding that got the most attention in trucking circles is: “The charging capacity required to supply a large passenger vehicle travel center/truck stop will be roughly equivalent to the electric load of a small town.” 

The Electric Highways Study was conducted by National Grid along with Calstart, Geotab, RMI, and Stable Auto. Its geographic focus was New York and Massachusetts, but the implications are national. The report reached six main conclusions:

1. A typical highway electric vehicles charging site will eventually need 20+ fast chargers.
2. While light-duty EVs (e.g., cars and SUVs) will drive electric load increases in the near term, medium/heavy electric vehicles will greatly increase charging needs in the medium/long term. By 2045, over 75% of average daily energy needs will likely come from medium/heavy vehicles.
3. The high levels of demand will require connections to the high-voltage transmission system at many highway fast-charging sites.
4. Hence, where possible, locate highway EV chargers near existing transmission lines.
5. Build the grid interconnection once, and build it right, rather than planning on a series of upgrades.
6. Due to long timelines for upgrading transmission lines, preparation for large sites should begin immediately.

Much of this strikes me as logical, given the underlying premises. But there are two implicit premises that the report fails to consider. First, is it conceivable that the United States will have enough electricity capacity to meet the projected need for an all-electric motor vehicle fleet by 2050 or 2060? Second, is battery electric the most cost-effective approach for heavy, long-distance trucks?

I’ve written about each of these questions in previous newsletters. In the Oct. 2022 issue, I cited an article in The Dispatcher drawing on calculations by energy analyst Roger Andrews. His analysis of the planned decarbonization energy transition in the United States finds that in addition to needing to replace the 61% of electricity generated by fossil fuels, this country would need an additional 49% of zero-carbon electricity to handle the conversion of all surface transportation to electricity. That means replacing 110% of our current electric generating capacity over something like four decades. It is fairly certain that this is not doable. The urgency the Electric Highway study calls for is not as urgent if the planned goal is impossible to accomplish.

In the June issue, I reviewed a detailed study on the electrification of the Class 8 heavy truck fleet carried out by the trucking industry research organization American Transportation Research Institute (ATRI). Its researchers built a model of the life-cycle CO2 emissions of a Class 8 sleeper cab truck with three alternative propulsion systems: internal combustion engine (ICE), battery electric (BEV), and hydrogen fuel cell (FCEV). The study included carbon footprint estimates of vehicle production, energy production and consumption by the truck, and vehicle disposal and recycling. The conclusion was that the ICE’s overall carbon footprint was 3.7 million pounds, the BEV’s was 2.6 million, and the FCEV’s was 2.0 million pounds. In addition, due to the enormous weight of the batteries in the Class 8 BEV, the payload capacity of that big rig was significantly less than that of the FCEV. So hydrogen fuel cells seem more likely to be the way to electrify big rigs.

To be sure, there is far less investment going into fuel-cell Class 8 trucks these days than into BEV Class 8’s. And there are all kinds of questions about the infrastructure needed to refuel FCEVs. But if the electricity needed for an all-BEV trucking future is unlikely to be available in the next 40 years, more research and development on both Class 8 FCEVs and the hydrogen infrastructure they will need would certainly be wise.

» return to top

Major Benefits of Advanced Driver Assistance Systems
By Marc Scribner

In recent years, much of the public conversation on vehicle automation has focused on highly automated self-driving capabilities. While these technologies offer great promise to enhance safety, productivity, and quality of life, the proliferation of lower-level automation technologies that assist rather than replace human drivers is already impacting the driving landscape. Last month, new research conducted by MITRE Corporation at the direction of the Partnership for Analytics Research in Traffic Safety (PARTS), a group made up of the National Highway Traffic Safety Administration and several automakers, was released and found sizeable safety benefits are already being realized from advanced driver assistance systems (ADAS) introduced in recent years.

The MITRE/PARTS study examined crash data on 93 vehicle models from model years 2015 to 2020 that were involved in police-reported crashes in 13 states from Jan. 2016 to Aug. 2021. It examined the following ADAS features already on the market: forward collision warning, automatic emergency braking, pedestrian automatic emergency braking, lane departure warning, lane keeping assistance, and lane centering assistance.

The study found sizable benefits of forward collision warning by itself, with a 16% reduction of front-to-rear crashes and a 19% reduction in front-to-rear crashes involving injuries for vehicles equipped with only forward collision warning. However, it did not find a statistically significant reduction of single-vehicle road-departure crashes for vehicles equipped with only lane departure warnings.

The safety benefits dramatically improved when ADAS warning features were combined with automated features. Front-to-rear crashes with vehicles equipped with both forward collision warning and automatic emergency braking were reduced by 49%, with a 53% reduction in crashes involving injuries. When lane departure warning was combined with lane keeping assistance, all single-vehicle road departure crashes and just those involving injuries were reduced by 8% and 7%, respectively.

The MITRE/PARTS study did not find statistically significant reductions in crashes or crash severity for pedestrian automatic emergency braking, but this may be due to the smaller number of incidents and lower market penetration compared to rear-end vehicle crashes and automatic emergency braking.

Research from the Insurance Institute for Highway Safety (IIHS) published earlier this year suggests pedestrian automatic emergency braking may not yet perform well in the types of conditions where it would do the most good—at night with poor roadway lighting. IIHS found that pedestrian automatic emergency braking reduced pedestrian crashes by 27% in all lighting conditions. However, when it examined only nighttime crashes on unlit streets, it found no difference between vehicles equipped with and without this feature.

The lack of nighttime safety benefits of pedestrian automatic emergency braking may have to do with the limitations of the sensors involved. Most of these systems involve cameras alone, with better performance coming from sensor stacks that contain both cameras and radar. However, IIHS cautions not to overweight their results because pedestrian automatic emergency braking was a new ADAS feature when they conducted their tests, and automakers’ latest iterations may have improved nighttime performance.

With respect to policymakers interpreting these promising early results on ADAS technology performance, I suggest there are three main takeaways. First, they should recognize the value of public-private partnerships such as PARTS in keeping industry and government on the same page. At the early stages of technical development, information sharing can help direct both future research projects and policymaker attention.

Second, policymakers should appreciate that various vehicle automation technology developed by the private sector is already producing safety benefits on the roads today. The standards and test procedures being developed for sensors and ADAS software may help inform future work on highly automated self-driving technologies.

Third, and most importantly, policymakers should avoid overly prescriptive regulatory interventions, such as mandating that current ADAS technologies be equipped on all new vehicles. As the pedestrian automatic emergency braking nighttime performance example makes clear, these new technologies are rapidly iterating and improving. Mandating yesterday’s technology in perpetuity would risk short-circuiting ADAS innovation and potentially delay better technologies from coming to market. Technology lock-in and path dependence at this early stage could mean more fatalities, injuries, and property damage that could otherwise have been prevented. If policymakers do move forward with mandates, they must take care that any minimum performance standards do not prevent better new technologies from replacing inferior old technologies.

ADAS and vehicle automation, in general, remain in the early stages of development. The performance results to date are very encouraging and are bright spots in otherwise gloomy news about recent road safety trends. But policymakers must avoid taking counterproductive actions that would limit innovation and the ensuing safety benefits.

» return to top

The Automated Vehicle Implosion

November was not a good month for autonomous vehicle (AV) startup companies. The biggest news was Ford and Volkswagen (VW) shutting down their joint venture AV company, ARGO AI, suffering a $2.7 billion write-off. Despite two previous Ford CEOs having promised self-driving cars would be on sale by 2021, ARGO was nowhere near that goal. Ford and VW each said they would take on some ARGO staff to work on things like Ford’s Level 3 Blue Cruise system.

General Motors’ Cruise venture is still going forward, with a small number of AVs operating at night in part of San Francisco, but Morgan Stanley’s Adam Jonas told The Wall Street Journal that “he was no longer assigning any value to GM’s Cruise driverless-car business in his valuation of the automaker’s enterprise value.” Honda announced on Dec. 1 that it will shift its focus to partially automated vehicles, noting that fully autonomous vehicles are not ready for prime time. Honda is an investor in GM’s Cruise, in addition to doing its own vehicle autonomy work.

Bloomberg published an article headlined “The Auto Industry’s $75 Billion Bet on Autonomy Is Not Paying Off.” Among the developments the article cited was the stock price of AV startup Aurora having dropped from $17.11 in Nov. 2021 to just $1.75 a year later. Several years ago, Intel purchased Israeli startup Mobileye for $15.3 billion but took it public this fall expecting a valuation of $50 billion; it ended up at $21 billion.

Even Waymo, with what has appeared to be unlimited backing from parent company Alphabet (formerly known as Google) and with robotaxis providing limited service in Phoenix, seems to be hitting the pause button. Its co-CEO, Tekedra Mawakana, told the Wall Street Journal’s Tech Live conference in October that vehicle automation “is really about being patient in the learning . . . This is a really long-term opportunity.” She went on to say that lower levels of automation could be achieved in coming years, but that Level 4 could still be years away. WSJ reporter Sebastian Herrera went on to say, “The technology has been beset by high costs, regulatory hurdles, and slower advancements than expected. Now, experts aren’t sure when people will be able to purchase autonomous vehicles.”

I think another factor was an avalanche of venture capital that has poured into startup AV companies during the years when interest rates were near zero. That made speculative ventures look more attractive than was ever likely to be the case. The same phenomenon has driven billions into highly speculative electric vertical take-off and landing (eVTOL) startup companies, hoping to provide affordable air-taxi service. A handful of those might emerge with viable aircraft and workable business models, but it’s still too early to tell.

» return to top

Feedback on Gas Stations and EV Charging Stations

Last month’s lead article on the future of gas stations as electric vehicles emerge generated more than usual feedback. Ethan Elkind of the University of California-Berkeley pointed out that with extensive research and development money going into improved batteries, the recharging times assumed in the article might come way down, a reasonable point. Were the average recharging time to match the average refueling time at a gas pump, the one-to-six ratio of acreage needed for EV charging stations would get closer to one-to-one. He added that a bigger hurdle for gas stations’ survival may be the availability of charging overnight at home, at least for those who have garages and shell out for their own charging equipment.

Transportation consultant Richard Mudge made a similar point about home-garage chargers handling some of the demand, unlike the case for conventional vehicles where home refueling isn’t an option. As a Tesla owner, he reported rarely needing to stop for more than 20 minutes at a Tesla Super Charger; he also reported that he pays about the same at a Tesla Super Charger as he would pay to refuel at a gas station.

Finally, several readers pointed out a math error in the calculations in the article. The one-to-six ratio remained the same, but the numbers served per day were incorrect. The corrected numbers are 2,016 cars per day for the gas station and 336 cars a day for an EV station occupying the same acreage. Those numbers have been corrected in the online edition.

» return to top

News Notes

New Study—Freight Rail Deregulation: Past Experience and Future Reforms
My colleague Marc Scribner’s new Reason Foundation policy brief published today examines “the history of economic regulation of the U.S. railroad industry, discusses emerging regulatory threats, and recommends reforms policymakers can enact to ensure freight rail remains on a strong competitive footing going forward.” You can find the full report here and a short overview here.

I-81 Viaduct Tear-Down Halted by Lawsuit
One of the first urban Interstate projects approved by the Federal Highway Administration to be torn down and replaced by a boulevard—I-81 through downtown Syracuse, NY—has been put on hold. A lawsuit filed by “Renew 81 for All” won an injunction halting initial demolition on Nov. 10. Oral arguments are set to begin in state court on Jan. 12. The plaintiffs object to the “community grid” planned to replace the Interstate and find fault with the environmental review which they say did not consider alternatives with fewer negative impacts on traffic, environment, and nearby communities.

Colorado DOT Rejects I-25 Express Lanes P3 Proposal
CDOT’s Colorado Transportation Investment Office (CTIO) has rejected a $1 billion proposal from global toll road company Roadis to add two express toll lanes each way to a 21-mile stretch of I-25 between Denver and Fort Collins. The only reason given by CTIO was that the proposal failed to pass its CDOT review panel. But Public Works Financing reports that the proposal likely failed due to a new policy from the Colorado Transportation Commission that calls for shifting significant funding from highways to transit projects in the name of reducing greenhouse gas emissions. In September, the Denver metropolitan planning organization (MPO) cut two planned highway expansion projects from its long-range plan.

Pennsylvania Major Bridges P3 Project Back on Track
PennDOT was forbidden by legislation passed earlier this year from using new toll revenues to pay for the replacement or rebuilding of nine major Interstate highway bridges. Inframation News (Nov. 30) reported that the agency has shifted from a revenue-risk to an availability-payment P3 model, enabling the project to proceed. Last month, the state issued $1.9 billion in bonds to substitute for the unavailable toll revenue. The selected P3 consortium, led by Macquarie, is continuing with pre-development work. As of now, the project includes six of the original nine bridges, all on Interstate highways.

Miami Expressways Get a Rating Agency Vote of Confidence
Moody’s Investors Service affirmed its A3 rating on the toll revenue bonds of the Miami-Dade Expressway Authority (MDX) last month and revised the outlook from negative to stable. This good news reflects MDX’s success thus far in litigating against a 2019 state law that sought to abolish MDX and replace it with a state-run toll agency. MDX’s litigation success is based on Miami-Dade County’s home rule authority. Voters there last month approved a ballot measure that would require a popular vote to permit a state take-over of its expressways, airports, or seaport.

$2.7 Billion Harbor Tunnel Going Forward in Sydney
The second stage of developing the new Western Harbor Tunnel in Sydney moved forward with the award of a $2.72 billion contract to Spanish developer Acciona. The 6.5 km tunnel will be excavated beneath the seabed of Sydney’s harbor via a tunnel boring machine (comparable to the Port of Miami tunnel project, but much longer). The project is being developed by the New South Wales government, but as with several other such projects, it is considered a candidate for privatization after it is completed, according to Inframation News.

West Virginia Turnpike Travel Plazas Makeover
Following the lead of other major turnpikes (in Florida, Indiana, New York, etc.), the West Virginia Turnpike last month announced a $152 million program to upgrade its three service plazas. They will have multiple food outlets, expanded truck parking, a convenience store, and EV charging stations. The Parkways Authority has studied the successful (typically 30-year) public-private partnerships used for upgrades by other toll roads. It has held discussions with provider Areas USA and plans to release an RFP for reconstruction of the first plazas by early next year,

Musk Tunnels Going Forward—or Not?
The Wall Street Journal recently ran a lengthy front-page article reporting that a growing number of municipalities that have had discussions about new tunnels with Elon Musk’s Boring Company are dismayed by the company’s lack of follow-through. Two days later Inframation News reported that Boring Company and the Alamo Regional Mobility Authority in San Antonio are in active discussions about their plans for a tunnel linking downtown with the airport. However, the RMA now wants the project to be done in two steps: an initial one-mile tunnel linking downtown to its Pearl District, to be followed (if successful) by extending the tunnel to the airport. The plan continues to rely on Boring Company paying all construction costs, which it hopes to recover from customer fares.
 
EVs Are More Damaged in Crashes
Insurance company AXA Switzerland conducted crash tests and data analysis this year and concluded that EVs yield more expensive damage claims from collisions than regular cars, for two reasons. First, because they can accelerate faster than conventional cars, drivers may drive them more recklessly. Second, due to their increased weight—typically about one-third more than a comparable non-EV—their damage from a crash is greater. AXA also reported statistics which “show that drivers of electric cars cause 50 percent more collisions with damage to their own vehicles than drivers of [cars with] conventional combustion engines.”

Tesla Announces First Class 8 Truck Deliveries
On Dec. 1, Tesla delivered to Pepsico an undisclosed number of its Semi, a Class 8 tractor-trailer with a reported range of up to 500-miles at gross weight of 82,000 pounds. Pepsico said they would have 15 Semis in place at their Frito-Lay facility in Modesto, CA, by year-end. Tesla has said it will produce 50,000 Semi trucks in North America by 2024. Tesla lists the vehicle’s energy consumption at 2 kWh/mile and its drag coefficient at 0.36, about half that of a conventional diesel Class 8 rig.

Four Teams Lining Up for Puerto Rico Toll Road P3 Leases
Inframation News reported last month that “at least four” teams have submitted their qualifications for long-term P3 concessions of a bundle of four state-run toll roads. The three the newsletter identified are Abertis, Plenary Group, and Sacyr. The state P3 Authority has estimated the value of the long-term lease at as much as $2.5 billion. The toll roads total 622 lane-miles, with PR-52 generating the majority of the annual toll revenue.

North Carolina Express Toll Lanes Attract Interest
While the Charlotte-area MPO has not yet decided to recommend a near-term P3 procurement rather than a farther-off NCDOT procurement of new express toll lanes on I-77 between the city and the South Carolina border, the possibility of a competitive P3 procurement has led to expressions of interest from other potential developers (though no names have yet surfaced). NCDOT studies of express lanes for that corridor date back as far as 2010.

GM Seeks to Operate New Driverless Vehicle in San Francisco
GM’s Cruise division has developed a driverless shuttle without any onboard driver controls. Named “Origin,” the vehicle seats four. Cruise has asked the state motor vehicles department for a permit to carry out test runs of Origins at night in a limited area of San Francisco. The company’s existing robotaxi service in the city operates only at night, and those vehicles have ordinary on-board controls, though they now operate without a safety driver on board. The Origin is Cruise’s first vehicle designed from scratch to be operated without a driver on board.

Cincinnati Selling Its Freight Railroad
In an example of asset recycling, Cincinnati is selling its Cincinnati Southern Railway (CSR) to Norfolk Southern, one of the major Class 1 railroads. CSR extends 337 miles connecting Cincinnati to Chattanooga, TN. CSR is operated by a subsidiary of Norfolk Southern under a lease that expires in 2026. The sale of the city-owned railroad is expected to yield the city $1.62 billion.

Home Buyers Moving Farther from Jobs
Data from the National Association of Realtors released last month show that the medium distance people moved from their previous residence was 50 miles in the year ended June 30, 2022. That’s a huge increase from the previous median of 15 miles (over the previous five years). This change reflects the trend to home-based work and the large consequent decline in mass transit usage.

To Hyperloop or Not?
Politico reported (Oct. 23) that Transportation Secretary Pete Buttigieg thinks hyperloop is “super interesting” but he doesn’t think the federal government should subsidize it. The same article noted Elon Musk’s April comment that his Boring Company will “attempt to build a working hyperloop,” though no one else has succeeded—and that Musk several years ago disavowed any interest in developing the idea.

Correction to Last Month’s Issue
Reader Sam Schwartz spotted an error in last month’s News Note about record sales of gasoline in fiscal year 2022. Drawing on a report from Eno’s Jeff Davis, the note said that a record 6.8 billion gallons were sold in FY 2022. What it should have said was that the 2022 total was 6.8 billion gallons more than were sold in 2021. We apologize for the error, which was ours, not Jeff’s.

» return to top

Quotable Quotes

“The delay of the [Maryland] OP Lanes concession into a new administration is especially striking because the project had such a strong democratic mandate. Governor Hogan actually proposed the initiative before his second term as governor, then campaigned on the initiative when he was up for re-election. Hogan then won re-election by a 12-point margin in a historically blue state. Even more striking is that Hogan made infrastructure investment, and the OP Lanes initiative in particular, the centerpiece of his administration. Can a project with that much democratic support really be delayed by a small, vocal, well-resourced opposition for the entirety of a governor’s term?”
—Michael Bennon, “Maryland OP Lanes Commercial Close Delayed,” Public Works Financing, Nov. 2022

“I was at a conference recently where a representative of a major Commonwealth government unit tasked with assessing the validity of benefit/cost assessments for projects said they green-lit a major road project in Australia’s second-largest city, though it had a benefit/cost ratio of 0.7, because . . . honestly, I am not sure why, something maybe about benefits that weren’t included in the benefit/cost analysis? So one must call BS on this. If there are other benefits, monetize them. Implicitly, the other benefits were worth more than 30% of the cost of the project overall if full benefits exceeded full costs. But if they are so squirrelly that one cannot monetize them, why? If practice does not incorporate full benefits (and full costs), again, why? I am as skeptical of benefit and cost practice as anyone, but I still think we should do things (and only do things) where the benefits are greater than the costs. We should, of course, debate what are the benefits, the categories of benefits, their value if realized, and the likelihood of them being realized. Similarly with costs. But if you insist something is a benefit, or a cost, demonstrate it. Otherwise, we can just follow politicians’ whims—and that is what B/C analysis often devolves into, contorting ‘facts’ into a nice rhetorical package to satisfy a politician looking for votes or dollars which has been green-eyeshade-washed.”
—David Levinson, “Benefits Should Outweigh Costs,” Transportist, Dec. 2022

“What happened to the goal of ‘walkable cities”? Back in 1972, when I finished my graduate studies in architecture and urban planning, the accepted view on city mobility was that the sidewalks were for pedestrians, and the streets were for cars, taxis, trucks, buses, motorcycles, and bicycles. Sidewalks were not extensions of streets or the adjoining buildings. They were meant to be walked on, not to be cycled on or for parking bicycles, or to be used as additional seating for restaurants or additional display space for shops. It was not accepted practice to place signs in the path of pedestrians. . . . In the U.S. and continental Europe, pedestrians could not expect cars to stop automatically at crosswalks unless there were red lights, but if you did have a walk signal, you didn’t have to worry about cyclists and e-scooterists ignoring the red lights in both directions and sending you to the hospital—or worse.”
—Michael Sena, “Sidewalks: Refuge, Promenade, Chaos Strip,” The Dispatcher, Dec. 2022

» return to top

The post Surface Transportation News: Benefits of highway P3 concessions, transit ridership, and more appeared first on Reason Foundation.

Express Toll Lanes Reduce Congestion

• The variable toll adjusts based on traffic congestion.
• Most express toll lanes are managed to keep traffic flowing at 45 miles per hour or more during rush hours.
• Today, 60 express toll lane projects across the country are providing commuters with faster and more reliable alternative to congested highway lanes.

Express Toll Lanes Are Sustainable

• Variable tolling is able to offer drivers and transit vehicles a congestion-free travel option even when traffic volume in the general lanes increases.
• Since ETLs handle more vehicles per hour during peak periods than regular lanes do, regions with express toll lanes need to add fewer regular highway lanes.
• The same gas-powered vehicle going 45 miles per hour in a toll lane generates fewer greenhouse gas emissions than it does in stop-and-go traffic in general lanes.

Express Toll Lanes Are an Important Transit Solution

• Express buses using ETLs offer faster, more reliable service than buses in congested lanes.
• ETLs provide a semi-dedicated right-of-way that buses use free of charge.
• Transit agencies operate more buses that transport more passengers in corridors with express toll lanes than in corridors without ETLs.

Express Toll Lanes Are Optional

• No one is required to use an expres toll lane.
• No one is required to pay a toll unless they choose to use the toll lane.
• Most commuters tend to use ETLs for time-sensitive trips, such as going to the airport or picking up a child from daycare before late fees begin.
• People choose ETLs when they believe the value of their time savings exceeds the toll.

The post How express toll lanes benefit drivers appeared first on Reason Foundation.

HOV Lanes Are Either Too Full or Too Empty

• Most HOV lanes suffer from “empty lane syndrome,” where the lane is underutilized.
• In other cases, HOV lanes are nearly as congested as regular freeway lanes during peak periods.
• This is the “Goldilocks problem”: HOV lanes are too crowded or too empty, but never just right.

Most People in HOV Lanes Are Not Carpooling

• As many as three-quarters of people using HOV lanes legally are either family members traveling together (fam-pools) or a parent driving kids to school (school pools) but neither situation removes vehicles from the roadways in the way that carpool lanes were intended to remove cars.

Large Fractions of HOV Lane Users Don’t Belong In the Lanes

• Enforcement of HOV lanes is difficult and costly.
• Solo drivers or cars with fewer than the required number of passengers add to traffic congestion in large urban-area HOV lanes.
• A 2018 study found 84% of the vehicles in Tennessee’s HOV lanes were violators.

As States Kept Adding HOV Lanes, Carpooling Declined

• Between 1995 and 2005, HOV lane miles doubled from 1,500 to 3,000 lane miles, but carpooling plummeted from 19.7% of commuters in 1980 to only 8.9% in 2019.

Changes in US Commuting Mode, 1980-2019 (percent of total)

HOV lanes have failed to stimulate carpooling or reduce congestion and emissions. States are increasingly converting the lanes to high-occupancy toll (HOT) lanes, where pricing keeps traffic flowing smoothly, reducing tailpipe emissions.

The post HOV lanes have failed to reduce traffic congestion or emissions appeared first on Reason Foundation.

U.S. highways are facing a perfect storm of infrastructure nearing the end of its design life, growing travel demand, and an increasingly unreliable revenue stream. By tapping into private capital, public-private partnerships (P3s) provide one tool to stretch existing state department of transportation (DOT) resources further.

Public-private partnerships provide many additional advantages. They help shift risk from taxpayers to the private sector. In the current inflationary environment, speeding up project delivery could reduce costs as well as bring innovation and new ideas to roadway construction. Finally, P3s provide long-term asset management and performance.

This how-to guide for implementing a highway public-private partnership is designed both for states that have appropriate enabling legislation but have implemented few P3s (most states) as well as states that lack enabling legislation.

This guide has the following components:

• An explanation of P3s, detailing what P3s are and what they are not, as well as why transportation agencies would want to use them;
• How to set up a dedicated transportation P3 program in a state, including enabling legislation, a P3 Office, and a P3 steering committee. States with dedicated P3 Offices have more robust and successful P3 programs;
• How to differentiate between solicited and unsolicited proposals, and to prioritize projects and implement screening;
• Project stage development, including analyzing value for money;
• An explanatory roadmap and useful checklist for a project procurement process;
• An examination of a state’s responsibilities after a project reaches financial close but before it opens to the public; and
• A P3 state review and audit process for ensuring the private party meets the terms of the contract.

Since the first U.S. highway P3 was implemented in 1995, 11 states have entered into more than two dozen design-build-finance-operate-maintain (DBFOM) P3s. While that number is not overwhelming, P3s tend to be used for the largest, most complicated projects valued at more than $500 million (termed mega-projects).

However, compared to other countries, the U.S. lags in public-private partnerships. Most of the P3 activities have occurred in a handful of states because those states have better, clearer legislation and less political interference. While overall population is a factor (with more populous states entering into more P3s), Virginia (the 12th most populous state as of this writing) has entered into more P3s than any other state. New York (the 4th most populous state) has not entered into any P3s.

With declining fuel tax revenue, growing miles traveled, and aging infrastructure, the U.S. can no longer depend on government funding alone. Similar to other countries and other types of infrastructure, the U.S. must finance highways over the long term. Public-private partnerships provide an appropriate financing vehicle for large projects, along with innovative funding sources such as tolling and financing tools, including Transportation Infrastructure Finance and Innovation Act (TIFIA) loans and private activity bonds. These tools allow DOTs to stretch existing resources further.

It can be challenging for a state to enter into its first P3. But it can also be very rewarding. States that use this how-to guide can be rewarded with infrastructure that is built sooner and remains in good condition during the life of the infrastructure.

How to Implement a Highway Public-Private Partnership

The post How states can implement highway public-private partnerships appeared first on Reason Foundation.

The infrastructure bill also created a new discretionary program to help metro areas tear down urban freeways. And Congress also deserves blame for ignoring, in IIJA, the massive 2019 report from the Transportation Research Board that made the case for large-scale reconstruction and selective widening of the Interstate highway system. The report estimated this would require close to $1 trillion over a 20-year period. That neglect is especially short-sighted in light of a major new study on the economic value of the Interstate system.

Working Paper 27938 from the National Bureau of Economic Research estimates the annual economic value of the Interstate system as $742 billion. If the Transportation Research Board’s $1 trillion estimate of the cost of reconstruction is in the right ballpark, investing $1 trillion one time to preserve the annual value of $742 billion seems like a no-brainer.

Moreover, that $742 billion per year is only the economic value for goods movement due to faster and more reliable trips using the Interstate system. The economic value to individuals, families, and businesses from faster and safer long-distance travel via the Interstates is not included in that model. The study’s authors did not analyze those benefits, but if they are even one-third of those due to goods movement, the total annual benefits could approach $1 trillion per year. That makes the Interstate system’s one-time reconstruction cost of $1 trillion an incredible value proposition.

The study developed an ingenious methodology to estimate the goods-movement value-added. First, they built a very detailed model of freight flows among the 48 contiguous states, plus imports and exports via seaports and via land to and from Canada and Mexico. They modeled freight flows on this network down to the county level (over 3,000 counties across the country), taking into account traffic congestion levels to estimate trip times, and for each trip, they identified the best and second-best routes between origins and destinations.

After calibrating the model, they then removed the Interstate highways from the network and ran it again. The difference in annual economic value between the Interstate model and the one lacking Interstate highways was $742 billion in 2021 dollars.

The researchers also did additional model runs, each time removing only one Interstate corridor from the model to identify the value of individual Interstates with lots of truck traffic. From these model runs, they found that Interstate 75 had the highest annual value per mile—$29.3 million—for an annual value of $51.5 billion. The route with the highest annual value was I-80, at $66.7 billion.

These findings have critically important policy implications. First, they suggest that the traditional pay-as-you-go model, under which major highway projects are funded by annual appropriations of fuel tax money, is poorly suited to a national challenge such as rebuilding and modernizing the Interstates. The TRB report pointed out the benefits of long-term revenue-based financing of projects such as these. Yet federal law still does not permit tolls to be used to replace existing, worn-out lanes on Interstates; only lane additions and replacing obsolete bridges have clear-cut federal permission. Congress could fix this by liberalizing the existing three-state pilot program that allows toll-financed reconstruction of only a single Interstate corridor in each of the three states. Reason Foundation submitted legislative language to this end to the Senate Environment & Public Works Committee when it was debating what became IIJA, but it was not included.

The second implication of these findings is that the trucking industry’s long-standing opposition to tolling, spearheaded by its Alliance for Toll-Free Interstates, is misguided. The economic value of a rebuilt Interstate system so dwarfs the cost of rebuilding it that sensible, customer-friendly electronic tolling should be considered by the industry as the least-bad option for getting this much-needed reconstruction actually underway. Reason’s legislative proposal embodied a set of customer-friendly tolling provisions that state legislatures would have to agree to in order to obtain federal permission for toll-financed Interstate modernization.

Third, of course, is the good fit between toll-financed Interstate reconstruction and long-term design-build-finance-operate-maintain (DBFOM) public-private partnerships. Besides shifting the financial risk of highway megaprojects from taxpayers to investors, this kind of procurement builds in the responsible long-term stewardship of the rebuilt infrastructure. And that maintenance commitment is double-barreled. It is built into the terms of the long-term DBFOM concession agreement and is also backed up by covenants in the revenue bonds, insisted on by the bond buyers.

Many Americans may not realize that although 90% of the original funding for the Interstate highway system came from Congress via federal fuel-tax receipts, states actually own the Interstate highways within their borders. When Congress defaults on the task of funding Interstate reconstruction and modernization, it is up to state legislatures and transportation departments to take charge of renovating this vital, incredibly valuable infrastructure. A handful of states have done studies on the feasibility of toll-financing Interstate reconstruction. A new one from Michigan is finished and due for release very soon.

The public-private partnership (P3) community has a vital stake in potential revenue-risk DBFOM projects totaling up to $1 trillion. What’s needed now are a few pathfinder projects carried out under existing federal law. That is likely the best way to gain support for broader legislation in the coming years.

The post The costs and benefits of rebuilding the Interstates appeared first on Reason Foundation.

• Gas stations in an electric vehicle world
• Why California high-speed rail failed
• Treating induced demand as a religion?
• Smart roads’ disappointing performance
• Opposition to FHWA’s proposed GHG regulation
• The private sector’s historic role in British toll roads
• News Notes
• Quotable Quotes

Gas Stations in an Electric Vehicle World  

Shell, the world’s largest gasoline retailer with 46,000 stations in 80 countries, is showing off its gas station of the future in southwest London. Instead of gas pumps, the station has 10 fast chargers under artistic wood coverings. To keep customers occupied during charging periods of 20 to 40 minutes, it sells sodas, snacks, and basic groceries. Although it has only a few prototypes like the one in London, Shell already has 9,000 branded charging points in operation.

But as a lengthy article by Politico pointed out recently, it’s doubtful that many conventional urban gas stations with six or eight pumps can survive by converting to electric vehicle (EV) charging. The article explains the ongoing war between electric utilities and elective vehicle charging providers like EVgo and ChargePoint, along with truck stops and traditional gas stations. Until recently, most states had laws that prevented anyone but regulated electric utilities from selling electricity. Although that has been changing, the way electricity is provided to EV charge companies is economically untenable, at least in these early days of the transition from petroleum-fueled vehicles to electric vehicles.

But before going further, let’s do a little math.** With today’s electric vehicle batteries and DC fast chargers, average EV charging takes 20 to 40 minutes—say 30 minutes on average. A typical gasoline fill-up takes about five minutes. Hence, the dwell time of the EV is six times as long as the gas-fueled car. A gas station with 14 pumps can refuel 14 cars in five minutes. During a 12-hour day, it can refuel 2,016 cars. But in that same 12 hours, the station can handle one-sixth as many electric vehicles—just 336. If the average price to provide an EV charge were the same as the average gasoline bill, the station owner would see a drastic reduction in revenue.

One alternative would be a much larger footprint for the electric vehicle (EV) station—up to six times larger to generate the same revenue. That will not be feasible in most urban areas, where affordable land adjacent to gas stations is mostly not available. But it’s a different story in some low-density suburban areas, exurbs, and on long-distance highways in rural areas. That is why convenience store chains and truck stop chains are better positioned than gas stations to be the providers of EV charging.

One early mover is North America’s largest truck stop operator, Pilot Company. As Utility Dive pointed out last month, Pilot has formed a joint venture with General Motors and EVgo to add 2,000 fast chargers to 500 of its U.S. “travel centers” (aka truck stops). It turns out that EVgo had already been working with gas station/convenience store chain Wawa and several others. As you may have noticed in recent years, non-urban gas stations increasingly include “convenience stores,” whose operating margins are higher than what they make from selling gasoline. One consultant told Utility Dive that convenience stores now sell 80% of America’s gasoline. So it should not be surprising that the National Association of Convenience Stores joined with the National Association of Truck Stop Operators in trying to influence what became the Infrastructure Investment and Jobs Act (IIJA) legislation to address gas-station/convenience store problems with electric utilities. That lobbying produced only lip service in the final legislation, but most states have already exempted gas stations and convenience stores from their bans on those businesses selling electricity to EV operators.

Gas stations have a long history, starting out as mere “filling stations” (a gas pump outside a general store), becoming full “service stations” offering an array of auto maintenance services, and more recently becoming self-service operations selling fuel in most urban locations but paired with a convenience store in suburbs, exurbs, and the countryside.  My bet is on the truck-stop/convenience store EV charging model as the next step in their evolution.

» return to top

Why California’s High-Speed Rail Failed

Back in 2007, I read a number of reports suggesting that spending $33 billion of taxpayers’ money on a high-speed rail (HSR) system between Los Angeles and San Francisco would have costs exceeding benefits. The idea that a new rail corridor would cost less and be more beneficial than (a) adding priced express lanes to Interstate 5 between the two metro areas, or (b) getting more use out of the multiple airports in both metro areas that would offer travelers departure and arrival locations closer than downtown Los Angeles and San Francisco to their actual origins and destinations, struck me as ludicrous.

My concerns led to a highly detailed 2008 Reason Foundation study on the proposed system, released several months before voters statewide had to vote yes or no on a $10 billion general obligation bond issue to launch the project’s development. The 196-page “due diligence report” raised concerns about where the rest of the funding would come from, whether the travel time between Los Angles and San Francisco could actually be achieved, and the likelihood that if built, the rail system would require operating subsidies, like almost all overseas HSR systems. In Oct. 2008 testimony before the California Senate Transportation and Housing Committee, study co-author Joseph Vranich said, “The current proposal is untenable. The train will go slower than they say it will, will carry fewer people than they claim it will, and will cost much more than they say it will.” That all turned out to be correct.

It’s taken many years for the project’s failure to become widely recognized, but one dogged reporter has been on the California high-speed rail beat for more than a decade: Ralph Vartabedian, then at the Los Angeles Times and more recently writing major pieces for The New York Times. In his latest NYT article, “How California’s Bullet Train Went Off the Rails,” he reveals many new findings that explain mostly political decisions that led to the cost ballooning to $113 billion, with only a small segment under construction (from “nowhere to nowhere” in the middle of the state) and funding for the rest far from assured.

A key factor in the enormous cost escalation was the political decision early on to avoid the direct route between Los Angeles and San Francisco—paralleling I-5. That route would have relied in part on the existing state-owned right of way and avoided huge, costly battles with agricultural interests in the Central Valley who didn’t want their farms, groves, and ranches cut in half. It would also have avoided the much greater need for costly tunnels to cross the mountains between the two metro areas and the Central Valley. Vartabedian details the politicking that took place to put the route instead through Palmdale, Bakersfield, Fresno, Madera, and other areas. That route was longer, encouraged low-traffic station stops, and ended up requiring slower speeds on shared trackage in both the San Fernando Valley and Silicon Valley. Vartabedian, for the first time, reveals who was responsible for that foolish route decision.

In the early years, the California High-Speed Rail Authority assured the state legislature and the media that the system would not require operating subsidies, so they were confident that private investors would cover part of the construction costs in exchange for some of the resulting fare revenue. In those years, European and Japanese high-speed rail companies spent time in California checking into the viability of the project, likely hoping to become part of it. As Vartabedian had previously reported (and notes again in the current article), French railroad company SNCF recommended the I-5 route as far wiser, facilitating the promised two-hour and 40-minute nonstop travel time. But the company lost interest when the longer and more-costly route was chosen. And no private investment in the system ever materialized.

Many people suspected politics was behind the foolish decisions, but for this detailed article, Vartabedian got many early supporters and decision-makers to acknowledge what actually happened and how those decisions made the project unlikely to ever be completed (and incapable of meeting the nonstop trip time promised to voters who approved the 2008 bond issue). Vartabedian and the New York Times have done this country a great service by unveiling how politics contributed significantly to making an already questionable project unviable.

» return to top

Treating Induced Demand as a Religion?
By Baruch Feigenbaum

A recent article in Transfers Magazine published by the Pacific Southwest Region University Transportation Center argues for “spreading the gospel of induced demand.” Unfortunately, the article simplifies induced demand into a series of yes or no questions and then recommends that people, whom the article showed do not understand the concept, “become evangelical about it.”

The authors start by giving a brief introduction to induced demand. In the next section, the authors present the findings from a series of questions they asked 597 non-students and 520 university students throughout the U.S. about induced demand. I have some methodological concerns with the survey. The sample size is very small, so the margin of error could be very large. The survey used stated preference when revealed preference would have been a better process. The survey questions were binary, requiring yes or no answers. Yet induced demand falls within a range. The first question asked whether adding lanes to a roadway is “likely” or “unlikely” to reduce congestion in the long term. But the accurate grad school answer is “it depends.” If it is a low-density slow-growing area, then induced demand is unlikely. If it is a fast-growing area or one with a high population density and the new capacity is priced, induced demand is unlikely or at least smaller in magnitude. If the capacity is not priced, induced demand is likely.

The second question asked if transportation policy should make it easier for most people to drive for most trips or try to shift most trips toward public transit, walking, and bicycling. Again, why can’t the answer be both? Certainly, in rural areas, it makes sense to make it easier for people to drive, since other options might not be available. If you live in West Virginia and you live 20 miles from your job, walking does not seem like a viable alternative. And as the article does throughout, the paragraph includes a normative statement about “respondents who understood that road expansion will not alleviate traffic congestion.”

In a follow-up question, the authors asked what should be done about traffic congestion. They found that even those who agreed that induced demand is a problem supported road widening. The authors speculated that some respondents might support road widening to encourage economic development. Further, the article noted that 89% of respondents who agreed with induced demand thought building more transit would address the problem. Seventy-three percent thought transit was the best option. Yet the authors note that transit can also create induced demand since if more people use transit, more road space will become available for discretionary trips.

Finally, the survey examined whether people’s opinions on induced demand can be changed. It added “refutation text” claiming that adding lanes only reduces congestion over the short term. After reading the refutation text, support for expanding highways declined from 76% to 50%. But six months later, the researchers asked the same question and found support for road widening rebounded to 79%. The authors suggest the change in opinion was due to “acquiescence bias,” but it’s just as likely that, after experiencing congestion in their daily commutes, some people changed their minds.

After the research section, the authors switch to advocacy mode and recommend three calls to action. The first is that proponents should stop justifying roadway and transit projects with the promise of congestion relief. I agree with this recommendation. Highway projects can enable more economic activity, increase safety, improve freight delivery, and allow more people to use roadways. Congestion relief may not be a long-term benefit. Transit projects can help working-class residents reach their jobs, but they don’t reduce traffic congestion either.

The authors’ second recommendation is to spread the word about induced demand. But one of the main findings of the study is that almost nobody understands induced demand. If people don’t understand what it is, why are we asking them to teach it?

The third recommendation is to “update” our teaching on the subject. As somebody who completed a master’s degree project (mini-thesis) on induced demand, I’m dismayed that so few students understand it. But what individual will provide a balanced approach to induced demand? Perhaps retired University of California-Berkeley professor Robert Cervero would be willing to come out of retirement to teach the class. Cervero studied the phenomena of induced demand in California and then spent years pushing back about bogus claims about induced demand across the country.

More troubling is the authors’ recommendation of the “induced demand calculator,” which is used as a sort of propaganda tool and was created by several 501(c)4 advocacy groups. As I wrote in the January Surface Transportation Newsletter, the calculator does not provide an accurate measure of induced demand:

The calculator treats all new travel as bad. Yet increasing roadway capacity in urban areas has at least three benefits. First, new road capacity creates economic benefits. It allows employees to reach a larger number of employers in a given time, creating a better match between employees and employers. It promotes economic activity by increasing the number of consumers that can reach businesses in 15 minutes.

But the calculator’s biggest problem is that it is technically inaccurate. Instead of separating existing trips made at a different time or on a different roadway from new trips, the calculator assumes all new travel that happens at a given time on an expanded roadway at any given point is induced demand.

Most troubling is the report’s blurring of lines between research and advocacy. The authors advocate treating induced demand as a “religion.” Yet transportation research should be based on science. And religion and science are opposites. One requires creating a hypothesis and testing it using the scientific method. The other requires believing something as a fact without testing or questioning it. Neither this article nor the concept of induced demand should be treated as any type of gospel.

» return to top

Smart Roads’ Disappointing Performance

Engineering News-Record (ENR) published a major article on various kinds of “smart-road” technology in its Sept.5 issue, headlined “Laying Tech Test Tracks.” The subheadline gave away the findings: “Domestically and abroad, agencies are testing smart roads with mixed results.” The findings reinforced the skepticism I’ve expressed in previous newsletter articles about both on-road electric vehicle charging, now dubbed dynamic charging, and “solar roads.”

The idea of charging electric vehicles (EVs) while they drive on highways sounds appealing, as opposed to having to get off the road and sit waiting at a charging station for 45 to 60 minutes while the vehicle gets charged. The problems that are emerging in test projects reflect the practicality of actually doing this on a large scale, as well as the lack of a viable business model under which vehicle operators actually pay for the electricity they pick up while driving.

The ENR article profiles several test projects under way in both Europe and the United States. One startup is WiTricity Corp., in which Siemens recently acquired a minority stake. So far, all it has demonstrated is static charging, in which a bus or other vehicle is charged while sitting in one place. The big action is in dynamic charging, with several firms testing their approaches. One is Electreon, an Israeli startup. Early this year, it demonstrated dynamic charging on a 1km closed track near Milan, Italy. Electromagnetic coils were embedded in the roadway, in varying kinds of asphalt pavement, at a cost of $1 million per lane-km. The coils have an estimated life of 10 years. Trials of Electreon’s system are under way in Sweden on a 1.65 km highway section on Gotland Island. Electreon says that trial showed the vehicles could charge while driving at 80 km/hr (about 50 mph). More recently, Michigan DOT is gearing up for a trial of Electreon’s system on a 1-mile road segment.

To be able to pick up electric energy on the fly, an EV must be equipped with an Electreon receiver. For widespread use, in addition to many thousands of highway miles being equipped with in-pavement coils, all EVs would need to be outfitted with compatible receivers. And there must be a way to itemize the amount of electricity picked up by each vehicle so that the owner/operator can be charged for that amount. A contractor working with Electreon in Sweden noted to an ENR reporter that “There is still some work to do concerning standardization, industrialization, and the business model.” No doubt.

Let’s also do a bit of number-crunching about dynamic on-road charging. In the Italian trial, Electreon told ENR that a small Italian Fiat 500 drove for four hours on the closed track, and its small battery only went from 22% charged to 48% charged. On a highway trip, to get that modest increase in stored electricity, an EV going at 50 mph would have to be charging while driving 200 miles. A larger EV, like a Tesla, would have to drive a lot further than that, charging all the way, to get such a modest improvement in its stored electricity. That would require a huge amount of in-road coils, at $1.6 million per lane-mile.

Florida is also getting into dynamic charging tests. The Central Florida Expressway Authority is planning a $10 million dynamic charging pilot project on one mile of its upcoming Lake/Orange expressway. The roadway equipment, in this case, will be provided by Evolgy, a European company. The project is being coordinated by ASPIRE, an engineering research center at Utah State University, with support from the National Science Foundation. ASPIRE is also working with transportation agencies in Michigan, Indiana, and Utah on other dynamic charging pilot projects.

As of now, my assessment is that this is a cool-sounding idea that very likely will not make sense as an alternative to EV charging stations and has yet to set forth any kind of plausible business model.

» return to top

Opposition Builds to FHWA GHG Mandate

The Federal Highway Administration (FHWA) has received more than 39,000 comments regarding its proposed regulation that would require state departments of transportation (DOTs) to track on-road greenhouse gas (GHG) emissions with the goal of achieving net-zero highway emissions by 2050. More than half of Senate Republicans (27) sent a letter to the FHWA deputy administrator arguing that there is no legislative basis for such a regulation. The American Road & Transportation Builders Association also objected to the regulation. But 28 Senate Democrats sent a letter to Transportation Secretary Pete Buttigieg supporting the proposed regulation.

The American Association of State Highway and Transportation Officials (AASHTO), representing all 50 state transportation departments, sent a letter to FHWA pointing out that “consensus support” for the regulation is lacking among its members. AASHTO’s letter pointed out that “we do not see a provision in federal law that requires FHWA to establish a GHG emissions performance measure,” and that “FHWA’s [justification] of its legal authority for establishment of this new rule can lead to consequences beyond the intent of Congress.” 

Critics have pointed out that a provision similar to the proposed FHWA regulation had been included in the House transportation reauthorization bill, but that bill was scrapped when Congress adopted the bipartisan infrastructure law approved by the Senate, which became the IIJA law signed by President Joe Biden. Hence, Congress had considered such a requirement but ended up rejecting it.

This matters because of a recent Supreme Court decision: West Virginia v. Environmental Protection Agency. The majority opinion by Supreme Court Chief Justice John Roberts found that the EPA had put forth a mandate for states to adopt a cap-and-trade scheme for carbon emissions, after a bill to require that had recently been rejected by Congress. In rejecting EPA’s assertion of legislative powers, the court expanded on previous vague provisions in its “major questions” doctrine. Under the clarification, a regulation may be challenged if it is economically significant and is based on a broad interpretation of a very vague statutory provision or no authorization from Congress. (For more details, see “A Major Win for Limited Government,” Cato Policy Report.)

I am not an attorney, but I think it’s highly likely that if FHWA proceeds to enact this proposed regulation, there will be immediate litigation based on the West Virginia decision, and that litigation is likely to lead to the regulation being thrown out. That will hand the matter back to Congress, where it belongs.

» return to top

The Private Sector’s Historic Role in British Toll Roads
By Alan Rosevear, Dan Bogart, and Leigh Shaw-Taylor

Robert Poole’s Editor’s Note: I met co-author Dan Bogart when he hosted me for my 2018 book tour appearance at the University of California-Irvine, where I learned of his already extensive research on United Kingdom turnpike trusts. This article is the concluding section of the authors’ new working paper on the subject, which I highly recommend.

We have shown that before the expansion of railways, a network of good-quality main roads across England and Wales provided a transport infrastructure that was fit for purpose. This contrasted with the generally expressed view that main roads had been in a poor state at the turn of the [19th] century. Government had intervened during this period, but the extent to which it was responsible for infrastructure improvement has been unclear. Our analysis demonstrates that turnpike trusts were responsible for building 4,000 miles of new, good-quality road in England and Wales, much of it between 1810 and 1838. On a directly comparable basis, the not-for-profit trusts built 30 times the mileage than had been built with direct government funding during the early 1800s. Nevertheless, government intervened successfully in less-direct, subtle ways across the wider road network.

Firstly, it provided a framework in which interest groups and government actors could explore both the problems and solutions to meeting demand. Member of Parliament Henry Parnell described their input as “working with the trusts,” though in practice, there was intervention for a short period in some trusts and increased regulation and greater public reporting for all.

Secondly, although the government-funded works of Telford created an iconic road to Holyhead, the exposure and approval given to McAdam and his methods in government enquiries persuaded many more trusts to employ him. This ultimately led to the age of standardization which was an indirect triumph for government intervention. We believe that this voluntary adoption of the expert-led approach resulted from the partnership of government with the not-for-profit turnpike trusts. It left some localism and conveniently kept the costs of road infrastructure on the road user, not direct taxation.

Finally, our analysis illustrates how the growing state capacity in England and Wales did not directly lead to a large increase in public goods and road infrastructure. In the main, it led to better regulation and support of not-for-profit trusts which could hold and efficiently manage nationally important infrastructure assets. The framework of support, targeted management intervention, and regulation established by government made the independent turnpike trusts of the early 19th century more capable than those which had begun to fail in the late 18th century. As such, our work points to a synthesis between the traditional view that turnpike trusts were the principal actors in creating the good road network of England and Wales and the revisionist view, which sees government as playing a large and leading role.

» return to top

News Notes

Two Possible Start Dates for New Charlotte Express Toll Lanes
The Charlotte Regional Transportation Planning Organization (CRTPO) board is interested in the proposed addition of express toll lanes on I-77 between Charlotte and the South Carolina border, but the question it must decide is how to finance and procure them. The North Carolina Department of Transportation explained to CRTPO board members last month that if the state develops the project, the earliest it could begin to receive funding is 2029. But if a long-term toll-financed public-private partnership like that used to develop the toll lanes now operational on I-77 north of Charlotte is used, the $2.1 billion project could begin several years sooner. NCDOT will pursue the option CRTPO recommends.

Electric Truck Charging Network Planned for I-10
Startup company TeraWatt Infrastructure has announced that it will develop and install charging stations sized for electric trucks along I-10 from California to Texas. Freightwaves quotes CEO Neha Palmer saying that “We have brought in the large amount of power that you need for large-scale EV charging, especially for those [heavy truck] large-battery formats.” Unfortunately, the charging stations cannot be located at existing rest areas on I-10, due to a federal law dating to 1960 that forbids offering any commercial services at Interstate rest areas. Hence, electric big rigs will have to leave I-10 and go to an offline location to get charged.

Modernized Service Plazas Are Opening on New York Thruway
Under a 33-year public-private partnership (P3), 23 of the 27 service plazas on the Thruway are being rebuilt and modernized. Last month saw the reopening of the third plaza, Junius Ponds in Seneca County, with new retailers Shake Shack, Starbucks, and an Applegreen Market Store. The revamped plaza includes outdoor picnic space, room for food trucks, a dog walking area, and (soon) two EV charging stations. The $450 million cost of the program is being met by Empire State Thruway Partners, which will pay the Thruway Authority 0.84% of each facility’s gross revenue for 33 years. Although most of the Thruway is an Interstate (I-90), because it is a toll road that predates the 1960 ban on commercial services, it and other tolled Interstates were exempted from the commercial services ban.

Express Toll Lanes Opening in California and Utah
New express toll lanes (ETLs) opened at the beginning of November on US 101 in the Bay Areaa and on I-15 in Utah. Both projects are extensions of existing express lanes added in recent years.  In Utah, the I-15 ETLs now extend 82 miles from south of Salt Lake City to Ogden to its north. Utah DOT says this is the country’s longest continuous ETL corridor; it has one lane in each direction. The new California ETLs are in San Mateo County, from Redwood City to I-380 in South San Francisco. These 22 miles of new ETLs connect to recently completed ETLs on US 101 in Santa Clara County. The latter offer one express lane in each direction, rather than two in San Mateo County. The 101 express lanes are part of the growing network of such lanes in the San Francisco Bay Area.

Melbourne Airport Rail Line Found Not Cost-Effective
A benefit/cost analysis of the proposed $8.3 billion rail line between downtown Melbourne and the Melbourne Airport has been found by Infrastructure Australia to be not worth building at this point. The net present value of the project was found to be -$2.4 billion, with a benefit/cost ratio of 0.5. Infrastructure Australia used the same 7% discount rate as America’s Office of Management & Budget (OMB). A business case assessment by the Victoria government used only 4%, with a benefit/cost ratio of 1.0. Infrastructure Australia noted that the rail line may be justified in the future, but the Tullamarine Freeway between the airport and downtown will not reach capacity until 2036.

Toll Traffic Volume at Pre-COVID Levels
Fitch Ratings on Oct. 17 reported that traffic volume on U.S. toll roads returned to 99% of its 2019 level during the first six months of 2022. Toll traffic lagged this average in the San Francisco Bay Area while exceeding 99% on most tolled facilities in Florida, Oklahoma, and Texas. The data were published in Fitch’s U.S. Airports and Toll Roads Traffic Monitor.

Gasoline Use Reached New High in 2022
Jeff Davis reported in the Oct. 20 issue of Eno Transportation Weekly that a record 6.8 billion gallons of gasoline were sold in the United States in the 2022 fiscal year (FY); the previous peak was in 2018. The data come from the year-end report from the Treasury Department on the receipts from the federal gasoline tax—$27.5 billion compared with $26.25 billion in FY 2018. Federal diesel tax receipts also reached an all-time high of $12.2 billion. Motorists and truckers evidently drove more than expected in FY 2022, and larger, heavier gas-guzzling SUVs and pickup trucks are a larger component of the personal vehicle fleet. Legislated increases in federal Corporate Average Fuel Economy (CAFE) requirements and increasing electric vehicle penetration will reduce fuel consumption in future years.

Audi Developing Anti-Pollution Devices for Electric and Conventional Vehicles
Rubber-tire vehicles operating on pavement generate particulate matter, 85% of which is caused by abrasion of tires and roadways. German auto company Audi, along with supplier Mann+Hummel is developing a filter in line with the radiator (on internal combustion vehicles) to trap these fine dust particles. On EVs, the filter can also be operated while the vehicle is stationary, and being charged. The filter system has been tested on Audi vehicles, including the electric e-tron.

Parkersburg Bridge Privatization Ahead of Schedule
The aging Memorial Bridge in Parkersburg, West Virginia, is being rehabilitated by United Bridge Partners, which is buying the bridge from the city. The $50 million renovation cost is being paid by UBP, whose contract with the city transfers ownership and operations to the company. UBP is also continuing to pay part-time toll collectors during reconstruction, despite the bridge being closed to traffic, and it is working on a severance package for them, since tolling will go all-electronic when the bridge re-opens in Aug. 2023, three months earlier than the original schedule called for. The toll when the refurbished bridge reopens is expected to be $1 compared with the prior 50 cents.

$1.5 Billion Rail Complex to Relieve Los Angeles Ports Congestion
BNSF Railway last month announced plans to develop a $1.5 billion rail facility in Barstow, 130 miles from the ports of Long Beach and Los Angeles. The purpose of the 4,500-acre facility is to allow containers offloaded from incoming ships to be sent by rail directly to the Barstow International Gateway, where the cargo can be transloaded from 40-foot international containers to 53-foot domestic containers for onward shipment by rail or truck. BNSF already has a rail yard on the property, which is linked to the railroad’s main lines heading east.

Hurricane Leads to EV Battery Fires in Florida
Among the impacts of Hurricane Ian on the southwest coast of Florida have been many vehicles damaged by flooding. State Fire Marshal Jimmy Patronis sent an alert on Oct. 6 to first responders, noting that corrosion from having been underwater has led to EV batteries catching fire. The next day the Fire Marshal’s Office sent out a detailed warning outlining recommended procedures from the National Fire Protection Association (NFPA). It outlined what EV owners should do (and not do) if their vehicles experienced flooding and procedures for firefighters to deal with battery fires.

General Motors Thinks You Will Drain Your EV During Power Outages
The giant auto company last month announced the launch of a new division, GM Energy, that will sell electricity storage units to EV owners. The equipment will enable the EV owner to use electricity from the EV’s battery and/or the storage unit to supply electricity to their home during power outages. This might be fine for a half-hour outage, but as someone who lives in hurricane country, I’m very familiar with power outages lasting three to five days. One thing I don’t want during such a period is to be stranded, immobile, and unable to get to grocery stores or Home Depot to deal with other impacts of the hurricane.

Infrastructure Asset Recycling Proposed in Ecuador
Ecuador’s Minister of Transport and Public Works plans to lease existing airports and toll roads to investors, aiming to raise large enough up-front payments to reduce the government’s $64 billion debt. Inframation News reported (Oct. 21) that if Ecuador’s Congress approves a new investment law that would permit asset recycling, it will engage in feasibility studies of long-term P3 leases of two airports, a seaport, and several highways.

Will Construction Cost Inflation Consume New Federal Spending?
The July-August issue of ARTBA’s Transportation Builder magazine contains a graph of the sharply increasing costs of the inputs to highway and street projects. The producer price index for these inputs (excluding labor costs) has increased from 100 in 2014 to 150.1 as of June 2022, with most of that increase taking place since 2020. American Road & Transportation Builders Association (ARTBA) chief economist Alison Premo Black noted, “The average cost of materials used in highway and street construction was up 15% in July [2022] compared to July 2021.” With skilled construction labor also in short supply, a significant fraction of increased federal IIJA funding will be absorbed by the increased cost of already planned projects.

I-81 Syracuse Viaduct Removal Moving Forward
Engineering News-Record (Oct. 3) reports that the project to tear down the elevated I-81 route through Syracuse, NY, passed a milestone in September with the shortlisting of firms for the first phase of deconstruction. The total expected cost of removing the 1.4-mile viaduct and replacing it with a boulevard is $2.3 billion. Deconstruction is expected to begin by year-end and continue through 2025.

» return to top

Quotable Quotes

“Not looking good in hindsight are two former California governors, Arnold Schwarzenegger (R) and Jerry Brown (D), who backed the [high-speed rail] plan as a way to reduce carbon emissions from cars and planes. Don’t feel too sorry for California voters, though, who brought this mess on themselves—first by approving the 2008 referendum, then by re-electing Brown in 2014 over moderate Republican Neel Kashkari, who campaigned against what he called the “crazy train.” . . . Full operation of a San Francisco-to-Los Angeles bullet train would cut carbon emissions by the equivalent of 213 million gallons of gasoline per year, according to the high-speed rail authority’s 2022 annual report. That’s about a week’s worth of California’s fuel consumption in 2021. Surely there is a cheaper, less-grandiose way to achieve the same savings.”
—Charles Lane, “California ‘Crazy Train’ Is Still Going Nowhere Fast,” The Washington Post, Oct. 12, 2022

“Cal HSR is just the most dramatic example of the cultural framework that has overtaken public policy/projects in the last 20 years, where there is a general tacit agreement (diffused among several authorities, consultants, and elected decision-makers) that outcomes don’t have to be taken seriously—and that special interest orientation (ideology, mode, geography) is given the same weight as engineering economics—especially if the project is supported by ‘someone else’s money.’”
—Stephen Lockwood, “Just Another Piece of Mega-Pork,” posted on a private transportation blog, Oct. 14, 2022 (used by permission)

“The administrative state’s corrupting, fundamental forces are on full display in our MARAD/FOIA case [regarding the Jones Act], which is indeed right out of the textbooks. A federal agency tasked with supporting the U.S. transportation system and Merchant Marine has evolved over decades to become little more than a lobbying firm for a law (and industry) that actually undermines the agency’s statutory purpose. Its ‘advisory committee’ is stacked with industry insiders dedicated to preserving that harmful status quo, and its employees routinely strategize with lobbyists and other industry players—‘elites’ by anyone’s definition—to deliver [economic] rents, not to effectuate great policy, regardless of the harms that such actions cause.”
—Scott Lincicome, “My ‘Treason’ Charge and the New Right’s Governance Fantasy,” TheDispatch.com, Oct. 26, 2022

» return to top

**Editor’s note Nov. 8, 2022: The original figures in this paragraph were incorrect and have been updated.

The post Surface Transportation News: Gas stations and electric vehicle charging, high-speed rail failure, and more appeared first on Reason Foundation.

According to a database of design-build-finance-operate-maintain (DBFOM) transportation P3s I’ve maintained since State Route 91 in California reached financial close in 1993, there have been 15 AP transportation projects since they began in 2009. But according to the same database, there have been 19 revenue-risk projects through 2021, with nearly all having reached financial close since 2009.

The big news in autumn 2022 is that about $16 billion in likely revenue-risk projects are in the pipeline. They include the $5 billion first phase of the Op Lanes Maryland project, three Atlanta express toll lane megaprojects at an estimated $7.3 billion, the $2.3 billion North Carolina I-77 extension project near Charlotte, and the $1.5 billion Calcasieu I-10 bridge replacement in Louisiana.

What is leading state transportation departments to re-embrace revenue-risk transportation public-private partnerships?

One reason is that their financial advisors have pointed out to them that a long-term commitment to a stream of availability payments is a liability on the state’s balance sheet. By contrast, the revenue bonds issued in revenue-risk P3 projects are non-recourse; state taxpayers are not at risk. Some states wisely count availability-payment obligations as part of their state debt limit. This limits how many such projects they can commit to.

Moreover, for projects that rely at least partly on user fees, revenue-risk P3 companies invest a lot more equity in their project than is typical of AP public-private partnerships; my data show the average AP concession has only 6.2% equity investment compared with 28.9% average in revenue-risk projects. The equity provides a cushion during times of recession, compared with all-debt or 93%-debt financing. Fitch Ratings recently increased its ratings of revenue-risk express toll lanes projects that came through the COVID-19 pandemic without missing their debt service payments.

Also politically relevant is that a given transportation megaproject requires less taxpayer support if done as revenue-risk. My information shows that the state departments of transportation (DOTs) (i.e., taxpayers) cover 33% of the cost of the average AP project but only 13% of the cost of the average revenue-risk project.

Those are all pragmatic reasons that help explain the return of revenue-risk public-private partnerships for megaprojects with a bondable revenue stream. But as a policy analyst, I like to focus on substantive reasons why revenue-risk P3s constitute better transportation policy, where they are feasible. 

One of the most important of these is proper long-term stewardship of the highway, bridge, tunnel, airport terminal, etc., by the P3 company. The United States continues to have a large problem with deferred maintenance in many infrastructure sectors, including highways and transit.

In my book, Rethinking America’s Highways, I attribute this problem to the increasing politicization of infrastructure. Elected officials, whether in Congress or state legislatures, love to create ribbon-cutting opportunities for themselves, and building new infrastructure projects does that. In contrast, properly funding ordinary, ongoing maintenance does not come with ribbon-cutting ceremonies. So there is a built-in tendency to allocate taxpayers’ funds to new projects at the expense of proper ongoing maintenance. Some researchers call this the “ribbons vs. brooms” problem. A 50-year revenue-risk P3 builds in the proper long-term stewardship of the highway or bridge in question.

A less-understood benefit is that revenue-risk public-private partnerships also create a customer-provider relationship that is absent when the state builds and maintains a highway based on what the legislature decides. When I first started researching highway policy, I was surprised to learn that those who operate vehicles on highways are called “users,” not customers. (Only in the toll road sector are the vehicle operators called “customers” and are genuinely seen as such.) State DOTs apparently adopted this terminology because they are not paid directly by vehicle operators. Fuel tax revenues are paid to the state, and the legislature allocates them to the state DOT as it sees fit. In other words, the DOT’s de-facto customer is the legislature—that is who pays its bills, and that is whom it must satisfy.

In other words, a 50-year P3 highway, bridge, or tunnel is a business, serving and accountable to its customers. We have seen P3 companies make significant changes in a DOT’s preliminary design, to make an express toll lane project more accessible to potential customers. Others have come up with design changes that reduce construction costs, getting more bang for the investors’ bucks and by reducing the project’s construction cost, somewhat reducing the toll rates needed to provide a return on the investment. This model is similar to investor-owned electric, gas, and water utilities, which also have customers, not “users.”

To be sure, as I acknowledge in my book and policy papers, there are cases where an availability-payment model makes sense. If tolls are not feasible (e.g., the Port of Miami tunnel), if there is no realistic bondable user-fee revenue stream (rail transit), or if the toll revenue would be far too little (Pennsylvania’s Rapid Bridge Replacement Project), the AP model offers real benefits. It shifts construction and late-completion risks and provides guaranteed long-term maintenance, so it’s superior to traditional design-bid-build and design-build models for transportation megaprojects.

I’m not surprised by the resurgence of the revenue-risk model in recent years. With such an array of potential megaprojects in coming decades—including replacing much of the nation’s worn-out Interstate highway system and replacing major bridges that are functionally obsolete and/or structurally deficient—the stewardship and user-funded benefits of this model suggest it will continue to be in demand.

A version of this column first appeared in Public Works Financing.

The post Transportation departments embrace revenue-risk public-private partnerships appeared first on Reason Foundation.

The Denver Regional Council of Governments recently approved a long-range transportation plan that unwisely calls for eliminating the planned express lane extensions on C-470 and I-25. Rather than wrongly stigmatizing the toll lanes as part of a car-centric vision of the past that they’re trying to get away from, Colorado’s regional planners should view express lanes as part of the future’s greener, more efficient transportation network that serves electric cars and buses.

The idea that highways are inherently bad due to the emissions from today’s gas-powered vehicles will be less and less accurate in the coming decades as electric cars become widely adopted. A long-range transportation plan should look at all long-term trends and take a holistic approach. In the years to come, more Coloradans are likely to buy electric cars than to give up driving and their cars entirely. The region’s plans need to reflect that reality.

The Denver metro area was one of the country’s five fastest-growing large regions between 2010 and 2020. Only Dallas, Houston, and Seattle grew faster over the last decade. Denver’s population increase is spread across six counties, and work and commuting patterns vary widely.

With today’s large-scale decentralization of homes and jobs, it is increasingly difficult to serve large numbers of workers via mass transit. Over the past decade, the University of Minnesota has studied “access to destination” in America’s largest 50 metro areas. The university’s researchers analyzed the percentage of all available jobs that workers could reach using various modes of transportation.

The latest results, using 2019 data, show that metro Denver residents could reach 55% of the area’s jobs within 30 minutes if they traveled by car. But if they were using transit, Denver’s workers could only get to 1.39% of the area’s jobs within 30 minutes.

For those willing to commute for 50 minutes, car drivers could reach nearly every available job in Denver. In contrast, even with a 50-minute commute, mass transit users could only get 7% of the Denver region’s jobs, according to the University of Minnesota research.

Thus, even if doubling the transit system’s reach could double transit’s share by the year 2050, that would still make only 14% of jobs reachable after a 50-minute transit commute. The majority of workers will still be commuting by car in the coming decades — even if transit use doubles and working from home continues to grow.

And due to its high quality of life, metro Denver is likely to remain one of America’s fastest-growing large metro areas — bringing more cars and workers to the area.

Denver will stay a sprawling region, so its long-range transportation strategy should reflect the future that is likely to happen.

The express lanes being eliminated use variable pricing to keep traffic flowing smoothly at around 45 miles per hour, which minimizes emissions by reducing traffic congestion. The toll lanes also provide mass transit agencies with a way to offer faster express bus service—without the transit agency needing to find the money to build the lanes or to use them.

Buses using the express lanes — for free — can provide bus riders with faster trips between key destinations without the riders paying the tolls. When Miami converted its congested I-95 carpool lanes into express toll lanes, for example, ridership on express bus service in the corridor quadrupled because the buses became much faster and more reliable.

Express toll lanes provide a sustainable revenue source to fund the highway lanes that electric cars will need in the decades to come. They are also a perfect match for region-wide express bus service. Rather than eliminating express lanes, metro Denver should build a region-wide express toll lanes network that would better serve the future electric cars, buses, and emergency vehicles.

Reducing emissions is an admirable goal, but planners shouldn’t pretend that the workers and businesses across the Denver region will be giving up their cars for bikes and walking. The region’s economy depends on people and goods moving efficiently, and express lanes should be a key part of the long-term plan.

A version of this column first appeared in The Denver Gazette.

The post Express lanes for electric vehicles should be a bigger part of Denver’s long-range transportation plan appeared first on Reason Foundation.