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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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.

In this issue:

• The coming eVTOL shakeout
• Airlines and FAA ignored rules after runway incursions
• Unintended consequences of banning fees for family seating
• Airline ancillary fees make sense for airlines and passengers
• Superior landing system in operation in Germany
• Alaska and United diverge on electrification
• News Notes
• Quotable Quotes

The Coming eVTOL Shakeout

This year may see the first stages of winnowing out electric vertical take-off and landing (eVTOL) startup companies. Thoughtful aviation and financial experts are taking a harder look at the large array of would-be advanced aerial mobility (AAM) developers and operators.

For example, the outgoing chief executive officer of Wisk expressed serious concerns to Aviation Daily’s Ben Goldstein (Jan. 31, 2023). “There are going to be a lot of failures this year,” Wisk CEO Gary Gysin told Goldstein. “I’ve already had companies approaching me asking to be bought out because they are running out of money.” And Gysin added that he expects “a more significant batch of failures” in 2024. He noted that with interest rates sharply higher than a year ago, future earnings look a lot less rosy, with stock market valuations having been “pummeled” already.

An aviation acquaintance last November shared with me his comparison of six eVTOL startups with traded shares, contrasting their initial public offering (IPO) price with their then-current price. I have replaced his November 2022 prices with mid-February 2023 prices, as follows:

I can’t offer an explanation for EHang’s increase, but it’s not very relevant to the U.S. market since it is only seeking certification in China.

Aviation Week did a detailed assessment of eVTOL startups, “Reality Check” by Graham Warwick, in its Jan. 30-Feb. 12 issue. Drawing in part on assessments by Sergio Cecutta of SMG Consulting, it included an updated table of leading startups, with each one’s 2023 rank compared with its 2022 assessment. Here are the magazine’s revised rankings.

Many factors are discussed in Warwick’s lengthy article. I have added the number of seats for each eVTOL. From a value proposition perspective, I see little potential in carrying only one or two passengers. Lilium stands out with six, plus a longer range than most, focusing more on inter-city than air-taxi markets. And Beta may have commercial prospects by hauling only cargo. Wisk remains only 10th on the list, in part because its concept is fully autonomous, which is likely to take years longer to certify than piloted eVTOLs.

Another concern is second-ranked Archer’s plan to outsource its air vehicle production to global auto company Stellantis (parent of Jeep and RAM, among other vehicles). Goldstein quoted Savanthi Syth of Raymond James as considering this a “competitive advantage” for Archer. I disagree. There is a huge difference between auto production and aircraft construction, as pointed out by Bill Johnson of Single Seat Consulting.

“[T]he auto industry certainly has the understanding of scale, but they do not understand the safety and specifications that you need for aviation. The difference between them is the amount of tolerance that you have for safety. A car’s engine or systems can fail, and it’s not necessarily an emergency, but in a plane that’s not the case. Basically, the culture and mentality of the mass production of automobiles does not inculcate this idea of very precise and safety consciousness that the aviation industry requires,” Johnson told Aviation Daily.

If I were a market trader, I’d bet on Joby and Beta to do better than most, and also Lilium if it can achieve its inter-city range goals. EHang is irrelevant, and Volocopter and Wisk might be candidates to sell short. These are just my opinions and definitely not intended as recommendations for any actual investors.

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Airlines and FAA Ignored Rules After Two Runway Incursions

In two recent runway incursion incidents, pilots of the involved aircraft failed to comply with Federal Aviation Administration (FAA) rules put in place after an Air Canada A320 on approach to San Francisco International in 2017 nearly landed on a line of aircraft waiting on the adjacent taxiway. The rule calls for planes involved in such incidents not to complete their planned flights immediately to facilitate finding out what cockpit crews and controllers said and did in the minutes leading up to a near-collision. The reason for this rule is that cockpit voice recorders have only two hours of capacity. After that, the device records over the previous information. By going ahead with the flight, the cockpit crew destroys the evidence needed to assess what happened, with the goal of improving aviation safety.

Last month, on Jan. 13, an American 777 taxied in front of a Delta 737 that had begun its take-off roll at John F. Kennedy International Airport. After a safety warning from the airport’s ASDE-X system, the 737’s crew was able to abort its take-off, averting a collision. But soon thereafter, it took off on its planned flight, with its voice recorder proceeding to record over the incident. The same thing happened with the 777, which also went ahead with its planned take-off.

A similar incident happened on Feb. 4, when a Southwest 737 was cleared onto the runway at Austin-Bergstrom while a FedEx 767 was on final approach to that runway in low-visibility conditions (where the runway end was not visible from the control tower). Air traffic control transcripts showed that a controller asked the 737 if they were actually moving, getting the reply, “rolling now.” Fortunately, the FedEx crew realized they might land atop the 737 and made a quick decision to go around. The 737 taxied back to its starting point and made a normal takeoff. Neither plane was required to stand down at Austin-Bergstrom so that the content of their voice recorders could be saved.

“I’m very proud of the FedEx flight crew and that pilot,” Jennifer Homendy, chairwoman of the National Transportation Safety Board, told CNN. “They saved, in my view, 128 people from a potential catastrophe.” Homendy added, “It was very close, and we believe less than 100 feet.”

Aviation Daily (Feb. 7, 2023) reports that overall runway incursions have continued to increase since 2011. FAA defines four categories, of which the most serious is a near-collision such as these two, deemed Category A. While less-severe Category B incursions have increased every year since 2017, Category A incursions fluctuated between three and five per year since 2016, except for zero in 2022. Unfortunately, 2023 has now begun with two such near-disasters.

The National Transportation Safety Board (NTSB) is investigating both incidents and will record its interviews with the cockpit crews. Unfortunately, there will be no data available to judge the accuracy and completeness of what they tell NTSB. I hope its report will fault FAA for not enforcing its own stand-down rule so that cockpit voice recorder data will be saved—at least for near-collisions of airliners—in the future.

Note: For more on this topic, see the Quotable Quote below from Gary Leff.

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Unintended Consequences of Banning Fees for Family Seating
By Marc Scribner

In his State of the Union address to Congress on Feb. 7, President Joe Biden called for prohibiting or otherwise restricting “junk fees,” naming hotel resort fees, event ticket service fees, and cellular carrier transfer fees as specific targets of his ire. He also mentioned airline ancillary fees on seat selection, saying, “And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough—they can’t just treat your child like a piece of luggage.”

This call to prohibit certain ancillary fees on airline seat selection earned widespread applause. After all, who could oppose young children sitting with their parents on a plane? While this may have been a an effective use of populist political rhetoric, it raises numerous questions on how such a rule would be implemented in practice and the potential outcomes on the traveling public. As is often the case, this may prove to be better politics than policy.

President Biden called on Congress to ban charges on family seating by passing legislation he calls the Junk Fee Prevention Act. One problem is this bill does not exist beyond the title. No legislative text has been introduced for members of Congress, let alone the public, to review. Perhaps in recognition that President Biden’s hypothetical bill won’t be ready for consideration in the near future, the White House also released a fact sheet on President Biden’s competition agenda. Included was a call for unilateral regulatory action to “[b]an airline fees for family members to sit with young children” by having the U.S. Department of Transportation (DOT) “launch a rulemaking to ban the practice.”

In order to satisfy President Biden’s request, the transportation department would presumably exercise its Section 41712 aviation consumer protection authority to prohibit “unfair” practices and methods of competition granted to it by Congress. Section 41712 powers to police against unfair airline conduct have largely remained the same since Congress first authorized them in 1938, apart from a 1958 amendment that extended the unfair conduct prohibition to include ticket sellers as well as air carriers.

The Department of Transportation’s Section 41712 authority was modeled on language included in 1938 amendments to the Federal Trade Commission Act. However, while DOT’s authority has largely remained the same since then, Congress modernized the Federal Trade Commission’s (FTC) similar Section 45 authority in 1994 to add new standards of proof. Under these standards, for conduct to qualify as legally unfair, it must be (1) “likely to cause substantial injury to consumers,” (2) not “reasonably avoidable by consumers themselves,” and (3) “not outweighed by countervailing benefits to consumers or to competition.”

The FTC’s balancing test for unfair practices reflects case law and internal agency practice developed over several decades. By codifying them, Congress aimed to ensure regulatory quality and consistency in enforcement by explicitly requiring the FTC to carefully consider the business practices alleged to be unfair and weigh them against market factors. When Congress created the Consumer Financial Protection Bureau in the Dodd-Frank Act of 2010, it also included an identical unfairness balancing test (12 U.S.C. § 5531(c)). DOT’s Section 41712 authority is both anomalous and nebulous, and the Office of the Secretary of Transportation in recent years has wielded it to re-regulate airline and ticket agent business practices best left to market competition.

Although current Section 41712 unfairness determinations aren’t subject to FTC-style standards of proof, there are many important questions that ought to be answered before DOT proceeds with a family seating ancillary fee ban.

If DOT required airlines to guarantee family seating in all circumstances, how would this mandate be integrated into airline reservation systems? What would happen if a parent attempted to purchase a ticket shortly before a flight that is already mostly full of fee-paying customers and there aren’t enough seats grouped together? Would the flight be shown as full and no sale be permitted? Could parents consent to not sit next to their minor children in this case in order to take the flight? If not, would parents flying with minor children have access to fewer flights because of this policy? Would customers who have already paid fees to select their particular seats be forcibly moved to seats they did not purchase and refunded those fees?

Ultra-low-cost carriers (ULCCs) with the most-aggressive airfare unbundling business models would bear a disproportionate share of the costs of a mandatory family seating rule. Through their aggressive pricing, ULCCs also exert most of the downward price pressure on average airfares—competitive business practices that allow all air travelers to benefit from lower fares even if they aren’t flying on a ULCC. Would this crackdown on ancillary fees cause average base airfares to rise? If so, by how much?

Perhaps the benefits of guaranteed family seating are worth the costs of higher airfares and fewer flight options for parents traveling with young children. But detailed analysis should be conducted and presented in a transparent manner for all to see. Rather than mandating a questionable policy, if Congress wishes to promote regulatory quality that maximizes consumer welfare, it should amend DOT’s Section 41712 authority to incorporate an FTC-style unfairness balancing test.

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Airline Ancillary Fees Make Sense for Airlines and Passengers

President Biden attacked airline ancillary fees in his State of the Union speech on Feb. 7, calling them “junk fees.” He demanded that airlines show the full price of a ticket, including ancillary fees—even if some of the optional extras get signed up for at the check-in counter, long after the ticket was purchased.

Ancillary fees are optional for air travelers, as is obvious when they apply to checked versus carry-on baggage, alcoholic beverages, and premium seats, if available. They have become a significant part of airline revenue, whether majors, hybrids, low-cost or ultra-low-cost carriers. According to the Department of Transportation’s Bureau of Transportation Statistics, in 1990, 88.5% of U.S. airline revenue was derived from airfares. By 2022, that number had decreased to 72.6%. The growth of ancillary fees has made it possible for airlines to advertise basic fares, expecting that many travelers will opt for some of the optional services.

Ancillary fees have been used most extensively by ULCCs, both here and in Europe. As Aviation Week’s Helen Massy-Beresford noted in an article last fall on ancillary fees in Europe, “Customers, it seems, are willing to pay to make their journeys smoother, with paid-for cabin bags, extra legroom, or assigned seats.”

The article provides examples from European LCCs EasyJet, Ryanair, and Wizz Air. For example, Wizz Air reported ancillary revenue per passenger for a recent period averaged €34.20; EasyJet’s latest was £22.07. (A personal note: I wish U.S. carriers charged for cabin bags, which would likely shift some of them from overhead bins to cargo holds so that those of us who travel light would be assured of overhead bin space.)

FAA may well be concerned because when airlines enable reduced airfares by relying more on ancillary fees, this leads to reduced ticket tax revenue since that tax applies only to the airfare itself. This is a problem that no other country faces. About 80% of FAA’s budget is devoted to the capital and operating costs of the air traffic control (ATC) system, so basically, that tax pays for air traffic control (and the general fund covers safety regulation and a portion of airport grants). In virtually every other country worldwide, the ATC system is paid for by ATC fees, paid by air carriers and business jets according to charging principles promulgated by the International Civil Aviation Organization. So any FAA or congressional gripes about short-changing the Aviation Trust Fund because of ancillary fees is only a problem because the United States is out of step with the rest of the world on how to pay for air traffic control.

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Superior Landing System Operational in Germany

I have often written about the superior performance and economics of Ground-Based Augmentation System (GBAS) landing systems over traditional Instrument Landing System (ILS). The former uses augmented GPS signals to provide precision landing approaches at far lower cost (for multi-runway airports) than ILS. One GBAS installation can handle all the runway ends at a large airport. Think what this would mean for multi-runway airports such as DFW and O’Hare.

The latest news is that the German air navigation service provider (ANSP) DFS, last summer, got the GBAS at Frankfurt Airport certified for higher-precision Category II approaches. This is a big deal because it is the first (and so far only) airport that is now doing Cat. II GBAS approaches. The Frankfurt system allows two different glide slopes, 3 degrees and 3.2 degrees. A flight doing a Cat. II approach at Frankfurt can begin at 10,000 feet altitude. 35 nautical miles from the runway end, performing a continuous descent approach at idle thrust. And the higher slope angle further reduces noise exposure on the ground.

And it gets even better. As discussed in a detailed article in Air Traffic Technology International 2023, (“Realizing the Potential for More Capacity” by Olaf Weber, Oliver Reitenbach, Winfried Dunkeo, and Jascha Runow), during low-visibility conditions when Cat. II approaches are often used, testing and simulation by DFS has shown that runway occupancy time for a Cat. II-landed aircraft is less than for an ILS Cat. II landing due to poor signal transmission in what are called instrument landing system protection zones. Since GBAS is in communication without interruption, the equipped plane can exit the runway sooner. DFS fast-time simulations found that if even 10 to 30% of arriving aircraft are GBAS-capable, there is some runway throughput increase; with 60% of arrivals GBAS equipped, the throughput increases are very significant.

Over 100 airports worldwide have installed GBAS, generally as a supplement to their existing ILS, since the majority of airliners and other aircraft are not fully equipped for GBAS landings. Besides Frankfurt, other equipped European airports include Bremen, Malaga, and Zurich. Notable examples elsewhere include Sydney, Australia and Chennai, India. In the United States, early adopters include Charleston, Houston’s George Bush Intercontinental Airport, Newark Liberty International, and Moses Lake (WA), to be joined soon by San Francisco International, which was approved by FAA last March but is not yet operational.

There is a kind of chicken-and-egg problem inhibiting wider airport GBAS usage. Most airliners are not currently able to interface with GBAS. Although most Airbus and Boeing aircraft being produced today are GPS-capable, unless the airline operating them uses GBAS-equipped airports, the onboard equipment is not enabled. To deal with this problem, a European GBAS Alliance has been organized, with representatives from airlines, airports, ANSPs, IATA, and others to “bridge the gap between on-board and ground systems.” One of its objectives is to get Single European Sky funding to certify GBAS ground systems for even more-precise Cat. III operations.

No such effort is under way in this country, in large part due to FAA indifference. Despite the superior performance and economics of GBAS, FAA does not fund either research or airport equipage with GBAS. The few U.S. airports with functioning GBAS installations have had to pay for it themselves, with United Airlines helping to pay for it at hubs, including Newark, San Francisco and George Bush Intercontinental.

GBAS should have been an integral part of modernizing air traffic management under FAA’s struggling NextGen program. I’ve never seen a coherent FAA answer to the question, “Why not?”

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Alaska and United Diverge on Electrified Aviation

Both Alaska and United plan to electrify their short-haul routes via new and re-powered aircraft, but United also plans eVTOL air taxi services to its larger hub airports.

Alaska is partnering with ZeroAvia in order to retrofit the latter’s liquid-hydrogen fuel cell to power De Havilland Dash 8-400 turboprops. This would be the airline’s first extensive use of electric propulsion. The airline has announced no plans for replacing or re-powering its Embraer E-175 regional jets.

United is investing in the Heart Aerospace 30-passenger hybrid-electric ES-30, with an initial order for 200 and deliveries starting in 2028. They will likely be flown by its regional affiliate, Mesa Air Group. United leadership is also betting heavily on eVTOL air taxis to convey passengers from central cities to their major airport(s). Edward Espiritu, of United’s Ventures and Corporate Development operation, told Aviation Week, “We’re not in it to get cool science projects. We want to invest in commercially viable products and that includes scaling it to an operational level where we can create value and ultimately profitability.”

But with the four-passenger eVTOLs it plans to acquire from Archer and Eve, it’s not clear how large that market will be. It has committed to up to 300 Archer Midnight eVTOLs and up to 400 Eve eVTOLs. Mike Leskinen, head of United Airlines Ventures, envisions competing with UberX for trips between Newark and Manhattan by offering time savings for most of the hour that the trip can take by highway. Leskinen told Aviation Week’s Ben Goldstein, “Tickets may be a bit more expensive at first—we’re thinking business travelers mainly—but we expect it to come down to a price similar to UberX before long.” How an Uber-like fare from between one and four passengers could cover the direct operating costs, landing fees, and annualized acquisition cost is hard to imagine, but it’s not my money.

Electrifying regional turboprops and possibly jets strikes me as far more likely to be commercially viable. As I’ve pointed out before, the huge amount of energy needed for vertical take-off and landing will severely limit most eVTOLs’ range, and their very limited seat capacity will limit their passenger miles per trip. But we’ll see when the best-positioned eVTOLs gain certification and begin carrying paying passengers.

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News Notes

Athens Airport Up for Sale
The Greek government’s asset management fund (HRADF) currently owns 30% of the shares in Athens International Airport. In keeping with the government’s privatization/asset-recycling policy, it has asked HRADF to sell those shares via either an initial public offering or competitive bidding by commercial entities. AviAlliance, owned by PSP Investments, already owns 40% and would have the option to buy another 10% plus one share. Other pre-qualified bidders from an aborted 2019 sale process include Ardian, ADP Group, Ferrovial, Macquarie, and Vinci Airports. The airport served 22.7 million passengers in 2022.

Pacific ANSPs Conduct Trial of Trajectory-Based Operations
The air navigation service providers of Canada, Japan, Singapore, Thailand, and the United States carried out the first multi-region trial of a procedure that coordinates traffic in a performance-based manner, called trajectory-based operations (TBO). Each ANSP developed its own way of implementing TBO and these were modeled in five scenarios involving 10 airports and nine flights traversing selected Flight Information Regions. Aviation Daily reports (Jan. 25, 2023) that the next planned step will be on live flights, for which the time frame is not yet clear.

Newark’s New Terminal A Opens Up Competition
Terminal A, which opened on Jan. 12, is not only larger and better-equipped than the “downtrodden” terminal it replaced, but it also will reduce United Airlines’ dominance of flight activity at Newark Liberty International Airport, Pre-pandemic figure published in Aviation Daily showed United with 51.% of EWR passengers, with American at 6.9%, JetBlue at 6.43%, Spirit at 4.43%, and Delta at 4.21%. The good news is that on opening day Terminal A had 21 common-use gates which Air Canada, American, and JetBlue will use; Delta will be able to expand when the next 12 gates open.

Panama Plans P3 Concessions for Three Regional Airports
Currently, all five of Panama’s commercial airports are run by the Tocumen International Airport Administration (AITSA). Early this month, it announced that it will seek long-term public-private partnerships for three of the airports. The original P3 plan called for concessions for all four of the smaller airports, but after thinking through the use of Panama Pacifico International Airport as an alternative to Tocumen International under certain weather conditions (and its use by low-cost carriers), AITSA will retain control of that airport.

Drone Advisory Group Opposes Drone Toll Lanes
AUVSI, a nonprofit organization focused on autonomous systems, last fall issued a release opposing what it terms a “dangerous trend.” State legislators in Louisiana, Mississippi, Texas, and West Virginia have introduced bills to restrict and tax flights by uncrewed air vehicles. AUVSI calls state bills to allow drone companies to acquire avigation easements from land owners as “the creation of toll lanes in the sky for drones.” This raises an important unresolved question of whether federal or state governments will define and manage low-altitude airspace—and how UAV operators will pay for their use of that airspace.

AENA Invites Financial Partners for Its Brazilian Airports
Last summer, Spanish airport company AENA won an auction for a long-term (30-year) P3 lease to operate, manage, and improve 11 Brazilian airports, paying €736 million as the winning bidder. Inframation reported (on Feb. 6, 2023) that AENA is open to investments by infrastructure funds, pension funds, and sovereign wealth funds in the concession, which is known as the Eleven Airports Block of Brazil (BOAB).

Another Japanese Airport Privatization Candidate
Medium-size Komatsu Airport appears to be close to deciding on following a number of other Japanese airport by opting for a long-term P3 concession. Komatsu handled 1.8 million passengers a year prior to the pandemic, about 14% of them international. The airport has only one runway, which it must share with the Japan Air Self-Defense Force; also, its terminal buildings are 40 years old and “in urgent need of upgrading.” A report on a potential second runway is to be discussed in March, and following that will be a discussion of the airport’s future status.

U.S. Airport Traffic Reached 95% of 2019 Levels in 3Q22
Last month, Fitch Ratings reported its findings on traffic recovery at U.S. airports and toll roads whose bonds it rates. By the third quarter of 2022, the average across all the airport Fitch rates was 95% of the third quarter of 2019. International travel lagged domestic travel recovery, putting hubs such as Los Angeles International, San Francisco International, Dulles International, O’Hare International Airport, and Seattle-Tacoma International all below 90% of 2019 levels. Above average figures were attained by domestic-oriented airports such as Chicago Midway International, LaGuardia, Dallas Love Field, Dallas-Fort Worth, DFW, and Reagan National.

Honduras Gets ADS-B and Multilateration for Newest Airport
For its new international airport serving Honduras’s capital city of Tegucigalpa, the ANSP for six Central American countries—COCESNA—implemented a Frequentis system called Quadrant. It combines ADS-B (via COCESNA’s subscription to Aireon) with wide-angle multilateration (WAM), an alternative to radar. Wide-angle multilateration uses a geographical array of ground stations with minimal maintenance needs. Space-based ADS-B provides quicker updates than radar, but operates only with ADS-B-equipped aircraft. WAM tracks non-cooperative targets as well (akin to primary radar).

Philippines Shifts to Only Partial Privatization at Manila
The long-planned privatization of Ninoy Aquino Airport has been downgraded to just an operations and maintenance contract rather than a long-term P3 concession. A $2.2 billion proposal to modernize the airport, submitted by GMR Infrastructure and Megawide Construction, was rejected by the Philippines government. Terms of reference for the operations and maintenance contract are being prepared.

Boom Breaks Ground on SST Factory
Startup supersonic transport developer Boom Supersonic broke ground for its initial production facility at Piedmont Triangle International Airport in Greensboro, N.C. This development comes prior to Boom’s completion of a flyable prototype or the development of the jet engines the production Mach 1.7 Overture airliner will use.

Delta Brings (Some) Competition to Dallas Love Field
Although it has only one gate at Southwest-dominated DAL, Delta plans to use it more extensively this year than in the past. Starting June 5, it will add twice-daily service to both LGA and LAX. It will also increase the frequency of its daily flights to ATL from DAL. The flights will be operated on Airbus A 310 aircraft with 12 first-class seats, 18 Comfort+ seats, and 102 standard economy seats. Delta is leasing its gate from Alaska Airlines.

Some Well-Informed Perspectives on Autonomous Flight
In a Feb. 3 guest op-ed for the Eno Center for Transportation, NASA-Ames expert Parimal Kopardekar outlines a number of reasons why various aviation automation concepts are being researched and follows this with the challenges each poses to airspace management. This is an excellent primer on the subject and should be read by anyone proposing innovations in this field.

Good Viewing Opportunities

• A brief and very well-done video on the FAA’s NOTAMs debacle was produced by my colleagues in Reason’s journalism division.
• A much longer video is of a recent Commerce Committee hearing about Southwest’s winter problems. The best testimony is from Cliff Winston of Brookings Institution. You can watch it at https://www.commerce.senate.gov/2023/2/executive-session.

Corrections to Last Month’s Issue

• In the article on fledgling U.S. remote tower projects, consultant Bill Payne pointed out that the remote tower project at Leesburg, VA, has received from FAA an “operational viability decision” that allows the remote tower to control traffic without a backup mobile tower (but the RT has still not been officially certified by FAA). The RT project at Loveland, CO, has not yet gotten that far.
• In the article on airline deregulation, the Europoean Union’s 1997 authorization of cabotage rights applied only to EU member states.

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Quotable Quotes

“Aviation watchdog JonNYC notes that there were procedural changes after the [2017] Air Canada near-miss [at SFO], but those changes do not seem to be followed in these two recent incidents. In all cases, the American, Delta, Southwest, and FedEx planes continued to operate. As a result, their cockpit voice recorders—which only capture the most-recent two hours of data—were overwritten. But FAA shouldn’t be allowing this. . . . The FAA’s Air Traffic Organization needs work to avoid situations like these and the FAA—supervising itself—isn’t getting that done. The FAA should not be regulating itself. We need better funding of technology, culture change, and separation of oversight. That doesn’t have to mean ‘privatization.’ The Canadian model is a separate non-profit, but we don’t even have to do that. Just put the Air Traffic Organization into a new separate agency, build the culture [from the] ground up, and do longer-term funding for IT. Have the FAA serve as regulator.”
—Gary Leff, “The FAA’s System for Responding to Air Traffic Control Near-Disasters Is Broken,” View from the Wing, Feb. 7, 2023

“The December travails of Southwest Airlines would be an everyday occurrence if its capital allocation process were as starved and unpredictable as the FAA’s. When Congress appropriates less funding for FAA than is needed to run a full-staffed, safe and efficient operation, FAA has some tools at its disposal, but they can sometimes make the situation even worse. Given a choice between safety and efficiency, FAA will always choose safety, which means they will maximize the funds available for operations. Because FAA cannot, on its own initiative, move funds between its operations budget and the Facilities & Equipment budget, it keeps new systems running out of the F&E budget long after they are fully operational, in order to preserve more funds in the safety-critical operations budget. While definitely the right choice for the airspace system, this practice reduces funds in the F&E budget that Congress and the Office of Management & Budget had really thought would be available for new systems development—like a new NOTAM system.”
—David Grizzle, “The Problems at the FAA Begin Way Outside the FAA,” Aviation Daily, Jan. 25, 2023

“[A] better question than why NOTAM failed might be why the Department of Transportation runs air traffic control in the first place. It is not a public good according to economic theory, and it could easily be provided by the private sector with funding from user fees. Canada adopted a nonprofit, private-sector air traffic control system in 1996 and it has maintained a high level of safety while also modernizing its technology faster than the U.S.—all without costing Canadian taxpayers a penny. One of the biggest problems the FAA faces is having to beg Congress for funding every year rather than having a consistent, user-based revenue stream. . . . Privatization proposals have bounced around for decades and include a 2017 House bill, which received bipartisan support, to create an equivalent to the Canadian system. It’s time to clear the runway for this idea.”
—“The Week,” National Review, Feb. 6, 2023

“Extensive research by ACI World and InterVISTAS has demonstrated the critical need to modernize global policy frameworks on airport charges towards ones that incentivize sustainability, efficiency, investment in infrastructure, and that generate a multiplier of socio-economic benefits and connectivity. In consideration of the changed competitive landscape, it is critical that airport charging policies be focused on market needs and signals, and that the best way forward for the benefit of the traveling public and local communities, is through commercial agreements between airports and airlines.”
—Luis Felipe de Oliveira, ACI World, “Building on the Successes of 2022,” International Airport Review, Dec. 2022

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The post Aviation Policy News: Airlines and FAA ignored rules after near misses on runways, junk fees in Congress, and more 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.

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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.

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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.

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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.

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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.

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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.

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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.

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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)

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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.

• FAA’s NOTAMs debacle
• Why doesn’t FAA’s new control tower plan include remote towers?
• Fixing the Air Traffic Organization’s culture
• Defending and building upon airline deregulation
• Should the government mandate larger airliner seats?
• News Notes
• Quotable Quotes

FAA’s NOTAMs Debacle

On Jan. 11, I was one of the hundreds of thousands of air travelers affected by the Federal Aviation Administration’s (FAA) nearly two-hour ground stop, which led to more than 11,000 flights being cancelled or delayed. The cause was a failure in FAA’s Notice to Air Missions (NOTAM) system. The direct cause was the insertion of corrupt data during an update of the system the previous day. But the underlying cause is an obsolete and dysfunctional system that should have been rethought and replaced decades ago.

Our Notice to Air Missions system is part of an international system (called AFTN), because aviation is international. It is supposed to notify pilots, dispatchers, and others about potential safety hazards at airports and along airways relevant to a planned flight. The international version began in 1920, and the format has remained mostly unchanged since 1924. The world shifted to ASCII (upper and lower case type) in 1963, but the FAA continues to use the teletype-era all-caps format.

The major problem with NOTAMs is information overload. At any given time, FAA NOTAMs may consist of 30-to-100 pages of all-caps text, with no prioritization of what might be a serious hazard and nothing highlighted for a particular air route (e.g., Ronald Reagan Washington National Airport to Miami International). According to an aviation group called OpsGroup, the number of NOTAMs reached 500,000 in 2006 but doubled to one million NOTAMs seven years later, as FAA and other agencies continued to add notifications of things like construction cranes that are far from runways and birds congregating at or near airports. The mindset seems to be, ‘We’d better include it, in case something bad happens, and we get blamed.’

In an online aviation discussion group that I’ve been a member of for several decades, pilots and other professionals offered many critiques of NOTAMs following the ground stop. One airline pilot pointed out that the airline dispatcher’s flight plan for a specific flight extracts for the cockpit crew the departure, arrival, and alternate airports for a specific flight, and arranges the airports’ NOTAM information in flight order, but the all-caps information for each airport is a mish-mash of everything someone could think of that might be relevant, with hazard locations indicated by latitude and longitude, loads of cryptic abbreviations, and no emphasis on what might actually be important. “Hence, flight crews can spend a long time sifting through irrelevant trivia about there being a 150-foot crane a mile from the airport, or the MDA [Minimum Descent Altitude] for a particular [visual] approach on an ILS runway being adjusted from 420 ft. to 425 ft.,” the pilot wrote on the message board.

The most startling thing I found in these discussions is that the ground stop was basically unnecessary. To quote the same pilot, “Most of the active NOTAMs will have been issued days or even weeks before, so the pilots could actually have been given the previous day’s NOTAMs and just been updated with any new stuff on that day.”

In subsequent online discussions, estimates of the number of flights that could have proceeded had this decision been made ranged from 80% to 99% of that morning’s flights.

FAA’s NOTAM system is a disgrace, yet there is no announced plan to replace its obsolete computers, its ancient all-caps type, and its failure to highlight relevant safety hazards. The agency’s 2015 “FAA Resiliency Assessment Report” listed 32 air traffic control-related systems that needed change to ensure their resiliency; NOTAM was not included.  In a Jan. 12 Reuters article, David Shepardson noted, “FAA has been trying to modernize the Notices to Air Mission (NOTAM) system,” but so far, the only tangible result has been changing its name to replace “Air Men” with “Air Missions.” That says something about FAA priorities.

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Why Doesn’t FAA’s New Control Tower Plan Include Remote/Digital Towers?

The winter issue of Managing the Skies, the magazine of the FAA Managers Association, includes a lengthy article on the extra money Congress allocated to the Federal Aviation Administration (FAA) via the Infrastructure Investment & Jobs Act (also often referred to as the bipartisan infrastructure law). One section of the article, “Building a New Generation of Towers,” describes FAA’s plan to replace 30 smaller control towers by 2030. It discusses the agency’s recently launched Sustainable Tower Design Initiative intended to “tap innovative minds in private industry and academia…for new approaches both to design and to rapid construction.”

The article recounts an early 1960s effort that tapped major architectural firms to develop ever-grander monuments. Alas, there is not a word in this article about remote/digital towers, and this concept is also absent from FAA’s description of the program.

Remote/digital towers are certified and in operation in half a dozen European countries. They dispense with towering buildings in favor of using an array of cameras and other sensors at various locations at an airport to feed panoramic displays in a control room either on the surface or securely underground. These facilities cost a lot less to build and maintain. They also provide better performance, for example, with infrared cameras that can see approaching aircraft through low clouds, fog, and rain. They can also electronically tag aircraft viewed on the panoramic screens, and do many other things better than 20th-century “towers.”

For replacing 30 towers at smaller airports, another possibility for low-activity airports is to control several such airports from a single remote tower center (RTC). Such RTCs are certified and in operation in Germany, Norway, and Sweden and are under development in several other European countries. Whether at single airports or for groups of several, installing digital/remote towers would be faster and less costly than constructing new 20th-century towers.

Although Congress in 2018 authorized FAA to start implementing remote towers, no such projects are under way. Two state-funded remote towers have been built and are in partial operation in Leesburg, VA, and Loveland, CO. These projects began in 2015 and 2014 and have been ready for full operation for years—but are still not FAA-certified. The agency has cooperated with the project developers and has loaned some controllers, but the endless delays in certification are beyond comprehension.

Last summer, at the U.S Contract Tower Association meeting, FAA Air Traffic Organization’s (ATO) Jeffrey Vincent told attendees that “remote/digital towers are the future.” At that time, he was ATO’s Vice President for Air Traffic Services. Recently, he was shifted to being executive director of ATO’s Drone Integration Office. The “30 by 30” program would appear to be a good fit for remote/digital towers. It would be more credible if FAA finally certified the remote/digital towers at Leesburg and Loveland. And it might help if Congress, in the 2023 FAA reauthorization bill, imposed a date after which FAA could no longer build towering edifices.

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Fixing the Air Traffic Organization’s Culture

The Notice to Air Missions (NOTAMs) fiasco and the Federal Aviation Administration’s (FAA) continued failure to embrace remote/digital towers are examples of a serious organizational problem. Congress created the Air Traffic Organization (ATO) in 2000, hoping that instead of being a cautious bureaucracy, it would become a “performance-based organization,” operating more like a Silicon Valley tech company to produce the world’s best, most-advanced air traffic control (ATC) system. As two decades of Government Accountability Office (GAO) and Department of Transportation (DOT) Inspector General reports have since documented, U.S. air traffic control has not been transformed. Other developed countries have pioneered remote towers, electronic flight strips, space-based ADS-B surveillance, and much more.

In 2012 the Hudson Institute commissioned me to do a peer-reviewed study of innovation within the FAA’s air traffic control system. My 54-page report was published by Hudson in Jan. 2014 (and is also available on the Reason Foundation website).

In the report, I examined seven case studies of air traffic control innovations (including controller-pilot data link, GPS landing systems, space-based ADS-B surveillance, and remote towers). In each of the seven cases, these innovations were developed and implemented sooner in other countries than in the United States (and some have still not been implemented here).

The report next offered several hypotheses to explain this difference in performance, noting that the peer countries that innovated faster and better had all separated their ATC function from their transportation agency and aviation safety regulator. The hypotheses were the following:

ATO identity as a safety agency, rather than a technology service provider. The hypothesis was that being embedded in a safety regulatory agency, rather than being regulated by it at arm’s length (as all the other aviation participants are) created an overly cautious organizational culture that is slow to implement innovation.

Loss of technical expertise. FAA engineers and software people are paid per standard federal general schedule pay categories, and work in what is, in fact, a very large bureaucracy. It is hardly surprising that many of the best and brightest can (and do) find greater satisfaction and higher pay by transitioning to private industry. This ends up putting the ATO at a disadvantage in dealing with large aerospace contractors, who sometimes design and develop more elaborate and expensive ways of meeting the ATO’s requirements.

Loss of managerial expertise. Despite Congress mandating “procurement reform,” the ATO’s procurement record features many projects that go far over budget and whose delivery extends over many years. As with engineers, the same differences in compensation and working environment lead to the best program managers being hired away by aerospace companies.

Excessive oversight. In conversations with individuals who previously served as ATO chief operating officer, I was often regaled with their frustration of having to pay attention to too many overseers: the Secretary of Transportation, the FAA Administrator, the Inspector General, GAO, Congress’s authorizing committees, Congress’s budget committees, etc. This problem applies to FAA itself as well as the ATO.

The assembled peer reviewers, all with considerable aviation and government experience, judged all four of these causes as significant, and they were generally positive about the reforms that I proposed. They were:

1. Separate the ATO from FAA, putting ATO at arm’s length from the safety regulator, as is now the case in nearly all first-world countries, and has been International Civil Aviation Organization (ICAO) policy since 2001. The potential for organizational culture change would be greater if the new ATO were located somewhere other than in the FAA building—perhaps across the Potomac in a Virginia suburb.
2. Shift from aviation user taxes to direct funding, similar to airports charging landing fees, rents, etc. This would be analogous to other federal entities that provide services to customers, such as the huge electric utility Tennessee Valley Authority. With its own revenue stream, the new ATO could issue long-term revenue bonds, like airports and electric utilities do, so that large capital modernizations could be financed up-front, rather than being paid for out of annual cash flow, which leads to very long periods to get improvements implemented systemwide.
3. Change the governance model. Whether new ATO would be structured as a government corporation (as proposed by the Clinton administration) or a nonprofit federally chartered corporation is a decision to be debated. Both models exist in high-performance air navigation service providers overseas.

These changes are not an all-or-nothing proposition. In a 2010 article in The Journal of Air Traffic Control, former FAA Administrator Langhorne Bond and I made a stand-alone case for simply separating the ATO from FAA, making the ATO a separate federal entity, located outside Washington, DC, regulated at arm’s length by FAA (as it regulates airports, airlines, etc.). We argued that “a separate ATO would be in a much stronger position to advocate for timely implementation [of new technology] and to carry this out in a timely and cost-effective manner.”

In other words, we think separation has a good chance of leading to a more businesslike organizational culture, consistent with the new ATO becoming a high-tech service business serving aviation customers. That paper, with slight updating, was posted on the Reason Foundation website.

This is not a call to revisit air traffic control corporatization, as was debated in 2017-18 and which failed to get beyond the House Transportation & Infrastructure Committee. The coalition that backed the bill no longer exists and shows no signs of being rebuilt. Moreover, someone inserted in the huge year-end budget omnibus bill a sentence saying, “The agreement does not support any efforts to transfer the FAA’s air traffic functions to a not-for-profit, independent, private corporation.”

But as Bond and I argued in the above paper, arm’s-length separation between FAA and the ATO would remove a potential conflict of interest (self-regulation of ATC safety), be consistent with ICAO policy and global practice, and at least offer the possibility of leading to a more entrepreneurial organizational culture. That would be a meaningful reform to include in this year’s FAA reauthorization.

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Defending and Building Upon Airline Deregulation
By Marc Scribner

FAA’s NOTAM system failure (discussed in detail in this issue’s lead article) has prompted a variety of responses, many of which misapprehend the problems faced by the aviation system and would be counterproductive if implemented. One example was an op-ed published in The New York Times by William J. McGee, a former longtime travel reviewer at Consumer Reports who is now employed by the American Economic Liberties Project, a progressive advocacy organization focused on discarding the consumer welfare standard as the lodestar of U.S. competition policy.

McGee argues that the Airline Deregulation Act of 1978 was a mistake and that the U.S. should return to something closer to the pre-deregulation environment, when interstate air travel was operated as a government-controlled cartel. This runs counter to the evidence on airline deregulation, but McGee is right to suggest that Congress should consider new reforms to improve air travel. However, contra McGee, Americans would be far better served by preserving the gains of the Airline Deregulation Act while also extending deregulation to recognize the global nature of the industry in the 21st century.

In the early 20th century, U.S. aviation policy largely focused on the carriage of mail for the Post Office. After the Postmaster General attempted to cartelize air mail providers in the early 1930s, the resulting national scandal led to a revamp of aviation regulation. This culminated with the Civil Aeronautics Act of 1938, which authorized the regulation of airfares, routing, mail rates, and safety. Soon after, regulators grandfathered the existing 23 carriers into the system, establishing and enforcing a new cartel of long- and medium-haul interstate trunk carriers that were shielded from market entry and price competition.

But the federal cartel did not apply to intrastate air travel. In 1949, Kenny Friedkin founded Pacific Southwest Airlines (PSA) to operate exclusively within California as a charter carrier. Since PSA did not operate across state lines, it was exempt from the heavy-handed economic regulation of the federal Civil Aeronautics Board (CAB) and instead operated under the authority of the more-lenient California Public Utilities Commission.

This exercise in regulatory arbitrage led to PSA becoming the first scheduled low-cost carrier. By the 1950s, PSA was offering airfares between Burbank and San Francisco for roughly $10, or approximately $100 in today’s dollars. For comparison, the airfares between Boston and Washington, which were about the same distance apart but served only by CAB-regulated trunk carriers, were more than twice as expensive as PSA’s fares. Friedkin’s success with PSA inspired Herb Kelleher to cofound Southwest Airlines in 1966 as a PSA-style intrastate carrier in Texas.

But it wasn’t just would-be regional carrier entrepreneurs taking notice of PSA’s low-cost model. Academic researchers were growing increasingly concerned that federal economic regulation’s focus on protecting incumbent trunkline carriers from competition was harming the welfare of American consumers.

One of those academics was future Supreme Court Justice Stephen Breyer, then a young Harvard Law School professor, who was hired by Sen. Edward Kennedy to advise his Judiciary Committee on airline competition and regulation. Another academic, economist Alfred Kahn of Cornell University, was appointed by President Jimmy Carter to chair the CAB in 1977. Kahn is widely known as the “father of airline deregulation” for leading the Carter administration’s role in developing the Airline Deregulation Act of 1978, which ultimately abolished the CAB that he chaired at the time.

The results of the Airline Deregulation Act have greatly benefited U.S. air travelers. Inflation-adjusted average domestic airfares fell 47% between 1978 and 2022, while passenger volumes tripled, rising more than four times faster than population growth. About 50% of scheduled interstate flights are now operated by what remains of the legacy trunk carriers, down from 100% in the pre-deregulation years. The rest are primarily operated by low-cost and ultra-low-cost carriers, which now put most of the downward pressure on airfares through aggressive price competition and route entry that was outlawed prior to the Airline Deregulation Act.

While less competition and higher prices would result from McGee’s prescription, a better approach would be to build on the success of airline deregulation by extending it to foreign carriers. The European Union fully authorized cabotage rights—the operation of domestic routes by foreign-flagged carriers—in 1997. The explosive growth of low-cost carriers such as Ryanair and EasyJet followed the European Union’s liberalization policies, and European air travelers now enjoy far greater access to popular destinations at much lower prices. Freeing the U.S. airline market to evolve to its global potential would likely generate significant benefits for travelers. But for this to occur, policymakers must correctly identify existing barriers to competition rather than resurrecting barriers from the past.

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Should the Government Mandate Larger Airline Seats?

In the 2018 FAA reauthorization act, Congress required the Federal Aviation Administration (FAA) to “issue regulations that establish minimum dimensions for passenger seats . . . including minimums for seat pitch, width, and length that are necessary for the safety of passengers.” FAA has not issued such regulations, based on its contention that no connection between seat size and emergency evacuation has been demonstrated. But with ongoing litigation over this by FlyersRights.org, the agency is seeking comments on standards for emergency evacuations.

Having grown up in an airline family, I recall hearing about airline employees being recruited for evacuation tests. In those days, the requirements for those tests were less stringent than today’s—there were no requirements for balanced demographics, for example. Today’s Part 25 (of Federal Air Regulations) spells out age and sex requirements, requires dolls to be used to simulate infants, forbids using certain categories of airline employees from playing the part of passengers, and includes requirements such as that only half the available exits may be used and using only onboard emergency lighting.

Yet there will always be problems with such evacuation tests. Those taking part know why they are there (hence, are unlikely to panic), know they will have to jump feet-first into a chute, will not have carry-on bags to worry about (or try to bring with them). The requirement is to evacuate the entire flight in 90 seconds, and somehow the tests seem to show that this is being accomplished in not-totally realistic tests.

There is less empirical data on this subject than we’d like. Back in 1993, the (now-defunct) federal Office of Technology Assessment (OTA) released a background paper, “Aircraft Evacuation Testing: Research and Technology Issues.” The report noted that evacuation tests are costly and “expose participants to significant hazards,” including injuries. They also simulate “only a narrow range of emergency conditions.” Also, the evacuation demonstration criteria “are inflexible, regardless of technologies that could extend the period of survivability within the cabin.”

A significant problem OTA pointed out is that human behavior in an actual emergency situation “cannot yet be reliably simulated,” and then-emerging dynamic simulations would need to be validated via psychological data that “will be difficult to obtain.” The report also noted that survivability is improving, thanks to highly fire-resistant materials and more crashworthy seats, restraints, and overhead bins.

Adding to the pressure for change, Sen. Tammy Duckworth (D-IL) plans to introduce a provision in the forthcoming FAA reauthorization bill to revamp evacuation standards to include disabled passengers, the hearing-impaired, the young and the old, and non-English speakers. A Politico report on this effort noted that a 2019 FAA Civil Aerospace Medical Institute study found that current seat dimensions had no impact on evacuations for 99% of able-bodied Americans. But the evacuation tests on which that conclusion was based included only able-bodied adults 18 to 64—no children, older people, or disabled people.

Yet carrying out realistic evacuation tests involving children, the very elderly, and people in wheelchairs raises serious ethical and safety questions. Yet without data, any new policies will be based on good intentions and impose large costs on airlines, which will ultimately be paid for via fare increases.

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News Notes

Skycraft Plans Space-Based ADS-B Service
A Canberra-based company, Skycraft, has reached an agreement with Airservices Australia to launch and operate a 200-satellite constellation to improve ADS-B coverage in Australia and its oceanic airspace. The first satellites are scheduled for launch this month via a SpaceX Falcon 9 launch vehicle from Cape Canaveral. The service will include controller-pilot communications in addition to ADS-B surveillance. Skycraft is the first competitor to the pioneer of space-based ADS-B, U.S.-based Aireon.

FAA Issues Airworthiness Criteria for Archer’s eVTOL
On Dec. 19, FAA issued the airworthiness criteria that Archer Aviation’s eVTOL air taxi must meet in order to operate. The company said it hopes to win that certification by late 2024. Archer’s prototype achieved its first transition from vertical to forward flight on Nov. 29. In addition to airworthiness, Archer will also need certification of its manufacturing, which it plans to carry out via auto company Stellantis, which has never built an aircraft.

Two Airport P3 Wins for Turkey’s TAV Airports
TAV, partly owned by Aeroports de Paris, has won a 25-year extension of its concession to operate Ankara’s Esenboga International Airport. The new concession will expire in 2050. TAV has agreed to invest €300 million to add a new runway, control tower, and cargo facilities. The airport served 7.9 million passengers in 2021’s first 11 months. Earlier this year, a consortium led by TAV reached financial close on the new Antalya Airport concession.

Major New Airport Opens in India
Early this month India’s newest greenfield airport opened. New Goa Airport (GOX) has an initial capacity of 4.4 million passengers; its ultimate capacity after several planned expansions will be 13.1 million passengers. It has been financed and developed under a 40-year P3 concession by GMR Group. Three Indian airlines are scheduled to begin service at GOX this month. Goa is one of the largest tourist destinations in India.

Bidders Lining Up for Paris Region Airport Concession
Inframation reported (Jan. 5) that major airport companies Vinci, Eiffage, Egis, and Bouygues are among those considering bids on Paris Beauvais Airport. The 30-year P3 concession has an estimated value of €4 billion. The airport served 4.6 million passengers in 2022. The current 15-year concession expires in June, and the RFP is to be released in February. Beauvais Airport is 80 km north of Paris, and was France’s 10th busiest airport in 2019.

Digital Towers and UTM Partnership Announced
In December, remote/digital tower pioneer Saab and UTM pioneer Altitude Angel announced a joint venture. Saab will integrate Altitude Angel’s Guardian UTM services into Saab’s r-TWR next-generation digital tower. Richard Ellis of Altitude Angel told Air Traffic Management that via the partnership, “Saab will be able to provide Digital Towers which are equipped and ready for our future skies, as the use of drones increases and Urban Air Mobility through eVTOL aircraft becomes a day-to-day occurrence.”

Airbus Plans High-Altitude 5G Service
Rural areas may have an alternative to costly 5G cell towers if Airbus succeeds in offering such service via high-altitude solar-powered aircraft. The vehicle called Zephyr is designed to stay aloft for months at altitudes in the 60,000 ft. range, electrically powered via solar cells. The company’s three prototypes have had several years of high-altitude testing, with the longest duration being 64 days. The concept is called high-altitude pseudo-satellite (HAPS), and Airbus is one of a number of would-be providers. Airbus’s  Samer Halawi told Aviation Week that providing 4G/5G service in rural Mexico would cost less than half as much as using (currently non-existent) cell towers.

Joby Completes Second FAA Review
Last month Joby Aviation completed the second of four FAA system reviews for its S4 eVTOL. This “system review” is aimed at evaluating the “overall architecture of the aircraft and ensure the company’s development process is on track to satisfy FAA’s safety objectives associated with complex aircraft systems.” Joby aims to certify the S4 by late 2024. Since Joby will be manufacturing the S4 itself, its manufacturing system must be certified, in addition to the S4’s airworthiness.

Boom Selects Custom Team to Develop Supersonic Engine
In a surprise December announcement, Boom Supersonic announced that the engines to power its Mach 1.7 aircraft will be designed by Florida Turbine Technologies, a relatively new company formed by former Pratt & Whitney engineers. Manufacturing will be done by GE Additive division of GE Aerospace, while maintenance, repair, and overhaul will be done by Standard Aero, which handles those tasks for military F110 supersonic jet engines. The first flight is now estimated at 2026, with Boom aiming for FAA certification in 2029.

Graves Undecided on User Fees for New Entrants
In a Dec. 14 interview with Politico, Rep. Garret Graves (R-LA), who will chair the House Transportation Committee’s Aviation Subcommittee, expressed uncertainty about including some kind of user fee requirement for new users of the airspace, such as drones, eVTOLs, very high altitude aircraft, and space launch and recovery. While agreeing on the subject’s importance, Graves said he is “absolutely not ready” to commit to any specifics prior to discussions with tax-writing committees and subject-matter experts.

Virgin Islands Plans Airport P3s
The U.S. Virgin Islands Port Authority (VIPA) has released a Request for Qualifications for a P3 concession to modernize and operate its airports on St. Thomas and St. Croix, which it describes as having “outdated facilities and unpleasant conditions” in their terminals. Qualifications from potential bidders are due March 16, and VIPA hopes to issue an RFP to a short-list of best-qualified teams by mid-March and a preferred team selected by Jan. 2024. Operators must have experience with airports handling at least 1 million annual passengers.

Bidders Lining Up for Greek Regional Airport
Four teams have submitted expressions of interest for a P3 concession to develop and operate Kalamata International Airport, the first of 23 regional airports to be concessioned. The four teams are headed by Aeroports de la Cote d’Azur, Fraport, GMR Airports, and Corporacion America Airports. Kalamata served 341,000 passengers in 2019, mostly from abroad.

Raytheon Testing Hybrid-Electric Propulsion
For planned testing of hybrid-electric propulsion in a converted DeHavilland Dash 8-100 turboprop airliner, Raytheon has begun ground-testing of its integrated power train. It consists of a one-megawatt electric motor and a Pratt & Whitney turbine powerplant adapted for hybrid operations. While these ground tests are going on, another alternative has begun flight testing at Moses Lake, WA. Universal Hydrogen has installed a one-megawatt powertrain driven by a hydrogen fuel cell, powering a Dash 8-300 aircraft.

London City Airport Seeking OK for Nine Million Passengers
Privately owned London City Airport has asked the United Kingdom’s government for an increase in its annual passenger cap from 6.5 million to 9 million. Final passenger numbers for 2022 are expected to be 3 million, with projected traffic back to pre-pandemic five million by 2024. It could exceed its current 6.5 million cap by the mid-2020s and hit nine million by 2031. Based on survey data from local stakeholders, London City will minimize early morning and late evening flights.

Brisbane Considering a Third Terminal
Australia’s Brisbane Airport Corporation (BAC) is discussing the addition of a third terminal with its airline customers. The airport handled 23 million passengers in 2019, and its projections show 50 million by 2040. BAC is anticipating the 2032 Summer Olympics to be held in Brisbane. Current plans call for investing $3.3 billion to upgrade its two existing terminals over the next decade, but BAC expects the third terminal will be needed to properly handle 2032 traffic.

Commercial Space Video
My colleagues at Reason TV interviewed me about my recent Reason article contrasting NASA’s method of operation and that of the emerging commercial space launch industry. They produced an excellent documentary, released around the time of NASA’s Artemis 1 launch. You can watch it on Reason TV or on its YouTube channel.

Correction to Last Month’s Article in FAMs
In the Dec. 2022 issue’s article about TSA’s Federal Air Marshals, I erred in stating that the United States and Israel are the only two countries with a program of armed guards on some commercial aviation flights. Reader Tom Windmuller emailed to inform me that Turkey also operates such a program, of which I was not aware.

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Quotable Quotes

“[T]here’s no question in my mind that the ATC system is antiquated and is not taking advantage of new technology. To quote Peter DeFazio, this whole ‘NextGen’ in many cases, we’re implementing technologies from the ‘90s, and Peter calls it ‘NeverGen.’ It’s [about] having a more agile system because technology is just going to move even faster. So how do we have a system in place in regard to training, in regard to procurement, in regard to testing, to where we can continue to take advantage of newer technologies and more-efficient systems.”
—Rep. Garret Graves (R-LA), in Oriana Pawlyk, “Politico Pro Q&A: Rep. Garret Graves, ranking member, House Transportation Aviation Subcommittee,” Politico Pro Transportation, Dec. 26, 2022

“The market for 30-seat aircraft is going to be a magnitude higher than the market for 19-seat aircraft. There’s just a lot more utility—and given the constraints that airports are going to face with growing demand—a lot more appetite for 30-seat aircraft. You can fly a lot more routes profitably, and so we were more than advocates—we were insistent that the move up to 30 seats [by Heart Aerospace] was the right decision. Once we laid out the logic to Anders [Forslund] and his team at Heart, they were all in.”
—Mike Leskinen, United Airlines VP, Corporate Development, in Ben Goldstein, “United Exec Hints at Stretched Heart ES-30 Variants,” Aviation Daily, Dec. 23, 2022

“Why address this question [airline ownership and control] via ICAO at all? This is a question for like-minded states and groups of states. In 2009 IATA launched its Agenda for Freedom, as a platform for like-minded states to mutually exchange waivers of the requirements. This was fully supported by the European Union, as well as 10 states, including, interestingly, the USA. Those were different times. The USA has been the go-to stop-the-conversation-stone-dead answer whenever this issue has been considered in the past. This was on the back of an unholy alliance of engineers and pilots who saw their jobs disappearing, on the one hand, and the military on the other, which argues that they need the right to requisition [U.S.] aircraft capacity at any time to move troops.”
—Andrew Charlton, “Who Owns Ownership and Control?” Aviation Intelligence Reporter, Nov. 2022

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The post Aviation Policy News: FAA’s debacle, new air traffic control tower plan, and more 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.

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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.

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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.

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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.

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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.

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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

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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

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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.

• Electric hybrids—an overlooked market?
• FAA’s eVTOL regulatory framework takes shape
• New propaganda from Federal Air Marshals
• J.D. Power annual airport ratings
• A possible breakthrough in sustainable aviation fuel
• Does aviation face a “climate crisis”?
• News Notes
• Quotable Quotes

Electric Hybrids—An Overlooked Market?

I continue to puzzle over the hype about tiny electric vertical take-off and landing aircraft (eVTOLs) as the coming revolution in aviation. To be sure, the idea is cool, and it increasingly appears to be technically feasible. All-electric means no vehicle emissions (despite the carbon footprint of battery production and disposal). And eVTOLs seem likely to be far quieter than helicopters, whose market they will likely challenge.

But as I’ve written previously in this newsletter, we have yet to see a business model that justifies the mass production of four-passenger commercial air vehicles just because the technology works. Consider these shortcomings—Four passengers mean very few fares, even at 100% load factor, from which to recover capital and operating costs. Short range, in most cases, is also a serious limitation for cost recovery (10-mile trips versus 300-mile trips). And insisting on vertical take-off and landing uses a huge amount of energy that might be better used for much greater range.

These considerations lead me to think there’s likely more of a market niche in larger aircraft (19 passengers and up) with longer range (at least several hundred miles) to fill a very real emerging need: short/medium-haul regional air service. While today’s batteries cannot meet those requirements, a hybrid conventional take-off/landing concept appears to be quite feasible. Here are brief profiles of companies pursuing such aircraft.

Ampaire is a start-up that last month flew a nine-passenger Cessna Caravan that it converted to hybrid-electric propulsion. The company hopes to get Federal Aviation Administration (FAA) certification for its Eco Caravan in 2024. Ampaire Chief Executive Officer Kevin Noertker pointed out to Aviation Week’s Graham Warwick that most airports don’t have electric charging infrastructure and won’t have it for some time. So hybrid electric is the way to begin the decarbonization of aviation. He says the hybrid design (diesel plus battery/motor) reduces fuel consumption and emissions by 50%-70%. And the maximum range of the aircraft is beyond 1,000 nm.

Making its first flight in September was the all-electric Alice prototype developed by startup company Eviation. It has been designed for low drag and is powered by two Magni650 electric propulsion units driving two aft-mounted propellors. It is can carry nine passengers and has a range of 440 nautical miles. That’s dramatically higher than any of the four-passenger eVTOLs, suggesting the very large difference in capacity and range enabled by foregoing vertical takeoff and landing. Eviation is aiming for 2024 certification. Like Ampaire’s plane, it can use normal aircraft certification thanks to not employing powered vertical lift.

Nine passengers are better than four, but for short/medium regional service—the niche that very definitely needs filling—30 passengers would be far more important. This brings me to the Swedish startup Heart Aerospace. Its clean-sheet-design ES-30 electric aircraft is configured for 30 passengers. With its 5.5 metric ton battery pack, its range is 200 kilometers (124 miles). But with the addition of a range-extender consisting of two turbogenerators, it can fly 248 miles with 30 passengers or 497 miles with 25 passengers. Unlike smaller hybrids, the ES-30 is pressurized and has three-abreast seating, a galley and lavatory, and overhead bins. Heart has had serious discussions with United and Mesa, both of which have invested in it, as have Air Canada and Saab.

At least three U.S. airlines have invested in hydrogen-electric developer ZeroAvia: Alaska, American, and United. ZeroAvia is developing hydrogen fuel cell powertrains to replace the conventional engines of turboprop and regional jet aircraft in the 50 to 80-passenger range. The company plans test-flying the system on aircraft such as the Dornier Do 228, Cessna Caravan, and DeHavilland Twin Otter. It is aiming for certification by the late 2020s. At this point, hydrogen fuel cells are a technically riskier proposition than hybrid-electric aircraft.

Were I wealthy enough to be an angel investor, I’d be far more disposed to put my money into companies developing hybrid electric aircraft serving regional airline markets than into eVTOLs serving yet-to-be-invented markets.

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FAA’s eVTOL Regulatory Framework Takes Shape
By Marc Scribner

Emerging electric vertical take-off and landing (eVTOL) developers have set ambitious deployment timelines, such as Joby Aviation’s target service launch in 2024. But as with other new entrants, FAA’s rules governing conventional aviation need to be modernized for these novel aircraft types to be integrated into the National Airspace System. While full airspace integration will likely take many years, FAA has recently begun the process that may allow it to meet the eVTOL industry’s aggressive timelines.

Developers of eVTOL aircraft promise to combine the versatility of helicopters with affordability and lower noise profiles, which would allow them to compete with conventional surface transportation options. Joby, a leading developer in the eVTOL and advanced air mobility (AAM) industries, has conducted acoustic flight testing with NASA. A May 2022 NASA study found that Joby’s eVTOL prototype emitted noise profiles during takeoff, cruising, and landing far below today’s acceptable cityscape sounds, and at cruising would likely be imperceptible against urban background noise. As for affordability, Joby and competitor Wisk Aero are targeting a ticket price of $3 per passenger-mile, which would put eVTOL AAM service within striking distance of Uber’s pricing for conventional surface street ride-hailing and with much shorter trip times.

That said, there are numerous technical and business challenges that must be addressed before an optimistic AAM scenario can become reality. And aside from these, a regulatory and air traffic management framework must exist to allow for eVTOL deployment at scale, accounting for both the airworthiness of the aircraft and business operations.

The first step is aircraft airworthiness certification. Last month, FAA issued a notice of proposed airworthiness criteria for Joby’s JAS4-1 eVTOL aircraft. The JAS4-1 would be operated with a single pilot onboard under visual flight rules. If FAA’s proposal is finalized quickly, it may enable Joby and others to meet their near-term deployment targets. While some in the industry had previously raised concerns about FAA’s decision to base initial eVTOL airworthiness certification on Part 21.17(b) Special Class rules that do not readily comport with international standards, past skeptics seem to have been won over by FAA’s approach of building on these early type-specific eVTOL airworthiness criteria toward generally applicable Part 23 Normal Category certification standards.

Following airworthiness certification, FAA must separately certify eVTOL operations. One of the biggest regulatory hurdles for eVTOL developers hoping to operate commercial AAM services was FAA’s existing Part 135 air carrier and operator regulations, which did not allow for the certification of powered-lift operations like those provided by eVTOL aircraft. Fortunately, FAA earlier this month published a notice of proposed rulemaking to update Part 135 air carrier definitions to explicitly include powered-lift operations. If finalized, assuming technical and business challenges are met, Joby and others may be able to achieve their mid- to late-decade commercial operations targets.

With an FAA reauthorization due by the end of Sept. 2023, Congress has indicated that it plans to address eVTOL and AAM, perhaps through a dedicated “new entrants” title to the law. To date, Congress has primarily focused on interagency coordination and infrastructure needs, such as AAM vertiports, but it may choose to examine more granular airworthiness and operations certification issues.

With respect to the congressional direction of eVTOL and AAM airworthiness and operations certification, it is important to understand that legislators possess few tools to speed up internal FAA integration efforts. In addition, due to strained staff capacity on key congressional authorizing committees and the limited technical backgrounds of those overworked staffers, this work would likely be farmed out to external stakeholders and experts. What could result from these potential political deliberations would be anyone’s guess.

The uncertainty inherent in this approach to policymaking should give AAM advocates pause as they ramp up their education and lobbying efforts to Congress ahead of FAA reauthorization. While AAM enthusiasts may be frustrated by the often-slow pace of FAA decision-making, key regulatory decisions affecting developers may be better coming from expert regulators at FAA rather than congressional sausage-making. Even those most skeptical of FAA’s current approach to AAM should appreciate that it is often better to work with the devil you know than the devil you don’t.

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New Propaganda from Federal Air Marshals

American Military News reported that a handful of federal air marshals (FAMs) are threatening to resign if they are ordered by the Department of Homeland Security (DHS) to be sent to the country’s southern border to back up Border Patrol agents. The publication cited an article in the Washington Examiner dating an initial DHS request to FAMs to volunteer for border duty in mid-2021. Reuters reported that fewer than 150 had volunteered and that DHS has begun assigning federal air marshals to border duty.

And this led to a clever propaganda ploy by the Air Marshal National Council. After warning DHS and FAMs Director Tirrell Stevenson that FAMs will refuse orders for border duty, the organization’s public message is that this diversion of FAMs means that 99% of U.S. airline flights would be unguarded. That scary-sounding message led to Fox News and several House Republicans raising alarms about “creating a massive risk to public safety.” That rhetoric ignores the fact that the vast majority of U.S. flights do not have federal air marshals on board—a maximum of 8% ever do. It also ignores the fact that the only known country that has a comparable program of armed security officers on airline flights is Israel, which has faced far more serious threats to aviation over many decades. And it also ignores the fact that no FAM has ever interdicted a would-be terrorist on an actual airline flight.

And that’s just for starters. As I most recently reported in the story on secondary cockpit barriers (Sept. 2022 issue), the best analysis of onboard airliner security measures finds the cost of U.S. air marshals to be vastly more than any realistic estimates of their benefit to aviation security. In their 2018 book Are We Safe Enough? Mark Stewart and John Mueller calculated the benefit/cost ratio of the FAMs program to be 0.03—meaning that each dollar spent on FAMs yields only three cents worth of benefits. By contrast, adding a secondary barrier to protect the cockpit when the armored door has to be opened has a benefit/cost ratio of 41. One reason for this huge difference is that a secondary barrier is a modest one-time cost, while the FAM program consumes about $1 billion of the Transportation Security Administration’s budget every year. It also costs the airlines the loss of revenue from two front-cabin seats for each flight that has FAMs aboard.

Fox News and the Washington Examiner should apologize for misinforming viewers and readers by accepting at face value the federal air marshals’ highly misleading propaganda.

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J.D. Power’s Annual Airport Ratings

Once again, analytical firm J.D. Power has released its annual ranking of North American airports. The company assigns scores for six aspects of each airport: terminal facilities, airport arrival and departure, baggage claim, security check, and food/beverage/retail offerings. With a maximum of 1,000 points, the highest score among the “mega” airports was 800 points—earned by Minneapolis-St. Paul International Airport (MSP). In the “large” airport category, the top scorer was Tampa International Airport (TPA) at 846 points. And in the “medium” airport category, the winner was Indianapolis International Airport (IND) with 842 points.

As the above scores suggest, large airports tended to score higher than mega airports, which might suggest some dis-economies of scale. It’s also interesting to see how airports that scored below the average score in each category did. In the mega category, the average for the lower half was 755, compared with an average of 786 for the eight above-average mega airports. The lowest of the below-average mega airports was—you guessed it—Newark Liberty International Airport (EWR) at just 719 points.

In the large airport category, the average score was 804, compared with 762 for those in the bottom portion of this category. The lowest-ranked large airport was Philadelphia International (PHL) at just 729 points.

A well-known airport 2008 economic productivity study in the Journal of Urban Economics analyzed a global set of 109 airports. It found that the most-productive airports were those with partial or total control by private investors, with the second-best set-up being airports operated by airport authorities. After that came airports operated by city, county, or state/province governments—and bringing up the rear were airports operated by multi-purpose port authorities.

With the airports divided into groups this way, mega airports run by airport authorities averaged 801 points in the JD Power rankings, airports run by government departments averaged 797 points, with airports run by port authorities in last place at 790. For the large airports, the average scores were 769 points for airport authorities, 759 for government departments, and 755 for port authorities. Though both distributions are consistent with the journal article’s findings, the differences are small and likely not statistically significant. Unfortunately, there are no privatized U.S. mega, large, or medium airports for comparative scoring.

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A Possible Breakthrough in Sustainable Aviation Fuel

One of the problems with projections being made by global climate models is that—of necessity—they assume existing technology. If major breakthroughs in energy sources or propulsion technology emerge 10 years from now, that’s not possible to include in today’s models’ scenarios.

One potential breakthrough in sustainable aviation fuel (SAF) was announced on Nov. 29 by Worcester Polytechnic Institute (WPI), whose news release was headlined, “WPI Researchers Create Method for Making Net-Zero Aviation Fuel,” and was discussed in an Aviation Daily article on Dec. 6.

The research by WPI researchers Jagan Jayachandran and Adam Powell is a potential aircraft fuel composed of magnesium hydride mixed with conventional hydrocarbon fuel. The products of combustion would be magnesium oxide nanoparticles, water vapor, and (yes) CO2, but that’s not the end of the story. The nanoparticles react with CO2 and water in the exhaust plume to produce magnesium bicarbonate, thereby removing CO2 from the exhaust. An important finding is that the new fuel would be denser than conventional jet fuel, potentially leading to 8% longer range compared with today’s fuel, other things equal. Even getting the same range would be a huge improvement over liquid ammonia since it would provide 2.5 times its range, or liquid hydrogen (providing 3.5 times its range).

To be sure, this research was based on modeling and computational analysis; no such fuel has been produced, let alone tested in a jet engine. In an email Powell acknowledged that there are “8-10 potential show-stoppers, as described at the end of the paper.” He also noted that the potential 8% range increase could be eaten up by the need for stronger, heavier fuel tanks and structural modifications to carry the heavier fuel. But stronger tanks would also be needed for liquid hydrogen.

The WPI news release noted that Jayachandra and Powell plan physical experiments with samples of the fuel. And it quoted Powell as saying, “We hope our work, which opens up a new category of sustainable aviation fuel, will spark the imagination of other researchers.”

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Does Aviation Face a “Climate Crisis”?

Over the past few years, many media and government officials worldwide have switched from talking and writing about climate change and global warming to a “climate crisis” or “climate emergency.” There is no scientific question that average temperatures are increasing and sea levels are rising. But some climate-focused organizations seem to have captured enough media attention to lead large parts of U.S. and European media to adopt the more apocalyptic terminology. If we really had only 10 years or 20 years to radically reduce CO2 emissions or ‘the earth would burn’ and island nations would be submerged, drastic measures would be called for. But that is not what reputable scientists and the Intergovernmental Panel on Climate Change (IPCC) are telling us.

Most reporting on the sixth (most recent) IPCC report, released this year, focused on the worst-case climate scenario, known as RCP8.5. Among other unrealistic assumptions, this scenario assumes a six-fold rise in global per-capita coal consumption by 2100, which is grossly unrealistic. My Reason colleague, science correspondent Ron Bailey, published a useful overview of this problem back in May. Bailey recounts a New York Times article on a study using “too hot” climate models that predicted mass extinctions of marine life from climate warming, comparable to the Permian age extinction 250 million years ago. Bailey rightly concluded, “Exaggerating the real problem of man-made climate change is not helpful for guiding the public and policymakers in their efforts to mitigate and adapt to rising global temperatures.”

Bailey also cited a  commentary in the scientific journal Nature explaining that many of the “hot” climate models that project extreme temperatures by century’s end “do a poor job of reproducing historical temperatures over time.” Recognizing this problem, the 2022 IPCC report ceased its previous policy of averaging the results of a large set of models in favor of giving greater weight to models that were more consistent with historical climate and temperature trends. The five authors are all climate scientists.

This is an aviation policy newsletter, not a climate science newsletter. I’m including this article because it appears that a some aviation leaders are potentially being misled, not by what IPCC’s 2022 report actually says but by worst-case scenarios reported out of context by major media and amplified by climate-action interest groups.

In a previous newsletter article on this topic (Sept. 2021), I recommended a book by a distinguished climate scientist who served as Undersecretary for Science in the Department of Energy in the Obama administration—Steven E. Koonin. In his book, Unsettled: What Climate Science Tells Us, What It Doesn’t and Why It Matters, Koonin explains climate modeling and urges policymakers to distinguish among climate scenarios and, in particular, to be skeptical of RCP8.5. I’m happy to recommend it once again to aviation thought leaders and policymakers.

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News Notes

Vinci Invests in Mexican Airports
Vinci Airports has invested $1.17 billion to acquire 30% of Mexican airport operator Grupo Aeroportuario del Centro Norte (OMA). The company operates 13 Mexican airports, including Acapulco, Chihuahua, Ciudad Juarez, Durango, Mazatlan, Tampico, and Zacatecas. Prior to this acquisition, Vinci was the world’s sixth-largest airport group, based on 2020 revenue. Earlier this year, it won a concession for the seven airports in the Cape Verde islands, bringing its total to 70 airports. Adding the OMA airports, that total is now 83.

Partial Sale of Auckland Airport Proposed
The mayor of Auckland has proposed selling the city government’s 18% stake in Auckland International Airport, Inframation News reported on Dec. 2. Based on recent share prices on the New Zealand and Auckland stock exchanges, the sale would yield about NZ$2 billion (US $1.28 billion). While Australia is known for infrastructure asset recycling of this sort, sale of the airport stake would appear to be a first for New Zealand. The country’s three largest airports, then owned by the national government, were privatized via initial public offerings in 1998. Individual investors own 53% of Auckland International’s shares, with institutional investors owning the rest.

Steps Toward Single European Sky
Eurocontrol, which coordinates upper airspace in Europe (and collects ATC fees from airspace users on behalf of individual ANSPs) last month signed an agreement with DFS, Germany’s ANSP, under which Eurocontrol’s Maastricht Upper Area Control Center (MUAC) and DFS’s Karlsruhe Upper Area Control Center will harmonize their processes, procedures, and technology. The new system will use a common “virtual infrastructure” serving both centers and potentially extendable to other control centers. Separately, the FABEC group of ANSPs has added Swiss airspace to its upper-airspace free-route airspace agreement.

U.S. and Overseas Airlines Ask for More Time on 5G Fixes
Airlines for America, GAMA, Boeing, and others submitted a letter to FAA, DOT, the Commerce Dept. and other agencies stating that altimeter manufacturers and some airlines will be unable to meet the year-end deadline to re-equip with altimeters resistant to interference from 5G antennas near airports. On behalf of non-US airlines, IATA sent its own letter to FAA making similar points and noting that one of the replacement radar altimeters has not yet been certified by FAA. And in November, FAA asked the Federal Communications Commission to require 19 other wireless providers to agree to the same mitigation measures that AT&T and Verizon have been implementing this year.

Miami-Dade Voters Approve Defense of Miami International Airport
Two ballot measures approved by voters on Nov. 8 were aimed at preventing the state government from taking over Miami International Airport and Port Miami, in violation of the county’s home rule charter. Both measures passed: a provision requiring county commission members to support home rule status and a requirement that any proposed state takeover must be approved by a county referendum. One way to preserve county ownership would be a long-term public-private partnership lease, in which the county would remain owner and regulator but would no longer be able to micromanage the airport. A 2021 Reason Foundation policy study estimated that the net proceeds (after bond payoffs) from a public-private partnership lease of Miami International Airport would be $2.6 billion.

Colombia Planning Long-term P3 for El Dorado International
In response to an unsolicited proposal from Odinsa and Pavimentos Colombia, the National Infrastructure Agency expects next year to put out a request for proposals for a design-build-finance-operate-maintain (DBFOM) P3 concession to make major improvements to El Dorado International, the country’s largest airport, in Bogota, the capital city. Under the country’s P3 law, the first step will be a feasibility study by outside consultants.

Should EU Member Governments Self-Regulate their ANSPs?
Europe has three times as many high-altitude air traffic control centers as the United States, serving one-third less annual traffic. But elected officials in each country, under pressure from controllers’ unions, have balked at consolidating facilities and streamlining airspace. Early this month, airline trade groups the International Air Transport Association (IATA) and Airlines for Europe called for European air navigation service provider (ANSP) performance to be reviewed by an independent regulator, as called for in 2020 by the European Commission. Both organizations are stressing the need to reduce aviation emissions in calling for streamlined, more-efficient airspace.

O’Hare’s $12 Billion Terminal Upgrades Pass Environmental Review
The core of the latest phase in Chicago O’Hare International Airport’s transformation will take down aging Terminal 2 and replace it with a huge new Global Terminal. The environmental review, begun in 2018, resulted in a FONSI—a finding of no significant impact. That stemmed from the plan’s projected reduction of taxi times, which will reduce emissions. Besides replacing T2, the plan also calls for a $1.3 billion renovation of Terminal 5, increasing its gate capacity by 25%. O’Hare ranked well below average in the 2022 J.D. Power study of US airports, scoring better than only one in its category, Newark. While the decade-long program of O’Hare runway expansion is finished, that and the terminal expansion will obviously facilitate more flights. In Europe, that would not be assessed as “no significant impact.” Not that I’m complaining, mind you.

Brazil Airport Privatizations Put on Hold
The recently elected government of former president Lula da Silva has put on hold a series of previously announced infrastructure privatizations and P3s. Both the airports of Galeao and Santos Dumont were due to be privatized by the end of this year, as was a projected $1.2 billion auction of Porto de Santos, the country’s largest port.

U.S.-Canada AAM Corridor Announced
The Northeast Airspace Integration Research Alliance (NUAIR) and Canadian vertiport company VPorts announced on Nov. 29 an agreement to establish a corridor for electric aircraft between Syracuse (NY) Hancock International Airport and Montreal’s Mirabel Airport. VPorts had previously announced plans for a network of vertiports in Quebec, including both Mirabel and Saint-Hubert airports. NUAIR runs an FAA-designated test site for unmanned aircraft systems at the airport in Rome, New York and has worked with NASA on vertiport automation systems.

Skyports and Corporacion America Airports Collaboration
Latin America’s largest airport company, CAAP, has formed a joint venture with Skyports Infrastructure to develop vertiports at some of CAAP’s 53 airport sites. The first step under their memorandum of understanding is to review those airport sites to select the best candidates for vertiports.

NATS Deploys Radar Not Fooled by Wind Turbines
NATS, the United Kingdom’s ANSP, has implemented a new primary surveillance radar that is not flummoxed by huge wind turbines. Conventional radars show a wind turbine as “clutter” that can hide or be mistaken for an aircraft. The new radar installed at Lowther Hill can filter this clutter to the point where interference with air traffic surveillance is no longer a problem. The installation of this new radar will clear the way for multiple planned wind farm projects, projected to produce 2.5 gigawatts of electricity. 

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Quotable Quotes

“This summer we welcomed the ICAO Council’s formal condemnation of Russia for its numerous violations of international aviation rules. These include violating the sovereign airspace of Ukraine, as well as multiple technical requirements, which have had a significant impact on aviation safety in Russia. This includes attempts to circumvent EU sanctions by illegally double-registering aircraft in Russia that have been stolen from leasing companies and operating aircraft on international routes without a valid safety certificate. This resulted in ICAO declaring a “Significant Safety Concern” against Russia. ICAO only does this in the most exceptional circumstances, and in the gravest of cases involving aviation safety. In essence, ICAO declared that Russian aviation is unsafe, also highlighting a lack of oversight. The global aviation community has given a clear signal that these actions cannot be without consequences. This decision was historic, as it was the first time a category one country was expelled from the ICAO Council, and I am proud to say that ICAO was the first UN body to do so!”
—Henrik Hololei, European Commission, “The 41st Assembly of ICAO: A European Perspective,” Aviation Intelligence Reporter, Dec. 2022

“County Amendment 1 would amend the county charter to require the mayor and county commissioners to take an oath of office affirming that ‘They will support, protect, and defend the Miami-Dade County Home Rule Charter and the government of Miami-Dade County.’. . . Here’s what’s driving Amendment 1: In 2019 the Legislature tried to abolish the Miami-Dade Expressway Authority, which operates five local toll roads, and replace it with a state-run agency. The county has fought that measure off, for now, but there are worrisome rumblings that the state wants to take over the county’s prime economic engines: the airport and the seaport. . . . Miami-Dade County Referendum 2 asks county voters to amend the Home Rule Charter to specify that ownership or authority for Miami International Airport, PortMiami, and Miami-Dade Expressway Authority can’t be transferred without voter approval first.”
—Editorial Board, “November 2022 Election Recommendations,” Miami Herald, Nov. 4, 2022

“Digital towers—that is the wave of the future. It’s an opportunity to address some of our difficulties around staffing.”
—Jeffrey Vincent, FAA Vice President for Air Traffic Services, in “Why Digital Tower May Be the Future of FAA Contract Towers,” AAAE Aviation News Today, July 27, 2022

“In terms of the future, a radically-under-covered part of the most recent IPCC report is that it assigns a much lower probability to the extreme scenario (RCP8.5) featured in previous reports and deemed the most probable, ‘business as usual’ outcome in those reports. Put another way, the new report was surer that global warming is caused by humans, but much less sure that it would produce an extreme outcome. That would seem to qualify as good news, but the reception of the report still tended toward the apocalyptic. The UN Secretary General characterized the report’s message as a ‘code red for humanity,’ where only immediate, drastic action could prevent ‘catastrophe.’ Countless stories in mainstream media took a similar tack, which was amplified by environmental activists and echoed by most Democratic politicians.”
—Ruy Teixeira, “The Democrats’ Climate Problem: How Trying to Solve a Real Problem Turned into Political Kryptonite,” The Liberal Patriot, Oct. 27, 2022

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The post Aviation Policy News: Airport rankings, propaganda from air marshals, and more 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.

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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.

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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. 

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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.

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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.

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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.

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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.

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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.

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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

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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.

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.

• Airport groups are changing commercial aviation
• ULCCs in a changing U.S. airline market
• Congress unlikely to shake up the air traffic control status quo
• Time to rethink airport slots
• Modest improvements coming for European airspace
• Progress is being made on reducing high-altitude contrails
• News notes
• Quotable quotes

Airport Groups Are Changing Commercial Aviation

Over the past 25 years, a new phenomenon has quietly evolved—the airport group. A study by ICF and Oxford Economics, commissioned by Airports Council International, documents the growth of this new entity and explains how and why it is adding value to large and medium airports worldwide. The study is “Value Creation by Airport Groups” and is online here.

An airport group is a set of airports with common management. Today, 425 airports are part of airport groups, handling 2.7 billion annual passengers (29% of the global total) and 27 million annual tons of cargo (23% of the total). As of 2019, airport groups handled 53% of Europe’s passengers, 28% of Asia-Pacific passengers, 14% of passengers in Latin America and the Caribbean, but only 3% of passengers in North America, 2% in the Middle East, and none in Africa.

If you recognize this distribution as similar to the figures for privatized airports, you’re right. Most airport groups consist of either privatized airports (London Heathrow, Frankfurt) or corporatized airports (Amsterdam Schiphol). The report identifies 27 airport groups, all but six of which provided data for the ICF-Oxford study. The five largest airport groups, ranked by the number of annual passengers, are:

Two small airport groups are U.S.-based—Vantage Airport Group and AvPorts.

The study identifies two types of airport groups in terms of their underlying business. The large majority are airport operators, per se—i.e., that is their primary business. But five large groups are led by infrastructure and construction companies: Vinci Airports, Egis Group, Atlantia, Ferrovial, and GMR Airports. The report does not identify any major differences in how the two types operate.

Why should we care about this emerging phenomenon? The report identifies a number of ways in which the airport group model adds value. It provides economies of scale (e.g., in knowledge sharing with smaller airport members, lower costs via bulk purchases), resilience (e.g., a downturn in one country’s economy may not affect the airports in other countries or regions), and increased ability to finance capital investments. The airport group can also set management policies and performance targets for member airports and ensure that various standards are met. Airport groups can try out new technologies and procedures at one of their airports before deciding whether to adopt them group-wide.

As I noted above, there is a significant overlap between airport groups and airport privatization. And that means we should not be surprised that this model has not become very visible in the United States. We have, however, seen airport groups taking part in responding to requests from qualifications from the occasional U.S. airport that expresses potential interest in privatization (e.g., St. Louis in 2019). So when U.S. airport owners finally get serious about long-term public-private partnership leases of their airports, I expect there will be keen interest from global airport groups.

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Ultra-Low-Cost Carriers in a Changing U.S. Airline Market

On his third-quarter earnings call late last month, United Airlines CEO Scott Kirby declared that ultra-low-cost carriers (ULCCs) are “doomed” due to rising fuel costs and labor shortages, going so far as to describe the ULCCs’ business model as a Ponzi scheme. Aviation Daily then quoted airline consultant William Swelbar as not having quite as negative a view but suggesting that with the current U.S. pilot shortage, “legacy carriers are offering their regional pilots as much or more money than flight crews at ULCCs earn, in many cases.” Both Kirby and Swelbar are highly knowledgeable airline experts, but I’d like to offer a different assessment.

First, I doubt that it’s sustainable for legacy carriers to dramatically increase pilot compensation for flying regional jets that carry a small fraction of mainline airliners’ passengers. Second, the fact that regionals, many of them owned by or contracted by legacy carriers, have much lower cockpit crew salaries means that ULCCs can address their own growth needs by offering improved pay and benefits to regionals’ pilots and first officers.

Third, with one exception, I see no signs of ultra-low-cost carriers slacking off on growth. That exception is Spirit, which has agreed to be bought out by JetBlue. Earlier this month, Spirit announced that it is cutting 35 routes next year, as it anticipates being absorbed into JetBlue, which will reduce the seating capacity of Spirit’s planes and convert it to JetBlue’s model of being an intermediate between a legacy carrier and an ultra-low-cost carrier. That change, assuming regulators permit the merger to happen, will open up the market for the remaining ULCCs. And they intend to expand into that void.

At the Routes World 2022 conference in Las Vegas last month, Frontier CEO Barry Biffle told attendees that JetBlue taking Spirit out of the market was as if “Nordstrom purchased a discount store like Walmart and then closed it down.” On Oct. 25, Biffle told Aviation Daily that with 18 Airbus A321XLR (extra long-range) aircraft in the pipeline, Frontier is looking to expand its existing international routes, with the new planes capable of trans-Atlantic and South American service. With the XLR version, “From Miami, you can reach pretty much anywhere in South America,” he said. Frontier already serves 20 non-U.S destinations in the Caribbean and Central America, in addition to its 92 domestic destinations, which include major airports such as ATL, BNA, BOS, BWI, CLT, DFW, FLL, LGA, MIA, MCO, MSP, ORD, PHL, SAN, SEA, and SFO, in addition to numerous smaller airports that are more-typical of ultra-low-cost carriers.

How about the other ULCCs? Allegiant now serves 91 airports, mostly in the United States. Newcomer Avelo, now in its second year, already serves 21 destinations, including Burbank, Ft. Lauderdale, Las Vegas, Orlando, and Tampa, plus smaller cities like Eugene, OR, New Haven, CT, Ogden, UT, and Sonoma, CA. And fellow newcomer Breeze has 30 destinations thus far, including large airports BNA, LAS, LAX, MCO, PIT, SFO, and TPA, plus smaller points like Ft. Myers, Hartford, Huntsville, Islip, Norfolk, Provo, and Syracuse.

Ultra-low-cost carriers appear to have found solid market niches aimed primarily at price-sensitive leisure travelers. The decline and then disappearance of Spirit will open additional opportunities, and if they can recruit enough pilots in the next five years, ULCCs’ planned growth seems probable, Scott Kirby’s skepticism notwithstanding.

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Next Congress Unlikely to Shake Up Air Traffic Control Status Quo
By Marc Scribner

At the beginning of November, I attended the Air Traffic Control Association’s ATCA Global conference in Washington, D.C. While many fascinating discussions on a variety of topics took place, perhaps the most urgent related to the forthcoming Federal Aviation Administration (FAA) reauthorization, which is due by the end of Sept. 2023.

Unlike the debate leading up to the previous reauthorization, much of which was focused on a failed effort to spin off FAA’s Air Traffic Organization into an independent, nonprofit user co-op, the debate this time around is likely to be centered on workforce problems plaguing the aviation sector. These include shortages of airline pilots and air traffic controllers needed to meet surging air travel demand in the recovery from the COVID-19 pandemic, which have led to a large number of flight delays and cancellations. As Congress prepares for FAA reauthorization with a special focus on labor shortages, it should consider technology solutions and governance reforms that could improve workforce productivity and enhance aviation system resilience.

During a panel of industry stakeholders, former longtime House Transportation and Infrastructure Committee aviation staffer Holly Woodruff Lyons said that aviation workforce shortages and their impacts on air service are likely going to be the most important issue motivating members of Congress going into reauthorization. Brad Van Dam, senior vice president for government affairs at the American Association of Airport Executives, noted that dozens of airports have seen commercial service cuts due to workforce issues, and members of Congress are experiencing the resulting flight delays and cancellations firsthand.

At another panel, aviation industry veterans weighed in on what the priorities should be for the next confirmed FAA administrator. Will Ris, the former longtime senior vice president for government affairs at American Airlines and currently a member of FAA’s Management Advisory Council, argued that Data Comm and space-based ADS-B should be the top technology priorities for the new Administrator. Ris said FAA needs to be more open to new ideas from outside the agency and must develop a better process for introducing new technologies and practices, but acknowledged this will be difficult to accomplish in a constrained and uncertain budget environment.

Sharon Pinkerton, the senior vice president for legislative and regulatory policy at Airlines for America, agreed with Ris but argued that FAA process is badly broken. Concerns about staffing at FAA are legitimate, but FAA “can’t do human infrastructure without adequate technology infrastructure,” concluded Pinkerton.

This point was underscored by Paul Rinaldi, a former air traffic controller who retired last year as the longest-serving president of the National Air Traffic Controllers Association, who called for fundamental reform of the Federal Aviation Administration. Responding to Ris’s earlier point, Rinaldi said, “Data Comm is old technology that we should already have in our system.”

Rinaldi had been a strong supporter of spinning off FAA’s Air Traffic Organization into an independent, user-supported nonprofit modeled on world-leader Nav Canada in the lead-up to the 2018 reauthorization. Institutional reform, said Rinaldi, isn’t needed solely to speed procurement and deployment of new technologies but also to recruit, train, and retain top talent. “We still train controllers like in the 1970s,” he lamented.

The Federal Aviation Administration continues to fall behind peer countries in modernizing its air traffic control system. Earlier this month, FAA announced Cleveland Hopkins International Airport as the first U.S. commercial airport to see FAA’s Terminal Flight Data Manager (TFDM) system deployed (“New Surface Congestion Prevention System Debuts At Cleveland Hopkins,” Aviation Daily, Nov. 7, 2022). Both TFDM configurations include electronic flight strips, which would replace the paper flight strips used by controllers for generations. Electronic flight strips replaced paper strips years ago in Canada, the United Kingdom, and most of Europe, but FAA doesn’t anticipate finishing its planned 89-site deployment of TFDM until 2031.

ATCA Global featured many exciting new air traffic management technologies, especially those designed to manage new entrants, such as unmanned aircraft systems and advanced air mobility. However, FAA’s legacy institutional problems are likely to prevent the agency from keeping up with technology.

At the closing keynote panel, Kip Spurio, technical director of air traffic systems at Raytheon, predicted the National Airspace System of 2035 will be a lot like today. Changing FAA culture to be more innovative will require strong leadership that hasn’t yet materialized. “If the U.S. really wants to stake a claim to being the preeminent aviation and airspace system in the world, it will require concerted effort,” said Spurio.

The air traffic control governance reforms debated five years ago that ultimately were not included in the 2018 FAA reauthorization are not likely to be considered in the next Congress. This is unfortunate because modernizing the technical capabilities of U.S. air traffic control with technologies already widely deployed in peer countries could help address both the workforce shortages facing FAA by increasing controller productivity and help integrate new entrants into the National Airspace System, subjects that are likely to receive top billing in next year’s planned reauthorization. Unfortunately, Congress is most likely to reauthorize FAA and spend the next five years wondering why their words were not translated into meaningful action.

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Time to Rethink Airport Slots

Long-time readers of this newsletter know that I oppose systems that deal with airport demand that exceeds runway capacity by having the government allocate landing/takeoff slots to specific airlines. As practically every economist will tell you, the best way to deal with demand that exceeds supply is to raise the price. Of course, in most countries, the “price” to use the scarce good of runway space is based on the gross weight of the aircraft. Legacy airlines claim that they own slots they were allocated many years or decades ago, but in the United States, at least, the U.S. Department of Transportation (DOT) has never accepted that claim.

The slot system is a barrier to competition at popular hub airports. The U.S. DOT attempts to promote competition (increased entry by non-incumbent carriers) when airlines propose to merge (or form other agreements, like American and JetBlue in the northeast, currently) by imposing divestiture of some slots at congested airports. But this is a far cry from market-based allocation.

During the pandemic, as air traffic shrank dramatically in both Europe and the U.S., governments waived the usual rule that at slot-controlled airports, carriers must use at least 80% of their slots during a given time period or they would lose those they weren’t using—the so-called 80/20 rule. U.S. DOT, last month, finally restored the 80/20 rule for U.S. slot-controlled airports, while European officials only restored theirs to 75/25, under heavy pressure from legacy carriers, some of them partially state-owned.

Recently we’ve witnessed the disclosure, during litigation about the American/JetBlue “Northeast Alliance,” that American had forgotten that it owned some of its slots at LaGuardia Airport. While that was going on, United CEO Scott Kirby threatened to cease serving JFK unless DOT gave United more slots than the few it has, which enable only four daily round-trips between that airport and two each to Los Angeles and San Francisco. He argued that because JFK has one more runway than Newark, it must have extra capacity because Newark works well with one less. Yet United has repeatedly urged DOT—unsuccessfully—not to reallocate slots that Southwest gave up when it ended service at Newark due to congestion at that airport.

Back in 2008, one of the last actions of then-Transportation Secretary Mary Peters was to change federal airport policy to permit landing fees to be based on something other than gross weight—such as demand and supply. The airline trade association (then called ATA) litigated against this change but lost in court. So the policy remains. In principle, DOT could reassert its long-standing position that airlines have no property rights in “their” slots and encourage slot-controlled airports to shift to demand-based landing and takeoff fees instead of slots.

Incidentally, since the U.K. left the European Union, it is no longer part of the EU slot system and can decide how to deal with congestion at Heathrow and Gatwick. Both airports already vary their landing fees between peak and off-peak hours, but those fees are still based on gross weight. Both airports are owned and managed by commercial airport companies that might well be amenable to a shift to market-based landing and takeoff charges.

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Modest Improvements Coming for European Airspace

At a conference sponsored by Eurocontrol last month in Brussels, the agency’s director general, Eamonn Brennan, told Aviation Week’s Helen Massy-Beresford that the long-promised Single European Sky may not happen. “I don’t think it’ll ever happen in the way we all would like it to happen—a real Single European Sky. But we can make improvements.”

The near-term improvements he was referring to are two: Europe-wide free route airspace and Eurocontrol’s new network management system. Free route airspace will enable pilots to plan flights that avoid traditional zig-zag routes between mapped waypoints used by air traffic controllers. Simon Hocquard of CANSO, the Civil Air Navigation Services Organization, cited estimates of one billion fewer nautical miles flown per year, six million metric tons of fuel saved, 20 million metric tons of CO2 reduction, and $4.8 billion in fuel savings.” Those estimates assume that pilots opt to use the free route airspace rather than requesting deviations from their filed flight plans to avoid higher air traffic control charges in some countries’ airspaces. Free route airspace implementation has been slowed down by Russia’s war against Ukraine but is now expected to be in place Europe-wide by the end of 2025, one year later than planned. Maps in the Oct. 24/Nov. 6, 2022, edition of Aviation Week showed flight information regions with free route airspace by the end of 2022 and by end-2025, the latter still with a few small gaps.

The other impending change is Eurocontrol’s forthcoming integrated network management system. This technology upgrade will apply to all its network manager operational systems, with a new digital architecture in place by 2030. The first portion will go live in 2024. Legacy systems at individual air navigation service providers (ANSPs) are expected to evolve over the next five years to interface smoothly with the network management system. The new overall system is aiming to handle 13.8 million flights per year, up from the 9.5 million expected in 2022. It is intended to enable airline-chosen “ business trajectories” and 4D profiles under which controllers can manage flights in terms of time as well as distance.

These are all worthwhile improvements, but they will do little or nothing to reduce the high unit costs of European air traffic control (compared with Canada and the United States) due to far too many ATC facilities requiring far too many controllers. Those constraints are still not being tackled, which appears to be why Brennan thinks the Single European Sky will not accomplish its original objectives.

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Progress Being Made on Reducing High-Altitude Contrails

As I’ve reported previously, aviation’s non-CO2 emissions appear to constitute as much as two-thirds of its impact on global warming. Some of this is due to other tailpipe emissions, such as soot and nitrous oxides. Another contributor is contrails, which form at high altitudes under certain temperature and moisture conditions. It turns out that today’s much-improved weather forecasting can often identify areas where those conditions exist, which in principle should enable slightly altering flight paths to either go around that area or fly at a slightly different altitude.

A company called Satavia, which specializes in data analysis and aviation atmospheric science, has been working with two airlines, Etihad and KLM, to optimize their flight plans to avoid contrail formation. Its first test project, last year with Etihad, used a 787 flight from London Heathrow to Abu Dhabi. Satavia used its DecisionX:NetZero software to calculate small changes in altitude and routing to avoid contrail-forming conditions. NATS and Eurocontrol took part in those tests, reported in Aviation Week (Jan. 10-23, 2022). Last year Eurocontrol itself conducted live contrail trials in Europe, modifying the vertical flight profile of 209 flights over a 10-month period.

Aviation Daily presented an update on Satavia’s work in its Oct. 20, 2022 issue. This year it has adjusted the flight profiles of 49 Etihad and KLM flights. Each day’s flights are evaluated for potential contrail areas, with typically between 2% and 5% selected as most likely. Satavia gives each airline a daily briefing pack of proposed routing and altitude changes. After the flights, the company analyzes whether the predicted contrail conditions were avoided and, if so, the savings—computed as CO2-equivalent. Those 49 flight adjustments were reported as saving the equivalent of 6,309 tons of CO2. The company is aiming to auction off the climate savings at $10-20 per ton. Doing that will require validation that the contrails would have formed, except for the altered flight plans.

In a separate project, Airbus is planning to test the impact of hydrogen-fueled aircraft engines on contrail formation, in a project called Blue Condor. It will equip two identical gliders each with a small jet engine—one powered by conventional kerosene fuel and the other by hydrogen. The planes will fly together in conditions conducive to contrail formation, with a chase plane carrying a suite of measurement instruments. The plan is to carry out these tests in early 2023 in the western United States. Hydrogen combustion produces 2.5 times more water vapor than conventional jet engines but no soot. So the tests should help to determine whether or how much contrail formation results from hydrogen fuel, compared with regular jet fuel.

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News Notes

MAC Calls for User Fees for New Airspace Users
The FAA Management Advisory Council (MAC) last month urged Congress to figure out how new users of the National Air Space (NAS) should pay for their growing usage of the airspace. New users include space launch and recovery, drones, and both urban air mobility (UAM) and regional air mobility (RAM). MAC member Donna McLean told Politico that new entrants are rapidly growing but are, in effect, being subsidized via the aviation user taxes paid by commercial and general aviation. “That is on everyone’s mind for [FAA] reauthorization,” McLean told an RTCA webinar audience on Oct. 26.

NATS Wins Contract to Operate Gatwick’s Tower
The UK is one of few countries where airports are responsible for local air traffic control. They can build and operate their own traditional or remote tower or hire an approved control tower company to manage tower operations. For the past six years, London Gatwick (LGW) has been served by Air Navigation Solutions Ltd, an affiliate of DFS, the German ANSP. But in this year’s competition for a new term, the tower division of NATS (the UK’s ANSP) won the bidding. According to Air Traffic Management, NATS is considering making use at LGW of some of the digital tower/artificial intelligence tools it has implemented at London Heathrow (LHR).

SpaceX and T-Mobile Plan Satellite Phone Service
T-Mobile and SpaceX announced an agreement under which the cellular phone company will use the SpaceX Starlink satellite network to provide voice and text-messaging services. The initial services will include not just the continental United States but also parts of Alaska, Hawaii, Puerto Rico, and U.S. territorial waters, with service beginning by late 2023. Competitors planning such services include AST SpaceMobile and Lynk, both of which have agreements with mobile phone networks in other countries.

Two U.S. Airports Pursuing Cargo Facility P3s
Los Angeles International (LAX) and Phoenix Sky Harbor International (PHX) are planning new air cargo facilities to be developed and operated as long-term public-private partnerships (P3s). LAX last month revised its request for proposals (RFP) to add more details on financing and to extend the deadline for submitting qualifications. The project will modernize and expand 27 cargo buildings totaling 2.6 million square feet. The Phoenix P3 project will finance, develop, and operate a new cargo complex on a 28-acre site on the airport‘s northwest corner. Responses to its RFP are due in mid-January, with a contract award as early as next May.

Nigeria Pursuing Airport P3s
Late month, the Federal Airports Authority of Nigeria (FAAN) announced winning bidders for three airport P3 concessions. A consortium led by TAV Airports was selected to develop international passenger and cargo terminals at the Murtala Mohammed International Airport in Lagos. TAV Airports, partly owned by Aeroports de Paris, operates 15 airports in Croatia, Georgia, Kazakhstan, Latvia, and other developing countries. A consortium headed by Corporacion America Airports is the preferred bidder for concessions to modernize the Abuja and Kano airports.

Can Starlink Satellites Provide GPS Backup?
The Radionavigation Laboratory at the University of Texas-Austin has announced the results of research commissioned by the Army Research Office. Their team reverse-engineered signals from Starlink satellites to show that they could be used for a positioning system in the event of GPS outages. Prof. Todd Humphrey from the Radionavigation Lab told MIT Technology Review that this research “could form the basis of a useful navigation system.” The Starlink constellation already includes over 3,000 satellites in low earth orbits, providing much higher signal strength than GPS satellites. A team at Ohio State University has also been researching this idea and says their algorithm generated an accuracy of about 7.7 meters.

Saudi eVTOL Network Planned
Saudi Arabian airline Saudia has signed a memorandum of understanding with electric vertical take-off and landing (eVTOL) developer Lilium for an eVTOL network in Saudi Arabia. The network would provide point-to-point services and feeder services to Saudia’s airport hubs. Service would be provided by Lilium’s seven-seat Jet eVTOL.

Azerbaijan Signs Up with Aireon for Space-Based ATC Surveillance
The ANSP of Azerbaijan (AZANS) has signed up with Aireon to provide space-based ADS-B surveillance of the country’s airspace. The Baku Flight Information Region (FIR) includes 86,600 square kilometers over land and 78,800 square kilometers over the Caspian Sea.

Mexican President Calls for Cabotage to Increase Airline Competition
President Andres Manual Lopez Obrador (AMLO) early this month said airfares in Mexico are too high and that allowing non-Mexican carriers to serve domestic routes would reduce average fares. In its Nov. 10 article, Aviation Daily notes that the European Union allows airlines from member states to operate domestic routes in other states, such as Ryanair’s domestic routes in Italy. Ultra-low-cost carriers (ULCCs) already have large domestic market shares in Mexico—Volaris at 40% market share and Viva Aerobus at 30%.

Inspector General Assesses FAA UAS Traffic Management Plans
In a Sept. 28 audit report, the DOT Office of Inspector General reviews FAA’s progress on the subject of managing traffic in the fast-growing field of unmanned aircraft systems (UAS). Called UAS Traffic Management, some such systems have been introduced in other countries. FAA has developed some concepts of operation but “has not established milestones for implementing the policies and processes necessary to allow for UTM deployment.” The report is AV2022041.

Drone Firm Links with Airways New Zealand UTM
New Zealand’s ANSP already has an operational UAS Traffic Management system called AirShare. It recently announced an agreement with startup company FlyFreely, which offers its own drone management platform for low-altitude operations. Airways New Zealand announced in late August an agreement that allows FlyFreely drone operators to access controlled airspace via AirShare.

October Was Big for Hydrogen News
Increasing interest in using hydrogen for future aircraft propulsion led to several developments last month. First, hydrogen pioneer ZeroAvia acquired HyPoint, a startup company developing hydrogen fuel cells for aviation. While ZeroAvia has focused on low-temperature fuel cells, HyPoint is a pioneer in high-temperature fuel cells. Several days later, American Airlines made a second strategic investment in Universal Hydrogen, which followed its August investment in ZeroAvia. Third, electric aircraft propulsion firm MagniX announced that it’s expanding into hydrogen fuel cells for 50-90-passenger aircraft.

Philippines Asks for Revised Bids for Provincial Airports
The Philippines’ government seeks to engage private companies to improve and operate 10 provincial airports throughout the island nation. Last month the government asked the companies that submitted proposals under the previous government to resubmit them to its Private Public Partnership Center before the end of the year. Inframation News also reported that the government will continue to operate the Ninoy Aquino International Airport in Manila until the two new airports being developed privately to serve Manila reach completion.

Tahiti Airport Award Thrown Out
The winning bid from Vinci Airports to redevelop and expand the Tahiti Airport was rejected by a court, leading to a new procurement. The other two bidders, Egis Projects and the local Chamber of Commerce had challenged the award of the 40-year P3 concession. A new competition is expected early in 2023.

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Quotable Quotes

“FAA has been supporting and trying to figure out how to incorporate these new users; inherently, the current aviation users are cross-subsidizing the new entrants, and it’s time for the new entrants to step up and pay. It’s very complicated, but we have got to make some decisions. . . . That’s on everyone’s mind for reauthorization.”
—Donna McLean, in Oriana Pawlyk, “New Airspace Entrants Should Pay Into the System, Advisor Says,” Politico Pro Transportation, Oct. 26, 2022

“[Airspace reform delays are] a disgrace. . . a scandal…. We have got to tackle these issues; it’s just too important; we can’t ignore it. Whether we call it the Single European Sky or whether we call it ‘get off your arse and sort [out] this inefficiency, it needs to be done.”
—Willie Walsh [IATA Director General], in Helen Massy-Beresford, “Eurocontrol Sees Free Route Airspace Delayed Until 2024,” Aviation Daily, Oct. 6, 2022

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The post Aviation Policy News: Airport groups, the evolving U.S. airline market, and more 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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

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**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.

• Benefits from airport privatization
• A common rate for Europe’s air routes?
• Wisk plans autonomous eVTOL
• Air-to-rail substitution questioned in Europe
• Whither small community air service?
• The case for digital towers
• News Notes
• Quotable Quotes

New Study Finds Large Benefits from Airport Privatization

Does the type of ownership make a difference to airport performance? One of the much-quoted studies on this subject appeared in the Journal of Urban Economics in 2008, reflecting the early wave of mostly European sales and partial sales of airports. It found positive results on airport productivity, but its sample size was small—only 16 privatized airports out of a 109-airport dataset.

A new study from the National Bureau of Economic Research (NBER Working Paper 30544), reflects a world in which 437 airports have been privatized to date. The authors drew from a dataset of 2,444 airports in 217 countries. Rather than comparing all privatized airports with all the rest, they focused on before-and-after comparisons of the privatized airports. They sought to answer the question of whether the type of privatization leads to differences in airport performance. In particular, to the best of my knowledge, this is the first such study that considers whether different outcomes occur when airports are acquired by infrastructure investment funds, rather than by converting the airport to an airport company. Their most important finding is that “infrastructure funds improve airport performance.”

Here is a summary of seven key changes. The first is adding more air traffic, where the number of passengers per flight increases by 20% compared with non-infra-fund acquisitions. And overall passenger numbers increase by 84% under infra-fund ownership. Second, the fund-owned airports attract new airlines, with the increase in competition leading to better service and lower fares. These airports also increase the number of airline routes, especially international routes.

A surprising finding (to this American policy researcher) is that under infrastructure fund ownership, there are “dramatic declines” in flight cancellations and a large increase in on-time departures. This reflects non-U.S. airports, since even before privatization, they generally had common-use gates, which means greater flexibility for the airport to assign airliners to gates. In privatized airports, this continues to be an airport function, not an airline function.

Since the available performance data included little on the quality of airport retail and related passenger-experience indicators, the NBER researchers relied on the Airport Council International (ACI) World’s annual Air Service Quality (ASQ) awards, which assess passenger satisfaction via annual surveys. They found that transitions to infrastructure fund ownership increase the chance of an airport winning an ASQ award.

On airport finance, the researchers documented that fees charged to airlines increased after privatization of either type. There is also a strong relationship between acquisition by an infrastructure fund and removal of price regulation. Net operating income increases by 108% after infra fund acquisition, but this is due more to higher revenues than to cost-cutting—for example, there is no change in employees per passenger.

Throughout the study, the researchers distinguished between concessions of less than 30 years and those with longer terms, defining the latter (and outright sales) as forms of ownership. Overall, they found that “sales” (including longer-term concession) lead to larger efficiency improvements than shorter-term concessions, suggesting that “ownership rights may lead to better-aligned incentives.”

They also examined the role of airport competition. In general, they found that “improvements are much larger in the presence of a competing airport,” with the stronger relationship occurring under infra fund ownership.

Overall, they found that “privatization consistently improves productivity only with [infra fund] involvement.” They speculate that this may be due to new strategies, equity-based compensation for management, and investing in better passenger services and technology.

This important study is likely to inform plans for long-term airport concessions in the United States and worldwide. Inframation News (Aug. 23) provided an overview of continued investor interest, despite only a handful of transactions from 2020 through 2022. It quoted Macquarie executive John Bruen saying “Once the [aviation] sector has got itself back up there and is robust and . . . at . . . (pre-COVID) volume levels again, then I think you’ll see the transaction activity.” The report also includes a chart showing the eight largest airport infrastructure fund investors. Leading the pack with nine airports is IFM Investors, followed by Macquarie Asset Management with eight.

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A Common Rate for High-Altitude Air Routes in Europe?

Airline flights in Europe often take zigzag routes—not because of air traffic control rules, but because after becoming airborne, pilots often request a route change to avoid airspaces with high rates per kilometer flown. This does lead to minor ATC cost savings for the airlines involved, but at the expense of more fuel burned and more CO2 emissions. Getting airlines to fly the shortest, most-efficient routes has been an ongoing challenge, but could reduce per-flight CO2 emissions by up to 10%.

With increasing pressure on aviation to become more climate-friendly, Eurocontrol has endorsed an idea I proposed in the May issue of this newsletter: charging the same “unit rate” for all high-altitude flights in Europe. Eurocontrol Think Paper #18, Sept. 6, 2022 is called “One Size Fits All—A Common Unit Rate for Europe?” Current unit rates range from €28.72 to €130.30 per kilometer—a huge range. The report finds that a common unit rate is technically feasible and could save up to 4,400 tons of CO2 on a busy day. It finds that implementation by Eurocontrol (which operates the current Europe-wide billing system) would also be feasible. And it notes that different airlines would be winners and losers—those flying mostly in Europe’s core area would benefit from lower charges but those operating outside the core or to non-European regions would pay more. European airlines have long called for “fixing the fractional [air traffic management] system” and creating “an efficient airspace.”

But the Eurocontrol paper unfortunately proposes to retain the fragmentation of Europe’s air traffic management system. Its report explicitly calls for redistributing the proceeds from the common unit rate to subsidize the high-cost air navigation service providers (ANSP), assuming they would continue to retain their costly, wasteful infrastructure and excess staffing. That is no way to bring about a true Single European Sky.

Figure 5 in the report is a table showing ANSP winners and losers at the assumed common unit rate. The 19 winners—ANSPs with low costs that would receive annual windfalls absent revenue redistribution—are mostly in smaller countries such as Malta, Latvia, Estonia, Bulgaria, Cyprus, etc. The 10 losers are all in affluent western European countries, such as Switzerland, Italy, Germany, Spain, and Netherlands. When their officials cry crocodile tears over not receiving enough unit rate fee income, it’s because they and their national governments are unwilling to consider facility consolidation, labor reforms, and more-extensive cross-border free-route airspace.

Here is a table (reproduced from the May issue of this newsletter) drawn from a 2017 Eurocontrol/FAA report an air traffic management in the U.S. and Europe

To summarize, with one-third less air traffic, Europe has 200% more en-route centers and 46% more controllers. Ever since the Single European Sky was proposed more than two decades ago, this underlying problem has loomed larger than any other obstacle.

If some European body had the courage and authority to implement a common unit rate similar to the one used in the Eurocontrol report—but without the redistribution of revenue to the wealthy countries with high-cost ANSPs—what would happen? The initial response of governments in high-cost places like France, Germany, and Switzerland, would be to come up with their own subsidies to preserve the status quo of their ANSPs. But how long would their parliaments put up with those subsidies continuing indefinitely? My guess is that pressure from voters and lawmakers would soon arise calling for these subsidies to jet-setters to be phased out. And the way to do that would be to reduce their ANSPs’ cost structure. This could entail faster implementation of virtual centers and other forms of facility consolidation, remote/digital towers, possible cross-border mergers of smaller ANSPs, and some kind of labor reform, including generous early retirement incentives.

I can’t think of any other way to achieve the stated goals of the Single European Sky, leading to a system whose ANSPs are more like the efficient systems of Canada and the United States. If you know of such an alternative, please let me know.

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Wisk Plans Autonomous 4-Seat eVTOL

Start-up electric vertical take-off and landing aircraft (eVTOL) developer Wisk Aero has unveiled its planned production model, Generation 6. It is designed to carry four passengers but no pilot; its flights would be monitored by a “multi-vehicle supervisor” who would handle up to three of these eVTOLs at a time. Articles about the Generation 6 unveiling stressed that Wisk is the first such firm to apply to the Federal Aviation Administration (FAA) for certification of an autonomous passenger-carrying eVTOL.

The company has an illustrious history and some top talent. It began as Kittyhawk Aero, backed by Google co-founder Larry Page. In 2019, Boeing adopted the business to replace its in-house eVTOL project. Access to all of Boeing’s expertise suggests Wisk may have an edge over other leading eVTOL startups. Like a minority of those, Wisk plans to both produce and operate its eVTOLs in commercial service. Wisk has recruited some top-notch talent. Chief technology officer is Jim Tighe, former chief aerodynamicist for Scaled Composites and chief engineer of its SpaceShipTwo.

Despite its apparent advantages, there is a long path to FAA certification awaiting Wisk. The agency has published its Urban Air Mobility Concept of Operations (ConOps) Version 1.0, for piloted eVTOLs. NASA has done more visionary work, recently releasing a UAM ConOps at Maturity Level 4 (medium-density and complexity of operations with collaborative and automated systems). But so far there is no FAA plan for how it would certify automated eVTOLs.

An article in the June 2022 issue of Aerospace Testing International by David Hughes explores some of the other hurdles facing certification of eVTOLs and managing their flight operations in urban airspace. David Silver of the Aerospace Industries Association told Hughes that he does not expect any changes in how US airspace operates within the next three to five years.

For eVTOL operations a serious unmet need is near real-time microweather data for urban and suburban airspace. As I discussed in this newsletter several years ago, the planned vehicles are small and lightweight and subject to being blown around by unexpected wind gusts, which might appear between tall buildings. Don Berchoff of TruWeather told Aviation Week (Oct. 10-23, 2022) that “Anywhere you have buildings, we don’t have weather models today that could tell you what winds are going to do based on the building configurations. This is a total mystery that needs to get solved now because we’re going to be flying in urban areas with lighter aircraft.” TruWeather is getting underway on a $750,000 project to test a network of ground-based weather sensors in Hampton, VA.

Wisk has recently estimated that its target price for Generation 6 passenger flights is $3 per passenger-mile. I have no idea how that price could possibly cover capital and operating costs of this four-passenger vehicle with one-third of a pilot. You can’t assume 100% load factors, nor routinely clear and not-windy flight conditions. Even at an average of 2.5 passengers per trip, a 15-mile trip to the airport would generate $112. And you have to account for trips that cannot be made when planned, due to adverse weather.

These problems will affect all Urban Air Mobility providers, with or without pilots. I continue to admire the engineering that’s going into these vehicles, but I have yet to see a business model that looks plausible.

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Air-to-Rail Substitution in Europe Questioned

Several European governments are contemplating bans on some short-haul flights within Europe, aiming at routes where there is high-speed rail (HSR) service, such as that available in some inter-city corridors in France, Germany, Spain, and Italy. Both Delta and United have dipped a toe into this concept, the former with its year-old Air+Rail service, which is now available in some form to 20 destinations in Europe. And Star Alliance, which includes United and Lufthansa, in July announced a partnership with German rail operator Deutsche Bahn.

The idea is that because short-haul flights produce twice the CO2 emissions per passenger-mile as long-haul flights, they are low-hanging fruit for reducing aviation’s carbon footprint. To be sure, electrified high-speed rail has a significantly lower operational carbon footprint than diesel rail (which accounts for a significant fraction of non-HSR passenger rail in Europe). But a policy of banning short-haul flights would have many costly consequences—for airports (losing significant amounts of revenue), for air travelers (lost time and inconvenient connections to long-haul flights, etc.). Also ignored in flight-ban proposals is the fact that most European HSR stations are in downtown locations, not at airports. A plan that banned short-haul flights would require billions in new spending to build HSR extensions to, and stations at, those unserved airports.

A new study looks into these problems, analyzing various alternative air-rail policies using data on 87 air travel routes in Germany: “The Substitution of Short-Haul Flights with Rail Services in German Air Travel Markets: A Quantitative Analysis,” by Vreni Reiter, Augusto Voltes-Dorta, and Pere Suau-Sanchez.

A key factor addressed in this study is the importance of flights to and from connecting hub airports, for those traveling between points in Germany and to and from other countries. This point has been noted by officials in both France and Germany, so in building their model to assess how air travel would be affected, the researchers tried four different air-to-rail policies based on the share of connecting passengers on each of the routes: 10%, 35%, 60%, and 80%. A 10% threshold would mean that only flight frequencies where 10% or more of their capacity is used for connections would be allowed to operate. By analyzing detailed flight data for a sample month in 2019, they found the number of weekly flights that would be banned under each alternative, ranging from 1,195 weekly flights at 10% to 4,780 using the 80% threshold.
 
The next step was to assess the costs and benefits of each version of the policy. They estimated CO2 emissions for electric and diesel passenger trains, based on which types operated on which rail lines. The emission savings compared with air travel were valued at Germany’s current “social cost of carbon,” which is €77.13/ton of CO2.

Next, they estimated the excess travel time due to rail trips being longer than plane trips—taking into account waiting times, getting to airports or train stations, etc. For the least restrictive policy (10% threshold), the carbon savings were €45 million/year and the travel time cost increase was €218 million. And for the 80% threshold, the carbon savings were €227 million/year and the travel time cost increase was €1.05 billion/year. In other words, costs exceed benefits by nearly a factor of five. Note also that the estimate of costs does not include the billions of euros that would be needed to extend existing HSR lines to newly-built airport HSR stations. Nor does it include electrifying all the diesel-powered rail routes and replacing their locomotives with electric ones. Nor does it include the loss of airport revenue, due to banned short-haul flights.

In short, shifting short-haul traffic from air to rail in Europe is not a low-hanging fruit on the road to low carbon footprints. Replacing coal-fired powerplants with nuclear would have vastly greater impact.

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Whither Small Community Air Service?

There is growing concern in the aviation community about the future of airline service to small airports. Major airlines have parked 50-seat regional jets due to both pilot shortages and high fuel consumption. Faye Malarkey Black of the Regional Airline Association told Aviation Daily back in June that “I think the service we provide to the smallest communities has never seen a bigger existential threat than we see today.” Since 2019, 71% of small communities have lost some or all of their air service. Also in June, Bill Swelbar of Swelbar-Zhang Consultancy identified 89 airports vulnerable to losing additional air service that are within 180 miles of a large or medium-hub airport, of which more than half are “highly vulnerable” and served by a single carrier.

One trend that may help is the continued growth of ultra-low-cost carriers (ULCCs), which are filling in for some of the lost smaller-airport service. Recently Swelbar noted startup ULCC Avelo launching service to Kalamazoo, MI, and Breeze providing cross-country (hub-avoiding) routes from eastern airports including Charleston, SC and Richmond, VA. As I was writing this article, I received a news release announcing new Breeze service to Provo, UT, Savannah, GA, and Westchester, NY. According to Swelbar-Zhang, ULCCs now serve 192 cities. And between 2007 and 2021, ULCCs added 46 small and non-hub airports to their networks, while legacy carriers exited 43 such airports. But as Swelbar has pointed out, ULCCs typically operate something like two flights per week on a route, compared with two to three daily departures provided by traditional regional carriers.

Another idea has been proposed by SkyWest CEO Chip Childs, which has announced plans to end service to 29 small cities. It has applied to FAA for permission to launch a charter airline subsidiary, SkyWest Charter. That entity would operate under Part 135 regulations applicable to planes with no more than 30 seats. Most regional carriers operated under Part 135 until the mid-1990s, when FAA transitioned most of them to airline-category Part 121. Pilot qualification requirements are less-stringent for Part 135 carriers, which would help the new charter operation with pilot and copilot recruitment.

Longer term, of course, there is the prospect of Regional Air Mobility (RAM)—new-generation electric and eVTOL aircraft with ranges up to several hundred miles and (one hopes) passenger capacity more like 12 to 30, compared with Urban Air Mobility eVTOLs carrying four passengers. RAM would not be “the” solution for small airports, but it could be one part of a solution.

One other point should also be considered: reforming or ending Essential Air Service (EAS) subsidies. As Swelbar has pointed out, subsidizing service to small airports within 120 miles of medium and large airports is essentially “paying people not to get on the highway and drive to larger airports with superior service.” To be sure, ending or reducing EAS might become politically feasible if Regional Air Mobility can actually offer a cost-effective alternative to driving to those larger airports with far more destinations.

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The Growing Case for Digital Towers

For more than a decade, I have been reporting global progress in replacing physical control towers with what were originally called “remote towers.” That’s because the earliest applications were to provide tower services at small airports based on cameras and other sensors at the small airport and the control room located on the ground somewhere else—potentially several hundred miles away. Today, however, this phenomenon is increasingly referred to as “digital towers,” thanks to a much wider range of use cases.

London Heathrow Airport (LHR) is a good example. Its air traffic control is provided by the U.K.’s ANSP—NATS. LHR replaced its old tower with a new one in 2007, at a cost of £50 million. They are not ready to scrap it. Instead, they are enhancing its performance by installing 18 cameras on the tower, and another set of cameras on the two LHR runways. Data from those cameras is sent to a new digital lab on one floor of the tower, with large display screens like those in a remote tower centers now operational in Germany, Norway, and Sweden. The lab was created and is operated by Searidge Technologies, a company owned jointly by NATS and Nav Canada.

One of the earliest applications developed by the digital lab was a solution to an operating condition called “Tower in Cloud.” When this low-visibility weather condition occurs, controllers atop the 87-meter (285 ft.) tower cannot see the entire arrival runway. The traditional practice in such conditions is to slow down the arriving traffic, from 48 arrivals per hour to just 40. This was due to the lag time in controllers getting information from surface radar about where each plane is on the runway and when it has exited. The solution involved two improvements: first, install cameras at each exit on the arrival runway, to be followed by cameras at the “hold line” of the departure runway.

Assisting with this new runway surveillance system is a network-based artificial intelligence system called Aimee. It monitors every runway exit simultaneously and tells the controller precisely when the tail of the aircraft clears the runway. This enables an increase in the safe aircraft arrival rate during Tower in Cloud conditions (and could do the same thing for Seattle’s tower). Both LHR runways are fully equipped with the cameras, because arrivals go to one runway in the morning and to the other in the afternoon.

Another advantage of the digital facility in the tower is night-time visibility. There is considerable glare from lighted buildings, lighted parking areas, and general light pollution from the large metro area. Moreover, far away from those buildings the runways and taxiways are largely in the dark. The cameras can see better in the dark than human eyes looking out the window.

LHR is in the approval process for building its long-needed £2.5 billion third runway. It will not be visible from the existing tower cab, and LHR and NATS have no desire to build a new tower to serve that runway. So their plan is to control traffic on the new runway digitally.

This sensible approach could be adapted to solve a current problem at Chicago O’Hare (ORD). Its relatively new set of east-west runways have led to increased aircraft noise east and west of the airport during the night. To address this problem, the O’Hare Noise Compatibility Commission in August approved an “overnight runway rotation” plan aimed at evenly distributing the noise around the region. Given the wide north-south expanse of the new runway configuration, ORD added two additional control towers to serve the northernmost and southernmost runways. But those towers are closed at night (presumably for budgetary reasons). Hence, no landings or take-offs occur on those two at night—and hence, only four of the six east-west runways are left to “rotate” the nightly noise exposure. Outfitting those two runways with Heathrow-type cameras, etc. would enable them to be controlled from ORD’s main tower. But fat chance of FAA considering such a 21st-century solution.

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News Notes

User Fees for New Airspace Users
American Airlines CEO Robert Isom told attendees at last month’s U.S. Travel Association conference that new users of the airspace—such as drones, eVTOLs, and space launch companies—should start paying for their use of the air traffic control system. In a sign of potential opposition, drone organization AUVSI argued against pending proposals in some state legislatures for user taxes on those who use low-level avigation easements—in effect, toll lanes for drones.

Ligado Network Will Jam Iridium Receivers, Study Finds
In a report requested by Congress, the National Academies of Science, Engineering, and Medicine found that while “most” commercial GPS receivers will not be jammed by Ligado’s 5G wireless network, it will interfere with Iridium’s mobile satellite services used by the Pentagon (and also by Aireon, which provides space-based ADS-B services to airlines and ANSPs). Specifically, the report found that “Iridium terminals will experience harmful interference on their downlink caused by Ligado user terminals operating in the UL1 band while those Iridium terminals are within a significant range of a Ligado emitter—up to 732 meters.”

Virgin Islands Seeks Airports P3
The Virgin Islands Port Authority (VIPA) plans to issue a request for qualifications (RFQ) for teams that may be interested in a long-term DBFOM concession to upgrade and manage the terminals at its two commercial airports, on St. Croix and St. Thomas. A request for proposals (RFP) may be issued by the end of the year, according to an article in Inframation News (September 22nd). Similar P3s have modernized Jamaica’s airport terminals in Kingston and Montego Bay.

Ferrovial and AECOM Seek Florida Vertiport Sites
Ferrovial Vertiports and AECOM will work together to identify sites for a planned vertiport network in Florida. The agreed-upon due-diligence protocols will consider airspace, soil conditions, weather patterns, utility sources, intermodal connections, potential eVTOL service volume, current and potential types of eVTOLs, and community priorities regarding noise, safety, and sustainability. Ferrovial is working with German eVTOL developer Lilium, whose eVTOL is targeted mainly at inter-city travel.

FAA Issues Interim Vertiport Design Guidance
On Sept. 26, FAA issued preliminary vertiport design standards, cautioning that, as of now, the agency does not have enough validated eVTOL performance data, so this guidance is a general outline. The agency hopes to issue an Advisory Circular with more specifics in 2024-25, according to Aviation Daily’s report on Oct. 4. The newsletter pointed out that the current FAA engineering brief is not closely aligned with the current European standard, according to Rex Alexander of helicopter consultancy Five-Alpha.

Vietnam Planning $1.7 Billion P3 Airport
Consistent with its national government’s plans to improve airport capacity, the province of Kon Tum in the Central Highlands is planning development of a major airport with a capacity for between 3 million and 5 million annual passengers. Construction is planned to begin in 2023, assuming the selection of a qualified P3 team.

Japan’s Kagoshima Considers Airport Privatization
In March 2022 the Kagoshima prefecture released its vision for the future of its commercial airport, saying that it would consider a P3 concession to finance improvements and operate the expanded airport. Last month it announced that it is gathering information about Japan’s recent experience with airport P3 concessions. The vision for the airport calls for 7.3 million annual passengers by 2030, compared with 5.6 million before the pandemic. The Inframation News article cites existing airport concessions in Japan and says the national government “would like all the country’s 97 airports to be privatized.”

More Electric Taxiing News
Germany’s Düsseldorf Airport has agreed to work with WheelTug on a feasibility study of the company’s FASTGate (Fast And Safe Turn) system. WheelTug installs motorizing capabilities on commercial airliners, enabling planes to taxi in and out without needing a conventional tug or using the plane’s engines. A recent feasibility study at Mumbai International Airport identified potential annual savings of tens of millions of dollars. Competitor Safran has redesigned its powered wheel system to operate one wheel on each of the two main landing gear assemblies and reduced its weight. These systems are more feasible for short/medium-range aircraft (A320, B737 families) which involve many takeoffs and landings per day.

Greece Studying Privatization of Kalamata Airport
The national Hellenic Corporation of Assets and Participations (HCAP) last month released a request for qualifications for the privatization on Kalamata International Airport in southern Greece. HCAP envisions a 40-year P3 concession that includes modernization and expansion plus operation of the airport. In addition to serving 340,000 annual passengers, Kalamata is also a base for the Hellenic Air Force.

Puerto Rico Decides Not to Privatize Regional Airports
Inframation News reported (Sept. 19) that the Puerto Rico Ports Authority has dropped plans to hire a private company to operate, manage, and improve its nine regional airports. The newsletter cited two sources, which said that the decision came about partly due to local political opposition and also to the dire financial condition of the airports.

IFM Increases Bid for Vienna Airport Stake
Australia’s IFM Global Infrastructure Fund on Sept. 16 increased its bid for 10% of the shares in Vienna Airport. The city of Vienna, the province of Lower Austria, and the Employee Foundation together own 50% of the shares. Back in June, IFM Investors made a nearly €3 billion offer to take full control of the airport, but that bid was rejected.

Macquarie Buys Major Share of Latin American Airport Companies
Australian infrastructure giant Macquarie has closed a deal to acquire 50% stakes in airport companies Odinsa and Corporacion Quiport. Odinsa is the developer/operator of El Dorado International Airport in Bogota, Colombia. And Corporacion Quiport is the developer/operator of Sucre International Airport in Quito, the capital of Ecuador, serving 5 million annual passengers.

Good Reading on LaGuardia’s New P3 Terminal
“The Team that Fixed LaGuardia,” by Ben Cohen in the Sept. 17 issue of the Wall Street Journal, tells the story of how a small team of LGA leaders, led by Frank Scremin of Vantage Airport Management, built the gleaming new Terminal B at LaGuardia airport. Their Operational Readiness and Transition (ORAT) team not only managed to keep construction on track while keeping key elements of the terminal in operation during construction but also tested and fine-tuned all its systems before the re-opening this year.

San Antonio Plans to Privatize Car Parking
Before year-end, San Antonio International Airport plans to issue a request for proposals (RFP) to upgrade and optimize its parking garages, which increasingly have to turn away would-be customers. They have in mind one of several privatization/P3 options, including a long-term concession. The airport already has a 30-year DBFOM concession with American Corporate Airport Partners that built a corporate hangar complex that the airport continues to lease to various tenants.

$7.4 Billion Invested in Advanced Aerial Mobility Thus Far
Aviation Daily (Oct. 13) reported that recent investments by United Airlines in Embraer spinoff Eve Holding and by several investors in Japan’s SkyDrive brought the reported total raised by eVTOL startups to $7.4 billion. In first place among startups is Joby Aviation ($1.8 billion) with Lilium next ($938 million).

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Quotable Quotes

“Our results suggest that [airport] privatizations, especially by PE [private equity] funds, do well both for their investors and for the general public. They increases the fees they charge airlines but despite these higher fees, also increase the number of passengers flying through them. They appear to accomplish this by providing better service, offering passengers nonstop flights to more places, lower cancellation rates, and better amenities inside the airports. Our results suggest that PE ownership increases productivity more than non-PE private without significantly different effects on prices (fees), suggesting overall benefits relative to non-PE ownership.”
—Sabrina T. Howell, Yeejin Jang, Hyeik Kim, and Michael S. Weisbach, “All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization,” National Bureau of Economic Research, NBER Working Paper 30544, Sept. 2022

“Today aircraft [in Europe] do not fly their most-efficient routes for various reasons. If we were to have every flight operate in the most optimal way, the perfect flight would have about a 10% emissions reduction between the reality we see today and the perfect flight. The perfect flight is something we will probably never obtain, but definitely between 0 and 10% there is a lot to be gained by having better flight efficiency, including by improving air traffic management.”
—Filip Cornelis, in Helen Massy-Beresford, “European Commission Urges Single European Sky Progress,” Aviation Daily, June 23, 2022

“I don’t believe anything is going to change between now and three years in how airspace operates. There is a path to certify a piloted vehicle but not a path to certify an autonomous vehicle. The goal of some of our members is to have fully autonomous vehicles but no one, including AIA, expects to have to happen in the next three to five years. We do intend to understand what we need to do to certify from an autonomous standpoint.”
—David Silver, Aerospace Industries Association, in David Hughes, “Highways in the Sky,” Aerospace Testing International, June 2020

“The [eVTOL] challenge is at the moment we’re looking at four-seaters with a pilot. It’s hard to see how you could ever make money out of that. Also, the question is will they ever be able to land airside? Do they have to land outside the airport if they’re bringing people to the airport? The concept that they’re going to pick up passengers at the top of a skyscraper in London or Sao Paulo? No way. The owners of those skyscrapers will never let random people into their building to go up to the top floor. . . . At some point you’ll get something that may work. A four-seater I don’t see, particularly without a pilot on board, and I don’t see it getting certified without a pilot on board.”
—Aengus Kelly, CEO of AerCap, in Helen Massey-Beresford, “CEO of World’s Largest Lessor Skeptical of eVTOL Air Taxis,” Aviation Daily, Oct. 14, 2022

“NATS doesn’t see building physical towers as something that is going to continue. I am not suggesting that someone who already has a physical control tower has to throw that tower away. We can enhance it with digital control tower capability. However, if that tower comes to the end of its life, a 100 percent digital tower facility will be a perfect replacement, and it will give the airport far more than a physical tower can provide.”
—Andy Taylor, NATS Chief Solutions Officer, in David Hughes, “Digital Tower Technology Goes Big with NATS at Heathrow,” The Journal of Air Traffic Control, Spring 2019

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The post Aviation Policy News: Benefits from airport privatization, the case for digital towers, and more 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.

• Priced managed lanes rebound from the pandemic
• Rhode Island heavy truck tolls are unconstitutional
• Growing concerns about vehicle electrification
• Consistent policies for managed lane networks
• New questions about urban automated vehicles
• Undercutting users-pay/users-benefit
• Clearing debris from highway lanes, safely
• News Notes
• Quotable Quotes

Priced Managed Lanes Rebound from Pandemic

When traffic flow collapsed nationwide in the first half of 2020 during the COVID-19 pandemic, many skeptics suggested that variably-priced express toll lanes risked going under. That is especially true of those that were financed based on projected traffic flows. How could these facilities survive when there was hardly any traffic congestion? Who would pay tolls to avoid non-existent congestion?

The good news is that these fears were greatly exaggerated. A Sept. 2022 report from Fitch Ratings, “Peer Review of U.S. Managed Lanes,” provides an update on the 14 revenue-bond-financed projects the company rates, ranging from the very first one (SR-91 in Orange County, CA) to yet-to-open ones (I-66 outside the Beltway and Hampton Roads in eastern Virginia). Five of these facilities were upgraded to BBB or BBB+. They are SH-288 in the Houston area, I-77 in Charlotte, NC, the LBJ (I-635) express lanes in Dallas, the North Tarrant Express lanes in Ft. Worth, and the TxDOT I-35 East project in Dallas. In addition, the recently opened C-470 in Denver had its outlook revised from negative to stable. Of the 14 projects rated by Fitch, one is rated A (SR-91), eight are rated BBB, three are at BBB- and two at BBB+.

The Fitch analysts, Anne Triceri and Scott Monroe, explain the key rating drivers of these projects, which have risk factors beyond those of standard toll roads. One success factor is their unique debt structure, such as large reserve accounts and the flexibility provided by TIFIA loans (which can operate as interest-only during downturns). In the Texas projects, because those express toll lanes allow trucks, that additional traffic provided large revenue boosts during months when commuters were few and far between.

Thinking back over the 26 years since the SR-91 express lanes opened to traffic, all the naysaying has been falsified—at least for express toll lanes that are financed based on their toll revenues and which therefore had to pass a market test in order to be financed and built. Among the concerns raised—and now answered—are these:

Claim: Hardly anyone would pay high toll rates to avoid congestion.
Fact: Millions of people welcome the chance to pay, whenever they deem the value of the time savings and reliable trip time is worth more to them than the cost of the toll. 

Claim: Too many people will crowd into the lanes, so they won’t reduce congestion.
Fact: Variable pricing works; nearly all these facilities meet federal performance standards of at least 45 miles per hour travel speeds during peak periods (except where bottlenecks exist, as on I-95 northbound in Miami and I-405 northbound in the Seattle metro area).

Claim: Who would be foolish enough to invest in such risky projects?
Fact: Global toll road companies, infrastructure investment funds and buyers of revenue bonds have readily invested in these projects and are doing well.

Claim: Long-term public-private partnership projects are a scam, intended to go bankrupt and leave taxpayers holding the bag. (I kid you not: this claim was made in a 2014 cover story in The Weekly Standard.)
Fact: Actually, it’s just the opposite. Transurban North America president Pierce Coffee told a recent conference that the company continued to make its bond payments throughout the pandemic traffic downturn. “We were bearing the revenue risk,” she explained. “We were protecting the taxpayers.”

Nonsense like the above claims should finally be put to rest. Revenue-financed express toll lanes have proved their value and viability. They have come through an unprecedented traffic collapse with the same or increased bond ratings. The market has spoken.

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Rhode Island Heavy-Truck Tolls Are Unconstitutional

In a decision with far-reaching implications, federal judge William E. Smith of the U.S. District Court for the District of Rhode Island ruled that the Class-8-trucks-only toll on Interstate highway bridges violates the Commerce Clause of the U.S. Constitution. The suit was filed four years ago by the American Trucking Associations and several others. I’m not an attorney, but from a highway policy standpoint, I think the ruling makes good sense, and I hope it will be upheld if Rhode Island decides to appeal.

The state took advantage of a provision in Section 129 of the highway code that allows toll financing to be used to replace non-tolled bridges on the Interstate system with toll bridges. The Federal Highway Administration (FHWA) granted approval for the state’s proposed Rhode Works program under this provision. ATA and its allies argued that the tolls discriminated against out-of-state trucks, which would clearly violate the Commerce Clause—that is, the so-called “dormant” Commerce Clause which says that states may not interfere with interstate commerce (as opposed to the “active” Commerce Clause under which Congress can regulate interstate commerce).

The best explanation of the ruling that I’ve seen is by Eno Center for Transportation’s Jeff Davis (see Quotable Quotes for the link). Here are a few key facts about Rhode Works. The tolls were charged only to heavy trucks (Class 8 and above). An individual Class 8 truck could be tolled only once per day per bridge, and a maximum of $40 per day. Tolls were collected at only 12 bridges, nine of them on I-95. The revenues were spent on an array of bridges statewide that are not tolled.

Judge Smith understood and cites previous Supreme Court decisions regarding state regulation of interstate commerce: that states must not discriminate against interstate (as opposed to in-state) commerce and that they must not impose undue burdens on interstate commerce. He ruled that the tolls were not really related to the costs of replacing the bridges being tolled because Rhode Works uses much of the revenue on other bridges. He also cited evidence that Class 8 trucks were only 3% of the traffic on the tolled bridges—which he ruled is “inherently unfair.”  He also cited data (presumably from ATA’s brief) that 80% of the tolled vehicles are from out of state. Also, the 20% of tolled trucks that operate only within the state disproportionately receive benefits from the $40 per day maximum. Hence, the tolling program discriminates against interstate commerce, as Davis put it, “in both intent and effect.”

Let me add my two cents worth to Jeff Davis’s excellent summary. First, I think what Rhode Island enacted was a disguised border toll, something like Virginia contemplated in a quickly-abandoned plan to toll I-81 in 2019, with a high toll once vehicles crossed the border into Virginia but a very generous frequent-user rate available to state residents. That was less disguised than Rhode Works, but with the same motivation of making non-Virginians pay the bulk of the tolls.

Second, I’m very disappointed that FHWA approved Rhode Works, as being allowable under 23 USC 129, which specifically permits tolling to pay for a new bridge that replaces an old non-tolled bridge on the Interstate. When RIDOT people ran this idea by me prior to enacting Rhode Works, I suggested this was contrary to the wording and intent of 23 USC 129 and would likely run afoul of the dormant commerce clause. So I was surprised and dismayed by FHWA’s expansive reading of that provision.

State departments of transportation (DOTs) should take notice. Trying to make non-residents pay the majority of the tolls on a replacement bridge is likely to violate the dormant commerce clause. And in any future liberalization of Interstate tolling, Congress should insist that toll rates be the same for in-state and out-of-state users.

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Growing Concerns About Vehicle Electrification

Late last month at an event in Denver, the chairman of the Mercedes-Benz Group announced that this high-end automaker would cease making internal combustion engine (ICE) vehicles by 2030 (a shift from its previous plan to do this by 2039). That means just about every large automaker except Toyota plans to go electric vehicle(EV)-only by around 2035. But a number of recent studies have raised serious questions about whether this timetable is actually doable.

One concern is the availability and cost of battery ingredients—especially minerals such as lithium and cobalt. There aren’t enough mines, and many are in developing countries where mining raises serious questions (regarding child labor, for instance). A good overview of this question is “The EV Revolution: Cell-Side Analysis,” in the Aug. 20 issue of The Economist. A much longer assessment is provided in Volt Rush, a recent book by British journalist Henry Sanderson. That book and other reports document the growing dominance of China in rare earths, battery production, and EV production. In his review of Volt Rush in The Wall Street Journal (Sept. 10, 2022), energy analyst Mark P. Mills notes questions that Sanderson leaves unanswered: “Whether the world can mine enough minerals for our current EV ambitions, and what the energy used in those massive mineral supply chains does to claims of carbon-free EVs.”

Besides reading these and a number of recent papers on the shortcomings of the U.S. electricity grid for the projected EV future, what motivated me to write this article was the long lead article in the October issue of The Dispatcher, written by Michael L. Sena, a very knowledgeable transportation consultant. “Batteries: Theme of the Next Mad Max Dystoposeries” is well-researched, with citations to many of Sena’s sources.

First, Sena provides details on the surprising extent to which the Chinese government has set out to become the world’s dominant player in battery electric vehicles (BEVs). He’s been following these efforts since a trip to China in 2007 and discussed it in his 2008 book, Beating Traffic: Time to Get Unstuck. I was surprised to learn (from his current article) how much of the battery minerals sector, battery production, and BEV production is Chinese. His second point is that “battery production numbers just don’t add up.” As EV production has ramped up, the cost of the needed materials has risen, and the long-term downward trend of EV batteries (as measured by the cost per kilowatt-hour) has leveled off and started to rise. Another point is the current difficulty in recycling EV batteries—which, if it can be done cost-effectively, might reduce the need for new battery production. So far, this is far-from-proven technology.

To me the most chilling point is about the electricity needed to power a complete replacement of ICE vehicles with BEVs. Sena cites calculations by energy analyst Roger Andrews. For a hypothetical one billion BEVs worldwide, at realistic annual driving (20,000 km/year), Andrews came up with 4,400 Terawatt-hours of electricity to power those vehicles. His paper has tables for several countries, the European Union, and the world. The table for the United States estimates a need for 49% increase in installed electricity generation capacity to handle a complete transition to BEVs. Since federal policy also calls for replacing all fossil fuel electricity generation (which accounts for 61% of current generation), the total need for new electricity generation would be 110%—a staggering number.

These are sobering points. One thing that will help is the billions of venture capital going into developing alternative EV battery concepts that do not rely to the same extent on rare-earth minerals. Nearly all projections involving responses to climate change assume current technologies and their costs, because you can’t do projections of things that don’t yet exist. But I think the concerns that many researchers have raised, and which Sena has nicely summarized, call for some hard thinking about 2030 or 2035 termination of ICE production. Toyota may be right that hybrids may be more feasible for the medium term than a complete transition to BEVs.

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Consistent Policies for Managed Lanes Networks
By Baruch Feigenbaum

After metro areas build out their networks of priced-managed lanes, the next step is to develop regionwide operating guidelines for those lanes. Having managed lanes on every limited-access highway helps form an interconnected network that motorists and buses use to reach their destinations in a consistent, reliable time. However, having different operating rules for different portions of the network makes travel more complicated for users and reduces the number who will use the lanes. This is a problem because the lanes are only effective at reducing congestion and increasing transit usage if drivers understand how to use them.

The Northern Virginia area of Washington, DC, provides a good case study. In Northern Virginia, every Interstate highway (I-66 outside the Beltway, I-95, I-395, and I-495) has (or for I-66 outside the Beltway will have by December) managed lanes. For this analysis, I have included Interstates with congestion pricing (I-66 inside the beltway) but not fixed-rate toll roads such as the Dulles Toll Road and the Dulles Greenway.

Some managed lane features, such as geometric design, cannot be changed. I-95 and I-395 are reversible; I-66 outside the Beltway and I-495 have lanes in both directions. Who operates various links (Cintra, Transurban, or the Virginia Department of Transportation) is part of long-term contracts and will not change for many years (unless the contract is violated).

Operating rules are policies that detail which vehicles can use the lanes when the lanes operate, and how drivers can pay for the lanes. Making some operating rules more uniform would help drivers. For example, trucks are allowed to use the I-66 outside the Beltway lanes but not the lanes on I-66 inside the Beltway, I-95/I-395, or I-495. It is not difficult to imagine a truck driver using the direct connector from the I-66 lanes to the I-495 lanes and then finding out he is not supposed to be in the lanes when he gets a visit from a friendly Virginia State Patrol officer.

The trucking community has generally opposed tolling, citing among other things bogus numbers on the cost of toll collection that assume tollbooths and human operators. All managed lanes use all-electronic tolling. However, the way to build support for managed lanes is not to exclude truckers but rather to offer them the option to use the lanes. The feasibility and costs of retrofitting other managed lanes in the region for trucks are unclear, but it seems worth studying from both a policy and political perspective. (Having trucks use I-66 inside the Beltway does not make sense from an operational perspective.)

In addition, the lanes have different operating hours. I-66 outside the Beltway and I-495 operate 24 hours a day, seven days a week (24/7). I-95/I-395 operates 24/7 except when the lanes are being reversed, generally late mornings on weekdays and Saturday afternoons on weekends. However, I-66 inside the Beltway operates peak period/peak direction only. As a congestion-priced highway I-66 inside the Beltway is different from the other managed lanes, but given that its traffic flows are largely bi-directional, the “non-peak” direction needs pricing as much as the peak direction. Ideally, the entire road would be priced 24/7 because traffic congestion can be a problem middays, evenings, and weekends. Originally, VDOT planned to price peak periods in both directions, but then-Gov. Terry McAuliffe prevented off-peak-direction pricing for political reasons.

There are some operating rules that are uniform to all lanes but this might not be the best long-term solution. For example, all of the lanes allow vehicles with three or more people to travel for free. All allow motorcycles to travel for free. Thankfully, none allow alternative fuel vehicles to travel for free as is common in California. But allowing carpools and motorcyclists into the lanes reduces the amount of capacity for toll-paying customers. These carpools and motorcyclists have no incentive to leave the lanes regardless of the price of the tolls. Therefore, the tolls need to be higher than they would be without carpools and motorcyclists to deter enough potential customers from the lanes to reduce congestion.

Many high occupancy vehicle (HOV) lanes began as busways. But because there were not enough buses to justify their own dedicated lane, busways were converted to four-person carpool lanes, and then three-person, and often down to two. But even three-person carpools include many fam-pools or school-pools, where a parent is transporting two children to school. These are not the envisioned carpools (the children cannot drive themselves) that would get a car off the road. Instead, managed lanes should provide free passage only to truly high-occupancy buses and registered vanpools. Both are legitimate transit options that help take vehicles off the road.

The easiest way to pay tolls for each highway is to use an EZPass transponder or via Payviam (if you drive a vehicle with a built-in transponder such as trucks or some Audi and Mercedes Benz vehicles). However, for those from outside of the region or others without an EZPass, all Virginia highways provide a pay-by-plate option. All allow drivers to pay a toll online within five days for a modest administration fee, generally $1.50. However, not all drivers are going to know which website to use or how to pay the toll. And if the lane operator needs to mail you a bill the administration fee increases to $12.50. A $12.50 administration fee seems excessive for a $5 toll. Certainly, toll-road operators want to encourage drivers to get an EZPass but other major entities including the Florida Turnpike Authority and other local entities such as the Dulles Toll Road and Dulles Greenway charge a smaller $2-$5 administration fee or no fee at all.

As other regions build out their managed lanes network, they will need to tackle the same operational questions as Northern Virginia. When the physical infrastructure is complete, policymakers, transportation agencies, and lane operators need to coordinate on regionwide operating rules.

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Some New Questions About Urban AVs
By Marc Scribner

On July 21, the National Highway Traffic Safety Administration (NHTSA) acknowledged receipt of and requested comments on two petitions for temporary exemption from Federal Motor Vehicle Safety Standards (FMVSS) submitted by General Motors and Ford for those automakers’ newly developed automated vehicles (AVs). These petitions generated numerous public responses, but the responses to GM’s petition are most interesting given the unconventional design of its Cruise Origin and indicate that cities are likely to approach AVs with varying levels of enthusiasm.

Cruise, GM’s AV subsidiary, has made recent headlines for operational challenges experienced in San Francisco. In early June, a Cruise ridehailing AV, a modified Chevrolet Bolt equipped with an automated driving system (ADS), was struck by another vehicle that resulted in minor passenger injuries after it attempted to make an unprotected left turn. A San Francisco police investigation found the vehicle that struck the Cruise AV to be the “party at most fault,” but this incident led Cruise to initiate a voluntary recall of all 80 of its ADS units to avoid similar events in the future. Later in June, Cruise experienced a network malfunction that caused several of its ridehailing AVs to cluster on a downtown San Francisco street late at night, impeding traffic on the block for two hours. These events were referenced by some commenters in response to GM’s FMVSS exemption petition to NHTSA.

The exemption petitions submitted by GM and Ford are similar in that they both propose to deploy purpose-built AVs. But they differ significantly in that the Ford vehicle would be equipped with conventional manual controls allowing it to be operated by human drivers. GM’s battery-electric Cruise Origin, in contrast, is a specially designed autonomous passenger shuttle that lacks a steering wheel and pedals for manual human operation.

Exemptions from FMVSS were first provided by Congress in 1968, two years after it had authorized federal auto safety regulation with the National Traffic and Motor Vehicle Safety Act of 1966. The current framework was largely established in subsequent 1972 amendments, which granted the Secretary of Transportation the authority to approve exemptions to “facilitate the development or field evaluation of new motor vehicle safety features,” “facilitate the development or field evaluation of a low-emission motor vehicle,” and to avoid “prevent[ing] a manufacturer from selling a motor vehicle whose overall level of safety is equivalent to or exceeds the overall level of safety of nonexempted motor vehicles,” in addition to the economic hardship exemption created by the 1968 law. This general exemption authority is currently codified at 49 U.S.C. § 30113.

In its petition for exemption, GM argued that its Cruise Origin vehicles should be exempt under two FMVSS exemption bases because the Origin provides an overall safety level at least equal to that of non-exempt vehicles and exempting the battery-electric Origin would make development of a low-emission vehicle easier.

In its response to the GM petition, the San Francisco Municipal Transportation Agency (SFMTA) urged NHTSA to condition approval of the Cruise Origin exemption on 12 requirements involving data sharing, vehicle design, and operations, repeatedly referencing the operational problems Cruise had experienced in San Francisco. While conceding that it “does not have the technical expertise to conclude that the absence of fatal crashes from the testing to date of the Cruise AV signals superior driving,” SFMTA urges NHTSA to “launch a rulemaking proceeding to prescribe minimum standards for performance of all automated driving systems operating on public roads.”

The operational mandates SFMTA suggests to NHTSA would have been better directed at California’s state and local regulators (including SFMTA itself), which have the clear authority to regulate the operations of any vehicles on their public roads—unlike NHTSA, which is authorized to regulate motor vehicle safety and performance and not the operation of those vehicles.

With respect to SFMTA’s request that NHTSA develop new regulations on automated driving system (ADS) performance, those rules will need to reference consensus technical standards that are still under development. Regulating ADS performance in the absence of consensus standards through the development of government-unique standards is both extremely challenging due to limited regulator technical expertise and explicitly discouraged by the National Technology Transfer and Advancement Act of 1995.

Like San Francisco, the National Association of City Transportation Officials (NACTO) requests that NHTSA put the regulatory cart before the technical standards horse with respect to ADS performance. But NACTO goes further, urging NHTSA to deny GM’s petition by alleging several socioeconomic and environmental problems well beyond the purview or expertise of safety vehicle regulators at NHTSA in addition to claiming GM has not proven the Cruise Origin’s safety equivalence to non-exempt vehicles.

On the safety equivalence claim, NACTO appears to misunderstand what NHTSA is supposed to evaluate. The main question NHTSA will be investigating is, does exempting the Origin from specific FMVSS preserve the safety equivalence with a compliant Origin? For example, would removing the Origin’s rearview mirrors degrade safety when compared to an Origin with rearview mirrors? Given the lack of historic crash data due to the novelty of the Cruise Origin and NHTSA’s limited tools to evaluate ADS performance, the extremely high standard of safety proof that NACTO demands is unlikely to exist in the near-term. Worse, adopting NACTO’s interpretation of NHTSA’s exemption authority would likely prevent any exemptions for ADS-equipped vehicles and deny NHTSA the data needed to develop eventual minimum performance requirements, effectively short-circuiting the process NACTO claims to support.

Not all big city transportation stakeholders have expressed skepticism toward NHTSA granting GM’s exemption petition. The San Francisco Chamber of Commerce urged NHTSA to approve GM’s petition. So too did the National Federation of the Blind. In contrast to San Francisco, Phoenix, Arizona, Mayor Kate Gallego personally wrote to NHTSA supporting GM’s petition, stating that Phoenix officials believe deployment of the Cruise Origin would help promote “a thriving environment, livable communities, enhanced productivity, and bustling commerce.”

Academic AV experts have also offered their support for GM’s exemption petition. Kara Kockelman, the Dewitt Greer Centennial Professor of Transportation Engineering at the University of Texas at Austin and one of the world’s most prominent AV scholars, wrote to NHTSA to express her “very strong support of GM and Cruise’s request for temporary exemptions,” citing the potential safety, congestion, environmental, and social equity benefits of the Cruise Origin.

To be sure, the benefits of AVs extend will extend well beyond dense urban cores. But the responses to GM’s Cruise Origin exemption petition suggest the benefits to urban cores may not be distributed evenly. This may have less to do with the performance of the AVs and the features of the built environment and more to do with the varying political enthusiasm for deploying AVs among officials in particular cities.

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Undercutting Users-Pay/Users-Benefit

A number of governors from both parties are touting their temporary suspension of state fuel taxes in the run-up to the November election. Most of them say this won’t harm highway finances because they are drawing on higher-than-expected federal money (from the Infrastructure Investment and Jobs Act or left over from various COVID-19 relief measures). That may fool some, but those federal dollars could have been used for net new investment, rather than paying for politicians’ gas-tax holidays.

When gas prices were nearly $4 per gallon, Florida’s populist Republican Gov. Ron DeSantis, got the legislature to approve a 25 cents per gallon gas tax holiday for the month of October, leading up to the November election, where he’s seeking a second term. In late August he upped the ante by also using federal dollars to compensate for temporary cuts in the toll rates on Florida’s Turnpike and other state-run toll roads. For six months beginning Sept. 1, 2022, customers on state-run toll roads are eligible for discounts of 22% to 25% (if they have SunPass transponder accounts). At least the three independent metro-area toll agencies (in Miami, Orlando, and Tampa) are exempt from this political grandstanding. And why isn’t the Florida Department of Transportation objecting? Its leadership is appointed by the governor, so they must remain silent.

Adding implicit support for these measures, Transportation Secretary Pete Buttigieg told a House Transportation & Infrastructure Committee hearing in July that general fund transfers are “a legitimate way to fund highways.” According to Politico’s account of the hearing, he left open the question of whether Congress should retain a users-pay approach in the future.

Several previous Democratic administrations have wanted to convert the federal Highway Trust Fund into an all-purpose transportation trust fund, but Congress has never signed on to that idea. The concept would be that while highway users would continue to pay, the revenues would be distributed to Amtrak, bicycle networks, and anything else that could conceivably be considered surface transportation. That is a recipe for poorly funded roads and highways.

It is critically important for those of us who want a robust, state-of-the-art highway system to retain and restore not just users-pay but its corollary, users-benefit. The eventual transition from per-gallon fuel taxes to per-mile charges provides a once-in-a-century opportunity to restore the users-pay/users-benefit paradigm, converting the highway system into a utility, analogous to water supply, telecoms, and electricity.

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Clearing Debris from Highway Lanes, Safely

Debris in active traffic lanes is a hazard to moving vehicles and to state DOTs whose crews must get out of their vehicles to remove it. All too often, these workers get injured or killed by moving vehicles. In a 2016 study, the AAA Foundation for Traffic Safety identified an average (over four years) of 50,000 annual crashes into roadway debris, leading to 10,000 injuries and 125 deaths.

At the annual meeting of the International Bridge, Tunnel, & Turnpike Association (IBTTA) in August, I was intrigued to see a video of a better way (than an on-foot worker) to quickly and safely get debris out of traffic lanes. A company called J-Tech is now offering a device called LaneBlade that can be attached to a utility truck to push debris over to the breakdown lane. LaneBlade consists of a large center surface with “wings” on each end that keeps the debris from sliding to the side while it is being pushed. The company’s Fred Bergstresser told me that (mounted on a large enough truck), LaneBlade can move a disabled car, a refrigerator, a mattress, or even a fully loaded truck.

Not wanting to be seen as promoting a particular product, I asked him who their competitors are. There appears to be no commercial competition. One state DOT built its own Gator Getter to move “road gators” (truck tire treads) from roadways. A device aimed at small debris is called Debris Clear. That’s about it. Consequently, LaneBlade has been purchased by a number of DOTs, including those of Florida, Illinois, Ohio, Pennsylvania, Tennessee, and Texas.

I get no commission for writing this. I’m doing so because I’m impressed by this clever, life-saving device.

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News Notes

Toll Road Company Buys Stake in the Chicago Skyway Concession
Two of the three Canadian public employee pension funds that jointly own the 99-year concession to operate and manage the Chicago Skyway, a 7.8-mile toll bridge linking downtown Chicago to the Indiana Toll Road, are selling their stakes. Canada Pension Plan Investment Board and OMERS Infrastructure last month agreed to sell their combined 67% of the concession to Atlas Arteria, an Australian toll road company. Atlas is paying $2 billion for the two-thirds interest. The original 99-year lease valued the concession at $1.8 billion; the Atlas bid implies a $3 billion valuation of the concession. Ontario Teachers’ Pension Plan is retaining its one-third stake.

Warren Buffet Buys Majority Stake in Pilot/Flying J
Buffett’s investment company Berkshire Hathaway has acquired 80% of Pilot/Flying J, the largest truck stop operator in North America. Some analysts think Buffett is eying the company’s land holdings, on the assumption that automation may reduce the need for truck stops. An alternative view is that Buffett understands the ongoing shift to truck electrification and the need to expand the number and location of truck stops. With 80% ownership, Buffet could buck trade association NATSO which has strongly opposed allowing truck stops directly alongside long-distance Interstates. Buffet shook up freight railroads by purchasing BNSF and taking it private. Might he now be planning to shake up trucking and truck stops?

Georgia DOT Gets Qualifications from Three Teams for SR 400 P3
In the first of three major revenue-risk DBFOM concessions for express toll lanes, GDOT has received qualifications from three teams for the first project: adding express toll lanes to 16 miles of SR 400. The three teams are led by ASTM/Shikun & Binui, Cintra/Macquarie, and Meridiam/Acciona. The estimated cost of the project is between $2 billion and $2.4 billion, according to Public Works Financing. The concession term will be 50 years. The express lanes will include state-funded Bus Rapid Transit service in addition to toll-paying motorists.

TxDOT 10-Year Plan Devotes $85 Billion to Improved Highways
As one of America’s largest and fastest-growing states, Texas needs an expanded-capacity highway system. And that is what the new 10-year plan calls for. The expansion plans include I-35 through Austin and San Antonio and further expansions in the Dallas/Ft. Worth and Houston metro areas. In addition, $14 billion of the total is devoted to roadways in rural areas.

A Toll Truckway for the Port of Tacoma?
Washington State DOT is building two miles of toll lanes alongside I-5 linking the Port of Tacoma with SR 167. The $376 million project began construction in July. It’s part of the state DOT’s Puget Sound Gateway Program. Since much of the traffic to and from the port consists of drayage trucks, and the new corridor will charge tolls, this may become, de facto, America’s first toll truckway.

Chile Unveils $13 Billion P3 Portfolio
The Ministry of Public Works last month unveiled its plans for large-scale public-private partnership (P3) projects for 2022-2026. About $4.6 billion of the total will be dedicated to unfinished portions of the Pan-American highway and its accesses to nearby cities, via 12 separate projects. The plan also includes long-term concessions to improve four regional airports.

Denver Tollway Unveils 3-Year Widening Project
The E-470 Public Highway Authority announced the beginning of a third-laning project (each way) along 11 miles of this ring road around the eastern half of the Denver metro area. The 47-mile toll road runs from I-25 South to I-25 North and passes near Denver International Airport in the metro area’s eastern suburbs. The $350 million project began its initial construction phase in late September.

Gateway Tunnel Will Cost $16 Billion, Be Completed in 2035
The new tunnel beneath the Hudson River, bringing Amtrak and commuter trains from New Jersey to Manhattan, is already over budget and very late, before it even begins construction to replace the aging tunnel that was damaged by Hurricane Sandy in 2012. The poor performance of U.S. transit rail tunnels and light rail projects is analyzed in a new report from the Eno Center for Transportation, “On the Right Track: Rail Transit Project Delivery Around the World.” It documents that the United States pays far more per mile for such projects than the average of 10 peer nations overseas. The report singles out Chile, Italy, and Norway for best practices and more bang for the buck.

Battery Swapping May Work for Commercial Vehicles
An article in The Economist (Aug. 27) explains the pros and cons of a system developed by Taiwanese firm Gogoro, which allows subscribers to exchange a depleted battery from a moped or scooter. A consortium of Japanese vehicle producers is considering a similar service for electric delivery vans and light trucks. This appears to be a good fit for local commercial electric trucks that are on the road all day and require frequent recharging but does not appear to be a good fit for personal EVs, which have many different sizes and makes of battery and need recharging much less often.

Israel Plans New Express Toll Lanes
An interagency request for qualifications (RFQ) was issued last month for three new express toll lane projects in Israel. The project is envisioned as a 29-year DBFOM concession for the express lanes and includes the development and implementation of a tolling system. Qualifications are due Dec. 15. Israel has one operational express toll lane project—the only one outside the United States. The express lanes will include express bus service and incentives for three-person carpools.
 
Werner Planning 24/7 Automated Long Haul Truck Service
Trucking company Werner Enterprises and technology company Kodiak Robotics announced a partnership on Sept. 29, aiming at autonomous long-haul truck operations with human drivers handling only the first-mile pickup and last-mile delivery portions of the trip. The agreement came after a week-long pilot project in which a Kodiak-automated truck (with a safety driver) operated four round trips between Dallas and Lake City, FL. The automation system is called Kodiak Driver. No specifics were announced about where and when the operations would begin without a human driver on the long-haul portion of such trips.

Setbacks for Electric Bikes and Scooters
Battery fires on e-bikes in New York City have led the city’s public housing authority to propose banning such bikes from their buildings. City firefighters have responded to 26 battery-based fires in public housing since 2021, Ars Technica reports. Elsewhere in the city, battery-based fires have resulted in 73 injuries and five deaths. Many e-bikes in New York are do-it-yourself conversions, which do not comply with UL battery safety standards. And in San Francisco, the city has proposed banning e-scooters from sidewalks, due to injuries to pedestrians. The only exception would be for scooter-share companies that use geofencing to disable scooters from operating on sidewalks.

Ground-Breaking for Toll Border Crossing Near San Diego
Last month saw the ground-breaking ceremony for a tolled border crossing at the Otay Mesa East port of entry from Mexico. The four-lane toll bridge is expected to decrease border wait times by 50%. Variable tolling will be used in order to reduce congestion. Toll rates for personal vehicles will range from $5 to $25 and for commercial vehicles from $15 to $45. Target date for completion of the project is Dec. 2024.

Correction to September Article
In September’s article “Canada Points the Way on P3s for Highway Rest Areas,” the number of years since the federal ban on commercial services at U.S. Interstate rest areas was mistakenly written as 72 years ago. Since the ban went into effect in 1960, the correct number is 62 years ago. This error has been corrected in the online edition of the September newsletter.

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Quotable Quotes

“This analysis is straightforward. Rhode Island has a legitimate—even compelling—interest in the maintenance of its ailing bridges. But there is no reason that interest cannot be served by a tolling system that does not offend the Commerce Clause. Indeed, many states have implemented tolling systems that fairly apportion their costs across various users and do not discriminate against interstate commerce. Applying strict scrutiny, Rhode Works’ tolling program fails the test.”
—Judge William E. Smith, in American Trucking Associations v. Alviti, in Jeff Davis, “Federal Judge Finds Rhode Island’s Truck Tolls on Interstate Bridges Unconstitutional,” Eno Transportation Weekly, Sept. 23, 2022

“Let us reset the clock and stop forcing battery electric cars into the market. Instead, we should focus on reducing emissions from the cars we can produce without creating a completely new business ecosystem and infrastructure that will be controlled by China. Hybrid vehicles that charge themselves looked like the perfect place to start 20 years ago, and, in my book, it is still the best option we have right now. We learned a hard lesson with ‘Dieselgate,’ which is that if you set unreachable goals, but at the same time make it economically impossible for companies to hit these goals, businesses will cheat. It’s either that or go out of business. Passing a law that makes it impossible to sell a car that does not have zero emissions at the tailpipe turns the car business over to those who will pollute the air from their countries, beyond the reach of US and EU courts and totally unresponsive to climate activists.”
—Michael L. Sena, “Batteries: Theme of the Next Mad Max Dystoposeries,” The Dispatcher, Oct. 2022

“Self-driving ‘all the time, everywhere’ hasn’t stalled. It’s always been and always will be a pipedream. (I’ve never been able to drive my own car ‘all the time, everywhere’ even though Madison Avenue has forever suggested that I can (or should be able to if I wasn’t such a …) Self-driving doesn’t need to be ‘all the time, everywhere’ because there is a driver in the car. Let them do the driving at times and places where the system doesn’t work very well. In fact, more should be done to not allow them to drive either in heavy snow, torrential downpours, dense fog, when they are tired, when they’ve had too much to drink, smoke, or snort. We need to get to a point at which Driverless (self-driving in an operational design domain—ODD) actually delivers safe origin to destination mobility in some ODD that delivers real value to society. Let’s define the ODDs where this technology does work. Put it to work there and begin recouping some value from all the sunk investment. Then focus on the most efficient and effective way to grow the ODDs such that they most expeditiously generate the most value to society,”
—Alain Kornhauser, “Why Self-Driving Cars Have Stalled” Smart Driving Car.com, Sept. 12, 2022

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